<PAGE>
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[LOGO OF EXCELSIOR FUNDS]
Tax-Exempt
Fixed Income
Portfolios
SEMI-ANNUAL REPORT
September 30, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
STATEMENTS OF ASSETS AND LIABILITIES....................................... 1
STATEMENTS OF OPERATIONS................................................... 2
STATEMENTS OF CHANGES IN NET ASSETS........................................ 3
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS................. 4
PORTFOLIOS OF INVESTMENTS
Short-Term Tax-Exempt Securities Fund.................................... 6
Intermediate-Term Tax-Exempt Fund........................................ 8
New York Intermediate-Term Tax-Exempt Fund............................... 10
Long-Term Tax-Exempt Fund................................................ 11
California Tax-Exempt Income Fund........................................ 13
NOTES TO FINANCIAL STATEMENTS.............................................. 20
</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 OF
CONNECTICUT, THEIR 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>
Excelsior Tax-Exempt Funds, Inc.
Statements of Assets and Liabilities
September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
New York
Short-Term Intermediate- Intermediate- California
Tax-Exempt Term Term Long-Term Tax-Exempt
Securities Tax-Exempt Tax-Exempt Tax-Exempt Income
Fund Fund Fund Fund Fund
----------- ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at cost--
see accompanying
portfolios............ $39,081,691 $312,787,562 $147,059,556 $166,222,998 $62,931,856
=========== ============ ============ ============ ===========
Investments, at value
(Note 1).............. $38,953,071 $308,464,140 $143,269,379 $157,336,618 $62,646,657
Cash................... 10,259 95,584 70,326 69,606 3,689
Interest receivable.... 471,049 5,399,594 2,100,230 2,363,103 877,895
Receivable for fund
shares sold........... -- -- -- 1,593 --
Receivable due from
investment adviser.... -- -- -- -- 37,280
Prepaid expenses....... 384 4,209 1,111 3,505 369
Unamortized
organization costs
(Note 5).............. -- -- -- -- 12,594
----------- ------------ ------------ ------------ -----------
Total Assets........... 39,434,763 313,963,527 145,441,046 159,774,425 63,578,484
LIABILITIES:
Payable for dividends
declared.............. 110,426 1,026,130 451,307 593,894 186,788
Investment advisory
fees payable (Note
2).................... 17,076 138,539 116,717 114,955 --
Administration fees
payable (Note 2)...... 5,756 56,540 26,080 24,837 10,367
Administrative
servicing fees payable
(Note 2).............. 4,352 39,127 4,904 24,968 20,282
Directors' fees payable
(Note 2).............. 607 4,921 2,461 2,928 815
Accrued expenses and
other payables........ 16,816 50,575 36,737 40,095 9,413
----------- ------------ ------------ ------------ -----------
Total Liabilities...... 155,033 1,315,832 638,206 801,677 227,665
----------- ------------ ------------ ------------ -----------
NET ASSETS.............. $39,279,730 $312,647,695 $144,802,840 $158,972,748 $63,350,819
=========== ============ ============ ============ ===========
NET ASSETS consist of:
Undistributed
(distributions in
excess of) net
investment income..... $ (121) $ (509) $ (31) $ 28,847 $ 13,538
Accumulated net
realized gain (loss)
on investments........ (384,533) 2,728,270 1,633,543 (259,660) (19,394)
Unrealized depreciation
of investments........ (128,620) (4,323,422) (3,790,177) (8,886,380) (285,199)
Par value (Note 4)..... 5,564 34,258 17,102 17,498 8,934
Paid in capital in
excess of par value... 39,787,440 314,209,098 146,942,403 168,072,443 63,632,940
----------- ------------ ------------ ------------ -----------
Total Net Assets........ $39,279,730 $312,647,695 $144,802,840 $158,972,748 $63,350,819
=========== ============ ============ ============ ===========
Shares of Common Stock
Outstanding............. 5,564,063 34,257,904 17,102,194 17,498,361 8,933,613
NET ASSET VALUE PER
SHARE.................. $7.06 $9.13 $8.47 $9.09 $7.09
===== ===== ===== ===== =====
</TABLE>
See Notes to Financial Statements
1
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Statements of Operations
Six Months Ended September 30, 1999 (Unaudited)
<TABLE>
<CAPTION>
New York
Short-Term Intermediate- Intermediate- California
Tax-Exempt Term Term Long-Term Tax-Exempt
Securities Tax-Exempt Tax-Exempt Tax-Exempt Income
Fund Fund Fund Fund Fund
---------- ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $ 825,885 $ 7,207,188 $ 3,536,234 $ 4,357,267 $ 1,312,382
--------- ------------ ----------- ------------ -----------
EXPENSES:
Investment advisory fees
(Note 2)................. 62,178 557,977 402,527 433,512 159,320
Administration fees (Note
2)....................... 31,616 243,241 122,819 132,131 48,571
Administrative servicing
fees (Note 2)............ 13,041 117,038 15,356 77,381 63,131
Registration and filing
fees..................... 6,674 7,807 1,506 9,951 1,495
Custodian fees............ 5,701 40,636 20,932 23,093 8,574
Shareholder servicing
agent fees............... 5,412 9,604 5,614 23,857 12,347
Legal and audit fees...... 2,267 17,385 12,683 9,882 4,615
Directors' fees and
expenses (Note 2)........ 1,094 8,417 4,169 4,805 1,690
Shareholder reports....... 1,612 11,707 6,014 6,090 2,439
Amortization of
organization costs (Note
5)....................... -- -- -- -- 3,153
Miscellaneous expenses.... 2,783 12,241 5,338 9,369 3,091
--------- ------------ ----------- ------------ -----------
Total Expenses............ 132,378 1,026,053 596,958 730,071 308,426
Fees waived and reimbursed
by investment adviser and
administrators (Note 2).. (13,041) (117,038) (15,356) (77,381) (149,112)
--------- ------------ ----------- ------------ -----------
Net Expenses.............. 119,337 909,015 581,602 652,690 159,314
--------- ------------ ----------- ------------ -----------
NET INVESTMENT INCOME...... 706,548 6,298,173 2,954,632 3,704,577 1,153,068
--------- ------------ ----------- ------------ -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
(Note 1):
Net realized gain (loss)
on security
transactions............. (65,713) 2,542,214 55,686 (1,303,963) (8,730)
Change in unrealized
appreciation/depreciation
of investments during the
period................... (594,598) (15,183,051) (6,435,954) (12,852,518) (1,453,614)
--------- ------------ ----------- ------------ -----------
Net realized and unrealized
loss on investments....... (660,311) (12,640,837) (6,380,268) (14,156,481) (1,462,344)
--------- ------------ ----------- ------------ -----------
Net increase (decrease) in
net assets resulting from
operations................ $ 46,237 $ (6,342,664) $(3,425,636) $(10,451,904) $ (309,276)
========= ============ =========== ============ ===========
</TABLE>
See Notes to Financial Statements
2
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
New York
Short-Term Intermediate- Intermediate- California
Tax-Exempt Term Term Long-Term Tax-Exempt
Securities Tax-Exempt Tax-Exempt Tax-Exempt Income
Fund Fund Fund Fund Fund
----------- ------------- ------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Six Months Ended September
30, 1999 (Unaudited)
Net investment income..... $ 706,548 $ 6,298,173 $ 2,954,632 $ 3,704,577 $ 1,153,068
Net realized gain (loss)
on investments........... (65,713) 2,542,214 55,686 (1,303,963) (8,730)
Change in unrealized
appreciation/depreciation
of investments during the
period................... (594,598) (15,183,051) (6,435,954) (12,852,518) (1,453,614)
----------- ------------ ------------ ------------ -----------
Net increase (decrease) in
net assets resulting from
operations............... 46,237 (6,342,664) (3,425,636) (10,451,904) (309,276)
Distributions to
shareholders from net
investment income........ (706,548) (6,298,681) (2,954,632) (3,704,577) (1,153,068)
Increase (decrease) in net
assets from fund share
transactions (Note 4).... (5,221,239) 1,301,225 (3,643,977) (9,318,237) (97,886)
----------- ------------ ------------ ------------ -----------
Net decrease in net
assets................... (5,881,550) (11,340,120) (10,024,245) (23,474,718) (1,560,230)
NET ASSETS:
Beginning of period...... 45,161,280 323,987,815 154,827,085 182,447,466 64,911,049
----------- ------------ ------------ ------------ -----------
End of period (1)........ $39,279,730 $312,647,695 $144,802,840 $158,972,748 $63,350,819
=========== ============ ============ ============ ===========
(1) Including
undistributed
(distributions in
excess of) net
investment income.... $ (121) $ (509) $ (31) $ 28,847 $ 13,538
=========== ============ ============ ============ ===========
Year Ended March 31, 1999
Net investment income..... $ 1,443,023 $ 11,636,643 $ 5,478,062 $ 7,015,150 $ 1,759,119
Net realized gain (loss)
on investments........... 244,067 6,083,660 3,648,244 5,951,423 (10,664)
Change in unrealized
appreciation/depreciation
of investments during the
year..................... 100,182 (2,332,942) (1,805,087) (4,375,908) 487,683
----------- ------------ ------------ ------------ -----------
Net increase in net assets
resulting from
operations............... 1,787,272 15,387,361 7,321,219 8,590,665 2,236,138
Distributions to
shareholders:
From net investment
income.................. (1,442,902) (10,672,361) (5,408,610) (7,009,654) (1,759,122)
In excess of net
investment income....... (121) (964,283) (31) -- --
From net realized gain on
investments............. -- (4,188,867) (1,856,161) (4,889,887) --
Increase in net assets
from fund share
transactions (Note 4).... 2,471,554 53,410,128 23,476,913 36,221,177 31,868,218
----------- ------------ ------------ ------------ -----------
Net increase in net
assets................... 2,815,803 52,971,978 23,533,330 32,912,301 32,345,234
NET ASSETS:
Beginning of year........ 42,345,477 271,015,837 131,293,755 149,535,165 32,565,815
----------- ------------ ------------ ------------ -----------
End of year (2).......... $45,161,280 $323,987,815 $154,827,085 $182,447,466 $64,911,049
=========== ============ ============ ============ ===========
--------
(2) Including
undistributed
(distributions in
excess of) net
investment income.... $ (121) $ (1) $ (31) $ 28,847 $ 13,538
=========== ============ ============ ============ ===========
</TABLE>
--------
See Notes to Financial Statements
3
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Financial Highlights -- Selected Per Share Data and Ratios
For a Fund share outstanding throughout each period.
