<PAGE>
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[LOGO FOR EXCELSIOR FUNDS]
Money Market
Portfolios
ANNUAL REPORT
March 31, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
LETTER TO SHAREHOLDERS.................................................... 1
STATEMENTS OF ASSETS AND LIABILITIES...................................... 2
STATEMENTS OF OPERATIONS.................................................. 3
STATEMENTS OF CHANGES IN NET ASSETS....................................... 4
FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS.................. 6
PORTFOLIOS OF INVESTMENTS
Treasury Money Fund...................................................... 8
Government Money Fund.................................................... 9
Money Fund............................................................... 10
Tax-Exempt Money Fund.................................................... 11
New York Tax-Exempt Money Fund........................................... 16
NOTES TO FINANCIAL STATEMENTS............................................. 19
INDEPENDENT AUDITORS' REPORT.............................................. 25
FEDERAL TAX INFORMATION................................................... 26
VOTING RESULTS OF SPECIAL MEETING OF SHAREHOLDERS......................... 26
</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 (From overseas, call 617-557-8280)
. Current Price and Yield Information 1-800-446-1012
. Internet Address: http://www.excelsiorfunds.com
This report must be preceded or accompanied by a current prospectus.
Prospectuses containing more complete information including charges and
expenses 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 distributed by
Edgewood Services, Inc.
You may write to Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. at
the following address:
Excelsior Funds
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, U.S. TRUST COMPANY, THEIR
PARENT AND AFFILIATES AND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. FUND
SHARES ARE NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. ALTHOUGH THE FUNDS
SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THE FUNDS.
<PAGE>
LETTER TO SHAREHOLDERS
--------------------------------------------------------------------------------
Dear Shareholder:
The fiscal year ended March 31, 2000 was exciting and rewarding both
domestically and abroad. In the U.S. and around the world, preparations for
"Y2K" and millennium celebrations consumed everyone's thoughts. The U.S.
economy was in the midst of an extraordinary expansion. Simultaneously, Europe
prepared for and converted to a new central currency, the Euro. Meanwhile, Asia
rebounded from fiscal turmoil in several key markets in early 1999.
All the major domestic equity indices exhibited strong performance. As the
fiscal year ended, the breadth of performance extended from the familiar large-
capitalization stocks to the mid-sized and small-cap stocks. Technology stocks
led all market sectors to new highs. This occurred, despite several interest
rate hikes by the Federal Reserve Board. The rising interest rate environment
and continued economic expansion seemed to temper only the performance of the
fixed-income markets.
Given the continued rate of expansion of the U.S. economy, we believe
interest rate increases are inevitable. This environment will make the coming
year a challenging one in the financial markets. We are confident that the
broad array of domestic and international equity as well as taxable and tax-
exempt fixed-income funds will help you meet your financial objectives.
On May 31, 2000, U.S. Trust Corporation, parent of the advisers to the
Excelsior Fund family ("U.S. Trust"), merged with a subsidiary of The Charles
Schwab Corporation. Earlier in the month, shareholders of the Excelsior Funds
approved new advisory contracts that will enable U.S. Trust to remain as the
investment adviser to the Excelsior Funds after the merger. We look forward to
participating in the benefits which the merger of such outstanding
organizations may bring to Excelsior Funds.
Sincerely,
/s/ Frederick S. Wonham
Frederick S. Wonham
Chairman of the Board and President
1
<PAGE>
Excelsior Funds, Inc.
Statements of Assets and Liabilities
March 31, 2000
<TABLE>
<CAPTION>
New York
Treasury Government Tax-Exempt Tax-Exempt
Money Money Money Money Money
Fund Fund Fund Fund Fund
------------ ------------ -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at cost--
see
accompanying portfolios. $528,171,933 $768,430,526 $1,750,721,293 $2,088,038,190 $419,214,674
============ ============ ============== ============== ============
Investments, at value
(Note 1)............... $528,171,933 $768,430,526 $1,750,721,293 $2,088,038,190 $419,214,674
Cash.................... -- -- -- -- 16
Interest receivable..... -- 8,496,220 2,507,907 9,964,145 2,593,058
Receivable for
investments sold....... -- -- -- 21,300,000 970,000
Prepaid expenses........ 12,854 24,067 104,466 38,972 9,364
------------ ------------ -------------- -------------- ------------
Total Assets............ 528,184,787 776,950,813 1,753,333,666 2,119,341,307 422,787,112
LIABILITIES:
Payable for dividends
declared............... 2,508,579 3,781,224 7,950,830 5,539,606 1,091,055
Payable for investments
purchased.............. -- -- -- 59,854,663 --
Investment advisory fees
payable (Note 2)....... 130,930 137,519 9,651 223,118 159,587
Administration fees
payable (Note 2)....... 77,661 159,696 352,602 271,370 53,253
Administrative service
fees payable (Note 2).. 17,171 49,622 562,475 235,055 11,736
Directors' fees payable
(Note 2)............... 2,921 5,116 10,584 13,557 2,993
Due to custodian bank... -- -- 4,067,261 1,960,941 --
Accrued expenses and
other payables......... 53,605 127,363 200,605 134,756 75,385
------------ ------------ -------------- -------------- ------------
Total Liabilities....... 2,790,867 4,260,540 13,154,008 68,233,066 1,394,009
------------ ------------ -------------- -------------- ------------
NET ASSETS............... $525,393,920 $772,690,273 $1,740,179,658 $2,051,108,241 $421,393,103
============ ============ ============== ============== ============
NET ASSETS consist of:
Undistributed
(distributions in
excess of) net
investment income...... $ 26,200 $ (75) $ 362 $ 1,873 $ --
Accumulated net realized
loss on investments.... (24,339) (88,497) (19,324) (92,753) (17,892)
Par value (Note 3)...... 525,395 772,816 1,740,381 2,051,450 421,412
Paid-in capital in
excess of par value.... 524,866,664 772,006,029 1,738,458,239 2,049,147,671 420,989,583
------------ ------------ -------------- -------------- ------------
Total Net Assets......... $525,393,920 $772,690,273 $1,740,179,658 $2,051,108,241 $421,393,103
============ ============ ============== ============== ============
Net Assets:
Shares.................. $525,393,920 $772,690,273 $1,467,182,804 $2,051,108,241 $421,393,103
Institutional Shares.... -- -- 272,996,854 -- --
Shares of Common Stock
Outstanding (Note 3):
Shares.................. 525,395,488 772,816,429 1,467,382,208 2,051,449,767 421,411,776
Institutional Shares.... -- -- 272,998,826 -- --
NET ASSET VALUE PER
SHARE:
Shares.................. $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Institutional Shares.... -- -- $1.00 -- --
== == ===== == ==
</TABLE>
See Notes to Financial Statements
2
<PAGE>
Excelsior Funds, Inc.
