<PAGE> 1
THE
RESERVE
FUNDS
Founders of
"America's First
Money Fund"
810 Seventh Avenue, New York, NY 10019-5868
GENERAL INFORMATION AND 24-HOUR YIELD AND BALANCE INFORMATION
800-637-1700
This literature is not authorized for distribution to prospective investors
unless
preceded or accompanied by an appropriate current prospectus.
Distributor -- Resrv Partners, Inc.
Founders of
"America's First
Money Fund"
-------------------------------------------------------------------------
----------
SEMI-ANNUAL REPORT
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NEW YORK TAX-EXEMPT FUND
CALIFORNIA TAX-EXEMPT FUND
CONNECTICUT TAX-EXEMPT FUND
FLORIDA TAX-EXEMPT FUND
MASSACHUSETTS TAX-EXEMPT FUND
NEW JERSEY TAX-EXEMPT FUND
FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1996
(UNAUDITED)
<PAGE> 2
RESERVE NEW YORK TAX-EXEMPT TRUST--NEW YORK FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1996--(UNAUDITED)
<TABLE>
<CAPTION>
MATURITY
DESCRIPTION OF SECURITY DATE
- --------------------------------------------------------------------------------------------------------------- ----------
<S> <C> <C>
Babylon IDA for Napco Security System, 3.35%(a)................................................................ 4/1/2000
Bleecker HDC Terrace Apt Project S85, 3.525%(a)................................................................ 7/1/2015
Brockport CSD GOB, 5.375%...................................................................................... 6/15/1997
<CAPTION>
PRINCIPAL
AMOUNT
DESCRIPTION OF SECURITY (IN THOUSANDS)
- --------------------------------------------------------------------------------------------------------------- --------------
<S> <C>
Babylon IDA for Napco Security System, 3.35%(a)................................................................ $1,000
Bleecker HDC Terrace Apt Project S85, 3.525%(a)................................................................ 2,515
Brockport CSD GOB, 5.375%...................................................................................... 900
<CAPTION>
VALUE
DESCRIPTION OF SECURITY (NOTE 1)
- --------------------------------------------------------------------------------------------------------------- --------------
Babylon IDA for Napco Security System, 3.35%(a)................................................................ $ 1,002,745
Bleecker HDC Terrace Apt Project S85, 3.525%(a)................................................................ 2,530,268
Brockport CSD GOB, 5.375%...................................................................................... 930,226
Buffalo RAN, 4.25%............................................................................................. 7/15/1997
Dutchess County IDA for M&R Associates Series 1984, 3.45%(a)................................................... 12/1/2002
Eagle Tax-Exempt Trust CP Series 1994C-Z Class A, 3.57%(a)..................................................... 6/15/2018
Erie County RAN, 4.25%......................................................................................... 11/19/1997
Guilderland IDA for North Eastern Industrial Park Series 1993 A, 3.55%(a)...................................... 12/1/2008
Jefferson County IDA for Watertown Carthage, 3.60%(a).......................................................... 12/1/2012
Metropolitan Transportation Authority Commuter Facilities Revenue Bonds Series 1991, 3.55%(a).................. 7/1/2021
Montgomery County IDR for Service Merchandise Co., 3.55%(a).................................................... 12/31/2024
Nassau County BAN, 4.50%....................................................................................... 8/15/1997
Nassau County RAN, 4%.......................................................................................... 3/5/1997
New York City GOB Custodial Receipts Series A31, 3.80%(a)...................................................... 8/1/2001
New York City GOB , 3.55%(a)................................................................................... 8/1/2014
New York City GOB Series A, 4.10%(a)........................................................................... 8/1/2022
New York City GOB Series A, 4.10%(a)........................................................................... 8/1/2023
New York City GOB Series A10, 4.25%(a)......................................................................... 8/1/2016
New York City GOB Series B, 3.55%(a)........................................................................... 8/15/2024
New York City GOB Series B-6, 4.05%(a)......................................................................... 8/15/2005
New York City GOB Series C4-97, 4.10%(a)....................................................................... 8/1/1997
New York City GOB Series C4-98, 4.10%(a)....................................................................... 8/1/1998
New York City GOB Series C5-00, 4.10%(a)....................................................................... 8/1/2000
New York City GOB Series D, 3.55%(a)........................................................................... 2/1/2020
New York City GOB Series E, 4%(a).............................................................................. 8/1/2023
New York City GOB Series E2, 4%(a)............................................................................. 8/1/2020
New York City GOB Series E4, 4%(a)............................................................................. 8/1/2021
New York City GOB Series E4, 4%(a)............................................................................. 8/1/2022
New York City GOB Series E5, 4%(a)............................................................................. 8/1/2016
New York City GOB Series E6, 4%(a)............................................................................. 8/1/2019
New York City HDC for Carnegie Park Project, 3.90%(a).......................................................... 12/1/2016
New York City HDC for Columbus Green Project, 3.90%(a)......................................................... 12/1/2009
New York City IDA for Goodwill Project, 3.35%(a)............................................................... 3/1/2000
New York City IDA for Stroheim and Roman, 3.45%(a)............................................................. 12/1/2015
New York City Municipal Water Finance Authority, 3.55%(a)...................................................... 1/10/1997
New York City Municipal Water Finance Authority, 4.10%(a)...................................................... 6/15/2023
New York State ERD/PCR for LILCO Series 85B, 3.25%(a).......................................................... 3/1/2016
New York State ERD/PCR for Rochester Gas & Electric Corporation, 3.40%(a)...................................... 10/1/2014
New York State ERD/PCR for Rochester Gas & Electric Corporation, 3.60%(a)...................................... 11/15/2015
New York State Job Development Authority Series F, 3.70%(a).................................................... 3/1/1999
New York State Local Government Assistance, 3.50%(a)........................................................... 4/1/2022
New York State Local Government Assistance, 3.50%(a)........................................................... 4/1/2025
North Hempstead BAN, 4%........................................................................................ 2/27/1997
Oneida County BAN, 4.25%....................................................................................... 5/9/1997
Onondaga County IDR for Edgecomb Metals Project, 3.70%(a)...................................................... 11/1/2009
Onondaga County IDR for McLane Co. Project, 4.15%(a)........................................................... 11/1/2004
Onondaga County IDR for Pass and Seymour, Inc. Project, 3.30%(a)............................................... 6/15/1997
Oppenheim Ephreta CSD GOB, 5.125%.............................................................................. 6/15/1997
Riverhead CSD TAN, 4.25%....................................................................................... 6/26/1997
Sands Point BAN, 3.80%......................................................................................... 11/20/1997
Suffolk County IDA, 3.70%(a)................................................................................... 11/1/2007
Syossett BAN, 4.25%............................................................................................ 7/18/1997
Syracuse IDA for General Accident Insurance Co. Project, 3.70%(a).............................................. 12/1/2003
Ulster County TAN, 4.25%....................................................................................... 3/26/1997
Westchester County IDR for M and F Associates Project, 4%(a)................................................... 7/1/2000
Yonkers IDR for Consumers Union Facility, 3.60%(a)............................................................. 7/1/2021
Total New York Fund Investments (99.43%) (Cost $151,146,848)...................................................
Other assets, less liabilities (.57%)..........................................................................
