<PAGE>
TRUSTEES AND OFFICERS
C. Oscar Morong, Jr., Chairman
Philip W. Coolidge*, President
H. B. Alvord
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
E. Kirby Warren
William S. Woods, Jr.
SECRETARY
Linda T. Gibson*
TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor
- --------------------------------------|-|---------------------------------------
INVESTMENT ADVISER
(OF EQUITY 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.
EQ/EI/A/96 Printed on Recycled Paper [recycle symbol]
[logo] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.
LANDMARK
EQUITY FUND
ANNUAL
REPORT
December 31, 1996
<PAGE>
- --------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS
Dear Shareholder:
1996 was an excellent year for the U.S. stock market, especially the well
established, large-capitalization stocks in which the Landmark Equity Fund
primarily invests. The market was driven higher by positive economic
developments, strong corporate earnings and, as it has been for the past several
years, substantial inflows of money from individuals and retirement plans into
equities and equity mutual funds. We are pleased that the shareholders of
Landmark Equity Fund have benefitted from these trends.
In this favorable environment, the Landmark Equity Fund continued to be
managed to achieve its investment objective: long-term capital growth. Through
its investment in Equity Portfolio, the Fund invests primarily in common stocks
of U.S. issuers, with an emphasis on established companies with medium to large
capitalizations and seasoned management teams.
This report reviews the Portfolio's investment activities and performance
during the year ended December 31, 1996, and provides a summary of Citibank's
perspective on and outlook for the U.S. stock market. On behalf of the Board of
Trustees of the Landmark Funds, I want to thank you for your confidence and
participation.
/s/ Philip W. Coolidge
Philip W. Coolidge
President
January 17, 1997
- --------------------------------------------------------------------------------
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 LANDMARK EQUITY FUND
- -------------------------------------- -----------------------------------------
2 Market Environment 6 Statement of Assets and Liabilities
Fund Snapshot -----------------------------------------
- -------------------------------------- 7 Statement of Operations
Portfolio Managers -----------------------------------------
3 The Portfolio Managers Respond 8 Statement of Changes in Net Assets
Quotes from the Portfolio Managers -----------------------------------------
- -------------------------------------- 9 Financial Highlights
4 Strategy and Outlook -----------------------------------------
Equity Portfolio by the Numbers 10 Notes to Financial Statements
- -------------------------------------- -----------------------------------------
5 Fund Data 12 Independent Auditors' Report
Performance Highlights -----------------------------------------
EQUITY PORTFOLIO
-----------------------------------------
13 Portfolio of Investments
-----------------------------------------
15 Statement of Assets and Liabilities
Statement of Operations
-----------------------------------------
16 Statement of Changes in Net Assets
Financial Highlights
-----------------------------------------
17 Notes to Financial Statements
-----------------------------------------
19 Independent Auditors' Report
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
The economic and market environments of 1996 defied the forecasts of most
investment strategists, including the Equity Portfolio's investment adviser,
Citibank, N.A. At the start of the year, many investors expected U.S. economic
growth to slow substantially. Instead, the pace of economic growth accelerated
during the first half of the year, raising concern among investors that the rate
of inflation might rise and that the environment for stocks would become less
attractive. The market's inflation fears were not realized, however, as economic
growth moderated during the second half of the year.
Sustainable, non-inflationary growth proved to be a formula for
above-average performance for many financial assets. In the stock market, the
combination of strong corporate earnings and investors' preference for stocks
that are easy to buy and sell supported the prices of large, well established
companies with consistent earnings growth. Small-cap and mid-cap companies fared
less well, however, due to a mid-summer correction in the formerly high-flying
technology sector.
Perhaps the most significant force behind the stock market's advance is the
continued inflow of money from individuals and retirement plans to stocks and
equity mutual funds. As the Baby Boom generation approaches middle age, its
members are becoming more conservative, shifting from net spenders to savers. By
maintaining a high level of demand for a finite universe of investments, Baby
Boomers have contributed substantially to lower interest rates and higher stock
prices.
- --------------------------------------------------------------------------------
FUND SNAPSHOT
- --------------------------------------------------------------------------------
COMMENCEMENT OF OPERATIONS
October 19, 1990
NET ASSETS AS OF 12/31/96
$228.9 million
FUND OBJECTIVE
Long-term capital growth; dividend income, if any, is incidental to this
investment objective.
DIVIDENDS
Paid semi-annually, if any
CAPITAL GAINS
Distributed annually, if any
BENCHMARKS
o Standard & Poor's 500 Index
o Lipper Growth Funds Average
INVESTMENT ADVISER,
EQUITY PORTFOLIO
Citibank, N.A.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGERS
- --------------------------------------------------------------------------------
GRANT HOBSON
Vice President, Citibank, N.A.
RICHARD GOLDMAN
Vice President, Citibank, N.A.
Grant D. Hobson and Richard Goldman are the managers of the Portfolio. Mr.
Hobson is responsible for managing U.S. equity portfolios for trust and pension
accounts of Citibank Global Asset Management and currently manages more than $1
billion of total assets at Citibank. Prior to joining Citibank in 1993, Mr.
Hobson was a Sector Portfolio Manager for Axe Houghton, formerly a division of
USF&G, where he was responsible for equity investments for pension accounts and
mutual funds. Mr. Goldman is responsible for managing approximately $600 million
of total assets and for quantitative equity research for the U.S. institutional
business of Citibank Global Asset Management. He joined Citicorp's Investment
Management Division in 1985 and from 1988 to 1994 was responsible for running
Citicorp's Institutional Investor Relations Department.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE PORTFOLIO MANAGERS RESPOND
To achieve the Landmark Equity Fund's objective, the Portfolio's investment
adviser, Citibank N.A., seeks to identify companies with strong, consistent and
profitable earnings growth. More specifically, we analyze thousands of stocks to
find those that meet our stringent criteria for return-on-equity, growth of
revenues and earnings-per-share and strong balance sheets. This bottom-up
approach to investment management is designed to enable the investment adviser
to find growing companies in virtually any market environment.
During 1996, we found such growth stocks in both the large-capitalization
and mid-capitalization sectors of the stock market. To take advantage of these
opportunities, we sold some of the Portfolio's less growth-oriented positions,
including stocks of utilities and energy companies, to free up cash for new
positions. Additions to the Portfolio during the second half of 1996 consisted
mainly of companies in the consumer non-durables, consumer services, finance and
technology industries. We also repositioned our investments in certain sectors;
for example, we shifted our holdings in the health care industry out of HMOs
into other types of companies with stronger, more visible growth potential.
While many of the growth stocks we identified in 1996 participated in the
stock market's rally, some in the mid-cap sector did not. Yet, we continue to
hold these companies because their fundamentals remain quite attractive. By
investing in good companies for the long haul, we are confident that this
strategy can provide shareholders with attractive returns.
- --------------------------------------------------------------------------------
QUOTES FROM THE PORTFOLIO MANAGERS
"Investors drove up the prices of large-capitalization, blue-chip stocks
in the second half 1996 because of their greater liquidity. We expect
mid-capitalization growth stocks to outperform as the market rally broadens."
"We used proceeds from the sale of utilities, energy companies and other less
growth-oriented companies to buy high-quality growth stocks in the consumer,
finance and technology sectors."
<PAGE>
- --------------------------------------------------------------------------------
STRATEGY AND OUTLOOK
We are cautiously optimistic about the prospect for the U.S. stock market
in 1997. We are optimistic because the economy appears to be on a steady course
in which it should neither overheat to inflationary levels nor deteriorate into
recession. Current indicators suggest that the first part of 1997 will show an
unchanged monetary policy, modestly lower interest rates and low rates of
inflation. Just as important, individuals and retirement plans continue to
provide the high levels of demand that have fueled higher stock prices over the
past several years.
We are tempering our optimism with caution because, while the fundamentals
of rising corporate earnings and good liquidity suggest that the bull market has
a way to go, stock prices relative to earnings are at the high end of their
historical range. The recent stock market rally has been exceptional in both
magnitude and duration, and we cannot rule out a short-term correction that
would bring valuations down to more sustainable levels.
Over the longer term, however, we continue to believe that stocks will
deliver more competitive returns than either bonds or cash. Consequently, we
would view a possible stock market correction in 1997 as an excellent
opportunity to buy high-quality growth companies at attractively low prices.