Statements of Operations
Year Ended March 31, 2000
<TABLE>
<CAPTION>
New York
Treasury Government Tax-Exempt Tax-Exempt
Money Money Money Money Money
Fund Fund Fund Fund Fund
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........ $24,049,334 $43,414,968 $66,548,195 $51,597,664 $11,096,555
----------- ----------- ----------- ----------- -----------
EXPENSES:
Investment advisory
fees (Note 2)......... 1,417,915 1,980,953 2,994,776 3,764,300 1,638,990
Administration fees
(Note 2).............. 719,231 1,206,118 1,822,501 2,291,147 498,766
Custodian fees......... 126,065 270,894 372,125 383,807 88,102
Administrative
servicing fees (Note
2).................... 100,084 273,807 1,182,749 1,009,060 39,686
Legal and audit fees... 47,799 82,236 120,576 136,455 36,940
Registration and filing
fees.................. 14,081 31,079 28,760 14,866 1,996
Directors' fees and
expenses (Note 2)..... 11,693 20,087 30,821 61,580 13,941
Shareholder reports.... 10,087 25,233 37,320 45,895 10,544
Shareholder servicing
agent fees............ 14,570 15,110 69,676 26,479 8,559
Miscellaneous expenses. 34,569 92,931 171,699 159,328 6,010
----------- ----------- ----------- ----------- -----------
Total Expenses......... 2,496,094 3,998,448 6,831,003 7,892,917 2,343,534
Fees waived and
reimbursed by
investment adviser and
administrators (Note
2).................... (100,084) (273,807) (1,362,718) (1,009,060) (576,907)
----------- ----------- ----------- ----------- -----------
Net Expenses........... 2,396,010 3,724,641 5,468,285 6,883,857 1,766,627
----------- ----------- ----------- ----------- -----------
NET INVESTMENT INCOME... 21,653,324 39,690,327 61,079,910 44,713,807 9,329,928
----------- ----------- ----------- ----------- -----------
REALIZED GAIN (LOSS) ON
INVESTMENTS (Note 1):
Net realized gain
(loss) on security
transactions.......... (24,339) (1,247) 34,486 68,882 (17,892)
----------- ----------- ----------- ----------- -----------
Net increase in net
assets resulting from
operations............. $21,628,985 $39,689,080 $61,114,396 $44,782,689 $ 9,312,036
=========== =========== =========== =========== ===========
</TABLE>
See Notes to Financial Statements
3
<PAGE>
Excelsior Funds, Inc.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
New York
Treasury Government Tax-Exempt Tax-Exempt
Money Money Money Money Money
Fund Fund Fund Fund Fund*
------------ ------------ -------------- -------------- ------------
<S> <C> <C> <C> <C> <C>
Year Ended March 31,
2000
Net investment income... $ 21,653,324 $ 39,690,327 $ 61,079,910 $ 44,713,807 $ 9,329,928
Net realized gain (loss)
on investments......... (24,339) (1,247) 34,486 68,882 (17,892)
------------ ------------ -------------- -------------- ------------
Net increase in net
assets resulting from
operations............. 21,628,985 39,689,080 61,114,396 44,782,689 9,312,036
Distributions to
shareholders:
From net investment
income
Shares................. (21,653,324) (39,690,302) (56,402,552) (44,703,007) (9,329,928)
Institutional Shares**. -- -- (4,676,979) -- --
Increase in net assets
from fund share
transactions (Note 3):
Shares................. 31,201,410 130,860,598 493,480,150 547,959,304 115,691,688
Institutional Shares**. -- -- 272,997,023 -- --
------------ ------------ -------------- -------------- ------------
Net increase in net
assets................. 31,177,071 130,859,376 766,512,038 548,038,986 115,673,796
NET ASSETS:
Beginning of year...... 494,216,849 641,830,897 973,667,620 1,503,069,255 305,719,307
------------ ------------ -------------- -------------- ------------
End of year (1)........ $525,393,920 $772,690,273 $1,740,179,658 $2,051,108,241 $421,393,103
============ ============ ============== ============== ============
(1) Including
undistributed
(distributions in
excess of) net
investment income.. $ 26,200 $ (75) $ 362 $ 1,873 $ --
============ ============ ============== ============== ============
Year Ended March 31,
1999
Net investment income... $ 23,557,435 $ 30,378,492 $ 35,599,290 $ 40,998,153 $ 4,164,534
Net realized gain (loss)
on investments......... 42,508 (18,567) 4,266 (25,479) --
------------ ------------ -------------- -------------- ------------
Net increase in net
assets resulting from
operations............. 23,599,943 30,359,925 35,603,556 40,972,674 4,164,534
Distributions to
shareholders:
From net investment
income................ (23,564,239) (30,378,492) (35,599,290) (40,998,164) (4,164,534)
In excess of net
investment income..... -- (100) (17) (8,928) --
Increase in net assets
from fund share
transactions (Note 3).. 24,540,692 41,732,622 314,791,213 106,572,629 305,719,307
------------ ------------ -------------- -------------- ------------
Net increase in net
assets................. 24,576,396 41,713,955 314,795,462 106,538,211 305,719,307
NET ASSETS:
Beginning of year...... 469,640,453 600,116,942 658,872,158 1,396,531,044 --
------------ ------------ -------------- -------------- ------------
End of year (2)........ $494,216,849 $641,830,897 $ 973,667,620 $1,503,069,255 $305,719,307
============ ============ ============== ============== ============
--------
(2) Including
undistributed
(distributions in
excess of) net
investment income.. $ 8,337 $ (100) $ (17) $ (8,927) $ --
============ ============ ============== ============== ============
--------
</TABLE>
* New York Tax-Exempt Money Fund commenced operations on August 3, 1998.
** Institutional Shares of the Money Fund commenced operations on December 16,
1999.
See Notes to Financial Statements
4
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
5
<PAGE>
Excelsior Funds, Inc.
Financial Highlights-Selected Per Share Data and Ratios
For a Fund share outstanding throughout each period.
<TABLE>
<CAPTION>
Net Asset Total Dividends Dividends
Value, Net Net Realized From From Net in Excess of
Beginning Investment Gain (Loss) Investment Investment Net Investment
of Period Income on Investments Operations Income Income
--------- ---------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
TREASURY MONEY FUND -- (2/13/91*)
Year Ended March 31,
1996................... $1.00 $0.05043 -- $0.05043 $(0.05043) --
1997................... 1.00 0.04676 -- 0.04676 (0.04676) --
1998................... 1.00 0.04853 -- 0.04853 (0.04853) --
1999................... 1.00 0.04543 $0.00002 0.04545 (0.04545) --
2000................... 1.00 0.04560 -- 0.04560 (0.04560) --
GOVERNMENT MONEY FUND -- (5/8/85*)
Year Ended March 31,
1996................... $1.00 $0.05296 -- $0.05296 $(0.05296) --
1997................... 1.00 0.04862 -- 0.04862 (0.04862) --
1998................... 1.00 0.05082 -- 0.05082 (0.05082) --
1999................... 1.00 0.04838 -- 0.04838 (0.04838) -- ++
2000................... 1.00 0.05004 -- 0.05004 (0.05004) --
MONEY FUND
Shares -- (5/3/85*):
Year Ended March 31,
1996................... $1.00 $0.05336 -- $0.05336 $(0.05336) --
1997................... 1.00 0.04888 -- 0.04888 (0.04888) --
1998................... 1.00 0.05139 -- 0.05139 (0.05139) --
1999................... 1.00 0.04901 -- 0.04901 (0.04901) -- ++
2000................... 1.00 0.05005 -- 0.05005 (0.05005) --
TAX-EXEMPT MONEY FUND -- (5/24/85*)
Year Ended March 31,
1996................... $1.00 $0.03362 -- $0.03362 $(0.03362) --
1997................... 1.00 0.03050 -- 0.03050 (0.03050) --
1998................... 1.00 0.03216 -- 0.03216 (0.03216) --
1999................... 1.00 0.02911 -- 0.02911 (0.02910) $(0.00001)
2000................... 1.00 0.02946 (0.00001) 0.02945 (0.02945) --
NEW YORK TAX-EXEMPT MONEY FUND -- (8/3/98*)
Period Ended March 31,
1999.................. $1.00 $0.01711 -- $0.01711 $(0.01711) --
Year Ended March 31,
2000.................. 1.00 0.02809 -- 0.02809 (0.02809) --
</TABLE>
* Commencement of operations
** Annualized
*** Not Annualized
+ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
++ Amount represents less than $0.00001 per share.
See Notes to Financial Statements
6
<PAGE>
<TABLE>
<CAPTION>
Ratio of Ratio of Ratio of
Net Gross Net
Net Asset Net Assets, Operating Operating Investment
Value, End Expenses Expenses Income Fee
Total End of Total of Period to Average to Average to Average Waivers
Distributions Period Return (000's) Net Assets Net Assets+ Net Assets (Note 2)
------------- --------- ------ ----------- ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.05043) $1.00 5.16% $ 258,169 0.55% 0.57% 5.03% $0.00021
(0.04676) 1.00 4.78% 349,087 0.52% 0.54% 4.68% 0.00026
(0.04853) 1.00 4.96% 469,640 0.52% 0.54% 4.86% 0.00021
(0.04545) 1.00 4.64% 494,217 0.52% 0.55% 4.55% 0.00029
(0.04560) 1.00 4.62% 525,394 0.51% 0.53% 4.58% 0.00021
$(0.05296) $1.00 5.43% $ 461,470 0.50% 0.53% 5.36% $0.00031
(0.04862) 1.00 4.97% 533,834 0.47% 0.51% 4.86% 0.00035
(0.05082) 1.00 5.20% 600,117 0.47% 0.50% 5.09% 0.00030
(0.04838) 1.00 4.95% 641,831 0.47% 0.50% 4.85% 0.00029
(0.05004) 1.00 5.08% 772,690 0.47% 0.50% 5.01% 0.00035
$(0.05336) $1.00 5.47% $ 394,285 0.50% 0.53% 5.40% $0.00037
(0.04888) 1.00 5.00% 498,066 0.47% 0.53% 4.89% 0.00052
(0.05139) 1.00 5.26% 658,872 0.48% 0.52% 5.14% 0.00046
(0.04901) 1.00 5.01% 973,668 0.48% 0.52% 4.85% 0.00049
(0.05005) 1.00 5.08% 1,467,183 0.47% 0.58% 5.05% 0.00104
$(0.03362) $1.00 3.41% $ 966,711 0.49% 0.53% 3.35% $0.00042
(0.03050) 1.00 3.09% 1,069,686 0.47% 0.52% 3.05% 0.00053
(0.03216) 1.00 3.26% 1,396,531 0.47% 0.53% 3.21% 0.00053
(0.02911) 1.00 2.95% 1,503,069 0.46% 0.52% 2.91% 0.00059
(0.02945) 1.00 2.96% 2,051,108 0.46% 0.52% 2.97% 0.00066
$(0.01711) $1.00 1.72%*** $ 305,719 0.47%** 0.79%** 2.24%** $0.00219
(0.02809) 1.00 2.82% 421,393 0.54% 0.71% 2.84% 0.00174
</TABLE>
See Notes to Financial Statements
7
<PAGE>
Excelsior Funds, Inc.