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and redemption prices per share on 152,941,552
shares of beneficial interest of $.001 par value outstanding..................................................
<CAPTION>
Buffalo RAN, 4.25%............................................................................................. 1,000
<S> <C>
Dutchess County IDA for M&R Associates Series 1984, 3.45%(a)................................................... 420
Eagle Tax-Exempt Trust CP Series 1994C-Z Class A, 3.57%(a)..................................................... 3,000
Erie County RAN, 4.25%......................................................................................... 2,000
Guilderland IDA for North Eastern Industrial Park Series 1993 A, 3.55%(a)...................................... 3,700
Jefferson County IDA for Watertown Carthage, 3.60%(a).......................................................... 3,500
Metropolitan Transportation Authority Commuter Facilities Revenue Bonds Series 1991, 3.55%(a).................. 5,800
Montgomery County IDR for Service Merchandise Co., 3.55%(a).................................................... 1,600
Nassau County BAN, 4.50%....................................................................................... 2,000
Nassau County RAN, 4%.......................................................................................... 3,000
New York City GOB Custodial Receipts Series A31, 3.80%(a)...................................................... 4,000
New York City GOB , 3.55%(a)................................................................................... 1,500
New York City GOB Series A, 4.10%(a)........................................................................... 2,650
New York City GOB Series A, 4.10%(a)........................................................................... 7,300
New York City GOB Series A10, 4.25%(a)......................................................................... 3,165
New York City GOB Series B, 3.55%(a)........................................................................... 9,300
New York City GOB Series B-6, 4.05%(a)......................................................................... 1,500
New York City GOB Series C4-97, 4.10%(a)....................................................................... 3,900
New York City GOB Series C4-98, 4.10%(a)....................................................................... 1,500
New York City GOB Series C5-00, 4.10%(a)....................................................................... 200
New York City GOB Series D, 3.55%(a)........................................................................... 300
New York City GOB Series E, 4%(a).............................................................................. 1,800
New York City GOB Series E2, 4%(a)............................................................................. 5,400
New York City GOB Series E4, 4%(a)............................................................................. 4,400
New York City GOB Series E4, 4%(a)............................................................................. 5,800
New York City GOB Series E5, 4%(a)............................................................................. 700
New York City GOB Series E6, 4%(a)............................................................................. 3,400
New York City HDC for Carnegie Park Project, 3.90%(a).......................................................... 1,410
New York City HDC for Columbus Green Project, 3.90%(a)......................................................... 900
New York City IDA for Goodwill Project, 3.35%(a)............................................................... 1,045
New York City IDA for Stroheim and Roman, 3.45%(a)............................................................. 1,500
New York City Municipal Water Finance Authority, 3.55%(a)...................................................... 2,000
New York City Municipal Water Finance Authority, 4.10%(a)...................................................... 1,700
New York State ERD/PCR for LILCO Series 85B, 3.25%(a).......................................................... 3,000
New York State ERD/PCR for Rochester Gas & Electric Corporation, 3.40%(a)...................................... 3,000
New York State ERD/PCR for Rochester Gas & Electric Corporation, 3.60%(a)...................................... 3,000
New York State Job Development Authority Series F, 3.70%(a).................................................... 590
New York State Local Government Assistance, 3.50%(a)........................................................... 8,400
New York State Local Government Assistance, 3.50%(a)........................................................... 4,000
North Hempstead BAN, 4%........................................................................................ 3,000
Oneida County BAN, 4.25%....................................................................................... 2,000
Onondaga County IDR for Edgecomb Metals Project, 3.70%(a)...................................................... 1,100
Onondaga County IDR for McLane Co. Project, 4.15%(a)........................................................... 2,560
Onondaga County IDR for Pass and Seymour, Inc. Project, 3.30%(a)............................................... 1,900
Oppenheim Ephreta CSD GOB, 5.125%.............................................................................. 2,500
Riverhead CSD TAN, 4.25%....................................................................................... 3,000
Sands Point BAN, 3.80%......................................................................................... 1,500
Suffolk County IDA, 3.70%(a)................................................................................... 1,630
Syossett BAN, 4.25%............................................................................................ 1,700
Syracuse IDA for General Accident Insurance Co. Project, 3.70%(a).............................................. 4,550
Ulster County TAN, 4.25%....................................................................................... 2,000
Westchester County IDR for M and F Associates Project, 4%(a)................................................... 1,340
Yonkers IDR for Consumers Union Facility, 3.60%(a)............................................................. 4,500
Total New York Fund Investments (99.43%) (Cost $151,146,848)...................................................
Other assets, less liabilities (.57%)..........................................................................
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and redemption prices per share on 152,941,552
shares of beneficial interest of $.001 par value outstanding..................................................
<CAPTION>
Buffalo RAN, 4.25%............................................................................................. 1,005,923
Dutchess County IDA for M&R Associates Series 1984, 3.45%(a)................................................... 423,466
Eagle Tax-Exempt Trust CP Series 1994C-Z Class A, 3.57%(a)..................................................... 3,048,572
Erie County RAN, 4.25%......................................................................................... 2,014,882
Guilderland IDA for North Eastern Industrial Park Series 1993 A, 3.55%(a)...................................... 3,710,579
Jefferson County IDA for Watertown Carthage, 3.60%(a).......................................................... 3,510,672
Metropolitan Transportation Authority Commuter Facilities Revenue Bonds Series 1991, 3.55%(a).................. 5,816,734
Montgomery County IDR for Service Merchandise Co., 3.55%(a).................................................... 1,602,638
Nassau County BAN, 4.50%....................................................................................... 2,026,770
Nassau County RAN, 4%.......................................................................................... 3,094,225
New York City GOB Custodial Receipts Series A31, 3.80%(a)...................................................... 4,099,847
New York City GOB , 3.55%(a)................................................................................... 1,502,473
New York City GOB Series A, 4.10%(a)........................................................................... 2,650,297
New York City GOB Series A, 4.10%(a)........................................................................... 7,300,818
