<PAGE>
Investment Advisers
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
U.S. Trust Company
225 High Ridge Road
Stamford, CT 06905
Transfer Agent
Chase Global Funds Services Company
73 Tremont Street
Boston, MA 02108
(800) 446-1012
Distributor
Edgewood Services, Inc.
5800 Corporate Drive
Pittsburgh, PA 15237
SHARES OF THE FUNDS ARE NOT DE-
POSITS OR OBLIGATIONS OF, OR
GUARANTEED OR ENDORSED BY, ANY
BANK, AND THE SHARES ARE NOT FED-
ERALLY INSURED BY THE FEDERAL DE-
POSIT INSURANCE CORPORATION, BANK
INSURANCE FUND, FEDERAL RESERVE
BOARD, OR ANY OTHER GOVERNMENTAL
AGENCY. ALTHOUGH THE FUNDS SEEK
TO PRESERVE THE VALUE OF YOUR IN-
VESTMENT AT $1.00 PER SHARE, IT
IS POSSIBLE TO LOSE MONEY BY IN-
VESTING IN THE FUNDS.
US EXMMIS SA00
[LOGO OF EXCELSIOR FUNDS]
Institutional
MONEY FUND
Semi-Annual Report
September 30, 2000
<PAGE>
Excelsior Funds, Inc.
Money Fund
Portfolio of Investments September 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal Discount
Amount Rate Value (Note 1)
--------- -------- --------------
<C> <S> <C> <C>
COMMERCIAL PAPER -- 34.38%
$ 80,000,000 American Express Co.,
10/16/00............................... 6.48% $ 80,000,000
85,000,000 Anheuser-Busch Cos, Inc.,
10/02/00............................... 6.71 85,000,000
85,000,000 Asset Securitization Corp.,
10/13/00............................... 6.57 84,829,362
85,000,000 Cafco Holding Corp.,
10/11/00............................... 6.64 84,860,813
80,000,000 Citibank Canada,
10/31/00............................... 6.55 80,000,000
85,000,000 Diageo plc,
10/02/00............................... 6.77 85,000,000
80,000,000 Hewlett-Packard Co.,
10/12/00............................... 6.56 79,856,222
40,000,000 Merck & Co., Inc.,
10/19/00............................... 6.56 39,877,789
--------------
TOTAL COMMERCIAL PAPER
(Cost $619,424,186).................... 619,424,186
--------------
CORPORATE BONDS -- 5.55%
50,000,000 AT&T Corp.,
07/19/01............................... 6.65# 50,000,000
50,000,000 Morgan Stanley Dean Witter & Co.,
Series C, 03/16/01..................... 6.63# 50,000,000
--------------
TOTAL CORPORATE BONDS
(Cost $100,000,000).................... 100,000,000
--------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 55.50%
Federal Home Loan Bank
300,000,000 10/12/00............................... 6.48# 300,000,000
100,000,000 10/26/00............................... 6.48# 100,000,000
100,000,000 02/15/01............................... 6.55 100,000,000
Student Loan Marketing Association
200,000,000 02/15/01............................... 6.52# 200,000,000
300,000,000 07/26/01............................... 6.65# 300,046,068
--------------
TOTAL U.S. GOVERNMENT
& AGENCY OBLIGATIONS
(Cost $1,000,046,068).................. 1,000,046,068
--------------
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ --------
<S> <C> <C>
OTHER SHORT-TERM INVESTMENTS -- 3.51%
INVESTMENT COMPANIES
15,732,181 Dreyfus Government Cash
Management Fund......... $ 15,732,181
2,424,485 Dreyfus Treasury Prime
Cash Management Fund.... 2,424,485
<CAPTION>
Principal
Amount
-----------
<S> <C> <C>
REPURCHASE AGREEMENT##
$45,000,000 Morgan Stanley Dean
Witter & Co. Repurchase
Agreement, 6.63%, dated
09/29/00, due 10/02/00,
to be repurchased at
$45,024,863............. 45,000,000
--------------
TOTAL OTHER SHORT-TERM
INVESTMENTS (Cost
$63,156,666)............ 63,156,666
--------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $1,782,626,920*).................................. 98.94% $1,782,626,920
OTHER ASSETS & LIABILITIES (NET)........................ 1.06 19,089,312
------ --------------
NET ASSETS.............................................. 100.00% $1,801,716,232
====== ==============
</TABLE>
--------
* Aggregate cost for Federal tax and book purposes.
# Variable or floating rate securities -- rate disclosed is as of September 30,
2000.
## The repurchase agreement is fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of this schedule of
investments.
See Notes to Financial Statements
<PAGE>
Excelsior Funds, Inc.