Portfolio of Investments March 31, 2000
Treasury Money Fund
<TABLE>
<CAPTION>
Principal Discount Value
Amount Rate (Note 1)
--------- -------- ------------
<C> <S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 97.50%
Federal Farm Credit Bank
$ 90,000,000 04/03/00................................. 6.05% $ 89,969,750
Federal Home Loan Bank
35,000,000 04/05/00................................. 5.87 34,977,172
U.S. Treasury Bills
354,000,000 04/27/00................................. 5.67 352,550,720
35,000,000 05/18/00................................. 5.50 34,748,681
------------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (Cost $512,246,323).......... 512,246,323
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ ------------
<C> <S> <C> <C>
OTHER SHORT-TERM INVESTMENTS -- 3.03%
15,925,610 Dreyfus Government Cash Management Fund
(Cost $15,925,610)......................... $ 15,925,610
------------
TOTAL INVESTMENTS (Cost $528,171,933*)................. 100.53% $528,171,933
OTHER ASSETS & LIABILITIES (NET)....................... (0.53) (2,778,013)
------ ------------
NET ASSETS............................................. 100.00% $525,393,920
====== ============
</TABLE>
--------
* Aggregate cost for Federal tax and book purposes.
See Notes to Financial Statements
8
<PAGE>
Excelsior Funds, Inc.
Portfolio of Investments March 31, 2000
Government Money Fund
<TABLE>
<CAPTION>
Principal Discount Value
Amount Rate (Note 1)
--------- -------- ------------
<C> <S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 97.48%
Federal Farm Credit Bank
$ 40,000,000 04/03/00................................. 6.05% $ 39,986,556
Federal Home Loan Bank
250,000,000 04/05/00................................. 5.87 249,836,945
49,900,000 01/26/01................................. 6.50 49,898,081
21,525,000 02/15/01................................. 6.58 21,500,307
Student Loan Marketing Association
150,000,000 04/20/00................................. 6.53# 150,000,000
100,000,000 05/18/00................................. 6.47# 100,000,000
42,000,000 08/03/00................................. 6.57# 41,992,886
100,000,000 08/10/00................................. 6.39# 99,989,263
------------
TOTAL U.S. GOVERNMENT & AGENCY
OBLIGATIONS (Cost $753,204,038) 753,204,038
------------
</TABLE>
<TABLE>
<CAPTION>
Value
Shares (Note 1)
------ ------------
<C> <S> <C> <C>
OTHER SHORT-TERM INVESTMENTS -- 1.97%
15,226,488 Dreyfus Government Cash Management Fund
(Cost $15,226,488).......................... $ 15,226,488
------------
TOTAL INVESTMENTS (Cost $768,430,526*).................. 99.45% $768,430,526
OTHER ASSETS & LIABILITIES (NET)........................ 0.55 4,259,747
------ ------------
NET ASSETS.............................................. 100.00% $772,690,273
====== ============
</TABLE>
--------
* Aggregate cost for Federal tax and book purposes.
# Variable or floating rate securities--rate disclosed is as of March 31, 2000.
See Notes to Financial Statements
9
<PAGE>
Excelsior Funds, Inc.
Portfolio of Investments March 31, 2000
Money Fund
<TABLE>
<CAPTION>
Principal Discount Value
Amount Rate (Note 1)
--------- -------- --------------
<C> <S> <C> <C>
U.S. GOVERNMENT & AGENCY OBLIGATIONS -- 87.32%
Federal Farm Credit Bank
$120,000,000 04/03/00............................... 6.05% $ 119,959,667
Federal Home Loan Bank
850,000,000 04/03/00............................... 6.05 849,714,305
350,000,000 04/05/00............................... 5.87 349,771,722
100,000,000 02/15/01............................... 6.55 100,000,000
Student Loan Marketing Association
100,000,000 08/10/00............................... 6.39# 99,989,263
--------------
TOTAL U.S. GOVERNMENT
& AGENCY OBLIGATIONS (Cost
$1,519,434,957) 1,519,434,957
--------------
COMMERCIAL PAPER -- 9.44%
23,000,000 Citibank Canada, 07/20/00.............. 6.15 23,000,000
75,000,000 Goldman Sachs Group, Inc., 04/04/00.... 5.85 74,963,438
44,264,000 Metlife Funding Inc., 04/03/00......... 5.85 44,249,614
22,000,000 Proctor & Gamble, 04/04/00............. 5.85 21,989,275
--------------
TOTAL COMMERCIAL PAPER
(Cost $164,202,327).................... 164,202,327
--------------
</TABLE>
<TABLE>
<CAPTION>
Principal Discount Value
Amount Rate (Note 1)
--------- -------- --------------
<C> <S> <C> <C>
CORPORATE BONDS -- 2.87%
$50,000,000 Morgan Stanley Dean Witter, Series C,
03/16/01 (Cost $50,000,000)............ 6.36% $ 50,000,000
--------------
<CAPTION>
Shares
------
<C> <S> <C> <C>
OTHER SHORT-TERM INVESTMENTS -- 0.98%
16,198,417 Dreyfus Government Cash Management
Fund................................... 16,198,417
885,592 Dreyfus Treasury Prime Cash Management
Fund................................... 885,592
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $17,084,009)..................... 17,084,009
--------------
TOTAL INVESTMENTS (Cost $1,750,721,293*)............ 100.61% $1,750,721,293
OTHER ASSETS & LIABILITIES (NET).................... (0.61) (10,541,635)
------ --------------
NET ASSETS.......................................... 100.00% $1,740,179,658
====== ==============
</TABLE>
--------
* Aggregate cost for Federal tax and book purposes.
# Variable or floating rate securities--rate disclosed is as of March 31, 2000.
See Notes to Financial Statements
10
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
Tax-Exempt Money Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- 51.15%
$33,862,000 Austin, Texas, Combined Utilities, Commercial
Paper,
3.800%, 04/12/2000............................... $ 33,862,000
15,000,000 Burke County, Georgia, Development Authority,
Commercial Paper,
3.900%, 05/17/2000............................... 15,000,000
16,000,000 Burke County, Georgia, Development Authority,
Commercial Paper,
4.100%, 09/12/2000............................... 16,000,000
11,500,000 Custer County, Idaho, Pollution Control Revenue
Bonds, Amoco Oil Co. Project, 4.150%,
10/01/2009+...................................... 11,500,000
11,000,000 Dallas, Texas, Dallas Area Rapid Transit
Authority, Commercial Paper,
3.650%, 04/10/2000............................... 11,000,000
20,000,000 Dallas, Texas, Dallas Area Rapid Transit
Authority, Commercial Paper,
3.950%, 05/10/2000............................... 20,000,000
10,000,000 Dallas, Texas, Dallas Area Rapid Transit
Authority, Commercial Paper,
3.900%, 05/16/2000............................... 10,000,000
19,800,000 Dallas, Texas, Dallas Area Rapid Transit
Authority, Commercial Paper,
3.900%, 05/16/2000............................... 19,800,000
11,000,000 Dallas, Texas, Dallas Area Rapid Transit
Authority, Commercial Paper, Series C,
4.000%, 08/08/2000............................... 11,000,000
17,200,000 Gulf Coast Waste Disposal Authority, Texas,
Pollution Control Revenue Bonds, Amoco Oil Co.
Project,
3.800%, 10/01/2017+.............................. 17,200,000
12,970,000 Gulf Coast Waste Disposal Authority, Texas,
Pollution Control Revenue Bonds, Exxon Corp.
Project,
3.950%, 06/01/2020+.............................. 12,970,000
5,000,000 Hockley County, Texas, Pollution Control Revenue
Bonds, Amoco Project, 4.200%, 03/01/2014+........ 5,000,000
7,940,000 Hockley County, Texas, Pollution Control Revenue
Bonds, Amoco Project, 3.850%, 11/01/2019+........ 7,940,000
10,000,000 Illinois Educational Facilities Authority
Commercial Paper,
3.600%, 04/10/2000............................... 10,000,000
14,500,000 Illinois Health Facilities Authority Revenue
Bonds, Series A,
3.700%, 10/01/2010+.............................. 14,500,000
15,000,000 Indianapolis, Indiana, General Obligation
Commercial Paper,
3.800%, 04/03/2000............................... 15,000,000
29,900,000 Indianapolis, Indiana, General Obligation
Commercial Paper, Series 5A, 3.900%, 05/15/2000.. 29,900,000
10,600,000 Indianapolis, Indiana, Gas & Utilities Systems
Commercial Paper,
4.000%, 08/08/2000............................... 10,600,000
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- (continued)
$12,700,000 Intermountain Power Agency, Utah,
3.550%, 04/05/2000................................ $ 12,700,000
20,000,000 Intermountain Power Agency, Utah,
3.650%, 04/10/2000................................ 20,000,000
25,000,000 Intermountain Power Agency, Utah,
4.050%, 08/10/2000................................ 25,000,000
12,100,000 Intermountain Power Agency, Utah,
4.100%, 08/07/2000................................ 12,100,000
5,000,000 Jackson County, Mississippi, Port Facilities
Revenue Bonds, Chevron USA, Inc. Project,
3.850%, 06/01/2023+............................... 5,000,000
7,232,000 Jacksonville, Florida, Electric Authority,
Commercial Paper,
3.800%, 04/12/2000................................ 7,232,000
20,000,000 Jacksonville, Florida, General Obligation
Commercial Paper,
3.900%, 07/20/2000................................ 20,000,000
8,740,000 Kansas City, Kansas, Pollution Control Revenue
Bonds, General Motors Corp. Project, 3.950%,
11/01/2007+....................................... 8,740,000
36,500,000 Kentucky Asset/Liability Fund, Commercial Paper,
3.550%, 04/14/2000................................ 36,500,000
7,600,000 Lincoln County, Wyoming, Pollution Control Revenue
Bonds, Amoco Project, 4.150%, 10/01/2012.......... 7,600,000
19,300,000 Lincoln County, Wyoming, Pollution Control Revenue
Bonds, Exxon Mobil Corp. Project, 3.950%,
08/01/2015+....................................... 19,300,000
9,000,000 Lincoln County, Wyoming, Pollution Control Revenue
Bonds, Exxon Mobil Corp. Project, Series B,
3.950%, 11/01/2014+............................... 9,000,000
20,300,000 Long Island Power Authority, New York, Electric
Systems Commercial Paper,
3.850%, 05/07/2000................................ 20,300,000
11,000,000 Michigan State, Building Authority Commercial
Paper,
3.650%, 04/27/2000................................ 11,000,000
17,000,000 Missouri State, Health & Educational Facilities
Revenue Bonds, Washington University, Series B,
3.950%, 03/01/2040+ .............................. 17,000,000
10,000,000 Mobile, Alabama, General Obligation Commercial
Paper,
4.000%, 07/26/2000................................ 10,000,000
15,000,000 Montgomery, Alabama, Electric Commercial Paper,
3.800%, 04/06/2000................................ 15,000,000
18,000,000 Montgomery, Alabama, Electric Commercial Paper,
3.850%, 04/06/2000................................ 18,000,000
</TABLE>
See Notes to Financial Statements
11
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
Tax-Exempt Money Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- (continued)
$15,000,000 Mount Vernon, Indiana, General Electric
Commercial Paper,
4.000%, 04/07/2000............................... $ 15,000,000
10,695,000 New York State, Power Authority & General Purpose
Revenue Bonds,
4.000%, 03/01/2016+.............................. 10,695,000
23,700,000 Nueces River, Texas, San Miguel Electric Corp.