New York City GOB Series A10, 4.25%(a)......................................................................... 3,165,368
New York City GOB Series B, 3.55%(a)........................................................................... 9,300,902
New York City GOB Series B-6, 4.05%(a)......................................................................... 1,500,166
New York City GOB Series C4-97, 4.10%(a)....................................................................... 3,900,437
New York City GOB Series C4-98, 4.10%(a)....................................................................... 1,500,168
New York City GOB Series C5-00, 4.10%(a)....................................................................... 200,022
New York City GOB Series D, 3.55%(a)........................................................................... 300,029
New York City GOB Series E, 4%(a).............................................................................. 1,800,197
New York City GOB Series E2, 4%(a)............................................................................. 5,400,590
New York City GOB Series E4, 4%(a)............................................................................. 4,400,489
New York City GOB Series E4, 4%(a)............................................................................. 5,800,634
New York City GOB Series E5, 4%(a)............................................................................. 700,077
New York City GOB Series E6, 4%(a)............................................................................. 3,400,372
New York City HDC for Carnegie Park Project, 3.90%(a).......................................................... 1,410,153
New York City HDC for Columbus Green Project, 3.90%(a)......................................................... 900,098
New York City IDA for Goodwill Project, 3.35%(a)............................................................... 1,047,397
New York City IDA for Stroheim and Roman, 3.45%(a)............................................................. 1,512,379
New York City Municipal Water Finance Authority, 3.55%(a)...................................................... 2,002,134
New York City Municipal Water Finance Authority, 4.10%(a)...................................................... 1,702,933
New York State ERD/PCR for LILCO Series 85B, 3.25%(a).......................................................... 3,024,779
New York State ERD/PCR for Rochester Gas & Electric Corporation, 3.40%(a)...................................... 3,008,639
New York State ERD/PCR for Rochester Gas & Electric Corporation, 3.60%(a)...................................... 3,005,072
New York State Job Development Authority Series F, 3.70%(a).................................................... 591,849
New York State Local Government Assistance, 3.50%(a)........................................................... 8,423,880
New York State Local Government Assistance, 3.50%(a)........................................................... 4,011,590
North Hempstead BAN, 4%........................................................................................ 3,094,583
Oneida County BAN, 4.25%....................................................................................... 2,051,940
Onondaga County IDR for Edgecomb Metals Project, 3.70%(a)...................................................... 1,103,505
Onondaga County IDR for McLane Co. Project, 4.15%(a)........................................................... 2,569,148
Onondaga County IDR for Pass and Seymour, Inc. Project, 3.30%(a)............................................... 1,902,912
Oppenheim Ephreta CSD GOB, 5.125%.............................................................................. 2,577,528
Riverhead CSD TAN, 4.25%....................................................................................... 3,060,417
Sands Point BAN, 3.80%......................................................................................... 1,503,267
Suffolk County IDA, 3.70%(a)................................................................................... 1,635,030
Syossett BAN, 4.25%............................................................................................ 1,729,244
Syracuse IDA for General Accident Insurance Co. Project, 3.70%(a).............................................. 4,633,715
Ulster County TAN, 4.25%....................................................................................... 2,061,370
Westchester County IDR for M and F Associates Project, 4%(a)................................................... 1,349,231
Yonkers IDR for Consumers Union Facility, 3.60%(a)............................................................. 4,511,293
--------------
Total New York Fund Investments (99.43%) (Cost $151,146,848)................................................... 152,064,671
Other assets, less liabilities (.57%).......................................................................... 876,881
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and redemption prices per share on 152,941,552
shares of beneficial interest of $.001 par value outstanding.................................................. $ 152,941,552
===========
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1996. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 3
RESERVE TAX-EXEMPT TRUST--CALIFORNIA FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1996--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Anaheim Certificate of Participation, 3.40%(a).............................. 8/1/2019 $ 250 $ 252,785
California HFA for Sutter Health Series 1990 B, 3.95%(a).................... 3/1/2020 300 300,032
California School Cash Reserve Project Series A, 4.75%...................... 7/2/1997 500 512,406
California MSR for Public Power, 3.25%(a)................................... 7/1/2022 300 300,826
California RAN, 3.45%....................................................... 6/30/1997 400 401,141
Foothill/Eastern Transportation Toll Road Revenue Bonds Series 95C,
3.40%(a)................................................................... 1/2/2035 1,000 1,002,775
Foothill/Eastern Transportation Toll Road Revenue Bonds, 3.45%(a)........... 1/2/2035 500 501,417
Hemet MHR for Sunwest Resort Village, 3.75%(a).............................. 7/1/2006 1,500 1,509,173
Irvine Ranch Water District Election #198, 3.95%(a)......................... 11/15/2013 500 500,054
Lancaster MHR for Westwood Park Apartments 1985, 3.45%(a)................... 12/1/2007 500 501,401
Los Angeles Community Redevelopment Agency for Baldwin Hills, 3.45%(a)...... 12/1/2014 400 400,942
Los Angeles Community Redevelopment for Promenade Towers Series 1989,
3.50%(a)................................................................... 4/1/2009 400 402,292
Los Angeles USD TRAN, 4.50%................................................. 6/30/1997 500 511,431
Los Angeles Custodial Receipts, 3.85%(a).................................... 7/1/2005 1,300 1,332,845
Orange County Apartment Development Revenue Bonds Issue A of 1991, the Lakes
Project 3.55%, Letter of Credit with Citibank (a).......................... 12/1/2006 1,000 1,002,918
Orange County Sanitation District Capital Improvement Program 1990-92, 3.90%
Letter of Credit with National Westminster (a)............................. 8/1/2015 200 200,021
Pasadena IDA for Rose Bowl Improvement Project, 3.35%(a).................... 12/1/2011 600 601,692
Pico Rivera Community Redevelopment Agency for Rainer Fund Crossroads Plaza
Project, 3.45%(a).......................................................... 12/1/2010 700 701,721
Puerto Rico Government Development Bank CP, 3.50%........................... 2/6/1997 1,000 1,001,052
Redlands CP, 3.75%(a)....................................................... 9/1/2015 1,000 1,002,964
San Bernadino IDA for Gate City, 3.75%(a)................................... 3/1/2005 300 300,031
San Bernadino IDA for Alta Park Project, 3.70%(a)........................... 5/1/2006 200 200,612
San Francisco Yerba Buena Gardens, 3.50%(a)................................. 9/1/2006 1,000 1,002,758
San Jose CP Pre-refunded RAW, 7.90%(a)...................................... 5/1/2010 250 260,920
San Jose IDA for Redevelopment Agency, 3.40%(a)............................. 7/1/2026 1,100 1,102,995
San Mateo TRAN, 4.50%....................................................... 7/1/1997 500 511,022
Santa Clara Electric Revenue Bonds Series 85C, 3.45%(a)..................... 7/1/2010 400 401,133
Santa Clara El Camino Hospital District, 3.45%(a)........................... 8/1/2015 200 200,562
Union City MHR for Skylark Apartments, 3.70%(a)............................. 11/1/2007 1,200 1,202,030
