<PAGE>
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[LOGO OF EXCELSIOR FUNDS]
Tax-Exempt
Fixed Income
Portfolios
SEMI-ANNUAL REPORT
September 30, 2000
<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
Long-Term Tax-Exempt Fund................................................ 6
Intermediate-Term Tax-Exempt Fund........................................ 8
Short-Term Tax-Exempt Securities Fund.................................... 10
New York Intermediate-Term Tax-Exempt Fund............................... 12
California Tax-Exempt Income Fund........................................ 14
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,
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, 2000 (Unaudited)
<TABLE>
<CAPTION>
New York
Intermediate- Short-Term Intermediate-
Long-Term Term Tax-Exempt Term California
Tax-Exempt Tax-Exempt Securities Tax-Exempt Tax-Exempt
Fund Fund Fund Fund Income Fund
------------ ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investments, at cost--see
accompanying portfolios.. $115,466,179 $293,089,034 $53,904,379 $134,589,050 $60,009,839
============ ============ =========== ============ ===========
Investments, at value
(Note 1)................. $111,549,550 $296,136,854 $54,147,310 $135,136,799 $60,106,727
Cash...................... 969 983 1,869 -- --
Interest receivable....... 1,551,404 4,740,431 713,090 1,762,544 844,166
Receivable for investments
sold..................... 4,067,725 10,243,801 -- -- 1,053,212
Receivable for fund shares
sold..................... 83,798 452,515 12,947 65,503 2,307
Prepaid expenses.......... 2,212 4,875 664 1,579 1,053
Unamortized organization
costs (Note 5)........... -- -- -- -- 6,271
------------ ------------ ----------- ------------ -----------
Total Assets.............. 117,255,658 311,579,459 54,875,880 136,966,425 62,013,736
LIABILITIES:
Payable for dividends
declared................. 452,748 1,085,179 187,800 448,679 190,427
Payable for fund shares
redeemed................. 27,881 49,359 309,319 542,987 50,994
Payable for investments
purchased................ -- 11,299,306 -- -- 1,096,219
Investment advisory fees
payable (Note 2)......... 48,603 68,740 10,938 50,453 25,693
Administration fees
payable (Note 2)......... 13,916 44,396 6,543 22,114 8,518
Administrative servicing
fees payable (Note 2).... 10,329 31,398 6,567 4,890 18,264
Directors' fees payable
(Note 2)................. 1,085 1,824 81 285 --
Due to custodian bank..... -- -- -- 22 51
Accrued expenses and other
payables................. 20,492 28,969 5,321 26,847 5,411
------------ ------------ ----------- ------------ -----------
Total Liabilities......... 575,054 12,609,171 526,569 1,096,277 1,395,577
------------ ------------ ----------- ------------ -----------
NET ASSETS................. $116,680,604 $298,970,288 $54,349,311 $135,870,148 $60,618,159
============ ============ =========== ============ ===========
NET ASSETS consist of:
Undistributed
(distributions in excess
of) net investment
income................... $ 41,735 $ 69,764 $ (123) $ (31) $ 13,538
Accumulated net realized
loss on investments...... (6,413,461) (3,177,075) (848,073) (2,876,755) (49,135)
Unrealized
appreciation/depreciation
of investments........... (3,916,629) 3,047,820 242,931 547,749 96,888
Par value (Note 4)........ 12,797 32,557 7,717 16,030 8,496
Paid in capital in excess
of par value............. 126,956,162 298,997,222 54,946,859 138,183,155 60,548,372
------------ ------------ ----------- ------------ -----------
Total Net Assets........... $116,680,604 $298,970,288 $54,349,311 $135,870,148 $60,618,159
============ ============ =========== ============ ===========
Shares of Common Stock
Outstanding.............. 12,797,205 32,556,956 7,717,152 16,029,585 8,495,706
NET ASSET VALUE PER
SHARE.................... $9.12 $9.18 $7.04 $8.48 $7.14
===== ===== ===== ===== =====
</TABLE>
See Notes to Financial Statements
1
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Statements of Operations
Six Months Ended September 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
New York
Intermediate- Short-Term Intermediate- California
Long-Term Term Tax-Exempt Term Tax-Exempt
Tax-Exempt Tax-Exempt Securities Tax-Exempt Income
Fund Fund Fund Fund Fund
---------- ------------- ---------- ------------- ----------
