LANDMARK FUNDS I, N-30B-2, 1995-03-08

LANDMARK FUNDS I
N-30B-2, 1995-03-08

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<PAGE>

[LOGO] LANDMARK (SM) FUNDS
Advised by Citibank, N.A.

------------------------------------

Landmark
Balanced Fund

------------------------------------

ANNUAL
REPORT
December 31, 1994

<PAGE>
- - --------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS
- - --------------------------------------------------------------------------------

Dear Shareholder:

1994 was a difficult year for financial markets. A stronger-than-expected
economy and higher interest rates adversely affected many types of investments,
especially the bond market, where prices declined almost 10% since the beginning
of 1994. The stock market fell just over 8% from its highs in the first half of
the year, but later recouped those losses on the strength of strong corporate
earnings and finished the year with a small gain.

Throughout the period, the Landmark Funds' investment adviser, Citibank,
N.A., managed the underlying Balanced Portfolio in a manner consistent with the
Landmark Balanced Fund's investment objectives: to earn high current income by
investing in a broad range of securities, to preserve capital, and to provide
growth potential with reduced risk. The Portfolio seeks to participate in the
potential long-term returns of the stock market at a lower level of share price
volatility than is normally available from a fund invested entirely in stocks.

This Annual Report for the period ended December 31, 1994 reviews the
Fund's investment activities and performance over the past twelve months and
provides a summary of Citibank's perspective on the financial markets and
outlook for the foreseeable future. On behalf of the Board of Trustees of the
Landmark Funds, I want to thank our shareholders for their participation and
support. We look forward to serving you in the months and years ahead.

/s/Philip W. Coolidge

Philip W. Coolidge
President
January 20, 1995

Remember that Mutual Fund Shares:

o Are not bank deposits or FDIC insured

o Are not obligations of or guaranteed by Citibank or Citicorp Investment
Services

o Are subject to investment risks, including possible loss of the principal
amount invested

TABLE OF CONTENTS
1 Letter to Shareholders
- - ----------------------------------------
2 Market Environment
Fund Snapshot
- - ----------------------------------------
3 Portfolio Managers
The Portfolio Responds
- - ----------------------------------------
4 Fund Quotes
Strategy and Outlook
- - ----------------------------------------
5 Balanced Portfolio by the Numbers
- - ----------------------------------------
6 Fund Data
Performance Highlights
- - ----------------------------------------
Landmark Balanced Fund
- - ----------------------------------------
7 Statement of Assets and Liabilities
- - ----------------------------------------
8 Statement of Operations
- - ----------------------------------------
9 Statement of Changes in Net Assets
- - ----------------------------------------
10 Financial Highlights
- - ----------------------------------------
11 Notes to Financial Statements
- - ----------------------------------------
14 Independent Auditors' Report
- - ----------------------------------------
Balanced Portfolio
- - ----------------------------------------
15 Portfolio of Investments
- - ----------------------------------------
18 Statement of Assets and Liabilities
Statement of Operations
- - ----------------------------------------
19 Statement of Changes in Net Assets
Financial Highlights
- - ----------------------------------------
20 Notes to Financial Statements
- - ----------------------------------------
22 Independent Auditors' Report

1
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- - --------------------------------------------------------------------------------
MARKET ENVIRONMENT
- - --------------------------------------------------------------------------------

In our semi-annual report six months ago, we advised a cautious approach to
stocks over the short term in order to participate in the long-term gains that
we believe lie ahead. Our caution proved to be prudent as large capitalization
stocks produced only small gains for the full year. Our relative optimism
regarding the bond market, however, was misplaced--the bond market suffered its
worst annual decline in years.

We attribute the performance of both financial markets for the 12-month
period ended December 31, 1994 to tighter monetary policy on the part of the
Federal Reserve Board, which attempted to slow the growth of the U.S. economy.
The Federal Reserve raised the federal funds rate (the rate banks charge each
other for overnight loans) six times during the year, from 3.0% to 5.5%, in an
effort to prevent an acceleration of inflation.

We believe, however, that higher short-term interest rates and inflation
fears alone are not a sufficient explanation for the bond market's decline.
Indeed, prices increased by only about 3% during 1994. In addition to tighter
monetary policy, a weak dollar relative to other currencies caused many foreign
investors to move their capital from the U.S. bond market to other nations. And
problems associated with some investors' highly leveraged fixed-income positions
placed additional selling pressure on bonds as some institutional investors were
forced to sell their holdings to repay their loans.

- - --------------------------------------------------------------------------------
FUND SNAPSHOT
- - --------------------------------------------------------------------------------

COMMENCEMENT OF OPERATIONS
October 19, 1990

NET ASSETS AS OF 12/31/94
$227.3 million

FUND OBJECTIVE
High current income, preservation of capital and provide
growth potential by investing in a mix of equity and fixed
income securities

DIVIDENDS
Paid quarterly, if any

CAPITAL GAINS
Distributed annually, if any

BENCHMARKS
o Standard & Poor's 500 Index
o Lehman Government/Corporate Bond Index
o Lipper Balanced Funds Average

INVESTMENT ADVISER,
BALANCED PORTFOLIO
Citibank, N.A.

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- - --------------------------------------------------------------------------------
PORTFOLIO MANAGERS
- - --------------------------------------------------------------------------------

A. Dwight Hyde, Jr.
Vice President, Citibank, N.A.
U.S. Chief Investment Officer,
Citibank Global Asset Management

Mr. Hyde has been responsible for managing the equity portion of the Portfolio
since its inception after serving as the manager of the equity portion of the
Fund since January 1993. He serves as U.S. Chief Investment Officer for Citibank
Global Asset Management and personally manages over $3.5 billion of equity
assets for Citibank, including the Equity Portfolio. He also serves as head of
the Equity Strategy Committee and is a member of the Citibank Investment Policy
Committee. Mr. Hyde joined Citibank in 1980. He has also served as Chief
Investment Officer at Dean Witter Asset Management and Paribas Asset Management.
Mr. Hyde is a member of the New York Society of Security Analysts and the
Financial Analysts Foundation.

Mark Lindbloom
Vice President, Citibank, N.A.

Mr. Lindbloom has been responsible for managing the fixed income portion of the
Portfolio since its inception after serving as the manager of the fixed income
portion of the Fund since March 1993. He also manages the Landmark Intermediate
Income Fund and intermediate maturity fixed income portfolios for investment
advisory and institutional accounts at Citibank. Prior to joining Citibank in
1986, Mr. Lindbloom was employed by Brown Brothers Harriman & Company, where he
managed discretionary corporate portfolios holding fixed income assets.

- - --------------------------------------------------------------------------------
THE PORTFOLIO RESPONDS
- - --------------------------------------------------------------------------------

The equity portion of the Portfolio was managed cautiously during the year,
focusing on companies that have demonstrated stability in uncertain markets and
solid future earnings prospects. For example, in 1994 we focused mainly on
large- and medium-capitalization growth stocks, with particular emphasis on the
economically sensitive capital spending and technology industries. We also found
attractive values in the stocks of commodity, energy, health care and
transportation companies. On the other hand, we tended to avoid the stocks of
companies that are sensitive to interest rates, such as banks and utilities.
Furthermore, we sold companies from the Portfolio that we believe became
relatively expensive on a valuation basis.

The Portfolio's fixed-income investments were managed with an eye toward
maintaining shareholder value and generating competitive levels of income.
Throughout most of the year, we maintained a "neutral" average duration (a
measure of the Portfolio's sensitivity to changes in interest rates) for the
portfolio, attempting to mirror the overall market's sensitivity to changes in
interest rates. Short-term investments in corporate notes, asset-backed
securities and commercial mortgage securities were balanced by longer term
investments in corporate bonds, mortgage-backed securities and U.S. Treasury
bonds, producing a portfolio with an average duration in the intermediate range.
All securities held by the Fund were rated investment-grade or its equivalent.
As of December 31, 1994, 88% were in AAA-rated bonds.