Upland MHR Community Redevelopment Bonds Series B for Northwood Project,
3.90%(a)................................................................... 3/1/2014 300 302,857
Vista MHR for Shadow Ridge Apartments Project, 3.45%(a)..................... 5/1/2005 500 802,277
--------------
Total California Fund Investments (91.67%) (Cost $19,125,643)............... 19,227,085
Other assets, less liabilities (8.33%)...................................... 1,747,385
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 20,974,470 shares of beneficial interest of
$.001 par value outstanding................................................ $ 20,974,470
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1996. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--CONNECTICUT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1996--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Beacon Falls BAN, 4.25%..................................................... 10/23/1997 $1,000 $ 1,009,572
Connecticut DAI for Allen Group Inc., 3.60%(a).............................. 2/1/2013 1,400 1,404,269
Connecticut DAI for Conco Medical Co. Project Series 85, 3.50%(a)........... 11/1/2005 100 100,229
Connecticut DAI for General Accident Insurance Co., 3.64%(a)................ 12/1/2013 1,700 1,700,170
Connecticut DAI for Martin Brower Corp. Series 1985, 3.25%(a)............... 5/1/2005 270 270,723
Connecticut DAI for Regional YMCA Project, 3.70%(a)......................... 6/1/2008 588 588,771
Connecticut DAI for Trudy Corporation Project, 3.40%(a)..................... 9/1/2009 600 601,728
Connecticut DAI for Zotos International Project, 3.80%(a)................... 12/1/2004 1,460 1,464,699
Connecticut Development Authority Health Care Revenue Bonds for Independent
Living Project 1990 Series, 3.35%(a)....................................... 7/1/2015 1,445 1,448,976
Connecticut Development Authority PCR for Central Vermont Public Service,
3.40%(a)................................................................... 12/1/2015 1,400 1,404,032
Connecticut Development Authority PCR for Connecticut Light and Power
Project Series 1993a, 3.50%(a)............................................. 9/1/2028 1,300 1,303,801
Connecticut Development Authority PCR for Western Massachusetts Electric
Co., 3.45%(a).............................................................. 9/1/2028 1,400 1,403,911
Connecticut GOB Series B, 4.75%............................................. 8/15/1997 500 510,449
Connecticut HEF for Charlotte Hungerford Hospital Series B, 3.30%(a)........ 7/1/2010 600 601,632
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
RESERVE TAX-EXEMPT TRUST--CONNECTICUT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1996--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Connecticut HEF for Kingswood Oxford School Issue Series A, 3.70%(a)........ 2/1/2009 $ 560 $ 561,755
Connecticut HEF for Yale New Haven Hospital Series E, 3.60%(a).............. 6/1/2012 570 580,231
Connecticut HEF for Pomfret School Issue Series A, 3.25%(a)................. 7/1/2024 1,385 1,388,092
Connecticut HFR Housing Mortgage Finance Project Series G, 3.40%(a)......... 5/15/2018 1,500 1,502,365
Connecticut State Special Assessment Unemployment Compensation Revenue Bonds
Series C, 3.90%(a)......................................................... 11/15/2001 1,500 1,524,481
Connecticut State Special Tax Transportation Infrastructure 2nd Lien Revenue
Bonds, 3.55%(a)............................................................ 12/1/2010 1,570 1,574,530
Danbury BAN, 4%............................................................. 1/8/1997 500 508,261
Hartford Redevelopment Agency MHR for Underwood Towers Project, 3.35%(a).... 6/1/2020 1,400 1,403,863
Madison BAN, 3.49%.......................................................... 3/19/1997 350 358,403
Metropolitan District of Hartford GOB, 5.90%................................ 12/1/1996 250 250,000
Naugatuck BAN, 3.33%........................................................ 3/27/1997 569 581,756
Puerto Rico Industrial, Medical, and Environmental RAW for Reynolds Metals,
3.80%(a)................................................................... 9/1/2013 1,200 1,211,589
Puerto Rico Government Development Bank Series 85 CP, 3.65%................. 12/12/1996 1,500 1,506,881
Puerto Rico Industrial, Medical, Higher Education and Environmental PCR
Bonds for Facilities Finance Authority, 3.50%(a)........................... 12/1/2015 700 702,046
Thomaston GOB, 3.43%........................................................ 2/20/1997 416 426,765
Tolland BAN, 3.70%.......................................................... 6/12/1997 650 661,662
Windsor Locks GOB, 5.625%................................................... 5/15/1997 575 581,611
Wolcott BAN, 4.25%.......................................................... 8/13/1997 704 715,135
--------------
Total Connecticut Fund Investments (99.54%) (Cost $29,695,015).............. 29,852,388
Other assets, less liabilities (.46%)....................................... 136,996
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 29,989,384 shares of beneficial interest of
$.001 par value outstanding................................................ $ 29,989,384
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1996. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--FLORIDA FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1996--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
FLORIDA -- 68.72%
Boca Raton IDA for Parking Garage Project, 3.825%(a)........................ 12/1/2014 $100 $ 100,010
Broward HFA for Wellby Apartment Project, 3.65%(a).......................... 12/1/2006 100 100,301
Collier HFA for, 3.50%(a)................................................... 12/1/2015 200 200,583
Dade Aviation Facilities Authority Series 84 A, 3.80%(a).................... 10/1/2009 100 100,263
Dade HFA for Hospital Project, 3.80%(a)..................................... 3/1/2025 100 100,270
Dade IDA for Dolphin Stadium Project, 3.60%(a).............................. 1/1/2016 100 100,296
Florida HFA for Oaks Mill Creek, 3.60%(a)................................... 11/1/2007 200 200,494
Gulf Breeze IDA for Series 85, 3.55%(a)..................................... 12/1/2015 200 200,580
Hillsborough PCR for Cannon Coal Convers, 4.10%(a).......................... 5/15/2018 200 200,596
Jacksonville IDA for Coastal Islands Project, 4%(a)......................... 8/1/2008 195 195,021
Lee County IDA for Charter Glade, 3.55%(a).................................. 11/1/2007 200 200,586
Manatee PCR for Florida Power and Light, 4.10%(a)........................... 9/1/2024 100 100,011
Palm Beach Water and Sewer, 4%(a)........................................... 10/1/2011 100 100,011
Port St. Lucie IDR, 3.45%(a)................................................ 1/1/2011 200 200,584
St. Johns HFA for Flagler Hospital, 3.50%(a)................................ 8/1/2016 200 200,585
University of North Florida IDA for Capital Improvement Project, 3.60%(a)... 11/1/2024 100 100,295
LOUISIANA -- 2.86%
Louisiana Offshore Terminal, 4.05%(a)....................................... 9/1/2008 100 100,011
MICHIGAN -- 5.73%
Dearburn EDA for Oakbrook Common Project Series 1993, 3.65%(a).............. 3/1/2025 100 100,010
Michigan Strategic Fund for Detroit Edison Co., 4.10%(a).................... 9/1/2030 100 100,300
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 5
RESERVE TAX-EXEMPT TRUST--FLORIDA FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1996--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
OREGON -- 2.86%
Medford HFA for Rogue Valley Health, 4.10%(a)............................... 10/1/2016 $100 $ 100,011
PENNSYLVANIA -- 2.86%
Schuykill IDA for N. East Power Co., 4.05%(a)............................... 12/1/2011 100 100,011
--------------
Total Florida Fund Investments (83.03%) (Cost $2,895,000)................... 2,900,829
Other assets, less liabilities (16.97%)..................................... 592,913
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 3,493,742 shares of beneficial interest of
$.001 par value outstanding................................................ $ 3,493,742
===========
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1996. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1995--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Billerica GOB, 5.85%........................................................ 10/15/1997 $345 $ 353,634
Duxbury GOB , 5.05%......................................................... 12/1/1996 405 405,000
