<PAGE>
[LOGO OF EXCELSIOR FUNDS, INC. APPEARS HERE]
DOMESTIC EQUITY PORTFOLIOS
ANNUAL REPORT
MARCH 31, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LETTER TO SHAREHOLDERS.................................................... 1
ADVISER'S DOMESTIC EQUITY MARKET REVIEW................................... 2
ADVISER'S INVESTMENT REVIEWS
Equity Fund.............................................................. 3
Income and Growth Fund................................................... 4
Aging of America Fund.................................................... 5
Business and Industrial Restructuring Fund............................... 6
Communication and Entertainment Fund..................................... 7
Early Life Cycle Fund.................................................... 8
Environmentally-Related Products and Services Fund....................... 9
Global Competitors Fund.................................................. 10
Long-Term Supply of Energy Fund.......................................... 11
Productivity Enhancers Fund.............................................. 12
STATEMENTS OF ASSETS AND LIABILITIES...................................... 14
STATEMENTS OF OPERATIONS.................................................. 16
STATEMENTS OF CHANGES IN NET ASSETS....................................... 18
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS................ 20
PORTFOLIOS OF INVESTMENTS
Equity Fund.............................................................. 24
Income and Growth Fund................................................... 25
Aging of America Fund.................................................... 27
Business and Industrial Restructuring Fund............................... 28
Communication and Entertainment Fund..................................... 30
Early Life Cycle Fund.................................................... 31
Environmentally-Related Products and Services Fund....................... 32
Global Competitors Fund.................................................. 33
Long-Term Supply of Energy Fund.......................................... 34
Productivity Enhancers Fund.............................................. 35
NOTES TO FINANCIAL STATEMENTS............................................. 36
INDEPENDENT AUDITORS' REPORT.............................................. 45
FEDERAL TAX INFORMATION................................................... 46
</TABLE>
For shareholder account information, current price and yield quotations, or to
make an initial purchase or obtain a prospectus, call the appropriate telephone
number listed below:
. INITIAL PURCHASE AND PROSPECTUS INFORMATION AND SHAREHOLDER SERVICES 1-800-
446-1012
. CURRENT PRICE AND YIELD INFORMATION 1-800-233-9180
This report must be preceded or accompanied by a current prospectus.
Prospectuses containing more complete information including charges and ex-
penses regarding Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. may
be obtained by contacting the Funds at 1-800-446-1012.
Investors should read the current prospectus carefully prior to investing or
sending money.
Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. are sponsored and
distributed by Edgewood Services, Inc.
You may write to Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. at
the following address:
EXCELSIOR FUNDS, INC.
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, UNITED STATES TRUST COMPANY OF NEW YORK, ITS PARENT OR AFFILIATES
AND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN THE FUNDS INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. FUND SHARES ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
<PAGE>
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the annual report for Excelsior Funds, Inc. The 1997
fiscal year was another year of growth for the fund complex, highlighted by
strong financial markets and new fund offerings which helped push the assets
of the funds over the $5 billion milestone.
In our on-going efforts to provide you with investment opportunities that
are best suited to meet your investment needs in the ever-evolving financial
marketplace, we continually evaluate the current Excelsior fund offerings. In
the coming year, we may make recommendations to you which we believe can
achieve this goal. These recommendations may include, among other things, the
establishment of new funds and possibly the consolidation of certain equity
funds. We will keep you apprised of these developments as our assessment of
these matters progresses.
The coming year promises to be both interesting and exciting. We are
cautiously optimistic regarding the domestic equity markets, international
equity markets continue to look attractive, and fiscal policy has been
effective in keeping inflation under control. With this in mind, I am
confident that the Excelsior fund family will continue to provide you with the
appropriate investment vehicles and dedicated service staff to help you meet
your investment objectives.
/s/ Frederick S. Wonham
Frederick S. Wonham
Chairman of the Board and President
1
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S DOMESTIC EQUITY MARKET REVIEW
- -------------------------------------------------------------------------------
The first quarter of fiscal 1997 saw the continuation of many of the trends
that began to make themselves felt in the previous quarter. Energy stocks
continued their strong performance, and technology proved increasingly
volatile, particularly toward quarter end. Large-capitalization companies
continued to perform well versus their small and mid-capitalization peers, as
did consumer stocks. Earnings uncertainties were on the rise, and earnings
disappointments (even small ones) were punished severely. We appeared
increasingly to be in a classic "stock picker's" market, an environment, we
believe, which plays to U.S. Trust's strengths -- that is, our consistent
bottom's up, long-term fundamental value investment approach.
Early on in the fiscal second quarter, the equity market was negatively
impacted by a sharp decline in the smaller-capitalization/early life cycle
area with particular focus on technology. While the overall equity market went
on to recover strongly, the small-capitalization/early life cycle and
technology areas had yet to regain their footing by quarter's end. Energy
stocks, however, continued their strong advance, along with the environmental
area -- solid waste in particular. Large-capitalization companies with solid
track records and earnings outlooks continued to perform well as did consumer
and interest-rate sensitive stocks in general.
For the second half of the fiscal year, the energy and environmental areas
gave up ground, but the trends of the first half in general grew more
pronounced. Large-capitalization stocks, for instance, continued to drive the
market, but leadership increasingly narrowed. Small-capitalization companies
lagged ever further behind their larger brethren. The reasons for this are
several. Faced with the need to get huge cash inflows working quickly on the
one hand, and a jittery stock market on the other, many mutual fund managers
gravitated toward more consistent, higher-quality larger-capitalization
issues. The rapid growth of index funds boosted large-capitalization stock
ownership even further.
But more than this, perhaps, is the fact that smaller companies simply were
unable to achieve sufficiently consistent and rapid earnings growth to attract
widespread investor attention. Small company earnings woes appeared to be a
combination of a lack of pricing power, less global exposure (access to
rapidly growing markets, cheaper labor, etc.), less product and geographic
diversification, fewer benefits from downsizing and outsourcing, and less
flexibility in managing earnings. At the same time, stock valuations for
smaller companies had yet to grow compelling -- at least on an overall basis.
In fact, what did seem clear as the fiscal year drew to a close, was that
valuations across the broad spectrum of the market appeared to be at least
fairly, if not fully valued.
2
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
EQUITY FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 11.09%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock
Price Index. Throughout the fiscal year, we maintained broad diversification
across strategies (growth, value, and small-capitalization) as well as longer-
term investment themes. Specifically, we maintained an underweight position in
technology, and generally little in the way of high-volatility small-
capitalization stocks. We maintained an overweight position in financial
service companies (though well diversified within the sector by type of
company), and a market weighting in the energy sector. As the year progressed,
we began to pay special attention to downside risk and keeping the portfolio
in balance. Purchases focused on high-quality, good business core holding
investments. Moving into the final quarter of the fiscal year, we began to
scale back our holdings in the financial area and to look toward consumer
staples and technology areas, and to large-capitalization growth companies in
general.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ---------------------------------------------------
Equity Fund+
- ---------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- ---------------------------------------------------
<S> <C> <C>
1 year 5 years 10 years
- ---------------------------------------------------
11.09% 15.38% 11.45%
- ---------------------------------------------------
Trust Shares
- ---------------------------------------------------
Since inception (11/12/96)
- ------------------------------
0.23%
- ------------------------------
</TABLE>
<TABLE>
<CAPTION>
Equity (reflects maximum sales charge) Equity (exclusive of sales charge) The Standard & Poors 500
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mar 31, 87 9,550 10,000 10,000
Mar 31, 88 8,477 8,876 9,160
Mar 31, 89 10,047 10,520 10,830
Mar 31, 90 11,251 11,781 12,930
Mar 31, 91 11,415 11,953 14,790
Mar 31, 92 13,821 14,472 16,420
Mar 31, 93 16,483 17,259 18,920
Mar 31, 94 17,560 18,388 19,200
Mar 31, 95 20,132 21,081 22,180
Mar 31, 96 25,456 26,656 29,300
Mar 31, 97 28,281 29,613 35,100
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Equity Fund and
a broad-based index over the past ten fiscal years. All dividends and capital
gain distributions are reinvested. The Fund's performance takes into account
fees and expenses. The index does not take into account charges, fees and
other expenses. Further information relating to Fund performance is contained
in the Financial Highlights section of the Prospectus and elsewhere in this
report.
The graph presents the performance of the Equity Fund's shares which have
been in existence since the Fund's inception. The performance of the Equity
Fund's Trust shares will be lower based upon the different inception date and
fees assessed to that class.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index
of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
3
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
INCOME AND GROWTH FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 12.61%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock
Price Index. To provide the income component of the Fund we held a variety of
fixed-income and convertible securities. Within the equity component of the
Fund, which comprises the balance of the portfolio, we emphasize thorough
diversification across three investment strategies--problem opportunity
(growth), transaction value, and early life cycle (small capitalization)--and
longer-term investment themes. In all of our investments, we focus on long-
term fundamental business value, with special attention to the breadth and
depth of employee incentives (compensation, safety, etc.). Regarding industry
and geographical exposure, we maintained a reasonable international component
and very few positions in regulated industries (including banking). During the
fiscal year, in line with the market as a whole, the Fund's larger-
capitalization holdings were a plus for performance, the smaller-
capitalization holdings a minus. With regard to both areas, we made little
attempt to alter the basic structure of the Fund in response to these near-
term market conditions. Our disciplined emphasis on long-term fundamental
value and thorough diversification remains consistent regardless of the
prevailing market environment.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- --------------------------------------------------
Income and Growth Fund+
- --------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- --------------------------------------------------
<S> <C> <C>
1 year 5 years 10 years
- --------------------------------------------------
12.61% 15.81% 10.63%
- --------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Income & Growth Income & Growth
(reflects maximum sales charge) (exclusive of sales charge) The Standard & Poors 500
------------------------------- --------------------------- ------------------------
<S> <C> <C> <C>
3/31/87 9,550 10,000 10,000
3/31/88 9,031 9,457 9,180
3/31/89 10,689 11,193 10,830
3/31/90 11,346 11,880 12,930
3/31/91 10,957 11,474 14,790
3/31/92 12,590 13,183 16,420
3/31/93 16,423 17,197 18,920
3/31/94 17,521 18,347 19,200
3/31/95 18,528 19,401 22,180
3/31/96 23,313 24,412 29,300
3/31/97 26,253 27,490 35,100
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Income and
Growth Fund and a broad-based index over the past ten fiscal years. All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
4
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
AGING OF AMERICA FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 8.18%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock Price
Index. The Fund's overall structure remained consistent--maintaining emphasis
on health care, financials, and large-capitalization consumer stocks. During
the first half, the fund's performance was hampered by weakness in the Fund's
health care positions as well as general weakness from the small-
capitalization sector. Strong performances came from large-capitalization
consumer stocks. Financial stocks were a mixed bag. During the second half,
the Fund's health care and REIT holdings advanced strongly, and the financial
services positions picked up as well. We did become more defensive in our
investment approach as the year progressed, eliminating some of the Fund's
more volatile smaller capitalization holdings.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- ----------------------------------------------------
Aging of America Fund+
- ----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- ----------------------------------------------------
<S> <C>
Since inception
1 year (12/31/92)
- ----------------------------------------------------
8.18% 10.68%
- ----------------------------------------------------
</TABLE>
<TABLE>
Aging of Americas Fund Aging of Americas Fund The Standard & Poors 500
(exclusive of sales charge) (reflects maximum)
<S> <C> <C> <C>
12/31/92 10,000 9,550 10,000
3/31/93 10,014 9,563 10,440
10,105 9,650 10,760
3/31/94 10,027 9,576 10,590
10,486 10,014 11,150
3/31/95 11,311 10,802 12,240
12,763 12,189 14,470
3/31/96 14,229 13,589 16,160
3/31/97 15,393 14,701 19,365
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Aging of
America Fund and a broad-based index since 12/31/92 (inception date). All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index
of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
5
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 18.09%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock
Price Index. Our investment strategy was consistent throughout the year, as we
remained well diversified with continued emphasis on the health care,
technology, aerospace, and financial services sectors. The Fund's technology
and small-capitalization stocks in general restrained performance. The Fund's
health care and financial services holdings began the year sluggishly but
improved over the course of the year. The fiscal fourth quarter saw a slowing
of momentum for the Fund; while pharmaceuticals remained strong, the
financials gave back some of their gains. Regarding investment strategy, we
did grow somewhat defensive, increasing our weighting of stable, larger and
solidly growing companies. We also began to focus on several subthemes,
including cost-cutting/downsizing, consolidation, and outsourcing.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Business and Industrial Restructuring Fund+
- -----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- -----------------------------------------------------
<S> <C>
Since inception
1 year (12/31/92)
- -----------------------------------------------------
18.09% 24.07%
- -----------------------------------------------------
Trust Shares
- -----------------------------------------------------
Since inception (9/19/96)
- ----------------------------------
10.85%
- ----------------------------------
</TABLE>
<TABLE>
<CAPTION>
Business and Ind. Rest. Business and Ind. Rest. The Standard & Poors 500
(reflects maximum sales charge) (exclusive of sales charge)
<S> <C> <C>
12/31/96 9,550 10,000 10,000
3/31/93 10,518 11,014 10,440
11,808 12,365 10,760
3/31/94 13,296 13,922 10,590
14,293 14,967 11,150
3/31/95 14,823 15,522 12,240
18,031 18,881 14,470
3/31/96 20,231 21,184 16,160
3/31/97 23,891 25,017 19,365
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Business and
Industrial Restructuring Fund and a broad-based index since 12/31/92
(inception date). All dividends and capital gain distributions are reinvested.
The Fund's performance takes into account fees and expenses. The index does
not take into account charges, fees and other expenses. Further information
relating to Fund performance is contained in the Financial Highlights section
of the Prospectus and elsewhere in this report.
The graph presents the performance of the Business and Industrial
Restructuring Fund's shares which have been in existence since the Fund's
inception. The performance of the Business and Industrial Restructuring Fund's
Trust shares will be lower based upon the different inception date and fees
assessed to that class.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index
of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
6
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
COMMUNICATION AND ENTERTAINMENT FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 0.34%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock Price
Index. Despite undeniable and compelling long-term prospects, delays in
technology and murky competitive environments (a result of deregulation)
brought confusion to the communication and entertainment investment theme in
1996. As a result of these near-term concerns, cable, wireless (cellular and
paging), and large telecommunications stocks all underperformed the broader
market last year. During the first half of the fiscal year, we increased
representation in traditional media and larger-capitalization technology
concerns. We also broadened our focus away from essentially growth-oriented
companies to include several transaction value opportunities and strong free
cash flow generators. During the second half, we refocused on several broad
subthemes: premium consumer brands; mature franchises selling at a discount;
emerging brands; and enablers (technology, infrastructure builders). We also
attempted to reduce volatility by paring exposure to the technology group and
to the cable and Competitive Local Exchange Carriers (as asset class valued on
non-traditional measures of future cash flows which tends to underperform
during periods of rising interest rates).
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Communication and Entertainment Fund+
- -----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- -----------------------------------------------------
<S> <C>
1 year Since Inception (12/31/92)
- -----------------------------------------------------
0.34% 12.94%
- -----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Comm. & Entern Comm. & Entern The Standard & Poors 500**
(reflects maximum sales charge)++ (exclusive of sales charge)
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 10,382 10,871 10,440
12,557 13,149 10,760
3/31/94 12,466 13,054 10,590
13,650 14,293 11,150
3/31/95 14,071 14,734 12,240
17,878 18,721 14,470
3/31/96 15,968 16,720 16,160
3/31/97 16,215 16,777 19,365
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Communication
and Entertainment Fund and a broad-based index since 12/31/92 (inception
date). All dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index
of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
7
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
EARLY LIFE CYCLE FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of (14.33)%* versus 5.11%** for the Russell 2000 Index and 19.83%*** for the
Standard & Poor's 500 Composite Stock Price Index. After a strong early start,
small-capitalization stocks peaked in early June 1996, and have been lagging
their larger-capitalization peers ever since. We took advantage of the
unsettled conditions to begin a thorough review of the Fund's investments. We
eliminated the more volatile small capitalization stocks and reemphasized a
strict discipline regarding valuations and the P/E multiples that we'll pay to
own. Most of the companies in the portfolio have an earnings track record and
can be classified as emerging good businesses rather than speculative ideas.
