<PAGE>
[LOGO OF EXELSIOR APPEARS HERE]
TAX-EXEMPT
FIXED INCOME
PORTFOLIOS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1996
<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
Tax-Exempt Money Fund.................................................... 8
Short-Term Tax-Exempt Securities Fund.................................... 12
Intermediate-Term Tax-Exempt Fund........................................ 13
New York Intermediate-Term Tax-Exempt Fund............................... 15
Long-Term Tax-Exempt Fund................................................ 17
NOTES TO FINANCIAL STATEMENTS.............................................. 19
</TABLE>
For shareholder account information, current price and yield quotations, or to
make an initial purchase or obtain a prospectus, call the appropriate telephone
number listed below:
. INITIAL PURCHASE AND PROSPECTUS INFORMATION AND SHAREHOLDER SERVICES 1-800-
446-1012
. CURRENT PRICE AND YIELD INFORMATION 1-800-233-9180
This report must be preceded or accompanied by a current prospectus.
Prospectuses containing more complete information including charges and
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 sponsored and
distributed by Edgewood Services, Inc.
You may write to Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. at
the following address:
EXCELSIOR FUNDS, INC.
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, UNITED STATES TRUST COMPANY OF NEW YORK, ITS PARENT OR AFFILIATES
AND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN THE FUNDS INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. FUND SHARES ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
<PAGE>
LETTER TO SHAREHOLDERS
- -------------------------------------------------------------------------------
Dear Shareholder:
As we close out our tenth anniversary year for the funds, we continue to
seek new opportunities to expand and improve our product offerings in response
to your investment needs. To this end, there have been some recent
developments which should be of interest to you and which I believe will
further enhance our fund family.
Our new alliance with the Excelsior Institutional Funds has enabled us to
offer two new funds. The Excelsior Institutional Optimum Growth Fund and
Institutional Value Equity Fund are both available to individual investors via
a second class of shares, Trust Shares. The Optimum Growth Fund combines a
mid- to large- capitalization growth strategy with a quantitative analysis in
the selection of complimentary securities from the Russell 1000 universe. The
Value Equity Fund applies a strict value-oriented philosophy to stock
selection and is managed by David Williams of U. S. Trust Company of New York,
who also manages the Excelsior Business & Industrial Restructuring Fund. In
addition to these funds, we now offer the California Tax-Exempt Income Fund.
This is an intermediate-term bond fund which intends to generate current
income which is exempt from state and federal taxes for California residents.
The extended Excelsior Funds Family now consists of fifteen domestic equity,
five international, eleven fixed-income, and five money market funds totaling
approximately $5.0 billion in assets. These funds have been designed to
provide a comprehensive range of investment options and offer investors, both
individual and institutional, an opportunity to allocate holdings in
accordance with their specific investment objectives.
Excelsior Fund shareholders are serviced by a dedicated team of
professionals. We recognize the importance of excellent shareholder service
and are committed to meeting your needs as investors in a proactive manner. We
appreciate the confidence which your investment represents in the funds and
strive to build on this confidence and expand our relationship with you as we
enter our second decade of operation.
Alfred C. Tannachion
Chairman of the Board and President
1
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
AS OF SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NEW YORK
SHORT-TERM INTERMEDIATE- INTERMEDIATE-
TAX-EXEMPT TAX-EXEMPT TERM TERM LONG-TERM
MONEY SECURITIES TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
FUND FUND FUND FUND FUND
------------ ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at cost--
see accompanying
portfolios............ $923,949,335 $42,217,812 $241,476,747 $96,064,760 $105,676,619
============ =========== ============ =========== ============
Investments, at value
(Note 1).............. $923,949,335 $42,287,386 $249,982,400 $98,016,765 $108,724,650
Cash................... -- 189 -- -- --
Interest receivable.... 4,274,604 597,728 3,814,444 1,378,923 1,646,702
Receivable for
investments sold...... -- -- -- -- 3,900,080
Receivable for fund
shares sold........... -- 253,180 230,214 -- 108,910
Prepaid expenses....... 5,765 319 1,671 645 606
Unamortized
organization costs
(Note 5).............. -- 5,254 -- -- --
------------ ----------- ------------ ----------- ------------
TOTAL ASSETS........... 928,229,704 43,144,056 254,028,729 99,396,333 114,380,948
LIABILITIES:
Payable for dividends
declared.............. 2,428,213 123,962 872,312 310,747 389,162
Payable for fund shares
redeemed.............. -- 2,826 86,026 25,284 58,442
Payable for investments
purchased............. -- 4,285,507 5,821,960
Investment advisory
fees payable (Note
2).................... 155,127 7,734 60,126 36,776 37,841
Due to custodian bank.. 13,626 -- 149 339 316
Accrued expenses and
other payables........ 341,463 23,532 95,281 87,686 91,425
------------ ----------- ------------ ----------- ------------
TOTAL LIABILITIES...... 2,938,429 158,054 1,113,894 4,746,339 6,399,146
------------ ----------- ------------ ----------- ------------
NET ASSETS.............. $925,291,275 $42,986,002 $252,914,835 $94,649,994 $107,981,802
============ =========== ============ =========== ============
NET ASSETS consist of:
Undistributed net
investment income..... $ -- $ 11,325 $ 45,970 $ -- $ 51,135
Accumulated net
realized gain (loss)
on investments........ (98,626) (692,808) (6,657,465) (1,932,349) 525,186
Unrealized appreciation
on investments........ -- 69,574 8,505,653 1,952,005 3,048,031
Par value (Note 4)..... 925,640 6,112 27,730 11,184 11,226
Paid in capital in
excess of par value... 924,464,261 43,591,799 250,992,947 94,619,154 104,346,224
------------ ----------- ------------ ----------- ------------
TOTAL NET ASSETS........ $925,291,275 $42,986,002 $252,914,835 $94,649,994 $107,981,802
============ =========== ============ =========== ============
Shares of Common Stock
Outstanding............ 925,639,961 6,111,315 27,730,289 11,184,043 11,225,989
NET ASSET VALUE PER
SHARE.................. $1.00 $7.03 $9.12 $8.46 $9.62
===== ===== ===== ===== =====
</TABLE>
See Notes to Financial Statements
2
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1996 (UNAUDITED)
<TABLE>
<CAPTION>
NEW YORK
SHORT-TERM INTERMEDIATE- INTERMEDIATE-
TAX-EXEMPT TAX-EXEMPT TERM TERM LONG-TERM
MONEY SECURITIES TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
FUND FUND FUND FUND FUND
----------- ---------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........ $16,030,761 $923,156 $6,454,234 $2,335,328 $2,815,371
----------- -------- ---------- ---------- ----------
EXPENSES:
Investment advisory
fees (Note 2)......... 1,140,083 64,502 446,210 234,010 250,327
Administrators' fees
(Note 2).............. 702,291 33,111 196,333 72,075 77,101
Administrative
servicing fees (Note
2).................... 230,249 14,649 74,033 14,235 34,430
Shareholder servicing
agent fees............ 13,857 4,477 11,112 5,625 14,796
Custodian fees......... 192,857 6,857 49,084 18,848 19,827
Registration and filing
fees.................. 6,157 5,625 4,946 -- 2,407
Legal and audit fees... 53,319 3,512 20,214 3,844 5,024
Directors' fees and
expenses (Note 2)..... 22,308 1,520 9,051 3,324 2,373
Shareholder reports.... 10,519 1,186 6,045 4,305 2,595
Amortization of
organization costs
(Note 5).............. -- 2,094 -- -- --
Miscellaneous
expenses.............. 22,805 1,749 6,156 2,372 2,242
----------- -------- ---------- ---------- ----------
