<PAGE> 1
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.
LOGO
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
PENNSYLVANIA TAX-EXEMPT FUND
FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1997
(UNAUDITED)
<PAGE> 2
RESERVE NEW YORK TAX-EXEMPT TRUST--NEW YORK TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bleecker HDC Terrace Apt Project S85, 3.85% (a)...................................... 7/1/2015 $ 2,470 $ 2,485,678
Brentwood USD TAN, 4.25%............................................................. 6/30/1998 2,600 2,648,631
Buffalo RAN, 4.40%................................................................... 8/5/1998 1,500 1,507,737
Connetquot CSD TAN, 4%............................................................... 6/25/1998 2,000 2,022,903
Eagle Tax-Exempt Trust COP Series 1994C-2 Class A, 4.08% (a)......................... 8/15/2024 3,000 3,033,542
Erie County RAN, 4.50%............................................................... 6/25/1998 1,000 1,023,282
Falconer GOB, 4.55%.................................................................. 6/15/1998 490 501,952
Guilderland IDA for North Eastern Industrial Park Series 1993 A, 4% (a).............. 12/1/2008 3,600 3,610,711
Jefferson County IDA for Watertown Carthage, 3.70% (a)............................... 12/1/2012 3,500 3,509,934
Leroy CSD RAN, 4%.................................................................... 6/26/1998 3,705 3,772,178
Massapequa USD BAN, 4.25%............................................................ 10/29/1998 1,000 1,007,162
Monroe-Woodbury GOB, 5.625%.......................................................... 5/15/1998 640 664,291
Montgomery County IDA for Service Merchandise Co., 3.90% (a)......................... 12/31/2024 1,600 1,602,906
New York City GOB, 3.75% (a)......................................................... 2/15/2016 9,000 9,041,610
New York City GOB Custodial Receipts Series A31, 3.90% (a)........................... 7/2/2000 4,000 4,050,268
New York City GOB Series A, 3.85% (a)................................................ 8/1/2023 400 401,243
New York City GOB Series A7, 3.85% (a)............................................... 8/1/2020 4,000 4,012,510
New York City GOB Series B, 3.85% (a)................................................ 8/15/2024 3,400 3,410,629
New York City GOB Series B5, 3.85% (a)............................................... 8/15/2022 1,000 1,003,142
New York City GOB Series B6, 3.85% (a)............................................... 8/15/2005 800 802,514
New York City GOB Series B7, 3.85% (a)............................................... 8/15/2018 3,200 3,210,008
New York City GOB Series B8, 3.85% (a)............................................... 8/15/2024 8,500 8,526,571
New York City GOB Series D, 3.85% (a)................................................ 2/1/2020 300 300,959
New York City GOB Series E2, 3.85% (a)............................................... 8/1/2020 2,800 2,808,757
New York City GOB Series E2, 3.85% (a)............................................... 8/1/2021 1,900 1,905,942
New York City GOB Series E4, 3.85% (a)............................................... 8/1/2021 800 802,502
New York City GOB Series E4, 3.85% (a)............................................... 8/1/2021 1,000 1,003,127
New York City GOB Series E4, 3.85% (a)............................................... 8/1/2022 5,600 5,617,513
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2009 1,000 1,003,127
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2010 1,000 1,003,127
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2015 3,000 3,009,382
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2019 1,000 1,003,127
New York City GOB Series E6, 3.85% (a)............................................... 8/1/2019 3,600 3,611,258
New York City HDC for Parkgate Tower, 3.85% (a)...................................... 12/1/2007 500 501,447
New York City IDA for Goodwill Project, 3.90% (a).................................... 3/1/2000 955 957,607
New York City IDA for Stroheim & Roman, 3.90% (a).................................... 12/1/2015 1,500 1,513,523
New York City Municipal Water Finance Authority, 4% (a).............................. 6/15/2025 1,000 1,001,686
New York State HFA for Mt. Sinai School, 3.85% (a)................................... 11/1/2014 1,800 1,805,045
New York State Dormitory Authority Public Library, 3.80% (a)......................... 7/1/2022 1,000 1,002,879
New York State ERD for Brooklyn Union Gas, 3.85% (a)................................. 12/1/2020 2,000 2,005,351
New York State ERD G&E Revenue Bonds, 3.75% (a)...................................... 2/1/2029 2,150 2,156,073
New York State ERD/PCR for LILCO Series 85B, 3.60% (a)............................... 3/1/2016 3,000 3,027,149
New York State Job Development Authority Series F, 4.30% (a)......................... 3/1/1999 1,630 1,635,377
New York State Job Development Authority Series 84, 4.30% (a)........................ 3/1/1999 2,960 2,969,764
New York State Job Development Authority Series 85, 4.30% (a)........................ 3/1/1999 1,270 1,274,189
New York State Local Government Assistance 1993A, 3.80% (a).......................... 4/1/2022 12,700 12,735,048
New York State Local Government Assistance Series B, 3.85% (a)....................... 4/1/2025 3,900 3,911,428
North Hempstead BAN, 4.25%........................................................... 2/26/1998 4,287 4,429,695
North Hempstead BAN, 4.10%........................................................... 10/29/1998 3,000 3,016,028
Onondaga County IDR for Edgecomb Metals Project, 3.85% (a)........................... 11/1/2009 1,100 1,103,506
Onondaga County IDR for McLane Co. Project, 4.35% (a)................................ 11/1/2004 3,200 3,211,396
Oyster Bay BAN, 4%................................................................... 2/27/1998 675 695,489
Queensbury UFSD BAN, 4.25%........................................................... 8/7/1998 4,000 4,063,987
Rotterdam Mononassen GOB, 4.75%...................................................... 6/15/1998 1,185 1,216,767
Suffolk County IDA for Target Rock Corporation Revenue Bonds, 3.70% (a).............. 2/1/2007 4,000 4,011,666
Suffolk County IDA for Satellite Transmission Systems, Inc., 4% (a).................. 11/1/2007 1,530 1,534,930
Syracuse BAN, 3.90%.................................................................. 12/19/1997 2,000 2,074,295
Syracuse IDA for General Accident Insurance Co. Project, 3.80% (a)................... 12/1/2003 4,550 4,636,158
Triboro Bridge and Tunnel Authority Special Obligation Series 1994, 3.75% (a)........ 1/1/2024 4,800 4,814,150
West Hampton Beach TAN, 4.25%........................................................ 6/29/1998 2,000 2,028,001
Yonkers IDA Civic Revenue Bonds for Consumers Union, 3.75% (a)....................... 7/1/2019 1,400 1,403,753
Yonkers IDR for Consumers Union Facility, 3.75% (a).................................. 7/1/2021 4,500 4,512,064
---------------
Total New York Fund Investments (99.34%) (Cost $162,099,426)......................... 163,166,674
Other assets, less liabilities (.66%)................................................ 1,088,782
---------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and redemption prices
per share on 164,255,456 shares of beneficial interest of $.001 par value
outstanding......................................................................... $ 164,255,456
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. 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 TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Anaheim COP, 3.55% (a)...................................................... 8/1/2019 $ 250 $ 252,835
California Community Development Authority Series A3, 3.70% (a)............. 5/15/2025 2,300 2,303,775
California HFA for Sutter Health Series 1990 B, 3.70% (a)................... 3/1/2020 400 401,209
California MSR Public Power Authority, 3.25% (a)............................ 7/1/2022 300 300,748
California PCR for Pacific Gas & Electric Co. Series 96D, 3.65%............. 12/4/1997 3,000 3,005,700
California RAN, 4.50%....................................................... 6/30/1998 500 506,862
California School District Cash Reserve Program Series A, 4.75%............. 7/2/1998 1,000 1,024,834
California Statewide CDA for House Ear Institute Series 93A, 3.65% (a)...... 12/1/2018 1,500 1,513,373
East Bay Municipal Water and Sewer Utility, 6% (a).......................... 6/1/1998 500 520,118
Foothill/Eastern Transportation Toll Road Revenue Bonds Series 95C, 3.55%
(a)........................................................................ 1/2/2035 1,000 1,002,734
Foothill/Eastern Transportation Toll Road Revenue Bonds, 3.60% (a).......... 1/2/2035 500 501,387
Grand Terrace HFA for Community Redevelopment Agency, 4.10% (a)............. 12/1/2011 3,800 3,810,770
Hemet MHR for Sunwest Resort Village, 3.70% (a)............................. 7/1/2006 1,500 1,508,838
Hermosa Beach EDA for Parking District Facility Project, 3.65% (a).......... 12/1/2023 2,000 2,005,219
Irvine Improvement Bond Assessment District 85, 3.60% (a)................... 9/2/2011 2,000 2,005,874
Irvine Ranch PCR for Water District Election #282, 3.70% (a)................ 11/15/2013 400 401,197
Irvine Ranch Public Facilities and Infrastructure Authority Series 85, 3.55%
(a)........................................................................ 11/1/2010 1,300 1,303,574
Kern High School District TRAN, 4.50%....................................... 8/20/1998 1,000 1,016,858
Lancaster MHR for Westwood Park Apartments 1985, 3.60% (a).................. 12/1/2007 500 501,357
Los Angeles Community Redevelopment Agency for Baldwin Hills, 3.75% (a)..... 12/1/2014 400 401,065
Los Angeles Community Redevelopment for Promenade Towers Series 1989, 3.80%
(a)........................................................................ 4/1/2009 3,175 3,194,720
Los Angeles Custodial Receipts, 3.80% (a)................................... 7/1/2005 1,890 1,919,771
Los Angeles Housing Authority Malibu Meadows Project Series 91-A, 4.20%
(a)........................................................................ 12/1/2015 1,000 1,003,089
Los Angeles IDA for International Airport Authority, 3.85% (a).............. 12/1/2025 1,000 1,003,151
Los Angeles USD TRAN, 4.50%................................................. 6/30/1998 1,000 1,022,479
Oakland USD TRAN, 4.25%..................................................... 10/28/1998 1,000 1,007,334
Orange County Apartment Development Revenue Bonds Issue A of 1991, the Lakes
Project 3.75%, Letter of Credit with Citibank (a).......................... 12/1/2006 1,000 1,002,795
Orange County Coast Assessment District 88-1, 3.70% (a)..................... 9/2/2018 1,300 1,304,018
Orange County Sanitation District Capital Improvement Program 1990-92, 3.75%
Letter of Credit with National Westminster (a)............................. 8/1/2015 200 200,605
Pasadena IDA for Rose Bowl Improvement Project, 3.65% (a)................... 12/1/2011 600 601,679
Pico Rivera Community Redevelopment Agency for Rainer Fund Crossroads Plaza
Project, 3.75% (a)......................................................... 12/1/2010 700 701,895
Puerto Rico Electric Power Authority Series 11, 3.80% (a)................... 7/1/2022 500 509,740
Puerto Rico Government Development Bank Series 97, 3.80%.................... 12/4/1997 2,000 2,003,748
Redlands COP, 3.60% (a)..................................................... 9/1/2015 965 967,676
Sacramento Municipal Utility District Series 1, 3.70%....................... 1/21/1998 3,000 3,005,474
San Bernadino HFR for Alta Park Project, 4.20% (a).......................... 5/1/2006 2,200 2,206,766
San Bernadino IDA for Gate City, 4.40% (a).................................. 3/1/2005 200 202,113
San Francisco HFR for Bayside Village Series 85, 3.95% (a).................. 12/1/2005 300 301,955
San Francisco HFR for Yerba Buena Gardens, 3.70% (a)........................ 9/1/2006 1,000 1,002,849
San Joaquin USD TRAN, 4.50%................................................. 1/15/1998 1,000 1,051,743
San Jose HFR Redevelopment Agency, 3.60% (a)................................ 7/1/2026 2,700 2,707,323
Santa Clara Electric Revenue Bonds Series 85C, 3.60% (a).................... 7/1/2010 300 300,832
Santa Clara El Cammino Hospital District, 3.70% (a)......................... 8/1/2015 200 200,549
Union City MHR for Skylark Apartments, 4.20% (a)............................ 11/1/2007 1,500 1,502,396
Upland MHR Community Redevelopment Bonds Series B for Northwood Project,
4.40% (a).................................................................. 3/1/2014 300 303,135
Vista MHR for Shadow Ridge Apartments Project, 3.95% (a).................... 5/1/2005 800 802,322
--------------
Total California Fund Investments (99.52%) (Cost $54,026,030)............... 54,318,484
Other assets, less liabilities (.48%)....................................... 261,545
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 54,580,029 shares of beneficial interest of
$.001 par value outstanding................................................ $ 54,580,029
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
RESERVE TAX-EXEMPT TRUST--CONNECTICUT TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Connecticut DAI for Allen Group Inc., 3.80% (a)............................. 2/1/2013 $1,400 $ 1,404,081
Connecticut DAI for Conco Medical Co. Project Series 85, 3.80% (a).......... 11/1/2005 700 701,809
Connecticut DAI for General Accident Insurance Co., 3.80% (a)............... 12/1/2013 1,700 1,732,187
Connecticut DAI for Martin Brower Corp. Series 1985, 3.70% (a).............. 5/1/2005 170 170,468
Connecticut DAI for Regional YMCA Project, 3.80% (a)........................ 6/1/2008 537 538,683
Connecticut DAI for Trudy Corporation Project, 3.70% (a).................... 9/1/2009 500 501,419
Connecticut DAI for Zotos International Project, 3.90% (a).................. 12/1/2004 1,655 1,659,951
Connecticut Development Authority Health Care Revenue Bonds for Independent
Living Project 1990 Series, 3.70% (a)...................................... 7/1/2015 2,145 2,151,065
Connecticut Development Authority PCR for Central Vermont Public Service,
3.50% (a).................................................................. 12/1/2015 1,400 1,403,759
Connecticut Development Authority PCR for Connecticut Light and Power
Project Series 1993, 3.85% (a)............................................. 9/1/2028 1,300 1,303,847
Connecticut Development Authority PCR for Western Massachusetts Electric Co.