Nevertheless, in the final fiscal quarter, in addition to the generalized
weakness in the small-capitalization sector, the fund encountered an unusual
number of negative "surprises." We have as a result become more aggressive in
reviewing and restructuring the portfolio, trading out of some of the more
smaller-capitalization portfolio holdings and focusing intently on owning the
highest-quality companies, truly "good businesses."
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Early Life Cycle Fund+
- -----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- -----------------------------------------------------
<S> <C>
Since inception
1 year (12/31/92)
- -----------------------------------------------------
(14.33)% 9.29%
- -----------------------------------------------------
Trust Shares
- -----------------------------------------------------
Since inception (9/6/96)
- -------------------------------
(9.77)%
</TABLE>
<TABLE>
<CAPTION>
Early Life Cycle Fund Early Life Cycle Fund Russell 2000 Index**
(reflects prior maximum sales charge)++ (exclusive of sales charge)
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 10,095 10,571 10,440
9/30/93 11,951 12,514 11,600
3/31/94 11,940 12,503 11,590
9/30/94 12,729 13,329 11,900
3/31/95 13,750 14,398 12,210
9/30/95 16,695 17,488 14,680
3/31/96 16,264 17,031 15,770
3/31/97 13,933 14,590 16,576
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Early Life
Cycle Fund and a broad-based index since 12/31/92 (inception date). All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
The graph presents the performance of the Early Life Cycle Fund's shares
which have been in existence since the Fund's inception. The performance of
the Early Life Cycle Fund's Trust shares will be lower based upon the
different inception date and fees assessed to that class.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: The Russell Company--The Russell 2000 Index is an unmanaged index
and is composed of the 2,000 smallest companies in the Russell 3000 Index.
The Russell 3000 Index is composed of 3,000 of the largest U.S. companies
by market capitalization. The index includes dividends reinvested.
*** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
8
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 21.22%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock
Price Index. While we have expanded the focus of the environmental theme to
include companies that improve resource utilization and/or enhance the
efficiency of our built environment, much of the Fund's gains were led by the
more traditional environmental stocks, in particular the solid waste sector.
In fact, we remained overweighted in the core environmental area of solid
waste. Other big winners, at least through the first three fiscal quarters,
came from the water technology area. The Fund is a blend of small, medium and
large-capitalization companies; in the fourth fiscal quarter, the Fund's
smaller companies hampered performance. As we moved toward year end, though
the structure and strategy of the Fund did not change, we reduced the number
of positions in the portfolio, selling several of our smaller-capitalization
names and concentrating instead on mid and large-capitalization issues.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Environmentally-Released Products and Services Fund+
- -----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- -----------------------------------------------------
<S> <C>
1 year Since inception (12/31/92)
- -----------------------------------------------------
21.22% 7.17%
- -----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Environ. Rel. Pr. & Ser. Environ. Rel. Pr. & Ser.
(reflects maximum sales charge) (exclusive of sales charge) The Standard & Poors 500
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 9,482 9,929 10,440
8,614 9,021 10,760
3/31/94 8,519 8,920 10,590
8,696 9,106 11,150
3/31/95 8,496 8,897 12,240
10,056 10,530 14,470
3/31/96 10,576 11,075 16,160
3/31/97 12,820 13,424 19,365
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in
Environmentally-Related Products and Services Fund and a broad-based index
since 12/31/92 (inception date). All dividends and capital gain distributions
are reinvested. The Fund's performance takes into account fees and expenses.
The index does not take into account charges, fees and other expenses. Further
information relating to Fund performance is contained in the Financial
Highlights section of the Prospectus and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
9
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
GLOBAL COMPETITORS FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 6.64%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock Price
Index. For the entire fiscal year, we maintained a broadly diversified
portfolio--both in terms of market sectors and investment strategies--
problem/opportunity (growth), value, and early life cycle (small
capitalization). Specifically, we continued to focus on identifying and owning
effective global competitors with above-average growth potential due to strong
product demand, effective capital allocation, and the ability to leverage
competitive advantages to gain market share. In the first fiscal quarter, the
Fund's consumer, financial, and energy stocks showed resilience, while
technology holdings proved a drag overall. The Fund picked up sharply in the
second fiscal quarter, driven by financials, food companies, and interest-rate
sensitive companies in general. Technology (once again) and telecommunications
holdings lagged. This pattern remained in place through the balance of the
year. Portfolio activity during this period involved a continued overweighting
of the financial sector, reducing our weighting in the telecommunications
sector, and shifting the Fund's technology component away from smaller, more
volatile concerns and toward later, well-established companies within the most
attractive technology sectors. We also continued to look favorably upon global
cosmetic and household products companies.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Global Competitors Fund+
- -----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- -----------------------------------------------------
<S> <C>
1 year Since inception (12/31/92)
- -----------------------------------------------------
6.64% 13.18%
- -----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Global Competitors Global Competitors The Standard & Poors 500
(reflects maximum sales charge) (exclusive of sales charge)
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 9,932 10,400 10,440
10,786 11,295 10,760
3/31/94 10,556 11,054 10,590
10,805 11,315 11,150
3/31/95 11,900 12,461 12,240
13,913 14,569 14,470
3/31/96 15,158 15,874 16,160
3/31/97 16,166 16,928 19,365
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Global
Competitors Fund and a broad-based index since 12/31/92 (inception date). All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index
of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
10
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
LONG-TERM SUPPLY OF ENERGY FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 28.28%* versus 19.83%** for the Standard & Poor's 500 Composite Stock Price
Index. The first three fiscal quarters saw solid gains for the Fund and the
energy sector overall. Gains were paced by the Exploration and Production
sector, which benefited from higher gas prices and exploratory successes aided
by advanced 3-D seismic technology. The oil services sector also remained
strong, peaking in April '96 as rig rates neared full capacity. The major
integrateds began modestly relative to the sharp rise in oil prices as
investors appeared to be looking through the price spike to more normalized
levels. As the year progressed, we cut our Exploration and Production sector
weighting as well as our alternative energy weighting, raised our ratings in
the major integrateds and in oil services. In the final fiscal quarter,
propelled by a precipitous decline in commodity prices, the energy sector saw
a negative shift in momentum, though the Fund managed to hold onto most of the
previous quarter's gains. At this time, we further lowered our Exploration and
Production weighting and increased our weighting in the major integrated oils.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Long-Term Supply of Energy Fund+
- -----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- -----------------------------------------------------
<S> <C>
1 year Since inception (12/31/92)
- -----------------------------------------------------
28.28% 14.89%
- -----------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Long-Term Supply Energy fund Long -Term Supply Energy fund The Standard & Poors 500
(reflect prior maximum sales charge)++ (exclusive of sales charge)
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 10,655 11,157 10,440
11,916 12,478 10,760
3/31/94 10,595 11,094 10,590
11,046 11,567 11,150
3/31/95 11,048 11,568 12,240
12,009 12,575 14,470
3/31/96 13,433 14,067 16,160
3/31/97 17,232 18,045 19,365
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Long-Term
Supply of Energy Fund and a broad-based index since 12/31/92 (inception date).
All dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation--Reflects the reinvestment of income
dividends and, where applicable, capital gain distributions. The Standard &
Poor's 500 Composite Stock Price Index is a widely accepted unmanaged index
of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
11
<PAGE>
EXCELSIOR FUNDS, INC.
ADVISER'S INVESTMENT REVIEW
PRODUCTIVITY ENHANCERS FUND
- -------------------------------------------------------------------------------
For the twelve months ended March 31, 1997, the Fund realized a total return
of 1.02%*, versus 19.83%** for the Standard & Poor's 500 Composite Stock Price
Index. During the first half of the fiscal year, we focused heavily on the
technology sector, followed by capital goods and the consumer sector. Weakness
in technology, particularly small-capitalization technology stocks, had a
negative impact on the Fund. During the second half of the fiscal year, we
conducted a thorough review of the Fund's investments, identifying areas where
the Fund was either under-represented or without representation. While the
main drivers of the Fund remained the same--technology, financials, aerospace,
diversified basic materials--we increased diversification and added emphasis
on good long-term fundamental business values at the portfolio's center. We
also shifted weightings somewhat, adding to positions on the consumer side and
in transportation, for instance. During the final quarter, holdings in the
areas of basic materials, financial services, and transportation helped the
Fund, though again performance was hampered by the further slide in technology
stocks.
[LINE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
- -----------------------------------------------------
Productivity Enhancers Fund+
- -----------------------------------------------------
Average Annual Total Return Ended on 3/31/97*
- -----------------------------------------------------
<S> <C>
1 year Since inception (12/31/92)
- -----------------------------------------------------
1.02% 10.21%
- -----------------------------------------------------
</TABLE>
<TABLE>
Productivity Enhancers Fund Productivity Enhancers Fund The Standard & Poors 500
(reflects maximum sales charge) (exclusive of sales charge)
<S> <C> <C> <C>
12/31/92 9,550 10,000 10,000
3/31/93 9,468 9,914 10,440
10,105 10,582 10,760
3/31/94 10,775 11,283 10,590
10,728 11,234 11,150
3/31/95 11,255 11,786 12,240
13,501 14,138 14,470
3/31/96 14,291 14,965 16,160
3/31/97 14,437 15,118 19,365
</TABLE>
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE. INVESTMENT RETURNS
AND PRINCIPAL VALUES WILL VARY AND SHARES MAY BE WORTH MORE OR LESS AT
REDEMPTION THAN THEIR ORIGINAL COST.
The above illustration compares a $10,000 investment made in Productivity
Enhancers Fund and a broad-based index since 12/31/92 (inception date). All
dividends and capital gain distributions are reinvested. The Fund's
performance takes into account fees and expenses. The index does not take into
account charges, fees and other expenses. Further information relating to Fund
performance is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
- --------
* Total return represents the change during the period in a hypothetical
account with dividends reinvested, without taking into account the 4.5%
maximum initial sales charge which was eliminated effective 2/14/97.
** Source: Standard & Poor's Corporation -- Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
+ The Fund is currently waiving certain fees. Had the Fund not waived fees,
returns would have been lower. This voluntary waiver may be modified or
terminated at any time.
++ Reflects 4.5% maximum sales charge on initial investment. The sales charge
was eliminated effective 2/14/97.
12
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
13
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<CAPTION>
INCOME AND AGING OF
EQUITY GROWTH AMERICA
FUND FUND FUND
------------ ------------ -----------
<S> <C> <C> <C>
ASSETS:
Investments, at cost--see accompanying
portfolios........................... $239,891,128 $100,064,467 $34,173,700
============ ============ ===========
Investments, at value (Note 1)........ $306,300,212 $132,131,071 $44,035,152
Cash.................................. 43 412 674
Dividends receivable.................. 437,580 85,702 41,575
Interest receivable................... 83,283 734,480 4,995
Receivable for investments sold....... 3,186,837 -- 1,128,883
Receivable for fund shares sold....... 1,075,668 79,125 23,886
Receivable from investment advisor
(Note 2)............................. -- -- --
Withholding tax receivable............ -- 2,718 --
Prepaid expenses...................... 11,945 4,900 1,773
Unamortized organization costs (Note
5)................................... -- -- 3,171
------------ ------------ -----------
TOTAL ASSETS.......................... 311,095,568 133,038,408 45,240,109
LIABILITIES:
Payable for investments purchased..... 3,211,712 -- --
Payable for fund shares redeemed...... 478,756 126,692 123,920
Investment advisory fee payable (Note
2)................................... 199,898 78,059 22,366
Due to custodian bank................. -- -- --
Accrued expenses and other payables... 134,564 66,119 36,269
------------ ------------ -----------
TOTAL LIABILITIES..................... 4,024,930 270,870 182,555
------------ ------------ -----------
NET ASSETS............................. $307,070,638 $132,767,538 $45,057,554
============ ============ ===========
NET ASSETS consist of:
Undistributed net investment income .. $ 639,545 $ 571,900 $ 32,870
Accumulated net realized gain (loss)
on investments....................... 7,037,544 4,968,595 1,153,902
Unrealized appreciation (depreciation)
of investments and foreign currency
translations......................... 66,409,084 32,066,192 9,861,452
Par value (Note 4).................... 11,897 8,705 4,444
Paid-in capital in excess of par
value................................ 232,972,568 95,152,146 34,004,886
------------ ------------ -----------
TOTAL NET ASSETS....................... $307,070,638 $132,767,538 $45,057,554
============ ============ ===========
SHARES:
Net Assets............................ $306,989,598 $132,767,538 $45,057,554
Shares of Common Stock Outstanding.... 11,893,854 8,705,319 4,444,010
NET ASSET VALUE PER SHARE.............. $25.81 $15.25 $10.14
====== ====== ======
TRUST SHARES:
Net Assets............................ $ 81,040 -- --
Shares of Common Stock Outstanding.... 3,144 -- --
NET ASSET VALUE PER SHARE.............. $25.78 -- --
======
</TABLE>
See Notes to Financial Statements
14
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND FUND FUND FUND FUND FUND FUND
------------- ------------- ----------- ---------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 99,261,956 $29,209,379 $52,479,549 $8,051,827 $67,679,200 $26,885,433 $16,471,895
============ =========== =========== ========== =========== =========== ===========
$125,283,194 $34,233,721 $52,436,200 $9,407,312 $82,461,922 $33,943,203 $17,128,680
317 104 444 77 -- -- 172
185,062 49,624 8,120 7,384 49,020 18,827 14,941
6,478 1,328 1,821 2,824 4,070 5,733 2,302
1,359,955 881,681 1,092,075 -- 1,763,534 -- 981,940
108,767 588 15,142 7,993 10,000 26,743 400
-- -- -- 666 -- -- 450
4,693 -- -- -- 522 -- --
4,583 1,640 2,539 316 3,538 1,169 782
3,171 3,171 3,171 3,171 3,171 3,171 3,171
------------ ----------- ----------- ---------- ----------- ----------- -----------
126,956,220 35,171,857 53,559,512 9,429,743 84,295,777 33,998,846 18,132,838
1,957,749 -- -- 523,941 -- 444,507 --
813,664 419,342 216,788 22,968 687,501 96,822 50,703
61,463 18,600 27,897 -- 42,577 15,761 --
-- -- -- -- 1,595,443 27,215 --
60,275 37,424 48,738 13,990 48,457 21,450 24,888
------------ ----------- ----------- ---------- ----------- ----------- -----------
2,893,151 475,366 293,423 560,899 2,373,978 605,755 75,591
------------ ----------- ----------- ---------- ----------- ----------- -----------
$124,063,069 $34,696,491 $53,266,089 $8,868,844 $81,921,799 $33,393,091 $18,057,247
============ =========== =========== ========== =========== =========== ===========
$ 145,348 $ -- $ -- $ 1,263 $ 65,558 $ 49,837 $ --
1,881,036 754,828 (2,895,898) 194,299 1,657,958 509,900 606,446
26,020,674 5,024,342 (43,349) 1,355,485 14,782,645 7,057,770 656,785
7,787 3,363 6,031 949 7,195 3,002 2,210
96,008,224 28,913,958 56,199,305 7,316,848 65,408,443 25,772,582 16,791,806
------------ ----------- ----------- ---------- ----------- ----------- -----------
$124,063,069 $34,696,491 $53,266,089 $8,868,844 $81,921,799 $33,393,091 $18,057,247
============ =========== =========== ========== =========== =========== ===========
$124,011,153 $34,696,491 $53,258,036 $8,868,844 $81,921,799 $33,393,091 $18,057,247
7,783,856 3,363,248 6,030,747 949,105 7,194,476 3,002,398 2,209,782
$15.93 $10.32 $8.83 $9.34 $11.39 $11.12 $8.17
====== ====== ===== ===== ====== ====== =====
$ 51,916 -- $ 8,053 -- -- -- --
3,264 -- 914 -- -- -- --
$15.91 -- $8.81 -- -- -- --
====== =====
</TABLE>
See Notes to Financial Statements
15
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
INCOME AND AGING OF
EQUITY GROWTH AMERICA
FUND+ FUND FUND
----------- ----------- ----------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income....................... $ 833,687 $ 2,468,384 $ 96,641
Dividend income....................... 3,956,821 1,719,063 669,224
Less: Foreign taxes withheld.......... -- (2,348) --
----------- ----------- ----------
TOTAL INCOME.......................... 4,790,508 4,185,099 765,865
EXPENSES:
Investment advisory fees (Note 2)..... 2,087,344 982,751 282,456
Administration fees (Note 2).......... 427,849 201,381 72,380
Administrative service fees (Note 2).. 132,737 106,888 21,988
Shareholder servicing agent fees...... 115,810 69,461 33,810
Custodian fees........................ 90,204 46,731 17,945
Registration and filing fees.......... 16,929 11,745 18,843
Legal and audit fees.................. 33,574 15,832 8,473
Directors' fees and expenses (Note
2).................................... 10,880 5,569 2,256
Shareholder reports................... 30,601 6,192 6,100
Amortization of organization costs
(Note 5).............................. -- -- 4,176
Distribution fees--Trust Shares (Note
2).................................... 88 -- --
Miscellaneous expenses................ 9,152 5,988 2,610
----------- ----------- ----------
TOTAL EXPENSES........................ 2,955,168 1,452,538 471,037
Fees waived by investment adviser and
administrators (Note 2)............... (132,737) (106,888) (21,988)
----------- ----------- ----------
NET EXPENSES.......................... 2,822,431 1,345,650 449,049
----------- ----------- ----------
NET INVESTMENT INCOME (LOSS)........... 1,968,077 2,839,449 316,816
----------- ----------- ----------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS (NOTE 1):
Net realized gain (loss):
Security transactions................. 13,470,108 8,780,963 3,293,736
Foreign currency translations......... -- (7,539) --
----------- ----------- ----------
Total net realized gain (loss)........ 13,470,108 8,773,424 3,293,736
Change in unrealized
appreciation/depreciation on
investments and foreign currency
translations during the year......... 11,035,720 3,899,616 132,436
----------- ----------- ----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS................. 24,505,828 12,673,040 3,426,172
----------- ----------- ----------
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS............. $26,473,905 $15,512,489 $3,742,988
=========== =========== ==========
</TABLE>
+ The Excelsior Fund began offering Trust Shares on November 12, 1996,
September 19, 1996, and September 6, 1996 for Equity Fund, Business and
Industrial Restructuring Fund, and Early Life Cycle Fund, respectively.