East Longmeadow GOB, 5.125%................................................. 2/1/1997 260 265,140
Framingham IDA for Perrini Corp., 3.60%(a).................................. 9/30/2005 300 300,900
Massachusetts, Municipal Wholesale Electric Series 1994 C, 3.45%(a)......... 7/1/2019 300 300,859
Massachusetts Dedicated Income Tax Bonds Series B, 3.90%(a)................. 12/1/1997 800 800,085
Massachusetts HEF for Endicott College, 3.55%(a)............................ 10/1/2011 400 400,939
Massachusetts HEF for Clark University, 3.35%(a)............................ 12/1/2004 100 100,276
Massachusetts HEF for Boston University Series H, 3.70%(a).................. 12/1/2015 400 401,860
Massachusetts HEF for Harvard University, 3.45%(a).......................... 2/1/2016 487 488,372
Massachusetts HEF for Harvard University, 3.45%(a).......................... 8/1/2017 200 200,563
Massachusetts HEF for Mount Ida College Series A, 3.35%(a).................. 7/1/2018 400 400,911
Massachusetts HEF Capital Assistance Program Series G-1, 3.30%(a)........... 1/1/2019 300 300,672
Massachusetts HEF Series D, 4%(a)........................................... 1/1/2035 200 200,596
Massachusetts HEF Capital Asset Series E, 4.05%(a).......................... 1/1/2035 700 702,099
Massachusetts HEF for Williams College Series E, 3.40%(a)................... 8/1/2014 400 401,107
Massachusetts HEF for Wellesley College Series B, 3.30%(a).................. 7/1/2022 400 400,036
Massachusetts IDA for KRH Rolls Inc. Project Series 1988, 3.50%(a).......... 5/1/2006 300 301,805
Massachusetts IDA for Cambridge Issue Series 1985, 3.35%(a)................. 10/1/2010 600 601,658
Massachusetts IFA for Composite Easy Day, 3.70%(a).......................... 7/1/2006 180 180,455
Massachusetts IFA for Governor Dummer Academy, 3.55%(a)..................... 7/1/2026 500 501,206
Massachusetts IFA for Groton School, 3.25%(a)............................... 6/1/2019 200 200,541
Massachusetts IFA for Holyoke Water Power Project, 3.50%(a)................. 5/1/2022 300 300,847
Massachusetts IFA for Quamco Series B, 3.45%(a)............................. 9/1/2001 300 300,835
Massachusetts Showa Womens Institute of Boston, 4%(a)....................... 3/15/2004 500 500,056
Massachusetts GOB, 6.90%.................................................... 6/1/1997 300 304,488
Taunton GOB, 5.375%......................................................... 3/1/1997 200 203,527
Westfield BAN, 4.15%(a)..................................................... 5/1/1997 600 602,984
--------------
Total Massachusetts Fund Investments (95.71%) (Cost $10,405,152)............ 10,421,451
Other assets, less liabilities (4.29%)...................................... 467,072
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption price per share on 10,888,523 shares of beneficial interest of
$.001 par value outstanding................................................ $ 10,888,523
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1996. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 6
RESERVE TAX-EXEMPT TRUST--NEW JERSEY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1995--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Atlantic Highlands BAN, 4.25%............................................... 1/31/1997 $1,000 $ 1,015,341
Burlington BAN, 3.69%....................................................... 6/13/1997 1,000 1,017,488
East Orange BAN, 4.625%..................................................... 12/12/1996 1,191 1,244,310
East Rutherford TAN, 4.25%.................................................. 4/25/1997 1,000 1,027,628
Emerson County BAN, 3.57%................................................... 2/06/1997 300 308,837
Essex County Improvement Authority GOB, 3.25%(a)............................ 12/01/2025 2,000 2,005,410
Fair Lawn BAN, 4%........................................................... 8/1/1997 1,000 1,014,095
Haddenfield Temp Note, 4.25%................................................ 7/3/1997 1,450 1,477,645
Jersey City GOB, 4.90%...................................................... 12/15/1996 250 255,825
Millburn Township BAN, 3.79%................................................ 12/27/1996 646 668,903
Monmouth GOB, 3.55%(a)...................................................... 8/1/2016 100 100,301
Morristown GOB, 5.30%....................................................... 7/15/1997 310 318,845
New Jersey Economic Recovery Notes, 3.60%(a)................................ 8/1/2008 900 902,664
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 4.05%(a)............. 12/1/2027 2,700 2,707,694
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 4.05%(a)............. 12/1/2027 2,300 2,306,586
New Jersey EDA for Economic Growth Bond Series F, 3.25%(a).................. 8/1/2014 770 772,061
New Jersey EDA for Lawrenceville School, 3.40%(a)........................... 7/1/2026 1,000 1,002,650
New Jersey EDA for St. Peters School Series 1995, 3.40%(a).................. 1/1/2010 1,260 1,263,601
New Jersey EDA for Trailer Marine Transportation Corp Project, 3.55%(a)..... 2/1/2002.. 400 400,039
New Jersey EDA for Volvo of American Corp, 3.916%(a)........................ 12/1/2004 2,900 2,900,310
New Jersey EDA/PCR, 3.20%(a)................................................ 9/1/2012 400 401,067
New Jersey HCF Hospital Capital Asset, 3.25%(a)............................. 7/01/2035 400 401,089
New Jersey Sports Expo Authority Series 92C, 3.20%(a)....................... 9/01/2024 2,700 2,721,751
New Jersey Transportation Authority Series 1997, 3.50%...................... 1/3/1997 1,500 1,502,582
New Jersey Turnpike Authority General Series 91D, 3.30%(a).................. 1/01/2018 2,800 2,836,316
Ocean County BAN, 4.25%..................................................... 6/20/1997 1,000 1,021,322
Port Authority of New York and New Jersey Special Obligation Revenue,
4.10%(a)................................................................... 5/1/2019 1,800 1,805,378
Puerto Rico IGOB, 3.65%..................................................... 12/12/1996 2,000 2,009,175
Washington Township GOB, 5.30%.............................................. 10/1/1997 315 321,128
--------------
Total New Jersey Fund Investments (96.66%) (Cost $35,426,675)............... 35,730,041
Other assets, less liabilities (3.34%)...................................... 1,235,359
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 36,965,400 shares of beneficial interest of
$.001 par value outstanding................................................ $ 36,965,400
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1996. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SECURITY TYPE ABBREVIATIONS:
<TABLE>
<S> <C> <C>
BAN --
CP --
CSD --
DAI --
EDA --
ERN --
ERD --
GDB --
GOB --
HCF --
HDC --
HEF --
HFA --
HFR --
IDA --
IDR --
IFA --
MHR --
MSR --
MTA --
PCR --
RAN --
RAW --
TAN --
TRAN --
USD --
<CAPTION>
BAN Bond Anticipation Notes
<S> <C>
CP Certificate of Participation
CSD Central School District
DAI Development Authority Industrial Development Refunding Bonds
EDA Economic Development Authority Revenue Bonds
ERN Economic Recovery Notes
ERD Energy Research and Development Authority
GDB Government Development Bonds
GOB General Obligation Bonds
HCF Health Care Facilities Revenue Bonds
HDC Housing Development Corporation Bonds
HEF Health and Educational Facilities Revenue Bonds
HFA Health Facilities Authority Revenue Bonds
HFR Housing Finance Agency Revenue Bonds
IDA Industrial Development Authority Revenue Bonds
IDR Industrial Development Agency Revenue Bonds
IFA Industrial Finance Authority
MHR Multifamily Housing Revenue Bonds
MSR Modesto Irrigation District of Santa Clara and Redding City
MTA Metropolitan Transportation Authority
PCR Pollution Control Revenue Bonds
RAN Revenue Anticipation Notes
RAW Revenue Anticipation Warrants
TAN Tax Anticipation Notes
TRAN Tax & Revenue Anticipation Notes
USD Unified School District
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
RESERVE TAX-EXEMPT TRUST ("TRUST")
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996--(UNAUDITED)
<TABLE>
<CAPTION>
CALIFORNIA FUND
---------------
<S> <C>
ASSETS:
Investments, at value (identified cost -- $19,125,643).................................. $19,227,085
Cash.................................................................................... 1,764,843
---------------
Total Assets.......................................................................... 20,991,928
---------------
LIABILITIES:
Accrued expenses........................................................................ 17,458
---------------