TOTAL EXPENSES........ 2,394,445 139,282 823,184 358,638 411,122
Fees waived by
investment adviser and
administrators (Note
2).................... (230,249) (14,649) (74,033) (14,235) (34,430)
----------- -------- ---------- ---------- ----------
NET EXPENSES.......... 2,164,196 124,633 749,151 344,403 376,692
----------- -------- ---------- ---------- ----------
NET INVESTMENT INCOME... 13,866,565 798,523 5,705,083 1,990,925 2,438,679
----------- -------- ---------- ---------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS (NOTE 1):
Net realized gain
(loss) on security
transactions.......... (29,980) (48,354) 762,806 (388,786) 747,788
Change in unrealized
appreciation
(depreciation) of
investments during the
period................ -- (12,347) (861,279) 564,682 948,697
----------- -------- ---------- ---------- ----------
NET REALIZED AND
UNREALIZED GAIN (LOSS)
ON INVESTMENTS......... (29,980) (60,701) (98,473) 175,896 1,696,485
----------- -------- ---------- ---------- ----------
NET INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS............. $13,836,585 $737,822 $5,606,610 $2,166,821 $4,135,164
=========== ======== ========== ========== ==========
</TABLE>
See Notes to Financial Statements
3
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
NEW YORK
SHORT-TERM INTERMEDIATE- INTERMEDIATE-
TAX-EXEMPT TAX-EXEMPT TERM TERM LONG-TERM
MONEY SECURITIES TAX-EXEMPT TAX-EXEMPT TAX-EXEMPT
FUND FUND FUND FUND FUND
------------ ----------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED
SEPTEMBER 30, 1996
(UNAUDITED)
Net investment income... $ 13,866,565 $ 798,523 $ 5,705,083 $ 1,990,925 $ 2,438,679
Net realized gain (loss)
on investments......... (29,980) (48,354) 762,806 (388,786) 747,788
Change in unrealized
appreciation
(depreciation) of
investments during the
period................. -- (12,347) (861,279) 564,682 948,697
------------ ----------- ------------ ----------- ------------
Net increase in net
assets resulting from
operations............. 13,836,585 737,822 5,606,610 2,166,821 4,135,164
Distributions to
shareholders:
From net investment
income................ (13,866,565) (806,213) (5,736,226) (1,990,925) (2,463,935)
From net realized gain
on investments........ -- -- -- -- (362,376)
Increase (decrease) in
net assets from fund
share transactions
(Note 4)............... (41,390,238) 84,555 (2,133,825) (1,932,684) 15,614,493
------------ ----------- ------------ ----------- ------------
Net increase (decrease)
in net assets.......... (41,420,218) 16,164 (2,263,441) (1,756,788) 16,923,346
NET ASSETS:
Beginning of period.... 966,711,493 42,969,838 255,178,276 96,406,782 91,058,456
------------ ----------- ------------ ----------- ------------
End of period (1)...... $925,291,275 $42,986,002 $252,914,835 $94,649,994 $107,981,802
============ =========== ============ =========== ============
YEAR ENDED MARCH 31,
1996
Net investment income... $ 28,104,738 $ 1,924,423 $ 11,057,236 $ 3,927,143 $ 4,260,065
Net realized gain (loss)
on investments......... (3,032) 882,628 3,726,746 1,897,037 3,728,907
Change in unrealized
appreciation
(depreciation) of
investments during the
year................... -- (268,919) 4,779,461 280,648 (152,514)
------------ ----------- ------------ ----------- ------------
Net increase in net
assets resulting from
operations............. 28,101,706 2,538,132 19,563,443 6,104,828 7,836,458
Distributions to
shareholders:
From net investment
income................ (28,104,738) (1,905,408) (10,980,123) (3,927,143) (4,185,190)
From net realized gain
on investments........ -- -- -- -- (1,314,007)
Increase (decrease) in
net assets from fund
share transactions
(Note 4)............... 151,824,779 (5,850,429) 11,604,736 7,065,566 9,840,745
------------ ----------- ------------ ----------- ------------
Net increase (decrease)
in net assets.......... 151,821,747 (5,217,705) 20,188,056 9,243,251 12,178,006
NET ASSETS:
Beginning of year...... 814,889,746 48,187,543 234,990,220 87,163,531 78,880,450
------------ ----------- ------------ ----------- ------------
End of year (2)........ $966,711,493 $42,969,838 $255,178,276 $96,406,782 $ 91,058,456
============ =========== ============ =========== ============
</TABLE>
(1) Including undistributed net investment income of $11,325 for Short-Term
Tax-Exempt Securities Fund, $45,970 for Intermediate-Term Tax-Exempt Fund
and $51,135 for Long-Term Tax-Exempt Fund.
(2) Including undistributed net investment income of $19,015 for Short-Term
Tax-Exempt Securities Fund, $77,113 for Intermediate-Term Tax-Exempt Fund
and $76,391 for Long-Term Tax-Exempt Fund.
See Notes to Financial Statements
4
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
5
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS
For a Fund share outstanding throughout each period.
<TABLE>
<CAPTION>
NET ASSET NET REALIZED DIVIDENDS DISTRIBUTIONS
VALUE, NET AND UNREALIZED TOTAL FROM FROM NET FROM NET
BEGINNING INVESTMENT GAIN (LOSS) ON INVESTMENT INVESTMENT REALIZED GAIN
OF PERIOD INCOME INVESTMENTS OPERATIONS INCOME ON INVESTMENTS
--------- ---------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
TAX-EXEMPT MONEY FUND -- (5/24/85*)
Year Ended March 31,
1992.......................................... $1.00 $0.03849 $0.00000 $0.03849 $(0.03849) $0.00000
1993.......................................... 1.00 0.02395 0.00000 0.02395 (0.02395) 0.00000
1994.......................................... 1.00 0.01938 0.00000 0.01938 (0.01938) 0.00000
1995.......................................... 1.00 0.02825 0.00000 0.02825 (0.02825) 0.00000
1996.......................................... 1.00 0.03362 0.00000 0.03362 (0.03362) 0.00000
Six
Months Ended September 30, 1996 (Unaudited).. 1.00 0.01524 0.00000 0.01524 (0.01524) 0.00000
SHORT-TERM TAX-EXEMPT SECURITIES FUND -- (12/31/92*)
Year Ended March 31,
1993.......................................... $7.00 $ 0.05 $ 0.07 $ 0.12 $ (0.05) $ 0.00
1994.......................................... 7.07 0.21 (0.03) 0.18 (0.21) (0.05)
1995.......................................... 6.99 0.25 (0.02) 0.23 (0.25) (0.01)
1996.......................................... 6.96 0.28 0.09 0.37 (0.28) 0.00
Six
Months Ended September 30, 1996 (Unaudited).. 7.05 0.13 (0.02) 0.11 (0.13) 0.00
INTERMEDIATE-TERM TAX-EXEMPT FUND -- (12/3/85*)
Year Ended March 31,
1992.......................................... $8.83 $ 0.49 $ 0.19 $ 0.68 $ (0.49) $ (0.07)
1993.......................................... 8.95 0.42 0.59 1.01 (0.42) (0.30)
1994.......................................... 9.24 0.34 (0.09) 0.25 (0.34) (0.26)
1995.......................................... 8.64 0.37 0.16 0.53 (0.37) 0.00
1996.......................................... 8.80 0.40 0.32 0.72 (0.40) 0.00
Six Months
Ended September 30, 1996 (Unaudited)......... 9.12 0.20 0.00 0.20 (0.20) 0.00
N.Y. INTERMEDIATE-TERM TAX-EXEMPT FUND -- (5/31/90*)
Year Ended March 31,
1992.......................................... $8.20 $ 0.41 $ 0.19 $ 0.60 $ (0.41) $ (0.08)
1993.......................................... 8.31 0.34 0.41 0.75 (0.34) (0.11)
1994.......................................... 8.61 0.31 (0.13) 0.18 (0.31) (0.22)
1995.......................................... 8.18 0.33 0.15 0.48 (0.33) (0.09)
1996.......................................... 8.24 0.35 0.20 0.55 (0.35) 0.00
Six
Months Ended September 30, 1996 (Unaudited).. 8.44 0.18 0.02 0.20 (0.18) 0.00
LONG-TERM TAX-EXEMPT FUND -- (2/5/86*)
Year Ended March 31,
1992.......................................... $9.15 $ 0.51 $ 0.30 $ 0.81 $ (0.51) $ (0.20)
1993.......................................... 9.25 0.46 0.99 1.45 (0.46) (0.48)
1994.......................................... 9.76 0.42 (0.12) 0.30 (0.42) (0.50)
1995.......................................... 8.87 0.43 0.50 0.93 (0.43) (0.10)
1996.......................................... 9.27 0.47 0.39 0.86 (0.46) (0.14)
Six
Months Ended September 30, 1996 (Unaudited).. 9.53 0.23 0.12 0.35 (0.23) (0.03)
</TABLE>
* Commencement of operations.
** Not annualized.
*** Annualized.
+ Total return data does not reflect the sales load payable on purchases of
Fund shares.
++ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
See Notes to Financial Statements
6
<PAGE>
<TABLE>
<CAPTION>
DISTRIBUTIONS RATIO OF NET RATIO OF GROSS RATIO OF NET
IN EXCESS NET ASSETS, OPERATING OPERATING INVESTMENT
NET REALIZED NET ASSET END OF EXPENSES EXPENSES INCOME PORTFOLIO FEE
GAIN ON TOTAL VALUE, END TOTAL PERIOD TO AVERAGE TO AVERAGE TO AVERAGE TURNOVER WAIVERS
INVESTMENNTS DISTRIBUTIONS OF PERIOD RETURN+ (000) NET ASSETS NET ASSETS++ NET ASSETS RATE (NOTE 2)
------------- ------------- ---------- ------- ----------- ------------ -------------- ------------ --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00000 $(0.03849) $1.00 3.92% $666,351 0.52% 0.52% 3.84% -- $0.00000
0.00000 (0.02395) 1.00 2.42% 659,327 0.52% 0.52% 2.39% -- 0.00000
0.00000 (0.01938) 1.00 1.96% 694,581 0.52% 0.52% 1.94% -- 0.00003
0.00000 (0.02825) 1.00 2.86% 814,890 0.49% 0.52% 2.85% -- 0.00030
0.00000 (0.03362) 1.00 3.41% 966,711 0.49% 0.53% 3.35% -- 0.00042
0.00000 (0.01524) 1.00 1.53%** 925,291 0.47%*** 0.53%*** 3.04%*** -- 0.00025
$ 0.00 $ (0.05) $7.07 1.65% $ 28,598 0.60%*** 0.84%*** 2.80%*** -- $ 0.00
0.00 (0.26) 6.99 2.55% 57,728 0.59% 0.60% 2.94% 539% 0.00
0.00 (0.26) 6.96 3.45% 48,188 0.59% 0.61% 3.60% 565% 0.00
0.00 (0.28) 7.05 5.42% 42,970 0.58% 0.64% 4.05% 124% 0.00
0.00 (0.13) 7.03 1.61%** 42,986 0.58%*** 0.65%*** 3.71%*** 88%*** 0.00
$ 0.00 $ (0.56) $8.95 7.95% $223,201 0.64% 0.64% 5.48% 276% $ 0.00
0.00 (0.72) 9.24 11.70% 285,317 0.64% 0.64% 4.57% 429% 0.00
(0.25) (0.85) 8.64 2.58% 298,261 0.64% 0.64% 3.74% 379% 0.00
0.00 (0.37) 8.80 6.34% 234,990 0.61% 0.64% 4.28% 362% 0.00
0.00 (0.40) 9.12 8.30% 255,178 0.60% 0.65% 4.44% 50% 0.00
0.00 (0.20) 9.12 2.16%** 252,915 0.59%*** 0.65%*** 4.47%*** 19%*** 0.00
$ 0.00 $ (0.49) $8.31 7.42% $ 52,238 0.88% 0.88% 4.82% 106% $ 0.00
0.00 (0.45) 8.61 9.27% 88,249 0.89% 0.89% 3.94% 339% 0.00
(0.08) (0.61) 8.18 1.87% 107,489 0.87% 0.87% 3.55% 326% 0.00
0.00 (0.42) 8.24 6.05% 87,164 0.78% 0.80% 4.06% 563% 0.00
0.00 (0.35) 8.44 6.77% 96,407 0.75% 0.77% 4.15% 154% 0.00
0.00 (0.18) 8.46 2.39%** 94,650 0.74%*** 0.77%*** 4.25%*** 104%*** 0.00
$ 0.00 $ (0.71) $9.25 9.19% $ 62,732 0.85% 0.85% 5.52% 218% $ 0.00
0.00 (0.94) 9.76 16.35% 85,520 0.86% 0.86% 4.73% 300% 0.00
(0.27) (1.19) 8.87 2.38% 82,151 0.85% 0.86% 4.25% 252% 0.00
0.00 (0.53) 9.27 11.01% 78,880 0.80% 0.83% 4.86% 214% 0.00
0.00 (0.60) 9.53 9.35% 91,058 0.77% 0.82% 4.85% 185% 0.01
0.00 (0.26) 9.62 3.62%** 107,982 0.75%*** 0.82%*** 4.87%*** 109%*** 0.00
</TABLE>
See Notes to Financial Statements
7
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
TAX-EXEMPT MONEY FUND
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- 58.03%
$ 6,500,000 Austin, Texas,
3.600%, 12/02/1996.................................. $ 6,500,000
6,500,000 Austin, Texas, Combined Utilities, Series A,
3.650%, 12/06/1996.................................. 6,500,000
8,400,000 Becker, Minnesota, Pollution Control Revenue Bonds
Northern State Power Co. Project,
3.650%, 11/07/1996.................................. 8,400,000
13,800,000 Becker, Minnesota, Pollution Control Revenue Bonds
Northern State Power Co. Project,
3.650%, 11/12/1996.................................. 13,800,000
7,400,000 Becker, Minnesota, Pollution Control Revenue Bonds
Northern State Power Co. Project,
3.650%, 11/14/1996.................................. 7,400,000
5,500,000 Becker, Minnesota, Pollution Control Revenue Bonds
Northern State Power Co. Project,
3.600%, 12/19/1996.................................. 5,500,000
7,000,000 Brownsville, Texas, Utilities System Revenue Bonds,
Series A,
3.650%, 10/17/1996.................................. 7,000,000
9,550,000 Burlington, Kansas, Electric Power,
3.650%, 11/26/1996.................................. 9,550,000
13,303,000 Dallas Texas, Waterworks & Sewer System Revenue
Bonds,
3.750%, 10/17/1996.................................. 13,303,000
6,400,000 Dallas, Texas, Waterworks & Sewer System Revenue
Bonds, Series A,
3.650%, 10/10/1996.................................. 6,400,000
11,722,000 Dallas, Texas, Waterworks & Sewer System Revenue
Bonds, Series A,
3.650%, 10/10/1996.................................. 11,722,000
10,000,000 Gainsville, Florida, Series C,
3.650%, 12/12/1996.................................. 10,000,000
2,500,000 Hockley County, Texas, Industrial Development Corp.,
Pollution Control Revenue Bonds, Amoco Project--
Standard Oil Co.,
3.750%, 03/01/2014++................................ 2,500,485
10,000,000 Houston, Texas, General Obligation Bond, Series A,
3.650%, 12/05/1996.................................. 10,000,000
3,000,000 Houston, Texas, General Obligation Bond, Series B,
3.650%, 12/11/1996.................................. 3,000,000
5,000,000 Houston, Texas, General Obligation Revenue Bonds,
3.650%, 10/25/1996.................................. 5,000,000
8,000,000 Houston, Texas, General Obligation Revenue Bonds,
Series A,
3.600%, 11/21/1996.................................. 8,000,000
7,800,000 Howard County, Maryland, Bond Anticipation Notes,
3.600%, 10/11/1996.................................. 7,800,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- (CONTINUED)
$ 8,500,000 Intermountain Power Agency, Utah, Power Supply
Revenue Bonds, Series F,
3.550%, 12/16/1996.................................. $ 8,500,000
12,000,000 Intermountain Power Agency, Utah, Power Supply
Revenue Bonds, Series G,
3.750%, 03/17/1997++................................ 12,000,000
2,400,000 Jacksonville, Florida, Electric Authority Revenue
Bonds, Series A,
3.650%, 11/20/1996.................................. 2,400,000
5,500,000 Jasper, Indiana,
3.700%, 12/02/1996.................................. 5,500,000
4,100,000 Joliet, Illinois, Regional Port District, Marine
Term Revenue Bonds, Exxon Corp. Project,
3.700%, 10/01/2024+................................. 4,100,000
3,000,000 Massachusetts Bay Transportation Authority,
Massachusetts, Series C,
3.600%, 12/12/1996.................................. 3,000,000
2,700,000 Massachusetts Water Resources Authority,
3.400%, 10/15/1996.................................. 2,698,974
5,000,000 Memphis, Tennesse, General Obligation Bonds, Series
A,
3.850%, 08/01/2004+................................. 5,000,000
5,000,000 Memphis, Tennesse, General Obligation Bonds, Series
A,
3.850%, 08/01/2007+................................. 5,000,000
10,230,000 Montgomery County, Alabama,
3.500%, 12/17/1996.................................. 10,230,000
10,000,000 Montgomery, Ohio, Miami Valley, Series C,
3.600%, 12/16/1996.................................. 10,000,000
3,774,000 Nassau County, New York, General Obligation
Unlimited Notes, Series B
4.000%, 11/15/1996.................................. 3,775,578
10,000,000 New Jersey General Obligation Bond,
3.650%, 12/13/1996.................................. 10,000,000
6,100,000 New York City, Municipal Water Authority,
3.600%, 10/01/1996.................................. 6,100,000
10,000,000 New York City Municipal Water Authority,
3.700%, 10/17/1996.................................. 10,000,000
3,100,000 New York City, New York, General Obligation Bonds,
Subseries E4,
3.700%, 08/01/2022+................................. 3,100,000
2,500,000 New York City, New York, General Obligation Bonds,
Subseries E6, (FGIC),
3.900%, 08/01/2019+................................. 2,500,000
68,000,000 New York City, New York, General Obligation
Unlimited Notes,
Series A,
4.500%, 02/12/1997.................................. 68,201,532
</TABLE>
See Notes to Financial Statements
8
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
TAX-EXEMPT MONEY FUND -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- (CONTINUED)
$10,000,000 North Carolina Eastern Municipal Power Agency,
Series B,
3.650%, 11/20/1996.................................. $ 10,000,000
13,500,000 Nueces River, Texas,
3.550%, 12/12/1996.................................. 13,500,000
10,000,000 Nueces River, Texas, Industrial Development
Authority, Pollution Control Refunding Revenue
Bonds,
3.600%, 10/15/1996.................................. 10,000,000
3,000,000 Petersburg, Indiana, Industrial Pel,
3.600%, 12/12/1996.................................. 3,000,000
4,000,000 Plaquemines, Louisiana, Port Harbor and Terminal,
Marine Terminal Facilities, Electro-Coal Transfer
Revenue Bonds,
3.700%, 11/21/1996.................................. 4,000,000
6,500,000 Pleasant Prairie, Wisconsin, Pollution Control
Revenue Bonds, Wisconsin Electric Power Co., Series
A,
3.850%, 09/01/2030+................................. 6,500,000
5,000,000 Pleasant Prairie, Wisconsin, Pollution Control
Revenue Bonds, Wisconsin Electric Power Co., Series
C,
3.850%, 09/01/2030+................................. 5,000,000
2,500,000 Purdue University, Indiana University Student Fees