See Notes to Financial Statements
16
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND+ FUND FUND+ FUND FUND FUND FUND
------------- ------------- ------------ ---------------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 73,760 $ 182,191 $ 171,656 $ 28,872 $ 166,985 $ 120,506 $ 38,781
1,720,957 282,639 358,990 49,058 1,045,610 404,006 172,753
(5,067) -- -- -- (3,359) -- --
----------- ----------- ------------ ---------- ---------- ---------- ----------
1,789,650 464,830 530,646 77,930 1,209,236 524,512 211,534
594,255 290,211 469,912 40,858 503,823 177,440 153,391
152,356 74,287 120,450 12,257 129,087 45,473 39,265
41,617 24,461 61,972 3,484 36,378 12,270 13,268
55,874 50,982 57,471 9,005 38,222 14,040 16,308
40,422 19,367 30,238 6,347 27,397 15,522 26,558
18,290 18,831 18,494 12,617 17,763 9,787 12,813
15,579 8,165 13,156 975 13,493 4,339 4,153
4,022 2,435 3,974 275 3,751 1,212 1,336
10,816 6,519 11,390 581 10,433 2,091 2,655
4,176 4,176 4,176 4,176 4,176 4,176 4,176
89 -- 10 -- -- -- --
3,555 3,062 4,413 711 3,686 2,519 2,297
----------- ----------- ------------ ---------- ---------- ---------- ----------
941,051 502,496 795,656 91,286 788,209 288,869 276,220
(41,617) (24,461) (61,972) (23,451) (36,378) (12,270) (24,184)
----------- ----------- ------------ ---------- ---------- ---------- ----------
899,434 478,035 733,684 67,835 751,831 276,599 252,036
----------- ----------- ------------ ---------- ---------- ---------- ----------
890,216 (13,205) (203,038) 10,095 457,405 247,913 (40,502)
----------- ----------- ------------ ---------- ---------- ---------- ----------
3,591,561 754,828 (1,252,061) 678,387 2,417,099 3,066,094 1,237,947
(2,769) -- -- -- (521) -- 237
----------- ----------- ------------ ---------- ---------- ---------- ----------
3,588,792 754,828 (1,252,061) 678,387 2,416,578 3,066,094 1,238,184
10,912,205 237,949 (10,176,904) 345,106 2,778,098 3,501,247 (273,291)
----------- ----------- ------------ ---------- ---------- ---------- ----------
14,500,997 992,777 (11,428,965) 1,023,493 5,194,676 6,567,341 964,893
----------- ----------- ------------ ---------- ---------- ---------- ----------
$15,391,213 $ 979,572 $(11,632,003) $1,033,588 $5,652,081 $6,815,254 $ 924,391
=========== =========== ============ ========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements
17
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
INCOME AND AGING OF
EQUITY GROWTH AMERICA
FUND+ FUND FUND
------------ ------------ -----------
<S> <C> <C> <C>
YEAR ENDED MARCH 31, 1997
Net investment income (loss)......... $ 1,968,077 $ 2,839,449 $ 316,816
Net realized gain (loss) on
investments......................... 13,470,108 8,773,424 3,293,736
Change in unrealized
appreciation/depreciation on
investments and foreign currency
translations during the year........ 11,035,720 3,899,616 132,436
------------ ------------ -----------
Net increase (decrease) in net assets
resulting from operations........... 26,473,905 15,512,489 3,742,988
Distributions to shareholders:
From net investment income:
Shares.............................. (1,439,009) (3,036,535) (314,773)
Trust Shares........................ (103) -- --
From net realized gain on
investments:
Shares.............................. (11,114,096) (5,519,778) (1,835,114)
Trust Shares........................ (27) -- --
In excess of net realized gain on
investments:
Shares.............................. -- -- --
------------ ------------ -----------
Total distributions................ (12,553,235) (8,556,313) (2,149,887)
------------ ------------ -----------
Increase (decrease) in net assets
from fund share transactions (Note
4)
Shares.............................. 104,492,129 (1,683,305) (1,327,320)
Trust Shares........................ 84,035 -- --
------------ ------------ -----------
Total from fund share
transactions...................... 104,576,164 (1,683,305) (1,327,320)
------------ ------------ -----------
Net increase (decrease) in net
assets.............................. 118,496,834 5,272,871 265,781
NET ASSETS:
Beginning of year................... 188,573,804 127,494,667 44,791,773
------------ ------------ -----------
End of year(1)...................... $307,070,638 $132,767,538 $45,057,554
============ ============ ===========
--------
(1) Including undistributed net
investment income.................. $ 639,545 $ 571,900 $ 32,870
============ ============ ===========
YEAR ENDED MARCH 31, 1996
Net investment income (loss)......... $ 892,355 $ 3,359,989 $ 179,442
Net realized gain on investments..... 12,290,132 3,102,820 229,173
Change in unrealized
appreciation/depreciation on
investments and foreign currency
translations during the year........ 24,331,637 19,139,107 7,454,373
------------ ------------ -----------
Net increase in net assets resulting
from operations..................... 37,514,124 25,601,916 7,862,988
Distributions to shareholders:
From net investment income: (775,213) (2,643,489) (162,762)
In excess of net investment income.. -- -- --
From net realized gain on
investments........................ (14,900,357) (495,121) --
In excess of net realized gain on
investments........................ -- -- --
Increase (decrease) in net assets
from fund share transactions (Note
4).................................. 29,318,351 5,106,774 14,917,963
------------ ------------ -----------
Net increase (decrease) in net
assets.............................. 51,156,905 27,570,080 22,618,189
NET ASSETS:
Beginning of year................... 137,416,899 99,924,587 22,173,584
------------ ------------ -----------
End of year(2)...................... $188,573,804 $127,494,667 $44,791,773
============ ============ ===========
--------
(2) Including
undistributed/(distributions in
excess of) net investment income.. $ 110,580 $ 992,864 $ 48,027
============ ============ ===========
</TABLE>
+ The Excelsior Fund began offering Trust Shares on November 12, 1996,
September 19, 1996 and September 6, 1996 for Equity Fund, Business and
Industrial Restructuring Fund, and Early Life Cycle Fund, respectively.
See Notes to Financial Statements
18
<PAGE>
<TABLE>
<CAPTION>
BUSINESS AND COMMUNICATION ENVIRONMENTALLY- LONG-TERM
INDUSTRIAL AND EARLY LIFE RELATED PRODUCTS GLOBAL SUPPLY PRODUCTIVITY
RESTRUCTURING ENTERTAINMENT CYCLE AND SERVICES COMPETITORS OF ENERGY ENHANCERS
FUND+ FUND FUND+ FUND FUND FUND FUND
------------- ------------- ------------ ---------------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
$ 890,216 $ (13,205) $ (203,038) $ 10,095 $ 457,405 $ 247,913 $ (40,502)
3,588,792 754,828 (1,252,061) 678,387 2,416,578 3,066,094 1,238,184
10,912,205 237,949 (10,176,904) 345,106 2,778,098 3,501,247 (273,291)
------------ ------------ ------------ ----------- ----------- ----------- ------------
15,391,213 979,572 (11,632,003) 1,033,588 5,652,081 6,815,254 924,391
(770,732) -- -- (8,832) (512,801) (236,119) --
(133) -- -- -- -- -- --
(2,941,935) (243,366) (760,083) -- (672,479) (2,816,614) (2,588,996)
(702) -- (98) -- -- -- --
-- -- (2,895,800) -- -- -- --
------------ ------------ ------------ ----------- ----------- ----------- ------------
(3,713,502) (243,366) (3,655,981) (8,832) (1,185,280) (3,052,733) (2,588,996)
------------ ------------ ------------ ----------- ----------- ----------- ------------
38,284,744 (12,989,055) (9,515,807) 3,897,322 6,150,507 6,336,079 (9,347,427)
48,311 -- 9,034 -- -- -- --
------------ ------------ ------------ ----------- ----------- ----------- ------------
38,333,055 (12,989,055) (9,506,773) 3,897,322 6,150,507 6,336,079 (9,347,427)
------------ ------------ ------------ ----------- ----------- ----------- ------------
50,010,766 (12,252,849) (24,794,757) 4,922,078 10,617,308 10,098,600 (11,012,032)
74,052,303 46,949,340 78,060,846 3,946,766 71,304,491 23,294,491 29,069,279
------------ ------------ ------------ ----------- ----------- ----------- ------------
$124,063,069 $ 34,696,491 $ 53,266,089 $ 8,868,844 $81,921,799 $33,393,091 $ 18,057,247
============ ============ ============ =========== =========== =========== ============
$ 145,348 $ -- $ -- $ 1,263 $ 65,558 $ 49,837 $ --
============ ============ ============ =========== =========== =========== ============
$ 430,247 $ 112,007 $ (110,895) $ (7,710) $ 327,789 $ 183,715 $ 53,347
2,629,951 2,474,867 3,934,385 31,865 721,363 521,934 5,861,616
11,536,487 1,240,983 6,178,733 923,672 9,216,453 3,435,626 (172,413)
------------ ------------ ------------ ----------- ----------- ----------- ------------
14,596,685 3,827,857 10,002,223 947,827 10,265,605 4,141,275 5,742,550
(345,537) (105,302) -- -- (257,433) (168,020) (53,347)
-- -- -- -- -- -- (50,322)
(987,000) (2,340,896) (4,027,696) -- (85,339) -- (4,101,238)
-- -- -- -- (86,658) -- --
30,605,398 15,653,291 24,303,965 (1,360,084) 35,973,688 3,508,362 9,266,366
------------ ------------ ------------ ----------- ----------- ----------- ------------
43,869,546 17,034,950 30,278,492 (412,257) 45,809,863 7,481,617 10,804,009
30,182,757 29,914,390 47,782,354 4,359,023 25,494,628 15,812,874 18,265,270
------------ ------------ ------------ ----------- ----------- ----------- ------------
$ 74,052,303 $ 46,949,340 $ 78,060,846 $ 3,946,766 $71,304,491 $23,294,491 $ 29,069,279
============ ============ ============ =========== =========== =========== ============
$ 137,328 $ (158) $ -- $ -- $ 121,474 $ 38,043 $ --
============ ============ ============ =========== =========== =========== ============
</TABLE>
See Notes to Financial Statements
19
<PAGE>
EXCELSIOR FUNDS, INC.
FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS
For a Fund share outstanding throughout each period.
<TABLE>
<CAPTION>
NET REALIZED DIVIDENDS DISTRIBUTIONS
NET ASSET NET AND UNREALIZED DIVIDENDS IN EXCESS OF FROM NET
VALUE, INVESTMENT GAIN (LOSS) TOTAL FROM FROM NET NET REALIZED GAIN
BEGINNING INCOME ON INVESTMENTS INVESTMENT INVESTMENT INVESTMENT ON INVESTMENTS
OF PERIOD (LOSS) AND OPTIONS OPERATIONS INCOME INCOME AND OPTIONS
--------- ---------- -------------- ---------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
EQUITY FUND -- (4/25/85*)
Shares:
Year Ended March 31,
1993................... $16.28 $0.08 $3.01 $3.09 $(0.09) -- $(0.51)
1994................... 18.77 0.05 1.16 1.21 (0.08) -- (0.39)
1995................... 19.17 0.07 2.67 2.74 (0.04) -- (0.47)
1996................... 21.40 0.12 5.21 5.33 (0.11) -- (2.19)
1997................... 24.43 0.18 2.50 2.68 (0.14) -- (1.16)
Trust Shares --
(11/12/96*)
Period Ended March 31,
1997.................. 26.30 0.04 0.03 0.07 (0.03) -- (0.56)
INCOME AND GROWTH FUND -- (1/6/87*)
Year Ended March 31,
1993................... $ 9.10 $0.27 $2.43 $2.70 $(0.35) -- $ 0.00
1994................... 11.45 0.31 0.46 0.77 (0.27) -- (0.01)
1995................... 11.94 0.38 0.26 0.64 (0.35) -- (0.41)
1996................... 11.82 0.39 2.61 3.00 (0.31) -- (0.06)
1997................... 14.45 0.33 1.45 1.78 (0.35) -- (0.63)
AGING OF AMERICA FUND -- (12/31/92*)
Period Ended March 31,
1993.................. $ 7.00 $0.01 $0.00 $0.01 $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 7.01 0.03 (0.02) 0.01 (0.03) -- 0.00
1995................... 6.99 0.04 0.85 0.89 (0.04) -- 0.00
1996................... 7.84 0.05 1.97 2.02 (0.05) -- 0.00
1997................... 9.81 0.07 0.72 0.79 (0.07) -- (0.39)
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND -- (12/31/92*)
Shares:
Period Ended March 31,
1993.................. $ 7.00 $0.02 $0.69 $0.71 $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 7.71 0.06 1.96 2.02 (0.07) -- (0.02)
1995................... 9.64 0.07 1.02 1.09 (0.06) -- (0.12)
1996................... 10.55 0.10 3.71 3.81 (0.09) -- (0.24)
1997................... 14.03 0.13 2.36 2.49 (0.12) -- (0.47)
Trust Shares --
(9/19/96*)
Period Ended March
31,1997............... 14.61 0.05 1.53 1.58 (0.05) -- (0.23)
COMMUNICATION AND ENTERTAINMENT FUND -- (12/31/92*)
Period Ended March 31,
1993.................. $ 7.00 $0.01 $0.60 $0.61 $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 7.61 0.02 1.52 1.54 (0.03) -- (0.37)
1995................... 8.75 0.04 1.06 1.10 (0.04) -- (0.17)
1996................... 9.64 0.03 1.30 1.33 (0.03) -- (0.62)
1997................... 10.32 0.00 0.05 0.05 0.00 -- (0.05)
</TABLE>
* Commencement of operations
** Not Annualized
*** Annualized
+ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
++ Total return data for periods prior to March 31, 1997 does not reflect the
sales load payable on purchases of shares. The sales load was eliminated
effective February 14, 1997.