Total Liabilities..................................................................... 17,458
---------------
NET ASSETS................................................................................ $20,974,470
=============
NET ASSETS CONSIST OF:
Shares of beneficial interest, $.001 par value, unlimited number of shares authorized... $ 20,974
Paid-in capital in excess of par........................................................ 20,953,496
---------------
NET ASSETS -- Equivalent to $1.00 per share based on 20,974,470 shares of beneficial
interest outstanding.................................................................... $20,974,470
=============
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
NOVEMBER 30, 1996--(UNAUDITED)
<TABLE>
<CAPTION>
FLORIDA FUND
------------
<S> <C>
ASSETS:
Investments, at value (identified cost -- $2,895,000)..................................... $2,900,829
Cash...................................................................................... 596,018
------------
Total Assets............................................................................ 3,496,847
------------
LIABILITIES:
Accrued expenses.......................................................................... 3,105
------------
Total Liabilities....................................................................... 3,105
------------
NET ASSETS.................................................................................. $3,493,742
===========
NET ASSETS CONSIST OF:
Shares of beneficial interest, $.001 par value, unlimited number of shares authorized..... $ 3,494
Paid-in capital in excess of par.......................................................... 3,490,248
------------
NET ASSETS -- Equivalent to $1.00 per share based on 3,493,742 shares of beneficial interest
outstanding............................................................................... $3,493,742
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1996--(UNAUDITED)
<TABLE>
<CAPTION>
RESERVE NEW YORK
TAX-EXEMPT TRUST RESERVE TAX-EXEMPT TRUST
---------------- -------------------------------------------------------------------
NEW YORK CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS NEW JERSEY
FUND FUND FUND FUND FUND FUND
---------------- ---------- ----------- ------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME (Note 1)............ $2,586,459 $ 242,235 $ 561,190 $42,788 $ 170,078 $611,380
---------------- ---------- ----------- ------- ------------- ----------
EXPENSES (Note 2)
Management fee.................... 374,397 36,610 84,039 6,360 25,986 91,213
Shareholder servicing,
administration and general
office expenses................. 189,439 15,484 36,486 3,026 9,480 44,311
Distribution assistance (Note
3).............................. 132,686 14,461 26,304 1,249 1,799 35,420
Equipment expense................. 29,433 2,819 6,248 555 1,751 6,911
Professional fees................. 19,911 2,000 4,654 354 1,264 5,210
Occupancy costs................... 11,696 1,084 2,509 895 683 2,752
Stationery, printing and
supplies........................ 19,298 1,708 4,207 244 1,094 4,567
Trustee fees...................... 4,424 420 1,059 37 272 1,131
Other expenses.................... 4,951 1,171 1,758 1,863 1,857
---------------- ---------- ----------- ------- ------------- ----------
Total Expenses.................. 786,235 75,757 167,264 12,720 44,192 193,372
---------------- ---------- ----------- ------- ------------- ----------
Less: Management fees and other
expenses voluntarily waived by
Investment Manager.............. (2,578)
---------------- ---------- ----------- ------- ------------- ----------
Net Expenses...................... 786,235 75,757 167,264 12,720 41,614 193,372
---------------- ---------- ----------- ------- ------------- ----------
NET INVESTMENT INCOME............... $1,800,224 $ 166,478 $ 393,926 $30,068 $ 128,464 $418,008
=============== ========= ========== ======== ============ ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
STATEMENTS OF CHANGES IN NET ASSETS--(UNAUDITED)
<TABLE>
<CAPTION>
RESERVE NEW YORK
TAX-EXEMPT TRUST RESERVE TAX-EXEMPT TRUST
---------------------------- ----------------------------------------------------------
NEW YORK FUND CALIFORNIA FUND CONNECTICUT FUND
---------------------------- --------------------------- ---------------------------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, YEAR ENDED NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
1996 MAY 31, 1996 1996 1996 1996 1996
------------ ------------ ------------ ----------- ------------ -----------
<S> <C> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income paid to
shareholders as dividends
(Note 1)...................... $(1,800,224) $ (4,189,736) $ (166,478) $ (269,905) $ (393,926) $ (804,738)
------------ ------------ ------------ ----------- ------------ -----------
FROM CAPITAL SHARE TRANSACTIONS
(at net asset value of $1 per
share):
Net proceeds from sale of
shares........................ 360,153,385 636,980,296 58,068,597 51,508,091 45,788,404 98,890,288
Net asset value of shares issued
on reinvestment of
dividends..................... 1,800,224 4,189,736 166,478 269,905 393,926 804,738
------------ ------------ ------------ ----------- ------------ -----------
Subtotal...................... 361,953,609 641,170,032 58,235,075 51,777,996 46,182,330 99,695,026
Cost of shares redeemed......... (334,466,463) (668,621,594) (49,872,574) (50,253,639) (50,994,250) (91,519,680)
------------ ------------ ------------ ----------- ------------ -----------
Increase (decrease) in net assets
derived from capital share
transactions and from investment
operations...................... 27,487,146 (27,451,562) 8,362,501 1,524,357 (4,811,920) 8,175,346
NET ASSETS:
Beginning of period............... 125,454,406 152,905,968 12,611,969 11,087,612 34,801,304 26,625,958
------------ ------------ ------------ ----------- ------------ -----------
End of period..................... $152,941,552 $125,454,406 $20,974,470 $12,611,969 $29,989,384 $34,801,304
============ =========== ============ ========== ============ ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
STATEMENTS OF CHANGES IN NET ASSETS--(UNAUDITED)
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
----------------------------------------------------------------------------
FLORIDA FUND
-------------
JUNE 24, 1996
(COMMENCEMENT MASSACHUSETTS FUND NEW JERSEY FUND
OF --------------------------- ----------------------------
OPERATIONS) SIX MONTHS SIX MONTHS
THROUGH ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31,
1996 1996 1996 1996 1996
------------- ------------ ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM INVESTMENT OPERATIONS:
Net investment income paid to shareholders
as dividends (Note 1).................... $ (30,068) $ (128,464) $ (288,434) $ (418,008) $ (797,253)
------------- ------------ ----------- ------------ ------------
FROM CAPITAL SHARE TRANSACTIONS
(at net asset value of $1 per share):
Net proceeds from sale of shares........... 15,440,163 20,985,685 44,175,742 106,914,373 189,336,696
Net asset value of shares issued on
reinvestment of dividends................ 30,068 128,464 288,434 418,008 797,253
------------- ------------ ----------- ------------ ------------
Subtotal................................. 15,470,231 21,114,149 44,464,176 107,332,381 190,133,949
Cost of shares redeemed.................... (11,976,489) (19,180,989) (45,677,798) (111,392,782) (170,715,398)
------------- ------------ ----------- ------------ ------------
Increase (decrease) in net assets derived
from capital share transactions and from
investment
operations................................. 3,493,742 1,933,160 (1,213,622) (4,060,401) 19,418,551
NET ASSETS:
Beginning of period.......................... 0 8,955,363 10,168,985 41,025,801 21,607,250
------------- ------------ ----------- ------------ ------------
End of period................................ $ 3,493,742 $10,888,523 $ 8,955,363 $36,965,400 $ 41,025,801
============== ============ ========== ============ ===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CONNECTICUT, MASSACHUSETTS,
CALIFORNIA, FLORIDA AND NEW JERSEY FUNDS) ("TRUST")
(THE NY TRUST AND TRUST ARE COLLECTIVELY REFERRED TO AS "TRUSTS")
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES:
------------------------------
The Trusts are registered under the Investment Company Act of 1940 as
nondiversified, open-end management investment companies. The policies
summarized below are consistently followed in the preparation of their
financial statements in conformity with generally accepted accounting
principles.