Money Fund
Statements of Assets and Liabilities
September 30, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments, at cost--see accompanying portfolio.......... $1,782,626,920
==============
Investments, at value (Note 1)............................ $1,782,626,920
Interest receivable....................................... 22,509,740
Receivable for shares sold................................ 70,734,333
Prepaid expenses.......................................... 146,109
--------------
Total Assets.............................................. 1,876,017,102
LIABILITIES:
Payable for dividends declared............................ 9,515,327
Payable for shares redeemed............................... 62,002,800
Investment advisory fees payable (Note 2)................. 17,230
Administration fees payable (Note 2)...................... 350,913
Administrative servicing fees payable (Note 2)............ 341,734
Directors' fees payable (Note 2).......................... 7,939
Due to custodian bank..................................... 1,938,366
Accrued expenses and other payables....................... 126,561
--------------
Total Liabilities......................................... 74,300,870
--------------
NET ASSETS................................................. $1,801,716,232
==============
NET ASSETS consist of:
Undistributed net investment income....................... $ 2,454
Accumulated net realized loss on investments.............. (19,632)
Par value (Note 3)........................................ 1,801,918
Paid-in capital in excess of par value.................... 1,799,931,492
--------------
Total Net Assets........................................... $1,801,716,232
==============
Net Assets:
Shares.................................................... $1,510,669,464
Institutional Shares...................................... 291,046,768
Shares of Common Stock Outstanding (Note 3):
Shares.................................................... 1,510,871,195
Institutional Shares...................................... 291,046,692
NET ASSET VALUE PER SHARE:
Shares.................................................... $1.00
=====
Institutional Shares...................................... $1.00
=====
</TABLE>
See Notes to Financial Statements
<PAGE>
Excelsior Funds, Inc.
Money Fund
Statements of Operations
Six Months Ended September 30, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest income............................................... $57,534,575
-----------
EXPENSES:
Investment advisory fees (Note 2)............................. 2,223,321
Administrative servicing fees (Note 2)........................ 1,838,481
Administration fees (Note 2).................................. 1,351,779
Custodian fees................................................ 230,884
Legal and audit fees.......................................... 65,907
Shareholder servicing agent fees.............................. 36,623
Shareholder reports........................................... 19,869
Directors' fees and expenses (Note 2)......................... 15,605
Registration and filing fees.................................. 14,386
Miscellaneous expenses........................................ 221,493
-----------
Total Expenses................................................ 6,018,348
Fees waived and reimbursed by investment adviser and
administrators (Note 2)...................................... (2,147,466)
-----------
Net Expenses.................................................. 3,870,882
-----------
NET INVESTMENT INCOME.......................................... 53,663,693
-----------
REALIZED LOSS ON INVESTMENTS (Note 1):
Net realized loss on security transactions.................... (308)
-----------
Net increase in net assets resulting from operations........... $53,663,385
===========
</TABLE>
See Notes to Financial Statements
<PAGE>
Excelsior Funds, Inc.
Money Fund
Statements of Changes in Net Assets
<TABLE>
<S> <C>
Six Months Ended September 30, 2000 (Unaudited)
Net investment income........................................ $ 53,663,693
Net realized loss on investments............................. (308)
--------------
Net increase in net assets resulting from operations......... 53,663,385
Distributions to shareholders:
From net investment income
Shares...................................................... (44,938,288)
Institutional Shares........................................ (8,723,313)
Increase in net assets from fund share transactions (Note 3):
Shares...................................................... 43,486,924
Institutional Shares........................................ 18,047,866
--------------
Net increase in net assets................................... 61,536,574
NET ASSETS:
Beginning of period......................................... 1,740,179,658
--------------
End of period (1)........................................... $1,801,716,232
==============
--------
(1) Including undistributed net investment income............ $ 2,454
==============
Year Ended March 31, 2000
Net investment income........................................ $ 61,079,910
Net realized gain on investments............................. 34,486
--------------
Net increase in net assets resulting from operations......... 61,114,396
Distributions to shareholders:
From net investment income
Shares...................................................... (56,402,552)
Institutional Shares*....................................... (4,676,979)
Increase in net assets from fund share transactions (Note 3):
Shares...................................................... 493,480,150
Institutional Shares*....................................... 272,997,023
--------------
Net increase in net assets................................... 766,512,038
NET ASSETS:
Beginning of year........................................... 973,667,620
--------------
End of year (2)............................................. $1,740,179,658
==============
--------
(2) Including undistributed net investment income............ $ 362
==============
</TABLE>
* Institutional shares of the Money Fund commenced operations on December 16,
1999.
See Notes to Financial Statements
<PAGE>
Excelsior Funds, Inc.