Revenue Bonds, Series E,
3.900%, 07/01/2011+................................. 2,500,000
5,000,000 San Antonio, Texas,
3.700%, 11/14/1996.................................. 5,000,000
5,600,000 San Antonio, Texas, Electric & Gas Revenue Bonds,
3.500%, 10/21/1996.................................. 5,600,000
6,600,000 San Antonio, Texas, Electric & Gas Revenue Bonds,
3.600%, 11/15/1996.................................. 6,600,000
5,000,000 Salt Lake County, Utah, Tax & Revenue General
Obligation Limited Notes,
4.500%, 12/31/1996.................................. 5,009,149
10,600,000 Salt River Project, Arizona, Agricultural
Improvement & Power District,
3.650%, 11/13/1996.................................. 10,600,000
10,000,000 Salt River Project, Arizona, Agricultural
Improvement & Power District,
3.600%, 12/13/1996.................................. 10,000,000
6,639,000 Salt River Project, Arizona, Agricultural
Improvement & Power District,
3.600%, 12/13/1996.................................. 6,639,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENT
SECURITIES -- (CONTINUED)
$10,000,000 Salt River Project, Arizona, Agricultural
Improvement & Power District,
3.550%, 12/16/1996................................. $ 10,000,000
2,400,000 Salt River Project, Arizona, Agricultural
Improvement & Power District,
3.600%, 12/18/1996................................. 2,400,000
10,000,000 Salt River Project, Arizona, Agricultural
Improvement & Power District,
3.600%, 12/18/1996................................. 10,000,000
10,000,000 South Carolina State, Public Service Authority
Revenue Bonds,
3.350%, 10/08/1996................................. 10,000,000
8,120,000 South Carolina State, Public Service Authority
Revenue Bonds,
3.650%, 10/18/1996................................. 8,120,000
5,193,000 South Carolina State, Public Service Authority
Revenue Bonds,
3.700%, 12/11/1996................................. 5,193,000
10,000,000 Texas Municipal Power Authority,
3.500%, 11/13/1996................................. 10,000,000
4,900,000 Toledo Lucas County, Ohio Port Authority Revenue
Bonds,
3.650%, 10/29/1996................................. 4,900,000
2,000,000 University of Minnesota, Series 85-1,
3.550%, 11/27/1996................................. 2,000,000
10,000,000 University of Minnesota, Series A,
3.600%, 12/17/1996................................. 10,000,000
6,500,000 University of Minnesota, Series B,
3.700%, 11/27/1996................................. 6,500,000
10,000,000 University of Texas, Permanent University Fund,
3.700%, 10/07/1996................................. 10,000,000
9,000,000 University of Texas Permanent University Fund,
3.600%, 10/09/1996................................. 9,000,000
5,375,000 Valdez, Alaska ARCO Transportation,
3.550%, 12/13/1996................................. 5,375,000
5,000,000 Vermont General Obligation Bond,
3.650%, 12/12/1996................................. 5,000,000
10,000,000 Vermont State,
3.600%, 12/17/1996................................. 10,000,000
------------
536,917,718
------------
TAX-EXEMPT CASH EQUIVALENTS --
BACKED BY LETTERS OF CREDIT -- 41.78%
ABN-AMRO BANK, NY.
-----------------
4,050,000 Illinois Health Facilities Authority, Palos
Community Hospital Revenue Bonds, Series B,
3.800%, 12/01/2015+................................ 4,050,000
</TABLE>
See Notes to Financial Statements
9
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
TAX-EXEMPT MONEY FUND -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENTS --
BACKED BY LETTERS OF CREDIT -- (CONTINUED)
BANK OF AMERICA
---------------
$18,000,000 California State Revenue Anticipation Warrants,
Series C2,
3.800%, 06/30/1997++............................... $ 18,000,000
BANK OF NEW YORK
----------------
10,000,000 Ohio County, Kentucky, Pollution Control Revenue
Bonds, Big Rivers Electric Corp., Series 1983,
4.100%, 06/01/2013................................. 10,000,000
BANK OF NOVA SCOTIA
-------------------
10,200,000 Gary, Indiana, Environmental Improvement Revenue
Notes, U.S. Steel Corp. Project, Series 1984,
3.750%, 07/15/2002+................................ 10,200,000
3,400,000 New Hampshire State Industrial Development
Authority, Pollution Control Revenue Bonds, Bangor
Hydro-Electric Co. Project, Series 1983,
3.600%, 01/01/2009+................................ 3,400,000
BANK OF TOKYO
-------------
11,900,000 University of Iowa, Facilities Revenue Bonds, Human
Biology Research, Series A,
4.050%, 06/01/2005................................. 11,900,000
BARCLAYS BANK, PLC
------------------
7,700,000 Bucks County, Pennsylvania, Industrial Development
Authority Revenue Bonds, Tru Realty--Toys R Us
Project,
3.600%, 12/01/2018+................................ 7,700,000
5,300,000 Farmington, New Mexico, Pollution Control Refunding
Revenue Bonds, Arizona Public Service Co., Series
B,
3.750%, 09/01/2024+................................ 5,300,000
CANADIAN IMPERIAL BANK OF COMMERCE
----------------------------------
4,500,000 Maricopa County, Arizona, Pollution Control
Refunding Revenue Bonds, Public Service Co. New
Mexico, Series A,
3.900%, 11/01/2022+................................ 4,500,000
CITIBANK, NY
------------
2,260,000 La Crosse, Wisconsin Industrial Development
Authority Revenue Bonds, Dairyland Power Project,
3.800%, 02/01/2015+................................ 2,260,000
COOPERATIVE FINANCE CORP.
4,880,000 Clark County, Kentucky, Pollution Control Revenue
Bonds, East Kentucky Power Co-Op,
3.400%, 10/15/2014+................................ 4,879,172
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENTS --
BACKED BY LETTERS OF CREDIT -- (CONTINUED)
CREDIT SUISSE
-------------
$ 6,000,000 Burke County, Georgia, Industrial Development
Authority, Pollution Control Revenue Bonds,
Oglethorpe Power Corp. Project,
3.950%, 10/03/1996................................. $ 5,999,845
6,900,000 Garden City, Kansas, Industrial Development Revenue
Bonds, Inland Container Corp. Project, Temple
Series 1983,
3.500%, 01/01/2008+................................ 6,900,000
10,440,000 Marshall County, West Virginia, Pollution Control
Revenue Bonds, Mobay Chemical Corp. Project,
3.600%, 12/01/2000................................. 10,440,000
FUJI BANK LTD NY
----------------
13,900,000 Des Moines, Iowa, Hospital Facilities Revenue
Bonds, Iowa Methodist Medical Center Project,
3.350%, 08/01/2015+................................ 13,900,000
16,100,000 Illinois Health Facilities Authority Revenue Bonds,
Healthcorp Affiliates, Series B,
3.800%, 11/01/2015+................................ 16,100,000
22,000,000 Illinois Health Facilities Authority Revenue Bonds,
Healthcorp Affiliates, Series A,
3.800%, 11/01/2015+................................ 22,000,000
11,200,000 Oregon State General Obligation Bonds, Series 73G,
3.800%, 12/01/2018+................................ 11,200,000
JACKSONVILLE, FLORIDA ELECTRIC AUTHORITY
----------------------------------------
4,000,000 Jacksonville, Florida, Electric Authority Revenue
Bonds,
3.600%, 12/16/1996................................. 4,000,000
KREDIETBANK N.V
---------------
6,685,000 Illinois Health Facilities Authority Revenue Bonds,
3.850%, 01/01/2016+................................ 6,685,000
LASALLE NATIONAL BANK
---------------------
12,900,000 Flint, Michigan, Hospital Building Authority,
Revenue Bonds,
3.850%, 07/01/2015+................................ 12,900,000
11,850,000 Illinois Health Facilities Authority Revenue Bonds,
Ingalls Memorial Hospital, Series B,
3.350%, 01/01/2016+................................ 11,850,000
7,180,000 Illinois Health Facilities Authority Revenue Bonds,
Ingalls Memorial Hospital, Series C,
3.350%, 01/01/2016+................................ 7,180,000
</TABLE>
See Notes to Financial Statements
10
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
TAX-EXEMPT MONEY FUND -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENTS --
BACKED BY LETTERS OF CREDIT -- (CONTINUED)
MORGAN GUARANTY TRUST CO.
------------------------
$23,800,000 Baltimore, Maryland, Port Facilities Revenue Bonds,
Occidental Petroleum, Series 1981,
3.500%, 10/14/2011+................................. $ 23,800,000
3,605,000 Florida Municipal Power Agency Revenue Bonds, Series
A,
3.550%, 12/13/1996.................................. 3,605,000
5,300,000 Kenton County, Kentucky, Industrial Building Revenue
Bonds, Redken Labs, Inc. Project, Series 1984,
3.600%, 12/01/2014.................................. 5,300,000
NATIONAL WESTMINSTER BANK
-------------------------
15,200,000 Massachusetts State Updates, General Obligation
Bonds, Series B,
3.850%, 12/01/1997.................................. 15,200,000
NORDEUTSCHE LANDESBANK
----------------------
9,900,000 Brazos, Texas, Harbor Industrial Development Corp.