# For fiscal years beginning on or after September 1, 1995, the Funds are
required to disclose the average commission rate per share it paid for
portfolio trades, on which commissions were charged, during the period.
See Notes to Financial Statements
20
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS RATIO RATIO RATIO
IN EXCESS OF OF NET OF GROSS OF NET
NET REALIZED NET ASSETS, OPERATING OPERATING INVESTMENT
GAIN ON NET ASSET END EXPENSES EXPENSES INCOME (LOSS) PORTFOLIO FEE
INVESTMENTS TOTAL VALUE, END TOTAL OF PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER WAIVERS
AND OPTIONS DISTRIBUTIONS OF PERIOD RETURN++ (000) NET ASSETS NET ASSETS + NET ASSETS RATE (NOTE 2)
- ------------- ------------- ---------- -------- ----------- ---------- ------------ ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-- $(0.60) $18.77 19.26% $106,144 1.08% 1.08% 0.51% 24% $0.00
$(0.34) (0.81) 19.17 6.54% 122,262 1.14% 1.14% 0.25% 17% 0.00
-- (0.51) 21.40 14.65% 137,417 1.05% 1.08% 0.36% 23% 0.00
-- (2.30) 24.43 26.45% 188,574 1.05% 1.12% 0.55% 27% 0.02
-- (1.30) 25.81 11.09% 306,990 1.01% 1.06% 0.71% 39% 0.01
-- (0.59) 25.78 0.23%** 81 1.36%*** 1.41%*** 0.45%*** 39% 0.00
-- $(0.35) $11.45 30.45% $ 51,303 1.15% 1.15% 2.76% 28% $0.00
-- (0.28) 11.94 6.69% 96,682 1.17% 1.17% 2.77% 28% 0.00
-- (0.76) 11.82 5.74% 99,925 1.06% 1.09% 3.31% 36% 0.00
-- (0.37) 14.45 25.83% 127,495 1.05% 1.11% 2.95% 22% 0.01
-- (0.98) 15.25 12.61% 132,768 1.03% 1.11% 2.17% 25% 0.01
-- $ 0.00 $ 7.01 0.14%** $ 2,389 0.99%*** 3.87%*** 0.77%*** 14%*** $0.03
-- (0.03) 6.99 0.13% 10,583 0.99% 1.82% 0.59% 24% 0.04
-- (0.04) 7.84 12.80% 22,174 0.99% 1.26% 0.63% 14% 0.02
-- (0.05) 9.81 25.80% 44,792 0.93% 0.97% 0.54% 34% 0.00
-- (0.46) 10.14 8.18% 45,058 0.95% 1.00% 0.67% 86% 0.00
-- $ 0.00 $ 7.71 10.14%** $ 1,935 0.99%*** 5.85%*** 2.48%*** 9%*** $0.04
-- (0.09) 9.64 26.40% 14,440 0.99% 1.73% 0.77% 75% 0.06
-- (0.18) 10.55 11.49% 30,183 0.98% 1.08% 0.83% 82% 0.01
-- (0.33) 14.03 36.48% 74,052 0.91% 0.95% 0.88% 56% 0.00
-- (0.59) 15.93 18.09% 124,011 0.91% 0.95% 0.90% 62% 0.01
-- (0.28) 15.91 10.85%** 52 1.26%*** 1.30%*** 0.54%*** 62% 0.00
-- $ 0.00 $ 7.61 8.71%** $ 5,785 0.99%*** 2.20%*** 1.06%*** 25%*** $0.01
-- (0.40) 8.75 20.07% 21,024 0.98% 1.16% 0.29% 60% 0.01
-- (0.21) 9.64 12.87% 29,914 0.98% 1.06% 0.46% 56% 0.01
-- (0.65) 10.32 13.48% 46,949 0.92% 0.97% 0.28% 65% 0.00
-- (0.05) 10.32 0.34% 34,696 0.99% 1.04% (0.03)% 65% 0.01
<CAPTION>
DISTRIBUTIONS
IN EXCESS OF
NET REALIZED
GAIN ON AVERAGE
INVESTMENTS COMMISSION
AND OPTIONS RATE#
- ------------- ----------
<S> <C>
-- N/A
$(0.34) N/A
-- N/A
-- N/A
-- $0.0663
-- $0.0663
-- N/A
-- N/A
-- N/A
-- N/A
-- $0.0777
-- N/A
-- N/A
-- N/A
-- N/A
-- $0.0831
-- N/A
-- N/A
-- N/A
-- N/A
-- $0.0755
-- $0.0755
-- N/A
-- N/A
-- N/A
-- N/A
-- $0.0677
</TABLE>
See Notes to Financial Statements
21
<PAGE>
EXCELSIOR FUNDS, INC.
FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS
For a Fund share outstanding throughout each period.
<TABLE>
<CAPTION>
NET REALIZED DIVIDENDS DISTRIBUTIONS
NET ASSET NET AND UNREALIZED DIVIDENDS IN EXCESS OF FROM NET
VALUE, INVESTMENT GAIN (LOSS) TOTAL FROM FROM NET NET REALIZED GAIN
BEGINNING INCOME ON INVESTMENTS INVESTMENT INVESTMENT INVESTMENT ON INVESTMENTS
OF PERIOD (LOSS) AND OPTIONS OPERATIONS INCOME INCOME AND OPTIONS
--------- ---------- -------------- ---------- ---------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
EARLY LIFE CYCLE FUND -- (12/31/92*)
Shares:
Period Ended March 31,
1993.................. $ 7.00 $ 0.00 $ 0.40 $ 0.40 $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 7.40 (0.01) 1.36 1.35 0.00 -- (0.09)
1995................... 8.66 (0.02) 1.31 1.29 0.00 -- (0.18)
1996................... 9.77 (0.02) 1.72 1.70 0.00 -- (0.69)
1997................... 10.78 (0.03) (1.43) (1.46) 0.00 -- (0.10)
Trust Shares --
(9/6/96*)
Period Ended March 31,
1997.................. 9.98 (0.03) (0.92) (0.95) 0.00 -- (0.22)
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND -- (12/31/92*)
Period Ended March 31,
1993.................. $ 7.00 $ 0.00 $(0.05) $(0.05) $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 6.95 0.00 (0.71) (0.71) 0.00 -- 0.00
1995................... 6.24 (0.01) (0.01) (0.02) 0.00 $(0.01) 0.00
1996................... 6.21 (0.02) 1.54 1.52 0.00 -- 0.00
1997................... 7.73 0.01 1.61 1.62 (0.01) -- 0.00
GLOBAL COMPETITORS FUND -- (12/31/92*)
Period Ended March 31,
1993.................. $ 7.00 $ 0.01 $ 0.27 $ 0.28 $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 7.28 0.05 0.41 0.46 (0.05) -- 0.00
1995................... 7.69 0.07 0.90 0.97 (0.07) -- 0.00
1996................... 8.59 0.07 2.27 2.34 (0.06) -- (0.02)
1997................... 10.83 0.06 0.66 0.72 (0.07) -- (0.09)
LONG-TERM SUPPLY OF ENERGY FUND -- (12/31/92*)
Period Ended March 31,
1993.................. $ 7.00 $ 0.01 $ 0.80 $ 0.81 $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 7.81 0.08 (0.12) (0.04) (0.07) -- 0.00
1995................... 7.70 0.09 0.24 0.33 (0.10) -- (0.01)
1996................... 7.92 0.07 1.63 1.70 (0.07) -- 0.00
1997................... 9.55 0.09 2.60 2.69 (0.09) -- (1.03)
PRODUCTIVITY ENHANCERS FUND -- (12/31/92*)
Period Ended March 31,
1993.................. $ 7.00 $ 0.01 $(0.07) $(0.06) $ 0.00 -- $ 0.00
Year Ended March 31,
1994................... 6.94 0.00 0.96 0.96 0.00 $(0.02) 0.00
1995................... 7.88 (0.01) 0.35 0.34 0.00 -- (0.10)
1996................... 8.12 0.02 2.12 2.14 (0.02) (0.01) (1.40)
1997................... 8.83 (0.02) 0.16 0.14 0.00 -- (0.80)
</TABLE>
* Commencement of operations
** Not Annualized
*** Annualized
+ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
++ Total return data for periods prior to March 31, 1997 does not reflect the
sales load payable on purchases of shares. The sales load was eliminated
effective February 14, 1997.
# For fiscal years beginning on or after September 1, 1995, the Funds are
required to disclose the average commission rate per share it paid for
portfolio trades, on which commissions were charged, during the period.
See Notes to Financial Statements
22
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS RATIO RATIO RATIO
IN EXCESS OF OF NET OF GROSS OF NET
NET REALIZED NET ASSETS, OPERATING OPERATING INVESTMENT
GAIN ON NET ASSET END EXPENSES EXPENSES INCOME (LOSS) PORTFOLIO FEE
INVESTMENTS TOTAL VALUE, END TOTAL OF PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER WAIVERS
AND OPTIONS DISTRIBUTIONS OF PERIOD RETURN++ (000) NET ASSETS NET ASSETS + NET ASSETS RATE (NOTE 2)
- ------------- ------------- ---------- -------- ----------- ---------- ------------ ------------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-- $ 0.00 $ 7.40 5.71%** $ 5,512 0.99%*** 2.70%*** 0.12%*** 4%*** $0.01
-- (0.09) 8.66 18.27% 24,951 0.95% 1.15% (0.25)% 20% 0.01
-- (0.18) 9.77 15.16% 47,782 0.96% 1.04% (0.23)% 42% 0.01
-- (0.69) 10.78 18.29% 78,061 0.90% 0.98% (0.17)% 38% 0.01
$(0.39) (0.49) 8.83 (14.33)% 53,258 0.94% 1.02% (0.26)% 55% 0.01
-- (0.22) 8.81 (9.77)%** 8 1.29%*** 1.40%*** (0.87)%*** 55% 0.00
-- $ 0.00 $ 6.95 (0.71)%** $ 2,452 0.99%*** 2.83%*** 0.32%*** 0%*** $0.02
-- 0.00 6.24 (10.15)% 4,533 0.99% 2.20% (0.07)% 28% 0.05
-- (0.01) 6.21 (0.27)% 4,359 0.99% 2.42% (0.10)% 61% 0.09
-- 0.00 7.73 24.48% 3,947 0.99% 2.46% (0.18)% 64% 0.12
-- (0.01) 9.34 21.22% 8,869 0.99% 1.33% 0.15% 73% 0.03
-- $ 0.00 $ 7.28 4.00%** $ 2,037 0.99%*** 3.97%*** 0.82%*** 0%*** $0.03
-- (0.05) 7.69 6.29% 10,059 0.99% 1.72% 0.81% 19% 0.05
-- (0.07) 8.59 12.73% 25,495 0.97% 1.18% 1.04% 29% 0.01
$(0.02) (0.10) 10.83 27.39% 71,304 0.89% 0.93% 0.73% 17% 0.00
-- (0.16) 11.39 6.64% 81,922 0.89% 0.94% 0.54% 25% 0.00
-- $ 0.00 $ 7.81 11.57%** $ 1,457 0.99%*** 7.03%*** 1.69%*** 0%*** $0.05
-- (0.07) 7.70 (0.57)% 6,830 0.99% 2.03% 1.21% 6% 0.07
-- (0.11) 7.92 4.28% 15,813 0.98% 1.35% 1.18% 31% 0.03
-- (0.07) 9.55 21.60% 23,294 0.96% 1.09% 0.88% 43% 0.01
-- (1.12) 11.12 28.28% 33,393 0.93% 0.98% 0.84% 87% 0.00
-- $ 0.00 $ 6.94 (0.86)%** $ 3,369 0.99%*** 4.23%*** 1.29%*** 183%*** $0.03
-- (0.02) 7.88 13.81% 15,702 0.99% 1.49% 0.01% 198% 0.10
-- (0.10) 8.12 4.45% 18,265 0.99% 1.21% (0.10)% 276% 0.02
-- (1.43) 8.83 26.97% 29,069 0.98% 1.06% 0.20% 472% 0.01
-- (0.80) 8.17 1.02% 18,057 0.98% 1.08% (0.16)% 300% 0.01
<CAPTION>
DISTRIBUTIONS
IN EXCESS OF
NET REALIZED
GAIN ON AVERAGE
INVESTMENTS COMMISSION
AND OPTIONS RATE#
- ------------- ----------
<S> <C>
-- N/A
-- N/A
-- N/A
-- N/A
$(0.39) $0.0433
-- $0.0433
-- N/A
-- N/A
-- N/A
-- N/A
-- $0.0711
-- N/A
-- N/A
-- N/A
$(0.02) N/A
-- $0.0873
-- N/A
-- N/A
-- N/A
-- N/A
-- $0.0809
-- N/A
-- N/A
-- N/A
-- N/A
-- $0.0797
</TABLE>
See Notes to Financial Statements
23
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
EQUITY FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- ------------
<C> <S> <C>
COMMON STOCKS -- 96.92%
FINANCIAL -- 23.67%
131,200 Associates First Capital Corp. ........................ $ 5,641,600
185,000 Fleet Financial Group, Inc. ........................... 10,591,250
29,240 General Re Corp. ...................................... 4,619,920
90,500 MBIA, Inc. ............................................ 8,676,688
136,038 Mellon Bank Corp. ..................................... 9,896,764
122,360 Morgan Stanley Group, Inc. ............................ 7,188,650
120,000 State Street Boston Corp. ............................. 8,325,000
350,000 United Asset Management Corp. ......................... 8,968,750
120,000 UNUM Corp. ............................................ 8,760,000
------------
72,668,622
------------
CONSUMER CYCLICAL -- 17.77%
178,200 Centex Corp. .......................................... 6,281,550
105,000 Dayton Hudson Corp. ................................... 4,383,750
200,000 Ford Motor Co. ........................................ 6,275,000
370,000 Heilig-Meyers Co. ..................................... 5,873,750
90,000 Houghton Mifflin Co. .................................. 4,860,000
60,000 Luxottica Group S.p.A. ADR............................. 3,187,500
152,834 McDonald's Corp. ...................................... 7,221,406
175,000 +O'Reilly Automotive, Inc. ............................ 6,431,250
70,000 Reuters Holdings plc ADR............................... 4,068,750
215,000 Wal-Mart Stores, Inc. ................................. 5,993,125
------------
54,576,081
------------
TECHNOLOGY -- 14.46%
74,570 +Cisco Systems, Inc. .................................. 3,588,681
111,480 Hewlett-Packard Co. ................................... 5,936,310
48,000 Intel Corp. ........................................... 6,672,000
56,920 Lucent Technologies, Inc. ............................. 3,002,530
86,020 +Microsoft Corp. ...................................... 7,881,582
200,000 Tektronix, Inc. ....................................... 10,100,000
131,220 Tyco International Ltd. ............................... 7,217,100
------------
44,398,203
------------
CONSUMER STAPLES -- 14.40%
210,000 Abbott Laboratories.................................... 11,786,250
298,600 +Alliance Pharmaceutical Corp. ........................ 3,583,200
54,100 +Cerner Corp. ......................................... 696,538
136,610 +Forest Laboratories, Inc. ............................ 5,139,951
130,000 +Genzyme Corp. ........................................ 2,892,500
220,000 Johnson & Johnson...................................... 11,632,500
100,900 Pfizer, Inc. .......................................... 8,488,213
------------
44,219,152
------------
CAPITAL GOODS -- 10.14%
120,000 General Electric Co. .................................. 11,910,000
101,533 Illinois Tool Works, Inc. ............................. 8,287,631
135,961 +Thermo Electron Corp. ................................ 4,197,796
220,000 WMX Technologies, Inc. ................................ 6,737,500
------------
31,132,927
------------
ENERGY -- 10.05%
110,103 Louisiana Land &
Exploration Co. ....................................... $ 5,216,130
92,000 Mobil Corp. ........................................... 12,017,500
95,500 +United Meridian Corp. ................................ 2,876,938
281,680 Unocal Corp. .......................................... 10,739,050
------------
30,849,618
------------
UTILITIES -- 5.00%
113,924 AT&T Corp. ............................................ 3,958,859
300,000 Enron Corp. ........................................... 11,400,000
------------
15,358,859
------------
RAW/INTERMEDIATE
MATERIALS -- 1.43%
190,000 Pall Corp. ............................................ 4,393,750
------------
TOTAL COMMON STOCKS
(Cost $231,188,128).................................... 297,597,212
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 2.83%
$3,091,000 Associates Corp. of North
America Master Notes................................. 3,091,000
5,612,000 General Electric Co.