Series 1993A, 3.70% (a).................................................... 9/1/2028 1,700 1,704,793
Connecticut HEF for Charlotte Hospital Series B, 3.65% (a).................. 7/1/2010 500 501,383
Connecticut HEF for Kingswood Oxford School Issue Series A, 3.80% (a)....... 2/1/2009 420 421,224
Connecticut HEF for New Haven Hospital RAW Series E, 3.80% (a).............. 6/1/2012 500 509,447
Connecticut HEF for Pomfret School Issue Series A, 3.65% (a)................ 7/1/2024 1,300 1,303,380
Connecticut HEF for Sharon Hospital Issue Series A, 3.60% (a)............... 9/1/2027 1,000 1,002,466
Connecticut HEF for Yale University Series T, 3.90% (a)..................... 7/1/2029 400 401,109
Connecticut HEF for Yale University Series T, 3.95% (a)..................... 7/1/2029 1,600 1,604,476
Connecticut HFA BDS Project, 3.85%, (a)..................................... 5/15/2018 1,400 1,402,376
Connecticut State GOB, 6%................................................... 3/1/1998 1,000 1,020,959
Connecticut State GOB, 3.75% (a)............................................ 5/15/2014 1,500 1,504,426
Connecticut State Special Assessment Unemployment Compensation RAW Series C,
3.90% (a).................................................................. 11/15/2001 1,500 1,524,322
Connecticut State Special Assessment Unemployment Compensation RAW Series
1993B Pre-refunded, 7.20% (a).............................................. 2/15/1998 460 481,899
Connecticut State Special Tax Transportation Infrastructure 2nd Lien Revenue
Bonds, 3.80% (a)........................................................... 12/1/2010 1,570 1,574,559
Darien Unlimited Tax GOB, 6.25%............................................. 8/15/1998 400 414,072
Hamden BAN, 4%.............................................................. 8/14/1998 1,000 1,013,185
Hartford Redevelopment Agency MHR for Underwood Towers Project, 3.75% (a)... 6/1/2020 1,400 1,403,920
New Canaan BAN, 3.75%....................................................... 3/10/1998 1,000 1,028,038
Puerto Rico Electric Power Authority Series 11, 3.80% (a)................... 7/1/2022 500 509,740
Puerto Rico Industrial, Medical, and Environmental RAW for Reynolds Metals,
3.80% (a).................................................................. 9/1/2013 1,200 1,211,463
Puerto Rico Government Development Bank Series 97, 3.80%.................... 12/4/1997 1,500 1,502,811
Puerto Rico University GOB, 4.55%........................................... 6/1/1998 500 513,233
Simsbury GOB, 4.60%......................................................... 1/15/1998 410 417,617
--------------
Total Connecticut Fund Investments (99.83%) (Cost $34,330,621).............. 34,538,167
Other assets, less liabilities (.17%)....................................... 58,158
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 34,596,325 shares of beneficial interest of
$.001 par value outstanding................................................ $ 34,596,325
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
ARIZONA -- .16%
Apache County IDA for Tucson Electric Power Company, 3.85% (a).............. 12/15/2018 $200 $ 200,344
CALIFORNIA -- .25%
Grand Terrace HFA for Community Redevelopment Agency, 4.10% (a)............. 12/1/2011 100 100,283
San Bernadino HFR for Alta Park Project, 4.20% (a).......................... 5/1/2006 200 200,615
CONNECTICUT -- .25%
Hartford Redevelopment Agency MHR for Underwood Towers Project, 3.75% (a)... 6/1/2020 400 401,120
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 5
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
FLORIDA -- 82.47%
Boca Raton IDA for Parking Garage Project, 4.325% (a)....................... 12/1/2014 $400 $ 404,114
Broward MHR for Welleby Apartment Project Series 1984, 3.90% (a)............ 12/1/2006 400 401,179
Collier IDA for Retirement Rental Housing Revenue Bonds HFA, 3.90% (a)...... 12/1/2015 200 200,588
Dade IDA for Aviation Authority Facilities Series 84A, 4.30% (a)............ 10/1/2009 100 100,298
Dade IDA for Dolphin Stadium Project, 3.85% (a)............................. 1/1/2016 300 300,888
Dade HFA for Hospital Revenue Bonds for Miami Children's Hospital Project,
3.85% (a).................................................................. 3/1/2025 200 200,549
Dade HFA for Hospital Revenue Bonds for Miami Children's Hospital Project,
3.80% (a).................................................................. 9/1/2025 200 200,549
Duval HFA for Lakes of Mayport Apartment Project, 3.90% (a)................. 12/1/2009 400 401,192
Florida General Service Division Facilities RAW, 7.75%...................... 9/1/1998 305 325,430
Gulf Breeze IDR for Series 85, 4% (a)....................................... 12/1/2015 200 200,591
Jacksonville IDR for Coastal Islands Project, 3.95% (a)..................... 8/1/2008 155 155,496
Manatee PCR for Florida Power and Light, 3.85% (a).......................... 9/1/2024 100 100,311
Putnam PCR for Florida Power and Light, 3.85% (a)........................... 9/1/2024 100 100,311
Port St. Lucie PCR for Florida Power and Light, 3.80% (a)................... 1/1/2011 200 200,583
Tampa Occupational License Tax Bonds, 3.85% (a)............................. 5/1/2027 200 200,552
University of North Florida Capital Improvement Project, 3.90% (a).......... 11/1/2024 300 300,893
CHICAGO -- 2.43%
Chicago O'Hare International Airport American Airlines Series 94, 3.85%
(a)........................................................................ 12/1/2017 100 100,315
MASSACHUSETTS -- 2.43%
Massachusetts HEF for Harvard University, 3.70% (a)......................... 2/1/2016 300 300,855
Massachusetts IFA for Governor Drummer Academy, 3.75% (a)................... 7/1/2026 200 200,506
MARYLAND -- 2.46%
Baltimore IDA for Mayor & City Council, 4.25% (a)........................... 8/1/2016 200 200,600
MISSOURI -- .25%
Cole IDA for Mobine Manufacturing Series 85, 4.15% (a)...................... 12/1/2015 200 201,354
NEW JERSEY -- .10%
New Jersey EDA for Volvo of American Corp., 4.378 (a)....................... 12/1/2004 200 202,018
OREGON -- .25%
Medford HFA for Rogue Valley Health, 3.95% (a).............................. 10/1/2016 100 100,318
--------------
Total Florida Fund Investments (98.26%) (Cost $5,977,181)................... 6,001,852
Other assets, less liabilities (1.74%)...................................... 106,562
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 6,108,414 shares of beneficial interest of
$.001 par value outstanding................................................ $ 6,108,414
===========
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Boston Water and Sewer Commission Revenue Bonds 1994A, 3.65% (a)............ 11/1/2024 $200 $ 200,567
Chelsea GOB, 5.75%.......................................................... 4/15/1998 315 319,512
Dennis GOB, 4.50%........................................................... 3/1/1998 470 476,274
Dighton-Rehoboth Regional School District GOB, 6.50%........................ 6/1/1998 190 198,577
Framingham IDA for Perrini Corp., 4% (a).................................... 9/30/2005 300 300,905
Hingham BAN, 4%............................................................. 12/19/1997 300 311,439
Massachusetts Dedicated Income Tax Bonds Series B, 3.95% (a)................ 12/1/1997 200 200,631
Massachusetts Dedicated Income Tax Bonds Series E, 3.95% (a)................ 12/1/1997 100 100,315
Massachusetts HEF for Endicott College Series A, 3.75% (a).................. 10/1/2011 300 300,762
Massachusetts HEF for Clark University, 3.95% (a)........................... 12/1/2004 100 100,294
Massachusetts HEF for Boston University Series H, 3.80% (a)................. 12/1/2015 400 404,331
Massachusetts HEF for Harvard University, 3.70% (a)......................... 2/1/2016 587 588,674
Massachusetts HEF for Harvard University, 3.70% (a)......................... 8/1/2017 200 200,570
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 6
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Massachusetts HEF for Mount College Series A, 3.75% (a)..................... 7/1/2018 $400 $ 401,016
Massachusetts HEF Capital Assistance Program Series G-1, 3.60% (a).......... 1/1/2019 300 300,775
Massachusetts HEF Capital Asset Series D, 3.75% (a)......................... 1/1/2035 400 401,144
Massachusetts HEF Capital Asset Series E, 3.80% (a)......................... 1/1/2035 600 601,729
Massachusetts HEF for Williams College Series E, 3.75% (a).................. 8/1/2014 400 401,154
Massachusetts HEF for Wellesley College Series B, 3.70% (a)................. 7/1/2022 400 401,219
Massachusetts IDA for KRH Rolls Inc. Project Series 1988, 4.40% (a)......... 5/1/2006 500 503,514
Massachusetts IFA for Composite Easy Day, 3.75% (a)......................... 7/1/2006 160 160,409
Massachusetts IFA for Emerson College, 3.75% (a)............................ 11/1/2025 500 501,423
Massachusetts IFA for Griffin Realty Series B, 3.80% (a).................... 7/1/2008 645 646,666
Massachusetts IFA for Groton School, 3.70% (a).............................. 6/1/2019 200 200,557
Massachusetts IFA for Holyoke Water Power Project, 3.60% (a)................ 5/1/2022 300 300,835
Massachusetts IFA for Quamco Series B, 3.60% (a)............................ 9/1/2001 800 802,224
Massachusetts Showa Women's Institute of Boston, 3.90% (a).................. 3/15/2004 600 601,873
Millford GOB, 6.20%......................................................... 11/1/1998 135 138,364
Natick BAN, 4.25%........................................................... 8/7/1998 500 507,841
Needham GOB, 5%............................................................. 6/15/1998 835 859,343
Puerto Rico Industrial, Medical, Higher Education and Environmental Bonds
for PCR Facility Authority, 4.05% (a)...................................... 12/1/2015 200 200,606
Watertown BAN, 4.25%........................................................ 5/13/1998 345 353,484
West Newbury BAN, 4.25%..................................................... 5/6/1998 375 379,298
Westfield BAN, 4.50%........................................................ 5/8/1998 500 513,591
--------------
Total Massachusetts Fund Investments (98.68%) (Cost $12,786,312)............ 12,879,916
Other assets, less liabilities (1.32%)...................................... 172,531
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 13,052,447 shares of beneficial interest of
$.001 par value outstanding................................................ $ 13,052,447
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--NEW JERSEY TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Atlantic City Improvement Authority Pooled Government Loan Program, 3.65%
(a)........................................................................ 7/1/2026 $2,000 $ 2,005,573
Clark Township TAN, 4.04%................................................... 4/8/1998 1,250 1,266,525
Cranford GOB, 4%............................................................ 2/27/1998 1,291 1,330,728
East Rutherford BAN, 4.31%.................................................. 1/23/1998 498 510,679
Eatontown BAN, 4.25%........................................................ 12/17/1997 550 572,473
Essex County Improvement Authority GOB, 3.65% (a)........................... 12/01/2025 2,000 2,005,427
Evesham Fire District BAN, 4.50%............................................ 4/14/1998 675 693,307
Fairfield BAN, 4%........................................................... 12/17/1997 600 622,153
Haddonfield Temp Notes, 4.30%............................................... 7/3/1998 950 969,038
Jersey City School Promissory Notes, 4.375%................................. 9/18/1998 2,000 2,023,495
Millville BAN, 4.10%........................................................ 7/8/1998 1,319 1,328,532
Monmouth County Authority Pooled Government Loan Program, 3.60% (a)......... 8/1/2016 100 100,275
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 3.65% (a)............ 12/1/2027 300 300,834
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 3.65% (a)............ 12/1/2027 1,000 1,002,779
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 3.70% (a)............ 12/1/2027 3,450 3,459,721
New Jersey EDA for Economic Growth Bond Series F, 3.65% (a)................. 8/1/2014 740 742,053
New Jersey EDA for Lawrenceville School, 3.65% (a).......................... 7/1/2026 1,000 1,002,816
New Jersey EDA for PCR Series 95, 3.65% (a)................................. 9/1/2012 800 802,219
New Jersey EDA for St. Peters School Series 1995, 3.85% (a)................. 1/1/2010 1,145 1,148,267
New Jersey EDA for Trailer Marine Corps Project, 3.70% (a).................. 2/1/2002 400 401,216
New Jersey EDA for Volvo of American Corp, 4.378% (a)....................... 12/1/2004 3,500 3,535,322
New Jersey EDA for RJB Associate Project, 3.95% (a)......................... 8/1/2008 900 902,658
New Jersey HCF Hospital Capital Asset, 3.70% (a)............................ 7/01/2035 400 401,118
New Jersey Sports Expo Authority Series 92C, 3.70% (a)...................... 9/01/2024 2,800 2,824,655
New Jersey Turnpike Authority General Series 91D, 3.70% (a)................. 1/01/2018 3,700 3,749,768
Port Authority of New York and New Jersey Versatile Structured Obligations,
3.85% (a).................................................................. 5/1/2019 3,800 3,810,926