Equity Portfolio
- --------------------------------------------------------------------------------
BY THE NUMBERS
- --------------------------------------------------------------------------------
TOP TEN EQUITY HOLDINGS OF THE PORTFOLIO
(As of 12/31/96)
- --------------------------------------------------------------------------------
NAME INDUSTRY SECTOR % OF NET ASSETS
Gillette Co. Consumer-Non Durable 2.66%
American International Group Inc. Finance 2.45%
Procter & Gamble Co. Consumer-Non Durable 2.37%
Colgate-Palmolive Co. Consumer-Non Durable 2.36%
State Street Boston Corp. Finance 2.32%
Wisconsin Central Transport Transportation 2.20%
Sigma Aldrich Corp. Commodities & Processing 2.19%
Federal National Mortgage Association Finance 2.18%
Nine West Group Inc. Retail Trade 2.17%
Walgreen Co. Retail Trade 2.17%
CHANGES IN PORTFOLIO SECTORS
Portfolio of investments as of 12/31/96
Consumer 40%
Capital Goods 28%
Industrial 14%
Financial 15%
Cash/Short Term/Other 3%
...Compared to 12/31/95
Consumer 34%
Capital Goods 24%
Industrial 20%
Financial 17%
Cash/Short Term/Other 5%
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
FUND DATA All Periods Ended December 31, 1996
<TABLE>
<CAPTION>
TOTAL RETURNS
--------------------------------
SINCE
ONE FIVE 10/19/90*
YEAR YEARS * INCEPTION
------ ------- ---------
<S> <C> <C> <C>
Landmark Equity Fund without Sales Charge .......................... 13.84% 11.80% 15.20%
Lipper Growth Funds Average ........................................ 19.24% 13.04% 17.46%+
Standard & Poor's 500 Index ........................................ 22.95% 15.20% 18.82%+
Landmark Equity Fund with Maximum Sales Charge of 4.75% ............ 8.43% 10.72% 14.30%
* Average Annual Total Return.
+ From 10/31/90
30-Day SEC Yield 0.29%
Income Dividends Per Share $0.118
Capital Gain Distributions $1.204
</TABLE>
- --------------------------------------------------------------------------------
PERFORMANCE HIGHLIGHTS
- --------------------------------------------------------------------------------
A $10,000 investment in the Fund made on inception date would have grown to
$22,915 with sales charge (as of 12/31/96). The graph shows how the Fund
compares to our benchmarks over the same period.
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.
Landmark Landmark
Equity Fund Equity Fund Lipper
Without With Growth Funds S&P
Sales Charge Sales Charge Average 500 Index
------------ ------------ ------------ ---------
Oct-90 9,847 9,379 10,000 10,000
Nov-90 10,438 9,942 10,660 10,646
Dec-90 10,534 10,034 11,014 10,943
Jan-91 10,996 10,474 11,690 11,420
Feb-91 11,811 11,250 12,534 12,237
Mar-91 11,888 11,323 12,938 12,533
Apr-91 11,635 11,082 12,922 12,563
May-91 12,427 11,837 13,456 13,104
Jun-91 11,723 11,167 12,795 12,504
Jul-91 12,412 11,822 13,430 13,087
Aug-91 13,111 12,488 13,838 13,397
Sep-91 12,667 12,065 13,712 13,173
Oct-91 12,956 12,340 13,993 13,350
Nov-91 12,401 11,812 13,435 12,812
Dec-91 13,772 13,118 14,921 14,277
Jan-92 13,549 12,905 14,997 14,012
Feb-92 13,883 13,224 15,208 14,194
Mar-92 13,515 12,874 14,755 13,917
Apr-92 13,571 12,927 14,656 14,326
May-92 13,538 12,895 14,738 14,397
Jun-92 13,106 12,484 14,309 14,182
Jul-92 13,665 13,016 14,821 14,762
Aug-92 13,285 12,654 14,499 14,460
Sep-92 13,576 12,931 14,724 14,630
Oct-92 13,923 13,261 15,021 14,681
Nov-92 14,694 13,996 15,769 15,182
Dec-92 14,818 14,114 16,061 15,369
Jan-93 14,897 14,189 16,259 15,498
Feb-93 14,684 13,986 16,004 15,709
Mar-93 15,535 14,797 16,447 16,040
Apr-93 15,289 14,563 15,937 15,652
May-93 15,726 14,979 16,516 16,071
Jun-93 15,572 14,833 16,566 16,118
Jul-93 15,370 14,640 16,526 16,054
Aug-93 16,066 15,302 17,225 16,662
Sep-93 16,110 15,345 17,401 16,534
Oct-93 16,335 15,559 17,643 16,876
Nov-93 16,133 15,367 17,297 16,716
Dec-93 16,635 15,845 17,797 16,918
Jan-94 16,973 16,166 18,322 17,494
Feb-94 16,703 15,909 18,036 17,020
Mar-94 15,961 15,203 17,187 16,277
Apr-94 16,253 15,481 17,244 16,486
May-94 16,579 15,792 17,310 16,756
Jun-94 16,103 15,339 16,727 16,346
Jul-94 16,607 15,819 17,169 16,882
Aug-94 17,020 16,211 17,955 17,574
Sep-94 16,584 15,797 17,632 17,149
Oct-94 16,894 16,091 17,911 17,546
Nov-94 16,333 15,557 17,239 16,902
Dec-94 16,568 15,781 17,398 17,151
Jan-95 16,674 15,882 17,520 17,595
Feb-95 17,260 16,440 18,173 18,280
Mar-95 17,682 16,842 18,678 18,819
Apr-95 17,870 17,021 19,061 19,372
May-95 18,444 17,568 19,616 20,145
Jun-95 18,736 17,846 20,420 20,613
Jul-95 19,328 18,410 21,372 21,295
Aug-95 19,139 18,229 21,537 21,348
Sep-95 19,719 18,782 22,157 22,249
Oct-95 19,778 18,838 21,825 22,169
Nov-95 20,843 19,853 22,585 23,140
Dec-95 21,132 20,128 22,664 23,586
Jan-96 21,685 20,655 23,149 24,388
Feb-96 21,820 20,784 23,672 24,615
Mar-96 22,213 21,158 23,883 24,852
Apr-96 22,385 21,322 24,669 25,217
May-96 22,791 21,708 25,323 25,865
Jun-96 23,042 21,948 24,958 25,963
Jul-96 21,727 20,695 23,475 24,816
Aug-96 22,310 21,250 24,304 25,339
Sep-96 23,551 22,432 25,682 26,763
Oct-96 23,563 22,444 25,857 27,502
Nov-96 24,879 23,697 27,398 29,578
Dec-96 24,057 22,915 27,001 28,993
- --------------------------------------------------------------------------------
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.