Commercial Paper,
3.900%, 04/03/2000............................... 23,700,000
27,500,000 Nueces River, Texas, San Miguel Electric Corp.
Commercial Paper,
3.900%, 04/04/2000............................... 27,500,000
25,000,000 Nueces River, Texas, San Miguel Electric Corp.
Commercial Paper,
3.950%, 05/18/2000............................... 25,000,000
6,000,000 Ohio State University, General Receipts Revenue
Bonds, Series B,
3.750%, 12/01/2019+.............................. 6,000,000
25,000,000 Omaha, Nebraska, Public Power District,
Commercial Paper,
3.800%, 04/13/2000............................... 25,000,000
23,800,000 Omaha, Nebraska, Public Power District,
Commercial Paper,
4.000%, 08/08/2000............................... 23,800,000
10,000,000 Petersburg, Indiana, Pollution Control Revenue,
Indiana Power & Light Co., Series B, (AMBAC),
3.900%, 01/01/2023+.............................. 10,000,000
15,000,000 Platte River, Colorado, Commercial Paper, 3.900%,
05/04/2000....................................... 15,000,000
6,500,000 Pleasant Prairie, Wisconsin, Pollution Control
Revenue Bonds, Wisconsin Electric Power Co.,
Series A,
3.950%, 09/01/2030+.............................. 6,500,000
1,795,000 Purdue University, Indiana, University Revenue
Bonds, Student Fee, Series E,
3.800%, 07/01/2011+.............................. 1,795,000
4,110,000 Purdue University, Indiana, University Revenue
Bonds, Student Fee, Series H,
3.800%, 07/01/2017+.............................. 4,110,000
7,250,000 Salt Lake City, Utah, Pollution Control Revenue
Bonds, Service Station Holdings Project,
3.950%, 02/01/2008+.............................. 7,250,000
23,000,000 Salt River, Arizona, Electric & Gas Commercial
Paper,
3.800%, 04/05/2000............................... 23,000,000
42,610,000 Salt River, Arizona, Electric & Gas Commercial
Paper,
3.800%, 08/09/2000............................... 42,610,000
15,000,000 Salt River, Arizona, Electric & Gas Commercial
Paper,
4.000%, 08/08/2000............................... 15,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- (continued)
$12,000,000 San Antonio, Texas, Water Commercial Paper,
3.600%, 04/13/2000................................ $ 12,000,000
20,000,000 Shelby County, Tennessee, Commercial Paper,
3.650%, 04/10/2000................................ 20,000,000
16,600,000 Shelby County, Tennessee, Commercial Paper,
3.950%, 07/10/2000................................ 16,600,000
11,900,000 South Carolina State, Public Service Authority,
Commercial Paper,
3.800%, 04/05/2000................................ 11,900,000
30,000,000 South Carolina State, Public Service Authority,
Commercial Paper,
3.800%, 04/13/2000................................ 30,000,000
10,000,000 South Carolina State, Public Service Authority,
Commercial Paper,
3.900%, 05/15/2000................................ 10,000,000
10,600,000 South Carolina State, Public Service Authority,
Commercial Paper,
4.050%, 09/12/2000................................ 10,600,000
10,000,000 St. James Parish, Louisiana, Pollution Control
Revenue Bonds, Texaco, Inc. Project, Series B,
3.650%, 09/01/2012+............................... 10,000,000
13,000,000 Tennessee School Board Association, Commercial
Paper, Series A,
3.900%, 05/16/2000................................ 13,000,000
28,240,000 Texas State, General Obligation Bonds, Veterans
Housing Assistance Fund I,
3.800%, 12/01/2016+............................... 28,240,000
10,000,000 Texas State, Public Finance Authority, Commercial
Paper,
3.850%, 05/09/2000................................ 10,000,000
15,000,000 Texas State, Tax & Revenue Anticipation Notes,
Series A,
4.500%, 08/31/2000................................ 15,035,910
24,087,000 Wisconsin State, General Obligation Commercial
Paper, Series 97A,
3.900%, 05/12/2000................................ 24,087,000
10,000,000 York County, South Carolina, Pollution Control
Revenue Bonds, (CFC),
4.050%, 09/15/2014+............................... 10,000,000
--------------
1,049,166,910
--------------
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 50.65%
ABN AMRO N.V./MORGAN GUARANTY TRUST
10,700,000 Long Island Power Authority, New York, Electric
Systems Revenue Bonds, Series 6, 3.900%,
05/01/2033+....................................... 10,700,000
BANK OF AMERICA
22,000,000 Des Moines, Iowa, Hospital Facilities Revenue
Bonds, Iowa Methodist Medical Center Project,
3.900%, 08/01/2015+............................... 22,000,000
</TABLE>
See Notes to Financial Statements
12
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
Tax-Exempt Money Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT -- (con-
tinued)
$20,000,000 Michigan Technological University Revenue Bonds,
Series A, (AMBAC), 3.900%, 10/01/2018+............ $ 20,000,000
45,000,000 Richmond, Virginia, Revenue Anticipation Notes,
Series D,
3.750%, 06/30/2000+............................... 45,000,000
11,800,000 University of Delaware, Revenue Bonds, 3.900%,
11/01/2023+....................................... 11,800,000
BANK OF NEW YORK
20,000,000 Massachusetts Bay Transportation Authority, Series
B,
4.250%, 09/01/2000................................ 20,014,238
20,000,000 New York City, New York, Transitional Finance
Authority Revenue Bonds, Series A46, 3.200%,
06/30/2000+....................................... 20,000,000
BANK ONE CHICAGO N.A.
9,700,000 New York State Energy & Research Development
Authority, Pollution Control Revenue Bonds, New
York State Electric & Gas Co., Series D, 3.700%,
10/01/2029+....................................... 9,700,000
BANK ONE LOUISIANA
14,920,000 Louisiana State, Offshore Terminal Authority
Deepwater Port Revenue Bonds, Loop, Inc. Project,
3.850%, 09/01/2008+............................... 14,920,000
13,600,000 Louisiana State, Offshore Terminal Authority
Deepwater Port Revenue Bonds, Loop, Inc. Project,
3.950%, 10/01/2019+............................... 13,600,000
BANK ONE N.A.
10,000,000 Chicago, Illinois, Water Revenue Bonds, 3.850%,
11/01/2030+....................................... 10,000,000
BARCLAYS BANK, PLC
7,700,000 Bucks County, Pennsylvania, Industrial Development
Authority Revenue Bonds, Tru Realty--Toys R Us
Project, 3.800%, 12/01/2018+...................... 7,700,000
BAYERISCHE LANDESBANK
13,400,000 New York City, New York, Transitional Finance
Authority Revenue Bonds, Series C, 3.950%,
05/01/2028+....................................... 13,400,000
20,000,000 Oklahoma State, Water Board Revenue Bonds, 4.100%,
09/01/2032+....................................... 20,000,000
30,000,000 Oregon State, General Obligation Bonds, Series
73H,
3.900%, 12/01/2019+............................... 30,000,000
BAYERISCHE VEREINSBANK
10,400,000 Snohomish County, Washington, Public Utilities
District No. 001, Electric Revenue Bonds, (MBIA),
3.800%, 01/01/2025+............................... 10,400,000
21,000,000 Virginia Commonwealth Transportation Revenue
Bonds, Series A77,
4.050%, 05/15/2024+............................... 21,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT -- (con-
tinued)
BAYERISCHE VEREINSBANK AG/CREDIT LOCAL DE
FRANCE/CHASE MANHATTAN BANK
$28,338,000 Clark County, Nevada, Airport Improvement Revenue
Bonds, Series A, (MBIA), 3.800%, 07/01/2012+...... $ 28,338,000
COMMERZBANK A.G.