Revenue Bonds, Badische Corp.,
3.600%, 12/01/2013+................................. 9,900,000
SANWA BANK
----------
23,600,000 Indiana Health Facilities Financing Authority
Revenue Bonds, St. Anthony's Medical Center Project,
4.050%, 12/01/2014+................................. 23,600,000
4,600,000 Michigan State Job Development Authority Revenue
Bonds, Hitachi Metals International Project,
3.750%, 01/01/2004+................................. 4,600,000
15,110,000 Mississippi Hospital Equipment & Facilities
Authority Revenue Bonds, Mississippi Baptist Medical
Center,
3.800%, 07/01/2012+................................. 15,110,000
32,125,000 Missouri State Enviromental Improvement & Energy
Resources Authority, Pollution Control Revenue
Bonds,
4.050%, 10/01/2002+................................. 32,125,000
SUMITOMO BANK, LTD.
------------------
3,400,000 District of Columbia, Revenue Bonds, George
Washington University, Series A,
4.000%, 03/01/2006+................................. 3,400,000
2,950,000 District of Columbia, Revenue Bonds, George
Washington University,
4.000%, 03/01/2006+................................. 2,950,000
10,200,000 Wake County, North Carolina, Industrial Facilities &
Pollution Control Financing Authority Revenue Bonds,
Carolina Power & Light Co. Project, Series 1985-B,
4.000%, 09/01/2015.................................. 10,200,000
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT CASH EQUIVALENTS --
BACKED BY LETTERS OF CREDIT -- (CONTINUED)
$12,900,000 Wake County, North Carolina, Industrial Facilities
& Pollution Control Financing Authority Revenue
Bonds, Carolina Power & Light Co. Project, Series
1985-C,
4.000%, 10/01/2015................................. $ 12,900,000
TORONTO DOMINION BANK, LTD.
--------------------------
1,000,000 Wisconsin State Health Facilities Authority Revenue
Bonds Refunding, Franciscan Health Care, Series A-
1,
3.450%, 01/01/2016+................................ 1,000,000
11,565,000 Wisconsin State Health Facilities Authority Revenue
Bonds Refunding, Franciscan Health Care, Series A-
2,
3.450%, 01/01/2016+................................ 11,565,000
------------
386,599,017
------------
<CAPTION>
SHARES
-----------
<C> <S> <C>
OTHER INVESTMENTS -- 0.04%
432,600 Dreyfus Tax-Exempt Cash Management Fund............ 432,600
-------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $923,949,335*)....................................... 99.85% $923,949,335
OTHER ASSETS &
LIABILITIES (NET).......................................... 0.15 1,341,940
------ ------------
NET ASSETS................................................. 100.00% $925,291,275
====== ============
</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.
++ Variable rate put bonds and notes with demand features to mature within one
year.
FGIC--Financial Guaranty Insurance Corp.
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 instrumentsthat may be acquired by the Fund.
At September 30, 1996, approximately, 43% 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 September 30, 1996, approximately, 17% 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
11
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
SHORT-TERM TAX-EXEMPT SECURITIES FUND
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 88.86%
$2,000,000 Alabama State Refunding General Obligation Bonds,
5.900%, 03/01/1999.................................... $ 2,073,180
1,500,000 Connecticut State General Obligation Bonds, Series C,
5.100%, 03/15/2000.................................... 1,528,980
2,000,000 Connecticut State Special Assessment Unemployment
Compensation Revenue Bonds, Series A, (AMBAC),
5.000%, 11/15/1999.................................... 2,033,420
5,000,000 Connecticut State Special Tax Obligation Refunding
Revenue Bonds, Transportation Infrastructure Purposes,
Series C, (FGIC),
5.500%, 10/01/2000.................................... 5,173,900
1,700,000 Fairfax County, Virginia, General Obligation Bonds,
Series A,
5.000%, 06/01/1999.................................... 1,730,889
2,000,000 Harris County, Texas, Refunding Bonds,
5.750%, 10/01/1998.................................... 2,063,600
2,000,000 Hawaii State, Public Improvements General Obligation
Bonds, Series CK,
5.000%, 09/01/1998.................................... 2,034,680
1,500,000 Houston, Texas, General Obligation Bonds, Series C,
5.500%, 03/01/1999.................................... 1,540,185
1,910,000 Howard County, Maryland, Construction Public
Improvements General Obligation Bonds, Series A,
5.000%, 02/15/2000.................................... 1,946,080
2,000,000 Massachusetts State Turnpike Authority, Anticipation
Notes,
Series A,
5.000%, 06/01/1999.................................... 2,029,280
1,260,000 Minnesota State Public Improvement Bonds, Recreational
Facilities Improvements,
5.600%, 10/01/1999.................................... 1,306,758
1,900,000 Mississippi State General Obligation Bonds, Series B,
5.000%, 08/01/1999.................................... 1,937,069
2,000,000 Municipal Assistance Corporation for New York City ,
New York, Revenue Bonds, Series E,
5.500%, 07/01/2000.................................... 2,073,100
4,000,000 New Jersey State Transportation Trust Fund Authority,
Transportation System Revenue Bonds, Series B,
5.000%, 06/15/1999.................................... 4,067,520
2,000,000 New York State Local Government Assistance Corp.,
Revenue Bonds, Series B,
5.100%, 04/01/1999.................................... 2,033,300
1,000,000 South Columbia Basin, Washington, Irrigation District,
Refunding Revenue Bonds,
5.750%, 12/01/2000.................................... 1,044,260
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (CONTINUED)
$1,500,000 Union County, New Jersey, Improvement Authority
Revenue Bonds, Correctional Facilities Project,
5.400%, 06/15/2000................................... $ 1,542,945
2,000,000 Virginia Beach, Virginia, Refunding General
Obligation Bonds,
5.250%, 02/01/1999................................... 2,040,340
-----------
38,199,486
-----------
TAX-EXEMPT SECURITIES -- BACKED BY
LETTERS OF CREDIT -- 8.84%
BANK OF AMERICA
---------------
2,000,000 California State Revenue Anticipation Warrants,
Series C2,
3.800%, 06/30/1997+.................................. 2,000,000
MORGAN GUARANTY, NY
-------------------
1,800,000 New York City, New York, General Obligation Bonds,
Subseries E3,
3.900%, 08/01/2023+.................................. 1,800,000
-----------
3,800,000
-----------
<CAPTION>
SHARES
----------
<C> <S> <C>
OTHER INVESTMENTS -- 0.67%
287,900 Dreyfus Tax-Exempt Cash Management Fund.............. 287,900
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $42,217,812*)......................................... 98.37% $42,287,386
OTHER ASSETS &
LIABILITIES (NET)........................................... 1.63 698,616
------ -----------
NET ASSETS.................................................. 100.00% $42,986,002
====== ===========
</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.
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 September 30, 1996, approximately, 9% 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 September 30, 1996, approximately, 21% of the net assets are invested in
Connecticut 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
12
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
INTERMEDIATE-TERM TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 88.05%
$10,000,000 Alabama State Public School & College Authority,
Capital Improvement Revenue Bonds, (MBIA)
5.250%, 11/01/2005.................................. $ 10,165,700
10,000,000 California State Public Improvement General
Obligation Bonds, (FGIC),
7.500%, 11/01/2003.................................. 11,618,100
10,000,000 Cobb County, Georgia School District, General
Obligation Bonds,
4.750%, 02/01/2005.................................. 9,891,000
10,000,000 Connecticut State General Obligation Bonds, Series
D,
6.250%, 11/15/2009.................................. 10,755,600
10,000,000 Connecticut State Special Tax Obligation Revenue
Refunding Bonds, Transportation Infrastructure,
Series A,
5.125%, 09/01/2005.................................. 10,070,800
10,000,000 Fairfax County, Virginia, Refunding General
Obligation Bonds, Series C,
5.250%, 05/01/2008.................................. 10,008,100
10,000,000 Florida State Board of Education Refunding General
Obligation Bonds, Series B,
5.125%, 06/01/2008.................................. 9,904,100
10,000,000 Georgia State General Obligation Bonds, Series C,
6.500%, 07/01/2004.................................. 11,095,600
10,000,000 Hawaii State General Obligation Bonds, Series CJ,
5.900%, 01/01/2006.................................. 10,532,500
10,000,000 Hawaii State Refunding General Obligation Bonds,
Series CI,
4.500%, 11/01/2005.................................. 9,602,700
10,000,000 Maryland State Department of Transportation,
Consolidated Transportation Bonds, Second Issue,
4.375%, 12/15/2003.................................. 9,663,100
10,000,000 Maryland State & Local Facilities, Public
Improvements Correctional Facilities, 3rd Series,
5.700%, 10/15/2006.................................. 10,512,500
10,000,000 Maryland State & Local Facilities, Public
Improvements Correctional Facilities, 3rd Series,
4.400%, 07/15/2004.................................. 9,729,200
10,000,000 Massachusetts State Public Improvements, General
Obligation Bonds, Series C, (MBIA)
5.625%, 08/01/2011.................................. 10,079,900
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (CONTINUED)
$10,000,000 New Jersey State Refunding General Obligation
Bonds, Series D,
5.625%, 02/15/2005................................. $ 10,454,200
10,000,000 New Jersey State, Transportation Trust Fund Revenue
Bonds, Transportation System, Series A,
5.250%, 06/15/2008................................. 10,015,400
10,000,000 Ohio State Public Facilities Commission Revenue
Bonds, Series II-B, (MBIA),
5.000%, 11/01/2007................................. 9,857,400
8,840,000 Ohio State University Revenue Bonds, General
Receipts, Series B,
3.700%, 12/01/2006+................................ 8,840,000
10,000,000 Puerto Rico Telephone Authority Revenue Bonds,
(AMBAC),
4.950%, 01/01/2003................................. 10,117,200
10,000,000 Texas State Refunding Bonds, Series A,
5.800%, 10/01/2004................................. 10,617,100
10,000,000 University of Texas Permanent University Fund,
Refunding Revenue Bonds, (PUFG)
4.500%, 07/01/2007................................. 9,249,200
10,000,000 Wisconsin State Refunding General Obligation Bonds,
Series 3,
4.875%, 11/01/2005................................. 9,905,600
------------
222,685,000
------------
TAX-EXEMPT SECURITIES -- ESCROWED
IN U.S. GOVERNMENTS -- 4.40%
10,000,000 Fairfax County, Virginia, Industrial Development
Authority Revenue Bonds, Fairfax Hospital System,
6.801%, 08/29/2023
(Prerefunded 08/15/2001)........................... 11,138,400
------------
TAX-EXEMPT SECURITIES -- BACKED BY
LETTERS OF CREDIT -- 6.17%
SANWA BANK
----------
6,800,000 Indiana Health Facilities Financing Authority, St.