3
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- - --------------------------------------------------------------------------------
FUND QUOTES FROM THE PORTFOLIO MANAGERS
- - --------------------------------------------------------------------------------

"The major stock indices have held
up fairly well in 1994, but the list of
stocks reaching new highs has
become smaller. We've become more
cautious as a result."

"We've invested in companies where
we feel earnings prospects are solid,
and we've been trimming companies
that have high price-earnings ratios."

"The characteristics of the fixed-
income market are far different
than they were a year ago. A slower
pace of economic growth should
benefit bonds."

- - --------------------------------------------------------------------------------
STRATEGY AND OUTLOOK
- - --------------------------------------------------------------------------------

Looking forward, we believe that the level of economic growth and the
Federal Reserve's monetary policy decisions will continue to dominate the stock
and bond markets over the next several months. If the Federal Reserve raises
short-term interest rates further because of concerns about inflation, the
markets are likely to remain under pressure over the near term.

If, on the other hand, economic growth begins to moderate to more
sustainable levels, stocks and bonds should react positively. Rising corporate
earnings and declining bond yields should prove to be positive for the financial
markets as 1995 unfolds.

Finally, we expect the new Republican-controlled Congress to be positive
for stocks and bonds. If initiatives such as a capital-gains tax cut and the
balanced budget amendment are successful, capital should flow into financial
assets, driving prices higher. Perhaps most significantly, deficit-reduction
measures should help support the dollar relative to other currencies, making the
U.S. markets more attractive to overseas investors. We expect the combination of
moderate economic growth, low inflation, lower taxes on capital gains and
foreign investment to be a powerful foundation for stock and bond market gains
in 1995 and beyond.

4
<PAGE>

TOP TEN EQUITY HOLDINGS OF THE PORTFOLIO
(As of 12/31/94)
- - --------------------------------------------------------------------
Name Industry Sector % of Net Assets

General Electric Co. Electronic 2.34%
American Express Co. Finance-Non Banks 1.86%
Royal Dutch Petroleum Co. Energy 1.64%
General Motors Corp. Cyclicals-Durables 1.55%
Consolidated Rail Inc. Transportation 1.54%
Air Products & Chemicals Inc. Commodities 1.46%
American Telephone &
Telegraph Co. Information Processing 1.45%
General Motors Corp.
"Class E" Information Processing 1.43%
Unocal Corp. Energy 1.32%
Texas Instruments, Inc. Electronic 1.31%

FIXED INCOME HOLDINGS
As of 12/31/94, the fixed income holdings were distributed
as follows (as a percent of the total portfolio):
- - --------------------------------------------------------------------
U.S. Treasuries .............. 19%
Mortgage Obligations ......... 13
Asset Backed Securities ...... 2
Corporate Bonds .............. 3
Yankee Bonds ................. 2
--
39%

CHANGES IN PORTFOLIO
ASSET ALLOCATION
Portfolio of investments as of 12/31/94

Cash/Short Term/Other ................. 5%
Stocks ................................ 56%
Treasuries ............................ 19%
Other Bonds ........................... 20%

Compared to 12/31/93

Cash/Short Term/Other ................. 8%
Stocks ................................ 57%
Treasuries ............................ 9%
Other Bonds ........................... 26%
5
<PAGE>

- - --------------------------------------------------------------------------------
FUND DATA All Periods Ended December 31, 1994
- - --------------------------------------------------------------------------------

Total Returns
-----------------------------
Since
10/19/90
One Inception
Year (annualized)
-------- ------------
Landmark Balanced Fund
without Sales Charge .................. (2.06)% 11.17%
Lipper Balanced Funds Average ........... (2.50)% 11.58%*
Standard & Poor's 500 Index ............. 1.31% 13.77%*
Lehman Government/Corporate Bond Index .. (3.51)% 8.19%*
Landmark Balanced Fund
with Maximum Sales Charge of 4.75% .... (6.71)% 9.89%

*From 10/31/90

30-Day SEC Yield 3.17%
Income Dividends Per Share $0.394
Capital Gain Distributions $0.030

- - --------------------------------------------------------------------------------
PERFORMANCE HIGHLIGHTS
- - --------------------------------------------------------------------------------

A $10,000 investment in the Fund made on inception date would have grown to
$14,866 with sales charge (as of 12/31/94). The graph shows how the Fund
compares to our benchmarks for the period October 31, 1990 to December 31, 1994.

The graph includes the initial sales charge on the Fund (no comparable charge
exists for the other indices) and assumes all dividends and distributions from
the Fund are reinvested at Net Asset Value.

The following data is presented as a graph in the printed report.

Landmark Landmark Lehman
Balanced Balanced Lipper Government/
Without With Balanced S&P 500 Corporate
Sales Sales Funds Index Bond Index
Charge Charge Average (Unmanaged) (Unmanaged)
-------- -------- -------- ----------- -----------
Oct. 90 $10,000 $ 9,525 $10,000 $10,000 $10,000
$10,553 $10,052 $10,435 $10,646 $10,133
- - --------------------------------------------------------------
Dec. 90 $10,798 $10,285 $10,677 $10,943 $10,354
$11,302 $10,766 $11,034 $11,420 $10,510
$11,881 $11,316 $11,520 $12,237 $10,628
$12,026 $11,455 $11,724 $12,533 $10,719
$12,037 $11,465 $11,752 $12,563 $10,793
$12,481 $11,888 $12,098 $13,104 $10,917
$12,047 $11,475 $11,725 $12,504 $10,969
$12,624 $12,024 $12,122 $13,087 $10,957
$13,115 $12,492 $12,433 $13,397 $11,095
$12,938 $12,324 $12,449 $13,173 $11,350
$13,175 $12,549 $12,632 $13,350 $11,587
$12,949 $12,334 $12,353 $12,812 $11,690
- - --------------------------------------------------------------
Dec. 91 $13,995 $13,331 $13,357 $14,277 $11,807
$13,736 $13,083 $13,241 $14,012 $12,205
$13,941 $13,279 $13,400 $14,194 $12,024
$13,770 $13,116 $13,202 $13,917 $12,088
$13,824 $13,168 $13,322 $14,326 $12,022
$13,900 $13,240 $13,460 $14,397 $12,094
$13,655 $13,007 $13,315 $14,182 $12,328
$14,115 $13,444 $13,712 $14,762 $12,510
$13,907 $13,246 $13,582 $14,460 $12,830
$14,157 $13,484 $13,753 $14,630 $12,944
$14,366 $13,683 $13,754 $14,681 $13,120
$14,827 $14,123 $14,094 $15,182 $12,919
- - --------------------------------------------------------------
Dec. 92 $14,950 $14,240 $14,355 $15,369 $12,908
$15,061 $14,345 $14,548 $15,498 $13,130
$15,039 $14,324 $14,644 $15,709 $13,416
$15,559 $14,820 $14,920 $16,040 $13,694
$15,359 $14,630 $14,738 $15,652 $13,741
$15,603 $14,862 $14,978 $16,071 $13,846
$15,598 $14,857 $15,146 $16,118 $13,839
$15,476 $14,741 $15,170 $16,054 $14,153
$15,966 $15,208 $15,628 $16,662 $14,244
$15,955 $15,198 $15,681 $16,534 $14,571
$16,090 $15,326 $15,822 $16,876 $14,622
$15,922 $15,166 $15,591 $16,716 $14,682
- - --------------------------------------------------------------
Dec. 93 $16,218 $15,448 $15,867 $16,918 $14,508
$16,571 $15,784 $16,253 $17,494 $14,571
$16,241 $15,469 $15,934 $17,020 $14,791
$15,622 $14,880 $15,348 $16,277 $14,469
$15,714 $14,968 $15,377 $16,486 $14,114
$15,920 $15,164 $15,449 $16,756 $13,997
$15,553 $14,815 $15,167 $16,346 $13,971
$15,981 $15,222 $15,509 $16,882 $13,937
$16,305 $15,530 $15,906 $17,574 $14,216
$15,866 $15,113 $15,618 $17,149 $14,222
$16,099 $15,334 $15,711 $17,546 $14,007
$15,703 $14,957 $15,324 $16,902 $13,991
- - --------------------------------------------------------------
Dec. 94 $15,884 $15,130 $15,453 $17,151 $13,741

Notes: All Fund performance numbers represent past performance, and are no
guarantee of future results. The Fund's share price and investment return will
fluctuate, so that the value of an investor's shares, when redeemed, may be
worth more or less than their original cost. Total returns include change in
share price and reinvestment of dividends and distributions, if any. Total
return figures "with sales charge" are provided in accordance with SEC
guidelines for comparative purposes for prospective investors.