15,745,000 Dade County, Florida, Water & Sewer Revenue Bonds,
Series 94, (FGIC), 3.800%, 10/05/2022+............ 15,745,000
25,000,000 Massachusetts State, General Obligation Bonds,
Series A,
3.800%, 09/01/2016+............................... 25,000,000
CREDIT LOCAL DE FRANCE
17,600,000 District of Columbia Revenue Bonds, JFK Center for
the Performing Arts, (AMBAC), 3.850%, 10/01/2029+. 17,600,000
CS FIRST BOSTON
25,000,000 Ohio County, Kentucky, Pollution Control Revenue
Bonds, Big Rivers Electric Corp. Project, (AMBAC),
3.750%, 06/01/2013+............................... 25,000,000
10,000,000 Ohio County, Kentucky, Pollution Control Revenue
Bonds, Big Rivers Electric Corp. Project, (AMBAC),
3.900%, 10/01/2015+............................... 10,000,000
18,350,000 Piedmont Municipal Power Agency, South Carolina,
Electric Power & Light Revenue Bonds, Series A,
(MBIA), 3.900%, 01/01/2024+....................... 18,350,000
20,000,000 Piedmont Municipal Power Agency, South Carolina,
Electric Power & Light Revenue Bonds, Series B,
(MBIA), 3.900%, 01/01/2019+....................... 20,000,000
9,430,000 Washington State, Public Power Supply System
Project No. 2 Revenue Bonds, Series 2A-2, (MBIA),
3.800%, 07/01/2012+............................... 9,430,000
FIRST NATIONAL BANK
15,600,000 Illinois Health Facilities Authority Revenue
Bonds, Healthcorp. Affiliates, Series B, 3.900%,
11/01/2015+....................................... 15,600,000
31,900,000 Illinois Health Facilities Authority Revenue
Bonds, St. Lukes Medical Center, Series B, (MBIA),
3.850%, 11/15/2023+............................... 31,900,000
FIRST UNION NATIONAL BANK
11,000,000 Capital Region Airport Commission, Virginia,
Passenger Facilities Charge Revenue Bonds, Series
B,
3.750%, 06/01/2029+............................... 11,000,000
</TABLE>
See Notes to Financial Statements
13
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
Tax-Exempt Money Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT --
(continued)
$21,100,000 Wake County, North Carolina, Industrial Facilities
& Pollution Control Financing Authority Revenue
Bonds, Carolina Power & Light Co., Series B,
3.850%, 09/01/2015+............................... $ 21,100,000
16,600,000 Wake County, North Carolina, Industrial Facilities
& Pollution Control Financing Authority Revenue
Bonds, Carolina Power & Light Co., Series C,
3.850%, 10/01/2015+............................... 16,600,000
LANDESBANK HESSEN-THURINGEN
21,400,000 Intermountain Power Agency, Utah, Power Supply
Revenue Bonds, Series F, (AMBAC), 4.075%,
07/01/2015+....................................... 21,400,000
10,005,000 New York City, New York General Obligation Bonds,
Subseries A-6, 3.750%, 08/01/2019+................ 10,005,000
39,600,000 Washington State, General Obligation Bonds, Series
VR-96B,
3.800%, 06/01/2020+............................... 39,600,000
LASALLE NATIONAL BANK
7,100,000 Flint, Michigan, Hospital Building Authority
Revenue Bonds, Hurley Medical Center, Series B,
3.900%, 07/01/2015+............................... 7,100,000
14,400,000 Illinois Health Facilities Authority Revenue
Bonds, Ingalls Memorial Hospital, Series B,
3.900%, 01/01/2016+............................... 14,400,000
13,565,000 Illinois Health Facilities Authority Revenue
Bonds, Ingalls Memorial Hospital, Series C,
3.900%, 01/01/2016+............................... 13,565,000
44,800,000 Illinois Health Facilities Authority Revenue
Bonds, Resurrection Health, Series B, (FSA),
3.950%, 05/15/2029+............................... 44,800,000
MORGAN GUARANTY TRUST
14,800,000 Detroit, Michigan, Sewage Disposal Revenue Bonds,
Series A, (MBIA), 3.900%, 07/01/2023+............. 14,800,000
6,900,000 Kenton County, Kentucky, Industrial Building
Revenue Bonds, Redken Labs, Inc. Project, 3.900%,
12/01/2014+....................................... 6,900,000
12,450,000 Missouri State Health & Educational Facilities
Authority Revenue Bonds, Washington University
Project,
3.900%, 09/01/2009+............................... 12,450,000
15,500,000 New York City, New York, General Obligation Bonds,
Series F6,
3.800%, 02/15/2018+............................... 15,500,000
10,215,000 New York City, New York, Transitional Finance
Authority Revenue Bonds, Subseries B-1, 3.950%,
11/01/2027+....................................... 10,215,000
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT --
(continued)
MORGAN STANLEY DEAN WITTER
$11,375,000 Charlotte, North Carolina, General Obligation
Bonds, Series 69,
3.820%, 02/01/2019+............................... $ 11,375,000
8,000,000 Georgia State, General Obligation Bonds, Series
213,
3.960%, 03/01/2009+............................... 8,000,000
10,750,000 Wisconsin State Transportation Revenue Bonds,
Series 279,
3.870%, 07/01/2009+............................... 10,750,000
NATIONSBANK OF NORTH CAROLINA
23,600,000 Mecklenburg County, North Carolina, General
Obligation Bonds, Series C, 3.650%, 03/01/2014+... 23,600,000
13,000,000 Mecklenburg County, North Carolina, General
Obligation Bonds, Series C, 3.900%, 03/01/2015+... 13,000,000
NORDDEUTSCHE LANDESBANK
14,950,000 Brazos, Texas, Harbor Industrial Development
Revenue Bonds, Badische Corp., 3.900%,
12/01/2013+....................................... 14,950,000
NORTHERN TRUST
20,300,000 Illinois Health Facilities Authority Revenue
Bonds, Healthcorp. Affiliates, Series A, 3.850%,
11/01/2015+....................................... 20,300,000
9,015,000 Purdue University, Indiana, University Revenue
Bonds, Student Fee, Series O, 3.800%, 07/01/2019+. 9,015,000
RABOBANK NEDERLANDER
15,225,000 Mississippi Hospital Equipment & Facilities
Authority Revenue Bonds, Mississippi Baptist
Medical Center, 3.900%, 07/01/2012+............... 15,225,000
SCOTIABANK
11,000,000 Indiana State Development Finance Authority
Commercial Paper, USX Corporate Project,
4.050%, 12/01/2022................................ 11,000,000
TORONTO DOMINION BANK, LTD.
2,550,000 New York State Pollution Control Revenue Bonds,
Niagara Mohawk Power Corp., Class B,
3.900%, 12/01/2025+............................... 2,550,000
25,000,000 Utah State, General Obligation Bonds, Series A,
3.850%, 07/01/2016+............................... 25,000,000
22,400,000 Utah State, General Obligation Bonds, Series C,
3.650%, 07/01/2016+............................... 22,400,000
UBS AG
10,000,000 Missouri State Environmental Improvement & Energy
Resources Authority, Pollution Control Revenue
Bonds, Union Electric Co. Project, Series A,
3.950%, 06/01/2015+............................... 10,000,000
</TABLE>
See Notes to Financial Statements
14
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
Tax-Exempt Money Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- --------------
<C> <S> <C> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES --
BACKED BY LETTERS OF CREDIT -- (continued)
WACHOVIA BANK
$27,000,000 Baltimore,
Maryland, Port
Facilities
Revenue Bonds,
Occidental
Petroleum,
3.900%,
10/14/2011+....... $ 27,000,000
WELLS FARGO BANK,
N.A.
6,900,000 Garden City,
Kansas,
Industrial
Development
Revenue Bonds,
Inland Container
Corp. Project,
4.000%,
01/01/2008+....... 6,900,000
WESTDEUTSCHE
LANDESBANK
1,109,000 Clark County,
Nevada, Airport
Improvement
Revenue Bonds,
Series A1,
3.650%,
07/01/2025+....... 1,109,000
WESTDEUTSCHE
LANDESBANK/CREDIT
LOCAL DE
FRANCE/LANDESBANK
HESSEN-THURINGEN
30,000,000 Suffolk County,
New York, Tax
Anticipation
Notes, Series I,
4.500%,
08/10/2000........ 30,065,042
--------------
1,038,871,280
--------------
TOTAL INVESTMENTS
(Cost
$2,088,038,190*)... 101.80% $2,088,038,190
OTHER ASSETS & LIA- (1.80)
BILITIES (NET)..... (36,929,949)
---------- --------------
NET ASSETS......... 100.00% $2,051,108,241
========== ==============
</TABLE>
--------
* Aggregate cost for Federal tax and book purposes.
+ Variable rate demand bonds and notes are payable upon not more than seven
business days notice.
AMBAC--American Municipal Bond Assurance Corp.
FGIC --Financial Guaranty Insurance Corp.