A. The Trust and NY Trust shares of beneficial interest authorized are
unlimited. The Trust's shares are divided into six series, Connecticut Fund,
Interstate Fund, Massachusetts Fund, California Fund, New Jersey and Florida
Fund. These financial statements and notes apply only to the Connecticut,
Massachusetts, California, New Jersey and Florida Funds of Reserve Tax-Exempt
Trust and to the New York Fund of Reserve New York Tax-Exempt Trust.
B. Securities are stated at value which represents amortized cost plus
interest accrued to date. Under Securities and Exchange Commission Rule 2a-7,
the Trusts use amortized cost to value each Fund, by which investments are
valued at cost and the difference between the cost of each instrument and its
value at maturity is accrued into income on a straight line basis over the
number of days to maturity, irrespective of intervening changes in interest
rates or market values of investments. The maturity of floating or variable
rate instruments in which the Trusts may invest will be deemed to be, for
floating rate instruments (1) following, and for variable rate instruments the
longer of (1) or (2) following: (1) the notice period required before the Fund
is entitled to receive payment of the principal amount of the instrument; (2)
the period remaining until the instrument's next rate adjustment, for purposes
of Rule 2a-7 and for computing each portfolio's average weighted life to
maturity.
C. It is the Trusts' policy to comply with the requirements of Subchapter M of
the Internal Revenue Code and to distribute all income to its shareholders.
Accordingly, no Federal income tax provision is required.
D. Investments are recorded as of the date of their purchase and sale.
Interest income is determined on the basis of interest accrued, premium
amortized, and discount accreted.
E. Net investment income on investments is distributed to shareholders daily
and automatically reinvested in additional shares.
F. Each Fund is charged only for its direct or allocated (in proportion to net
assets or number of shareholder accounts) share of expenses.
2. MANAGEMENT FEE, SHAREHOLDER SERVICING COSTS AND TRANSACTIONS WITH AFFILIATES:
----------------------------------------------------------------------------
Reserve Management Company, Inc. ("RMCI") manages the Trusts' investments,
effects purchases and sales thereof, and absorbs certain promotional expenses.
For such services RMCI receives management fees from each Fund at an annual
rate of .50% of the first $500 million, .475% of the next $500 million, .45%
of the next $500 million, .425% of the next $500 million and .40% of any
excess over $2 billion of the average daily closing net assets.
Also, under the current Service Agreement, RMCI was reimbursed $279,152 (New
York Fund), $56,921 (Connecticut Fund), $16,407 (Massachusetts Fund), $24,686
(California Fund), $5,111 (Florida Fund) and $66,739 (New Jersey Fund) during
the six months ended November 30, 1996 for expenditures made on behalf of the
Trusts' for personnel, office space and equipment and shareholder accounting
and administrative services, to conduct the Trusts' business. The manager
waived management fees and expenses of $5,399 on the Massachusetts Fund. At
November 30, 1996 the New York, Connecticut, Massachusetts, California,
Florida and New Jersey Funds, had accrued expenses of $13,196, $13,937,
$8,221, $17,458, $3,105 and $33,051, respectively, due to RMCI.
3. DISTRIBUTION ASSISTANCE:
-----------------------
Pursuant to a Distribution Plan, each Trust will make payments of up to .20%
per annum of the average net asset value of the Trust qualified shareholder
accounts as to which the payee or RMCI has rendered assistance in distributing
its shares.
11
<PAGE> 12
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CONNECTICUT, MASSACHUSETTS,
CALIFORNIA, FLORIDA AND NEW JERSEY FUNDS) ("TRUST")
(THE NY TRUST AND TRUST ARE COLLECTIVELY REFERRED TO AS "TRUSTS")
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)--(CONTINUED)
4. MANAGEMENT'S USE OF ESTIMATES:
--------------------------------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the dates of the
financial statements and the reported amounts of income and expenses during
the reporting periods. Actual results could differ from those estimates.
5. INVESTMENT CONCENTRATION:
-------------------------
The New York, Connecticut, Massachusetts, California, Florida and New Jersey
Funds invest substantially all of their assets in portfolios of tax-exempt
debt obligations primarily consisting of issuers of each of the respective
states. The issuers' abilities to meet their obligations may be affected by
economic, regional or political developments. In order to reduce the credit
risk associated with such factors, 85.24%, 75.48%, 82.45%, 80.75%, 77.07% and
67.06% of the New York, Connecticut, Massachusetts, California, Florida and
New Jersey Funds' investments, respectively, were backed by letters of credit,
bond insurance of financial institutions and financial guaranty assurance
agencies.
6. COMPONENTS OF NET ASSETS:
---------------------------
At 11/30/96, the following funds had these components of net assets:
<TABLE>
<CAPTION>
NEW YORK CONNECTICUT MASSACHUSETTS NEW JERSEY
------------ ----------- ------------- -----------
<S> <C> <C> <C> <C>
Par Value.............................................. $ 152,941 $ 29,989 $ 10,889 $ 36,965
Paid-in-Capital........................................ 152,788,611 29,959,395 10,877,634 36,928,435
------------ ----------- ------------- -----------
Net Assets............................................. $152,941,552 $29,989,384 $ 10,888,523 $36,965,400
============= ============ ============ ============
</TABLE>
------------------------
FEDERAL TAX INFORMATION
The dividends distributed by each Fund are exempt interest dividends for
Federal tax purposes.