<PAGE>
Landmark Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
<TABLE>
<S> <C> <C>
ASSETS:
Investment in Equity Portfolio, at value (Note 1A) ........................... $229,386,742
Receivable for shares of beneficial interest sold ............................ 491,713
- ------------
Total assets ............................................................. 229,878,455
- ------------
LIABILITIES:
Payable for shares of beneficial interest repurchased ........................ 831,121
Payable to affiliates--Shareholder servicing agents' fee (Note 2B) ........... 51,907
Accrued expenses and other liabilities ....................................... 41,180
- ------------
Total liabilities ........................................................ 924,208
- ------------
NET ASSETS for 12,545,303 shares of beneficial interest outstanding .......... $228,954,247
============
NET ASSETS CONSIST OF:
Paid-in capital .............................................................. $171,392,666
Unrealized appreciation ...................................................... 44,404,273
Accumulated net realized gain ................................................ 13,032,442
Undistributed net investment income .......................................... 124,866
- ------------
Total .................................................................... $228,954,247
============
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST ........ $18.25
======
COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a 4.75% sales charge ($18.25/0.9525) $19.16
======
</TABLE>
See notes to financial statements
<PAGE>
Landmark Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (Note 1B):
Dividend Income from Equity Portfolio ................................... $3,308,036
Interest Income: from Equity Portfolio .................................. 522,929
Other Income: Foreign Tax reclaims ...................................... 26,953
Allocated Expenses from Equity Portfolio ................................ (1,349,323) $ 2,508,595
----------
EXPENSES:
Shareholder Servicing Agents' fees (Note 2B) ............................ 561,584
Administrative fees (Note 2A) ........................................... 561,584
Distribution fees (Note 3) .............................................. 336,950
Expense fees (Note 6) ................................................... 224,619
----------
Total expenses ...................................................... 1,684,737
Less aggregate amount waived by Administrator and Distributor
(Notes 2A and 3) ...................................................... (673,900)
----------
Net expenses ....................................................... 1,010,837
-----------
Net investment income .............................................. 1,497,758
-----------
NET REALIZED AND UNREALIZED GAIN FROM EQUITY PORTFOLIO:
Net realized gain ....................................................... 26,516,316
Net change in unrealized appreciation ................................... 1,062,588
-----------
Net realized and unrealized gain from Equity Portfolio ............. 27,578,904
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................... $29,076,662
===========
</TABLE>
See notes to financial statements
<PAGE>
Landmark Equity Fund
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1996 1995
------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM:
OPERATIONS:
Net investment income ....................................... $ 1,497,758 $ 2,546,594
Net realized gain ........................................... 26,516,316 7,372,648
Net change in unrealized appreciation ....................... 1,062,588 37,840,071
------------ ------------
Net increase in net assets resulting from operations ...... 29,076,662 47,759,313
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ....................................... (1,433,073) (2,534,653)
Net realized gain ........................................... (14,330,626) (6,988,138)
------------ ------------
Decrease in net assets from distributions to shareholders . (15,763,699) (9,522,791)
------------ ------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (Note 5):
Net proceeds from sale of shares ............................ 13,950,013 9,027,385
Net asset value of shares issued to shareholders
from reinvestment of distributions ........................ 15,763,320 9,521,722
Cost of shares repurchased .................................. (27,800,567) (27,032,148)
------------ ------------
Net increase (decrease) in net assets from transactions in
shares of beneficial interest ........................... 1,912,766 (8,483,041)
------------ ------------
NET INCREASE IN NET ASSETS .................................. 15,225,729 29,753,481
NET ASSETS:
Beginning of period ......................................... 213,728,518 183,975,037
------------ ------------
End of period (including undistributed net investment income
of $124,866 and $69,808, respectively) .................... $228,954,247 $213,728,518
============ ============
</TABLE>
See notes to financial statements
<PAGE>
Landmark Equity Fund
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1996 1995 1994++ 1993++ 1992++
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period .......... $ 17.20 $ 14.13 $ 14.80 $ 13.23 $ 12.36
-------- -------- -------- -------- -------
Income From Operations:
Net investment income ......................... 0.122 0.211 0.173 0.071** 0.065
Net realized and unrealized gain (loss) on
investments ................................. 2.250 3.651 (0.245) 1.550** 0.868
-------- -------- -------- -------- -------
Total from operations .................... 2.372 3.862 (0.072) 1.621 0.933
-------- -------- -------- -------- -------
Less Distributions From:
Net investment income ....................... (0.118) (0.210) (0.169) (0.051) (0.063)
Net realized gain on investments ............ (1.204) (0.582) (0.429) -- --
-------- -------- -------- -------- -------
Total from distributions ................ (1.322) (0.792) (0.598) (0.051) (0.063)
-------- -------- -------- -------- -------
Net Asset Value, end of period................. $ 18.25 $ 17.20 $ 14.13 $ 14.80 $ 13.23
======== ======== ======== ======== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) ..... $228,954 $213,729 $183,975 $200,903 $10,973
Ratio of expenses to average net assets ....... 1.05%(A) 1.05%(A) 1.05%(A) 1.07% 1.40%
Ratio of net investment income to average
net assets .................................. 0.67% 1.30% 1.15% 0.52% 0.53%
Portfolio turnover(B) ......................... -- -- 1% 23% 79%
Total return .................................. 13.84% 27.55% (0.41)% 12.26% 7.60%
Note: If Agents of the Fund for the periods indicated had not voluntarily waived a portion of their fees
and had expenses been limited to that required by certain state securities laws for the year ended
December 31, 1992, the net investment income (loss) per share and the ratios would have been as follows:
Net investment income (loss) per share ........ $0.067 $0.170 $0.136 $0.029** $(0.070)
Ratios:
Expenses to average net assets ................ 1.35%(A) 1.30%(A) 1.29%(A) 1.37% 2.50%
Net investment income (loss) to
average net assets ........................... 0.37% 1.05% 0.91% 0.21% (0.57)%
** The per share amounts were computed using a monthly average number of shares outstanding during the year.
(A) Includes the Fund's share of Equity Portfolio allocated expenses for the periods subsequent to May 1,
1994.
(B) 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 all of its investable assets to the Portfolio is shown in the Portfolio's financial
statements which are included elsewhere in this report.
++ On May 1, 1994 the fund began investing all of its investable assets in Equity Portfolio.
</TABLE>
See notes to financial statements
<PAGE>
Landmark Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
The Landmark Equity Fund (the "Fund") is a separate diversified series of
Landmark Funds II (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. The Fund invests all of its investable assets in
Equity 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 objective of long-term capital
growth by investing all of its investable assets in the Portfolio, an open-end,
diversified management investment company having the same investment objective
and policies and substantially the same investment restrictions as the Fund. The
value of such investment reflects the Fund's proportionate interest (79.5% at
December 31, 1996) 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 preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
The significant accounting policies consistently followed by the Fund 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.
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.
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
carryovers) under income tax rules and regulations. For the year ended December
31, 1996, the fund reclassified $9,627 from undistributed net investment income,
$274,873 to paid-in capital and $265,246 from accumulated net realized gain on
investments.
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) 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 fees 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 FEES -- Under the terms of an Administrative Services
Agreement, the administrative fees payable to the Administrator, as compensation
for overall administrative services and general office facilities, may not
exceed an annual rate of 0.25% of the Fund's average daily net assets. The
Administrative fees amounted to $561,584 of which $449,267 was voluntarily
waived for the year ended December 31, 1996. 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 Trustee or 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
0.25% 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 $561,584 for the year ended December 31,
1996.
(3) 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 Distribution fees amounted to $336,950, of which $224,633
was voluntarily waived for the year ended December 31, 1996. 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.
(4) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio for the year
ended December 31, 1996 aggregated $13,658,540 and $28,206,327, respectively.
(5) 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 DECEMBER 31,
-------------------------
1996 1995
---------- ----------
Shares sold ..................... 770,660 566,734
Shares issued to
shareholders from rein-
vestment of distributions ...... 862,316 571,311
Shares repurchased .............. (1,514,522) (1,731,639)
---------- ----------
Net increase (decrease) ........ 118,454 (593,594)
========== ==========
(6) EXPENSE FEES
LFBDS has entered into an expense 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
may be terminated by either party upon not less than 30 days nor more than 60
days written notice.
The Fund has agreed to pay LFBDS an expense fee on an annual basis, 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
operating expenses of the Fund including expenses allocated from the Portfolio
less expenses waived by the Administrator and Distributor would, on an annual
basis, exceed an agreed upon rate, currently 1.05% of the Fund's average daily
net assets.