FSA --Financial Security Assurance
MBIA --Municipal Bond Insurance Assoc.
Note:
These municipal securities meet the three highest ratings assigned by Moody's
Investors Services, Inc. or Standard and Poor's Corporation or, where not
rated, are determined by the Investment Adviser, under the supervision of the
Board of Directors, to be of comparable quality at the time of purchase to
rated instruments that may be acquired by the Fund.
At March 31, 2000, approximately, 51% of the net assets are invested in
municipal securities that have letter of credit enhancement features or
escrows in U.S. Government securities backing them, which the Fund relies on.
Without such features, the securities may or may not meet the quality
standards of securities purchased by the Fund.
At March 31, 2000, approximately, 15% of the net assets are invested in Texas
municipal securities. Economic changes affecting the state and certain of its
public bodies and municipalities may affect the ability of issuers to pay the
required principal and interest payments of the municipal securities.
See Notes to Financial Statements
15
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
New York Tax-Exempt Money Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT --
67.06%
ABN AMRO BANK N.V./MORGAN GUARANTY TRUST
$ 4,500,000 Long Island Power Authority, New York Electric
Systems Revenue Bonds, Series 6, 3.900%,
05/01/2033+........................................ $ 4,500,000
BANK OF NEW YORK
2,925,000 New York City, New York, Health & Hospital
Corporate Revenue Bonds Health Systems, Series E,
3.650%, 02/15/2026+................................ 2,925,000
4,700,000 New York City, New York, Industrial Development
Agency, Civic Facility Revenue Bonds, Children's
Oncology Society, 3.600%, 05/01/2021+.............. 4,700,000
20,000,000 New York City, New York, Transitional Finance
Authority Revenue, Series A46, 3.200%, 06/30/2000+. 20,000,000
BANK OF NOVA SCOTIA
6,700,000 New York State Local Government Assistance
Corporation, Series G, 3.550%, 04/01/2025+......... 6,700,000
11,000,000 Suffolk County, New York, Water Authority Bond
Anticipation Notes, 3.600%, 11/01/2002+............ 11,000,000
BANKERS TRUST COMPANY
1,500,000 Dutchess County, New York, Industrial Development
Agency Revenue Bonds, Toys R Us--NYTEX, Inc.
Project, 4.025%, 11/01/2019........................ 1,500,000
BAYERISCHE LANDESBANK
3,900,000 New York City, New York, General Obligation Bonds,
Series F5
3.650%, 02/15/2016+................................ 3,900,000
BAYERISCHE LANDESBANK/
WESTDEUTSCHE LANDESBANK
1,900,000 Long Island Power Authority, New York, Electric
Systems Revenue Bonds, Series 1, 3.800%,
05/01/2033+........................................ 1,900,000
4,000,000 Long Island Power Authority, New York, Electric
Systems Revenue Bonds, Series 2, 3.650%,
05/01/2033+........................................ 4,000,000
12,475,000 New York State Local Government Assistance Corp.
Revenue Bonds, Series A, 3.600%, 04/01/2022+....... 12,475,000
BAYERISCHE VEREINSBANK AG
15,000,000 New York City, New York, General Obligation Bonds,
Series A50,
3.850%, 04/14/2000................................. 15,000,000
3,500,000 New York State Dormitory Authority Revenue Bonds,
Series A74, (FGIC), 3.800%, 05/15/2024+............ 3,500,000
6,000,000 New York State Dormitory Authority Revenue Bonds,
Series A55, (MBIA), 3.800%, 07/01/2028+............ 6,000,000
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT --
(continued)
CHASE MANHATTAN BANK
$ 1,200,000 New York City, New York, City Treasures Cultural
Reserve, Jewish Museum of National History Revenue
Bonds, 3.600%, 12/01/2021+......................... $ 1,200,000
15,900,000 New York City, New York, General Obligation Bonds,
Subseries B9,
3.800%, 08/15/2023+................................ 15,900,000
1,000,000 New York State Dormitory Authority Revenue,
Memorial Sloan-Kettering, 3.750%, 07/01/2019+...... 1,000,000
3,500,000 New York State Housing Finance Agency, Mt. Sinai
Medical School, Revenue Bonds, Series A, 3.600%,
11/01/2014+........................................ 3,500,000
COMMERZBANK A.G.
7,300,000 New York City, New York, General Obligation Bonds,
Subseries J2,
3.800%, 02/15/2016+................................ 7,300,000
7,835,000 New York City, New York, Health & Hospital
Corporate Revenue Health Systems, Series F, 3.650%,
02/15/2026+........................................ 7,835,000
CREDIT LOCAL DE FRANCE
6,800,000 Niagara Falls, New York, Bridge Common Toll Revenue
Bonds, Series A, (FGIC), 3.550%, 10/01/2019+....... 6,800,000
4,700,000 Yonkers, New York, Industrial Development Agency,
Civic Facility Revenue Bonds, Consumers Union
Facility, 3.750%, 07/01/2019+...................... 4,700,000
CREDIT SUISSE
9,100,000 New York City, New York, City Treasures Cultural
Reserve, American Museum of Natural History Revenue
Bonds, Series B, (MBIA), 3.400%, 04/01/2021+....... 9,100,000
CS FIRST BOSTON
28,000,000 Long Island Power Authority, New York Electric
Systems Revenue Bonds, Subseries 7B, (MBIA),
3.650%, 04/01/2025+................................ 28,000,000
FIRST UNION NATIONAL BANK
17,000,000 New York State Dormitory Authority, New York Public
Library, Revenue Bonds, Series A, (MBIA),
3.650%, 07/01/2028+................................ 17,000,000
LANDESBANK HESSEN-THURINGEN
7,500,000 Buffalo, New York, General Obligation Revenue
Anticipation Notes, Series A, 4.650%, 07/25/2000... 7,541,775
MANUFACTURERS & TRADERS
4,400,000 New York City, New York, Industrial Development
Agency, Civic Facilities Revenue Bonds, Jewish
Community Center, 3.800%, 03/01/2030+.............. 4,400,000
</TABLE>
See Notes to Financial Statements
16
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
New York Tax-Exempt Money Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- BACKED BY LETTERS OF CREDIT --
(continued)
MORGAN GUARANTY TRUST
$ 1,000,000 Nassau County, New York, Industrial Development
Agency, Civic Facilities Revenue Bonds, Winthrop
University Hospital Association Project,
3.850%, 03/01/2028+................................ $ 1,000,000
5,000,000 New York City, New York, General Obligation Bonds,
Series F6,
3.800%, 02/15/2018+................................ 5,000,000
1,500,000 New York City, New York, General Obligation Bonds,
Subseries J3,
3.650%, 02/15/2016+................................ 1,500,000
11,000,000 New York State Dormitory Authority Revenue,
Memorial Sloan-Kettering, 3.750%, 07/01/2026+...... 11,000,000
1,700,000 New York State Energy Research & Development
Authority, Pollution Control Revenue Bonds, New
York State Electric & Gas, Series C,
3.700%, 06/01/2029+................................ 1,700,000
SOCIETE GENERALE
3,700,000 New York State Energy Research & Development
Authority, Pollution Control Revenue Bonds, Orange
& Rockland Utilities, Series A, (AMBAC), 3.550%,
08/01/2015+........................................ 3,700,000
13,800,000 New York State Energy Research & Development
Authority, Pollution Control Revenue Bonds, Orange
& Rockland Utilities, Series A, (FGIC), 3.400%,
10/01/2014+........................................ 13,800,000
TORONTO DOMINION BANK
10,550,000 New York City, New York, General Obligation Bonds,
Series F2,
3.650%, 02/15/2012+................................ 10,550,000
WESTDEUTSCHE LANDESBANK
1,945,000 New York City, New York, City Treasures Cultural
Reserve, Carnegie Hall,
3.650%, 12/01/2010+................................ 1,945,000
5,000,000 Triborough Bridge & Tunnel Authority Revenue Bonds,
Series C, (AMBAC), 3.700%, 01/01/2013+............. 5,000,000
WESTDEUTSCHE LANDESBANK/CREDIT LOCAL DE
FRANCE/LANDESBANK HESSEN-THURINGEN
15,000,000 Suffolk County, New York, Tax Anticipation Notes,
Series I,
4.500%, 08/10/2000................................. 15,027,685
------------
282,599,460
------------
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- 32.31%
$ 5,400,000 Long Island Power Authority, New York, Electric
Systems, Commercial Paper, 3.750%, 04/07/2000....... $ 5,400,000
10,000,000 Metropolitan Transportation Authority of New York,
Commercial Paper,
3.900%, 08/08/2000.................................. 10,000,000
8,000,000 Metropolitan Transportation Authority of New York,
Commercial Paper, Series B, 3.600%, 04/10/2000...... 8,000,000
6,000,000 New York City, New York, City Municipal Water
Financing Authority, Water & Sewer Systems
Commercial Paper, 3.600%, 04/27/2000................ 6,000,000
5,000,000 New York City, New York, City Municipal Water
Financing Authority, Water & Sewer Systems
Commercial Paper, 3.850%, 04/27/2000................ 5,000,000
7,000,000 New York City, New York, City Municipal Water
Financing Authority, Water & Sewer Systems
Commercial Paper, Series 5A, 3.750%, 04/05/2000..... 7,000,000
6,000,000 New York City, New York, General Obligation
Commercial Paper, 3.650%, 05/16/2000................ 6,000,000
4,000,000 New York City, New York, General Obligation
Commercial Paper, Series H3, 3.600%, 04/10/2000..... 4,000,000
4,500,000 New York City, New York, Housing Development
Corporation Multifamily Rent Housing Revenue Bonds,
Parkgate Development, Series A,
3.700%, 10/15/2028+................................. 4,500,000
6,325,000 New York State Dormitory Authority, Columbia
University Commercial Paper, 3.850%, 07/12/2000..... 6,325,000
4,500,000 New York State Dormitory Authority, Commercial
Paper,
3.550%, 04/07/2000.................................. 4,500,000
10,900,000 New York State Dormitory Authority, Rockefeller
University Revenue Bonds, Series A, 3.700%,
07/01/2014+......................................... 10,900,000
11,300,000 New York State Environmental Facilities, Commercial
Paper
3.700%, 04/12/2000.................................. 11,300,000
10,000,000 New York State Power Authority, General Purpose
Revenue Bonds,
3.600%, 04/03/2000.................................. 10,000,000
10,000,000 New York State Power Authority, General Purpose
Revenue Bonds,
4.000%, 09/01/2000.................................. 10,000,000
10,000,000 New York State Power Authority, General Purpose
Revenue Bonds, Series 2, 3.900%, 06/07/2000......... 10,000,000
5,500,000 New York State Power Authority, General Purpose
Revenue Bonds, Series 4, 3.850%, 05/15/2000......... 5,500,000
</TABLE>
See Notes to Financial Statements
17
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments March 31, 2000
New York Tax-Exempt Money Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
--------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT SECURITIES -- (continued)
$ 1,500,000 Onondaga County, New York, General Obligation
Bonds, 4.250%, 05/01/2000.......................... $ 1,501,965
9,000,000 Puerto Rico Commonwealth, Tax & Revenue
Anticipation Notes, Series A1, 4.500%, 07/30/2000.. 9,021,816
1,200,000 Westchester County, New York, General Obligation
Bonds, Series B,
4.500%, 11/15/2000................................. 1,204,833
------------
136,153,614
------------
<CAPTION>
Shares
------
<C> <S> <C>
OTHER INVESTMENTS -- 0.11%
461,600 Provident Institutional New York Tax-Exempt Money
Fund............................................... 461,600
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $419,214,674*)..................................... 99.48% $419,214,674
OTHER ASSETS & LIABILITIES (NET)......................... 0.52 2,178,429
------ ------------
NET ASSETS............................................... 100.00% $421,393,103
====== ============
</TABLE>
--------
* Aggregate cost for Federal tax and book purposes.