Money Fund
Financial Highlights -- Selected Per Share Data and Ratios
Selected data for a share outstanding throughout each period are as follows:
<TABLE>
<CAPTION>
Six Months Ended Period Ended
September 30, 2000 March 31,
(Unaudited) 2000*
------------------ ------------
<S> <C> <C>
Net Asset Value, Beginning of Period..... $ 1.00 $ 1.00
-------- --------
Investment Operations:
Net investment income................... 0.03118 0.01688
Net realized loss on investments........ (0.00001) --
-------- --------
Total From Investment Operations........ 0.03117 0.01688
-------- --------
Distributions:
From net investment income.............. (0.03117) (0.01688)
-------- --------
Net Asset Value, End of Period........... $ 1.00 $ 1.00
======== ========
Total Return............................. 3.11 %(1) 1.70 %(1)
======== ========
Ratios and Supplemental Data:
Ratios to Average Net Assets.............
Net Expenses............................ 0.25 %(2) 0.25 %(2)
Gross Expenses (3)...................... 0.49 %(2) 0.49 %(2)
Net Investment Income .................. 6.21 %(2) 5.72 %(2)
Fee Waivers (Note 2).................... $0.00121 $0.00071
Net Assets at end of Period (000's
omitted)................................. $291,047 $272,997
</TABLE>
-----
* Institutional Shares of the Money Fund commenced operations December 16,
1999.
(1) Not annualized
(2) Annualized
(3) Expense ratios before waiver of fees and reimbursement of expenses, if
any, by the adviser and administrators.
See Notes to Financial Statements
<PAGE>
EXCELSIOR FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
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, as amended, as an open-end management investment company.
Excelsior Fund currently offers shares in eighteen managed investment
portfolios, each having its own investment objectives and policies. The
following is a summary of significant accounting policies for Money Fund, (the
"Portfolio"). Such policies are in conformity with generally accepted
accounting principles and are consistently followed by the 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 Portfolio offers two classes of shares: Shares and Institutional Shares.
The Financial Highlights of Shares as well as the financial statements for the
remaining portfolios of Excelsior Fund are presented separately.
With regard to the Portfolio, it is Excelsior Fund's policy, to the extent
possible, to maintain a continuous net asset value per share of $1.00. The
Portfolio has adopted certain investment portfolio, valuation and dividend
distribution policies to enable it to do so. However, there can be no
assurance that the net asset value per share of Portfolio will not vary.
(a) Portfolio Valuation:
Securities are valued at amortized cost, which has been determined by the
Portfolio's Board of Directors to represent the fair value of the
Portfolio's investments. Amortized cost valuation involves valuing an
instrument at its cost initially and, thereafter, assuming a constant
amortization to maturity of any discount or premium.
(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 earned from settlement date and
is recorded on the accrual basis.
(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 subcustodian or are maintained in the Federal Reserve/Treasury
book-entry system and must have, at all times, an aggregate market value
not less than the repurchase price (including accrued interest).
<PAGE>
If the value of the underlying security falls below the value of the
repurchase price, 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 Portfolio 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:
Net investment income dividends are declared daily and paid monthly. Net
realized capital gains, unless offset by any available capital loss
carryforward, are distributed to shareholders annually or more frequently
to maintain a net asset value of $1.00 per share.
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
deferral of losses on wash sales and net capital losses incurred after
October 31 and within the taxable year ("Post-October losses").
In order to avoid a Federal excise tax, the 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 the Portfolio continues 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.
At March 31, 2000, the Portfolio had approximate capital loss
carryforwards for Federal tax purposes available to offset future net
capital gains through the indicated expiration dates:
<TABLE>
<CAPTION>
Expiration Date March 31,
------------------------------------------------------------------------------------
2004 2005 Total
------ ------- -------
<C> <S> <C>
$7,000 $12,000 $19,000
</TABLE>
(f) Expense Allocation:
Expenses directly attributable to the Portfolio are charged to it and
expenses directly attributable to a particular class of shares are charged
to such class. Other expenses are allocated to the Portfolio based on
average daily net assets.
2. Investment Advisory Fee, Administration Fee and Related Party Transactions
United States Trust Company of New York ("U.S. Trust NY") and U.S. Trust
Company (collectively with U.S. Trust NY, "U.S. Trust") serve as the
investment adviser to the Portfolio. For the services provided pursuant to the
Investment Advisory Agreements, U.S. Trust is entitled to receive a fee,
computed daily and paid monthly, at the annual rate of .25% of the average
daily net assets of the Portfolio. U.S. Trust NY is a state-chartered bank and
trust company and a member bank of the Federal
<PAGE>
Reserve System. U.S. Trust Company is a Connecticut state bank and trust
company. Each is a wholly-owned subsidiary of U.S. Trust Corporation, a
registered bank holding company. U.S. Trust Corporation is a wholly-owned
subsidiary of The Charles Schwab Corporation ("Schwab").