<TABLE>
<CAPTION>
Dividends Distributions
Net Asset Net Realized Total Dividends in Excess of From Net
Value, Net and Unrealized From From Net Net Realized
Beginning Investment Gain (Loss) Investment Investment Investment Gain on
of Period Income on Investments Operations Income Income Investments
--------- ---------- -------------- ---------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SHORT-TERM TAX-EXEMPT SECURITIES FUND--(12/31/92*)
Year Ended March 31,
1995................... $ 6.99 $0.25 $(0.02) $ 0.23 $(0.25) -- $(0.01)
1996................... 6.96 0.28 0.09 0.37 (0.28) -- --
1997................... 7.05 0.26 (0.01) 0.25 (0.27) -- --
1998................... 7.03 0.27 0.08 0.35 (0.27) -- --
1999................... 7.11 0.26 0.06 0.32 (0.26) -- --
Six Months Ended September 30,
1999
(Unaudited)........... 7.17 0.12 (0.11) 0.01 (0.12) -- --
INTERMEDIATE-TERM TAX-EXEMPT FUND--(12/3/85*)
Year Ended March 31,
1995................... $ 8.64 $0.37 $ 0.16 $ 0.53 $(0.37) -- --
1996................... 8.80 0.40 0.32 0.72 (0.40) -- --
1997................... 9.12 0.40 -- 0.40 (0.41) -- --
1998................... 9.11 0.42 0.37 0.79 (0.41) -- $(0.01)
1999................... 9.48 0.38 0.14 0.52 (0.35) $(0.03) (0.13)
Six Months Ended September 30,
1999
(Unaudited)........... 9.49 0.18 (0.36) (0.18) (0.18) -- --
NEW YORK INTERMEDIATE-TERM TAX-EXEMPT FUND--(5/31/90*)
Year Ended March 31,
1995................... $ 8.18 $0.33 $ 0.15 $ 0.48 $(0.33) -- $(0.09)
1996................... 8.24 0.35 0.20 0.55 (0.35) -- --
1997................... 8.44 0.36 0.01 0.37 (0.36) -- --
1998................... 8.45 0.35 0.34 0.69 (0.35) -- --
1999................... 8.79 0.33 0.12 0.45 (0.33) -- (0.11)
Six Months Ended Septem-
ber 30, 1999
(Unaudited)........... 8.80 0.16 (0.33) (0.17) (0.16) -- --
LONG-TERM TAX-EXEMPT FUND--(2/5/86*)
Year Ended March 31,
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)
1997................... 9.53 0.46 0.03 0.49 (0.46) -- (0.13)
1998................... 9.43 0.44 0.71 1.15 (0.43) -- (0.12)
1999................... 10.03 0.42 0.12 0.54 (0.42) -- (0.28)
Six Months Ended September 30,
1999
(Unaudited)........... 9.87 0.20 (0.78) (0.58) (0.20) -- --
CALIFORNIA TAX-EXEMPT INCOME FUND--(10/1/96*)
Period ended March 31,
1997.................. $ 7.00 $0.12 $(0.05) $ 0.07 $(0.12) -- --
Year Ended March 31,
1998................... 6.95 0.28 0.23 0.51 (0.28) -- --
1999................... 7.18 0.27 0.07 0.34 (0.27) -- --
Six Months Ended September 30,
1999
(Unaudited)........... 7.25 0.13 (0.16) (0.03) (0.13) -- --
</TABLE>
* Commencement of operations
** Annualized
+ Expense ratios before waiver of fees and reimbursement of expenses (if any)
by adviser and administrators.
# Amount represents less than $0.01 per share.
See Notes to Financial Statements
4
<PAGE>
<TABLE>
<CAPTION>
Ratio of Ratio of Ratio of
Net Gross Net
Net Asset Net Assets, Operating Operating Investment
Value, End Expenses Expenses Income Portfolio Fee
Total End Total of Period to Average to Average to Average Turnover Waivers
Distributions of Period Return (000's) Net Assets Net Assets+ Net Assets Rate (Note 2)
------------- --------- -------- ----------- ---------- ----------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(0.26) $6.96 3.45% $ 48,188 0.59% 0.61% 3.60% 565% --
(0.28) 7.05 5.42% 42,970 0.58% 0.64% 4.05% 124% --
(0.27) 7.03 3.55% 41,078 0.58% 0.65% 3.73% 87% --
(0.27) 7.11 5.01% 42,345 0.59% 0.65% 3.76% 58% --
(0.26) 7.17 4.51% 45,161 0.58% 0.65% 3.58% 47% -- #
(0.12) 7.06 0.30%** 39,280 0.58%** 0.64%** 3.41%** 68%** -- #
$(0.37) $8.80 6.34% $234,990 0.61% 0.64% 4.28% 362% --
(0.40) 9.12 8.30% 255,178 0.60% 0.65% 4.44% 50% --
(0.41) 9.11 4.58% 244,050 0.58% 0.64% 4.56% 28% --
(0.42) 9.48 8.81% 271,016 0.58% 0.64% 4.47% 30% --
(0.51) 9.49 5.53% 323,988 0.58% 0.64% 3.95% 48% -- #
(0.18) 9.13 (3.69)%** 312,648 0.57%** 0.64%** 3.95%** 75%** -- #
$(0.42) $8.24 6.05% $ 87,164 0.78% 0.80% 4.06% 563% --
(0.35) 8.44 6.77% 96,407 0.75% 0.77% 4.15% 154% --
(0.36) 8.45 4.46% 102,252 0.72% 0.75% 4.25% 89% --
(0.35) 8.79 8.35% 131,294 0.71% 0.74% 4.08% 47% --
(0.44) 8.80 5.16% 154,827 0.73% 0.75% 3.75% 65% -- #
(0.16) 8.47 (3.87)%** 144,803 0.72%** 0.74%** 3.67%** 39%** -- #
$(0.53) $9.27 11.01% $ 78,880 0.80% 0.83% 4.86% 214% --
(0.60) 9.53 9.35% 91,058 0.77% 0.82% 4.85% 185% $0.01
(0.59) 9.43 5.47% 107,926 0.74% 0.81% 4.80% 125% 0.01
(0.55) 10.03 12.18% 149,535 0.74% 0.81% 4.40% 83% 0.01
(0.70) 9.87 5.42% 182,447 0.76% 0.86% 4.17% 88% 0.01
(0.20) 9.09 (11.38)%** 158,973 0.75%** 0.84%** 4.27%** 66%** -- #
$(0.12) $6.95 2.12%** $ 13,232 0.66%** 1.53%** 3.69%** 7%** $0.03
(0.28) 7.18 7.42% 32,566 0.50% 1.24% 3.90% 14% 0.05
(0.27) 7.25 4.74% 64,911 0.50% 1.08% 3.65% 5% 0.04
(0.13) 7.09 (0.85)%** 63,351 0.50%** 0.97%** 3.62%** 21%** 0.02
</TABLE>
See Notes to Financial Statements
5
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
Short-Term Tax-Exempt Securities Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
---------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 90.92%
$1,500,000 Alabama State General Obligation Bonds, Series A,
5.500%, 10/01/2003.................................... $ 1,557,723
1,700,000 Burlington County, New Jersey, General Obligation
Bonds,
5.200%, 10/01/2000.................................... 1,727,897
1,275,000 Chicago, Illinois, Sales Tax Revenue Bonds, (FGIC),
4.000%, 01/01/2001.................................... 1,275,555
1,000,000 Cobb County & Marietta, Georgia, Water Authority,
Water Refunding Revenue Bonds,
4.900%, 11/01/2002.................................... 1,019,448
1,500,000 Colorado Water Resource Power Development Authority,
Clean Water Revenue Bonds, Series A,
5.000%, 09/01/2002.................................... 1,529,292
1,800,000 Fort Worth, Texas, Water & Sewer Refunding Revenue
Bonds,
5.000%, 02/15/2004.................................... 1,832,427
1,900,000 Georgia State Tollway Authority, State Guaranteed
Refunding Revenue Bonds, Georgia 400 Project,
4.500%, 07/01/2001.................................... 1,914,860
1,500,000 Hawaii State General Obligation Bonds, Series CS,
(MBIA),
5.250%, 04/01/2004.................................... 1,541,701
1,250,000 Honolulu, Hawaii, City & County General Obligation
Bonds, Series C, (FGIC),
5.000%, 07/01/2004.................................... 1,273,177
1,500,000 Kemmerer County, Wyoming, Pollution Control Revenue
Bonds, Exxon Project,
3.750%, 11/01/2014+................................... 1,500,000
2,000,000 Milwaukee, Wisconsin, Metropolitan Sewer District
Revenue Bonds, Series A,
4.500%, 10/01/2002.................................... 2,013,954
1,700,000 Minneapolis, Minnesota, Special School District No.