Puerto Rico Government Development Bank-Adjustable Rate Bonds, 3.80% (a).... 12/4/1997 2,000 2,003,748
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
RESERVE TAX-EXEMPT TRUST--NEW JERSEY TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Rahway BAN, 4%.............................................................. 12/23/1997 $ 500 $ 518,882
Trenton Temp Notes, 4%...................................................... 12/18/1997 1,000 1,038,317
Vernon Board of Education Temp Notes, 4%.................................... 1/16/1998 1,000 1,035,265
--------------
Total New Jersey Fund Investments (97.68%) (Cost $41,701,336)............... 42,108,769
Other assets, less liabilities (2.32%)...................................... 999,675
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 43,108,444 shares of beneficial interest of
$.001 par value outstanding................................................ $ 43,108,444
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--PENNSYLVANIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Allegheny County for University of Pittsburgh Project Series 85, 3.75%
(a)........................................................................ 7/1/2015 $ 500 $ 503,046
Allegheny County IDA for Longwood at Oakmont, 3.85% (a)..................... 7/1/2027 600 601,743
Beaver County TRAN, 3.75%................................................... 2/19/1998 1,000 1,001,849
Bucks County IDA for Edgecomb Metals Co, Inc. 3.85% (a)..................... 10/1/2009 500 503,176
Butler County IDA for Lutheran Welfare RAW, 3.80% (a)....................... 11/1/2026 500 501,470
Dauphin County HEF General Authority Variable Rate Bonds, 4.13% (a)......... 11/1/2017 500 500,992
Delaware Valley Finance Authority Series 85, 3.80% (a)...................... 12/1/2020 600 601,767
Delaware Valley PCR for Peco Energy Corporation, 3.70%...................... 12/5/1997 500 502,281
Delaware Valley PCR for Philadelphia Electric Co., 3.75% (a)................ 8/1/2016 600 601,713
Emmaus General Authority Local Government Revenue Bonds, 3.95% (a).......... 3/1/2024 1,600 1,604,853
Montgomery County TRAN, 3.75%............................................... 1/21/1998 1,000 1,001,849
Philadelphia HEF for Kings College, 4.50% (a)............................... 11/1/1998 200 201,383
Philadelphia HEF for Temple University, 3.90% (a)........................... 10/1/2009 600 601,880
Philadelphia School District TRAN, 4.50%.................................... 6/30/1998 500 511,006
Philadelphia TRAN, 4.50%.................................................... 6/30/1998 500 511,006
Philadelphia Hospital Authority for Children's Hospital, 3.80% (a).......... 3/1/2027 600 601,740
Philadelphia PCR Gas and Electric, 3.75%.................................... 12/4/1997 1,000 1,001,130
Puerto Rico EPR Series 11, 3.80% (a)........................................ 7/1/2022 500 509,740
Puerto Rico Industrial, Medical Environmental PCR, 4.05% (a)................ 12/1/2015 500 501,515
University of Pittsburgh HEF Capital Bond Project, 3.75% (a)................ 1/1/2019 500 503,047
Western Wayne School District GOB, 5%....................................... 10/15/1998 100 101,483
York County General Authority Pooled Finance, 3.95% (a)..................... 9/1/2026 500 501,498
--------------
Total Pennsylvania Fund Investments (97.45%) (Cost $13,405,414)............. 13,470,167
Other assets, less liabilities (2.55%)...................................... 352,887
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 13,823,054 shares of beneficial interest of
$.001 par value outstanding................................................ $ 13,823,054
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
RESERVE TAX-EXEMPT TRUST--PENNSYLVANIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
SECURITY TYPE ABBREVIATIONS:
<TABLE>
<S> <C> <C>
BAN -- Bond Anticipation Notes
COP -- Certificate of Participation
CSD -- Central School District
DAI -- Development Authority
Industrial Development
Refunding Bonds
EDA -- Economic Development Authority
Revenue Bonds
ERD -- Energy Research and
Development Authority
GOB -- General Obligation Bonds
HCF -- Health Care Facilities Revenue
Bonds
HDC -- Housing Development
Corporation Bonds
HEF -- Health and Educational
Facilities Revenue Bpnds
HFA -- Health Facilities Authority
Revenue Bonds
HFR -- Housing Finance Revenue Bonds
IDA -- Industrial Development
Authority Revenue Bonds
IDR -- Industrial Development Agency
Revenue Bonds
IFA -- Industrial Finance Authority
MHR -- Multifamily Housing Revenue
Bonds
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>
RESERVE TAX-EXEMPT TRUST
STATEMENT OF ASSETS AND LIABILITIES
SIX MONTHS ENDED NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
FLORIDA FUND
------------
<S> <C>
ASSETS:
Investments, at value (identified cost -- $3,680,000).................................... $3,689,647
Cash..................................................................................... 420,058
------------
Total Assets........................................................................... 4,109,705
------------
LIABILITIES:
Accrued expenses......................................................................... 321
------------
Total Liabilities...................................................................... 321
------------
NET ASSETS................................................................................. $4,109,384
===========
NET ASSETS CONSIST OF:
Shares of beneficial interest, $.001 par value, unlimited number of shares authorized.... $ 4,109
Paid-in capital in excess of par......................................................... 4,105,275
------------
NET ASSETS -- Equivalent to $1.00 per share based on 4,109,384 shares of beneficial
interest outstanding..................................................................... $4,109,384
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
RESERVE NEW YORK
TAX-EXEMPT TRUST RESERVE TAX-EXEMPT TRUST
---------------- --------------------------------------------------------------------------
NEW YORK CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS NEW JERSEY PENNSYLVANIA*
FUND FUND FUND FUND FUND FUND FUND
---------------- ---------- ----------- -------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME (Note 1)............ $3,223,504 $682,265 $ 593,610 $102,683 $ 261,120 $729,664 $103,731
---------------- ---------- ----------- -------- ------------- ---------- ------------
EXPENSES
Management fee.................... 442,433 95,513 83,065 14,362 36,476 102,847 13,983
Shareholder servicing,
administration and general
office expenses................. 188,565 33,936 26,256 4,357 9,780 46,142 5,884
Distribution assistance (Note
3).............................. 153,958 38,000 24,816 5,500 1,806 38,849 5,559
Equipment expense................. 23,554 4,798 3,598 594 1,456 5,718 813
Professional fees................. 13,211 4,483 3,389 483 1,375 3,649 578
Occupancy costs................... 9,841 2,004 1,505 248 609 2,390 340
Stationery, printing and
supplies........................ 5,417 3,506 2,731 441 1,036 5,654 646
Trustee fees...................... 1,502 287 231 33 96 367 46
Other expenses.................... 18,864 3,645 2,158 640 1,490 3,018 117
---------------- ---------- ----------- -------- ------------- ---------- ------------
Total Expenses.................. 857,345 186,172 147,749 26,658 54,124 208,634 27,966
---------------- ---------- ----------- -------- ------------- ---------- ------------
Less: Management fees and other
expenses voluntarily waived by
Investment Manager..............
---------------- ---------- ----------- -------- ------------- ---------- ------------
Net Expenses...................... 857,345 186,172 147,749 26,658 54,124 208,634 27,966
---------------- ---------- ----------- -------- ------------- ---------- ------------
NET INVESTMENT INCOME............... $2,366,159 $496,093 $ 445,861 $ 76,025 $ 206,996 $521,030 $ 75,765
=============== ======== ========== ======== ============ ========== ===========
</TABLE>
- ---------------
* Pennsylvania commenced operations on September 12, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
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 YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30 MAY 31, NOVEMBER 30, MAY 31,
1997 1997 1997 1997 1997 1997
------------- ------------- ------------ ------------- ------------ -------------
<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)...................... $ (2,366,159) $ (3,838,918) $ (496,093) $ (498,099) $ (445,861) $ (797,967)
------------- ------------- ------------ ------------- ------------ -------------
FROM CAPITAL SHARE TRANSACTIONS
(at net asset value of $1 per
share):
Net proceeds from sale of
shares........................ 350,200,088 676,647,327 104,881,595 153,856,260 49,183,226 104,926,291
Net asset value of shares issued
on reinvestment of
dividends..................... 2,366,159 3,838,918 496,093 498,099 445,861 797,967
------------- ------------- ------------ ------------- ------------ -------------
Subtotal...................... 352,566,247 680,486,245 105,377,688 154,354,359 49,629,087 105,724,258
Cost of shares redeemed......... (341,490,875) (652,760,567) (81,750,055) (136,013,932) (48,529,265) (107,029,059)
------------- ------------- ------------ ------------- ------------ -------------
Net increase (decrease) in net
assets derived from capital
share transactions and from
investment operations........... 11,075,372 27,725,678 23,627,633 18,340,427 1,099,822 (1,304,801)
NET ASSETS:
Beginning of period............... 153,180,084 125,454,406 30,952,396 12,611,969 33,496,503 34,801,304
------------- ------------- ------------ ------------- ------------ -------------
End of period..................... $ 164,255,456 $ 153,180,084 $ 54,580,029 $ 30,952,396 $ 34,596,325 $ 33,496,503
============ ============ =========== ============ =========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
STATEMENTS OF CHANGES IN NET ASSETS--(UNAUDITED)
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
--------------------------------------------------------------------------------------------------------------------
FLORIDA FUND
--------------------------------- PENNSYLVANIA FUND
JUNE 24, 1996 ------------------
(COMMENCEMENT MASSACHUSETTS FUND NEW JERSEY FUND SEPTEMBER 12, 1997
OF --------------------------- ----------------------------- (COMMENCEMENT
SIX MONTHS OPERATIONS) SIX MONTHS SIX MONTHS OF OPERATIONS)
ENDED THROUGH ENDED YEAR ENDED ENDED YEAR ENDED THROUGH
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30,
1997 1997 1997 1997 1997 1997 1997
----------------- ------------- ------------ ------------ ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE)
IN NET
ASSETS
FROM
INVESTMENT
OPERATIONS:
Net
investment
income
paid
to
shareholders
as dividends
(Note 1).. $ (76,025) $ (92,773) $ (206,996) $ (285,186) $ (521,030) $ (909,418) $ (75,765)
------------ ------------ ------------ ------------ ------------- ------------- ------------
FROM
CAPITAL
SHARE
TRANSACTIONS
(at net
asset
value of
$1 per
share):
Net
proceeds
from
sale
of
shares... 31,883,261 38,626,682 23,466,028 52,472,123 118,147,351 223,428,579 25,718,558
Net
asset
value
of
shares
issued
on
reinvestment
of
dividends... 76,025 92,773 206,996 285,186 521,030 909,418 75,765
------------ ------------ ------------ ------------ ------------- ------------- ------------
Subtotal... 31,959,286 38,719,455 23,673,024 52,757,309 118,668,381 224,337,997 25,794,323
Cost of
shares
redeemed... (29,960,256) (34,610,071) (23,655,186) (48,678,063) (115,012,037) (225,911,698) (11,971,269)
------------ ------------ ------------ ------------ ------------- ------------- ------------
Net
increase
(decrease)
in net
assets
derived
from
capital
share
transactions
and from
investment
operations... 1,999,030 4,109,384 17,838 4,079,246 3,656,344 (1,573,701) 13,823,054
NET ASSETS:
Beginning
of
period... 4,109,384 0 13,034,609 8,955,363 39,452,100 41,025,801 0
------------ ------------ ------------ ------------ ------------- ------------- ------------
End of
period... $ 6,108,414 $ 4,109,384 $ 13,052,447 $ 13,034,609 $ 43,108,444 $ 39,452,100 $ 13,823,054
============ ============ ============ ============ ============= ============= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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
non-diversified, open-end 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 seven series, California Fund,
Connecticut Fund, Florida Fund, Interstate Fund, Massachusetts Fund, New
Jersey Fund and Pennsylvania Fund. These financial statements and notes apply
only to the California, Connecticut, Florida, Massachusetts, New Jersey and
Pennsylvania 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 $260,954 (New
York Fund), $52,659 (California Fund), $39,868 (Connecticut Fund), $6,796
(Florida Fund), $15,842 (Massachusetts Fund), $66,938 (New Jersey Fund) and
$8,424 (Pennsylvania Fund) during the six months ended November 30, 1997 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. At November 30, 1997, the New York, California,
Connecticut, Florida, Massachusetts, New Jersey and Pennsylvania Funds, had
accrued expenses of $12,282, $4,261, $2,416, $452, $783, $3,365 and $1,136,
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.