Anthony's Medical Center Project Revenue Bonds,
4.050%, 12/01/2014+................................ 6,800,000
UNION BANK OF SWITZERLAND
-------------------------
8,800,000 Louisiana State Offshore Terminal Authority,
Deepwater Port Refunding Revenue Bonds, 1st Stage,
LOOP, Inc., Series A,+
3.700%, 09/01/2008................................. 8,800,000
------------
15,600,000
------------
</TABLE>
See Notes to Financial Statements
13
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
INTERMEDIATE-TERM TAX-EXEMPT FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
----------- ------------
<C> <S> <C>
OTHER INVESTMENTS -- 0.22%
559,000 Dreyfus Tax-Exempt Cash Management Fund............. $ 559,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $241,476,747*)...................................... 98.84% $249,982,400
OTHER ASSETS & LIABILITIES (NET).......................... 1.16 2,932,435
------ ------------
NET ASSETS................................................ 100.00% $252,914,835
====== ============
</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.
PUFG--Permanent University Fund Guaranty.
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 September 30, 1996, approximately, 11% 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 September 30, 1996, approximately, 12% of the net assets are invested in
Maryland 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
14
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
NEW YORK INTERMEDIATE-TERM TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 92.16%
$4,000,000 Honolulu, Hawaii, City & County, Series A, (FGIC),
6.000%, 09/01/2005.................................... $ 4,264,080
3,825,000 Metropolitan Transportation Authority of New York,
Commuter Facilities Revenue Bonds, Series A, (MBIA),
7.000%, 07/01/2006.................................... 4,403,034
4,130,000 Municipal Assistance Corp., City of New York, Series
E,
6.000%, 07/01/2005.................................... 4,446,813
3,900,000 Nassau County, New York, Combined Sewer Districts
Refunding General Obligation Bonds, Series G, (MBIA),
5.100%, 01/15/2003.................................... 3,962,595
4,000,000 New Jersey State, Refunding General Obligation Bonds,
Series E,
6.000%, 07/15/2006.................................... 4,312,800
3,000,000 New York City, New York, Municipal Water Finance
Authority, Water & Sewer System Revenue Bonds,
Series B, (AMBAC),
5.125%, 06/15/2004.................................... 3,055,230
3,500,000 New York State Dormitory Authority, City University
System Revenue Bonds, Series A, (FGIC),
5.600%, 07/01/2004.................................... 3,663,065
4,750,000 New York State Dormitory Authority, Columbia
University Revenue Bonds, Series A,
4.500%, 07/01/2005.................................... 4,576,435
4,000,000 New York State Dormitory Authority, Cornell University
Revenue Bonds,
5.125%, 07/01/2006.................................... 4,085,960
7,500,000 New York State Environmental Facilities Corp.,
Pollution Control Revenue Bonds, State Water Revolving
Fund, Series A,
7.250%, 06/15/2010.................................... 8,355,075
2,500,000 New York State Housing Finance Agency Special
Obligation Bonds, New York City Health Facilities,
Series A,
6.900%, 05/01/2003.................................... 2,803,800
4,000,000 New York State Local Government Assistance Corp.
Revenue Bonds, Series A,
5.400%, 04/01/2005.................................... 4,123,160
4,000,000 New York State Local Government Assistance Corp.
Revenue Bonds, Series A,
5.400%, 04/01/2005.................................... 4,123,680
4,500,000 New York State Power Authority & General Purpose
Revenue Bonds, Series CC,
4.800%, 01/01/2005.................................... 4,445,415
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
<C> <S> <C> <C>
TAX-EXEMPT SECURITIES -- (CONTINUED)
$4,000,000 New York State Refunding General Obligation
Bonds, Series B,
5.500%, 08/15/2006............................... $ 4,141,520
4,450,000 New York State Thruway Authority Highway & Bridge
Revenue Bonds, Series B, (MBIA),
5.750%, 04/01/2006............................... 4,672,544
4,725,000 Port Authority of New York & New Jersey, Revenue
Bonds, Cons-103 Series, (MBIA),
5.125%, 12/15/2009............................... 4,640,139
4,000,000 Puerto Rico Telephone Authority Revenue Bonds,
(MBIA),
5.250%, 01/01/2005............................... 4,115,680
5,000,000 Puerto Rico Telephone Authority Revenue Bonds,
Reserve 1, (AMBAC),
5.050%, 01/01/2004............................... 5,084,600
4,000,000 Triborough Bridge & Tunnel Authority, New York,
Revenue and General Purpose Bonds, Series A,
5.000%, 01/01/2008............................... 3,955,640
-----------
87,231,265
-----------
TAX-EXEMPT SECURITIES -- ESCROWED
IN U.S. GOVERNMENTS -- 3.04%
2,500,000 New York City, New York, Municpial Water Finance
Authority, Water & Sewer System Revenue Bonds,
Series C,
(Prerefunded 6/15/01)
7.750%, 06/15/2020............................... 2,872,600
-----------
TAX-EXEMPT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 6.55%
CHEMICAL BANKING CORP.