Promissory Notes..................................... 5,612,000
------------
TOTAL DEMAND NOTES
(Cost $8,703,000).................................... 8,703,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $239,891,128*)....................................... 99.75% $306,300,212
OTHER ASSETS AND
LIABILITIES (NET).......................................... 0.25 770,426
------ ------------
NET ASSETS................................................. 100.00% $307,070,638
====== ============
</TABLE>
- --------
* For Federal tax purposes, the tax basis on investments aggregates
$239,893,069.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
24
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
INCOME AND GROWTH FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 70.30%
CONSUMER CYCLICAL -- 17.58%
3,495 Bayerische Motoren Werke AG.......................... $ 2,858,707
40,000 Electronic Data Systems Corp......................... 1,615,000
80,000 Heilig-Meyers Co..................................... 1,270,000
50,000 Herman Miller, Inc................................... 3,412,500
45,000 Luxottica Group S.p.A. ADR........................... 2,390,625
75,000 McDonald's Corp...................................... 3,543,750
120,000 ServiceMaster Ltd. Partnership....................... 3,270,000
115,000 Smart & Final, Inc................................... 2,256,875
90,000 Wiley (John) & Sons, Inc., Class A................... 2,722,500
------------
23,339,957
------------
CONSUMER STAPLES -- 10.11%
43,000 Gillette Co.......................................... 3,122,875
60,000 Johnson & Johnson.................................... 3,172,500
32,000 Kellogg Co........................................... 2,152,000
65,000 Novo-Nordisk A.S., ADR............................... 3,282,500
3,040 SMH AG (Bearer)...................................... 1,690,415
------------
13,420,290
------------
TECHNOLOGY -- 9.65%
57,000 Adobe Systems, Inc................................... 2,280,000
153,334 +Analog Devices, Inc................................. 3,450,015
115,000 ECI Telecommunications Limited Designs............... 2,113,125
266,000 +Interleaf, Inc...................................... 399,000
79,000 +SDL, Inc............................................ 1,323,250
100,000 +Unitrode Corp....................................... 3,250,000
------------
12,815,390
------------
FINANCIAL -- 9.17%
21,750 American International
Group, Inc........................................... 2,552,906
26,000 Household International, Inc......................... 2,239,250
95,000 IPC Holdings Ltd..................................... 2,315,625
40,000 Morgan Stanley Group, Inc............................ 2,350,000
75,000 Mutual Risk Management Ltd. ......................... 2,718,750
------------
12,176,531
------------
ENERGY -- 7.38%
22,000 Exxon Corp........................................... 2,370,500
41,000 Norsk Hydro A.S., ADR................................ 2,003,875
40,000 +SEACOR Holdings, Inc. .............................. 2,145,000
65,000 +Transmontaigne Oil Co. ............................. 1,015,625
75,000 +United Meridian Corp................................ 2,259,375
------------
9,794,375
------------
RAW/INTERMEDIATE MATERIALS -- 5.70%
41,000 Nucor Corp........................................... 1,875,750
70,000 Pall Corp............................................ 1,618,750
36,000 Pioneer Hi-Bred
International, Inc. ................................. $ 2,263,500
95,000 Worthington Industries, Inc.......................... 1,816,875
------------
7,574,875
------------
CAPITAL GOODS -- 4.98%
42,000 Dover Corp. ......................................... 2,205,000
35,000 Raychem Corp. ....................................... 2,883,125
50,000 Trinity Industries, Inc. ............................ 1,518,750
------------
6,606,875
------------
UTILITIES -- 4.16%
45,000 +AES Corp. .......................................... 2,520,000
65,000 +NEXTEL Communications, Inc., Class A................ 861,250
90,000 UGI Corp. ........................................... 2,137,500
------------
5,518,750
------------
TRANSPORTATION -- 1.57%
40,000 +Federal Express Corp. .............................. 2,085,000
------------
TOTAL COMMON STOCKS
(Cost $62,982,301)................................... 93,332,043
------------
CONVERTIBLE PREFERRED STOCKS -- 5.88%
FINANCIAL -- 3.64%
325,000 Capstead Mortgage Corp.,
Series B, Preferred
Exchange $1.26....................................... 4,834,375
------------
ENERGY -- 2.24%
80,000 Callon Petroleum Co.,
Series A, Preferred
Exchange $2.13....................................... 2,980,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $6,484,259).................................... 7,814,375
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
CORPORATE BONDS -- 4.61%
TRANSPORTATION -- 1.56%
$2,000,000 Greyhound Lines, Inc.,
Debenture,
10.00%, 07/31/01..................................... 2,070,000
------------
MATERIALS -- 1.55%
2,000,000 Fort Howard Sr. Notes,
9.25%, 03/15/01...................................... 2,060,000
------------
ENERGY -- 1.50%
2,000,000 Vintage Petroleum Sr. Sub-Notes,
9.00%, 12/15/05...................................... 1,990,000
------------
TOTAL CORPORATE BONDS
(Cost $5,807,883).................................... 6,120,000
------------
</TABLE>
See Notes to Financial Statements
25
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
INCOME AND GROWTH FUND -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- ------------
<C> <S> <C>
CONVERTIBLE BONDS -- 14.09%
TECHNOLOGY -- 10.35%
$3,400,000 BBN Corp.,
6.00%, 4/01/12...................................... $ 3,043,000
4,236,000 Kollmorgen Corp., Sub-Debenture,
8.75%, 05/01/09..................................... 4,230,705
4,959,000 Network Equipment Technologies, Inc., Sub-Debenture,
7.25%, 05/15/14..................................... 4,103,573
2,500,000 VLSI Technology,
8.25%, 10/01/05..................................... 2,371,875
------------
13,749,153
------------
CONSUMER STAPLES -- 2.36%
3,400,000 Novacare, Inc., Sub-Debenture,
5.50%, 01/15/00..................................... 3,128,000
------------
TRANSPORTATION -- 1.38%
2,800,000 World Corp., Inc.,
7.00%, 05/15/04..................................... 1,830,500
------------
TOTAL CONVERTIBLE BONDS
(Cost $18,633,024).................................. 18,707,653
------------
DEMAND NOTES -- 4.64%
979,000 Associates Corp. of North America Master Notes...... 979,000
5,178,000 General Electric Co. Promissory Notes............... 5,178,000
------------
TOTAL DEMAND NOTES
(Cost $6,157,000)................................... 6,157,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $100,064,467*)...................................... 99.52% $132,131,071
OTHER ASSETS AND LIABILITIES (NET)........................ 0.48 636,467
------ ------------
NET ASSETS................................................ 100.00% $132,767,538
====== ============
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$100,091,722.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
26
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
AGING OF AMERICA FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- -----------
<C> <S> <C>
COMMON STOCKS -- 93.35%
CONSUMER CYCLICAL -- 31.20%
30,000 Black & Decker Corp. ................................... $ 963,750
27,500 Fisher Scientific International......................... 1,213,438
43,000 +General Nutrition Cos., Inc. .......................... 870,750
15,000 Houghton Mifflin Co. ................................... 810,000
24,000 Lowe's Cos., Inc. ...................................... 897,000
19,000 Marriott International, Inc. ........................... 945,250
25,000 +Proffitt's, Inc. ...................................... 943,750
25,000 +Revco D.S., Inc. ...................................... 1,012,500
20,000 Sears, Roebuck & Co. ................................... 1,005,000
30,000 Stewart Enterprises, Inc., Class A...................... 1,087,500
30,000 Time Warner, Inc. ...................................... 1,297,500
30,000 +Vencor, Inc. .......................................... 1,136,250
30,000 Wal-Mart Stores, Inc. .................................. 836,250
14,215 Walt Disney Co. ........................................ 1,037,695
-----------
14,056,633
-----------
CONSUMER STAPLES -- 27.89%
40,000 Assisted Living Concepts, Inc. ......................... 840,000
30,000 Columbia/HCA Healthcare Corp. .......................... 1,008,750
15,000 Conagra, Inc. .......................................... 813,750
12,000 Eastman Kodak Co. ...................................... 910,500
30,000 First Brands Corp. ..................................... 735,000
10,000 Gillette Co. ........................................... 726,250
51,700 +Healthsouth Corp. ..................................... 988,763
18,000 Johnson & Johnson....................................... 951,750
32,500 Mattel, Inc. ........................................... 780,000
15,000 Novartis AG ADR......................................... 929,806
35,000 PepsiCo, Inc. .......................................... 1,141,875
14,000 Pfizer, Inc. ........................................... 1,177,750
5,000 Pharmacia & Upjohn, Inc. ............................... 183,125
25,000 +Premier Parks Inc. .................................... 650,000
10,000 Schering-Plough Corp. .................................. 727,500
-----------
12,564,819
-----------
FINANCIAL -- 27.43%
15,000 Allstate Corp. ......................................... 890,625
19,000 American Express Co. ................................... 1,137,625
30,000 Arden Realty Group, Inc. ............................... 817,500
25,200 Associates First Capital Corp. ......................... 1,083,600
25,000 Barnett Banks of Florida, Inc. ......................... 1,162,500
15,000 Beneficial Corp. ....................................... 969,375
15,000 Dean Witter Discover & Co. ............................. 523,125
10,000 First Union Corp. (North Carolina)...................... 811,250
40,000 Health and Retirement Properties Trust.................. 720,000
30,000 Hospitality Properties Trust............................ 918,750
15,000 Mellon Bank Corp. ...................................... 1,091,250
12,500 Nationwide Financial Services, Inc., Class A............ 321,875
23,400 Summit Bancorp (New Jersey)............................. 1,023,750
12,200 UNUM Corp. ............................................. 890,600
-----------
12,361,825
-----------
CAPITAL GOODS -- 3.59%
7,000 Boeing Co. ............................................. $ 690,375
30,000 +Thermo Electron Corp. ................................. 926,250
-----------
1,616,625
-----------
TECHNOLOGY -- 3.24%
45,000 +Alliance Pharmaceutical Corp. ......................... 540,000
15,000 Guidant Corp. .......................................... 922,500
-----------
1,462,500
-----------
TOTAL COMMON STOCKS
(Cost $32,184,950)...................................... 42,062,402
-----------
CONVERTIBLE PREFERRED STOCKS -- 1.97%
FINANCIAL -- 1.97%
22,500 SunAmerica, Inc., Preferred
Exchange $3.19
(Cost $904,750)......................................... 888,750
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 2.41%
$1,084,000 General Electric Co.
Promissory Notes
(Cost $1,084,000)..................................... 1,084,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $34,173,700*)......................................... 97.73% $44,035,152
OTHER ASSETS AND
LIABILITIES (NET)........................................... 2.27 1,022,402
------ -----------
NET ASSETS.................................................. 100.00% $45,057,554
====== ===========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$34,173,700.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
27
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- ------------
<C> <S> <C>
COMMON STOCKS -- 97.61%
FINANCIAL -- 23.97%
100,000 +Amerin Corp. ......................................... $ 1,987,500
35,500 Amvesco plc ADR........................................ 1,925,875
30,000 Aon Corp. ............................................. 1,837,500
30,000 Associates First Capital Corp. ........................ 1,290,000
141,250 Bank Plus Corp. ....................................... 1,465,469
8,000 Bankers Trust New York Corp. .......................... 656,000
18,000 Chase Manhattan Corp. ................................. 1,685,250
42,000 Donaldson, Lufkin & Jenrette, Inc. .................... 1,538,250
65,000 Everest Re Holdings, Inc. ............................. 1,909,375
62,000 FBL Financial Group, Inc.,
Class A................................................ 1,612,000
45,000 GCR Holdings Ltd. ..................................... 1,012,500
77,000 +ITLA Capital Corp. ................................... 1,097,250
25,000 Mellon Bank Corp. ..................................... 1,818,750
40,000 Mid Ocean Ltd. ........................................ 1,910,000
16,500 Morgan (J.P.) & Co., Inc. ............................. 1,621,125
38,000 PNC Bank Corp. ........................................ 1,520,000
105,539 Prime Retail, Inc. .................................... 1,358,815
17,500 Student Loan Marketing Association..................... 1,666,875
38,000 Travelers Group, Inc. ................................. 1,819,250
------------
29,731,784
------------
CONSUMER STAPLES -- 20.23%
30,000 +Amerisource Health Corp.,
Class A................................................ 1,312,500
80,000 +Apria Healthcare Group, Inc. ......................... 1,450,000
43,000 Avon Products, Inc. ................................... 2,257,500
35,000 Bristol-Myers Squibb Co. .............................. 2,065,000
23,000 CPC International, Inc. ............................... 1,886,000
26,000 Eastman Kodak Co. ..................................... 1,972,750
32,000 General Mills, Inc. ................................... 1,988,000
125,000 +Medaphis Corp. ....................................... 1,296,875
48,000 Pharmacia & Upjohn, Inc. .............................. 1,758,000
25,000 Philip Morris Companies, Inc. ......................... 2,853,125
84,500 Suiza Foods Corp. ..................................... 2,260,375
70,000 Sunbeam Corp. ......................................... 2,100,000
22,000 Warner Lambert Co. .................................... 1,903,000
------------
25,103,125
------------
TECHNOLOGY -- 16.70%
130,000 +Amdahl Corp. ......................................... 1,218,750
77,000 +Bell & Howell Holdings Co. ........................... 1,607,375
32,000 Computer Associates International, Inc. .............. 1,244,000
92,000 Digex, Inc. ........................................... 621,000
15,000 International Business Machines Corp. ................. 2,060,625
122,500 Medical Manager Corp. ................................. 1,133,125
30,000 Motorola, Inc. ........................................ 1,811,250
37,000 Nokia Corp., Class A, ADR.............................. 2,155,250
92,000 +Phoenix Technologies Ltd. ............................ 1,357,000
35,000 +Plantronics, Inc. .................................... 1,505,000
4,000 +Plasma-Therm, Inc. ................................... 19,750
TECHNOLOGY -- (CONTINUED)
110,000 Smallworldwide plc ADR................................. $ 1,787,500
31,000 Texas Instruments, Inc. ............................... 2,321,125
34,000 Thiokol Corp. ......................................... 1,878,500
------------
20,720,250
------------
CAPITAL GOODS -- 9.26%
12,500 ABB AB ADR............................................. 1,353,125
26,000 AlliedSignal, Inc. .................................... 1,852,500
43,000 +American Standard Cos., Inc. ......................... 1,935,000
20,000 Boeing Co. ............................................ 1,972,500
75,000 Chicago Bridge & Iron Co., N.V.--New York Shares....... 1,331,250
75,000 +Coltec Industries, Inc. .............................. 1,387,500
22,000 United Technologies Corp. ............................. 1,655,500
------------
11,487,375
------------
CONSUMER CYCLICAL -- 8.48%
132,000 +Data Documents, Inc. ................................. 1,320,000
67,300 Designer Holdings Ltd. ................................ 529,987
62,000 Ford Motor Co. ........................................ 1,945,250
26,000 General Motors Corp. .................................. 1,439,750
100,000 Viad Corp. ............................................ 1,600,000
89,000 Westinghouse Electric Corp. ........................... 1,579,750
37,000 XEROX Corp. ........................................... 2,104,375
------------
10,519,112
------------
ENERGY -- 6.81%
59,000 +Flores & Rucks, Inc. ................................. 2,389,500
16,000 Mobil Corp. ........................................... 2,090,000
111,000 +Nabors Industries, Inc. .............................. 2,164,500
68,000 YPF S.A. ADR........................................... 1,802,000
------------
8,446,000
------------
TRANSPORTATION -- 5.81%
50,000 +AMERCO................................................ 1,237,500
60,200 Coach USA, Inc. ....................................... 1,715,700
80,000 Hvide Marine, Inc., Class A............................ 1,820,000
126,000 Kitty Hawk, Inc. ...................................... 1,512,000
106,000 Smithway Motor Express, Class A........................ 927,500
------------
7,212,700
------------
RAW/INTERMEDIATE MATERIALS -- 4.34%
48,000 Cambrex Corp. ......................................... 1,608,000
57,000 +Fort Howard Corp. .................................... 1,767,000
125,000 PalEx, Inc. ........................................... 1,015,625
21,000 W.R. Grace & Co. ...................................... 994,875
------------
5,385,500
------------
HOLDING COMPANY DIVERSIFIED -- 1.18%
48,000 Internatio-Muller N.V. ................................ 1,466,723
------------
UTILITIES -- 0.83%
47,000 +Worldcom, Inc. ....................................... 1,028,125
------------
TOTAL COMMON STOCKS
(Cost $95,191,250)..................................... 121,100,694
------------
</TABLE>
See Notes to Financial Statements
28
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- ------------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCKS -- 2.66%
CONSUMER CYCLICAL -- 1.51%
35,000 Kmart Financing, Inc., Preferred
Exchange $3.88........................................ $ 1,872,500
------------
CONSUMER STAPLES -- 1.15%
220,000 RJR Nabisco Holdings,
Series C, Preferred
Exchange $0.60........................................ 1,430,000
------------
TOTAL CONVERTIBLE
PREFERRED STOCKS
(Cost $3,190,706)..................................... 3,302,500
------------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 0.71%
$143,000 Associates Corp. of North
America Master Notes.................................. 143,000
737,000 General Electric Co.