<S> <C> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $3,134,674 $ 7,156,129 $1,238,458 $3,063,505 $1,288,155
---------- ----------- ---------- ---------- ----------
EXPENSES:
Investment advisory fees
(Note 2)................. 292,539 518,940 81,022 325,777 151,826
Administration fees (Note
2)....................... 88,932 225,368 41,051 99,036 46,155
Administrative servicing
fees (Note 2)............ 37,883 91,477 20,061 13,560 55,725
Shareholder servicing
agent fees............... 23,262 11,693 5,008 8,258 14,929
Custodian fees............ 14,994 37,810 7,298 16,289 7,920
Registration and filing
fees..................... 6,926 7,714 5,575 8,500 9,388
Legal and audit fees...... 4,125 12,286 2,057 2,272 5,835
Shareholder reports....... 2,786 7,369 1,427 6,633 2,499
Directors' fees and
expenses (Note 2)........ 2,093 5,909 1,091 1,695 1,386
Amortization of
organization costs (Note
5)....................... -- 1,974 -- -- 3,170
Miscellaneous expenses.... 3,980 8,902 4,384 6,178 2,519
---------- ----------- ---------- ---------- ----------
Total Expenses............ 477,520 929,442 168,974 488,198 301,352
Fees waived and reimbursed
by investment adviser and
administrators (Note 2).. (37,883) (91,477) (20,061) (13,560) (149,262)
---------- ----------- ---------- ---------- ----------
Net Expenses.............. 439,637 837,965 148,913 474,638 152,090
---------- ----------- ---------- ---------- ----------
NET INVESTMENT INCOME...... 2,695,037 6,318,164 1,089,545 2,588,867 1,136,065
---------- ----------- ---------- ---------- ----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
(Note 1):
Net realized loss on
security transactions.... (789,507) (3,159,254) (169,958) (330,536) (4,267)
Change in unrealized
appreciation/depreciation
of investments during the
period................... 2,093,709 7,169,294 355,689 2,437,778 546,375
---------- ----------- ---------- ---------- ----------
Net realized and
unrealized gain on
investments.............. 1,304,202 4,010,040 185,731 2,107,242 542,108
---------- ----------- ---------- ---------- ----------
Net increase in net assets
resulting from
operations............... $3,999,239 $10,328,204 $1,275,276 $4,696,109 $1,678,173
========== =========== ========== ========== ==========
</TABLE>
See Notes to Financial Statements
2
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
New York
Intermediate- Short-Term Intermediate-
Long-Term Term Tax-Exempt Term California
Tax-Exempt Tax-Exempt Securities Tax-Exempt Tax-Exempt
Fund Fund Fund Fund Income Fund
------------ ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Six Months Ended September
30, 2000 (Unaudited)
Net investment income..... $ 2,695,037 $ 6,318,164 $ 1,089,545 $ 2,588,867 $ 1,136,065
Net realized loss on
investments.............. (789,507) (3,159,254) (169,958) (330,536) (4,267)
Change in unrealized
appreciation/depreciation
of investments during the
period................... 2,093,709 7,169,294 355,689 2,437,778 546,375
------------ ------------ ----------- ------------ -----------
Net increase in net assets
resulting from
operations............... 3,999,239 10,328,204 1,275,276 4,696,109 1,678,173
Distributions to
shareholders from net
investment income........ (2,695,037) (6,318,164) (1,089,545) (2,588,867) (1,136,065)
Increase (decrease) in net
assets from fund share
transactions (Note 4).... (6,621,120) 2,288,808 (62,235) 7,384,728 (4,957,580)
------------ ------------ ----------- ------------ -----------
Net increase (decrease) in
net assets............... (5,316,918) 6,298,848 123,496 9,491,970 (4,415,472)
NET ASSETS:
Beginning of period...... 121,997,522 292,671,440 54,225,815 126,378,178 65,033,631
------------ ------------ ----------- ------------ -----------
End of period (1)........ $116,680,604 $298,970,288 $54,349,311 $135,870,148 $60,618,159
============ ============ =========== ============ ===========
(1) Including
undistributed
(distributions in
excess of) net
investment income.... $ 41,735 $ 69,764 $ (123) $ (31) $ 13,538
============ ============ =========== ============ ===========
Year Ended March 31, 2000
Net investment income..... $ 6,942,069 $ 12,466,315 $ 1,617,964 $ 5,546,162 $ 2,331,454
Net realized loss on
investments.............. (5,551,954) (17,821) (359,297) (2,546,219) (34,204)