001, Certificates of Participation, Series A, (MBIA),
5.500%, 02/01/2003.................................... 1,757,326
2,000,000 Mississippi State Highway Revenue Bonds, Four Lane
Highway Program,
5.250%, 06/01/2004.................................... 2,054,782
1,275,000 Monmouth County, New Jersey, General Obligation Bonds,
5.000%, 10/01/2000.................................... 1,292,677
1,900,000 Monroe County, New York, Refunding Public Improvement
General Obligation Bonds,
5.000%, 03/01/2001.................................... 1,927,740
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
---------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$1,000,000 Nebraska Public Power Distribution Revenue Bonds,
Series B,
5.000%, 01/01/2002................................... $ 1,015,241
2,000,000 New Jersey State Transportation Corp. Revenue Bonds,
Capital Grant Anticipation Notes, Series A, (FSA),
5.250%, 09/01/2001................................... 2,031,884
1,500,000 Omaha Public Power District, Nebraska, Electric
Refunding Revenue Bonds, Series A,
5.000%, 02/01/2001................................... 1,519,441
2,000,000 Stamford, Connecticut, Refunding General Obligation
Bonds,
5.000%, 07/15/2002................................... 2,049,026
1,000,000 Suffolk County, New York, Industrial Development
Agency, Southwest Sewer Systems Revenue Bonds,
(MBIA),
4.250%, 02/01/2001................................... 1,003,692
2,000,000 Texas State General Obligation Bonds, Series B,
5.000%, 10/01/2001................................... 2,036,582
1,800,000 University of Texas, University Financing Systems
Revenue Bonds, Series A,
5.000%, 08/15/2003................................... 1,838,646
-----------
35,713,071
-----------
TAX-EXEMPT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 7.38%
MORGAN GUARANTY TRUST
1,800,000 New York City, New York, General Obligation Bonds,
3.700%, 02/15/2016+.................................. 1,800,000
NORTHERN TRUST COMPANY
1,100,000 Purdue University, Indiana, University Revenue Bonds,
Student Fee, Series O,
3.650%, 07/01/2019+.................................. 1,100,000
-----------
2,900,000
-----------
</TABLE>
See Notes to Financial Statements
6
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
Short-Term Tax-Exempt Securities Fund -- (continued)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
---------- -----------
<C> <S> <C>
OTHER INVESTMENTS -- 0.87%
340,000 Provident Tax-Exempt Municipal Fund................... $ 340,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $39,081,691*)........................................ 99.17% $38,953,071
OTHER ASSETS AND LIABILITIES (NET)......................... 0.83 326,659
------ -----------
NET ASSETS................................................. 100.00% $39,279,730
====== ===========
</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.
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 September 30, 1999, approximately, 15%, 13% and 12% of the net assets are
invested in Texas, New Jersey and New York municipal securities,
respectively. 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
7
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
Intermediate-Term Tax-Exempt Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 96.66%
$10,000,000 Alabama State Public School & College Authority,
Capital Improvement Revenue Bonds, (MBIA),
5.250%, 11/01/2005................................. $ 10,368,080
10,000,000 Chicago, Illinois, General Obligation Bonds, Series
A, (FGIC),
5.000%, 01/01/2008................................. 10,005,930
10,000,000 Connecticut State General Obligation Bonds, Series
C, 5.500%, 08/01/2006.............................. 10,510,150
20,000,000 Connecticut State Special Tax Obligation Refunding
Revenue Bonds, Transportation Infrastructure,
Series A, (FGIC), 5.500%, 10/01/2010............... 20,769,740
10,000,000 Florida State Board of Education Refunding General
Obligation Bonds, Series A,
5.000%, 06/01/2007................................. 10,171,340
10,000,000 Florida State Division Board Finance Department,
General Services Refunding Revenue Bonds, Series A,
Environment Protection-Preservation 2000, (FSA),
5.500%, 07/01/2008................................. 10,480,120
10,000,000 Florida State Division Board Finance Department,
General Services Refunding Revenue Bonds, Series B,
Environmental Protection-Preservation, (AMBAC),
6.000%, 07/01/2008................................. 10,833,680
10,000,000 Georgia State General Obligation Bonds, Series C,
6.500%, 07/01/2007................................. 11,136,720
10,000,000 Hawaii State General Obligation Bonds, Series CS,
(MBIA),
5.000%, 04/01/2007................................. 10,068,380
10,000,000 Honolulu, Hawaii, City & County General Obligation
Refunding Bonds, Series C, (FGIC),
5.500%, 11/01/2006................................. 10,421,920
10,000,000 Jacksonville, Florida, Electric Authority Refunding
Revenue Bonds, St. Johns River, Issue 2-15, 5.500%,
10/01/2006......................................... 10,460,540
10,000,000 Lower Colorado River Authority of Texas, Refunding
Revenue Bonds, 6th Series,
5.000%, 01/01/2009................................. 10,216,270
10,000,000 Maryland State & Local Facilities, Public
Improvements Correctional Facilities, 3rd Series,
5.700%, 10/15/2006................................. 10,520,290
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$10,000,000 Massachusetts State General Obligation Bonds,
Series A, 6.000%, 11/01/2010....................... $ 10,763,220
10,000,000 Metropolitan Atlanta Rapid Transportation
Authority, Georgia, Sales Tax Refunding Revenue
Bonds, Series A, (MBIA),
6.250%, 07/01/2007................................. 10,921,830
10,000,000 Metropolitan Atlanta Rapid Transportation
Authority, Georgia, Sales Tax Refunding Revenue
Bonds, Series A, (MBIA),
6.250%, 07/01/2010................................. 10,985,350
10,000,000 Municipal Assistance Corp., City of New York, New
York, Series O, 5.250%, 07/01/2007................. 10,255,140
10,000,000 New Jersey State, Transportation Trust Fund Revenue
Bonds, Transportation System, Series A, (AMBAC),
5.250%, 06/15/2008................................. 10,215,250
10,000,000 New York State Power Authority & General Purpose
Refunding Revenue Bonds, Series A,
5.000%, 02/15/2007................................. 10,116,250
10,000,000 New York State, Environmental Facilities Corp.