12
<PAGE> 13
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CONNECTICUT, MASSACHUSETTS,
CALIFORNIA, FLORIDA AND NEW JERSEY FUNDS) ("TRUST")
(THE NY TRUST AND TRUST ARE COLLECTIVELY REFERRED TO AS "TRUSTS")
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)--(CONTINUED)
SUPPLEMENTARY INFORMATION (UNAUDITED) (FOR ONE SHARE OUTSTANDING DURING EACH
PERIOD):
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS FOR FISCAL YEARS ENDED MAY 31,
ENDED ---------------------------------------------------------------------
NEW YORK FUND NOVEMBER 30, 1996 1996 1995 1994 1993 1992
- ------------------------------------ ----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
------- ---------- ---------- ---------- ---------- ----------
Income from investment operations... .0193 .0381 .0352 .0249 .0281 .0421
Expenses............................ .0052 .0105 .0099 .0099 .0103 .0104
------- ---------- ---------- ---------- ---------- ----------
Net investment income(1)............ .0141 .0276 .0253 .0150 .0178 .0317
Dividends from net investment
income(1)......................... (.0141) (.0276) (.0253) (.0150) (.0178) (.0317)
------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period...... $1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
============== ========= ======= ======= ======= =======
Total Return........................ 2.83%(2) 2.76% 2.53% 1.50% 1.78% 3.17%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------
Net assets in thousands, end of
period............................ 158,530 125,454 152,906 148,387 149,785 156,567
Ratio of expenses to average net
assets............................ 1.03%(2) 1.04% .98% .98% 1.02% 1.03%
Ratio of net investment income to
average net assets................ 2.80%(2) 2.72% 2.48% 1.48% 1.76% 3.09%
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 17, 1994
SIX MONTHS YEAR ENDED (COMMENCEMENT OF
ENDED MAY 31, OPERATIONS) THROUGH
CALIFORNIA FUND NOVEMBER 30, 1996 1996 MAY 31, 1995
- -------------------------------------------------- ----------------- ---------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period.............. $1.0000 $ 1.0000 $1.0000
------- ---------- -------
Income from investment operations................. .0196 .0379 .0243
Expenses.......................................... .0052 .0106 .0062(2)
------- ---------- -------
Net investment income(1).......................... .0144 .0273 .0181
Dividends from net investment income(1)........... (.0144) (.0273) (.0181)
------- ---------- -------
Net asset value, end of period.................... $1.0000 $ 1.0000 $1.0000
============== ========= ===============
Total Return...................................... 2.87%(2) 2.73% 1.81%
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------
Net assets in thousands, end of period............ 9,813 12,612 11,088
Ratio of expenses to average net assets........... 1.03%(2) 1.04% 1.02%(2)
Ratio of net investment income to average net
assets.......................................... 2.83%(2) 2.67% 2.95%(2)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FOR FISCAL YEARS ENDED MAY 31,
ENDED ---------------------------------------------------------------------
CONNECTICUT FUND NOVEMBER 30, 1996 1996 1995 1994 1993 1992
- ------------------------------------ ----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
------- ---------- ---------- ---------- ---------- ----------
Income from investment operations... .0186 .0368 .0352 .0250 .0269 .0400
Expenses............................ .0050 (.0102) .0098(3) .0086(3) .0087(3) .0091(3)
------- ---------- ---------- ---------- ---------- ----------
Net investment income(1)............ .0136 .0266 .0254 .0164 .0182 .0309
Dividends from net investment
income(1)......................... (.0136) .0266 (.0254) (.0164) (.0182) (.0309)
------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period...... $1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
============== ========= ======= ======= ======= =======
Total Return........................ 2.72%(2) 2.66% 2.54% 1.64% 1.82% 3.09%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------
Net assets in thousands, end of
period............................ 28,432 34,801 26,626 128,693 157,115 191,101
Ratio of expenses to average net
assets............................ 1.00%(2) 1.01% .89%(3) .85%(3) .86%(3) .90%(3)
Ratio of net investment income to
average net assets................ 2.70%(2) 2.61% 2.33% 1.62% 1.81% 3.05%
</TABLE>
13
<PAGE> 14
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CONNECTICUT, MASSACHUSETTS,
CALIFORNIA, FLORIDA AND NEW JERSEY FUNDS) ("TRUST")
(THE NY TRUST AND TRUST ARE COLLECTIVELY REFERRED TO AS "TRUSTS")
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)--(CONTINUED)
SUPPLEMENTARY INFORMATION (UNAUDITED) (FOR ONE SHARE OUTSTANDING DURING EACH
PERIOD):
<TABLE>
<CAPTION>
JUNE 24, 1996
(COMMENCEMENT OF
OPERATIONS) THROUGH
FLORIDA FUND NOVEMBER 30, 1996(2)
- ------------------------------------ --------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $ 1.0000
-------
Income from investment operations... .0148
Expenses............................ .0044
-------
Net investment income(1)............ .0104
Dividends from net investment
income(1)......................... (.0104)
-------
Net asset value, end of period...... $ 1.0000
=================
Total Return........................ 2.37%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------
Net assets in thousands, end of
period............................ 2,885
Ratio of expenses to average net
assets............................ 1.00%
Ratio of net investment income to
average net assets................ 2.36%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FOR FISCAL YEARS ENDED MAY 31,
ENDED ---------------------------------------------------------------------
MASSACHUSETTS FUND NOVEMBER 30, 1996 1996 1995 1994 1993 1992
- ------------------------------------ ----------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period............................ $1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
------- ---------- ---------- ---------- ---------- ----------
Income from investment operations... .0184 .0362 .0335 .0227 .0257 .0386
Expenses(3)......................... .0043 .0086 .0070 .0052 .0048 .0045
------- ---------- ---------- ---------- ---------- ----------
Net investment income(1)............ .0141 .0276 .0265 .0175 .0209 .0341
Dividends from net investment
income(1)......................... (.0141) (.0276) (.0265) (.0175) (.0209) (.0341)
------- ---------- ---------- ---------- ---------- ----------
Net asset value, end of period...... $1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
============== ========= ======= ======= ======= =======
Total Return........................ 2.81%(2) 2.76% 2.65% 1.75% 2.09% 3.41%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------
Net assets in thousands, end of
period............................ 10,314 8,955 10,169 14,824 13,305 7,186
Ratio of expenses to average net
assets(3)......................... .85%(2) .84% .69% .51% .46% .44%
Ratio of net investment income to
average net assets................ 2.79%(2) 2.71% 2.60% 1.73% 2.04% 3.28%
</TABLE>
<TABLE>
<CAPTION>
JUNE 21, 1994
SIX MONTHS YEAR ENDED (COMMENCEMENT OF
ENDED MAY 31, OPERATIONS) THROUGH
NEW JERSEY FUND NOVEMBER 30, 1996 1996 MAY 31, 1995
- -------------------------------------------------- ----------------- ---------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period.............. $1.0000 $ 1.0000 $1.0000
------- ---------- -------
Income from investment operations................. .0186 .0369 .0330
Expenses.......................................... .0052 .0106 .0087(2)(3)
------- ---------- -------
Net investment income(1).......................... .0134 .0263 .0243
Dividends from net investment income(1)........... (.0134) (.0263) (.0243)
------- ---------- -------
Net asset value, end of period.................... $1.0000 $ 1.0000 $1.0000
============== ========= ===============
Total Return...................................... 2.69%(2) 2.63% 2.43%
RATIOS/SUPPLEMENTAL DATA
- --------------------------------------------------
Net assets in thousands, end of period............ 29,034 41,026 21,607
Ratio of expenses to average net assets........... 1.03%(2) 1.04% 1.01%(2)(3)
Ratio of net investment income to average net
assets.......................................... 2.67%(2) 2.59% 2.82%(2)
</TABLE>
- ---------------
(1) Based on compounding of daily dividends. Not indicative of future results.
(2) Annualized.
(3) During these periods the Manager waived all or a portion of fees and
expenses. If there were no reductions in expenses, the actual expenses would
have been 1.00% for the Connecticut and Massachusetts Funds.
14