12
<PAGE> 13
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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, California, Connecticut, Florida, Massachusetts, New Jersey and
Pennsylvania 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, 70.24%, 73.25%, 66.76%, 92.58%,
64.29%, 65.03% and 58.60% of the New York, California, Connecticut, Florida,
Massachusetts, New Jersey and Pennsylvania 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 11/30/97, the following funds had these components of net assets:
<TABLE>
<CAPTION>
NEW YORK CALIFORNIA CONNECTICUT FLORIDA
------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Par Value............................................... $ 164,255 $ 54,580 $ 34,596 $ 6,108
Paid-in-Capital......................................... 164,091,201 54,525,449 34,561,729 6,102,306
------------ ----------- ----------- ----------
Net Assets.............................................. $164,255,456 $54,580,029 $34,596,325 $6,108,414
============= ============ ============ ==========
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS NEW JERSEY PENNSYLVANIA
------------ ----------- -----------
<S> <C> <C> <C> <C>
Par Value............................................... $ 13,052 $ 43,108 $ 13,823
Paid-in-Capital......................................... 13,039,395 43,065,336 13,809,231
------------ ----------- -----------
Net Assets.............................................. $ 13,052,447 $43,108,444 $13,823,054
============= ============ ============
</TABLE>
------------------------
FEDERAL TAX INFORMATION
The dividends distributed by each Fund are exempt interest dividends for
Federal tax purposes.
13
<PAGE> 14
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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, 1997 1997 1996
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0184 .0352 .0381
Expenses........................................ .0049 .0105 .0105
------- ------- -------
Net investment income(1)........................ .0135 .0247 .0276
Dividends from net investment income(1)......... (.0135) (.0247) (.0276)
------- ------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000
============== ======= =======
Total Return.................................... 2.70%(2) %2.47 %2.76
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 164,255 153,180 125,454
Ratio of expenses to average net assets......... .97%(2) %1.04 %1.04
Ratio of net investment income to average net
assets........................................ 2.67%(2) %2.43 %2.72
<CAPTION>
NEW YORK FUND 1995 1994 1993
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <<C> <C> <C>
Net asset value, beginning of period............ $ 1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0352 .0249 .0281
Expenses........................................ .0099 .0099 .0103
------- ------- -------
Net investment income(1)........................ .0253 .0150 .0178
Dividends from net investment income(1)......... (.0253) (.0150) (.0178)
------- ------- -------
Net asset value, end of period.................. $ 1.0000 $ 1.0000 $ 1.0000
======= ======= =======
Total Return.................................... %2.53 %1.50 %1.78
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 152,906 148,387 149,785
Ratio of expenses to average net assets......... % .98 % .98 %1.02
Ratio of net investment income to average net
assets........................................ %2.48 %1.48 %1.76
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 17, 1994
SIX MONTHS YEAR ENDED YEAR ENDED (COMMENCEMENT OF
ENDED MAY 31, MAY 31, OPERATIONS) THROUGH
CALIFORNIA FUND NOVEMBER 30, 1997 1997 1996 MAY 31, 1995
- ------------------------------------------------ ----------------- ---------- ---------- -------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000 $1.0000
------- ---------- ---------- -------
Income from investment operations............... .0179 .0341 .0379 .0243
Expenses........................................ .0049 .0102 .0106 .0062
------- ---------- ---------- -------
Net investment income(1)........................ .0130 .0239 .0273 .0181
Dividends from net investment income(1)......... (.0130) (.0239) (.0273) (.0181)
------- ---------- ---------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000 $1.0000
============== ========= ========= ===============
Total Return.................................... 2.60%(2) 2.39% 2.73% 1.81%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 54,580 30,952 12,612 11,088
Ratio of expenses to average net assets......... .97%(2) 1.03% 1.04% 1.02%(2)
Ratio of net investment income to average net
assets........................................ 2.60%(2) 2.40% 2.67% 2.95%(2)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FOR FISCAL YEARS ENDED MAY 31,
ENDED ---------------------------------------
CONNECTICUT FUND NOVEMBER 30, 1997 1997 1996
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0179 .0341 .0368
Expenses........................................ .0044 (.0098) (.0102)
------- ------- -------
Net investment income(1)........................ .0135 .0243 .0266
Dividends from net investment income(1)......... (.0135) (.0243) .0266
------- ------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000
============== ======= =======
Total Return.................................... 2.70%(2) %2.43 %2.66
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 34,596 33,497 34,801
Ratio of expenses to average net assets......... .89%(2) %0.97 %1.01
Ratio of net investment income to average net
assets........................................ 2.68%(2) %2.39 %2.61
<CAPTION>
CONNECTICUT FUND 1995 1994 1993
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <<C> <C> <C>
Net asset value, beginning of period............ $ 1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0352 .0250 .0269
Expenses........................................ .0098(3) .0086(3) .0087(3)
------- ------- -------
Net investment income(1)........................ .0254 .0164 .0182
Dividends from net investment income(1)......... (.0254) (.0164) (.0182)
------- ------- -------
Net asset value, end of period.................. $ 1.0000 $ 1.0000 $ 1.0000
======= ======= =======
Total Return.................................... %2.54 %1.64 %1.82
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 26,626 128,693 157,115
Ratio of expenses to average net assets......... %(.893) %(.853) %(.863)
Ratio of net investment income to average net
assets........................................ %2.33 %1.62 %1.81
</TABLE>
14
<PAGE> 15
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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
SIX MONTHS (COMMENCEMENT OF
ENDED OPERATIONS) THROUGH
FLORIDA FUND NOVEMBER 30, 1997 MAY 31, 1997
- ------------------------------------------------ ----------------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $1.0000
------- -------
Income from investment operations............... .0180 .0321
Expenses........................................ .0047 .0093
------- -------
Net investment income(1)........................ .0133 .0228
Dividends from net investment income(1)......... (.0133) (.0228)
------- -------
Net asset value, end of period.................. $1.0000 $1.0000
============== ===============
Total Return.................................... 2.68%(2) 2.42%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 6,108 4,109
Ratio of expenses to average net assets......... .93%(2) 1.04%(2)
Ratio of net investment income to average net
assets........................................ 2.65%(2) 2.39%(2)
<CAPTION>
FLORIDA FUND
- ------------------------------------------------
<S> <<C> <C> <C>
Net asset value, beginning of period............
Income from investment operations...............
Expenses........................................
Net investment income(1)........................
Dividends from net investment income(1).........
Net asset value, end of period..................
Total Return....................................
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period..........
Ratio of expenses to average net assets.........
Ratio of net investment income to average net
assets........................................
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FOR FISCAL YEARS ENDED MAY 31,
ENDED ---------------------------------------
MASSACHUSETTS FUND NOVEMBER 30, 1997 1997 1996
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0180 .0338 .0362
Expenses........................................ .0037 .0079(3) .0086(3)
------- ------- -------
Net investment income(1)........................ .0143 .0259 .0276
Dividends from net investment income(1)......... (.0143) (.0259) (.0276)
------- ------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000
============== ======= =======
Total Return.................................... 2.87%(2) 2.59% 2.76%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 13,052 13,035 8,955
Ratio of expenses to average net assets......... .74%(2) .79%(3) .84%(3)
Ratio of net investment income to average net
assets........................................ 2.84%(2) 2.58% 2.71%
<CAPTION>
MASSACHUSETTS FUND 1995 1994 1993
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <<C> <C> <C>
Net asset value, beginning of period............ $ 1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0335 .0227 .0257
Expenses........................................ .0070(3) .0052(3) .0048(3)
------- ------- -------
Net investment income(1)........................ .0265 .0175 .0209
Dividends from net investment income(1)......... (.0265) (.0175) (.0209)
------- ------- -------
Net asset value, end of period.................. $ 1.0000 $ 1.0000 $ 1.0000
======= ======= =======
Total Return.................................... 2.65% 1.75% 2.09%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 10,169 14,824 13,305
Ratio of expenses to average net assets......... .69%(3) .51%(3) .46%(3)
Ratio of net investment income to average net
assets........................................ 2.60% 1.73% 2.04%
</TABLE>
<TABLE>
<CAPTION>
JUNE 21, 1994
SIX MONTHS YEAR ENDED YEAR ENDED (COMMENCEMENT OF
ENDED MAY 31, MAY 31, OPERATIONS) THROUGH
NEW JERSEY FUND NOVEMBER 30, 1997 1997 1996 MAY 31, 1995
- ------------------------------------------------ ----------------- ---------- ---------- -------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000 $1.0000
------- ---------- ---------- -------
Income from investment operations............... .0178 .0343 .0369 .0330
Expenses........................................ .0051 .0107 .0106 .0087(3)
------- ---------- ---------- -------
Net investment income(1)........................ .0127 .0236 .0263 .0243
Dividends from net investment income(1)......... (.0127) (.0236) (.0263) (.0243)
------- ---------- ---------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000 $1.0000
============== ========= ========= ===============
Total Return.................................... 2.55%(2) 2.36% 2.63% 2.43%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 43,108 39,452 41,026 21,607
Ratio of expenses to average net assets......... 1.02%(2) 1.06% 1.04% 1.01%(2)(3)
Ratio of net investment income to average net
assets........................................ 2.54%(2) 2.33% 2.59% 2.82%(2)
</TABLE>
15
<PAGE> 16
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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>
SEPTEMBER 12,
1997
(COMMENCEMENT
OF
OPERATIONS)
THROUGH
NOVEMBER 30,
PENNSYLVANIA FUND 1997
- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 1.0000
-------
Income from investment
operations.................. .0082
Expenses...................... .0022
-------
Net investment income(1)...... .0060
Dividends from net investment
income(1)................... (.0060)
-------
Net asset value, end of
period...................... $ 1.0000
===============
Total Return.................. 2.72%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------
Net assets in thousands, end
of period.................... 13,823
Ratio of expenses to average
net assets................... 1.00%(2)
Ratio of net investment income
to average net assets........ 2.71%(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.
16
<PAGE> 17
American Express Money Market Account
is a cash management service offered by The
Reserve Funds through American Enterprise
Investment Services Inc., a subsidiary of
American Express Financial Corporation. Shares
offered are shares of The Reserve Funds.
AMERICAN ENTERPRISE INVESTMENT SERVICES INC.
A subsidiary of American Express Financial Corporation
IDS Tower 10
Minneapolis, Minnesota 55440
This literature is not authorized for distribution to prospective investors
unless preceded or accompanied by an appropriate current prospectus.
Distributor -- Resrv Partners, Inc.
(C) 1998 American Express Financial Corporation
All rights reserved.