6
<PAGE>

- - --------------------------------------------------------------------------------
Landmark Balanced Fund
- - --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1994
- - --------------------------------------------------------------------------------

Assets:
Investment in Balanced Portfolio,
at value (Note 1A) ..................................... $ 227,785,802
Receivable for shares of beneficial
interest sold .......................................... 114,725
-------------
Total assets ......................................... 227,900,527
-------------

Liabilities:
Payable for shares of beneficial
interest repurchased ................................... 482,389
Payable to affiliates--Shareholder
servicing agents' fee (Note 3B) ........................ 47,957
Accrued expenses and other liabilities ................... 61,385
-------------
Total liabilities .................................... 591,731
-------------
Net Assets for 16,810,822 shares of
beneficial interest outstanding ........................ $ 227,308,796
=============

Net Assets Consist of:
Paid-in capital .......................................... $ 232,566,335
Unrealized appreciation of investments ................... 1,543,118
Accumulated net realized loss
on investments ......................................... (7,003,192)
Undistributed net investment income ...................... 202,535
-------------
Total ................................................ $ 227,308,796
=============

Net Asset Value and Redemption Price
Per Share of Beneficial Interest ....................... $13.52
======

Computation of Offering Price:
Maximum Offering Price per share based
on a 4.75% sales charge ($13.52/0.9525) ................ $14.19
======

See notes to financial statements

7
<PAGE>

- - --------------------------------------------------------------------------------
Landmark Balanced Fund
- - --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1994
- - --------------------------------------------------------------------------------

Investment Income (Note 1B):
Interest ...................................... $ 2,049,771
Dividends ..................................... 867,711 $ 2,917,482
------------

Dividend Income from Balanced Portfolio ....... 2,317,246
Interest Income from Balanced Portfolio ....... 4,152,334
Other Income Foreign Tax reclaim .............. 6,190
Allocated Expenses from Balanced Portfolio .... (821,143) 5,654,627
------------ ------------
8,572,109

Expenses:
Shareholder Servicing Agents'
fees (Note 3B) .............................. 977,967
Investment advisory fees (Note 2) ............. 340,160
Administrative fees (Note 3A) ................. 409,258
Distribution fees (Note 4) .................... 122,246
Expense reimbursement fees (Note 7) ........... 191,943
------------
Total expenses ............................ 2,041,574
Less aggregate amount waived by
Shareholder Servicing Agents (Note 3B) ...... (366,738)
-------------
Net expenses ............................. 1,674,836
------------
Net investment income .................... 6,897,273

Net Realized and Unrealized Gain
(Loss) on Investments:
Net realized gain (loss)
from investment transactions ................ (6,869,492)
Net change in unrealized
appreciation(depreciation) .................. (5,321,496)
------------
Net realized and unrealized
gain (loss) on investments .................. (12,190,988)
------------
Net Decrease in Net Assets
Resulting from Operations ................... $ (5,293,715)
============

See notes to financial statements

8
<PAGE>

- - --------------------------------------------------------------------------------
Landmark Balanced Fund
- - --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------

Year Ended Year Ended
December 31, December 31,
1994 1993
------------- -------------
Increase (Decrease) in Net
Assets from:
Operations:
Net investment income ...................... $ 6,897,273 $ 3,537,220
Net realized gain (loss)
on investment transactions ............... (6,869,492) 3,189,168
Net change in unrealized appreciation
(depreciation) of investments ............ (5,321,496) 4,538,368
------------- -------------
Net increase (decrease) in net
assets resulting from operations ........ (5,293,715) 11,264,756
------------- -------------

Equalization (Note 1E) ..................... -- 2,143
------------- -------------

Distributions to Shareholders from:
Net investment income ...................... (6,810,013) (3,542,388)
Net realized gain on investments ........... (527,276) (2,203,230)
------------- -------------
Decrease in net assets from
distributions to shareholders .......... (7,337,289) (5,745,618)
------------- -------------

Transactions in Shares of Beneficial
Interest (Note 6):
Net proceeds from sale of shares ........... 9,407,740 19,709,621
Net asset value of shares issued
to shareholders from reinvestment
of distributions ......................... 7,330,858 5,730,746
Net asset value of shares issued
in connection with the acquisition
of Citibank IRA Balanced
Portfolio (Note 8) ....................... -- 238,052,969
Cost of shares repurchased ................. (42,014,602) (19,095,025)
------------- -------------
Net increase (decrease) in net
assets from transactions in
shares of beneficial interest .......... (25,276,004) 244,398,311
------------- -------------
Net Increase (Decrease)
in Net Assets ............................ (37,907,008) 249,919,592

Net Assets:
Beginning of period ........................ 265,215,804 15,296,212
------------- -------------
End of period (including undistributed
net investment income of $202,535
and $17,648, respectively) ............... $ 227,308,796 $ 265,215,804
============= =============

See notes to financial statements

9
<PAGE>

- - --------------------------------------------------------------------------------
Landmark Balanced Fund
- - --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
October 19, 1990
Year Ended December 31, (Commencement of
-------------------------------------------------------- Operations) to
1994 1993 1992 1991 December 31,1990
---- ---- ---- ---- ----------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period .......... $ 14.24 $ 13.54 $ 12.93 $ 10.27 $ 9.75
-------- -------- -------- -------- --------
Income From Operations:
Net investment income ......................... 0.399 0.336<F2> 0.266 0.336 0.081
Net realized and unrealized gain
(loss) on investments ....................... (0.695) 0.803 0.600 2.665 0.513
-------- -------- -------- -------- --------
Total from operations .................... (0.296) 1.139 0.866 3.001 0.594
-------- -------- -------- -------- --------
Less Distributions From:
Net investment income ....................... (0.394) (0.319) (0.256) (0.341) (0.074)
Net realized gain on investments ............ (0.030) (0.120) -- -- --
-------- -------- -------- -------- --------
Total from distributions ................ (0.424) (0.439) (0.256) (0.341) (0.074)
-------- -------- -------- -------- --------
Net Asset Value, end of period ................ $ 13.52 $ 14.24 $ 13.54 $ 12.93 $ 10.27
======== ======== ======== ======== ========
Ratios/Supplemental Data:

Net assets, end of period
(000's omitted) ............................. $227,309 $265,216 $15,296 $10,239 $ 6,855
Ratio of expenses to average
net assets .................................. 1.02%<F4> 1.04% 1.40% 1.40% 1.40%<F1>
Ratio of net investment income
to average net assets ....................... 2.82% 2.46% 2.07% 2.88% 4.06%<F1>
Portfolio turnover ............................ 29%<F5> 101% 102% 117% 12%
Total return .................................. (2.06)% 8.48% 6.82% 29.61% 6.09%<F3>

Note: If Agents of the Fund for the periods indicated and Agents of Balanced Portfolio for the period May 1, 1994 to December 31,
1994 had not waived a portion of their fees and an expense reimbursement agreement had not been in effect and had expenses been
limited to that required by certain state securities laws, the net investment income per share and the ratios would have been as
follows:

<S> <C> <C> <C> <C> <C>
Net investment income per share ............ $ 0.378 $ 0.310<F2> $ 0.148 $ 0.211 $ 0.059
Ratios:
Expenses to average net assets ............. 1.17%<F4> 1.23% 2.32% 2.47% 2.50%<F1>
Net investment income to
average net assets ........................ 2.67% 2.27% 1.15% 1.81% 2.96%<F1>

<FN>
<F1>Annualized
<F2>Because of the significant increase in Fund shares outstanding during the year ended December 31, 1993, the per share amount
for net investment income was computed using a monthly average number of shares outstanding during the year.
<F3>Not annualized
<F4>Includes the Fund's share of Balanced Portfolio allocated expenses for the period May 1, 1994 to December 31, 1994.
<F5>Portfolio turnover represents the rate of portfolio activity for the period while the Fund was making investments directly in
securities. The portfolio turnover rate for the period since the Fund transferred substantially all of its investable assets
to the Portfolio is shown in the Portfolio's financial statements which are included elsewhere in this report.