+ Variable rate demand bonds and notes are payable upon not more than seven
business days notice.
AMBAC--American Municipal Bond Assurance Corp.
FGIC --Financial Guaranty Insurance Corp.
MBIA --Municipal Bond Insurance Assoc.
Note:
These municipal securities meet the three highest ratings assigned by Moody's
Investors Services, Inc. or Standard and Poor's Corporation or, where not
rated, are determined by the Investment Adviser, under the supervision of the
Board of Directors, to be of comparable quality at the time of purchase to
rated instruments that may be acquired by the Fund.
At March 31, 2000, approximately, 67% of the net assets are invested in
municipal securities that have letter of credit enhancement features or
escrows in U.S. Government securities backing them, which the Fund relies on.
Without such features, the securities may or may not meet the quality
standards of securities purchased by the Fund.
At March 31, 2000, approximately, 97% of the net assets are invested in New
York municipal securities. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers to pay
the required principal and interest payments of the municipal securities.
See Notes to Financial Statements
18
<PAGE>
EXCELSIOR FUNDS, INC.
EXCELSIOR TAX-EXEMPT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies
Excelsior Funds, Inc. ("Excelsior Fund") and Excelsior Tax-Exempt Funds,
Inc. ("Excelsior Tax-Exempt Fund" and collectively with Excelsior Fund, the
"Funds") were incorporated under the laws of the State of Maryland on August
2, 1984 and August 8, 1984, respectively, and are registered under the
Investment Company Act of 1940, as amended, as open-end management investment
companies.
Excelsior Fund and Excelsior Tax-Exempt Fund currently offer shares in
eighteen and seven managed investment portfolios, respectively, each having
its own investment objectives and policies. The following is a summary of
significant accounting policies for Treasury Money Fund, Government Money Fund
and Money Fund, portfolios of Excelsior Fund, and Tax-Exempt Money Fund and
New York Tax-Exempt Money Fund, portfolios of Excelsior Tax-Exempt Fund (the
"Portfolios"). Such policies are in conformity with generally accepted
accounting principles and are consistently followed by the Funds 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.
With regard to the Money Fund and the Government Money Fund, Excelsior Fund
offers two classes of shares: Shares and Institutional Shares. At March 31,
2000, Government Money Fund has not issued Institutional Shares. The Financial
Highlights of the Institutional Shares as well as the financial statements for
the remaining portfolios of the Funds are presented separately.
With regard to the Portfolios, it is the Funds' policy, to the extent
possible, to maintain a continuous net asset value per share of $1.00. Each of
the Portfolios 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 the Portfolios will not vary.
(a) Portfolio Valuation:
Securities are valued at amortized cost, which has been determined by
each Fund's Board of Directors to represent the fair value of the
Portfolios' 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).
19
<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 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:
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, 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 the Funds 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.
At March 31, 2000, the following Portfolios 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,
-----------------------------------------------------------
2001 2002 2003 2004 2005 2006 2007 2008 Total
------- ---- ------- ------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Treasury Money Fund..... -- -- -- -- -- -- -- $22,000 $22,000
Government Money Fund... $10,000 -- $48,000 $1,000 -- $ 6,000 $ 3,000 19,000 87,000
Money Fund.............. -- -- -- 7,000 $12,000 -- -- -- 19,000
Tax-Exempt Money Fund... -- -- -- -- 7,000 35,000 27,000 -- 69,000
New York Tax-Exempt
Money Fund............. -- -- -- -- -- -- -- 7,000 7,000
</TABLE>
To the extent that such carryforwards are utilized, no capital gain
distributions will be made. During the year ended March 31, 2000, Money
Fund and Tax-Exempt Money Fund utilized capital loss carryforwards for
Federal tax purposes totaling approximately $35,000 and $93,000,
respectively.
Post-October losses are deemed to arise on the first business day of a
Portfolio's next taxable year. Treasury Money Fund, Government Money Fund,
Tax-Exempt Money Fund and New York Tax-Exempt Money Fund incurred, and
elected to defer, net capital losses of approximately $2,000, $1,000,
$23,000 and $10,000, respectively, for the year ended March 31, 2000.
20
<PAGE>
(f) Expense Allocation:
Expenses directly attributable to a Portfolio are charged to that
Portfolio and expenses directly attributable to a particular class of
shares are charged to such class. Other expenses are allocated to the
respective Portfolios 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 Portfolios. 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 rates of .25% of the average
daily net assets of the Government Money Fund, the Money Fund and the Tax-
Exempt Money Fund, .30% of the average daily net assets of the Treasury Money
Fund, and .50% of the average daily net assets of the New York Tax-Exempt
Money Fund. U.S. Trust NY is a state-chartered bank and trust company and a
member bank of the Federal 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.
On January 12, 2000, The Charles Schwab Corporation ("Schwab") and U.S.
Trust Corporation entered into a definitive agreement to merge (the "Merger").
After the Merger, U.S. Trust Corporation will be a wholly-owned subsidiary of
Schwab. The Merger is subject to the approval of U.S. Trust Corporation
shareholders. The Merger is expected to take place on or about May 31, 2000,
but could occur later.
As a consequence of the Merger and in order to provide continuity of
investment advisory services, the Board of Directors of Excelsior Fund
proposed for the approval of its shareholders a new advisory agreement with
U.S. Trust. The new proposed advisory agreement was submitted to and approved
by a vote of Excelsior Fund shareholders--see "Voting Results of Special
Meeting of Shareholders". The new advisory agreement will become effective on
the date of the Merger.
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 the
Funds. 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, 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 year ended
March 31, 2000, administration fees charged by U.S. Trust Company were as
follows:
<TABLE>
<S> <C>
Treasury Money Fund.............................................. $206,125
Government Money Fund............................................ 343,912
Money Fund....................................................... 590,499
Tax-Exempt Money Fund............................................ 659,131
New York Tax-Exempt Money Fund................................... 143,945
</TABLE>
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 Portfolios for a portion
of other expenses. For the period from April 1, 1999 through November 18,
1999, U.S. Trust voluntarily waived fees and reimbursed expenses to the extent
necessaryfor New York Tax-Exempt Money Fund to maintain an annual expense
ratio of not more than .60%. Beginning November 19, 1999, U.S. Trust
contractually agreed to waive investment advisory fees and to reimburse other
ordinary operating expenses through March 31, 2000 to the extent necessary to
keep total
21
<PAGE>
operating expenses from exceeding certain annual percentages of each
Portfolio's average daily net assets specified below. U.S. Trust has extended
this contractual agreement through the fiscal year ended March 31, 2001.