Promissory Notes...................................... 737,000
------------
TOTAL DEMAND NOTES
(Cost $880,000)....................................... 880,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $99,261,956*)....................................... 100.98% $125,283,194
OTHER ASSETS AND LIABILITIES (NET)........................ (0.98) (1,220,125)
------ ------------
NET ASSETS................................................ 100.00% $124,063,069
====== ============
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$99,282,015.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
29
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
COMMUNICATION AND ENTERTAINMENT FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
-------- -----------
<C> <S> <C>
COMMON STOCKS -- 98.67%
CONSUMER CYCLICAL -- 39.54%
15,000 Callaway Golf Co. ...................................... $ 429,375
40,000 Comcast Corp., Class A Special.......................... 675,000
12,000 Harley-Davidson, Inc. .................................. 406,500
15,000 Harte-Hanks............................................. 436,875
10,000 Houghton Mifflin Co. ................................... 540,000
7,500 International Business Machines Corp. .................. 1,030,313
40,000 Meredith Corp. ......................................... 925,000
12,000 New York Times Co., Class A............................. 529,500
38,500 +Paging Network, Inc. .................................. 310,406
45,000 +Tele-Communications Liberty Media Group, Class A....... 894,375
40,000 Teleport Communications Group, Inc., Class A............ 915,000
20,000 Time Warner, Inc. ...................................... 865,000
20,000 Times Mirror Co., Class A............................... 1,092,500
25,000 Tribune Co. ............................................ 1,012,500
11,200 Univision Communications, Inc. ......................... 365,400
23,884 +Viacom, Inc., Class B.................................. 791,157
18,550 Walt Disney Co. ........................................ 1,354,150
37,800 Wiley (John) & Sons, Inc., Class A...................... 1,143,450
-----------
13,716,501
-----------
TECHNOLOGY -- 30.20%
15,000 +America On-Line, Inc. ................................. 635,625
41,667 +Analog Devices, Inc. .................................. 937,497
20,000 +Cisco Systems, Inc. ................................... 962,500
20,000 +Computer Learning Centers, Inc. ....................... 655,000
45,900 ECI Telecommunications Limited Designs.................. 843,413
25,000 GTE Corp. .............................................. 1,165,625
25,000 +Informix Corp. ........................................ 375,000
14,740 Lucent Technologies, Inc. .............................. 777,535
20,000 Nokia Corp., Class A ADR................................ 1,165,000
10,000 +Qualcomm, Inc. ........................................ 563,750
45,000 +SDL, Inc. ............................................. 753,750
22,000 +3Com Corp. ............................................ 717,750
28,500 +Unitrode Corp. ........................................ 926,250
-----------
10,478,695
-----------
UTILITIES -- 19.95%
24,000 Ameritech Corp. ........................................ 1,476,000
20,000 BellSouth Corp. ........................................ 845,000
30,000 +LCI International, Inc. ............................... 502,500
41,600 MCI Communications Corp. ............................... 1,476,800
65,000 +NEXTEL Communications, Inc., Class A................... 861,250
16,000 SBC Communications, Inc. ............................... 842,000
42,000 +Worldcom, Inc. ........................................ 918,750
-----------
6,922,300
-----------
CONSUMER STAPLES -- 8.98%
37,500 +CUC International, Inc. ............................... $ 843,750
12,000 Eastman Kodak Co. ...................................... 910,500
24,000 +Learning Tree International, Inc. ..................... 666,000
28,700 +Sylvan Learning Systems, Inc. ......................... 695,975
-----------
3,116,225
-----------
TOTAL COMMON STOCKS
(Cost $29,209,379)...................................... 34,233,721
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $29,209,379*)......................................... 98.67% $34,233,721
OTHER ASSETS AND
LIABILITIES (NET)........................................... 1.33 462,770
------ -----------
NET ASSETS.................................................. 100.00% $34,696,491
====== ===========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$29,209,379.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
30
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
EARLY LIFE CYCLE FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 97.64%
CAPITAL GOODS -- 23.01%
80,700 +BE Aerospace, Inc....................................... $ 1,977,150
101,500 Juno Lighting, Inc....................................... 1,611,312
67,500 Lindsay Manufacturing Co................................. 2,143,125
136,000 +Morrison Knudsen Corp................................... 1,428,000
28,000 Teleflex, Inc............................................ 1,480,500
90,000 +Thermedics, Inc......................................... 1,406,250
40,000 Thiokol Corp............................................. 2,210,000
-----------
12,256,337
-----------
TECHNOLOGY -- 18.20%
15,000 +American Management
Systems, Inc. ........................................... 330,000
80,100 +Asyst Technologies, Inc................................. 1,561,950
10,000 +Cisco Systems, Inc...................................... 481,250
35,000 +Glenayre Technologies, Inc.............................. 341,250
70,000 +Hyperion Software Corp.................................. 1,120,000
43,000 +Informix Corp........................................... 645,000
295,200 +Interleaf, Inc. ........................................ 442,800
26,100 +MICROS Systems, Inc. ................................... 893,925
124,500 +Phoenix Technologies Ltd. .............................. 1,836,375
75,000 +Premenos Technology Corp. .............................. 459,375
94,500 +SDL, Inc. .............................................. 1,582,875
-----------
9,694,800
-----------
CONSUMER CYCLICAL -- 15.43%
50,000 +Custom Chrome, Inc...................................... 650,000
25,000 Factory Card Outlet Corp................................. 193,750
33,000 Fair Isaac & Co., Inc.................................... 1,192,125
60,000 +Perceptron, Inc......................................... 1,545,000
27,000 RDO Equipment Co., Class A............................... 472,500
76,000 +Recovery Engineering, Inc............................... 560,500
104,100 +Renters Choice, Inc. ................................... 1,470,413
60,000 +Scientific Games Holdings Corp.......................... 1,275,000
22,500 +WestPoint Stevens, Inc.................................. 857,812
-----------
8,217,100
-----------
FINANCIAL -- 11.74%
100,000 +Americredit Corp. ...................................... 1,737,500
55,000 Cullen/Frost Bankers, Inc. .............................. 1,952,500
30,000 First American Corp. (Tennessee)......................... 1,897,500
61,000 +Homestate Holdings, Inc. ............................... 343,125
12,500 Nationwide Financial Services, Inc., Class A............. 321,875
-----------
6,252,500
-----------
CONSUMER STAPLES -- 11.44%
120,000 +Alliance Pharmaceutical Corp............................ $ 1,440,000
100,000 +Ligand Pharmaceuticals,
Class B.................................................. 1,112,500
227,400 +Pepsi-Cola Puerto Rico Bottling Co., Class B............ 966,450
75,500 +Pharmacopeia, Inc....................................... 1,255,188
40,000 +Sunrise Medical, Inc. .................................. 520,000
20,000 +Vivus, Inc. ............................................ 797,500
-----------
6,091,638
-----------
TELECOMMUNICATION -- 6.07%
86,700 +Allen Telecom, Inc...................................... 1,517,250
75,000 Teleport Communications Group, Inc., Class A............. 1,715,625
-----------
3,232,875
-----------
RAW/INTERMEDIATE
MATERIALS -- 5.65%
120,200 NN Ball & Roller, Inc. .................................. 1,247,075
75,000 TriMas Corp.............................................. 1,762,500
-----------
3,009,575
-----------
TRANSPORTATION -- 3.74%
63,000 Air Express International Corp........................... 1,992,375
-----------
ENERGY -- 2.36%
70,000 +Seagull Energy Corp. ................................... 1,260,000
-----------
TOTAL COMMON STOCKS
(Cost $52,050,549)....................................... 52,007,200
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 0.80%
$429,000 General Electric Co.
Promissory Notes
(Cost $429,000).......................................... 429,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $52,479,549*)........................................ 98.44% $52,436,200
OTHER ASSETS AND
LIABILITIES (NET).......................................... 1.56 829,889
------ -----------
NET ASSETS.................................................. 100.00% $53,266,089
====== ===========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$52,479,549.
+ Non-income producing security.
See Notes to Financial Statements
31
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
ENVIRONMENTALLY-RELATED PRODUCTS AND SERVICES FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- ----------
<C> <S> <C> <C>
COMMON STOCKS -- 95.36%
CAPITAL GOODS -- 36.03%
5,000 Case Corp. ........................................... $ 253,750
5,000 Deere & Co. .......................................... 217,500
4,000 Fluor Corp. .......................................... 210,000
1,500 General Electric Co. ................................. 148,875
7,400 Harsco Corp. ......................................... 269,175
30,000 +ITEQ, Inc. .......................................... 195,000
30,000 +Philip Environmental, Inc. .......................... 453,750
12,000 +Republic Industries, Inc. ........................... 417,000
10,500 +U.S. Filter Corp. ................................... 324,188
13,000 +U.S.A. Waste Services, Inc. ......................... 461,500
8,000 WMX Technologies, Inc. ............................... 245,000
----------
3,195,738
----------
TECHNOLOGY -- 19.88%
15,000 +Advanced Lighting Technologies, Inc. ................ 330,000
3,000 +Cisco Systems, Inc. ................................. 144,375
3,300 Honeywell Corp. ...................................... 223,987
1,000 +Incyte Pharmaceuticals, Inc.......................... 50,750
1,000 Intel Corp. .......................................... 139,000
12,500 Memtec Ltd. ADR....................................... 317,187
1,500 +Microsoft Corp. ..................................... 137,438
4,000 Perkin-Elmer Corp. ................................... 257,500
5,625 +Thermo Instrument Systems, Inc. ..................... 163,125
----------
1,763,362
----------
RAW/INTERMEDIATE
MATERIALS -- 14.45%
9,000 Minerals Technologies, Inc. .......................... 299,250
9,000 Monsanto Co. ......................................... 344,250
14,000 Pall Corp. ........................................... 323,750
5,000 Pioneer Hi-Bred International, Inc. .................. 314,375
----------
1,281,625
----------
CONSUMER STAPLES -- 10.79%
4,900 Air Products & Chemicals, Inc. ....................... 332,587
4,400 Gillette Co. ......................................... 319,550
3,700 Lilly (Eli) & Co. .................................... 304,325
----------
956,462
----------
ENERGY -- 7.53%
15,000 +Cuno Inc. ........................................... 230,625
10,000 +Newpark Resources, Inc. ............................. 437,500
----------
668,125
----------
UTILITIES -- 3.45%
9,000 +California Energy Co., Inc. ......................... 306,000
----------
CONSUMER CYCLICAL -- 3.23%
5,200 Tyco International Ltd. .............................. 286,000
----------
TOTAL COMMON STOCKS
(Cost $7,101,827)..................................... 8,457,312
----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- ----------
<C> <S> <C>
DEMAND NOTES -- 10.71%
$489,000 Associates Corp. of North America Master Notes.......... $ 489,000
461,000 General Electric Co.
Promissory Notes........................................ 461,000
----------
TOTAL DEMAND NOTES
(Cost $950,000)......................................... 950,000
----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $8,051,827*).......................................... 106.07% $9,407,312
OTHER ASSETS AND LIABILITIES (NET).......................... (6.07) (538,468)
------ ----------
NET ASSETS.................................................. 100.00% $8,868,844
====== ==========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$8,051,827.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
32
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
GLOBAL COMPETITORS FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------ -----------
<C> <S> <C>
COMMON STOCKS -- 100.35%
CONSUMER STAPLES -- 26.44%
33,000 Astra AB, Class B......................................... $ 1,554,184
24,250 Avon Products, Inc. ...................................... 1,273,125
19,400 CPC International, Inc. .................................. 1,590,800
12,800 Estee Lauder Companies, Class A........................... 619,200
43,000 Gillette Co. ............................................. 3,122,875
38,800 Johnson & Johnson......................................... 2,051,550
3,300 L'Oreal................................................... 1,156,925
30,000 Pfizer, Inc. ............................................. 2,523,750
14,500 Philip Morris Companies, Inc. ............................ 1,654,812
31,000 Procter & Gamble Co. ..................................... 3,565,000
35,000 Schering-Plough Corp. .................................... 2,546,250
-----------
21,658,471
-----------
FINANCIAL -- 18.54%
24,250 American International Group, Inc. ....................... 2,846,344
51,400 Associates First Capital Corp. ........................... 2,210,200
33,000 Bank of Boston Corp. ..................................... 2,211,000
27,200 Citicorp.................................................. 2,944,400
14,550 General Re Corp. ......................................... 2,298,900
45,600 Morgan Stanley Group, Inc. ............................... 2,679,000
-----------
15,189,844
-----------
CAPITAL GOODS -- 13.45%
14,500 Boeing Co. ............................................... 1,430,063
27,200 General Electric Co. ..................................... 2,699,600
28,100 Goodyear Tire and Rubber Co. ............................. 1,468,225
29,100 Illinois Tool Works, Inc. ................................ 2,375,288
53,350 +Thermo Electron Corp. ................................... 1,647,181
65,000 +Thermo Fibergen, Inc. ................................... 536,250
50,000 +ThermoSpectra Corp. ..................................... 656,250
22,500 +Thermo Voltek Corp. ..................................... 208,125
-----------
11,020,982
-----------
CONSUMER CYCLICAL -- 12.70%
32,000 Electronic Data Systems Corp. ............................ 1,292,000
43,600 Hilton Hotels Corp. ...................................... 1,057,300
37,800 Luxottica Group S.p.A. ADR................................ 2,008,125
32,000 McDonald's Corp. ......................................... 1,512,000
20,000 +Samsonite Corp. ......................................... 865,000
89,200 +Thermo Fibertek, Inc. ................................... 808,375
65,000 +ThermoLase Corp. ........................................ 739,375
25,000 ThermoQuest Corp. ........................................ 350,000
24,250 Walt Disney Co. .......................................... 1,770,250
-----------
10,402,425
-----------
ENERGY -- 10.32%
10,000 Anadarko Petroleum Corp. ................................. 561,250
25,000 Chevron Corp. ............................................ 1,740,625
25,000 Mobil Corp. .............................................. 3,265,625
16,500 Royal Dutch Petroleum Co. ................................ 2,887,500
-----------
8,455,000
-----------
TECHNOLOGY -- 10.08%
36,000 +Cisco Systems, Inc. ..................................... $ 1,732,500
10,000 Computer Associates International, Inc. .................. 388,750
58,200 +Hyperion Software Corp. ................................. 931,200
30,000 +Informix Corp. .......................................... 450,000
20,600 Intel Corp. .............................................. 2,863,400
5,000 International Business Machines Corp. .................... 686,875
10,000 Motorola, Inc. ........................................... 603,750
8,000 Texas Instruments, Inc. .................................. 599,000
-----------
8,255,475
-----------
RAW/INTERMEDIATE
MATERIALS -- 4.62%
38,800 Crown Cork & Seal Co., Inc. .............................. 2,003,050
58,200 Sigma-Aldrich Corp. ...................................... 1,782,375
-----------
3,785,425
-----------
UTILITIES -- 3.05%
70,000 +LCI International, Inc. ................................. 1,172,500
30,000 Vodafone Group plc ADR.................................... 1,323,750
-----------
2,496,250
-----------
TRANSPORTATION -- 1.15%
14,550 +UAL Corp................................................. 942,112
-----------
TOTAL COMMON STOCKS
(Cost $67,484,200)........................................ 82,205,984
-----------
RIGHTS -- 0.31%
CAPITAL GOODS -- 0.31%
65,000 +Thermo Fibergen, Inc.