Pollution Control, State Water Sub-Revolving Fund,
Series E, (MBIA),
5.500%, 06/15/2005................................. 10,431,300
10,000,000 Ohio State Public Facilities Commission Revenue
Bonds, Series II-B, (MBIA),
5.000%, 11/01/2007................................. 10,130,380
10,000,000 Pennsylvania State General Obligation Refunding
Revenue Bonds, (AMBAC),
5.125%, 09/15/2006................................. 10,234,680
10,000,000 Puerto Rico Commonwealth Electric Power Authority
Revenue Bonds, Series FF, (MBIA),
5.250%, 07/01/2010................................. 10,171,880
10,000,000 San Antonio, Texas, Electric & Gas Revenue Bonds,
Series A,
5.000%, 02/01/2008................................. 10,073,910
10,000,000 Tennessee State General Obligation Bonds, Series A,
5.000%, 05/01/2007................................. 10,182,780
10,000,000 Texas State General Obligation Bonds, Series A,
6.000%, 10/01/2009................................. 10,738,880
10,000,000 Utah State General Obligation Bonds, Series A,
5.000%, 07/01/2007................................. 10,166,320
</TABLE>
See Notes to Financial Statements
8
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
Intermediate-Term Tax-Exempt Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$10,000,000 Wisconsin State Refunding General Obligation
Revenue Bonds, 6.200%, 05/01/2006.................. $ 10,846,610
------------
302,196,940
------------
<CAPTION>
Shares
-----------
<C> <S> <C>
OTHER INVESTMENTS -- 2.00%
6,267,200 Provident Tax-Exempt Municipal Fund................ 6,267,200
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $312,787,562*)...................................... 98.66% $308,464,140
OTHER ASSETS AND LIABILITIES (NET)........................ 1.34 4,183,555
------ ------------
NET ASSETS................................................ 100.00% $312,647,695
====== ============
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
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 September 30, 1999, approximately, 13% and 11% of the net assets are
invested in Florida and Georgia municipal securities, respectively, and
approximately 10% of the net assets are invested in each of the Connecticut,
Texas and 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
9
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
New York Intermediate-Term Tax-Exempt Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 95.13%
$10,000,000 Long Island Power Authority, New York, Electric
Systems Revenue Bonds, Series A, (AMBAC), 5.500%,
12/01/2009.......................................... $ 10,369,830
7,000,000 Metropolitan Transportation Authority of New York,
Transportation Facilities Revenue Bonds, Series M,
(FGIC),
5.500%, 07/01/2008.................................. 7,285,355
5,000,000 Monroe County, New York, Public Improvement
Refunding General Obligation Bonds, Series A,
5.500%, 03/01/2006.................................. 5,227,695
10,000,000 Municipal Assistance Corp., City of New York, Series
G,
6.000%, 07/01/2006.................................. 10,714,050
10,000,000 Municipal Assistance Corp., City of New York, Series
G,
6.000%, 07/01/2007.................................. 10,734,900
5,000,000 New York & New Jersey Port Authority Revenue Bonds,
4.250%, 12/01/2005.................................. 4,930,400
10,000,000 New York City, New York, City Transitional Finance
Authority, Future Tax Revenue Bonds, Series A,
5.250%, 08/15/2009.................................. 10,145,640
7,000,000 New York State Dormitory Authority, Columbia
University Revenue Bonds, Series A,
5.750%, 07/01/2008.................................. 7,434,147
5,000,000 New York State Dormitory Authority, Cornell
University Revenue Bonds,
5.125%, 07/01/2006.................................. 5,131,580
5,000,000 New York State Environmental Facilities Corp.,
Pollution Control Revenue Bonds, State Water
Revolving Fund, Series E, (MBIA), 5.500%,
06/15/2007.......................................... 5,213,090
10,000,000 New York State Local Government Assistance Corp.
Revenue Bonds, Series A, (FGIC),
5.000%, 04/01/2009.................................. 9,977,540
5,000,000 New York State Power Authority & General Purpose
Revenue Bonds, Series A,
5.000%, 02/15/2007.................................. 5,058,125
5,000,000 New York State Thruway Authority General Revenue
Bonds, Series E, 5.500%, 01/01/2006................. 5,211,400
7,000,000 New York State Thruway Authority Highway & Bridge
Revenue Bonds, Series C, (FGIC),
5.500%, 04/01/2008.................................. 7,264,558
5,000,000 New York State Thruway Authority Service Contract
Revenue Bonds, Local Highway & Bridge,
6.000%, 04/01/2005.................................. 5,292,105
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 7,000,000 Puerto Rico Commonwealth Electric Power Authority
Revenue Bonds, Series FF, (MBIA),
5.250%, 07/01/2009................................. $ 7,193,074
5,000,000 Puerto Rico Commonwealth Public Improvement General
Obligation Bonds, (MBIA),
5.000%, 07/01/2005................................. 5,122,585
5,000,000 Suffolk County, New York, Industrial Development
Agency, Southwest Sewer Systems Revenue Bonds,
(FGIC),
6.000%, 02/01/2008................................. 5,372,315
10,000,000 Triborough Bridge & Tunnel Authority, New York,
Revenue and General Purpose Bonds, Series A,
5.000%, 01/01/2008................................. 10,079,970
------------
137,758,359
------------
TAX-EXEMPT SECURITIES -- ESCROWED IN U.S. GOVERNMENTS -- 3.58%
5,000,000 Suffolk County, New York, Water Authority
Waterworks Revenue Refunded Balance Bonds,
Series A, (AMBAC),
5.250%, 06/01/2017
(Prerefunded 06/01/2004 @ 100)..................... 5,177,320
------------
<CAPTION>
Shares
-----------
<C> <S> <C>
OTHER INVESTMENTS -- 0.23%
333,700 Provident Institutional New York Tax-Exempt Money
Fund............................................... 333,700
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $147,059,556*)...................................... 98.94% $143,269,379
OTHER ASSETS AND LIABILITIES (NET)........................ 1.06 1,533,461
------ ------------
NET ASSETS................................................ 100.00% $144,802,840
====== ============
</TABLE>
- --------
* Aggregate cost for Federal tax and book purposes.
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, 1999, approximately, 90% 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
10
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
Long-Term Tax-Exempt Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 92.33%
$ 6,000,000 California State Department of Water Resources,
Central Valley Project Revenue Bonds, Series Q,
(MBIA),
5.375%, 12/01/2027.................................. $ 5,731,530
6,000,000 Chicago, Illinois, General Obligation Bonds, (FGIC),
5.250%, 01/01/2028.................................. 5,451,006
6,000,000 East Bay California Municipal Utility Distribution
Water System Revenue Bonds, (FGIC),
5.000%, 06/01/2026.................................. 5,397,006
6,000,000 Florida State Board of Education Capital Outlay,
Series A,
5.000%, 06/01/2027.................................. 5,334,522
6,000,000 Florida State Turnpike Authority Revenue Bonds,
Series B, (FGIC), 5.000%, 07/01/2027................ 5,356,326
6,000,000 Fulton County, Georgia, Water & Sewer Revenue Bonds,
(FGIC), 4.750%, 01/01/2028.......................... 5,085,240
6,000,000 Intermountain Power Agency, Utah, Power Supply
Refunding Revenue Bonds, Series D,
5.000%, 07/01/2021.................................. 5,389,980
6,000,000 Los Angeles, California, Department of Water and
Power Waterworks Revenue Bonds,
4.500%, 10/15/2024.................................. 4,948,836
6,000,000 Louisville & Jefferson County, Kentucky,
Metropolitan Sewer District Revenue Bonds, Sewer &
Drain Systems, Series A, (FGIC), 4.750%,
05/15/2028.......................................... 5,058,762
6,000,000 Massachusetts Bay Transportation Authority,
Massachusetts General Transportation System Revenue
Bonds, Series A, (MBIA),
4.500%, 03/01/2026.................................. 4,909,998
6,000,000 Massachusetts Bay Transportation Authority,
Massachusetts General Transportation System Revenue
Bonds, Series C,
5.000%, 03/01/2024.................................. 5,341,176
12,000,000 Massachusetts State Turnpike Authority, Metropolitan
Highway Systems Revenue Bonds, Series A, 5.250%,
01/01/2029.......................................... 10,871,808
6,000,000 Massachusetts State Water Resource Authority, Series
B, (MBIA), 5.000%, 12/01/2025....................... 5,320,512
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 6,000,000 Metropolitan Pier & Exposition Authority, Illinois,
State Tax Refunding Revenue Bonds, McCormick Place
Exposition Project, Series A, (AMBAC), 5.250%,
06/15/2027......................................... $ 5,478,012
6,000,000 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Bonds, Series B,
(FGIC),
4.750%, 07/01/2026................................. 5,027,478
6,000,000 New Jersey Health Care Facilities Financing
Authority Revenue Bonds, St. Barnabas Health
Center, Series B, (MBIA),
4.750%, 07/01/2028................................. 5,064,288
6,000,000 New York City, New York, Municipal Water Finance
Authority, Water & Sewer System Refunding Revenue
Bonds, Series A, (AMBAC),
5.125%, 06/15/2021................................. 5,492,430
6,000,000 New York City, New York, Municipal Water Finance
Authority, Water & Sewer System Refunding Revenue
Bonds, Series B, (MBIA),
5.500%, 06/15/2027................................. 5,752,734
6,000,000 New York City, New York, Transitional Financing
Authority Revenue Bonds, Future Tax Secured, Series
C,
4.750%, 05/01/2023................................. 5,133,756
6,000,000 Port Authority of New York & New Jersey, Revenue
Bonds, Series 104, (AMBAC),
5.200%, 07/15/2021................................. 5,627,802
6,000,000 Port Seattle, Washington, Revenue Bonds, Series A,
(FGIC),
5.500%, 10/01/2022................................. 5,787,702
6,000,000 Puerto Rico Commonwealth Infrastructure Financing
Authority, Series A, (AMBAC),
5.000%, 07/01/2028................................. 5,347,098
7,000,000 Purdue University, Indiana, University Revenue
Bonds, Student Fee, Series H,
3.650%, 07/01/2017+................................ 7,000,000
6,000,000 Salt River Project, Arizona, Agricultural
Improvement & Power Distribution, Electric Systems
Revenue Bonds, Series C,
6.500%, 01/01/2009................................. 6,678,426
</TABLE>
See Notes to Financial Statements
11
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
Long-Term Tax-Exempt Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 6,000,000 San Antonio, Texas, Electric & Gas Revenue Bonds,
Series A,
4.500%, 02/01/2021................................. $ 5,025,996
6,000,000 Utah, State Board of Regents, University of Utah
Auxiliary & Campus Refunding Revenue Bonds, Series
A, (MBIA),
4.750%, 04/01/2025................................. 5,159,394
------------
146,771,818
------------
TAX-EXEMPT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 3.77%
RABOBANK NEDERLANDER
6,000,000 Mississippi Hospital Equipment & Facilities
Authority Revenue Bonds, Mississippi Baptist
Medical Center,
3.750%, 07/01/2012+................................ 6,000,000
------------
<CAPTION>
Shares
-----------
<C> <S> <C>
OTHER INVESTMENTS -- 2.87%
4,564,800 Provident Tax-Exempt Municipal Fund................ 4,564,800
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $166,222,998*)...................................... 98.97% $157,336,618
OTHER ASSETS AND LIABILITIES (NET)........................ 1.03 1,636,130
------ ------------
NET ASSETS................................................ 100.00% $158,972,748
====== ============
</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, 1999, approximately, 17% of the net assets are invested in
each of the New York and Massachusetts municipal securities, and
approximately 10% of the net assets are invested in California 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, 1999 (Unaudited)
California Tax-Exempt Income Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 74.40%
$ 125,000 Anaheim, California, Electric Refunding Revenue
Bonds, (AMBAC),
4.750%, 10/01/2002................................... $ 127,663
200,000 Antelope Valley-East Kern, California, Water Agency
Refunding General Obligation Bonds, (AMBAC),
4.500%, 08/01/2001................................... 202,274
200,000 Bakersfield, California, City School District,
Refunding General Obligation Bonds, (MBIA),
5.000%, 08/01/2005................................... 206,106
595,000 Berkeley, California, Unified School District General
Obligation Bonds, (FGIC),
4.375%, 08/01/2006................................... 592,536
605,000 Beverly Hills, California, Public Financing Authority
Lease Refunding Revenue Bonds, Series A, (MBIA),
4.000%, 06/01/2002................................... 605,885
250,000 Burbank, California, Unified School District General
Obligation Bonds, (FGIC),
4.100%, 08/01/2003................................... 249,549
135,000 California Educational Facilities Authority, Santa
Clara University Refunding Revenue Bonds, (MBIA),
4.900%, 09/01/2006................................... 138,316
150,000 California Educational Facilities Authority, St.