[LOGO]
AMERICAN EXPRESS
MONEY MARKET
ACCOUNTS
OFFERED BY
THE RESERVE FUNDS
SEMI-ANNUAL REPORT
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
PENNSYLVANIA TAX-EXEMPT FUND
FOR THE SIX MONTHS ENDED
NOVEMBER 30, 1997
(UNAUDITED)
[LOGO]
<PAGE> 18
RESERVE NEW YORK TAX-EXEMPT TRUST--NEW YORK TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Bleecker HDC Terrace Apt Project S85, 3.85% (a)...................................... 7/1/2015 $ 2,470 $ 2,485,678
Brentwood USD TAN, 4.25%............................................................. 6/30/1998 2,600 2,648,631
Buffalo RAN, 4.40%................................................................... 8/5/1998 1,500 1,507,737
Connetquot CSD TAN, 4%............................................................... 6/25/1998 2,000 2,022,903
Eagle Tax-Exempt Trust COP Series 1994C-2 Class A, 4.08% (a)......................... 8/15/2024 3,000 3,033,542
Erie County RAN, 4.50%............................................................... 6/25/1998 1,000 1,023,282
Falconer GOB, 4.55%.................................................................. 6/15/1998 490 501,952
Guilderland IDA for North Eastern Industrial Park Series 1993 A, 4% (a).............. 12/1/2008 3,600 3,610,711
Jefferson County IDA for Watertown Carthage, 3.70% (a)............................... 12/1/2012 3,500 3,509,934
Leroy CSD RAN, 4%.................................................................... 6/26/1998 3,705 3,772,178
Massapequa USD BAN, 4.25%............................................................ 10/29/1998 1,000 1,007,162
Monroe-Woodbury GOB, 5.625%.......................................................... 5/15/1998 640 664,291
Montgomery County IDA for Service Merchandise Co., 3.90% (a)......................... 12/31/2024 1,600 1,602,906
New York City GOB, 3.75% (a)......................................................... 2/15/2016 9,000 9,041,610
New York City GOB Custodial Receipts Series A31, 3.90% (a)........................... 7/2/2000 4,000 4,050,268
New York City GOB Series A, 3.85% (a)................................................ 8/1/2023 400 401,243
New York City GOB Series A7, 3.85% (a)............................................... 8/1/2020 4,000 4,012,510
New York City GOB Series B, 3.85% (a)................................................ 8/15/2024 3,400 3,410,629
New York City GOB Series B5, 3.85% (a)............................................... 8/15/2022 1,000 1,003,142
New York City GOB Series B6, 3.85% (a)............................................... 8/15/2005 800 802,514
New York City GOB Series B7, 3.85% (a)............................................... 8/15/2018 3,200 3,210,008
New York City GOB Series B8, 3.85% (a)............................................... 8/15/2024 8,500 8,526,571
New York City GOB Series D, 3.85% (a)................................................ 2/1/2020 300 300,959
New York City GOB Series E2, 3.85% (a)............................................... 8/1/2020 2,800 2,808,757
New York City GOB Series E2, 3.85% (a)............................................... 8/1/2021 1,900 1,905,942
New York City GOB Series E4, 3.85% (a)............................................... 8/1/2021 800 802,502
New York City GOB Series E4, 3.85% (a)............................................... 8/1/2021 1,000 1,003,127
New York City GOB Series E4, 3.85% (a)............................................... 8/1/2022 5,600 5,617,513
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2009 1,000 1,003,127
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2010 1,000 1,003,127
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2015 3,000 3,009,382
New York City GOB Series E5, 3.85% (a)............................................... 8/1/2019 1,000 1,003,127
New York City GOB Series E6, 3.85% (a)............................................... 8/1/2019 3,600 3,611,258
New York City HDC for Parkgate Tower, 3.85% (a)...................................... 12/1/2007 500 501,447
New York City IDA for Goodwill Project, 3.90% (a).................................... 3/1/2000 955 957,607
New York City IDA for Stroheim & Roman, 3.90% (a).................................... 12/1/2015 1,500 1,513,523
New York City Municipal Water Finance Authority, 4% (a).............................. 6/15/2025 1,000 1,001,686
New York State HFA for Mt. Sinai School, 3.85% (a)................................... 11/1/2014 1,800 1,805,045
New York State Dormitory Authority Public Library, 3.80% (a)......................... 7/1/2022 1,000 1,002,879
New York State ERD for Brooklyn Union Gas, 3.85% (a)................................. 12/1/2020 2,000 2,005,351
New York State ERD G&E Revenue Bonds, 3.75% (a)...................................... 2/1/2029 2,150 2,156,073
New York State ERD/PCR for LILCO Series 85B, 3.60% (a)............................... 3/1/2016 3,000 3,027,149
New York State Job Development Authority Series F, 4.30% (a)......................... 3/1/1999 1,630 1,635,377
New York State Job Development Authority Series 84, 4.30% (a)........................ 3/1/1999 2,960 2,969,764
New York State Job Development Authority Series 85, 4.30% (a)........................ 3/1/1999 1,270 1,274,189
New York State Local Government Assistance 1993A, 3.80% (a).......................... 4/1/2022 12,700 12,735,048
New York State Local Government Assistance Series B, 3.85% (a)....................... 4/1/2025 3,900 3,911,428
North Hempstead BAN, 4.25%........................................................... 2/26/1998 4,287 4,429,695
North Hempstead BAN, 4.10%........................................................... 10/29/1998 3,000 3,016,028
Onondaga County IDR for Edgecomb Metals Project, 3.85% (a)........................... 11/1/2009 1,100 1,103,506
Onondaga County IDR for McLane Co. Project, 4.35% (a)................................ 11/1/2004 3,200 3,211,396
Oyster Bay BAN, 4%................................................................... 2/27/1998 675 695,489
Queensbury UFSD BAN, 4.25%........................................................... 8/7/1998 4,000 4,063,987
Rotterdam Mononassen GOB, 4.75%...................................................... 6/15/1998 1,185 1,216,767
Suffolk County IDA for Target Rock Corporation Revenue Bonds, 3.70% (a).............. 2/1/2007 4,000 4,011,666
Suffolk County IDA for Satellite Transmission Systems, Inc., 4% (a).................. 11/1/2007 1,530 1,534,930
Syracuse BAN, 3.90%.................................................................. 12/19/1997 2,000 2,074,295
Syracuse IDA for General Accident Insurance Co. Project, 3.80% (a)................... 12/1/2003 4,550 4,636,158
Triboro Bridge and Tunnel Authority Special Obligation Series 1994, 3.75% (a)........ 1/1/2024 4,800 4,814,150
West Hampton Beach TAN, 4.25%........................................................ 6/29/1998 2,000 2,028,001
Yonkers IDA Civic Revenue Bonds for Consumers Union, 3.75% (a)....................... 7/1/2019 1,400 1,403,753
Yonkers IDR for Consumers Union Facility, 3.75% (a).................................. 7/1/2021 4,500 4,512,064
---------------
Total New York Fund Investments (99.34%) (Cost $162,099,426)......................... 163,166,674
Other assets, less liabilities (.66%)................................................ 1,088,782
---------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and redemption prices
per share on 164,255,456 shares of beneficial interest of $.001 par value
outstanding......................................................................... $ 164,255,456
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS
2
<PAGE> 19
RESERVE TAX-EXEMPT TRUST--CALIFORNIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Anaheim COP, 3.55% (a)...................................................... 8/1/2019 $ 250 $ 252,835
California Community Development Authority Series A3, 3.70% (a)............. 5/15/2025 2,300 2,303,775
California HFA for Sutter Health Series 1990 B, 3.70% (a)................... 3/1/2020 400 401,209
California MSR Public Power Authority, 3.25% (a)............................ 7/1/2022 300 300,748
California PCR for Pacific Gas & Electric Co. Series 96D, 3.65%............. 12/4/1997 3,000 3,005,700
California RAN, 4.50%....................................................... 6/30/1998 500 506,862
California School District Cash Reserve Program Series A, 4.75%............. 7/2/1998 1,000 1,024,834
California Statewide CDA for House Ear Institute Series 93A, 3.65% (a)...... 12/1/2018 1,500 1,513,373
East Bay Municipal Water and Sewer Utility, 6% (a).......................... 6/1/1998 500 520,118
Foothill/Eastern Transportation Toll Road Revenue Bonds Series 95C, 3.55%
(a)........................................................................ 1/2/2035 1,000 1,002,734
Foothill/Eastern Transportation Toll Road Revenue Bonds, 3.60% (a).......... 1/2/2035 500 501,387
Grand Terrace HFA for Community Redevelopment Agency, 4.10% (a)............. 12/1/2011 3,800 3,810,770
Hemet MHR for Sunwest Resort Village, 3.70% (a)............................. 7/1/2006 1,500 1,508,838
Hermosa Beach EDA for Parking District Facility Project, 3.65% (a).......... 12/1/2023 2,000 2,005,219
Irvine Improvement Bond Assessment District 85, 3.60% (a)................... 9/2/2011 2,000 2,005,874
Irvine Ranch PCR for Water District Election #282, 3.70% (a)................ 11/15/2013 400 401,197
Irvine Ranch Public Facilities and Infrastructure Authority Series 85, 3.55%
(a)........................................................................ 11/1/2010 1,300 1,303,574
Kern High School District TRAN, 4.50%....................................... 8/20/1998 1,000 1,016,858
Lancaster MHR for Westwood Park Apartments 1985, 3.60% (a).................. 12/1/2007 500 501,357
Los Angeles Community Redevelopment Agency for Baldwin Hills, 3.75% (a)..... 12/1/2014 400 401,065
Los Angeles Community Redevelopment for Promenade Towers Series 1989, 3.80%
(a)........................................................................ 4/1/2009 3,175 3,194,720
Los Angeles Custodial Receipts, 3.80% (a)................................... 7/1/2005 1,890 1,919,771
Los Angeles Housing Authority Malibu Meadows Project Series 91-A, 4.20%
(a)........................................................................ 12/1/2015 1,000 1,003,089
Los Angeles IDA for International Airport Authority, 3.85% (a).............. 12/1/2025 1,000 1,003,151
Los Angeles USD TRAN, 4.50%................................................. 6/30/1998 1,000 1,022,479
Oakland USD TRAN, 4.25%..................................................... 10/28/1998 1,000 1,007,334
Orange County Apartment Development Revenue Bonds Issue A of 1991, the Lakes
Project 3.75%, Letter of Credit with Citibank (a).......................... 12/1/2006 1,000 1,002,795
Orange County Coast Assessment District 88-1, 3.70% (a)..................... 9/2/2018 1,300 1,304,018
Orange County Sanitation District Capital Improvement Program 1990-92, 3.75%
Letter of Credit with National Westminster (a)............................. 8/1/2015 200 200,605
Pasadena IDA for Rose Bowl Improvement Project, 3.65% (a)................... 12/1/2011 600 601,679
Pico Rivera Community Redevelopment Agency for Rainer Fund Crossroads Plaza
Project, 3.75% (a)......................................................... 12/1/2010 700 701,895
Puerto Rico Electric Power Authority Series 11, 3.80% (a)................... 7/1/2022 500 509,740
Puerto Rico Government Development Bank Series 97, 3.80%.................... 12/4/1997 2,000 2,003,748
Redlands COP, 3.60% (a)..................................................... 9/1/2015 965 967,676
Sacramento Municipal Utility District Series 1, 3.70%....................... 1/21/1998 3,000 3,005,474
San Bernadino HFR for Alta Park Project, 4.20% (a).......................... 5/1/2006 2,200 2,206,766
San Bernadino IDA for Gate City, 4.40% (a).................................. 3/1/2005 200 202,113
San Francisco HFR for Bayside Village Series 85, 3.95% (a).................. 12/1/2005 300 301,955
San Francisco HFR for Yerba Buena Gardens, 3.70% (a)........................ 9/1/2006 1,000 1,002,849
San Joaquin USD TRAN, 4.50%................................................. 1/15/1998 1,000 1,051,743
San Jose HFR Redevelopment Agency, 3.60% (a)................................ 7/1/2026 2,700 2,707,323
Santa Clara Electric Revenue Bonds Series 85C, 3.60% (a).................... 7/1/2010 300 300,832
Santa Clara El Cammino Hospital District, 3.70% (a)......................... 8/1/2015 200 200,549
Union City MHR for Skylark Apartments, 4.20% (a)............................ 11/1/2007 1,500 1,502,396
Upland MHR Community Redevelopment Bonds Series B for Northwood Project,
4.40% (a).................................................................. 3/1/2014 300 303,135
Vista MHR for Shadow Ridge Apartments Project, 3.95% (a).................... 5/1/2005 800 802,322
--------------
Total California Fund Investments (99.52%) (Cost $54,026,030)............... 54,318,484
Other assets, less liabilities (.48%)....................................... 261,545
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 54,580,029 shares of beneficial interest of
$.001 par value outstanding................................................ $ 54,580,029
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 20
RESERVE TAX-EXEMPT TRUST--CONNECTICUT TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Connecticut DAI for Allen Group Inc., 3.80% (a)............................. 2/1/2013 $1,400 $ 1,404,081
Connecticut DAI for Conco Medical Co. Project Series 85, 3.80% (a).......... 11/1/2005 700 701,809
Connecticut DAI for General Accident Insurance Co., 3.80% (a)............... 12/1/2013 1,700 1,732,187
Connecticut DAI for Martin Brower Corp. Series 1985, 3.70% (a).............. 5/1/2005 170 170,468
Connecticut DAI for Regional YMCA Project, 3.80% (a)........................ 6/1/2008 537 538,683
Connecticut DAI for Trudy Corporation Project, 3.70% (a).................... 9/1/2009 500 501,419
Connecticut DAI for Zotos International Project, 3.90% (a).................. 12/1/2004 1,655 1,659,951
Connecticut Development Authority Health Care Revenue Bonds for Independent
Living Project 1990 Series, 3.70% (a)...................................... 7/1/2015 2,145 2,151,065
Connecticut Development Authority PCR for Central Vermont Public Service,
3.50% (a).................................................................. 12/1/2015 1,400 1,403,759
Connecticut Development Authority PCR for Connecticut Light and Power
Project Series 1993, 3.85% (a)............................................. 9/1/2028 1,300 1,303,847
Connecticut Development Authority PCR for Western Massachusetts Electric Co.