(Cost $195,000)........................................... 255,938
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $67,679,200*)........................................ 100.66% $82,461,922
OTHER ASSETS AND LIABILITIES (NET)......................... (0.66) (540,123)
------ -----------
NET ASSETS................................................. 100.00% $81,921,799
====== ===========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$67,688,110.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements
33
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
LONG-TERM SUPPLY OF ENERGY FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 91.51%
ENERGY -- 88.15%
15,000 Amoco Corp. ............................................. $ 1,299,375
12,000 Anadarko Petroleum Corp. ................................ 673,500
12,879 British Petroleum Co. plc ADR............................ 1,767,643
25,000 +Chesapeake Energy Corp. ................................ 521,875
12,000 Chevron Corp. ........................................... 835,500
24,000 +Crown Central Petroleum, Class B........................ 288,000
12,000 +Diamond Offshore Drilling, Inc. ........................ 822,000
17,000 Enron Corp. ............................................. 646,000
17,000 +ENSCO International, Inc. .............................. 837,250
18,000 ENI S.p.A. ADR........................................... 911,250
21,000 Exxon Corp. ............................................. 2,262,750
22,000 +Falcon Drilling Company, Inc. .......................... 814,000
19,000 +Flores & Rucks, Inc. ................................... 769,500
23,000 KN Energy, Inc. ......................................... 908,500
16,000 Louisiana Land & Exploration Co. ........................ 758,000
15,000 Mobil Corp. ............................................. 1,959,375
28,800 +Nabors Industries, Inc. ................................ 561,600
20,000 PanEnergy Corp. ......................................... 862,500
11,000 Royal Dutch Petroleum Co. ............................... 1,925,000
10,000 Schlumberger Ltd. ....................................... 1,072,500
13,000 +SEACOR Holdings, Inc. .................................. 697,125
17,000 Sonat, Inc. ............................................. 926,500
16,885 +Tejas Gas Corp. ........................................ 732,387
10,000 Texaco, Inc. ............................................ 1,095,000
24,000 Titan Exploration, Inc. ................................. 201,000
30,000 Tosco Corp. ............................................. 855,000
8,500 Total S.A. ADR........................................... 360,187
20,000 Transmontaigne Oil Co. .................................. 312,500
25,000 +United Meridian Corp. .................................. 753,125
20,000 Unocal Corp. ............................................ 762,500
35,000 USX-Marathon Group, Inc. ................................ 975,625
15,000 +Western Atlas, Inc. .................................... 909,375
20,000 Western Gas Resources, Inc. ............................. 360,000
-----------
29,436,442
-----------
UTILITIES -- 3.36%
20,000 +AES Corp. .............................................. 1,120,000
-----------
TOTAL COMMON STOCKS
(Cost $23,498,672)....................................... 30,556,442
-----------
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- ----------
<C> <S> <C>
U.S. GOVERNMENT OBLIGATIONS -- 10.14%
$3,391,000 U.S. Treasury Bill 5.00%#, 04/10/97 (Cost
$3,386,761)........................................... $3,386,761
----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $26,885,433*)........................................ 101.65% $33,943,203
OTHER ASSETS AND LIABILITIES (NET)......................... (1.65) (550,112)
------ -----------
NET ASSETS................................................. 100.00% $33,393,091
====== ===========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$26,885,433.
+ Non-income producing security.
# Discount Rate.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
34
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS MARCH 31, 1997
PRODUCTIVITY ENHANCERS FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
------- -----------
<C> <S> <C>
COMMON STOCKS -- 87.79%
CAPITAL GOODS -- 34.12%
7,500 AAR Corp. ............................................... $ 225,000
9,000 AlliedSignal, Inc. ...................................... 641,250
3,700 Boeing Co. .............................................. 364,913
7,300 Case Corp. .............................................. 370,475
8,300 Deere & Co. ............................................. 361,050
10,000 Dover Corp. ............................................. 525,000
10,000 Emerson Electric Co. .................................... 450,000
7,000 General Electric Co. .................................... 694,750
18,700 IDEX Corp. .............................................. 439,450
7,000 Illinois Tool Works, Inc. ............................... 571,375
12,000 Kaydon Corp. ............................................ 502,500
20,000 +Lear Corp. ............................................. 667,500
6,300 Thiokol Corp. ........................................... 348,075
-----------
6,161,338
-----------
TECHNOLOGY -- 29.84%
18,333 +Analog Devices, Inc. ................................... 412,492
7,000 +Compaq Computer Corp. .................................. 536,375
5,300 First Data Corp. ........................................ 179,538
15,000 Hewlett-Packard Co. ..................................... 798,750
6,000 Intel Corp. ............................................. 834,000
5,000 International Business Machines Corp. ................... 686,875
5,100 +Microsoft Corp. ........................................ 467,287
5,000 +Oracle System Corp. .................................... 192,500
9,000 Tektronix, Inc. ......................................... 454,500
11,000 +Thermo Electron Corp. .................................. 339,625
10,000 +Xilinx, Inc. ........................................... 486,250
-----------
5,388,192
-----------
CONSUMER STAPLES -- 6.62%
6,500 Eastman Kodak Co. ....................................... 493,188
13,300 Johnson & Johnson ....................................... 703,237
-----------
1,196,425
-----------
CONSUMER CYCLICAL -- 5.09%
16,000 +CUC International, Inc. ................................ 360,000
15,200 +O'Reilly Automotive, Inc. .............................. 558,600
-----------
918,600
-----------
RAW/INTERMEDIATE
MATERIALS -- 4.84%
5,100 Georgia Pacific Corp. ................................... 369,750
3,000 Pioneer Hi-Bred International, Inc. ..................... 188,625
18,000 Steel Dynamics, Inc. .................................... 315,000
-----------
873,375
-----------
FINANCIAL -- 4.36%
14,000 Associates First Capital Corp. .......................... 602,000
4,000 Norwest Corp. ........................................... 185,000
-----------
787,000
-----------
TRANSPORTATION -- 2.92%
4,000 CSX Corp. ............................................... $ 186,000
2,000 Norfolk Southern Corp. .................................. 170,500
3,000 Union Pacific Corp. ..................................... 170,250
-----------
526,750
-----------
TOTAL COMMON STOCKS
(Cost $15,194,895)....................................... 15,851,680
-----------
<CAPTION>
PRINCIPAL
AMOUNT
---------
<C> <S> <C>
DEMAND NOTES -- 7.07%
$ 31,000 Associates Corp. of North America Master Notes......... 31,000
1,246,000 General Electric Co. Promissory Notes.................. 1,246,000
-----------
TOTAL DEMAND NOTES
(Cost $1,277,000)...................................... 1,277,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $16,471,895*)........................................ 94.86% $17,128,680
OTHER ASSETS AND LIABILITIES (NET)......................... 5.14 928,567
------ -----------
NET ASSETS 100.00% $18,057,247
====== ===========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$16,517,114.
+ Non-income producing security.
See Notes to Financial Statements.
35
<PAGE>
EXCELSIOR FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
Excelsior Funds, Inc. ("Excelsior Fund") was incorporated under the laws of
the State of Maryland on August 2, 1984 and is registered under the Investment
Company Act of 1940 (the "1940 Act"), as amended, as an open-end management
investment company.
Excelsior Fund currently offers shares in twenty managed investment
portfolios, each having its own investment objectives and policies. The
Excelsior Fund offers two classes of shares in each of the Equity, Aging of
America, Communication and Entertainment, Business and Industrial
Restructuring, Global Competitors and Early Life Cycle Funds--Shares and Trust
Shares. Trust Shares bear the additional expense of distribution fees. As of
March 31, 1997, only the Equity, Business and Industrial Restructuring and
Early Life Cycle Funds had Trust Shares outstanding.
The following is a summary of significant accounting policies for Equity
Fund, Income and Growth Fund, Aging of America Fund, Business and Industrial
Restructuring Fund, Communication and Entertainment Fund, Early Life Cycle
Fund, Environmentally-Related Products and Services Fund, Global Competitors
Fund, Long-Term Supply of Energy Fund and Productivity Enhancers Fund (the
"Portfolios"). Such policies are in conformity with generally accepted
accounting principles and are consistently followed by Excelsior Fund in the
preparation of the financial statements. 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 these estimates. The financial statements for the
remaining portfolios of Excelsior Fund and Excelsior Tax-Exempt Fund, Inc.
("Excelsior Tax-Exempt Fund") are presented separately.
(A) PORTFOLIO VALUATION:
Investments in securities that are traded on a recognized stock exchange
are valued at the last sale price on the exchange on which such securities
are primarily traded or at the last sale price on the national securities
market. Securities traded over-the-counter are valued each business day on
the basis of the closing over-the-counter bid prices. Securities for which
there were no transactions are valued at the average of the most recent bid
prices (as calculated by an independent pricing service (the "Service")
based upon its evaluation of the market for such securities) when, in the
judgment of the Service, quoted bid prices for securities are readily
available and are representative of the bid side of the market. Portfolio
securities that are primarily traded on foreign securities exchanges are
generally valued at the preceding closing values of such securities on
their respective exchanges, except that when an occurrence subsequent to
the time a value was so established is likely to have changed such value,
then a fair value of those securities will be determined by consideration
of other factors under the direction of the Board of Directors. A security
which is traded on more than one exchange is valued at the quotation on the
exchange determined to be the primary market on which the security is
traded. Securities for which market quotations are not readily available
are valued at fair value, pursuant to guidelines adopted by Excelsior
Fund's Board of Directors. Short-term debt instruments with remaining
maturities of 60 days or less are valued at amortized cost, which
approximates market value.
All other foreign securities are valued at the last current bid quotation
if market quotations are available, or at fair value as determined in
accordance with policies established by the Board of
36
<PAGE>
Directors. Investment valuations, other assets, and liabilities initially
expressed in foreign currencies are converted each business day into U.S.
dollars based upon current exchange rates. Purchases and sales of foreign
investments and income and expenses are converted into U.S. dollars based
upon currency exchange rates prevailing on the respective dates of such
transactions. Gains and losses attributable to foreign currency exchange
rates are recorded for financial statement purposes as net realized gains
and losses on investments. That portion of both realized and unrealized
gains and losses on investments that results from fluctuations in foreign
currency exchange rates is not separately disclosed.
Forward foreign currency exchange contracts: The Portfolios'
participation in forward currency exchange contracts will be limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging involves the purchase or sale of foreign currency with
respect to specific receivables or payables of a Portfolio generally
arising in connection with the purchase or sale of its portfolio
securities. Risk may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts
and is generally limited to the amount of unrealized gain on the contracts,
if any, at the date of default. Risk may also arise from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
Contracts are marked-to-market daily and the change in market value is
recorded as unrealized appreciation or depreciation. Realized gains or
losses arising from such transactions are included in net realized gains or
losses from foreign currency transactions.
(B) SECURITY TRANSACTIONS AND INVESTMENT INCOME:
Security transactions are recorded on a trade date basis. Realized gains
and losses on investments sold are recorded on the basis of identified
cost. Interest income, adjusted for amortization of premiums and, when
appropriate, discounts on investments, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date.
(C) REPURCHASE AGREEMENTS:
Excelsior Fund may purchase portfolio securities from financial
institutions deemed to be creditworthy by the investment adviser subject to
the seller's agreement to repurchase and Excelsior Fund's agreement to
resell such securities at mutually agreed upon prices. Securities purchased
subject to such repurchase agreements are deposited with Excelsior Fund's
custodian or sub-custodian or are maintained in the Federal
Reserve/Treasury book-entry system and must have, at all times, an
aggregate market value greater than 102% of the repurchase price (including
accrued interest).
If the value of the underlying security, including accrued interest,
falls below the value of 102% of the repurchase price plus accrued
interest, Excelsior Fund will require the seller to deposit additional
collateral by the next business day. Default or bankruptcy of the seller
may, however, expose the applicable Portfolio of Excelsior Fund to possible
delay in connection with the disposition of the underlying securities or
loss to the extent that proceeds from a sale of the underlying securities
were less than the repurchase price under the agreement.
(D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid quarterly. Net
realized capital gains are distributed to shareholders at least annually.
37
<PAGE>
Dividends and distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
net operating losses, foreign currency transactions, partnership income,
deferral of losses on wash sales and post-October losses.
In order to avoid a Federal excise tax, each Portfolio is required to
distribute certain minimum amounts of net realized capital gain and net
investment income for the respective periods ending October 31 and December
31 in each calendar year.
(E) FEDERAL TAXES:
It is the policy of Excelsior Fund that each Portfolio continue to
qualify as a regulated investment company, if such qualification is in the
best interest of the shareholders, by complying with the requirements of
the Internal Revenue Code applicable to regulated investment companies, and
by distributing substantially all of its taxable earnings to its
shareholders.
Net capital losses incurred after October 31 and within the taxable year
are deemed to arise on the first business day of a Portfolio's next taxable
year. Business and Industrial Restructuring Fund and Early Life Cycle Fund
incurred, and elected to defer, net capital losses of approximately $2,000
and $2,862,000, respectively, for the year ended March 31, 1997.
At March 31, 1997, aggregate gross unrealized appreciation for all
securities for which there was an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities for which there
was an excess of tax cost over value is as follows:
<TABLE>
<CAPTION>
NET
TAX BASIS TAX BASIS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------ -------------- --------------
<S> <C> <C> <C>
Equity Fund..................... $70,845,635 $(4,438,492) $66,407,143
Income and Growth Fund.......... 35,423,737 (3,384,388) 32,039,349
Aging of America Fund........... 10,033,680 (172,228) 9,861,452
Business and Industrial
Restructuring Fund............. 28,568,801 (2,567,622) 26,001,179
Communication and Entertainment
Fund........................... 6,122,799 (1,098,457) 5,024,342
Early Life Cycle Fund........... 8,711,513 (8,754,862) (43,349)
Environmentally-Related Products
and Services Fund.............. 1,584,650 (229,165) 1,355,485
Global Competitors Fund......... 17,424,151 (2,650,339) 14,773,812
Long-Term Supply of Energy
Fund........................... 7,224,438 (166,668) 7,057,770
Productivity Enhancers Fund..... 1,070,211 (458,645) 611,566
</TABLE>
38
<PAGE>
(F) EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio or a class of shares in
such Portfolio are charged to that Portfolio or such share class. Other
expenses are allocated to the respective Portfolios based on average net
assets.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE, DISTRIBUTION EXPENSES AND
RELATED PARTY TRANSACTIONS
United States Trust Company of New York ("U.S. Trust") serves as the
investment adviser to Excelsior Fund. For the services provided pursuant to
the Investment Advisory Agreement, U.S. Trust is entitled to receive a fee,
computed daily and paid monthly, at the annual rates of .75% of the average
daily net assets of the Equity Fund and Income and Growth Fund, and .60% of
the average daily net assets of the Aging of America Fund, Business and
Industrial Restructuring Fund, Communication and Entertainment Fund, Early
Life Cycle Fund, Environmentally-Related Products and Services Fund, Global
Competitors Fund, Long-Term Supply of Energy Fund and Productivity Enhancers
Fund.