U.S. Trust Company, Chase Global Funds Services Company, a corporate
affiliate of The Chase Manhattan Bank, and Federated Administrative Services
(collectively, the "Administrators") provide administrative services to
Excelsior Fund. For the services provided to the Portfolio, 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, Excelsior
Tax-Exempt Fund and Excelsior Institutional Trust (excluding the international
equity portfolios of Excelsior 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 six months
ended September 30, 2000, administration fees charged by U.S. Trust Company to
the Portfolio were $370,259.
From time to time, as they may deem appropriate in their sole discretion,
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 Portfolio for a portion of
other expenses. U.S. Trust has contractually agreed to waive investment
advisory fees and to reimburse other ordinary operating expenses through March
31, 2001, to the extent necessary to maintain an annual expense ratio of not
more than 0.50% for Shares of the Portfolio. With regard to Institutional
Shares, U.S. Trust has contractually agreed to waive fees and reimburse
expenses through March 31, 2001, to the extent necessary to maintain an annual
expense ratio of not more than .25%.
For the six months ended September 30, 2000, U.S. Trust waived investment
advisory fees totaling $308,729 for the Portfolio.
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 Portfolio. As a consideration for the
administrative services provided by each service organization to its
customers, the 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 organization's 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.
Administrative service fees paid by the Portfolio to affiliates of U.S.
Trust amounted to $1,838,471 for the six months ended September 30, 2000.
Through July 31, 2000, U.S. Trust and the Administrators voluntarily agreed to
waive investment advisory and administration fees payable by the Portfolio in
an amount equal to the administrative service fees payable (including fees
paid to affiliates of U.S. Trust) by the Portfolio. Effective August 1, 2000,
U.S. Trust has voluntarily agreed to continue waiving investment advisory and
administration fees payable by the Portfolio in an amount equal to the
administrative services fees expense paid to subsidiaries of U.S. Trust
Corporation. For the six months ended September 30, 2000, U.S. Trust and the
Administrators waived investment advisory and administration fees in an amount
equal to the administrative service fee of $1,838,481 for the Portfolio.
<PAGE>
Edgewood Services, Inc. ("the Distributor"), a wholly-owned subsidiary of
Federated Investors, Inc., serves as the distributor of Excelsior Fund. Shares
of the Portfolio are sold without a sales charge on a continuous basis by the
Distributor.
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. Each member of the Nominating Committee receives an
annual fee of $2,000 for services in connection with this committee.
3. Common Stock:
Excelsior Fund has authorized capital of 35 billion shares of Common Stock,
28.875 billion of which is currently classified to represent interests in one
of eighteen separate investment portfolios. Authorized capital currently
classified for the Portfolio is 2 billion shares.
Each share has a par value of $.001 and represents an equal proportionate
interest in the Portfolio with other shares of the Portfolio, and is entitled
to such dividends and distributions of taxable earnings on the assets
belonging to the Portfolio as are declared at the discretion of Excelsior
Fund's Board of Directors. Since the Portfolio has sold, reinvested and
redeemed shares only at a constant net asset value of $1.00 per share, the
number of shares represented by such sales, reinvestments and redemptions is
the same as the amounts shown below for such transactions.
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
09/30/00 03/31/00
--------------- ---------------
<S> <C> <C>
Sold:
Shares................................... $ 4,047,308,591 $ 6,092,031,150
Institutional Shares*.................... 861,598,987 934,355,336
Issued as reinvestment of dividends:
Shares................................... 6,811,666 5,196,004
Institutional Shares*.................... 1,752,842 514,849
Redeemed:
Shares................................... (4,010,633,333) (5,603,747,004)
Institutional Shares*.................... (845,303,963) (661,873,162)
--------------- ---------------
Net Increase............................... $ 61,534,790 $ 766,477,173
=============== ===============
</TABLE>
--------
* Institutional Shares of the Money Fund commenced operations December 16,
1999.
4. Line of Credit:
The Portfolio and other affiliated funds participate in a $250 million
unsecured line of credit provided by a syndication of banks under a line of
credit agreement. Borrowings may be made to temporarily finance the repurchase
of Portfolio shares. Interest is charged to each Portfolio, based on its
borrowings, at a rate equal to the Federal Funds Rate plus up to 2% per year.
In addition, a commitment fee, based on the average daily unused portion of
the line of credit, is allocated among the participating Portfolios at the end
of each quarter. For the six months ended September 30, 2000, the Portfolio
had no borrowings under the agreement.