</TABLE>

See notes to financial statements

10
<PAGE>

- - --------------------------------------------------------------------------------
Landmark Balanced Fund
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------

(1) SIGNIFICANT ACCOUNTING POLICIES

The Landmark Balanced Fund (the "Fund") is a separate diversified series of
Landmark Funds I (the "Trust"), a Massachusetts business trust. The Trust is
registered under the Investment Company Act of 1940, as amended, as an open-end,
management investment company. On May 1, 1994, the Fund began investing all of
its investable assets in Balanced Portfolio (the "Portfolio"), a management
investment company for which Citibank, N.A. ("Citibank") serves as Investment
Adviser. The Landmark Funds Broker-Dealer Services, Inc. ("LFBDS") acts as the
Fund's Administrator and Distributor. Citibank also serves as Sub-Administrator
and makes Fund shares available to customers as Shareholder Servicing Agent.

The Trust seeks to achieve the Fund's investment objectives of earning high
current income, preservation of capital and providing growth potential with
reduced risk by investing all of its investable assets in the Portfolio, an
open-end, diversified management investment company having the same investment
objectives and policies and substantially the same investment restrictions as
the Fund. The value of such investment reflects the Fund's proportionate
interest (99.3% at December 31, 1994) in the net assets of the Portfolio.

The financial statements of the Portfolio, including the portfolio of
investments, are contained elsewhere in this report and should be read in
conjunction with the Fund's financial statements.

The significant accounting policies consistently followed by the Fund are in
conformity with generally accepted accounting principles and are as follows:

A. INVESTMENT VALUATION -- Valuation of securities by the Portfolio is discussed
in Note 1A of the Portfolio's Notes to Financial Statements which are included
elsewhere in this report.

B. INVESTMENT INCOME -- The Fund earns income, net of Portfolio expenses, daily
based on its investment in the Portfolio. Prior to the Fund's investment in the
Portfolio, the Fund held its investments directly. For investments which were
held directly interest income was determined on the basis of interest accrued
and discount earned, adjusted for amortization of premium or discount on
long-term debt securities when required for federal income tax purposes. Gain
and loss from principal paydowns was recorded as interest income. Dividend
income was recorded on the ex-dividend date.

C. FEDERAL TAXES -- The Fund's policy is to comply with the provisions of the
Internal Revenue Code applicable to regulated investment companies and to
distribute to shareholders all of its taxable income, including any net realized
gain on investment transactions. Accordingly, no provision for federal income or
excise tax is necessary. At December 31, 1994, the Fund, for federal income tax
purposes, had a capital loss carryover of $3,730,366, which will expire on
December 31, 2002. Such capital loss carryover will reduce the Fund's taxable
income arising from future net realized gain on investment transactions, if any,
to the extent permitted by the Internal Revenue Code, and thus will reduce the
amount of the distributions to shareholders which would otherwise be necessary
to relieve the Fund of any liability for federal income or excise tax.

D. EXPENSES -- The Fund bears all costs of its operations other than expenses
specifically assumed by Citibank and LFBDS. Expenses incurred by the Trust with
respect to any two or more funds or series are allocated in proportion to the
average net assets of each fund, except when allocations of direct expenses to
each fund can otherwise be made fairly. Expenses directly attributable to a fund
are charged to that fund. The Fund's share of the Portfolio's expenses are
charged against and reduce the amount of the Fund's investment in the Portfolio.

E. DISTRIBUTIONS -- Distributions to shareholders are recorded on ex-dividend
date. The amount and character of income and net realized gains to be
distributed are determined in accordance with income tax rules and regulations,
which may differ from generally accepted accounting principles. These
differences are attributable to permanent book and tax accounting differences.
Reclassifications are made to the Fund's capital accounts to reflect income and
net realized gains available for distribution (or available capital loss

<PAGE>
- - --------------------------------------------------------------------------------
Landmark Balanced Fund
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS continued
- - --------------------------------------------------------------------------------

carryovers) under income tax rules and regulations. For the year ended December
31, 1994, the Fund reclassed $12,198 to paid-in capital, $127,473 from
accumulated net loss on investment and $115,275 to undistributed net investment
income.

Prior to January 1, 1994, the Fund followed equalization accounting by which a
portion of the proceeds from sales and cost of repurchases of Fund shares was
credited or charged to undistributed net investment income on the date of the
transaction so that undistributed net investment income per share was unaffected
by Fund shares sold or repurchased. The Fund discontinued equalization
accounting as of January 1, 1994 and reclassified net equalization credits in
the amount of $17,648 from accumulated net investment income to paid-in capital.
In management's opinion, discontinuance of equalization accounting will result
in less distortion of undistributed net investment income as compared to income
available for distribution for federal income tax purposes. This change has no
effect on the Fund's net assets, results of operations or net asset value per
share, and did not have a material effect on the per share amounts in the
Financial Highlights.

F. OTHER -- All the net investment income, realized and unrealized gain and loss
of the Portfolio is allocated pro rata, based on respective ownership interests,
among the Fund and the other investors in the Portfolio at the time of such
determination. Investment transactions are accounted for on the trade date
basis. Realized gains and losses are determined on the identified cost basis.

(2) INVESTMENT ADVISORY FEE

Prior to May 1, 1994 (when the Fund transferred all of its investable assets to
the Portfolio in exchange for an interest in the Portfolio), the Fund retained
Citibank, as its Investment Adviser. The investment advisory fee paid to
Citibank, as compensation for overall investment management services, amounted
to $340,160 for the four months ended April 30, 1994. The investment advisory
fee was computed at the annual rate of 0.40% of the Fund's average daily net
assets. The Portfolio has engaged Citibank to render investment advisory
services. See Note 2 of the Portfolio's Notes to Financial Statements which are
included elsewhere in this report.

(3) ADMINISTRATIVE SERVICES PLAN

The Trust has adopted an Administrative Services Plan (the "Administrative
Services Plan") which provides that the Trust, on behalf of the Fund, may obtain
the services of an Administrator, one or more Shareholder Servicing Agents and
other Servicing Agents and may enter into agreements providing for the payment
of fees for such services. Under the Trust Administrative Services Plan, the
aggregate of the fee paid to the Administrator from the Fund, the fees paid to
the Shareholder Servicing Agents from the Fund under such Plan and the Basic
Distribution Fee paid from the Fund to the Distributor under the Distribution
Plan may not exceed 0.65% of the Fund's average daily net assets on an
annualized basis for the Fund's then current fiscal year.

A. ADMINISTRATIVE FEE -- Under the terms of an Administrative Services
Agreement, the administrative fee paid to the Administrator, as compensation for
overall administrative services and general office facilities, may not exceed an
annual rate of 0.20% of the Fund's average daily net assets. Prior to May 1,
1994 (when the Fund transferred all of its investable assets to the Portfolio in
exchange for an interest in the Portfolio), the Administrator received fees
computed at the annualized rate of 0.20% of the Fund's average daily net assets
which amounted to $170,080 for the four months ended April 30, 1994. For the
period May 1, 1994 to December 31, 1994, under the Administrative Services Plan
the Administrator received fees computed at an annual rate of 0.15% of the
Fund's average daily net assets which amounted to $239,178. Citibank acts as
Sub-Administrator and performs such duties and receives such compensation from
LFBDS as from time to time is agreed to by LFBDS and Citibank. The Fund pays no
compensation directly to any officer who is affiliated with the Administrator,
all of whom receive remuneration for their services to the Fund from the
Administrator or its affiliates. Certain of the officers and a Trustee of the
Fund are officers or directors of the Administrator or its affiliates.