U.S. Trust, Chase Global Funds Services Company ("CGFSC"), a subsidiary of
The Chase Manhattan Bank and Federated Administrative Services (collectively,
the "Administrators") provide administrative services to Excelsior Fund. For
the services provided to the Portfolios, the Administrators are entitled
jointly to annual fees, computed daily and paid monthly, based on the combined
aggregate average daily net assets of Excelsior Fund (excluding the
international equity portfolios of Excelsior Fund and Excelsior Institutional
Trust), Excelsior Tax-Exempt Fund and Excelsior Institutional Trust, all of
which are affiliated investment companies, as follows: .200% of the first $200
million, .175% of the next $200 million, and .150% over $400 million.
Administration fees payable by each Portfolio of the three investment
companies are determined in proportion to the relative average daily net
assets of the respective Portfolios for the period paid. For the year ended
March 31, 1997, Administration fees charged by U.S. Trust were as follows:
<TABLE>
<S> <C>
Equity Fund............................................................ $49,810
Income and Growth Fund................................................. 22,040
Aging of America Fund.................................................. 7,896
Business and Industrial Restructuring Fund............................. 17,583
Communication and Entertainment Fund................................... 7,918
Early Life Cycle Fund.................................................. 12,655
Environmentally-Related Products and Services Fund..................... 1,250
Global Competitors Fund................................................ 14,478
Long-Term Supply of Energy Fund........................................ 5,177
Productivity Enhancers Funds........................................... 4,085
</TABLE>
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust and the
Administrators may undertake to waive a portion or all of the fees payable to
them and also may reimburse the Portfolios for a portion of other expenses. In
addition, until further notice to Excelsior Fund, U.S. Trust intends to
voluntarily waive fees to the extent necessary for each of Aging of America
Fund, Business and Industrial Restructuring Fund, Communication and
Entertainment Fund, Early Life Cycle Fund, Environmentally-Related Products
and Services Fund, Global Competitors Fund, Long-Term Supply of Energy Fund
and Productivity
39
<PAGE>
Enhancers Fund to maintain an annual expense ratio of not more than .99%. For
the year ended March 31, 1997, pursuant to this voluntary expense limitation
U.S. Trust waived fees as follows:
<TABLE>
<S> <C>
Environmentally-Related Products and Services Fund..................... $19,967
Productivity Enhancers Fund............................................ 10,916
</TABLE>
Excelsior Fund has also entered into administrative servicing agreements
with various service organizations (which may include affiliates of U.S.
Trust) requiring them to provide administrative support services to their
customers owning shares of the Portfolios. As a consideration for the
administrative services provided by each service organization to its
customers, each Portfolio will pay the service organization an administrative
service fee at the annual rate of up to .40% of the average daily net asset
value of its shares held by the service organizations' customers. Such
services may include assisting in processing purchase, exchange and redemption
requests; transmitting and receiving funds in connection with customer orders
to purchase, exchange or redeem shares; and providing periodic statements.
Until further notice to Excelsior Fund, U.S. Trust and the Administrators have
voluntarily agreed to waive investment advisory and administration fees
payable by each Portfolio in an amount equal to administrative service fees
payable by that Portfolio. For the year ended March 31, 1997, U.S. Trust and
the Administrators waived investment advisory and administration fees in
amounts equal to the administrative service fees for the Portfolios as
follows:
<TABLE>
<CAPTION>
U.S.
TRUST ADMINISTRATORS
-------- --------------
<S> <C> <C>
Equity Fund............................................ $127,393 $5,344
Income and Growth Fund................................. 105,756 1,132
Aging of America Fund.................................. 21,945 43
Business and Industrial Restructuring Fund............. 41,509 108
Communication and Entertainment Fund................... 24,418 43
Early Life Cycle Fund.................................. 61,885 87
Environmentally-Related Products and Services Fund..... 3,482 2
Global Competitors Fund................................ 36,364 14
Long-Term Supply of Energy Fund........................ 12,264 6
Productivity Enhancers Fund............................ 13,261 7
</TABLE>
Edgewood Services, Inc. (the "Distributor"), a wholly-owned subsidiary of
Federated Investors, serves as the sponsor and distributor of Excelsior Fund.
Effective February 14, 1997, shares of each Portfolio are sold without a sales
charge. Prior to February 14, 1997, certain sales of Excelsior Fund's shares
were subject to a maximum sales charge of 4.50% of the offering price.
Under the Excelsior Funds' Distribution Plan, adopted pursuant to Rule 12b-1
under the 1940 Act, the Trust Shares of each Fund bear the expense of
distributions fees at the maximum annual rate of .75% of the average daily net
asset value of the Fund's outstanding Trust Shares. Trust Shares of each
Excelsior Fund currently bear the expense of such distribution fees at the
annual rate of .35% of the average daily net asset value of the Fund's
outstanding Trust Shares.
Each Director of Excelsior Fund receives an annual fee of $9,000, plus a
meeting fee of $1,500 for each meeting attended, and is reimbursed for
expenses incurred for attending meetings. The Chairman receives an additional
annual fee of $5,000.
40
<PAGE>
For the year ended March 31, 1997, brokerage commissions on investment
transactions were paid to U.S. Trust as follows:
<TABLE>
<S> <C>
Aging of America Fund............................................ $ 540
Business and Industrial Restructuring Fund....................... 13,069
Communication and Entertainment Fund............................. 450
Early Life Cycle Fund............................................ 7,047
Environmentally-Related Product and Services Fund................ 3,111
Global Competitors Fund.......................................... 1,490
Long-Term Supply of Energy Fund.................................. 3,330
Productivity Enhancers Fund...................................... 1,170
</TABLE>
3. PURCHASES AND SALES OF SECURITIES:
For the year ended March 31, 1997, purchases and sales of securities,
excluding short-term investments, for the Portfolios aggregated:
<TABLE>
<CAPTION>
CONTRIBUTIONS
PURCHASES IN-KIND SALES
------------ ------------- ------------
<S> <C> <C> <C>
Equity Fund........................... $114,865,681 $79,831,593 $102,632,761
Income and Growth Fund................ 30,597,310 -- 40,891,104
Aging of America Fund................. 38,590,534 -- 41,095,113
Business and Industrial Restructuring
Fund................................. 99,274,113 -- 60,697,300
Communication and Entertainment Fund.. 29,420,723 -- 40,129,527
Early Life Cycle Fund................. 30,553,370 10,267,561 50,776,855
Environmentally-Related Products and
Services Fund........................ 8,062,940 -- 4,625,703
Global Competitors Fund............... 30,103,896 -- 19,827,386
Long-Term Supply of Energy Fund....... 25,264,705 -- 23,753,267
Productivity Enhancers Fund........... 73,837,041 -- 87,512,892
</TABLE>
4. COMMON STOCK:
Excelsior Fund currently has authorized capital classified into forty classes
of shares, each representing interests in one of twenty separate portfolios.
Authorized capital for each Portfolio is as follows: With respect to each of
the Equity and Income and Growth Funds, 375 million shares of Common Stock and
500 million shares of Common Stock--Special Series 1 (Trust Shares); and with
respect to each of the Aging of America Fund, Business and Industrial
Restructuring Fund, Communication and Entertainment Fund, Early Life Cycle
Fund, Environmentally-Related Products and Services Fund, Global Competitors
Fund, Long-Term Supply of Energy Fund and Productivity Enhancers Fund, 500
million shares of Common Stock and 500 million shares of Common Stock--Special
Series 1 (Trust Shares).
Each share (irrespective of series designation) has a par value of $.001, and
represents an equal proportionate interest in the particular Portfolio with
other shares of the same Portfolio, and is entitled to such dividends and
distributions of taxable earnings on the assets belonging to such Portfolio as
are declared at the discretion of Excelsior Fund's Board of Directors.
41
<PAGE>
<TABLE>
<CAPTION>
EQUITY FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Shares................. 2,986,879 $ 76,672,109 2,335,582 $ 53,181,056
Trust Shares........... 3,154 84,440 -- --
Contributions in-kind.... 3,211,246 79,831,593 -- --
Issued as reinvestment of
dividends
Shares................. 195,908 5,042,100 305,329 6,724,708
Trust Shares........... 5 129 -- --
Redeemed
Shares................. (2,218,612) (57,053,673) (1,343,291) (30,587,413)
Trust Shares........... (15) (534) -- --
---------- ------------ ---------- ------------
Net Increase............. 4,178,565 $104,576,164 1,297,620 $ 29,318,351
========== ============ ========== ============
<CAPTION>
INCOME AND GROWTH FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold..................... 1,397,170 $ 21,067,243 2,141,034 $ 28,619,545
Issued as reinvestment of
dividends............... 175,558 2,635,563 67,047 859,603
Redeemed................. (1,688,433) (25,386,111) (1,842,621) (24,372,374)
---------- ------------ ---------- ------------
Net Increase (Decrease).. (115,705) $ (1,683,305) 365,460 $ 5,106,774
========== ============ ========== ============
<CAPTION>
AGING OF AMERICA FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold..................... 1,152,870 $ 11,418,942 2,314,243 $ 20,136,308
Issued as reinvestment of
dividends............... 9,236 91,921 717 6,037
Redeemed................. (1,282,425) (12,838,183) (577,612) (5,224,382)
---------- ------------ ---------- ------------
Net Increase (Decrease).. (120,319) $ (1,327,320) 1,737,348 $ 14,917,963
========== ============ ========== ============
<CAPTION>
BUSINESS AND INDUSTRIAL RESTRUCTURING FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
------------------------- ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Shares................. 3,573,877 $ 54,756,284 2,885,350 $ 36,357,535
Trust Shares........... 3,212 47,503 -- --
Issued as reinvestment of
dividends:
Shares................. 23,121 351,922 8,050 103,087
Trust Shares........... 54 835 -- --
Redeemed:
Shares................. (1,090,887) (16,823,462) (476,976) (5,855,224)
Trust Shares........... (2) (27) -- --
---------- ------------ ---------- ------------
Net Increase............. 2,509,375 $ 38,333,055 2,416,424 $ 30,605,398
========== ============ ========== ============
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATION AND ENTERTAINMENT FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
-------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sold..................... 869,723 $ 9,495,234 2,119,351 $22,797,588
Issued as reinvestment of
dividends............... 2,618 30,755 29,026 316,412
Redeemed................. (2,057,577) (22,515,044) (701,525) (7,460,709)
----------- ------------ ---------- -----------
Net Increase (Decrease).. (1,185,236) $(12,989,055) 1,446,852 $15,653,291
=========== ============ ========== ===========
<CAPTION>
EARLY LIFE CYCLE FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
-------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sold:
Shares................. 1,632,860 $ 17,229,638 3,520,395 $36,370,860
Trust Shares........... 934 9,231 -- --
Contributions in-kind.... 873,834 10,267,561 -- --
Issued as reinvestment of
dividends:
Shares................. 36,989 400,554 41,814 408,622
Trust Shares........... 10 97 -- --
Redeemed:
Shares................. (3,753,354) (37,413,560) (1,214,105) (12,475,517)
Trust Shares........... (30) (294) -- --
----------- ------------ ---------- -----------
Net Increase (Decrease).. (1,208,757) $ (9,506,773) 2,348,104 $24,303,965
=========== ============ ========== ===========
<CAPTION>
ENVIRONMENTALLY-RELATED PRODUCTS
AND SERVICES FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
-------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sold..................... 592,783 $ 5,313,037 186,141 $ 1,314,576
Issued as reinvestment of
dividends............... 32 300 -- --
Redeemed................. (154,610) (1,416,015) (377,073) (2,674,660)
----------- ------------ ---------- -----------
Net Increase (Decrease).. 438,205 $ 3,897,322 (190,932) $(1,360,084)
=========== ============ ========== ===========
<CAPTION>
GLOBAL COMPETITORS FUND
---------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
-------------------------- -----------------------
SHARES AMOUNT SHARES AMOUNT
----------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sold..................... 2,453,720 $ 27,414,389 4,254,987 $42,316,428
Issued as reinvestment of
dividends............... 5,021 57,433 1,393 13,702
Redeemed................. (1,848,157) (21,321,315) (640,495) (6,356,442)
----------- ------------ ---------- -----------
Net Increase............. 610,584 $ 6,150,507 3,615,885 $35,973,688
=========== ============ ========== ===========
</TABLE>
43
<PAGE>
<TABLE>
<CAPTION>
LONG-TERM SUPPLY OF ENERGY FUND
-------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sold....................... 1,183,409 $ 13,166,360 1,212,809 $10,257,682
Issued as reinvestment of
dividends................. 14,801 166,314 820 6,920
Redeemed................... (635,829) (6,996,595) (770,397) (6,756,240)
---------- ------------ ---------- -----------
Net Increase............... 562,381 $ 6,336,079 443,232 $ 3,508,362
========== ============ ========== ===========
<CAPTION>
PRODUCTIVITY ENHANCERS FUND
-------------------------------------------------
YEAR ENDED YEAR ENDED
03/31/97 03/31/96
------------------------ -----------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- -----------
<S> <C> <C> <C> <C>
Sold....................... 749,379 $ 6,393,358 2,029,415 $18,271,102
Issued as reinvestment of
dividends................. 12,604 110,279 16,492 143,555
Redeemed................... (1,843,037) (15,851,064) (1,005,818) (9,148,291)
---------- ------------ ---------- -----------
Net Increase (Decrease).... (1,081,054) $ (9,347,427) 1,040,089 $ 9,266,366
========== ============ ========== ===========
</TABLE>
5. ORGANIZATION COSTS
Excelsior Fund has borne all costs in connection with the initial
organization of new portfolios, including the fees for registering and
qualifying its shares for distribution under Federal and state securities
regulations. All such costs are being amortized on the straight-line basis over
periods of five years from the dates on which each Portfolio commenced
operations.
44
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders and Board of Directors Excelsior Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the Equity, Income and Growth,
Aging of America, Business and Industrial Restructuring, Communication and
Entertainment, Early Life Cycle, Environmentally-Related Products and Services,
Global Competitors, Long-Term Supply of Energy and Productivity Enhancers
Portfolios (ten of the portfolios constituting the Excelsior Funds, Inc.) as of
March 31, 1997, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
March 31, 1997 by correspondence with the custodian and brokers or other
appropriate auditing procedures where replies from brokers were not received.
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 provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the above mentioned Portfolios of Excelsior Funds, Inc. at March 31, 1997,
the results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended and financial
highlights for each of the periods indicated therein, in conformity with
generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
May 9, 1997
45
<PAGE>
FEDERAL TAX INFORMATION: (UNAUDITED)
For the year ended March 31, 1997, the percentage of dividends paid that
qualify for the 70.0% dividends received deduction for corporate shareholders
and the designation of long-term capital gain for the Portfolios are
approximated as follows:
<TABLE>
<CAPTION>
DIVIDENDS RECEIVED LONG-TERM
FUND DEDUCTION CAPITAL GAIN
---- ------------------ ------------
<S> <C> <C>
Equity Fund................................ 78.02% $10,777,978
Income and Growth Fund..................... 35.02% 4,590,976
Aging of America Fund...................... 100.00% 1,835,114
Business and Industrial Restructuring
Fund...................................... 62.67% 2,174,207
Communication and Entertainment Fund....... -- 243,366
Early Life Cycle Fund...................... 13.07% 2,420,034
Environmentally-Related Products and Serv-
ices Fund................................. 100.00% --
Global Competitors Fund.................... 100.00% 672,480
Long-Term Supply of Energy Fund............ 20.11% 1,373,733
Productivity Enhancers Fund................ 3.59% --
</TABLE>
46