---------------------
3,200,000 New York, New York, General Obligation Unlimited,
Subseries A-4
3.900%, 08/01/2022+ ............................. 3,200,000
MORGAN GUARANTY TRUST
---------------------
3,000,000 New York City, New York, General Obligation
Unlimited, Subseries E-5
3.900%, 08/01/2009+ ............................. 3,000,000
-----------
6,200,000
-----------
</TABLE>
See Notes to Financial Statements
15
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
NEW YORK INTERMEDIATE-TERM TAX-EXEMPT FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- -----------
<C> <S> <C>
OTHER INVESTMENTS -- 1.81%
1,712,900 Shearson New York Tax-Exempt Money Fund................ $ 1,712,900
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $96,064,760*)........................................ 103.56% $98,016,765
OTHER ASSETS &
LIABILITIES (NET).......................................... (3.56) (3,366,771)
------ -----------
NET ASSETS................................................. 100.00% $94,649,994
====== ===========
</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 September 30, 1996, approximately, 10% 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 September 30, 1996, approximately, 83% 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
16
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
LONG-TERM TAX-EXEMPT FUND
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 91.15%
$ 4,000,000 Alaska State Housing Finance Agency Refunding
Revenue Bonds, Series A,
5.400%, 12/01/2013.................................. $ 3,777,320
5,000,000 Charlotte, North Carolina, Water & Sewer, General
Obligation Bonds,
5.600%, 05/01/2017.................................. 5,054,700
4,000,000 Connecticut State Health & Education Facilities
Authority Revenue Bonds, Veteran Memorial Medical
Center, Series A, (MBIA),
5.500%, 07/01/2026.................................. 3,814,160
4,000,000 Cook County, Illinois, General Obligation Bonds,
Series B, (MBIA),
5.375%, 11/15/2018.................................. 3,734,960
4,000,000 Dade County, Florida, Water & Sewer Systems Revenue
Bonds, (FGIC),
5.500%, 10/01/2025.................................. 3,876,120
4,000,000 Florida State Municipal Power Agency Refunding
Revenue Bonds, St. Lucie Project, (FGIC),
5.250%, 10/01/2021.................................. 3,716,480
4,000,000 Intermountain Power Agency, Utah, Power Supply
Refunding Revenue Bonds, Series A,
5.500%, 07/01/2020.................................. 3,821,120
10,000,000 Intermountain Power Agency, Utah, Power Supply
Refunding Revenue Bonds, Series D,
5.000%, 07/01/2021.................................. 8,966,900
4,000,000 Massachusetts Bay Transportation Authority, General
Transportation, Series B, (AMBAC),
5.375%, 03/01/2025.................................. 3,788,240
4,000,000 Nevada State, Colorado River Commission, General
Obligation Revenue Bonds,
5.300%, 07/01/2024.................................. 3,746,240
4,000,000 New Jersey State Transportation Trust Fund Authority
Refunding Revenue Bonds, Series A,
5.250%, 06/15/2014.................................. 3,835,000
4,000,000 New York State Local Assistance Corp. Refunding
Revenue Bonds, Series B,
5.500%, 04/01/2021.................................. 3,813,920
4,000,000 New York State Medical Care Facilities Finance
Agency Refunding Revenue Bonds, New York Hospital,
FHA Insured, Series A, (MBIA),
5.500%, 08/15/2024.................................. 3,824,200
5,000,000 Orlando, Florida, Utilities Commission, Water &
Electric Revenue Bonds, Series A,
5.250%, 10/01/2023.................................. 4,672,250
</TABLE>
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (CONTINUED)
$ 4,000,000 Orlando & Orange County Expressway Authority
Refunding Revenue Bonds, (AMBAC),
5.250%, 07/01/2012................................. $ 3,915,800
4,000,000 Port Authority of New York & New Jersey, Revenue
Bonds, Series 104, (AMBAC),
5.200%, 07/15/2021................................. 3,705,920
4,000,000 Port Seattle, Washington, Revenue Bonds, Series A,
(FGIC),
5.500%, 09/01/2021................................. 3,837,560
4,000,000 Salt River, Arizona, Agricultural Project Refunding
Revenue Bonds, Series C,
5.000%, 01/01/2013................................. 3,770,160
4,000,000 San Antonio, Texas, Electric & Gas Refunding
Revenue Bonds,
5.000%, 02/01/2014................................. 3,689,720
4,000,000 Seattle, Washington, Drain & Wastewater Utilities,
Refunding Revenue Bonds, (MBIA),
5.250%, 12/01/2025................................. 3,697,200
4,000,000 Texas State Turnpike Authority Dallas North Thruway
Revenue Bonds, President George Bush Turnpike,
(FGIC),
5.250%, 01/01/2023................................. 3,756,040
4,000,000 Valdez, Alaska, Marine Terminal Refunding Revenue
Bonds, BP Pipeline, Inc. Project, Series B,
5.500%, 10/01/2028................................. 3,765,520
4,000,000 Washington State General Obligation Bonds, Series
A,
5.750%, 09/01/2019................................. 3,974,600
4,000,000 Wisconsin State Transportation Refunding Revenue
Bonds, Series B,
5.500%, 07/01/2022................................. 3,871,320
------------
98,425,450
------------
TAX-EXEMPT SECURITIES -- ESCROWED
IN U.S. GOVERNMENTS -- 4.51%
5,000,000 Florida State Board of Education Capital Outlay,
Public Education, Series A,
5.500%, 06/01/2026................................. 4,864,200
------------
TAX-EXEMPT SECURITIES -- BACKED BY
LETTERS OF CREDIT--3.70%
UNION BANK, SWITZERLAND
-----------------------
4,000,000 Louisiana State Offshore Terminal Authority,
Deepwater Port Refunding Revenue Bonds, 1st Stage,
LOOP, Inc., Series A,
3.700%, 09/01/2008+................................ 4,000,000
------------
</TABLE>
See Notes to Financial Statements
17
<PAGE>
EXCELSIOR TAX-EXEMPT FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1996 (UNAUDITED)
LONG-TERM TAX-EXEMPT FUND -- (CONTINUED)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
--------- ------------
<C> <S> <C>
OTHER INVESTMENTS -- 1.33%
1,178,000 Dreyfus Tax-Exempt Cash Management Fund............... $ 1,178,000
257,000 Shearson Tax-Exempt Municipal Fund.................... 257,000
------------
1,435,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $105,676,619*)...................................... 100.69% $108,724,650
OTHER ASSETS &
LIABILITIES (NET)......................................... (0.69) (742,848)
------ ------------
NET ASSETS................................................ 100.00% $107,981,802
====== ============
</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 September 30, 1996, approximately, 19% of the net assets are invested in
Florida 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 TAX-EXEMPT FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Excelsior Tax-Exempt Funds, Inc. ("Excelsior Tax-Exempt Fund") was
incorporated under the laws of the State of Maryland on August 8, 1984 and is
registered under the Investment Company Act of 1940, as amended, as an open-end
management investment company.
Excelsior Tax-Exempt Fund currently offers shares in six managed investment
portfolios, each having its own investment objectives and policies. The
following is a summary of significant accounting policies for Tax-Exempt Money
Fund, Short-Term Tax-Exempt Securities Fund, Intermediate-Term Tax-Exempt Fund,
New York Intermediate Term Tax-Exempt Fund and Long-Term Tax-Exempt Fund (the
"Portfolios"). Such policies are in conformity with generally accepted
accounting principles and are consistently followed by Excelsior Tax-Exempt
Fund in the preparation of the financial statements. Generally accepted
accounting principles require management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from these estimates. The financial statements for
Excelsior Funds, Inc. ("Excelsior Fund") are presented separately.
With regard to Tax-Exempt Money Fund, it is Excelsior Tax-Exempt 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 and distribution policies to enable it to do so.
However, there can be no assurance that the net asset value per share of the
Portfolio will not vary.
(A) PORTFOLIO VALUATION:
Tax-Exempt Money Fund: Securities are valued at amortized cost, which has
been determined by the Fund's Board of Directors to represent the fair value
of the Fund'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.
Short-Term Tax-Exempt Securities Fund, Intermediate-Term Tax-Exempt Fund,
New York Intermediate-Term Tax-Exempt Fund and Long-Term Tax-Exempt
Fund: Securities are valued each business day as of the close of the New
York Stock Exchange after consultation with an independent pricing service
(the "Service"). When in the judgement of the Service, quoted bid prices for
securities are readily available and are representative of the bid side of
the market, these investments are valued at the mean between the quoted bid
prices (as obtained by the Service from dealers in such securities) and ask
prices (as calculated by the Service based upon its evaluation of the market
for such securities). Short-term debt instruments with remaining maturities
of 60 days or less, and variable rate demand notes and securities with put
options exercisable within one year, are valued at amortized cost, which
approximates market value. Securities and other assets for which market
quotations are not readily available are valued at fair value pursuant to
guidelines adopted by Excelsior Tax-Exempt Fund's Board of Directors.
The net asset value of the shares in Short-Term Tax-Exempt Securities
Fund, Intermediate-Term Tax-Exempt Fund, New York Intermediate-Term Tax-
Exempt Fund, and Long-Term Tax-Exempt Fund will fluctuate as the market
values of their portfolio securities change in response to changing market
rates of interest and other factors.
19
<PAGE>
(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) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Tax-Exempt Money Fund: 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.
Short-Term Tax-Exempt Securities Fund, Intermediate-Term Tax-Exempt Fund,
New York Intermediate-Term Tax-Exempt Fund and Long-Term Tax-Exempt
Fund: Dividends from net investment income are declared daily and paid
monthly. Net realized capital gains, unless offset by any available capital
loss carryforward, are distributed to shareholders at least annually.
Dividends and distributions are recorded on the ex-dividend date.
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 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.
(D) FEDERAL TAXES:
It is the policy of Excelsior Tax-Exempt Fund that each Portfolio continue
to qualify as a regulated investment company, if such qualification is in
the best interest of the shareholders, by complying with the requirements of
the Internal Revenue Code applicable to regulated investment companies, and
by distributing substantially all of its taxable earnings to its
shareholders.
At March 31, 1996, the following Portfolios had approximate capital loss
carryforwards for Federal tax purposes available to offset future net
capital gains as follows:
<TABLE>
<CAPTION>
EXPIRATION DATE MARCH 31,
-------------------------------------
2001 2002 2003 TOTAL
------- ------- ---------- ----------
<S> <C> <C> <C> <C>
Tax-Exempt Money Fund................ $18,000 $31,000 $ -- $ 49,000
Short-Term Tax-Exempt Securities
Fund................................ -- -- 644,000 644,000
Intermediate-Term Tax-Exempt Fund.... -- -- 7,420,000 7,420,000
New York Intermediate-Term Tax-Exempt
Fund................................ -- -- 1,544,000 1,544,000
</TABLE>
To the extent that such carryforwards are utilized, no capital gains
distributions will be made. During the year ended March 31, 1996, Tax-Exempt
Money Fund, Short-Term Tax-Exempt Securities Fund, Intermediate-Term Tax-
Exempt Fund, New York Intermediate-Term Tax-Exempt Fund and Long-Term Tax-
Exempt Fund utilized capital loss carryforwards for Federal Tax purposes
totaling approximately $8,000, $14,000, $1,005,000, $1,073,000 and $833,000,
respectively.