Marys College Refunding Revenue Bonds,
4.800%, 10/01/2002................................... 153,449
150,000 California Educational Facilities Authority, Stanford
University Refunding Revenue Bonds, Series J, 5.900%,
11/01/2003........................................... 158,127
225,000 California Health Facilities Financing Authority
Revenue Bonds, Cedars-Sinai Medical Center, Series A,
(MBIA),
4.250%, 08/01/2003................................... 225,859
275,000 California State Department of Transportation,
Certificates of Participation, Series A, (MBIA),
4.400%, 03/01/2004................................... 276,197
250,000 California State Department of Water Resources,
Central Valley Project Refunding Revenue Bonds,
Series L,
8.000%, 12/01/2001................................... 270,345
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 500,000 California State Department of Water Resources,
Central Valley Project Refunding Revenue Bonds,
Series U,
4.000%, 12/01/2006................................... $ 485,098
250,000 California State Public Works Board, Lease Revenue
Bonds, Franchise Tax Board, Series A, (MBIA),
4.850%, 09/01/2008................................... 252,879
500,000 California State Public Works Board, Lease Revenue
Bonds, Various California University Projects, Series
A,
5.600%, 10/01/2001................................... 513,989
300,000 California State, General Obligation Bonds,
6.000%, 09/01/2001................................... 311,306
750,000 California State, General Obligation Bonds,
6.100%, 11/01/2001................................... 782,874
750,000 California State, General Obligation Bonds,
6.250%, 04/01/2008................................... 828,499
230,000 California State, General Obligation Bonds,
6.700%, 02/01/2004................................... 250,753
250,000 Central Coast Water Authority, California, Refunding
Revenue Bonds, State Water Project Regional
Facilities, Series A, (AMBAC),
4.375%, 10/01/2001................................... 252,483
315,000 Central Coast Water Authority, California, Refunding
Revenue Bonds, State Water Project Regional
Facilities, Series A, (AMBAC),
6.000%, 10/01/2005................................... 341,508
550,000 Central Valley School District Financing Authority,
California School District General Obligation
Refunding Bonds, Series A, (MBIA),
5.850%, 08/01/2004................................... 585,842
545,000 Chino Basin California Regional Financing Authority
Revenue Bonds, Municipal Water District Sewer System
Project, (AMBAC), 7.000%, 08/01/2005................. 617,193
350,000 Contra Costa County, California, Certificates of
Participation, Capital Projects Program, (AMBAC),
4.625%, 02/01/2007................................... 350,628
</TABLE>
See Notes to Financial Statements
13
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 1,000,000 Contra Costa, California, Transportation Authority
Sales Tax General Obligation Bonds, Series A,
(FGIC),
6.000%, 03/01/2008.................................. $ 1,090,216
1,000,000 Contra Costa, California, Transportation Authority
Sales Tax Revenue Bonds, Series A, (FGIC), 6.000%,
03/01/2004.......................................... 1,066,064
550,000 Contra Costa, California, Transportation Authority
Sales Tax Revenue Bonds, Series A, (FGIC), 6.000%,
03/01/2007.......................................... 598,275
750,000 East Bay, California, Regional Park District
Refunding Revenue Bonds, 5.000%, 09/01/2007......... 770,197
250,000 Escondido, California Unified School District,
Series A, (FGIC), 5.000%, 09/01/2008................ 255,587
400,000 Fairfield, California, Water Refunding Revenue
Bonds, (AMBAC),
4.700%, 04/01/2005.................................. 407,766
155,000 Fresno, California, Sewer Revenue Bonds, Series A-1,
(AMBAC), 4.800%, 09/01/2006......................... 157,825
695,000 Golden West Schools Financing Authority, California
School District Refunding Revenue General Obligation
Bonds, Series A, (MBIA),
6.200%, 02/01/2003.................................. 738,025
200,000 Industry California Urban Development Agency,
Refunding Tax Allocation Bonds, (MBIA), 4.300%,
05/01/2002.......................................... 201,454
745,000 Los Altos, California School District, General
Obligation Bonds, Series A, (FSA),
5.000%, 08/01/2006.................................. 766,667
200,000 Los Angeles County, California, Public Works
Financing Authority, Lease Refunding Revenue Bonds,
Series A, (MBIA),
6.000%, 09/01/2003.................................. 213,324
300,000 Los Angeles County, California, Public Works
Financing Authority, Lease Refunding Revenue Bonds,
Series A, (MBIA),
6.000%, 09/01/2004.................................. 322,523
655,000 Los Angeles County, California, Public Works
Financing Authority, Refunding Revenue Bonds,
Regional Park & Open Space District, Series A,
5.000%, 10/01/2004.................................. 675,739
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 300,000 Los Angeles County, California, Public Works
Financing Authority, Refunding Revenue Bonds,
Regional Park & Open Space District, Series A,
5.250%, 10/01/2005.................................. $ 313,485
230,000 Los Angeles County, California, Schools Regionalized
Business Services Certificates of Participation,
Series B, (MBIA), 4.700%, 07/01/2006................ 232,046
500,000 Los Angeles, California, Department of Airports,
Airport Refunding Revenue Bonds, Series A, (FGIC),
6.000%, 05/15/2005.................................. 539,710
250,000 Los Angeles, California, Department of Water &
Power, Electrical Plant Refunding Revenue Bonds,
(AMBAC),
4.600%, 08/15/2006.................................. 251,266
305,000 Los Angeles, California, Harbor Department Revenue
Bonds, Series C,
4.875%, 11/01/2002.................................. 311,821
250,000 Los Angeles, California, Municipal Improvement
Corporation, Equipment Real Property, Certificates
of Participation, (AMBAC),
4.500%, 12/01/2001.................................. 253,079
150,000 Los Angeles, California, Municipal Improvement
Corporation, Sanitation Equipment Charge Revenue
Bonds, Series A, (FSA), 4.875%, 02/01/2006.......... 153,104
250,000 Los Angeles, California, Municipal Improvement
Corporation, Sanitation Equipment Charge Revenue
Bonds, Series A, (FSA), 5.000%, 02/01/2001.......... 253,892
400,000 Los Angeles, California, Municipal Improvement
Corporation, Sanitation Equipment Charge Revenue
Bonds, Series B, (AMBAC),
4.300%, 02/01/2004.................................. 400,137
750,000 Los Angeles, California, Municipal Improvement
Corporation, Sanitation Equipment Charge Revenue
Bonds, Series B, (AMBAC),
4.600%, 02/01/2006.................................. 754,464
</TABLE>
See Notes to Financial Statements
14
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 400,000 Los Angeles, California, State Building Authority
Lease Revenue Bonds, California Department of General
Services, Series A,
5.600%, 05/01/2004................................... $ 419,891
500,000 Los Angeles, California, Unified School District,
Series A, (FGIC), 4.400%, 07/01/2003................. 504,447
1,000,000 Marin, California Municipal Water District, Water
Revenue Bonds, 5.250%, 07/01/2005.................... 1,043,233
500,000 Metropolitan Water District of Southern California,
Refunding General Obligation Bonds, Series A,
5.250%, 03/01/2008................................... 519,272
100,000 Metropolitan Water District of Southern California,
Refunding General Obligation Bonds, Series A1,
5.000%, 03/01/2002................................... 102,281
250,000 Metropolitan Water District of Southern California,
Waterworks Refunding Revenue Bonds, Series A,
4.250%, 07/01/2003................................... 251,365
400,000 Metropolitan Water District of Southern California,
Waterworks Refunding Revenue Bonds, Series A,
7.000%, 07/01/2002................................... 431,061
200,000 Metropolitan Water District of Southern California,
Waterworks Refunding Revenue Bonds, Series B, (MBIA),
5.250%, 07/01/2007................................... 208,515
1,000,000 Modesto, California High School District, Stanislaus
County General Obligation Bonds, (FGIC),
5.000%, 08/01/2001................................... 1,020,147
200,000 Modesto, California Irrigation District Financing