<TABLE>
<S> <C>
Treasury Money Fund.................................................. 0.55%
Government Money Fund................................................ 0.50%
Money Fund--Shares................................................... 0.50%
Tax-Exempt Money Fund................................................ 0.50%
New York Tax-Exempt Money Fund....................................... 0.60%
</TABLE>
With regard to the Institutional Shares of Money Fund, for the period
December 16, 1999 (commencment of operations) through March 31, 2000, U.S.
Trust contractually agreed to waive fees and reimburse expenses to the extent
necessary to maintain an annual expense ratio of not more than .25%. U.S.
Trust has extended this contractual agreement through the fiscal year ended
March 31, 2001.
For the year ended March 31, 2000, U.S. Trust waived investment advisory
fees totaling $179,969 and $537,221 for Money Fund and New York Tax-Exempt
Money Fund, respectively.
The Funds have 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 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 to affiliates of U.S. Trust amounted to
$2,603,893 for the year ended March 31, 2000. Through the year ended March 31,
2000, U.S. Trust and the Administrators voluntarily agreed to waive investment
advisory and administration fees payable by each Portfolio in an amount equal
to the administrative service fees expense (including fees paid to affiliates
of U.S. Trust) by such Portfolio. They will continue to do so through July 31,
2000. Effective August 1, 2000, U.S. Trust has voluntarily agreed to continue
waiving investment advisor and administration fees payable by each portfolio
in an amount equal to the administrative services fees expense paid to
subsidiaries of U.S. Trust Corporation. For the year ended March 31, 2000,
U.S. Trust and the Administrators waived investment advisory and
administration fees in amounts equal to the administrative service fees for
the Portfolios as set forth below:
<TABLE>
<CAPTION>
U.S. Trust Administrators
---------- --------------
<S> <C> <C>
Treasury Money Fund.............................. $ 100,084 --
Government Money Fund............................ 273,569 $238
Money Fund....................................... 1,182,749 --
Tax-Exempt Money Fund............................ 1,009,060 --
New York Tax-Exempt Money Fund................... 39,686 --
</TABLE>
Edgewood Services, Inc. ("the Distributor"), a wholly-owned subsidiary of
Federated Investors, Inc., serves as the distributor of the Funds. Shares of
each Portfolio are sold without a sales charge on a continuous basis by the
Distributor.
Each Director of the Funds 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. Effective March 3, 2000, the members of the Nominating
22
<PAGE>
Committees of each of Excelsior Fund and Excelsior Tax-Exempt Fund receive an
annual fee of $2,000 per committee for their services.
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. Excelsior Tax-Exempt Fund has
authorized capital of 24 billion shares of Common Stock, 14 billion of which is
currently classified to represent interests in one of seven separate investment
portfolios. Authorized capital currently classified for each Portfolio is as
follows: 2 billion shares each of the Treasury Money Fund, the Government Money
Fund, the Money Fund, the New York Tax-Exempt Money Fund and 3 billion shares
for the Tax-Exempt Money Fund.
Each share 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 each
Fund's Board of Directors. Since the Portfolios have 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>
Treasury Money Fund
--------------------------------
Year Ended Year Ended
03/31/00 03/31/99
--------------- ---------------
<S> <C> <C>
Sold.......................................... $ 3,094,444,326 $ 2,679,518,952
Issued as reinvestment of dividends........... 3,419,901 3,026,464
Redeemed...................................... (3,066,662,817) (2,658,004,724)
--------------- ---------------
Net Increase.................................. $ 31,201,410 $ 24,540,692
=============== ===============
<CAPTION>
Government Money Fund
--------------------------------
Year Ended Year Ended
03/31/00 03/31/99
--------------- ---------------
<S> <C> <C>
Sold.......................................... $ 6,769,848,784 $ 4,372,983,435
Issued as reinvestment of dividends........... 2,370,376 1,710,757
Redeemed...................................... (6,641,358,562) (4,332,961,570)
--------------- ---------------
Net Increase.................................. $ 130,860,598 $ 41,732,622
=============== ===============
<CAPTION>
Money Fund
--------------------------------
Year Ended Year Ended
03/31/00 03/31/99
--------------- ---------------
<S> <C> <C>
Sold:
Shares...................................... $ 6,092,031,150 $ 4,459,113,083
Institutional Shares*....................... 934,355,336 N/A
Issued as reinvestment of dividends:
Shares...................................... 5,196,004 5,478,185
Institutional Shares*....................... 514,849 N/A
Redeemed:
Shares...................................... (5,603,747,004) (4,149,800,055)
Institutional Shares*....................... (661,873,162) N/A
--------------- ---------------
Net Increase.................................. $ 766,477,173 $ 314,791,213
=============== ===============
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
Tax-Exempt Money Fund
-------------------------------
Year Ended Year Ended
03/31/00 03/31/99
--------------- --------------
<S> <C> <C>
Sold........................................... $ 7,064,065,118 $5,351,039,833
Issued as reinvestment of dividends............ 2,141,478 2,425,946
Redeemed....................................... (6,518,247,292) (5,246,893,150)
--------------- --------------
Net Increase................................... $ 547,959,304 $ 106,572,629
=============== ==============
<CAPTION>
New York Tax-Exempt Money Fund
-------------------------------
Year Ended Period Ended
03/31/00 03/31/99**
--------------- --------------
<S> <C> <C>
Sold........................................... $ 1,354,331,537 $ 886,545,150
Issued as reinvestment of dividends............ 874,191 165,634
Redeemed....................................... (1,239,514,040) (580,991,477)
--------------- --------------
Net Increase................................... $ 115,691,688 $ 305,719,307
=============== ==============
</TABLE>
--------
* Institutional Shares of the Money Fund commenced operations December 16,
1999.
**Fund commenced operations August 3, 1998.
4. Line of Credit
The Portfolios 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 year ended March 31, 2000, the Portfolios had no
borrowings under the agreement.
5. Reorganization
On November 23, 1999, shareholders of Excelsior Funds (the "Trust") approved
an Agreement and Plan of Reorganization (the "Reorganization") by and between
Excelsior Funds, Inc. and the Trust. The Reorganization, which occurred as of
the close of business on December 15, 1999, provided for (a) the acquisition
by Money Fund of all of the assets and the assumption by Money Fund of the
liabilities of the Trust's Institutional Money Fund in exchange for
Institutional Shares of the Money Fund; (b) the distribution of Institutional
Shares of the Money Fund to the Trust's Institutional Money Fund shareholders
in liquidation of the Trust; and (c) the deregistration and termination of the
Trust.
As a result of the Reorganization, each shareholder of the Trust's
Institutional Money Fund became a shareholder of the Money Fund and held,
immediately after the Reorganization occurred, the same number of
Institutional Shares of the Money Fund as the shareholder held in the Trust's
Institutional Money Fund immediately before the Reorganization occurred.
24
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Shareholders
and Boards of Directors of
Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the portfolios of investments, of the Treasury Money, Government
Money, Money, Tax-Exempt Money, and New York Tax-Exempt Money Funds (three of
the portfolios constituting the Excelsior Funds, Inc. and two of the portfolios
constituting the Excelsior Tax-Exempt Funds, Inc.) (collectively, the "Funds")
as of March 31, 2000, 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 Funds' 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 auditing standards generally
accepted in the United States. 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 and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 2000, by correspondence with
the custodian and brokers or by 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
Treasury Money, Government Money, Money, Tax-Exempt Money, and New York Tax-
Exempt Money Funds at March 31, 2000, 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 the financial highlights for the periods indicated
therein, in conformity with accounting principles generally accepted in the
United States.
/s/ Ernst & Young LLP
Boston, Massachusetts
May 24, 2000
25
<PAGE>
Federal Tax Information: (Unaudited)
For the year ended March 31, 2000, the percentage of income earned from
direct treasury obligations was as follows:
<TABLE>
<CAPTION>
Interest
Earned
--------
<S> <C>
Treasury Money Fund................................................. 99.25%
Government Money Fund............................................... 33.33%
Money Fund.......................................................... 33.15%
Tax-Exempt Money Fund............................................... --
New York Tax-Exempt Money Fund...................................... --
</TABLE>
--------------------------------------------------------------------------------
Voting Results of Special Meetings of Shareholders: (Unaudited)
The proposal described below was submitted to a vote of shareholders of
Excelsior Fund and Excelsior Tax-Exempt Fund at a special meeting of
shareholders held on May 3, 2000 with regard to Tax-Exempt Money Fund and on
May 19, 2000 with regard to Treasury Money Fund, Government Money Fund, Money
Fund and New York Tax-Exempt Money Fund the "Meetings":
Proposal--Approval of a new investment advisory agreement between the
Portfolio and U.S. Trust:
At the Meetings, the shareholders of each Portfolio approved the Proposal as
follows:
<TABLE>
<CAPTION>
Portfolio For Against Abstain
--------- ----------- --------- ----------
<S> <C> <C> <C>
Treasury Money Fund 291,543,714 1,574,362 1,241,263
Government Money Fund 534,450,419 3,495,405 1,431,531
Money Fund 986,630,912 802,496 15,842,264
Tax-Exempt Money Fund 943,345,624 891,322 3,252,159
New York Tax-Exempt 259,169,121 328,899 828,713
</TABLE>
26
USTMMA300