20
<PAGE>
Net capital losses incurred after October 31 and within the taxable year
are deemed to arise on the first business day of a Portfolio's next taxable
year. Tax-Exempt Money Fund incurred, and elected to defer, net capital
losses of approximately $2,000 for the year ended March 31, 1996.
At September 30, 1996, aggregate gross unrealized appreciation for all
securities for which there was an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities in which there
was an excess of tax cost over value were as follows:
<TABLE>
<CAPTION>
TAX BASIS TAX BASIS NET
UNREALIZED UNREALIZED UNREALIZED
APPRECIATION (DEPRECIATION) APPRECIATION
------------ -------------- ------------
<S> <C> <C> <C>
Tax-Exempt Money Fund............. $ 32,045 $ (11,944) $ 20,101
Short-Term Tax-Exempt Securities
Fund............................. 138,839 (69,265) 69,574
Intermediate-Term Tax-Exempt
Fund............................. 9,168,356 (662,703) 8,505,653
New York Intermediate-Term Tax-
Exempt Fund...................... 2,188,595 (236,590) 1,952,005
Long-Term Tax-Exempt Fund......... 3,149,398 (101,367) 3,048,031
</TABLE>
(E) EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio are charged to that
Portfolio. Other expenses are allocated to the respective Portfolios based
on average net assets.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND RELATED PARTY TRANSACTIONS
United States Trust Company of New York ("U.S. Trust") serves as the
investment adviser to Excelsior Tax-Exempt Fund. 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 Tax-Exempt Money Fund, .30% of the average
daily net assets of Short-Term Tax-Exempt Securities Fund, .35% of the average
daily net assets of Intermediate-Term Tax-Exempt Fund and .50% of the average
daily net assets of New York Intermediate-Term Tax-Exempt Fund and Long-Term
Tax-Exempt Fund.
U.S. Trust, Chase Global Funds Services Company ("CGFSC"), a subsidiary of
The Chase Manhattan Bank and Federated Administrative Services (collectively,
the "Administrators") provide administrative services to Excelsior Tax-Exempt
Fund. For the services provided to the Portfolios, the Administrators are
entitled jointly to annual fees, computed daily and paid monthly, based on the
combined aggregate average daily net assets of Excelsior Tax-Exempt Fund,
Excelsior Fund (excluding the international equity portfolios of Excelsior Fund
and Excelsior Institutional Trust), 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, 1996, Administration fees charged by U.S. Trust were as follows:
<TABLE>
<S> <C>
Tax-Exempt Money Fund............................................. $52,830
Short-Term Tax-Exempt Securities Fund............................. 2,461
Intermediate-Term Tax-Exempt Fund................................. 14,542
New York Intermediate-Term Tax-Exempt Fund........................ 5,341
Long-Term Tax-Exempt Fund......................................... 5,932
</TABLE>
21
<PAGE>
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust and the
Administrators may undertake to waive a portion or all of the fees payable to
them and also may reimburse the Portfolios for a portion of other expenses.
Until further notice to Excelsior Tax-Exempt Fund, U.S. Trust intends to
voluntarily waive fees and reimburse expenses to the extent necessary for
Short-Term Tax-Exempt Securities Fund to maintain an annual expense ratio of
not more than .60%. For the six months ended September 30, 1996, no fees were
waived or expenses reimbursed pursuant to this voluntary limitation.
Excelsior Tax-Exempt Fund has also entered into administrative servicing
agreements with various service organizations (which may include affiliates of
U.S. Trust) requiring them to provide administrative support services to their
customers owning shares of the Portfolios. As a consideration for the
administrative services provided by each service organization to its customers,
each Portfolio will pay the service organization an administrative service fee
at the annual rate of up to .40% of the average daily net asset value of its
shares held by the service organizations' customers. Such services may include
assisting in processing purchase, exchange and redemption requests;
transmitting and receiving funds in connection with customer orders to
purchase, exchange or redeem shares; and providing periodic statements. Until
further notice to Excelsior Tax-Exempt Fund, U.S. Trust and the Administrators
have voluntarily agreed to waive investment advisory and administration fees
payable by each Portfolio in an amount equal to the administrative service fees
payable by such Portfolio. For the six months ended September 30, 1996, 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>
Tax-Exempt Money Fund................................. $230,249 $--
Short-Term Tax-Exempt Securities Fund................. 14,649 --
Intermediate-Term Tax-Exempt Fund..................... 73,739 294
New York Intermediate-Term Tax-Exempt Fund............ 14,202 33
Long-Term Tax-Exempt Fund............................. 33,522 908
</TABLE>
Edgewood Services, Inc. (the "Distributor"), a wholly-owned subsidiary of
Federated Investors, serves as the sponsor and distributor of Excelsior Tax-
Exempt Fund. Certain sales of Excelsior Tax-Exempt Fund's shares are subject to
a maximum sales charge of 4.50% of the offering price. Shares of each Portfolio
are sold on a continuous basis by the Distributor.
Each Director of Excelsior Tax-Exempt 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.
3. PURCHASES AND SALES OF SECURITIES
For the six months ended September 30, 1996, purchases and sales and
maturities of securities, excluding short-term investments, for the Portfolios
aggregated:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Short-Term Tax-Exempt Securities Fund.................. $17,147,001 $17,266,856
Intermediate-Term Tax-Exempt Fund...................... 29,070,200 21,576,900
New York Intermediate-Term Tax-Exempt Fund............. 46,971,834 45,703,046
Long-Term Tax-Exempt Fund.............................. 62,306,360 51,233,360
</TABLE>
22
<PAGE>
4. COMMON STOCK:
Excelsior Tax-Exempt Fund currently offers five classes of shares, each
representing interests in one of five separate Portfolios. Authorized capital
for each Portfolio is as follows: 1,500 million shares of Tax-Exempt Money Fund
and 500 million shares each of Short-Term Tax-Exempt Securities Fund,
Intermediate-Term Tax-Exempt Fund, New York Intermediate-Term Tax-Exempt Fund
and Long-Term Tax-Exempt 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 and tax-exempt
earnings on the assets belonging to such Portfolio as are declared at the
discretion of Excelsior Tax-Exempt Fund's Board of Directors. Since Tax-Exempt
Money Fund 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 amount shown below for such
transactions.
<TABLE>
<CAPTION>
TAX-EXEMPT MONEY FUND
---------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/96 03/31/96
---------------- ---------------
<S> <C> <C>
Sold......................................... $ 1,621,670,059 $ 3,563,760,620
Issued as reinvestment of dividends.......... 561,125 1,453,070
Redeemed..................................... (1,663,621,422) (3,413,388,911)
--------------- ---------------
Net Increase (Decrease)...................... $ (41,390,238) $ 151,824,779
=============== ===============
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM TAX-EXEMPT SECURITIES FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/96 03/31/96
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 1,445,180 $ 10,143,847 4,138,581 $ 29,147,090
Issued as reinvestment of
dividends................ 7,150 50,182 22,472 158,308
Redeemed.................. (1,439,780) (10,109,474) (4,989,971) (35,155,827)
---------- ------------ ---------- ------------
Net Increase (Decrease)... 12,550 $ 84,555 (828,918) $ (5,850,429)
========== ============ ========== ============
<CAPTION>
INTERMEDIATE-TERM TAX-EXEMPT FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/96 03/31/96
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 3,465,463 $ 31,286,980 7,022,612 $ 64,053,421
Issued as reinvestment of
dividends................ 34,389 311,568 72,517 662,041
Redeemed.................. (3,735,618) (33,732,373) (5,819,486) (53,110,726)
---------- ------------ ---------- ------------
Net Increase (Decrease)... (235,766) $ (2,133,825) 1,275,643 $ 11,604,736
========== ============ ========== ============
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
NEW YORK INTERMEDIATE-TERM TAX-EXEMPT FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/96 03/31/96
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 1,069,489 $ 8,979,231 3,519,848 $ 29,757,136
Issued as reinvestment of
dividends................ 11,934 100,344 28,744 243,592
Redeemed.................. (1,316,063) (11,012,259) (2,708,124) (22,935,162)
---------- ------------ ---------- ------------
Net Increase (Decrease)... (234,640) $ (1,932,684) 840,468 $ 7,065,566
========== ============ ========== ============
<CAPTION>
LONG-TERM TAX-EXEMPT FUND
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/96 03/31/96
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 2,643,903 $ 24,787,641 5,294,884 $ 50,924,332
Issued as reinvestment of
dividends................ 25,147 237,374 60,003 582,920
Redeemed.................. (1,000,756) (9,410,522) (4,308,376) (41,666,507)
---------- ------------ ---------- ------------
Net Increase.............. 1,668,294 $ 15,614,493 1,046,511 $ 9,840,745
========== ============ ========== ============
</TABLE>
5. ORGANIZATION COSTS:
Excelsior Tax-Exempt Fund has borne all costs in connection with the initial
organization of new portfolios, including the fees for registering and
qualifying its shares for distribution under Federal and state securities
regulations. All such costs are being amortized on the straight-line basis over
periods of five years from the dates on which each Portfolio commenced
operations.
24