B. SHAREHOLDER SERVICING AGENTS FEES -- The Trust, on behalf of the Fund, has
entered into shareholder servicing agreements with each Shareholder Servicing
Agent pursuant to which that Shareholder Servicing Agent acts as an agent for
its customers and provides other related services. For their services, each
Shareholder Servicing Agent receives fees from the Fund, which may be paid
periodically, which may not exceed, on an annualized basis, an amount equal to
0.40% of the average daily net assets of the Fund represented by shares owned
during the period for which payment is being made by investors for whom such
Shareholder Servicing Agent maintains a servicing relationship. Shareholder
Servicing Agents' fees amounted to $977,967, of which $366,738 was voluntarily
waived for the year ended December 31, 1994.

(4) DISTRIBUTION FEES

The Fund has adopted a Plan of Distribution pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, in which the Fund reimburses the
Distributor for expenses incurred or anticipated in connection with sales of
shares of the Fund, at an annual rate not to exceed 0.15% of the Fund's average
daily net assets. The Distributor may also receive an additional fee from the
Fund at an annual rate not to exceed 0.05% of the Fund's average daily net
assets in anticipation of, or as reimbursement for, advertising expenses
incurred by the Distributor in connection with the sale of shares of the Fund.
No payment of such additional fee has been made during the period. Under the
Administrative Services Plan distribution fees were computed at an annual rate
of 0.05% of the Fund's average daily net assets, which amounted to $122,246 for
the year ended December 31, 1994.

(5) INVESTMENT TRANSACTIONS

On May 1, 1994 the Fund transferred all of its investable assets ($246,231,647)
to the Portfolio in exchange for an interest in the Portfolio. Increases and
decreases in the Fund's investment in the Portfolio for the period May 1, 1994
to December 31, 1994 aggregated $3,619,716 and $25,470,972, respectively.

Purchases and sales of investments, other than short-term obligations during the
period January 1, 1994 to April 30, 1994 aggregated $78,436,141 and $68,770,188,
respectively.

(6) SHARES OF BENEFICIAL INTEREST

The Declaration of Trust permits the Trustees to issue an unlimited number of
full and fractional shares of beneficial interest (without par value).
Transactions in shares of beneficial interest were as follows:

Year Ended Year Ended
December 31, December 31,
1994 1993
----------- -----------
Shares sold .................................. 671,065 1,404,177
Shares issued in connection
with the acquisition of
Citibank IRA Balanced
Portfolio (Note 8) ......................... -- 17,043,695
Shares issued to shareholders from reinvest-
ment of distribution ....................... 539,598 403,690
Shares repurchased ........................... (3,026,611) (1,354,544)
----------- -----------
Net increase (decrease) ...................... (1,815,948) 17,497,018
=========== ===========

(7) EXPENSE REIMBURSEMENT FEE

LFBDS has entered into an expense reimbursement agreement with the Fund. LFBDS
has agreed to pay all of the ordinary operating expenses (excluding interest,
taxes, brokerage commissions, litigation costs or other extraordinary costs or
expenses) of the Fund, other than fees paid under the Administrative Services
Agreement, Distribution Agreement, and the Shareholder Servicing Agreements. The
Agreement shall terminate on May 31, 2000, unless sooner terminated by either
party upon not less than 30 days nor more than 60 days written notice to the
other party.

The Trust has agreed to pay LFBDS an expense reimbursement fee from the Fund, in
addition to the administrative and distribution fees, accrued daily and paid
monthly; provided, however, that such fee shall not exceed the amount such that
immediately after any such payment the aggregate expenses of the Fund including
expenses allocated from the Portfolio would, on an annual basis, exceed an
agreed upon rate, currently 1.02% of average daily net assets.
13

(8) ACQUISITION OF CITIBANK IRA BALANCED PORTFOLIO

On June 25, 1993, the Fund acquired all of the net assets of the Balanced
Portfolio of the Collective Investment Trust for Citibank IRAs pursuant to an
Agreement and Plan of Reorganization approved by Citibank IRA Balanced Portfolio
participants on February 18, 1993. The acquisition was accomplished by a
tax-free exchange of 17,043,695 shares of the Fund (valued at $238,052,969) in
exchange for the Balanced Portfolio's net assets on June 25, 1993. The Citibank
IRA Balanced Portfolio's net assets at that date ($238,052,969), including
$140,152 of unrealized appreciation, were combined with those of the Fund. The
aggregate net assets of the Fund after the acquisition were $258,574,336.

<PAGE>
- - --------------------------------------------------------------------------------
Landmark Balanced Fund
- - --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
- - --------------------------------------------------------------------------------

TO THE TRUSTEES AND THE SHAREHOLDERS OF LANDMARK FUNDS I (THE TRUST): LANDMARK
BALANCED FUND

In our opinion, the accompanying statement of assets and liabilities and the
related statements of operations and of changes in net assets and the financial
highlights present fairly, in all material respects, the financial position of
Landmark Balanced Fund (the "Fund"), a series of the Landmark Funds I, at
December 31, 1994, and the results of its operations, the changes in its net
assets and the financial highlights for the year then ended in conformity with
generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of investments owned at December 31, 1994,
provides a reasonable basis for the opinion expressed above. The statement of
changes in net assets for the period ended December 31, 1993 and the financial
highlights for each of the periods then ended were audited by other independent
accountants whose report dated February 2, 1994 expressed an unqualified opinion
on those statements.

PRICE WATERHOUSE LLP
Boston, Massachusetts
February 3, 1995
14
<PAGE>

- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS December 31, 1994
- - --------------------------------------------------------------------------------

Issuer Shares Value
- - --------------------------------------------------------------------------------
COMMON STOCKS -- 56.1%
- - --------------------------------------------------------------------------------

COMMODITIES - 3.3%
Air Products & Chemicals Inc. ............ 75,000 $ 3,346,875
Lubrizol Corp. ........................... 60,000 2,032,500
Nucor Corp. .............................. 41,200 2,286,600
------------
7,665,975
------------
CYCLICALS - DURABLES - 2.9%
Cooper Tire & Rubber Co. ................. 13,700 323,663
Ford Motor Co. ........................... 96,000 2,688,000
General Motors Corp. ..................... 84,000 3,549,000
------------
6,560,663
------------
CYCLICALS - NON DURABLES - 1.3%
Eastman Kodak Co. ........................ 62,000 2,960,500
------------

ELECTRONIC - 5.5%
Emerson Electric Co. ..................... 35,000 2,187,500
General Electric Co. ..................... 105,000 5,355,000
Hewlett Packard Co. ...................... 20,000 1,997,500
Texas Instruments, Inc. .................. 40,200 3,009,975
------------
12,549,975
------------

ENERGY - 3.6%
Royal Dutch Petroleum
Co. ADR's .............................. 35,000 3,762,500
Schlumberger LTD ......................... 27,000 1,360,125
Unocal Corp. ............................. 111,000 3,024,750
------------
8,147,375
------------
ENTERTAINMENT/MEDIA - 1.0%
Carnival Corp. ........................... 26,100 554,625
Gaylord Entertainment Co. ................ 12,000 273,000
Tele-Communications Inc.
Class "A" .............................. 65,000 1,413,750
------------
2,241,375
------------
FINANCE BANKS - 2.9%
BankAmerica Corp. ........................ 60,000 2,370,000
First Fidelity Bancorp ................... 47,000 2,109,125
Signet Banking Corp. ..................... 76,000 2,175,500
------------
6,654,625
------------