Landmark Equity Fund
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND THE SHAREHOLDERS OF LANDMARK FUNDS II (THE TRUST): LANDMARK
EQUITY 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 Equity Fund (the "Fund"), a series of Landmark Funds II, at December
31, 1996, the results of its operations, the changes in its net assets and the
financial highlights for the periods indicated 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 audits. We conducted our
audits 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
audits, which included confirmation of investments owned at December 31, 1996 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
February 4, 1997
<PAGE>
Equity Portfolio
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS December 31, 1996
ISSUER SHARES VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
COMMON STOCKS--97.1%
- --------------------------------------------------------------------------------
COMMERCIAL SERVICES - 0.9%
Interpublic Group Inc.................... 58,200 $ 2,764,500
------------
COMMODITIES & PROCESSING - 5.2%
Morton International Inc. ............... 75,000 3,056,250
Praxair Inc.............................. 123,800 5,710,275
Sigma Aldrich Corp....................... 101,215 6,319,611
------------
15,086,136
------------
CONSUMER-NON DURABLES - 12.7%
Clorox Co................................ 58,100 5,831,788
Coca-Cola Co............................. 55,600 2,925,950
Colgate-Palmolive Co..................... 73,700 6,798,825
Gillette Co.............................. 98,600 7,666,150
Kimberly-Clark Corp...................... 68,700 6,543,675
Procter & Gamble Co....................... 63,500 6,826,250
------------
36,592,638
------------
CONSUMER SERVICES - 7.1%
Carnival Corp............................ 185,500 6,121,500
CUC International Inc.*................... 221,250 5,254,688
Gannett Co. Inc.......................... 37,500 2,807,813
Regal Cinemas Inc.*...................... 108,300 3,330,225
Washington Post Co....................... 8,500 2,848,562
------------
20,362,788
------------
HEALTH SERVICES/TECHNOLOGY - 13.0%
Cardinal Health Inc...................... 99,300 5,784,225
Health Management Associates*............ 248,150 5,583,375
Johnson & Johnson......................... 126,000 6,268,500
Medtronic, Inc........................... 86,600 5,888,800
Pfizer Inc............................... 69,900 5,792,962
Schein Henry, Inc.*...................... 80,200 2,756,875
Schering-Plough Corp..................... 42,300 2,738,925
Warner Lambert Co........................ 36,400 2,730,000
------------
37,543,662
------------
PRODUCER MANUFACTURING - 10.9%
Crane Co................................. 96,750 2,805,750
Danaher Corp............................. 66,800 3,114,550
Deere & Co................................ 121,600 4,940,000
Emerson Electric Co...................... 63,100 6,104,925
Federal Signal Corp...................... 220,400 5,702,850
General Electric Co. .................... 60,400 5,972,050
Xerox Corp............................... 55,300 2,910,163
------------
31,550,288
------------
RETAIL TRADE - 6.5%
Hannaford Brothers Co.................... 86,400 2,937,600
Kohls Corporation*....................... 81,600 3,202,800
Nine West Group Inc.*.................... 135,000 6,260,625
Walgreen Co.............................. 156,500 6,260,000
------------
18,661,025
------------
ELECTRONICS/TECHNICAL SERVICES - 16.7%
Affiliated Computer Services*............ 116,400 3,462,900
Andrew Corporation*...................... 100,000 5,306,250
Automatic Data Processing................ 133,500 5,723,813
Cisco Systems, Inc.*..................... 80,600 5,128,175
Computer Associates Intl. Inc. .......... 93,225 4,637,944
Intel Corp............................... 41,700 5,460,093
Network General Corp.*................... 50,100 1,515,525
Oracle Corp.*............................ 137,550 5,742,712
Parametric Technology Corp.*............. 72,800 3,740,100
Perkin-Elmer Corp........................ 74,200 4,368,525
Sungard Data Systems, Inc.*.............. 77,800 3,073,100
------------
48,159,137
------------
ENERGY MINERALS - 6.5%
Exxon Corp. ............................. 55,900 5,478,200
Mobil Corp............................... 22,000 2,689,500
Royal Dutch Petroleum Co., ADRs.......... 31,100 5,310,325
Unocal Corp.............................. 129,500 5,260,937
------------
18,738,962
------------
FINANCE - 15.4%
American International
Group Inc............................. 65,400 $ 7,079,550
Federal National Mortgage
Association........................... 169,000 6,295,250
Franklin Resources Inc................... 85,600 5,852,900
MBIA Inc. ................................ 32,200 3,260,250
Norwest Corp............................. 141,900 6,172,650
State Street Boston Corp................. 104,000 6,708,000
Travelers Group Inc...................... 130,365 5,915,312
Zions BanCorporation..................... 30,000 3,120,000
------------
44,403,912
------------
TRANSPORTATION - 2.2%
Wisconsin Central Transport*............. 160,000 6,340,000
------------
TOTAL COMMON STOCKS
(Identified Cost $228,848,749)........ 280,203,048
------------
PRINCIPAL
ISSUER AMOUNT VALUE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS AT
AMORTIZED COST--3.1%
- --------------------------------------------------------------------------------
United States Treasury Bill
due 4/3/97............................ $9,117,000 $ 8,998,768
------------
TOTAL INVESTMENTS ....................... 100.2% 289,201,816
(Identified Cost $237,847,517)
OTHER ASSETS,
LESS LIABILITIES ..................... (0.2) (639,544)
----- ------------
NET ASSETS .............................. 100.0% $288,562,272
===== ============
ADRs--American Depositary Receipts
*Non-income producing
See notes to financial statements
<PAGE>
Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investments at value (Note 1A) (Identified Cost, $237,847,517) ......... $289,201,816
Cash ................................................................... 14,952
Dividends and interest receivable ...................................... 238,090
------------
Total assets ....................................................... 289,454,858
------------
LIABILITIES:
Payable for investments purchased ...................................... 729,926
Payable to affiliates--Investment advisory fees (Note 2) ............... 131,922
Accrued expenses and other liabilities ................................. 30,738
------------
Total liabilities .................................................. 892,586
------------
NET ASSETS ............................................................. $288,562,272
------------
REPRESENTED BY:
Paid-in capital for beneficial interests ............................... $288,562,272
============
</TABLE>
See notes to financial statements
Equity Portfolio
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding tax of $67,898) ............... $4,073,000
Interest ............................................................ 641,497
----------
Total Income ...................................................... $ 4,714,497
EXPENSES:
Investment advisory fees (Note 2) ................................... 1,387,227
Administrative fees (Note 3) ........................................ 138,723
Expense fees (Note 6) ............................................... 138,757
----------
Total expenses .................................................... 1,664,707
-----------
Net investment income ............................................. 3,049,790
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain from investment transactions ...................... 28,518,761
Unrealized appreciation of investments--
Beginning of period .............................................. 46,522,076
End of period .................................................... 51,354,299
----------
Net change in unrealized appreciation .............................. 4,832,223
-----------
Net realized and unrealized gain on investments .................. 33,350,984
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ................ $36,400,774
===========
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
Equity Portfolio
- --------------------------------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------
1996 1995
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income ........................................ $ 3,049,790 $ 3,620,844
Net realized gain on investment transactions ................. 28,518,761 7,439,032
Net change in unrealized appreciation of investments ......... 4,832,223 41,047,263
------------ ------------
Net increase in net assets resulting from operations ..... 36,400,774 52,107,139
------------ ------------
CAPITAL TRANSACTIONS:
Proceeds from contributions .................................. 61,756,061 43,731,563
Value of withdrawals ......................................... (55,752,909) (36,365,840)
------------ ------------
Net increase in net assets from capital transactions ..... 6,003,152 7,365,723
------------ ------------
NET INCREASE IN NET ASSETS: .................................. 42,403,926 59,472,862
NET ASSETS:
Beginning of period .......................................... 246,158,346 186,685,484
------------ ------------
End of period ................................................ $288,562,272 $246,158,346
============ ============
</TABLE>
See notes to financial statements
Equity Portfolio
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
MAY 1, 1994
YEAR ENDED DECEMBER 31, (COMMENCEMENT
------------------------------------ OF OPERATIONS) TO
1996 1995 DECEMBER 31, 1994
------------ ----------- -----------------
<S> <C> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000's omitted) ...... $288,562 $246,158 $186,685
Ratio of expenses to average net assets ........ 0.60% 0.60% 0.60%*
Ratio of net investment income to average
net assets ................................. 1.10% 1.73% 1.81%*
Portfolio turnover ............................. 90% 67% 35%
Average Commission rate per share (A) .......... $0.0585 N/A N/A
* Annualized
(A) The average commission rate paid is applicable for Funds that invest greater than 10% of average net assets
in equity transactions on which commissions are charged. This disclosure is required for fiscal periods
beginning on or after September 1, 1995.
</TABLE>
See notes to financial statements
<PAGE>
Equity Portfolio
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
Equity 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. The
Investment Adviser of the Portfolio is Citibank N.A. ("Citibank"). Signature
Financial Group (Grand Cayman), Ltd. ("SFG") acts as the Portfolio's
Administrator.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts and disclosure in the financial
statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Portfolio 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 approved by Board of Trustees 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. Short-term obligations, maturing in sixty
days or less, are valued at amortized cost, which constitutes fair value as
determined by the Trustees. 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 U.S. federal income tax purposes. Dividend income is recorded
on the ex-dividend date.
C. U.S. FEDERAL INCOME TAXES -- The Portfolio is considered a partnership under
the U.S. Internal Revenue Code. Accordingly, no provision for federal income
taxes is necessary.
D. 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 agreements.
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.
E. 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.
F. 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 fees paid to Citibank, as compensation for overall
investment management services, amounted to $1,387,227 for the year ended
December 31, 1996. The investment advisory fees are computed at the annual rate
of 0.50% of the Portfolio's average daily net assets.
(3) ADMINISTRATIVE FEES
Under the terms of an Administrative Services Agreement, the administrative fees
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 fees amounted to
$138,723 for the year ended December 31, 1996. 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 Trustee or 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 $247,813,845 and $239,153,783, respectively, for the year ended
December 31, 1996.
(5) FEDERAL INCOME TAX BASIS
OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at December 31, 1996, as computed on a federal income tax
basis, are as follows:
Aggregate cost ................... $237,847,517
============
Gross unrealized appreciation .... $ 53,947,816
Gross unrealized depreciation .... (2,593,517)
------------
Net unrealized appreciation ...... $ 51,354,299
============
(6) EXPENSE FEES
SFG has entered into an expense 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 may be terminated by either party upon not
less than 30 days nor more than 60 days written notice.
The Portfolio has agreed to pay SFG an expense fee on an annual basis 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 less expenses waived by the Administrator would, on an
annual basis, exceed an agreed upon rate, currently 0.60% of average daily net
assets.