Series 1993A, 3.70% (a).................................................... 9/1/2028 1,700 1,704,793
Connecticut HEF for Charlotte Hospital Series B, 3.65% (a).................. 7/1/2010 500 501,383
Connecticut HEF for Kingswood Oxford School Issue Series A, 3.80% (a)....... 2/1/2009 420 421,224
Connecticut HEF for New Haven Hospital RAW Series E, 3.80% (a).............. 6/1/2012 500 509,447
Connecticut HEF for Pomfret School Issue Series A, 3.65% (a)................ 7/1/2024 1,300 1,303,380
Connecticut HEF for Sharon Hospital Issue Series A, 3.60% (a)............... 9/1/2027 1,000 1,002,466
Connecticut HEF for Yale University Series T, 3.90% (a)..................... 7/1/2029 400 401,109
Connecticut HEF for Yale University Series T, 3.95% (a)..................... 7/1/2029 1,600 1,604,476
Connecticut HFA BDS Project, 3.85%, (a)..................................... 5/15/2018 1,400 1,402,376
Connecticut State GOB, 6%................................................... 3/1/1998 1,000 1,020,959
Connecticut State GOB, 3.75% (a)............................................ 5/15/2014 1,500 1,504,426
Connecticut State Special Assessment Unemployment Compensation RAW Series C,
3.90% (a).................................................................. 11/15/2001 1,500 1,524,322
Connecticut State Special Assessment Unemployment Compensation RAW Series
1993B Pre-refunded, 7.20% (a).............................................. 2/15/1998 460 481,899
Connecticut State Special Tax Transportation Infrastructure 2nd Lien Revenue
Bonds, 3.80% (a)........................................................... 12/1/2010 1,570 1,574,559
Darien Unlimited Tax GOB, 6.25%............................................. 8/15/1998 400 414,072
Hamden BAN, 4%.............................................................. 8/14/1998 1,000 1,013,185
Hartford Redevelopment Agency MHR for Underwood Towers Project, 3.75% (a)... 6/1/2020 1,400 1,403,920
New Canaan BAN, 3.75%....................................................... 3/10/1998 1,000 1,028,038
Puerto Rico Electric Power Authority Series 11, 3.80% (a)................... 7/1/2022 500 509,740
Puerto Rico Industrial, Medical, and Environmental RAW for Reynolds Metals,
3.80% (a).................................................................. 9/1/2013 1,200 1,211,463
Puerto Rico Government Development Bank Series 97, 3.80%.................... 12/4/1997 1,500 1,502,811
Puerto Rico University GOB, 4.55%........................................... 6/1/1998 500 513,233
Simsbury GOB, 4.60%......................................................... 1/15/1998 410 417,617
--------------
Total Connecticut Fund Investments (99.83%) (Cost $34,330,621).............. 34,538,167
Other assets, less liabilities (.17%)....................................... 58,158
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 34,596,325 shares of beneficial interest of
$.001 par value outstanding................................................ $ 34,596,325
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
ARIZONA -- .16%
Apache County IDA for Tucson Electric Power Company, 3.85% (a).............. 12/15/2018 $200 $ 200,344
CALIFORNIA -- .25%
Grand Terrace HFA for Community Redevelopment Agency, 4.10% (a)............. 12/1/2011 100 100,283
San Bernadino HFR for Alta Park Project, 4.20% (a).......................... 5/1/2006 200 200,615
CONNECTICUT -- .25%
Hartford Redevelopment Agency MHR for Underwood Towers Project, 3.75% (a)... 6/1/2020 400 401,120
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 21
RESERVE TAX-EXEMPT TRUST--FLORIDA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
FLORIDA -- 82.47%
Boca Raton IDA for Parking Garage Project, 4.325% (a)....................... 12/1/2014 $400 $ 404,114
Broward MHR for Welleby Apartment Project Series 1984, 3.90% (a)............ 12/1/2006 400 401,179
Collier IDA for Retirement Rental Housing Revenue Bonds HFA, 3.90% (a)...... 12/1/2015 200 200,588
Dade IDA for Aviation Authority Facilities Series 84A, 4.30% (a)............ 10/1/2009 100 100,298
Dade IDA for Dolphin Stadium Project, 3.85% (a)............................. 1/1/2016 300 300,888
Dade HFA for Hospital Revenue Bonds for Miami Children's Hospital Project,
3.85% (a).................................................................. 3/1/2025 200 200,549
Dade HFA for Hospital Revenue Bonds for Miami Children's Hospital Project,
3.80% (a).................................................................. 9/1/2025 200 200,549
Duval HFA for Lakes of Mayport Apartment Project, 3.90% (a)................. 12/1/2009 400 401,192
Florida General Service Division Facilities RAW, 7.75%...................... 9/1/1998 305 325,430
Gulf Breeze IDR for Series 85, 4% (a)....................................... 12/1/2015 200 200,591
Jacksonville IDR for Coastal Islands Project, 3.95% (a)..................... 8/1/2008 155 155,496
Manatee PCR for Florida Power and Light, 3.85% (a).......................... 9/1/2024 100 100,311
Putnam PCR for Florida Power and Light, 3.85% (a)........................... 9/1/2024 100 100,311
Port St. Lucie PCR for Florida Power and Light, 3.80% (a)................... 1/1/2011 200 200,583
Tampa Occupational License Tax Bonds, 3.85% (a)............................. 5/1/2027 200 200,552
University of North Florida Capital Improvement Project, 3.90% (a).......... 11/1/2024 300 300,893
CHICAGO -- 2.43%
Chicago O'Hare International Airport American Airlines Series 94, 3.85%
(a)........................................................................ 12/1/2017 100 100,315
MASSACHUSETTS -- 2.43%
Massachusetts HEF for Harvard University, 3.70% (a)......................... 2/1/2016 300 300,855
Massachusetts IFA for Governor Drummer Academy, 3.75% (a)................... 7/1/2026 200 200,506
MARYLAND -- 2.46%
Baltimore IDA for Mayor & City Council, 4.25% (a)........................... 8/1/2016 200 200,600
MISSOURI -- .25%
Cole IDA for Mobine Manufacturing Series 85, 4.15% (a)...................... 12/1/2015 200 201,354
NEW JERSEY -- .10%
New Jersey EDA for Volvo of American Corp., 4.378 (a)....................... 12/1/2004 200 202,018
OREGON -- .25%
Medford HFA for Rogue Valley Health, 3.95% (a).............................. 10/1/2016 100 100,318
--------------
Total Florida Fund Investments (98.26%) (Cost $5,977,181)................... 6,001,852
Other assets, less liabilities (1.74%)...................................... 106,562
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 6,108,414 shares of beneficial interest of
$.001 par value outstanding................................................ $ 6,108,414
===========
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Boston Water and Sewer Commission Revenue Bonds 1994A, 3.65% (a)............ 11/1/2024 $200 $ 200,567
Chelsea GOB, 5.75%.......................................................... 4/15/1998 315 319,512
Dennis GOB, 4.50%........................................................... 3/1/1998 470 476,274
Dighton-Rehoboth Regional School District GOB, 6.50%........................ 6/1/1998 190 198,577
Framingham IDA for Perrini Corp., 4% (a).................................... 9/30/2005 300 300,905
Hingham BAN, 4%............................................................. 12/19/1997 300 311,439
Massachusetts Dedicated Income Tax Bonds Series B, 3.95% (a)................ 12/1/1997 200 200,631
Massachusetts Dedicated Income Tax Bonds Series E, 3.95% (a)................ 12/1/1997 100 100,315
Massachusetts HEF for Endicott College Series A, 3.75% (a).................. 10/1/2011 300 300,762
Massachusetts HEF for Clark University, 3.95% (a)........................... 12/1/2004 100 100,294
Massachusetts HEF for Boston University Series H, 3.80% (a)................. 12/1/2015 400 404,331
Massachusetts HEF for Harvard University, 3.70% (a)......................... 2/1/2016 587 588,674
Massachusetts HEF for Harvard University, 3.70% (a)......................... 8/1/2017 200 200,570
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 22
RESERVE TAX-EXEMPT TRUST--MASSACHUSETTS TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Massachusetts HEF for Mount College Series A, 3.75% (a)..................... 7/1/2018 $400 $ 401,016
Massachusetts HEF Capital Assistance Program Series G-1, 3.60% (a).......... 1/1/2019 300 300,775
Massachusetts HEF Capital Asset Series D, 3.75% (a)......................... 1/1/2035 400 401,144
Massachusetts HEF Capital Asset Series E, 3.80% (a)......................... 1/1/2035 600 601,729
Massachusetts HEF for Williams College Series E, 3.75% (a).................. 8/1/2014 400 401,154
Massachusetts HEF for Wellesley College Series B, 3.70% (a)................. 7/1/2022 400 401,219
Massachusetts IDA for KRH Rolls Inc. Project Series 1988, 4.40% (a)......... 5/1/2006 500 503,514
Massachusetts IFA for Composite Easy Day, 3.75% (a)......................... 7/1/2006 160 160,409
Massachusetts IFA for Emerson College, 3.75% (a)............................ 11/1/2025 500 501,423
Massachusetts IFA for Griffin Realty Series B, 3.80% (a).................... 7/1/2008 645 646,666
Massachusetts IFA for Groton School, 3.70% (a).............................. 6/1/2019 200 200,557
Massachusetts IFA for Holyoke Water Power Project, 3.60% (a)................ 5/1/2022 300 300,835
Massachusetts IFA for Quamco Series B, 3.60% (a)............................ 9/1/2001 800 802,224
Massachusetts Showa Women's Institute of Boston, 3.90% (a).................. 3/15/2004 600 601,873
Millford GOB, 6.20%......................................................... 11/1/1998 135 138,364
Natick BAN, 4.25%........................................................... 8/7/1998 500 507,841
Needham GOB, 5%............................................................. 6/15/1998 835 859,343
Puerto Rico Industrial, Medical, Higher Education and Environmental Bonds
for PCR Facility Authority, 4.05% (a)...................................... 12/1/2015 200 200,606
Watertown BAN, 4.25%........................................................ 5/13/1998 345 353,484
West Newbury BAN, 4.25%..................................................... 5/6/1998 375 379,298
Westfield BAN, 4.50%........................................................ 5/8/1998 500 513,591
--------------
Total Massachusetts Fund Investments (98.68%) (Cost $12,786,312)............ 12,879,916
Other assets, less liabilities (1.32%)...................................... 172,531
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 13,052,447 shares of beneficial interest of
$.001 par value outstanding................................................ $ 13,052,447
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--NEW JERSEY TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Atlantic City Improvement Authority Pooled Government Loan Program, 3.65%
(a)........................................................................ 7/1/2026 $2,000 $ 2,005,573
Clark Township TAN, 4.04%................................................... 4/8/1998 1,250 1,266,525
Cranford GOB, 4%............................................................ 2/27/1998 1,291 1,330,728
East Rutherford BAN, 4.31%.................................................. 1/23/1998 498 510,679
Eatontown BAN, 4.25%........................................................ 12/17/1997 550 572,473
Essex County Improvement Authority GOB, 3.65% (a)........................... 12/01/2025 2,000 2,005,427
Evesham Fire District BAN, 4.50%............................................ 4/14/1998 675 693,307
Fairfield BAN, 4%........................................................... 12/17/1997 600 622,153
Haddonfield Temp Notes, 4.30%............................................... 7/3/1998 950 969,038
Jersey City School Promissory Notes, 4.375%................................. 9/18/1998 2,000 2,023,495
Millville BAN, 4.10%........................................................ 7/8/1998 1,319 1,328,532
Monmouth County Authority Pooled Government Loan Program, 3.60% (a)......... 8/1/2016 100 100,275
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 3.65% (a)............ 12/1/2027 300 300,834
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 3.65% (a)............ 12/1/2027 1,000 1,002,779
New Jersey EDA for Bayonne IMTT Docking Revenue Bonds, 3.70% (a)............ 12/1/2027 3,450 3,459,721
New Jersey EDA for Economic Growth Bond Series F, 3.65% (a)................. 8/1/2014 740 742,053
New Jersey EDA for Lawrenceville School, 3.65% (a).......................... 7/1/2026 1,000 1,002,816
New Jersey EDA for PCR Series 95, 3.65% (a)................................. 9/1/2012 800 802,219
New Jersey EDA for St. Peters School Series 1995, 3.85% (a)................. 1/1/2010 1,145 1,148,267
New Jersey EDA for Trailer Marine Corps Project, 3.70% (a).................. 2/1/2002 400 401,216
New Jersey EDA for Volvo of American Corp, 4.378% (a)....................... 12/1/2004 3,500 3,535,322
New Jersey EDA for RJB Associate Project, 3.95% (a)......................... 8/1/2008 900 902,658
New Jersey HCF Hospital Capital Asset, 3.70% (a)............................ 7/01/2035 400 401,118
New Jersey Sports Expo Authority Series 92C, 3.70% (a)...................... 9/01/2024 2,800 2,824,655
New Jersey Turnpike Authority General Series 91D, 3.70% (a)................. 1/01/2018 3,700 3,749,768
Port Authority of New York and New Jersey Versatile Structured Obligations,
3.85% (a).................................................................. 5/1/2019 3,800 3,810,926
Puerto Rico Government Development Bank-Adjustable Rate Bonds, 3.80% (a).... 12/4/1997 2,000 2,003,748
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 23
RESERVE TAX-EXEMPT TRUST--NEW JERSEY TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Rahway BAN, 4%.............................................................. 12/23/1997 $ 500 $ 518,882