Authority, Refunding Revenue Bonds, Series A, (MBIA),
4.850%, 10/01/2001................................... 203,858
975,000 Modesto, California Irrigation District Financing
Authority, Refunding Revenue Bonds, Series A, (MBIA),
5.450%, 10/01/2007................................... 1,030,631
350,000 M-S-R Public Power Agency, California, San Juan
Project Refunding Revenue Bonds, Series F, (AMBAC),
5.650%, 07/01/2003................................... 368,046
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 250,000 Northern California Power Agency, Public Power
Refunding Revenue Bonds, Geothermal Project,
Series A, (AMBAC),
5.500%, 07/01/2005.................................. $ 263,955
250,000 Northern California Power Agency, Public Power
Refunding Revenue Bonds, Series A, (AMBAC), 5.600%,
07/01/2006.......................................... 265,172
250,000 Novato, California, General
Obligation Bonds, Series A, (MBIA),
6.250%, 08/01/2007.................................. 277,038
1,100,000 Orange County, California, Local Transportation
Authority Sales Tax Revenue Bonds, 1st Senior,
(AMBAC),
6.000%, 02/15/2008.................................. 1,194,821
175,000 Orange County, California, Local Transportation
Authority Sales Tax Revenue Bonds, 1st Senior,
5.600%, 02/15/2002.................................. 181,115
300,000 Orange County, California, Local Transportation
Authority Sales Tax Revenue Bonds, 2nd Senior,
(FGIC),
4.700%, 02/15/2005.................................. 304,396
100,000 Orange County, California, Municipal Water District,
Water Facilities Corporation, Certificates of
Participation, (MBIA),
4.800%, 07/01/2003.................................. 102,266
250,000 Sacramento County, California, Public Facilities
Project, Certificates of Participation, (MBIA),
4.875%, 02/01/2005.................................. 256,237
400,000 Sacramento County, California, Sanitation District
Financing Authority Revenue Bonds,
5.500%, 12/01/2005.................................. 423,743
255,000 Sacramento, California, City Financing Authority
Lease Refunding Revenue Bonds, Series A, (AMBAC),
5.050%, 11/01/2006.................................. 263,575
250,000 Sacramento, California, Municipal Utilities District
Electric Refunding Revenue Bonds, Series Z, (FGIC),
6.000%, 07/01/2001.................................. 259,009
200,000 San Bernardino County, California Transportation
Authority Sales Tax Refunding Revenue Bonds,
Series A, (FSA),
4.500%, 03/01/2006.................................. 200,657
</TABLE>
See Notes to Financial Statements
15
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 255,000 San Bernardino County, California Transportation
Authority Sales Tax Refunding Revenue Bonds,
Series A, (MBIA),
4.625%, 03/01/2005.................................. $ 258,284
315,000 San Bernardino County, California Transportation
Authority Sales Tax Refunding Revenue Bonds,
Series A, (MBIA),
5.000%, 03/01/2000.................................. 316,935
300,000 San Bernardino County, California, Certificates of
Participation, Medical Center Financing Project,
(MBIA),
5.500%, 08/01/2007.................................. 317,778
150,000 San Diego County, California, Regional
Transportation Commission, Sales Tax Revenue Bonds,
2nd Senior, Series A, (FGIC),
5.250%, 04/01/2006.................................. 156,368
200,000 San Diego County, California, Regional
Transportation Commission, Sales Tax Revenue Bonds,
2nd Senior, Series A, (FGIC),
5.500%, 04/01/2004.................................. 209,730
750,000 San Diego, California, Metropolitan Transportation
District Board Authority Lease Revenue Bonds,
5.100%, 09/01/2003.................................. 777,151
175,000 San Diego, California, Open Space Park Facilities
District No. 1, Refunding General Obligation Bonds,
5.500%, 01/01/2004.................................. 183,486
300,000 San Diego, California, Public Facilities Financing
Authority, Sewer Revenue Bonds, Series B, (FGIC),
5.000%, 05/15/2008.................................. 306,519
250,000 San Diego, California, Public Safety Communications
Project, General Obligation Bonds,
6.500%, 07/15/2008.................................. 284,203
875,000 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Bonds,
5.500%, 07/01/2007.................................. 923,464
1,500,000 San Francisco, California, City and County Airport
Commission, International Airport Revenue Bonds,
(MBIA),
5.000%, 05/01/2006.................................. 1,543,143
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 680,000 San Francisco, California, City and County General
Obligation Bonds, Series 1, (FGIC),
4.500%, 06/15/2005................................... $ 687,123
1,020,000 San Francisco, California, City and County Parking
Authority, Parking Meter Refunding Revenue Bonds,
Series 1, (FGIC),
4.000%, 06/01/2006................................... 991,417
325,000 San Francisco, California, City and County Public
Utilities Commission, Water Refunding Revenue Bonds,
Series A,
6.500%, 11/01/2004................................... 356,871
200,000 San Francisco, California, State Building Authority
Lease Revenue Bonds, San Francisco Civic Center
Complex, Series A, (AMBAC), 4.125%, 12/01/2000....... 201,309
100,000 San Jose, California, Airport Refunding Revenue
Bonds, (FGIC),
5.500%, 03/01/2002................................... 103,446
625,000 San Jose, California, Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment Project,
(AMBAC),
4.750%, 08/01/2005................................... 636,439
500,000 San Jose, California, Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment Project,
(AMBAC),
5.000%, 08/01/2007................................... 513,334
200,000 San Jose, California, Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment Project,
(MBIA),
4.750%, 08/01/2003................................... 204,205
325,000 San Jose, California, Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment Project,
(MBIA),
5.375%, 08/01/2004................................... 340,163
250,000 San Jose, California, Unified School District, Clara
County District, Series A, (FGIC),
4.400%, 08/01/2005................................... 250,753
300,000 San Mateo County, California,
JT Powers Authority Lease Revenue Bonds, San Mateo
Community Health Care Center, Series A, (FSA),
5.600%, 07/15/2004................................... 316,705
500,000 San Mateo County, California, Transportation
Authority, Series A, (MBIA),
4.200%, 06/01/2004................................... 497,880
</TABLE>
See Notes to Financial Statements
16
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 750,000 San Mateo County, California, Transportation
District Sales Tax Revenue Bonds, Series A, (FSA),
5.000%, 06/01/2009.................................. $ 761,446
150,000 Santa Barbara County, California, Local
Transportation Authority Sales Tax Revenue Bonds,
(FGIC), 4.900%, 04/01/2006.......................... 153,435
285,000 Santa Clara County, California, Certificates of
Participation, Capital Project I, (AMBAC),
6.200%, 10/01/2000.................................. 292,234
300,000 Santa Clara County, California, Certificates of
Participation, Technology Projects, Series A,
5.000%, 05/15/2000.................................. 302,486
100,000 Santa Clara County, California, Financing Authority
Refunding Lease Revenue Bonds, Series A, (AMBAC),
4.200%, 11/15/2002.................................. 100,607
175,000 Santa Clara County, California, Financing Authority
Refunding Lease Revenue Bonds, Series A, (AMBAC),
4.300%, 11/15/2003.................................. 176,045
500,000 Santa Clara County, California, Transportation
District Sales Tax Refunding Revenue Bonds,
Series A,
4.500%, 06/01/2006.................................. 500,257
200,000 Southern California Public Power Authority,
Refunding Revenue Bonds, Palo Verde Project,
Series A, (AMBAC),
5.500%, 07/01/2004.................................. 209,415
1,000,000 Southern California Public Power Authority,
Refunding Revenue Bonds, Sub Southern Transmission
Project, (MBIA),
5.250%, 07/01/2009.................................. 1,031,498
1,000,000 University of California Refunding Revenue Bonds,
Multiple Purpose Projects, Series A, (MBIA),
6.000%, 09/01/2002.................................. 1,053,146
300,000 University of California Refunding Revenue Bonds,