FINANCE - NON BANKS - 7.4%
American Express Co. ..................... 100,000 4,262,500
American International
Group Inc. ............................. 28,000 2,744,000
Asia Tigers Fund ......................... 28,300 265,313
Avalon Properties Inc. ................... 75,000 1,725,000
Chile Fund ............................... 11,600 535,050
Emerging Germany Fund, Inc. .............. 23,100 170,363
Emerging Tiger Fund, Inc. ................ 34,600 393,575
Federal National
Mortgage Association ................... 40,000 2,915,000
First Australia Fund, Inc. ............... 8,500 75,438
France Growth Fund ....................... 12,300 112,238
Future Germany Fund ...................... 11,700 168,188
Irish Investment Fund, Inc. .............. 3,300 28,463
Malaysia Fund ............................ 19,600 338,100
Pakistan Investment Fund ................. 34,100 306,900
Thai Capital Fund ........................ 18,500 307,563
The India Fund, Inc. ..................... 42,000 446,250
The New Germany Fund ..................... 28,600 328,900
The Thai Fund, Inc. ...................... 14,100 315,485
Travelers Inc. ........................... 38,000 1,235,000
United Kingdom Fund, Inc. ................ 16,100 175,088
------------
16,848,414
------------
GROWTH STAPLES - 3.2%
McDonald's Corp. ......................... 86,000 2,515,500
PepsiCo Inc. ............................. 62,500 2,265,625
Sysco Corp. .............................. 100,000 2,575,000
------------
7,356,125
------------
HEALTH CARE - 5.8%
Abbott Laboratories ...................... 77,000 2,512,125
Coastal Healthcare Group ................. 52,600 1,439,925
Community Health Systems ................. 35,500 967,375
FHP Group ................................ 56,000 1,442,000
Johnson & Johnson ........................ 49,000 2,682,750
Pfizer Inc. .............................. 32,000 2,472,000
United Health Care Co. ................... 11,500 518,938
Value Health Inc. ........................ 35,300 1,314,925
------------
13,350,038
------------

15
<PAGE>

- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS December 31, 1994 continued
- - --------------------------------------------------------------------------------

Issuer Shares Value
- - --------------------------------------------------------------------------------

INFORMATION PROCESSING - 7.8%
American Telephone &
Telegraph Co. ........................... 66,000 $ 3,316,500
Cisco Systems, Inc. ...................... 70,000 2,458,750
DSC Communications ....................... 48,000 1,722,000
General Motors Corp. Class "E" ........... 85,000 3,272,500
Silicon Graphics Inc.* ................... 60,000 1,852,500
Stratus Computer Inc.* ................... 68,000 2,584,000
Xerox Corp. .............................. 26,500 2,623,500
------------
17,829,750
------------
MACHINERY - 3.2%
Cooper Industries Inc. ................... 46,000 1,569,750
Deere & Co. .............................. 30,000 1,987,500
Fluor Corp. .............................. 45,000 1,940,623
WMX Technologies Inc. .................... 71,000 1,863,750
------------
7,361,623
------------
RETAIL SALES - 4.2%
Home Depot Inc. .......................... 50,000 2,300,000
Limited Inc. ............................. 65,000 1,178,125
May Department Stores Co. ................ 70,000 2,362,500
Toys "R" Us Inc.* ........................ 80,000 2,440,000
Wal-Mart Stores Inc. ..................... 58,000 1,232,500
------------
9,513,125
------------
TRANSPORTATION - 2.7%
Consolidated Rail Inc. ................... 70,000 3,535,000
Norfolk Southern Co. ..................... 45,000 2,728,125
------------
6,263,125
------------
UTILITIES - 1.3%
FPL Group Inc. ........................... 38,000 1,334,750
Telefonos de Mexico ADR's ................ 42,700 1,750,700
------------
3,085,450
------------

TOTAL COMMON STOCK
(Identified Cost $120,023,280) 128,388,138
------------

- - --------------------------------------------------------------------------------
FIXED INCOME -- 39.0%
- - --------------------------------------------------------------------------------
Principal
Issuer Amount Value
- - --------------------------------------------------------------------------------

ASSET BACKED - 1.9%
Carco
7.875% , due 7/15/99 .................... $3,000,000 $2,960,625
General Motors Acceptance Corp.,
5.95%, due 2/15/97 ...................... 276,188 276,099
GMAC 1992 E Grantor Trust,
4.75%, due 8/15/97 ...................... 333,484 325,564
Merrill Lynch Asset Backed Co. ...........
5.125%, due 7/15/98 ..................... 730,712 715,410
------------
4,277,698
------------
MORTGAGE OBLIGATIONS - 13.4%
COLLATERALIZED MORTGAGE
OBLIGATIONS - 9.4%
Banc One Credit
7.55%, due 12/15/99 .................... 3,000,000 2,959,800
Equitable Capital Credit.
8.95%, due 10/15/06 ..................... 3,000,000 3,028,800
Federal Home Loan
Mortgage Corp.
6.00%, due 3/15/09 ...................... 3,000,000 2,388,687
6.00%, due 3/15/09 ...................... 2,496,985 1,987,972
Federal National
Mortgage Association
6.50%, due 9/17/09 ...................... 2,800,000 2,359,000
HFCHC
6.725%, due 5/20/08 ..................... 3,275,000 3,269,858
Nomura Asset Corp.
7.265%, due 7/07/03 ..................... 2,578,498 2,635,225
Resolution Trust Corp.
5.6125%, due 9/25/24 .................... 2,961,725 2,954,321
------------
21,583,663
------------

16
<PAGE>

- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS December 31, 1994 continued
- - --------------------------------------------------------------------------------
Principal
Issuer Amount Value
- - --------------------------------------------------------------------------------

MORTGAGE BACKED SECURITIES - 0.1%
Federal Home Loan Mortgage Corp.
8.50%, due 6/1/01 ....................... $ 44,837 $ 44,473
9.50%, due 2/1/01 ....................... 25,915 26,539
Federal National Mortgage Assoc
9.00%, due 11/1/01 ...................... 43,316 43,926
------------
114,938
------------
GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION - 3.9%
6.50%, due 1/15/25 TBA .................. 3,000,000 2,599,680
7.50%, due 1/15/25 ...................... 3,000,000 2,783,430
8.25%, due 7/15/05 TBA .................. 891,347 849,837
6.50%, due 1/15/10 TBA .................. 3,000,000 2,741,250
------------
8,974,197
------------
TOTAL MORTGAGE OBLIGATIONS ............... 30,672,798
------------

DOMESTIC CORPORATE BONDS - 2.9%
Caterpillar Inc.
9.00%, due 4/15/06 ...................... 2,300,000 2,363,250
General Motors Acceptance Corp.
8.70%, due 3/15/95 ...................... 1,450,000 1,454,843
5.15% due 9/14/95 ....................... 1,600,000 1,572,192
Grand Met. Investment Corp.,
Zero Coupon Bond,
due 6/1/04 .............................. 2,800,000 1,316,140
------------
6,706,425
------------
YANKEE BONDS - 1.8%
Aegon, NV
8.00%, due 8/15/06 ...................... 2,800,000 2,682,876
Phillips Electronics, NV
8.375%, due 9/15/06 ..................... 1,500,000 1,468,953
------------
4,151,829
------------

UNITED STATES
GOVERNMENT OBLIGATIONS - 19.0%
United States Government Agency - 2.1%
Federal National Mortgage Association
6.28%, due 2/3/04 ....................... 2,800,000 2,463,748
6.14%, due 1/21/04 ...................... 2,800,000 2,428,048
------------
4,891,796
------------
UNITED STATES TREASURY NOTES - 15.7%
7.25 %, due 11/30/96 ..................... $ 5,600,000 $ 5,557,104
7.37 %, due 11/15/97 ..................... 16,000,000 15,829,920
7.75 %, due 11/30/99 ..................... 5,000,000 4,981,250
7.50%, due 11/15/24 ...................... 10,000,000 9,565,600
------------
35,933,874
------------
UNITED STATES TREASURY STRIPPED BONDS - 1 2%
United States Treasury Stripped,
Zero Coupon Bond
due 8/15/03 ............................. 2,800,000 1,434,412
due 2/l5/04 ............................. 2,800,000 1,379,196
------------
2,813,608
------------
TOTAL UNITED STATES
GOVERNMENT OBLIGATIONS 43,639,278
------------
TOTAL FIXED INCOME
(Identified Cost $96,277,202) 89,448,028
------------

- - --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS -- 11.5%
- - --------------------------------------------------------------------------------

Salomon Repurchase Agreement,
6.00 %, due 1/03/95, proceeds at
maturity $26,259,495
(secured by $29,340,000
U.S. Treasury Note 4.75%
due 9/30/98) ............................ 26,242,000
------------
TOTAL INVESTMENTS ........................ 106.6% 244,078,166
(Identified Cost $242,542,482)
OTHER LIABILITIES
LESS ASSETS ............................. (6.6)% (15,130,203)
------------ ------------
NET ASSETS ............................... 100.0% $228,947,963
============ ============

* Non-income producing security

** TBA's are mortgage-backed securities traded under delayed delivery
commitments, settling after December 31, 1994. Although the unit price for
the trade has been established, the principal value has not been finalized.
However, the amount of the commitment will not fluctuate more than 2% from
the principal amount. Income on TBA's is not earned until settlement date.