Trenton Temp Notes, 4%...................................................... 12/18/1997 1,000 1,038,317
Vernon Board of Education Temp Notes, 4%.................................... 1/16/1998 1,000 1,035,265
--------------
Total New Jersey Fund Investments (97.68%) (Cost $41,701,336)............... 42,108,769
Other assets, less liabilities (2.32%)...................................... 999,675
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 43,108,444 shares of beneficial interest of
$.001 par value outstanding................................................ $ 43,108,444
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
RESERVE TAX-EXEMPT TRUST--PENNSYLVANIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
MATURITY AMOUNT VALUE
DESCRIPTION OF SECURITY DATE (IN THOUSANDS) (NOTE 1)
- ---------------------------------------------------------------------------- ---------- -------------- --------------
<S> <C> <C> <C>
Allegheny County for University of Pittsburgh Project Series 85, 3.75%
(a)........................................................................ 7/1/2015 $ 500 $ 503,046
Allegheny County IDA for Longwood at Oakmont, 3.85% (a)..................... 7/1/2027 600 601,743
Beaver County TRAN, 3.75%................................................... 2/19/1998 1,000 1,001,849
Bucks County IDA for Edgecomb Metals Co, Inc. 3.85% (a)..................... 10/1/2009 500 503,176
Butler County IDA for Lutheran Welfare RAW, 3.80% (a)....................... 11/1/2026 500 501,470
Dauphin County HEF General Authority Variable Rate Bonds, 4.13% (a)......... 11/1/2017 500 500,992
Delaware Valley Finance Authority Series 85, 3.80% (a)...................... 12/1/2020 600 601,767
Delaware Valley PCR for Peco Energy Corporation, 3.70%...................... 12/5/1997 500 502,281
Delaware Valley PCR for Philadelphia Electric Co., 3.75% (a)................ 8/1/2016 600 601,713
Emmaus General Authority Local Government Revenue Bonds, 3.95% (a).......... 3/1/2024 1,600 1,604,853
Montgomery County TRAN, 3.75%............................................... 1/21/1998 1,000 1,001,849
Philadelphia HEF for Kings College, 4.50% (a)............................... 11/1/1998 200 201,383
Philadelphia HEF for Temple University, 3.90% (a)........................... 10/1/2009 600 601,880
Philadelphia School District TRAN, 4.50%.................................... 6/30/1998 500 511,006
Philadelphia TRAN, 4.50%.................................................... 6/30/1998 500 511,006
Philadelphia Hospital Authority for Children's Hospital, 3.80% (a).......... 3/1/2027 600 601,740
Philadelphia PCR Gas and Electric, 3.75%.................................... 12/4/1997 1,000 1,001,130
Puerto Rico EPR Series 11, 3.80% (a)........................................ 7/1/2022 500 509,740
Puerto Rico Industrial, Medical Environmental PCR, 4.05% (a)................ 12/1/2015 500 501,515
University of Pittsburgh HEF Capital Bond Project, 3.75% (a)................ 1/1/2019 500 503,047
Western Wayne School District GOB, 5%....................................... 10/15/1998 100 101,483
York County General Authority Pooled Finance, 3.95% (a)..................... 9/1/2026 500 501,498
--------------
Total Pennsylvania Fund Investments (97.45%) (Cost $13,405,414)............. 13,470,167
Other assets, less liabilities (2.55%)...................................... 352,887
--------------
NET ASSETS (100%) equivalent to $1.00 net asset value, offering and
redemption prices per share on 13,823,054 shares of beneficial interest of
$.001 par value outstanding................................................ $ 13,823,054
============
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates shown were in
effect at November 30, 1997. Securities payable on demand are collateralized
by bank letters of credit or other bank credit agreements.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 24
RESERVE TAX-EXEMPT TRUST--PENNSYLVANIA TAX-EXEMPT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1997--(UNAUDITED)--(CONTINUED)
SECURITY TYPE ABBREVIATIONS:
<TABLE>
<S> <C> <C>
BAN -- Bond Anticipation Notes
COP -- Certificate of Participation
CSD -- Central School District
DAI -- Development Authority
Industrial Development
Refunding Bonds
EDA -- Economic Development Authority
Revenue Bonds
ERD -- Energy Research and
Development Authority
GOB -- General Obligation Bonds
HCF -- Health Care Facilities Revenue
Bonds
HDC -- Housing Development
Corporation Bonds
HEF -- Health and Educational
Facilities Revenue Bpnds
HFA -- Health Facilities Authority
Revenue Bonds
HFR -- Housing Finance Revenue Bonds
IDA -- Industrial Development
Authority Revenue Bonds
IDR -- Industrial Development Agency
Revenue Bonds
IFA -- Industrial Finance Authority
MHR -- Multifamily Housing Revenue
Bonds
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>
RESERVE TAX-EXEMPT TRUST
STATEMENT OF ASSETS AND LIABILITIES
SIX MONTHS ENDED NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
FLORIDA FUND
------------
<S> <C>
ASSETS:
Investments, at value (identified cost -- $3,680,000).................................... $3,689,647
Cash..................................................................................... 420,058
------------
Total Assets........................................................................... 4,109,705
------------
LIABILITIES:
Accrued expenses......................................................................... 321
------------
Total Liabilities...................................................................... 321
------------
NET ASSETS................................................................................. $4,109,384
===========
NET ASSETS CONSIST OF:
Shares of beneficial interest, $.001 par value, unlimited number of shares authorized.... $ 4,109
Paid-in capital in excess of par......................................................... 4,105,275
------------
NET ASSETS -- Equivalent to $1.00 per share based on 4,109,384 shares of beneficial
interest outstanding..................................................................... $4,109,384
===========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 25
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED NOVEMBER 30, 1997--(UNAUDITED)
<TABLE>
<CAPTION>
RESERVE NEW YORK
TAX-EXEMPT TRUST RESERVE TAX-EXEMPT TRUST
---------------- --------------------------------------------------------------------------
NEW YORK CALIFORNIA CONNECTICUT FLORIDA MASSACHUSETTS NEW JERSEY PENNSYLVANIA*
FUND FUND FUND FUND FUND FUND FUND
---------------- ---------- ----------- -------- ------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME (Note 1)............ $3,223,504 $682,265 $ 593,610 $102,683 $ 261,120 $729,664 $103,731
---------------- ---------- ----------- -------- ------------- ---------- ------------
EXPENSES
Management fee.................... 442,433 95,513 83,065 14,362 36,476 102,847 13,983
Shareholder servicing,
administration and general
office expenses................. 188,565 33,936 26,256 4,357 9,780 46,142 5,884
Distribution assistance (Note
3).............................. 153,958 38,000 24,816 5,500 1,806 38,849 5,559
Equipment expense................. 23,554 4,798 3,598 594 1,456 5,718 813
Professional fees................. 13,211 4,483 3,389 483 1,375 3,649 578
Occupancy costs................... 9,841 2,004 1,505 248 609 2,390 340
Stationery, printing and
supplies........................ 5,417 3,506 2,731 441 1,036 5,654 646
Trustee fees...................... 1,502 287 231 33 96 367 46
Other expenses.................... 18,864 3,645 2,158 640 1,490 3,018 117
---------------- ---------- ----------- -------- ------------- ---------- ------------
Total Expenses.................. 857,345 186,172 147,749 26,658 54,124 208,634 27,966
---------------- ---------- ----------- -------- ------------- ---------- ------------
Less: Management fees and other
expenses voluntarily waived by
Investment Manager..............
---------------- ---------- ----------- -------- ------------- ---------- ------------
Net Expenses...................... 857,345 186,172 147,749 26,658 54,124 208,634 27,966
---------------- ---------- ----------- -------- ------------- ---------- ------------
NET INVESTMENT INCOME............... $2,366,159 $496,093 $ 445,861 $ 76,025 $ 206,996 $521,030 $ 75,765
=============== ======== ========== ======== ============ ========== ===========
</TABLE>
- ---------------
* Pennsylvania commenced operations on September 12, 1997.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 26
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 YEAR ENDED ENDED YEAR ENDED ENDED YEAR ENDED
NOVEMBER 30, MAY 31, NOVEMBER 30 MAY 31, NOVEMBER 30, MAY 31,
1997 1997 1997 1997 1997 1997
------------- ------------- ------------ ------------- ------------ -------------
<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)...................... $ (2,366,159) $ (3,838,918) $ (496,093) $ (498,099) $ (445,861) $ (797,967)
------------- ------------- ------------ ------------- ------------ -------------
FROM CAPITAL SHARE TRANSACTIONS
(at net asset value of $1 per
share):
Net proceeds from sale of
shares........................ 350,200,088 676,647,327 104,881,595 153,856,260 49,183,226 104,926,291
Net asset value of shares issued
on reinvestment of
dividends..................... 2,366,159 3,838,918 496,093 498,099 445,861 797,967
------------- ------------- ------------ ------------- ------------ -------------
Subtotal...................... 352,566,247 680,486,245 105,377,688 154,354,359 49,629,087 105,724,258
Cost of shares redeemed......... (341,490,875) (652,760,567) (81,750,055) (136,013,932) (48,529,265) (107,029,059)
------------- ------------- ------------ ------------- ------------ -------------
Net increase (decrease) in net
assets derived from capital
share transactions and from
investment operations........... 11,075,372 27,725,678 23,627,633 18,340,427 1,099,822 (1,304,801)
NET ASSETS:
Beginning of period............... 153,180,084 125,454,406 30,952,396 12,611,969 33,496,503 34,801,304
------------- ------------- ------------ ------------- ------------ -------------
End of period..................... $ 164,255,456 $ 153,180,084 $ 54,580,029 $ 30,952,396 $ 34,596,325 $ 33,496,503
============ ============ =========== ============ =========== ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 27
STATEMENTS OF CHANGES IN NET ASSETS--(UNAUDITED)
<TABLE>
<CAPTION>
RESERVE TAX-EXEMPT TRUST
--------------------------------------------------------------------------------------------------------------------
FLORIDA FUND
--------------------------------- PENNSYLVANIA FUND
JUNE 24, 1996 ------------------
(COMMENCEMENT MASSACHUSETTS FUND NEW JERSEY FUND SEPTEMBER 12, 1997
OF --------------------------- ----------------------------- (COMMENCEMENT
SIX MONTHS OPERATIONS) SIX MONTHS SIX MONTHS OF OPERATIONS)
ENDED THROUGH ENDED YEAR ENDED ENDED YEAR ENDED THROUGH
NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30, MAY 31, NOVEMBER 30,
1997 1997 1997 1997 1997 1997 1997
----------------- ------------- ------------ ------------ ------------- ------------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE)
IN NET
ASSETS
FROM
INVESTMENT
OPERATIONS:
Net
investment
income
paid
to
shareholders
as dividends
(Note 1).. $ (76,025) $ (92,773) $ (206,996) $ (285,186) $ (521,030) $ (909,418) $ (75,765)
------------ ------------ ------------ ------------ ------------- ------------- ------------
FROM
CAPITAL
SHARE
TRANSACTIONS
(at net
asset
value of
$1 per
share):
Net
proceeds
from
sale
of
shares... 31,883,261 38,626,682 23,466,028 52,472,123 118,147,351 223,428,579 25,718,558
Net
asset
value
of
shares
issued
on
reinvestment
of
dividends... 76,025 92,773 206,996 285,186 521,030 909,418 75,765
------------ ------------ ------------ ------------ ------------- ------------- ------------
Subtotal... 31,959,286 38,719,455 23,673,024 52,757,309 118,668,381 224,337,997 25,794,323
Cost of
shares
redeemed... (29,960,256) (34,610,071) (23,655,186) (48,678,063) (115,012,037) (225,911,698) (11,971,269)
------------ ------------ ------------ ------------ ------------- ------------- ------------
Net
increase
(decrease)
in net
assets
derived
from
capital
share
transactions
and from
investment
operations... 1,999,030 4,109,384 17,838 4,079,246 3,656,344 (1,573,701) 13,823,054
NET ASSETS:
Beginning
of
period... 4,109,384 0 13,034,609 8,955,363 39,452,100 41,025,801 0
------------ ------------ ------------ ------------ ------------- ------------- ------------
End of
period... $ 6,108,414 $ 4,109,384 $ 13,052,447 $ 13,034,609 $ 43,108,444 $ 39,452,100 $ 13,823,054
============ ============ ============ ============ ============= ============= ============
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 28
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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
non-diversified, open-end 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 seven series, California Fund,
Connecticut Fund, Florida Fund, Interstate Fund, Massachusetts Fund, New
Jersey Fund and Pennsylvania Fund. These financial statements and notes apply
only to the California, Connecticut, Florida, Massachusetts, New Jersey and
Pennsylvania 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 $260,954 (New
York Fund), $52,659 (California Fund), $39,868 (Connecticut Fund), $6,796
(Florida Fund), $15,842 (Massachusetts Fund), $66,938 (New Jersey Fund) and
$8,424 (Pennsylvania Fund) during the six months ended November 30, 1997 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. At November 30, 1997, the New York, California,
Connecticut, Florida, Massachusetts, New Jersey and Pennsylvania Funds, had
accrued expenses of $12,282, $4,261, $2,416, $452, $783, $3,365 and $1,136,
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.