(7) LINE OF CREDIT
The Portfolio, along with the other Landmark Funds, entered into an ongoing
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 year ended December 31, 1996, the
commitment fee allocated to the Portfolio was $1,110. Since the line of credit
was established, there have been no borrowings.
<PAGE>
Equity Portfolio
- --------------------------------------------------------------------------------
INDEPENDENT
AUDITORS' REPORT
TO THE TRUSTEES AND THE INVESTORS OF THE PREMIUM PORTFOLIOS (THE TRUST), WITH
RESPECT TO ITS SERIES, EQUITY PORTFOLIO:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Equity Portfolio (the "Portfolio"), a
series of The Premium Portfolios, as at December 31, 1996 and the related
statements of operations and of changes in net assets and the financial
highlights for the periods indicated. 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 audits.
We conducted our audits 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 audits, which included confirmation of investments owned as
at December 31, 1996 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide 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, 1996, the
results of its operations and the changes in its net assets and the financial
highlights for the periods indicated in accordance with U.S. generally accepted
accounting principles.
PRICE WATERHOUSE
Chartered Accountants
Toronto, Ontario
February 4, 1997
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER
SERVICING AGENTS
FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
(212) 820-2383 or (800) 846-5300
FOR CITIGOLD CUSTOMERS:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT, (800) 285-1701, or for
all other States, (800) 285-1707
FOR CITIBANK 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,
Registered Representative 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 CITIBANK 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) 820-2380 in New York City
<PAGE>
TRUSTEES AND OFFICERS
C. Oscar Morong, Jr., Chairman
Philip W. Coolidge*, President
H. B. Alvord
Riley C. Gilley
Diana R. Harrington
Susan B. Kerley
E. Kirby Warren
William S. Woods, Jr.
SECRETARY
Linda T. Gibson*
TREASURER
John R. Elder*
*Affiliated Person of Administrator and Distributor
- --------------------------------------|-|---------------------------------------
INVESTMENT ADVISER
(OF SMALL CAP EQUITY 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.
EQ/SC/A/96 Printed on Recycled Paper
[logo] LANDMARK(SM) FUNDS
Advised by Citibank, N.A.
LANDMARK
SMALL CAP
EQUITY FUND
ANNUAL
REPORT
December 31, 1996
<PAGE>
- --------------------------------------------------------------------------------
A LETTER TO OUR SHAREHOLDERS
Dear Shareholder:
While 1996 was an excellent year for well established, large-capitalization
stocks in the U.S., small capitalization stocks lagged as investors placed a
substantial premium on quality and liquidity during the second half of the year.
Nonetheless, the Landmark Small Cap Equity Fund provided highly competitive
returns during the period, outpacing both the Russell 2000 small cap stock index
and the S&P 500 index of large stocks. The Fund had a particularly strong first
half of the year, when it was lauded by several financial publications for its
performance. We attribute the Fund's success to the investment adviser's
thorough and disciplined approach to security selection.
The Landmark Small Cap Equity Fund continued to be managed to achieve its
investment objective: long-term capital growth. Through its investment in Small
Cap Equity Portfolio, the Fund participates primarily in the ownership of common
stocks issued by domestic companies with market capitalizations of $750 million
or less.
This report reviews the Portfolio's investment activities and performance
during the year ended December 31, 1996, and provides a summary of Citibank's
perspective on and outlook for the U.S. small-capitalization stock market. On
behalf of the Board of Trustees of the Landmark Funds, I want to thank you for
your confidence and participation.
/s/ Philip W. Coolidge
Philip W. Coolidge
President
January 17, 1997
- --------------------------------------------------------------------------------
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 LANDMARK SMALL CAP EQUITY FUND
- -------------------------------------- -----------------------------------------
2 Market Environment 6 Statement of Assets and Liabilities
Fund Snapshot -----------------------------------------
- -------------------------------------- 7 Statement of Operations
3 Portfolio Manager -----------------------------------------
The Investment Adviser Responds 8 Statement of Changes in Net Assets
- -------------------------------------- -----------------------------------------
4 Strategy and Outlook 9 Financial Highlights
Small Cap Equity Portfolio -----------------------------------------
by the Numbers 10 Notes to Financial Statements
- -------------------------------------- -----------------------------------------
5 Fund Data 12 Independent Auditors' Report
Performance Highlights -----------------------------------------
SMALL CAP EQUITY PORTFOLIO
-----------------------------------------
13 Portfolio of Investments
-----------------------------------------
15 Statement of Assets and Liabilities
Statement of Operations
-----------------------------------------
16 Statement of Changes in Net Assets
Financial Highlights
-----------------------------------------
17 Notes to Financial Statements
-----------------------------------------
19 Independent Auditors' Report
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
MARKET ENVIRONMENT
After substantial gains during the first half of 1996, the small
capitalization market experienced a significant correction in July, a 16%
sell-off triggered by disappointing earnings by a small number of technology
companies. Although many small cap companies recovered from July's set-back
during the second half of the year, the broader small cap market underperformed
its large-capitalization counterpart for the 12-month period ended December 31,
1996.
Fortunately, July's disappointing earnings reports were limited to just a few
high-profile companies, and the majority of small cap stocks produced earnings
in line with most analysts' expectations. Yet, the small cap market did not
recover fully even after investors' fears of slower earnings growth dissipated.
Instead, investors redirected their investments from small cap stocks to large
cap stocks in an attempt to reduce risks in an uncertain environment.
We believe that the advent of lower prices without an earnings-growth slowdown
has created excellent opportunities in small cap stocks. The sector's
underperformance relative to larger companies has created attractive valuations
for many fast-growing companies; as a result, they are now available at
attractive prices. We expect to take full advantage of these opportunities as
the market environment evolves during the coming months.
- --------------------------------------------------------------------------------
FUND SNAPSHOT
COMMENCEMENT OF OPERATIONS
June 21, 1995
NET ASSETS AS OF 12/31/96
$24.3 million
FUND OBJECTIVE
Long-term capital growth; dividend income, if any, is incidental to this
investment objective.
DIVIDENDS
Paid semi-annually, if any
CAPITAL GAINS
Distributed annually, if any
BENCHMARK
o Lipper Small Company Growth Fund Average
o Russell 2000(R) Index
INVESTMENT ADVISER,
SMALL CAP EQUITY PORTFOLIO
Citibank, N.A.
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO MANAGER*
DAVID N. PEARL
Vice President, Citibank, N.A.
Mr. Pearl is a Portfolio Manager of U.S. Equity Assets for institutional
clients, with a focus on small and medium capitalization stocks.
Prior to joining Citibank in 1994, Mr. Pearl was a Portfolio Manager at Fleming
Capital Management where he managed a $125 million unit trust and invested over
$750 million in small capitalization growth stocks. Prior to this he was with
Bankers Trust Company, managing over $2 billion for institutional equity
clients. Mr. Pearl has also held the position of Research Analyst with BEA
Associates and has worked as a Manager, High Technology Programs for Coopers &
Lybrand.
LINDA J. INTINI
Vice President, Citibank, N.A.
*Effective February 24, 1997, Linda J. Intini became Portfolio Manager of the
Portfolio. Ms. Intini has over nine years of experience specializing in the
management of small cap equities, including over $300 million of Citibank's
small cap portfolios for trusts and individuals. Prior to joining Citibank, she
was a Portfolio Manager and Research Analyst with Manufacturers Hanover in the
Special Equity area. She also specialized in equity research at Eberstadt
Fleming.
- --------------------------------------------------------------------------------
THE INVESTMENT ADVISER RESPONDS
The Portfolio's investment adviser, Citibank, N.A., employs a bottom-up
approach to finding opportunities in the small capitalization marketplace,
focusing on the growth prospects of individual companies rather than
anticipating the effects of macroeconomic and industry trends. This
company-by-company evaluation leads us to the stocks of companies with
above-average growth rates and excellent prospects for the future. For example,
among the fundamentally strong companies we have found are a medical services
firm with a new insurance-eligible diagnostic test for cervical cancer, a
fast-growing toy company with a valuable manufacturing license and clever
management, and a technology company that is poised to benefit from the
evolution of the semiconductor industry.
Although we select securities for the Portfolio on a company-by-company basis,
we manage risk with a top-down perspective by limiting the extent to which the
portfolio's sector composition differs from the Russell 2000 small cap stock
index. This approach prevents us from establishing excessively large positions
in any particular economic sector, as can happen when strong industry
fundamentals create attractive growth prospects for a number of similar
companies.