See notes to financial statements

17
<PAGE>

- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1994
- - --------------------------------------------------------------------------------

Assets:
Investments at value (Note 1A)
(Identified Cost, $242,542,482) ......................... $244,078,166
Cash ...................................................... 200
Receivable for investments sold ........................... 1,869,272
Dividends and interest receivable ......................... 1,253,943
------------
Total assets .......................................... 247,201,581
------------
Liabilities:
Payable for investments purchased ......................... 18,166,074
Payable to affiliates--Investment
advisory fee (Note 2) ................................... 77,408
Accrued expenses and other liabilities .................... 10,136
------------
Total liabilities ..................................... 18,253,618
------------
Net Assets ................................................ $228,947,963
============
Represented by:
Paid-in capital for
beneficial interests .................................... $228,947,963
============

See notes to financial statements

<PAGE>
- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Period May 1, 1994 (Commencement of Operations) to December 31, 1994
- - --------------------------------------------------------------------------------

Investment Income:
Interest .................................. $ 4,161,173
Dividends ................................. 2,320,775
-----------
Total Income $ 6,481,948

Expenses:
Investment advisory fees (Note 2) ......... 640,795
Administrative fees (Note 3) .............. 80,099
Expense reimbursement fees (Note 6) ....... 101,856
-----------
Total expenses .......................... 822,750
-----------
Net investment income ................... 5,659,198
-----------
Net Realized and Unrealized Gain
(Loss) on Investments:
Net realized loss from investment
transactions ............................ (6,675,580)
Unrealized appreciation
(depreciation) of investments--
Beginning of period ..................... --
End of period ........................... 1,535,684
Plus unrealized depreciation
acquired in connection with Landmark
Balanced Fund contribution (Note 1) ..... 2,886,846
-----------
Net change in unrealized
appreciation (depreciation) ............. 4,422,530
-----------
Net realized and unrealized
loss on investments ..................... (2,253,050)
-----------
Net Increase in Net Assets
Resulting from Operations ............... $ 3,406,148
===========

See notes to financial statements

18
<PAGE>

- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- - --------------------------------------------------------------------------------
May 1, 1994
(Commencement
of Operations) to
December 31, 1994
-----------------

Increase (Decrease) in Net Assets from:
Operations:
Net investment income ..................................... $ 5,659,198
Net realized loss on investment transactions .............. (6,675,580)
Net change in unrealized depreciation of investments ...... 4,422,530
-------------
Net increase in net assets resulting from operations .. 3,406,148
-------------

Capital Transactions:
Proceeds from contributions ............................... 251,032,858
Value of withdrawals ...................................... (25,491,043)
-------------
Net increase in net assets from capital transactions .. 225,541,815
-------------

Net Increase in Net Assets ................................ 228,947,963
Net Assets:
Beginning of period ....................................... --
-------------
End of period ............................................. $ 228,947,963
=============

<PAGE>
- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- - --------------------------------------------------------------------------------
May 1, 1994
(Commencement
of Operations) to
December 31, 1994
---------------
Ratios/Supplemental Data:
Net Assets, end of period (000 omitted) ................... $228,948
Ratio of expenses to average net assets ................... 0.51%*
Ratio of net investment income to average net assets ...... 3.53%*
Portfolio turnover ........................................ 105%

* Annualized

See notes to financial statements

19
<PAGE>
- - --------------------------------------------------------------------------------
Balanced Portfolio
- - --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- - --------------------------------------------------------------------------------

(1) SIGNIFICANT ACCOUNTING POLICIES

Balanced Portfolio (the "Portfolio"), a separate series of The Premium
Portfolios (the "Portfolio Trust"), is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company which was organized as a trust under the laws of the State of New York.
The Declaration of Trust permits the Trustees to issue beneficial interests in
the Portfolio. Signature Financial Group (Grand Cayman), Ltd. ("SFG") acts as
the Portfolio's Administrator. On May 1, 1994 (commencement of operations of the
Portfolio) the Landmark Balanced Fund transferred all of its investable assets
($246,231,647 including $2,886,846 unrealized depreciation), to the Portfolio in
exchange for an interest in the Portfolio.

The significant accounting policies consistently followed by the Portfolio are
in conformity with generally accepted accounting principles and are as follows:

A. INVESTMENT SECURITY VALUATIONS -- Equity securities listed on securities
exchanges or reported through the NASDAQ system are valued at last sale prices.
Unlisted securities or listed securities for which last sales prices are not
available are valued at last quoted bid prices. Debt securities (other than
short-term obligations maturing in sixty days or less), are valued on the basis
of valuations furnished by pricing services which take into account appropriate
factors such as institutional-size trading in similar groups of securities,
yield, quality, coupon rate, maturity, type of issue, and other market data,
without exclusive reliance on quoted prices or exchange or over-the-counter
prices, since such valuations are believed to reflect more accurately the fair
value of the securities. Short-term obligations, maturing in sixty days or less,
are valued at amortized cost, which approximates market value. Securities, if
any, for which there are no such valuations or quotations are valued at fair
value as determined in good faith by or under guidelines established by the
Trustees.

B. INCOME -- Interest income consists of interest accrued and discount earned,
adjusted for amortization of premium or discount on long-term debt securities
when required for federal income tax purposes. Gain and loss from principal
paydowns are recorded as interest income. Dividend income is recorded on the
ex-dividend date.

C. U.S. FEDERAL TAXES -- The Portfolio is considered a partnership under the
U.S. Internal Revenue Code. Accordingly, no provision for federal income or
excise tax is necessary.

D. EXPENSES -- The Portfolio bears all costs of its operations other than
expenses specifically assumed by Citibank and SFG. Expenses incurred by the
Portfolio Trust with respect to any two or more portfolios or series are
allocated in proportion to the average net assets of each portfolio, except when
allocations of direct expenses to each portfolio can otherwise be made fairly.
Expenses directly attributable to a portfolio are charged to that portfolio.

E. REPURCHASE AGREEMENTS -- It is the policy of the Portfolio to require the
custodian bank to take possession, to have legally segregated in the Federal
Reserve Book Entry System or to have segregated within the custodian bank's
vault, all securities held as collateral in support of repurchase agreement
investments. Additionally, procedures have been established by the Portfolio to
monitor, on a daily basis, the market value of the repurchase agreement's
underlying investments to ensure the existence of a proper level of collateral.

F. TBA PURCHASE COMMITMENTS -- The Portfolio enters into "TBA" (to be announced)
purchase commitments to purchase securities for a fixed unit price at a future
date beyond customary settlement time. Although the unit price has been
established, the principal value has not been finalized. However, the amount of
the commitment will not fluctuate more than 2.0% from the principal amount. The
Portfolio holds, and maintains until the settlement date, cash or high-grade
debt obligations in an amount sufficient to meet the purchase price. TBA
purchase commitments may be considered securities in themselves, and involve a
risk of loss if the value of the security to be purchased declines prior to the
settlement date, which risk is in addition to the risk of decline in the value
of the Portfolio's other assets. Unsettled TBA purchase commitments are valued

at the current market value of the underlying securities, generally according to
the procedures described under Note 1A.

Although the Portfolio will generally enter into TBA purchase commitments with
the intention of acquiring securities for its portfolio, the Portfolio may
dispose of a commitment prior to settlement if the Portfolio's Adviser deems it
appropriate to do so.