Multiple Purpose Projects, Series A, (MBIA),
6.100%, 09/01/2000.................................. 306,877
150,000 University of California Refunding Revenue Bonds,
Multiple Purpose Projects, Series C, (AMBAC),
4.600%, 09/01/2005.................................. 152,012
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 600,000 University of California Refunding Revenue Bonds,
Multiple Purpose Projects, Series F, (FGIC),
5.000%, 09/01/2008.................................. $ 613,408
390,000 University of California Refunding Revenue Bonds,
Multiple Purpose Projects, Series G, (FGIC),
4.500%, 09/01/2004.................................. 394,275
500,000 Ventura County, California, Community College
District, Revenue Certificates of Participation,
(AMBAC),
4.000%, 12/01/2002.................................. 500,126
250,000 West & Central Basin Financing Authority, California
Revenue Bonds, (AMBAC),
5.500%, 08/01/2001.................................. 257,231
250,000 West Basin, California, Municipal Water District,
Revenue Certificates of Participation, Series A,
(AMBAC),
3.875%, 08/01/2002.................................. 249,524
100,000 West Basin, California, Municipal Water District,
Revenue Certificates of Participation, Series A,
(AMBAC),
4.000%, 08/01/2000.................................. 100,454
-----------
47,131,937
-----------
TAX-EXEMPT SECURITIES -- ESCROWED IN U.S. GOVERNMENTS -- 21.81%
350,000 Alameda County, California, Certificates of
Participation, (MBIA),
7.250%, 06/01/2013
(Prerefunded 12/01/2000 @102)....................... 371,692
300,000 California State Public Works Board, Lease Revenue
Bonds, Secretary of State, Series A, (AMBAC),
6.750%, 12/01/2012
(Prerefunded 12/01/2002 @102)....................... 330,168
200,000 California State Public Works Board, Lease Revenue
Bonds, Various California State University Projects,
Series A,
6.600%, 12/01/2022
(Prerefunded 12/01/2002 @102)....................... 219,227
260,000 California State Public Works Board, Lease Revenue
Bonds, Various California State University Projects,
Series A,
6.625%, 10/01/2010
(Prerefunded 10/01/2002 @102)....................... 284,254
</TABLE>
See Notes to Financial Statements
17
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- ESCROWED IN U.S. GOVERNMENTS -- (continued)
$ 200,000 California State Public Works Board, Lease Revenue
Bonds, Various California University Projects, Series
A, (AMBAC),
6.400%, 12/01/2016
(Prerefunded 12/01/2002 @102)........................ $ 217,983
750,000 California State, General Obligation Bonds, (FGIC),
6.000%, 08/01/2019
(Prerefunded 08/01/2004 @102)........................ 821,441
1,305,000 California State, General Obligation Bonds,
5.900%, 04/01/2023
(Prerefunded 04/01/2003 @102)........................ 1,403,563
750,000 Castaic Lake Water Agency Revenue Bonds, (MBIA),
7.125%, 08/01/2016
(Prerefunded 08/01/2000 @102)........................ 786,700
500,000 Central Coast Water Authority, California Refunding
Revenue Bonds, State Water Project Regional
Facilities, Series A, (AMBAC),
6.600%, 10/01/2022
(Prerefunded 10/01/2002 @102)........................ 546,064
250,000 Cupertino, California, Certificates of Participation,
Open Space Acquisition Project,
7.125%, 04/01/2016
(Prerefunded 04/01/2001 @102)........................ 266,092
250,000 East Bay, California, Municipal Utilities District
Wastewater Treatment System Revenue Bonds, (AMBAC),
6.375%, 06/01/2021
(Prerefunded 12/01/2001 @102)........................ 268,177
750,000 Fresno, California, Unified School District, Series
C, (FSA),
5.375%, 08/01/2021
(Prerefunded 08/01/2005 @102)........................ 801,080
1,000,000 Long Beach, California, Water Refunding Revenue
Bonds,
6.250%, 05/01/2024
(Prerefunded 05/01/2004 @102)........................ 1,102,077
175,000 Los Angeles County, California, Transportation
Commission Sales Tax Revenue Bonds, Series A, 6.750%,
07/01/2019
(Prerefunded 07/01/2002 @102)........................ 190,791
390,000 Los Angeles County, California, Transportation
Commission Sales Tax Revenue Bonds, Series A, 6.750%,
07/01/2020
(Prerefunded 07/01/2001 @102)........................ 416,948
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- ESCROWED IN U.S. GOVERNMENTS -- (continued)
$ 125,000 Los Angeles, California, Harbor Department Revenue
Bonds, Series A,
6.500%, 08/01/2025
(Prerefunded 08/01/02 @102).......................... $ 135,773
225,000 Los Angeles, California, Wastewater Systems Revenue
Bonds, Series D, (MBIA),
6.700%, 12/01/2021
(Prerefunded 12/01/2000 @102)........................ 237,486
525,000 Northern California Transmission Refunding Revenue
Bonds, Ore Transportation Project, Series A, (MBIA),
7.000%, 05/01/2024
(Prerefunded 05/01/2000 @101 1/2).................... 543,263
500,000 Northern California Transmission Refunding Revenue
Bonds, Ore Transportation Project, Series A, (MBIA),
7.000%, 05/01/2024
(Prerefunded 05/01/2000 @101 1/2).................... 509,897
750,000 Richmond, California, Redevelopment Agency Tax
Allocation Refunding Revenue Bonds, Harbor
Redevelopment Project, (FSA),
7.000%, 07/01/2009
(Prerefunded 07/01/2002 @102)........................ 822,934
700,000 Sacramento, California, City Financing Authority
Revenue Bonds,
6.800%, 11/01/2020
(Prerefunded 11/01/2001 @102)........................ 755,531
460,000 San Bernardino County, California SCH Health Care
Systems Revenue Bonds, Sisters of Charity, Series A,
7.000%, 07/01/2021,
(Prerefunded 07/01/2001 @102)........................ 493,799
500,000 San Francisco, California, Bay Area Rapid Transit
District, Prerefunded Sales Tax Revenue Bonds,
(FGIC),
5.500%, 07/01/2020
(Prerefunded 07/01/2005 @101)........................ 533,380
650,000 San Joaquin Hills, California, Transportation
Corridor Agency, Toll Road Revenue Bonds,
6.750%, 01/01/2032 (Prerefunded 01/01/2003 @102)..... 713,713
500,000 Santa Clara, California, Electric Revenue Bonds,
Series A, (MBIA),
6.250%, 07/01/2013
(Prerefunded 07/01/2001 @102)........................ 530,436
</TABLE>
See Notes to Financial Statements
18
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 1999 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- ESCROWED IN
U.S. GOVERNMENTS -- (continued)
$ 250,000 Santa Monica-Malibu, California, Unified School
District, Public Schools Facilities Reconstruction
Projects,
5.500%, 08/01/2015
(Prerefunded 08/01/2003 @102)...................... $ 266,756
235,000 Southern California Public Power Authority, Power
Project Revenue Bonds,
7.000%, 07/01/2009
(Prerefunded 07/01/2000 @102)...................... 245,638
------------
13,814,863
------------
<CAPTION>
Shares
-----------
<C> <S> <C>
OTHER INVESTMENTS -- 2.68%
802,689 Federated California Money Fund.................... 802,689
897,168 Provident California Money Fund.................... 897,168
------------
1,699,857
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $62,931,856*)........................................ 98.89% $62,646,657
OTHER ASSETS AND LIABILITIES (NET)......................... 1.11 704,162
------ -----------
NET ASSETS................................................. 100.00% $63,350,819
====== ===========
</TABLE>
- --------
*Aggregate cost for Federal tax and book purposes.
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 September 30, 1999, approximately, 21% 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, 1999, approximately, 99% of the net assets are invested in
California 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
19
<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 seven managed
investment portfolios, each having its own investment objectives and policies.
The following is a summary of significant accounting policies for Short-Term
Tax-Exempt Securities Fund, Intermediate-Term Tax-Exempt Fund, New York
Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt Fund and California
Tax-Exempt Income 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 the remaining portfolios of Excelsior Tax-Exempt Fund
and Excelsior Funds, Inc. ("Excelsior Fund") are presented separately.
(a) Portfolio Valuation:
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.
(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:
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 net capital losses incurred after
October 31 and within the taxable year ("Post-October losses").