12
<PAGE> 29
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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, California, Connecticut, Florida, Massachusetts, New Jersey and
Pennsylvania 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, 70.24%, 73.25%, 66.76%, 92.58%,
64.29%, 65.03% and 58.60% of the New York, California, Connecticut, Florida,
Massachusetts, New Jersey and Pennsylvania 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 11/30/97, the following funds had these components of net assets:
<TABLE>
<CAPTION>
NEW YORK CALIFORNIA CONNECTICUT FLORIDA
------------ ----------- ----------- ----------
<S> <C> <C> <C> <C>
Par Value............................................... $ 164,255 $ 54,580 $ 34,596 $ 6,108
Paid-in-Capital......................................... 164,091,201 54,525,449 34,561,729 6,102,306
------------ ----------- ----------- ----------
Net Assets.............................................. $164,255,456 $54,580,029 $34,596,325 $6,108,414
============= ============ ============ ==========
</TABLE>
<TABLE>
<CAPTION>
MASSACHUSETTS NEW JERSEY PENNSYLVANIA
------------ ----------- -----------
<S> <C> <C> <C> <C>
Par Value............................................... $ 13,052 $ 43,108 $ 13,823
Paid-in-Capital......................................... 13,039,395 43,065,336 13,809,231
------------ ----------- -----------
Net Assets.............................................. $ 13,052,447 $43,108,444 $13,823,054
============= ============ ============
</TABLE>
------------------------
FEDERAL TAX INFORMATION
The dividends distributed by each Fund are exempt interest dividends for
Federal tax purposes.
13
<PAGE> 30
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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, 1997 1997 1996
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0184 .0352 .0381
Expenses........................................ .0049 .0105 .0105
------- ------- -------
Net investment income(1)........................ .0135 .0247 .0276
Dividends from net investment income(1)......... (.0135) (.0247) (.0276)
------- ------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000
============== ======= =======
Total Return.................................... 2.70%(2) %2.47 %2.76
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 164,255 153,180 125,454
Ratio of expenses to average net assets......... .97%(2) %1.04 %1.04
Ratio of net investment income to average net
assets........................................ 2.67%(2) %2.43 %2.72
<CAPTION>
NEW YORK FUND 1995 1994 1993
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <<C> <C> <C>
Net asset value, beginning of period............ $ 1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0352 .0249 .0281
Expenses........................................ .0099 .0099 .0103
------- ------- -------
Net investment income(1)........................ .0253 .0150 .0178
Dividends from net investment income(1)......... (.0253) (.0150) (.0178)
------- ------- -------
Net asset value, end of period.................. $ 1.0000 $ 1.0000 $ 1.0000
======= ======= =======
Total Return.................................... %2.53 %1.50 %1.78
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 152,906 148,387 149,785
Ratio of expenses to average net assets......... % .98 % .98 %1.02
Ratio of net investment income to average net
assets........................................ %2.48 %1.48 %1.76
</TABLE>
<TABLE>
<CAPTION>
OCTOBER 17, 1994
SIX MONTHS YEAR ENDED YEAR ENDED (COMMENCEMENT OF
ENDED MAY 31, MAY 31, OPERATIONS) THROUGH
CALIFORNIA FUND NOVEMBER 30, 1997 1997 1996 MAY 31, 1995
- ------------------------------------------------ ----------------- ---------- ---------- -------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000 $1.0000
------- ---------- ---------- -------
Income from investment operations............... .0179 .0341 .0379 .0243
Expenses........................................ .0049 .0102 .0106 .0062
------- ---------- ---------- -------
Net investment income(1)........................ .0130 .0239 .0273 .0181
Dividends from net investment income(1)......... (.0130) (.0239) (.0273) (.0181)
------- ---------- ---------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000 $1.0000
============== ========= ========= ===============
Total Return.................................... 2.60%(2) 2.39% 2.73% 1.81%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 54,580 30,952 12,612 11,088
Ratio of expenses to average net assets......... .97%(2) 1.03% 1.04% 1.02%(2)
Ratio of net investment income to average net
assets........................................ 2.60%(2) 2.40% 2.67% 2.95%(2)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FOR FISCAL YEARS ENDED MAY 31,
ENDED ---------------------------------------
CONNECTICUT FUND NOVEMBER 30, 1997 1997 1996
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0179 .0341 .0368
Expenses........................................ .0044 (.0098) (.0102)
------- ------- -------
Net investment income(1)........................ .0135 .0243 .0266
Dividends from net investment income(1)......... (.0135) (.0243) .0266
------- ------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000
============== ======= =======
Total Return.................................... 2.70%(2) %2.43 %2.66
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 34,596 33,497 34,801
Ratio of expenses to average net assets......... .89%(2) %0.97 %1.01
Ratio of net investment income to average net
assets........................................ 2.68%(2) %2.39 %2.61
<CAPTION>
CONNECTICUT FUND 1995 1994 1993
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <<C> <C> <C>
Net asset value, beginning of period............ $ 1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0352 .0250 .0269
Expenses........................................ .0098(3) .0086(3) .0087(3)
------- ------- -------
Net investment income(1)........................ .0254 .0164 .0182
Dividends from net investment income(1)......... (.0254) (.0164) (.0182)
------- ------- -------
Net asset value, end of period.................. $ 1.0000 $ 1.0000 $ 1.0000
======= ======= =======
Total Return.................................... %2.54 %1.64 %1.82
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 26,626 128,693 157,115
Ratio of expenses to average net assets......... %(.893) %(.853) %(.863)
Ratio of net investment income to average net
assets........................................ %2.33 %1.62 %1.81
</TABLE>
14
<PAGE> 31
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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
SIX MONTHS (COMMENCEMENT OF
ENDED OPERATIONS) THROUGH
FLORIDA FUND NOVEMBER 30, 1997 MAY 31, 1997
- ------------------------------------------------ ----------------- -------------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $1.0000
------- -------
Income from investment operations............... .0180 .0321
Expenses........................................ .0047 .0093
------- -------
Net investment income(1)........................ .0133 .0228
Dividends from net investment income(1)......... (.0133) (.0228)
------- -------
Net asset value, end of period.................. $1.0000 $1.0000
============== ===============
Total Return.................................... 2.68%(2) 2.42%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 6,108 4,109
Ratio of expenses to average net assets......... .93%(2) 1.04%(2)
Ratio of net investment income to average net
assets........................................ 2.65%(2) 2.39%(2)
<CAPTION>
FLORIDA FUND
- ------------------------------------------------
<S> <<C> <C> <C>
Net asset value, beginning of period............
Income from investment operations...............
Expenses........................................
Net investment income(1)........................
Dividends from net investment income(1).........
Net asset value, end of period..................
Total Return....................................
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period..........
Ratio of expenses to average net assets.........
Ratio of net investment income to average net
assets........................................
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS FOR FISCAL YEARS ENDED MAY 31,
ENDED ---------------------------------------
MASSACHUSETTS FUND NOVEMBER 30, 1997 1997 1996
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0180 .0338 .0362
Expenses........................................ .0037 .0079(3) .0086(3)
------- ------- -------
Net investment income(1)........................ .0143 .0259 .0276
Dividends from net investment income(1)......... (.0143) (.0259) (.0276)
------- ------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000
============== ======= =======
Total Return.................................... 2.87%(2) 2.59% 2.76%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 13,052 13,035 8,955
Ratio of expenses to average net assets......... .74%(2) .79%(3) .84%(3)
Ratio of net investment income to average net
assets........................................ 2.84%(2) 2.58% 2.71%
<CAPTION>
MASSACHUSETTS FUND 1995 1994 1993
- ------------------------------------------------ ----------------- ----------------- -----------------
<S> <<C> <C> <C>
Net asset value, beginning of period............ $ 1.0000 $ 1.0000 $ 1.0000
------- ------- -------
Income from investment operations............... .0335 .0227 .0257
Expenses........................................ .0070(3) .0052(3) .0048(3)
------- ------- -------
Net investment income(1)........................ .0265 .0175 .0209
Dividends from net investment income(1)......... (.0265) (.0175) (.0209)
------- ------- -------
Net asset value, end of period.................. $ 1.0000 $ 1.0000 $ 1.0000
======= ======= =======
Total Return.................................... 2.65% 1.75% 2.09%
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 10,169 14,824 13,305
Ratio of expenses to average net assets......... .69%(3) .51%(3) .46%(3)
Ratio of net investment income to average net
assets........................................ 2.60% 1.73% 2.04%
</TABLE>
<TABLE>
<CAPTION>
JUNE 21, 1994
SIX MONTHS YEAR ENDED YEAR ENDED (COMMENCEMENT OF
ENDED MAY 31, MAY 31, OPERATIONS) THROUGH
NEW JERSEY FUND NOVEMBER 30, 1997 1997 1996 MAY 31, 1995
- ------------------------------------------------ ----------------- ---------- ---------- -------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period............ $1.0000 $ 1.0000 $ 1.0000 $1.0000
------- ---------- ---------- -------
Income from investment operations............... .0178 .0343 .0369 .0330
Expenses........................................ .0051 .0107 .0106 .0087(3)
------- ---------- ---------- -------
Net investment income(1)........................ .0127 .0236 .0263 .0243
Dividends from net investment income(1)......... (.0127) (.0236) (.0263) (.0243)
------- ---------- ---------- -------
Net asset value, end of period.................. $1.0000 $ 1.0000 $ 1.0000 $1.0000
============== ========= ========= ===============
Total Return.................................... 2.55%(2) 2.36% 2.63% 2.43%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------------------------
Net assets in thousands, end of period.......... 43,108 39,452 41,026 21,607
Ratio of expenses to average net assets......... 1.02%(2) 1.06% 1.04% 1.01%(2)(3)
Ratio of net investment income to average net
assets........................................ 2.54%(2) 2.33% 2.59% 2.82%(2)
</TABLE>
15
<PAGE> 32
RESERVE NEW YORK TAX-EXEMPT TRUST ("NY TRUST")
RESERVE TAX-EXEMPT TRUST (CALIFORNIA, CONNECTICUT, FLORIDA,
MASSACHUSETTS, NEW JERSEY AND PENNSYLVANIA 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>
SEPTEMBER 12,
1997
(COMMENCEMENT
OF
OPERATIONS)
THROUGH
NOVEMBER 30,
PENNSYLVANIA FUND 1997
- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period...................... $ 1.0000
-------
Income from investment
operations.................. .0082
Expenses...................... .0022
-------
Net investment income(1)...... .0060
Dividends from net investment
income(1)................... (.0060)
-------
Net asset value, end of
period...................... $ 1.0000
===============
Total Return.................. 2.72%(2)
RATIOS/SUPPLEMENTAL DATA
- ------------------------------
Net assets in thousands, end
of period.................... 13,823
Ratio of expenses to average
net assets................... 1.00%(2)
Ratio of net investment income
to average net assets........ 2.71%(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.
16