For example, when our stock selection criteria identified many rapidly growing
companies in the consumer discretionary sector of the economy in 1996, our risk
discipline led us to limit our overweighting versus the Russell 2000. Similarly,
the Portfolio ended the year with a relatively smaller percentage of its assets
in financial stocks as we realized profits in some of our successful banking and
financial services positions, but we maintained a prudent level of investment in
this sector. All other economic sectors, including technology, ended the year
reasonably close to their "neutral" weightings as represented in the index.
<PAGE>
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STRATEGY AND OUTLOOK
"We expect money to flow back into small-cap stocks when investors become
concerned that large-cap valuations are too high."
"It is very unusual for small stocks to underperform large stocks in the absence
of an earnings slowdown, which is the situation we faced during the second half
of 1996."
"Slow growth, low inflation and reasonable interest rates should be beneficial
for small-cap stocks in 1997."
Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
BY THE NUMBERS
TOP TEN EQUITY HOLDINGS OF THE PORTFOLIO
(As of 12/31/96)
- --------------------------------------------------------------------------------
NAME INDUSTRY SECTOR % OF NET ASSETS
Cytyc Corp. Health Care 2.12%
Mastech Corp. Technology 2.12%
Network General Corp. Technology 2.11%
Metro Networks Inc. Consumer Services 2.08%
Performance Food Group Co. Consumer Staples 2.08%
Lomak Petroleum Inc. Other Energy 2.05%
Belco Oil & Gas Corp. Other Energy 2.03%
American Homepatient Health Care 2.02%
NCS Healthcare Inc. Health Care 2.02%
Roosevelt Financial Group Financial Services 2.01%
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
FUND DATA All Periods Ended December 31, 1996
TOTAL RETURNS
------------------------
SINCE
ONE 6/21/95
YEAR INCEPTION*
--------- -----------
<S> <C> <C>
Landmark Small Cap Equity Fund without Sales Charge 37.80% 56.98%
Lipper Small Company Growth Fund Average 20.20% 22.52%+
Russell 2000 Index 16.50% 17.14%+
Landmark Small Cap Equity Fund with Maximum Sales Charge of 4.75% 31.25% 52.07%
* Average Annualized Total Return
+ From 6/30/95
</TABLE>
Income Dividends Per Share $0.000
Capital Gain Distribution $1.501
- -------------------------------------------------------------------------------
Performance Highlights
A $10,000 investment in the Fund made on inception date would have grown to
$19,002 with sales charge (as of 12/31/96). The graph shows how the Fund
compares to our benchmarks over the same period.
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.
- -------------------------------------------------------------------------------
Landmark Landmark
Small Cap Small Cap Lipper Russell
w/o sales w sales Small Co. 2000
charge charge Average Index
- -------------------------------------------------------------------------------
Jun-95 10,050 9,573 10,000 10,000
Jul-95 10,970 10,449 10,748 10,576
Aug-95 11,640 11,087 10,925 10,795
Sep-95 12,000 11,430 11,188 10,988
Oct-95 11,980 11,411 10,812 10,497
Nov-95 13,550 12,906 11,212 10,938
Dec-95 14,478 13,790 11,375 11,227
Jan-96 14,842 14,137 11,295 11,214
Feb-96 16,297 15,523 11,763 11,564
Mar-96 17,126 16,313 12,077 11,804
Apr-96 19,199 18,287 12,980 12,435
May-96 20,584 19,606 13,547 12,925
Jun-96 19,963 19,015 13,023 12,394
Jul-96 17,674 16,835 11,903 11,311
Aug-96 19,870 18,927 12,624 11,968
Sep-96 20,712 19,728 13,265 12,436
Oct-96 20,076 19,122 13,000 12,606
Nov-96 20,455 19,474 13,378 12,724
Dec-96 19,950 19,002 13,582 12,692
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.
<PAGE>
Landmark Small Cap Equity Fund
- -------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
<TABLE>
<S> <C>
ASSETS:
Investment in Small Cap Equity Portfolio, at value (Note 1A) ................. $24,342,788
Receivable for shares of beneficial interest sold ............................ 156,908
Receivable from the Administrator ............................................ 32,620
-----------
Total Assets ............................................................. 24,532,316
-----------
LIABILITIES:
Payable for shares of beneficial interest repurchased ........................ 182,766
Payable to affiliates - Shareholder servicing agents' fees (Note 2B) ......... 5,378
Accrued expenses and other liabilities ....................................... 32,903
-----------
Total liabilities ........................................................ 221,047
-----------
NET ASSETS for 1,334,913 shares of beneficial interest outstanding ........... $24,311,269
===========
NET ASSETS CONSIST OF:
Paid-in capital .............................................................. $21,840,115
Unrealized appreciation ...................................................... 2,471,154
-----------
Total .................................................................... $24,311,269
===========
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE OF BENEFICIAL INTEREST ........ $ 18.21
===========
COMPUTATION OF OFFERING PRICE:
Maximum Offering Price per share based on a 4.75% sales charge ($18.21/0.9525) $19.12
======
</TABLE>
See notes to financial statements
<PAGE>
Landmark Small Cap Equity Fund
- -------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME (Note 1B):
Dividend Income from Small Cap Equity Portfolio ........................................... $ 61,549
Interest Income from Small Cap Equity Portfolio ........................................... 58,104
Allocated Expenses from Small Cap Equity Portfolio ........................................ (88,233) $ 31,420
-----------
EXPENSES:
Shareholder Servicing Agents' fees (Note 2B) .............................................. 39,957
Administrative fees (Note 2A) ............................................................. 39,957
Distribution fees (Note 3) ................................................................ 23,974
Auditing fees ............................................................................. 16,100
Transfer agent fees ....................................................................... 12,000
Shareholder reports ....................................................................... 10,817
Legal fees ................................................................................ 5,853
Trustees fees ............................................................................. 5,251
Custodian fees ............................................................................ 3,750
Registration fees ......................................................................... 2,035
Miscellaneous ............................................................................. 2,943
-----------
Total expenses ......................................................................... 162,637
Less expenses assumed by the Administrator ................................................ (32,620)
Less aggregate amount waived by Administrator, Distributor and Shareholder
Servicing Agents (Note 2A, 2B and 3) .................................................... (77,762)
-----------
Net expenses ......................................................................... 52,255
-----------
Net investment loss .................................................................. (20,835)
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) FROM SMALL CAP EQUITY PORTFOLIO:
Net realized gain ......................................................................... 1,458,685
Net change in unrealized appreciation (depreciation) ...................................... 1,745,364
-----------
Net realized and unrealized gain (loss) from Small Cap Equity Portfolio ................. 3,204,049
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ...................................... $ 3,183,214
===========
</TABLE>
See notes to financial statements
<PAGE>
Landmark Small Cap Equity Fund
- -------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
JUNE 21, 1995
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income (loss) ....................................................... $ (20,835) $ 16,583
Net realized gain .................................................................. 1,458,685 288,370
Net change in unrealized appreciation .............................................. 1,745,364 725,790
------------ ------------
Net increase in net assets resulting from operations ............................. 3,183,214 1,030,743
------------ ------------
Distributions to Shareholders from:
Net investment income .............................................................. -- (16,583)
Net realized gain .................................................................. (1,756,057) (34,115)
------------ ------------
Decrease in net assets from distributions to shareholders ........................ (1,756,057) (50,698)
------------ ------------
TRANSACTIONS IN SHARES OF BENEFICIAL INTEREST (NOTE 5):
Net proceeds from sale of shares ................................................... 20,246,660 4,202,811
Net asset value of shares issued to shareholders
from reinvestment of distributions ............................................... 1,743,625 51,172
Cost of shares repurchased ......................................................... (4,253,714) (86,487)
------------ ------------
Net increase in net assets from transactions in shares
of beneficial interest ........................................................... 17,736,571 4,167,496
------------ ------------
NET INCREASE IN NET ASSETS ......................................................... 19,163,728 5,147,541
NET ASSETS:
Beginning of period ................................................................ 5,147,541 --
------------ ------------
End of period (including undistributed investment income
of $0 and $0, respectively) ...................................................... $ 24,311,269 $ 5,147,541
============ ============
</TABLE>
See notes to financial statements
<PAGE>
<TABLE>
Landmark Small Cap Equity Fund
- ---------------------------------------------------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<CAPTION>
June 21, 1995
(COMMENCEMENT OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------- ----------------
<S> <C> <C>
Net Asset Value, beginning of period ........................... $ 14.32 $10.00
----- -----
Income From Operations:
Net investment income (loss) ................................... (0.016) 0.05
Net realized and unrealized gain ............................... 5.407 4.42
----- -----
Total from operations ..................................... 5.391 4.47
----- -----
Less Distributions From:
Net investment income ........................................ -- (0.05)
Net realized gain ............................................ (1.501) (0.10)
----- -----
Total from distributions ................................. (1.501) (0.15)
----- -----
Net Asset Value, end of period ................................. $ 18.21 $14.32
===== =====
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted) ...................... $24,311 $5,148
Ratio of expenses to average net assets (A) .................... 0.88% 0%
Ratio of net investment income (loss) to average net assets .... (0.13)% 1.21%*
Total return ................................................... 37.80% 44.78%**
Note: If Agents of the Fund and Agents of Small Cap Equity Portfolio had not voluntarily waived a portion of
their fees, assumed Fund expenses for the periods indicated and had expenses been limited to that required by
certain state securities laws for the period ended December 31, 1995, the net investment income (loss) per share
and the ratios would have been as follows:
Net investment income (loss) per share ...................... $(0.133) $(0.288)
Ratios:
Expenses to average net assets (A) .......................... 1.83% 2.50%*
Net investment income (loss) to average net assets .......... (1.08)% (1.29)%*
* Annualized
** Not Annualized
(A) Includes the Fund's share of Small Cap Equity Portfolio allocated expenses for the periods indicated.