G. OTHER -- Investment transactions are accounted for on the date the
investments are purchased or sold. Realized gains and losses are determined on
the identified cost basis.

(2) INVESTMENT ADVISORY FEES

The investment advisory fee paid to Citibank, as compensation for overall
investment management services, amounted to $640,795 for the period May 1, 1994
(commencement of operations) to December 31, 1994. The investment advisory fee
is computed at the annual rate of 0.40% of the Portfolio's average daily net
assets.

(3) ADMINISTRATIVE FEE

Under the terms of an Administrative Services Agreement, the administrative fee
paid to the Administrator, as compensation for overall administrative services
and general office facilities, is computed at an annual rate of 0.05% of the
Portfolio's average daily net assets. The administrative fee amounted to $80,099
for the period May 1, 1994 (commencement of operations) to December 31, 1994.
Citibank acts as Sub-Administrator and performs such duties and receives such
compensation from SFG as from time to time is agreed to by SFG and Citibank. The
Portfolio pays no compensation directly to any officer who is affiliated with
the Administrator, all of whom receive remuneration for their services to the
Portfolio from the Administrator or its affiliates. Certain of the officers and
a Trustee of the Portfolio are officers or directors of the Administrator or its
affiliates.

(4) PURCHASES AND SALES OF INVESTMENTS

Purchases and sales of investments, other than short-term obligations,
aggregated $247,513,662 and $265,784,549, respectively, which include purchases
and sales of U.S. Government securities amounting to $86,400,594 and
$83,287,426, respectively, for the period May 1, 1994 (commencement of
operations) to December 31, 1994.

(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS

The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at December 31, 1994, as computed on a federal income tax
basis, are as follows:

Aggregate cost ........................................ $ 242,542,482
=============
Gross unrealized appreciation ......................... $ 9,570,964
Gross unrealized depreciation ......................... (8,035,280)
-------------
Net unrealized appreciation ........................... $ 1,535,684
=============

(6) EXPENSE REIMBURSEMENT FEE

SFG has entered into an expense reimbursement agreement with the Portfolio. SFG
has agreed to pay all of the ordinary operating expenses (excluding interest,
taxes, brokerage commissions litigation costs or other extraordinary costs or
expenses) of the Portfolio, other than fees paid under the Advisory Agreement
and Administrative Services Agreement. The Agreement shall terminate on April
30, 2004, unless sooner terminated by either party upon not less than 30 days
nor more than a 60 days written notice to the other party.

The Portfolio Trust has agreed to pay SFG an expense reimbursement fee from the
Portfolio, in addition to the administrative fee, accrued daily and paid
monthly; provided, however, that such fee shall not exceed the amount such that
immediately after any such payment the aggregate ordinary expenses of the
Portfolio would, on an annual basis, exceed an agreed upon rate, currently 0.55%
of average daily net assets.

(7) LINE OF CREDIT

As of May 1, 1994 the Portfolio, along with the other Landmark Funds, entered
into an agreement with a bank which allows the Funds collectively to borrow up
to $40 million for temporary or emergency purposes. Interest on the borrowings,
if any, is charged to the specific fund executing the borrowing at the base rate
of the bank. In addition, the $15 million committed portion of the line of
credit requires a quarterly payment of a commitment fee based on the average
daily unused portion of the line of credit. For the period May 1, 1994
(commencement of operations) to December 31, 1994, the commitment fee allocated
to the Portfolio was $1,060. Since the line of credit was established, there
have been no borrowings.

<PAGE>

TO THE TRUSTEES AND THE INVESTORS OF THE PREMIUM PORTFOLIOS (THE TRUST), WITH
RESPECT TO ITS SERIES, BALANCED PORTFOLIO:

We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Balanced Portfolio (the "Portfolio"),
a series of The Premium Portfolios, as at December 31, 1994 and the related
statements of operations and of changes in net assets and the financial
highlights for the period May 1, 1994 (commencement of operations) to December
31, 1994. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Portfolio's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.

We conducted our audit in accordance with U.S. generally accepted auditing
standards. Those standards require that we plan and perform an audit to obtain
reasonable assurance whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of investments owned at
December 31, 1994, by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from brokers
were not received, provides a reasonable basis for our opinion.

In our opinion, these financial statements present fairly, in all material
respects, the financial position of the Portfolio as at December 31, 1994, the
results of its operations and the changes in its net assets and the financial
highlights for the period May 1, 1994 (commencement of operations) to December
31, 1994 in accordance with U.S. generally accepted accounting principles.

PRICE WATERHOUSE
Chartered Accountants

Toronto, Ontario
February 3, 1995

<PAGE>

- - --------------------------------------------------------------------------------
SHAREHOLDER
SERVICING AGENTS
- - --------------------------------------------------------------------------------

FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
450 West 33rd Street, New York, NY 10001
(212) 564-3456 or (800) 846-5300

FOR CITIGOLD CUSTOMERS:
Citibank, N.A.
Citigold
P.O. Box 5130, New York, NY 10150-5130
Call Your Citigold Executive or (212) 974-0900 or (800) 285-1701

FOR PRIVATE BANKING CLIENTS:
Citibank, N.A.
The Citibank Private Bank
153 East 53rd Street, New York, NY 10043
Call Your Citibank Private Banking Account Officer,
Investment Specialist or (212) 559-5959

FOR CITIBANK GLOBAL ASSET MANAGEMENT CLIENTS:
Citibank, N.A.
Citibank Global Asset Management
153 East 53rd Street, New York, NY 10043
(212) 559-7117

FOR NORTH AMERICAN INVESTOR SERVICES CLIENTS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
Call Your Account Manager or (212) 657-9100

FOR CITICORP INVESTMENT SERVICES CUSTOMERS:
Citicorp Investment Services
One Court Square, Long Island City, NY 11120
Call Your Investment Consultant or (800) 846-5200
(212) 736-8170 in New York City

Logo Landmark
Funds

MONEY MARKET FUNDS:
Cash Reserves
Premium Liquid Reserves
Institutional Liquid Reserves

U.S. Treasury Reserves
Premium U.S. Treasury Reserves
Institutional U.S. Treasury Reserves

Tax Free Reserves
California Tax Free Reserves
Connecticut Tax Free Reserves
New York Tax Free Reserves

STOCK & BOND FUNDS:
U.S. Government Income Fund
Intermediate Income Fund
New York Tax Free Income Fund

Balanced Fund
Equity Fund
International Equity Fund
<PAGE>

TRUSTEES AND OFFICERS
Philip W. Coolidge*, President
H. B. Alvord
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
C. Oscar Morong, Jr.
Donald B. Otis
E. Kirby Warren
William S. Woods, Jr.

SECRETARY AND TREASURER
James B. Craver*

ASSISTANT TREASURER
Barbara M. O'Dette*

ASSISTANT SECRETARY
Molly S. Mugler*
*Affiliated Person of Administrator and Distributor

- - ---------------------------------------------------------

INVESTMENT ADVISER
(OF BALANCED PORTFOLIO)
Citibank, N.A.
153 East 53rd Street, New York, NY 10043

ADMINISTRATOR AND DISTRIBUTOR
The Landmark Funds Broker-Dealer Services, Inc.
6 St. James Avenue, Boston, MA 02116
(617) 423-1679

TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street, Boston, MA 02110

CUSTODIAN
Investors Bank and Trust Company
One Lincoln Plaza, Boston, MA 02111

AUDITORS
Price Waterhouse LLP
160 Federal Street, Boston, MA 02110

LEGAL COUNSEL
Bingham, Dana & Gould
150 Federal Street, Boston, MA 02110

- - ---------------------------------------------------------

SHAREHOLDER SERVICING AGENTS
(See Inside Cover)

This report is prepared for the information of shareholders. It is authorized
for distribution to prospective investors only when preceded or accompanied by
an effective prospectus.

This Report is Prepared & Printed on Recycled Paper [GRAPHIC OMITTED]
EQ/BL/A/94