20
<PAGE>
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, 1999, 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,
-------------------------------------
2003 2004 2005 2006 2007 Total
-------- ---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
Short-Term Tax-Exempt Securities
Fund............................... $319,000 -- -- -- -- $319,000
California Tax-Exempt Income Fund... -- -- -- -- $49 49
</TABLE>
At September 30, 1999, 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>
Net
Tax Basis Tax Basis Unrealized
Unrealized Unrealized Appreciation
Appreciation Depreciation (Depreciation)
------------ ------------ --------------
<S> <C> <C> <C>
Short-Term Tax-Exempt Securities
Fund............................ $ 68,184 $ (196,804) $ (128,620)
Intermediate-Term Tax-Exempt
Fund............................ 2,309,234 (6,632,656) (4,323,422)
New York Intermediate-Term Tax-
Exempt Fund..................... 202,249 (3,992,426) (3,790,177)
Long-Term Tax-Exempt Fund........ 221,696 (9,108,076) (8,886,380)
California Tax-Exempt Income
Fund............................ 345,758 (630,957) (285,199)
</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 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. U.S. Trust has delegated the daily management of the
security holdings of the California Tax-Exempt Income Fund to U.S. Trust
Company, N.A. ("U.S. Trust, N.A."). 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 .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 each of New York Intermediate-Term Tax-Exempt Fund, Long-
Term Tax-Exempt Fund and California Tax- Exempt Income Fund. U.S. Trust, N.A.
is compensated only by U.S. Trust and receives no fee directly from California
Tax-Exempt Income Fund. U.S. Trust NY is a state-chartered bank and
21
<PAGE>
trust company and a member bank of the Federal Reserve System. U.S. Trust
Company is a Connecticut state bank and trust company. U.S. Trust, N.A. is a
national bank. Each is a wholly-owned subsidiary of U.S. Trust Corporation, a
registered bank holding company.
U.S. Trust Company, Chase Global Funds Services Company, a corporate
affiliate of The Chase Manhattan Bank and Federated Administrative Services
(collectively, the "Administrators") provide administrative services to
Excelsior 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, and Excelsior Institutional Trust (excluding
the international equity portfolios of Excelsior Fund and Excelsior
Institutional Trust), all of which are affiliated investment companies, as
follows: .200% of the first $200 million, .175% of the next $200 million, and
.150% over $400 million. Administration fees payable by each Portfolio of the
three investment companies are determined in proportion to the relative
average daily net assets of the respective Portfolios for the period paid. For
the six months ended September 30, 1999, administration fees charged by U.S.
Trust Company were as follows:
<TABLE>
<S> <C>
Short-Term Tax-Exempt Securities Fund.................................. $ 8,550
Intermediate-Term Tax-Exempt Fund...................................... 65,824
New York Intermediate-Term Tax-Exempt Fund............................. 33,229
Long-Term Tax-Exempt Fund.............................................. 35,787
California Tax-Exempt Income Fund...................................... 13,159
</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. 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,
1999, no fees were waived or expenses reimbursed pursuant to this voluntary
limitation. In addition, U.S. Trust has voluntarily agreed to temporarily
waive fees and reimburse expenses to the extent necessary for the California
Tax-Exempt Income Fund to maintain an annual expense ratio of not more than
.50%. For the six months ended September 30, 1999, U.S. Trust waived
investment advisory fees totaling $85,981 for California Tax-Exempt Income
Fund.
Effective November 19, 1999, U.S. Trust has 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 operating
expenses from exceeding the following annual percentages of each Portfolio's
average daily net assets:
<TABLE>
<S> <C>
Intermediate-Term Tax-Exempt Fund......................................... 0.65%
New York Intermediate-Term Tax-Exempt Fund................................ 0.80%
Long-Term Tax-Exempt Fund................................................. 0.80%
</TABLE>
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
22
<PAGE>
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 by the
Portfolios amounted to $236,242 for the six months ended September 30, 1999.
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 (including fees paid to affiliates of U.S.
Trust) by such Portfolio. For the six months ended September 30, 1999, 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>
Short-Term Tax-Exempt Securities Fund................. $ 13,036 $ 5
Intermediate-Term Tax-Exempt Fund..................... 114,387 2,651
New York Intermediate-Term Tax-Exempt Fund............ 15,274 82
Long-Term Tax-Exempt Fund............................. 69,549 7,832
California Tax-Exempt Income Fund..................... 63,131 --
</TABLE>
Edgewood Services, Inc. (the "Distributor"), a wholly-owned subsidiary of
Federated Investors, Inc., serves as the distributor of Excelsior Tax-Exempt
Fund. Shares of each Portfolio are sold without a sales charge 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, 1999, 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................ $ 12,626,342 $ 19,303,524
Intermediate-Term Tax-Exempt Fund.................... 116,188,650 115,125,750
New York Intermediate-Term Tax-Exempt Fund........... 31,565,370 29,869,820
Long-Term Tax-Exempt Fund............................ 54,144,060 58,169,980
California Tax-Exempt Income Fund.................... 6,904,337 6,426,450
</TABLE>
4. Common Stock:
Excelsior Tax-Exempt Fund currently has authorized capital of 14 billion
shares of Common Stock, 13 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: 500 million
shares each of Short-Term Tax-Exempt Securities Fund, Intermediate-Term Tax-
Exempt Fund, New York Intermediate-Term Tax-Exempt Fund, Long-Term Tax-Exempt
Fund and California Tax-Exempt Income Fund.
23
<PAGE>
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.
<TABLE>
<CAPTION>
Short-Term Tax-Exempt Securities Fund
---------------------------------------------------
Six Months Ended Year Ended
09/30/99 03/31/99
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 1,007,505 $ 7,170,579 3,516,897 $ 25,176,264
Issued as reinvestment of
dividends............... 7,473 53,194 15,451 110,353
Redeemed................. (1,747,158) (12,445,012) (3,193,723) (22,815,063)
---------- ------------ ----------- ------------
Net Increase (Decrease).. (732,180) $ (5,221,239) 338,625 $ 2,471,554
========== ============ =========== ============
<CAPTION>
Intermediate-Term Tax-Exempt Fund
---------------------------------------------------
Six Months Ended Year Ended
09/30/99 03/31/99
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 4,409,306 $ 41,008,098 11,346,154 $108,730,236
Issued as reinvestment of
dividends............... 28,981 268,969 86,884 830,904
Redeemed................. (4,308,846) (39,975,842) (5,884,893) (56,151,012)
---------- ------------ ----------- ------------
Net Increase............. 129,441 $ 1,301,225 5,548,145 $ 53,410,128
========== ============ =========== ============
<CAPTION>
New York Intermediate-Term Tax-Exempt Fund
---------------------------------------------------
Six Months Ended Year Ended
09/30/99 03/31/99
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 4,753,804 $ 41,402,170 7,193,182 $ 63,714,519
Issued as reinvestment of
dividends............... 39,382 339,460 117,100 1,040,023
Redeemed................. (5,288,937) (45,385,607) (4,652,797) (41,277,629)
---------- ------------ ----------- ------------
Net Increase (Decrease).. (495,751) $ (3,643,977) 2,657,485 $ 23,476,913
========== ============ =========== ============
<CAPTION>
Long-Term Tax-Exempt Fund
---------------------------------------------------
Six Months Ended Year Ended
09/30/99 03/31/99
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 2,605,594 $ 24,910,177 7,696,897 $ 77,522,869
Issued as reinvestment of
dividends............... 77,351 741,657 225,193 2,263,258
Redeemed................. (3,676,865) (34,970,071) (4,338,267) (43,564,950)
---------- ------------ ----------- ------------
Net Increase (Decrease).. (993,920) $ (9,318,237) 3,583,823 $ 36,221,177
========== ============ =========== ============
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
California Tax-Exempt Income Fund
--------------------------------------------------
Six Months Ended Year Ended
09/30/99 03/31/99
------------------------ ------------------------
Shares Amount Shares Amount
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 1,863,952 $ 13,386,108 6,869,035 $ 49,621,017
Issued as reinvestment of
dividends................ 1,282 9,150 2,297 16,621
Redeemed.................. (1,880,371) (13,493,144) (2,457,295) (17,769,420)
---------- ------------ ---------- ------------
Net Increase (Decrease)... (15,137) $ (97,886) 4,414,037 $ 31,868,218
========== ============ ========== ============
</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.
6. 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 2% per year. In
addition, a commitment fee, based on the average daily unused portion of the
line of credit, is allocated among the participating Portfolios at the end of
each quarter. For the six months ended September 30, 1999, the Portfolios had
no borrowings under the agreement.
7. Year 2000 Risk:
The Funds depend on the smooth functioning of computer systems in almost
every aspect of their business. Like other mutual funds, businesses and
individuals around the world, the Funds could be adversely affected if the
computer systems used by their service providers do not properly process dates
on and after January 1, 2000, and distinguish between the year 2000 and the
year 1900. This is commonly known as the "Year 2000 Problem." The investment
adviser and the Funds' other service providers advise that they are taking
steps to address the Year 2000 Problem with respect to the computer systems
that they use. Currently, they do not anticipate that the transition to the
21st Century will have any material impact on their ability to continue to
service the Funds at current levels. At this time, however, there can be no
assurance that their efforts will be sufficient to avoid any adverse impact on
the Funds as a result of the Year 2000 Problem. In addition, the Funds and
their shareholders may experience losses as a result of computer difficulties
experienced by issuers of portfolio securities or third parties, such as
custodians, banks, broker-dealers or others with which the Funds do business.
25