</TABLE>
See notes to financial statements
<PAGE>
Landmark Small Cap Equity Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
The Landmark Small Cap Equity Fund (the "Fund") is a separate diversified series
of Landmark Funds II (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. The Fund invests all of its investable assets in
Small Cap Equity 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 objective of long-term capital
growth by investing all of its investable assets in the Portfolio, an open-end,
diversified management investment company having the same investment objective
and policies and substantially the same investment restrictions as the Fund. The
value of such investment reflects the Fund's proportionate interest (51.6% at
December 31, 1996) 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 preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosure in the financial statements. Actual
results could differ from those estimates.
The significant accounting policies consistently followed by the Fund 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.
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.
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
carryovers) under income tax rules and regulations. For the year ended December
31, 1996, the Fund reclassified $20,835 to net investment income, $41,889 to
accumulated net gain on investments and $62,724 from paid-in-capital.
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) 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 FEES -- Under the terms of an Administrative Services
Agreement, the administrative fees payable to the Administrator, as compensation
for overall administrative services and general office facilities, may not
exceed an annual rate of 0.25% of the Fund's average daily net assets. The
Administrative fees amounted to $39,957, all of which was voluntarily waived for
the year ended December 31, 1996. 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 Trustee or 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
0.25% 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 $39,957 of which $13,831 was voluntarily
waived for the year ended December 31, 1996.
(3) 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 Distribution fees amounted to $23,974 all of which was
voluntarily waived for the year ended December 31, 1996. 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.
(4) INVESTMENT TRANSACTIONS
Increases and decreases in the Fund's investment in the Portfolio for the period
aggregated $20,248,173 and $4,130,131 respectively.
(5) 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:
June 21, 1995
Year Ended (Commencement of
December 31, Operations) to
1996 December 31, 1995
----------- ---------------
Shares sold ....................... 1,099,302 362,453
Shares issued to shareholders from
reinvestment of distributions ... 96,298 3,754
Shares repurchased ................ (220,253) (6,641)
--------- -------
Net increase ...................... 975,347 359,566
========= =======
(6) ASSUMPTION OF EXPENSES
LFBDShas voluntarily agreed to pay a portion of the unwaived expenses of the
Fund for the year ended December 31, 1996, which amounted to $32,620.
<PAGE>
Landmark Small Cap Equity Fund
- -------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND THE SHAREHOLDERS OF LANDMARK FUNDS II (THE TRUST): LANDMARK
SMALL CAP EQUITY 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 Small Cap Equity Fund (the "Fund"), a series of Landmark Funds II, at
December 31, 1996, the results of its operations for the year then ended, the
changes in its net assets and the financial highlights for the periods indicated
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 audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments owned at December 31, 1996 by
correspondence with the custodian, provide a reasonable basis for the opinion
expressed above.
PRICE WATERHOUSE LLP
Boston, Massachusetts
February 4, 1997
<PAGE>
Small Cap Equity Portfolio
- ------------------------------------------------------------------------------
Portfolio Of Investments December 31, 1996
ISSUER SHARES VALUE
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
COMMON STOCKS -- 99.3%
- ------------------------------------------------------------------------------
CONSUMER DISCRETIONARY/SERVICES - 23.3%
Anchor Gaming*........................... 22,200 $ 893,550
Bally Entertainment Corp.* .............. 8,800 316,800
Film Roman Inc.*......................... 110,450 842,181
Forensic Technologies*................... 41,900 408,525
Forrester Research Inc.*................. 3,800 97,850
Gadzooks Inc.*........................... 43,600 795,700
HeftelBroadcasting Corp.* ............... 27,150 855,225
Lamar Advertising Co.*................... 35,200 853,600
Metro Networks Inc.*..................... 38,800 979,700
Micro Warehouse Inc.*.................... 32,800 385,400
Regal Cinemas*........................... 30,300 931,725
Remedy Temp Inc.*........................ 54,950 947,888
Snyder Communications Inc.*.............. 32,500 877,500
Suburban Lodges America*................. 55,700 891,200
Toy Biz Inc.*............................ 46,850 913,575
-----------
10,990,419
-----------
CONSUMER STAPLES - 7.4%
Carson Inc.*............................. 61,650 855,394
Consolidated Cigar Holdings*............. 33,150 820,462
Performance Food Group Co.*.............. 63,400 982,700
Worthington Foods Inc.................... 43,933 834,727
-----------
3,493,283
-----------
FINANCIAL SERVICES - 12.7%
First Empire State Corp.................. 2,950 849,600
Interwest Bancorp Inc.*.................. 26,000 838,500
Investors Financial Services Corp.*...... 30,900 857,475
Roosevelt Financial Group................ 45,150 948,150
Sirrom Capital Corp...................... 22,950 843,413
Texas Regional Bank Shares "A"........... 24,400 829,600
WestAmerica Bancorp...................... 14,200 820,050
-----------
5,986,788
-----------
HEALTH CARE - 12.7%
American HomePatient*.................... 34,900 951,025
Cytyc Corp.*............................. 37,050 1,000,350
ESC Medical Systems Ltd.*................ 32,800 836,400
Integrated Living Community.............. 100,400 577,300
NCS Healthcare Inc. Class "A"*........... 32,600 949,475
Physicians Sales & Service*.............. 58,250 837,344
Vivus Inc.*.............................. 23,200 841,000
-----------
5,992,894
-----------
INTEGRATED OILS - 1.6%
Giant Industries Inc..................... 54,550 763,700
-----------
MATERIALS & PROCESSING - 3.7%
Carbide/Graphite Group*.................. 45,350 889,993
Intertape Polymer Group.................. 35,950 826,850
-----------
1,716,843
-----------
OTHER ENERGY - 4.1%
Belco Oil & Gas Corp. ................... 34,950 956,756
Lomak Petroleum Inc...................... 56,550 968,419
-----------
1,925,175
-----------
PRODUCER DURABLES - 11.9%
Blount Inc. Class "A".................... 22,050 846,168
Champion Enterprises Inc.*............... 44,000 858,000
Dupont Photomasks*....................... 19,050 864,393
Hardinage Inc.*.......................... 31,800 846,675
Panavision Inc.*......................... 39,800 825,850
Polycom Inc.*............................ 95,050 463,369
Uniphase Corp.*.......................... 16,700 876,750
-----------
5,581,205
-----------
TECHNOLOGY - 18.4%
Activision Inc.*......................... 64,550 831,081
Epic Design Technology Inc.*............. 33,650 841,250
Inso Corp.*.............................. 21,550 856,613
Macromedia Inc.*......................... 46,100 829,800
Mastech Corp.*........................... 52,500 997,500
Midway Games Inc.*....................... 44,650 904,163
Network General Corp.*................... 32,950 996,738
Phoenix Technology Ltd.*................. 52,650 848,981
S3 Inc.*................................. 50,100 814,125
Silicon Valley Research Inc.*............ 71,000 142,000
Triquint Semiconductor Inc.*............. 23,326 615,223
-----------
8,677,474
-----------
UTILITIES - 3.5%
Atlantic Tele-Network*................... 51,200 780,800
PLD Telekom Inc.*........................ 144,900 887,513
-----------
1,668,313
-----------
TOTAL COMMON STOCKS
(Identified Cost $44,553,392) 46,796,094
-----------
- ------------------------------------------------------------------------------
SHORT-TERM OBLIGATIONS, AT AMORTIZED COST -- 5.4%
- ------------------------------------------------------------------------------
Morgan Stanley Repurchase Agreement
5.90% due 1/02/97 proceeds at
maturity $593,648 (collateralized by
$255,531 U.S. Treasury Note
10.625% due 8/15/15,
$259,276 U.S. Treasury Note
12.00% due 8/15/13 and
$91,795 U.S. Treasury Note
9.125% due 5/15/18) .................. 593,648
United States Treasury Bills
5.04% due 4/03/97..................... 1,973,960
-----------
2,567,608
-----------
Total Investments .............. 104.7% 49,363,702
(Identified Cost $47,121,000)
Other Assets,
Less Liabilities .............. (4.7) (2,221,380)
----- -----------
Net Assets ..................... 100.0% $47,142,322
===== ===========
* Non income producing
See notes to financial statements
<PAGE>
Small Cap Equity Portfolio
- ------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES December 31, 1996
ASSETS:
Investments at value (Note 1A) (Identified Cost, $47,121,000) ... $49,363,702
Dividend and Interest receivable ................................ 9,459
-----------
Total assets ................................................ 49,373,161
-----------
LIABILITIES:
Payable for investments purchased ............................... 2,168,062
Payable to affiliates - Investment advisors fees (Note 2) ....... 29,295
Accrued expenses and other liabilities .......................... 33,482
-----------
Total liabilities ........................................... 2,230,839
-----------
Net Assets ...................................................... 47,142,322
===========
REPRESENTED BY:
Paid-in capital for beneficial interests ........................ $47,142,322
===========
See notes to financial statements
<PAGE>
Small Cap Equity Portfolio
- ------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest Income .................................. $ 75,339
Dividend Income .................................. 73,749 $ 149,088
-----------
EXPENSES:
Investment advisory fees (Note 2) .................. 147,259
Auditing fees ...................................... 28,800
Custodian fees ..................................... 31,705
Legal fees ......................................... 5,853
Administrative fees (Note 3) ....................... 9,817
Trustee fees ....................................... 5,001
Miscellaneous ...................................... 2,022
-----------
Total expenses ................................... 230,457
Less aggregate amount waived by Investment
Adviser and Administrator (Notes 2 and 3) ......... (109,905)
-----------
Net expenses ..................................... 120,552
-----------
Net investment income ............................ 28,536
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain from investment transactions ..... 1,063,995
Unrealized appreciation of investments--
Beginning of period ............................. 725,820
End of period ................................... 2,242,702
-----------
NET CHANGE IN UNREALIZED APPRECIATION ............. 1,516,882
-----------
Net realized and unrealized gain on investments . 2,580,877
-----------
Net Increase in Net Assets Resulting from Operations $ 2,609,413
===========
</TABLE>
See notes to financial statements
<PAGE>
Small Cap Equity Portfolio
- ------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
JUNE 21, 1995
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
---------------- ----------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM:
OPERATIONS:
Net investment income $ 28,536 $ 16,583
Net realized gain on investment transactions ................. 1,063,995 288,385
Net change in unrealized appreciation of investments ......... 1,516,882 725,820
----------- ----------
Net increase in net assets resulting from operations ..... 2,609,413 1,030,788
----------- ----------
CAPITAL TRANSACTIONS:
Proceeds from contributions .................................. 45,631,942 4,044,649
Value of withdrawals ......................................... (6,088,455) (86,015)
----------- ----------
Net increase in net assets from capital transactions ..... 39,543,487 3,958,634
----------- ----------
NET INCREASE IN NET ASSETS: .................................. 42,152,900 4,989,422
NET ASSETS:
Beginning of period .......................................... 4,989,422 --
----------- ----------
End of period ................................................ $47,142,322 $4,989,422
=========== ==========
</TABLE>
See notes to financial statements
<PAGE>
Small Cap Equity Portfolio
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
JUNE 21, 1995
(COMMENCEMENT
YEAR ENDED OF OPERATIONS) TO
DECEMBER 31, 1996 DECEMBER 31, 1995
----------------- -----------------
<S> <C> <C>
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (000's omitted) ...................... $47,142 $4,989
Ratio of expenses to average net assets ........................ 0.61% -0-
Ratio of net investment income to average net assets ........... 0.15% 1.22%*
Portfolio turnover ............................................. 89% 41%
Average commission rate per share (A) .......................... $0.0467 N/A
Note: If Agents of the Portfolio had not voluntarily waived a portion of their fees and assumed Portfolio expenses for
the periods indicated and had expenses been limited to that required by certain state securities law for the period ended
December 31, 1995, the ratios would have been as follows:
RATIOS:
Expenses to average net assets ................................. 1.17% 2.50%*
Net investment income (loss) to average net assets ............. (0.41)% (1.28%)*
(A) The average commission rate paid is applicable for Funds that invest greater than 10% of average net assets in equity
transactions on which commissions are charged. This disclosure is required for fiscal periods beginning on or after
September 1, 1995.
* Annualized
</TABLE>
See notes to financial statements
<PAGE>
Small Cap Equity Portfolio
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
(1) SIGNIFICANT ACCOUNTING POLICIES
Small Cap Equity 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. The Investment Adviser of the Portfolio is Citibank N.A.
(Citibank"). Signature Financial Group (Grand Cayman), Ltd. ("SFG") acts as the
Portfolio's Administrator.
The preparation of financial statements in accordance with U.S. generally
accepted accounting principles require management to make estimates and
assumptions that affect the reported amounts and disclosures in the financial
statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Portfolio 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 U.S. federal income tax purposes. Dividend income is recorded
on the ex-dividend date.
C. U.S. FEDERAL INCOME TAXES -- The Portfolio is considered a partnership under
the U.S. Internal Revenue Code. Accordingly, no provision for federal income
taxes 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 agreements.
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. 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 fees paid to Citibank, as compensation for overall
investment management services, amounted to $147,259 of which $100,088 was
voluntarily waived for the year ended December 31, 1996. The Investment advisory
fees are computed at the annual rate of 0.75% of the Portfolio's average daily
net assets.
(3) ADMINISTRATIVE FEES
Under the terms of an Administrative Services Agreement, the administrative fees
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 fees amounted to $9,817
all of which was voluntarily waived for the year ended December 31, 1996.
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 Trustee or 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 $57,523,457 and $17,005,422, respectively, for the year ended
December 31, 1996.
(5) FEDERAL INCOME TAX BASIS OF INVESTMENTS
The cost and unrealized appreciation (depreciation) in value of the investment
securities owned at December 31, 1996, as computed on a federal income tax
basis, are as follows:
Aggregate cost $47,121,000
===========
Gross unrealized appreciation ...... $ 4,705,927
Gross unrealized depreciation ...... (2,463,225)
-----------
Net unrealized appreciation ........ $ 2,242,702
===========
(6) LINE OF CREDIT
The Portfolio, along with the other Landmark Funds, entered into an ongoing
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. 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 year ended
December 31, 1996, the commitment fee allocated to the Portfolio was $86. Since
the line of credit was established, there have been no borrowings.
<PAGE>
Small Cap Equity Portfolio
- --------------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
TO THE TRUSTEES AND THE INVESTORS OF THE PREMIUM PORTFOLIOS (THE TRUST), WITH
RESPECT TO ITS SERIES, SMALL CAP EQUITY PORTFOLIO:
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Small Cap Equity Portfolio (the
"Portfolio"), a series of The Premium Portfolios, as at December 31, 1996, the
related statements of operations and of changes in net assets and the financial
highlights for the periods indicated. 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 audits.
We conducted our audits 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 audits, which included confirmation of investments owned as
at December 31, 1996 by correspondence with the custodian and brokers and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide 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, 1996, the
results of its operations and the changes in its net assets and the financial
highlights for the periods indicated in accordance with U.S. generally accepted
accounting principles.
PRICE WATERHOUSE
Chartered Accountants
Toronto, Ontario
February 4, 1997
<PAGE>
- --------------------------------------------------------------------------------
SHAREHOLDER
SERVICING AGENTS
FOR CITIBANK NEW YORK RETAIL BANKING AND
BUSINESS AND PROFESSIONAL CUSTOMERS:
Citibank, N.A.
111 Wall Street, New York, NY 10043
(212) 820-2383 or (800) 846-5300
FOR CITIGOLD CUSTOMERS:
Citigold
P.O. Box 5130, New York, NY 10126-5130
Call Your Citigold Executive or, in NY or CT, (800) 285-1701, or for
all other states, (800) 285-1707
FOR CITIBANK 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 CITIBANK 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) 820-2380 in New York City