Change in unrealized
appreciation/depreciation
of investments during the
year..................... (9,976,476) (14,981,103) (578,736) (4,535,806) (1,617,902)
------------ ------------ ----------- ------------ -----------
Net increase (decrease) in
net assets resulting from
operations............... (8,586,361) (2,532,609) 679,931 (1,535,863) 679,348
Distributions to
shareholders:
From net investment
income.................. (6,933,273) (12,396,542) (1,617,964) (5,499,882) (2,331,454)
From net realized gain on
investments............. (1,016,099) (129,800) -- (1,457,670) --
Increase (decrease) in net
assets from fund share
transactions (Note 4).... (43,914,211) (16,257,424) 10,002,568 (19,955,492) 1,774,688
------------ ------------ ----------- ------------ -----------
Net increase (decrease) in
net assets............... (60,449,944) (31,316,375) 9,064,535 (28,448,907) 122,582
NET ASSETS:
Beginning of year........ 182,447,466 323,987,815 45,161,280 154,827,085 64,911,049
------------ ------------ ----------- ------------ -----------
End of year (2).......... $121,997,522 $292,671,440 $54,225,815 $126,378,178 $65,033,631
============ ============ =========== ============ ===========
--------
(2) Including
undistributed
(distributions in
excess of) net
investment income.... $ 41,735 $ 69,764 $ (123) $ (31) $ 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 Gain
Beginning Investment Gain (Loss) Investment Investment Investment on
of Period Income on Investments Operations Income Income Investments
--------- ---------- -------------- ---------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
LONG-TERM TAX-EXEMPT FUND--(2/5/86*)
Year Ended March 31,
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)
2000................... 9.87 0.42 (0.82) (0.40) (0.42) -- (0.06)
Six Months Ended September 30, 2000
(Unaudited)............ 8.99 0.21 0.13 0.34 (0.21) -- --
INTERMEDIATE-TERM TAX-EXEMPT FUND--(12/3/85*)
Year Ended March 31,
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)
2000................... 9.49 0.37 (0.43) (0.06) (0.37) -- --
Six Months Ended September 30, 2000
(Unaudited)............ 9.06 0.19 0.12 0.31 (0.19) -- --
SHORT-TERM TAX-EXEMPT SECURITIES FUND--(12/31/92*)
Year Ended March 31,
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) -- --
2000................... 7.17 0.25 (0.15) 0.10 (0.25) -- --
Six Months Ended September 30, 2000
(Unaudited)............ 7.02 0.14 0.02 0.16 (0.14) -- --
NEW YORK INTERMEDIATE-TERM TAX-EXEMPT FUND--(5/31/90*)
Year Ended March 31,
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)
2000................... 8.80 0.32 (0.37) (0.05) (0.32) -- (0.09)
Six Months Ended September 30, 2000
(Unaudited)............ 8.34 0.17 0.14 0.31 (0.17) -- --
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) -- --
2000................... 7.25 0.26 (0.18) 0.08 (0.26) -- --
Six Months Ended September 30, 2000
(Unaudited)............ 7.07 0.13 0.07 0.20 (0.13) -- --
</TABLE>
* Commencement of operations
(1) Expense ratios before waiver of fees and reimbursement of expenses (if
any) by adviser and administrators.
(2) Annualized
(3) Not Annualized
(4) 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(1) Net Assets Rate (Note 2)
------------- --------- ------- ----------- ---------- ------------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$(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
(0.48) 8.99 (4.01)% 121,998 0.75% 0.83% 4.54% 78% 0.01
(0.21) 9.12 3.77%(3) 116,681 0.75%(2) 0.82%(2) 4.61%(2) 58%(2) -- (4)
$(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% --
(0.37) 9.06 (0.58)% 292,671 0.57% 0.64% 4.06% 91% $0.01
(0.19) 9.18 3.47%(3) 298,970 0.57%(2) 0.63%(2) 4.26%(2) 122%(2) -- (4)
$(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% --
(0.25) 7.02 1.39% 54,226 0.56% 0.63% 3.54% 130% -- (4)
(0.14) 7.04 2.30%(3) 54,349 0.55%(2) 0.63%(2) 4.03%(2) 74%(2) -- (4)
$(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% --
(0.41) 8.34 (0.51)% 126,378 0.73% 0.75% 3.82% 64% -- (4)
(0.17) 8.48 3.68%(3) 135,870 0.73%(2) 0.75%(2) 3.97%(2) 47%(2) -- (4)
$(0.12) $ 6.95 2.12%(3) $ 13,232 0.66%(2) 1.53%(2) 3.69%(2) 7%(2) $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
(0.26) 7.07 1.13% 65,034 0.50% 0.95% 3.67% 16% 0.03
(0.13) 7.14 2.87%(3) 60,618 0.50%(2) 0.99%(2) 3.74%(2) 8%(2) 0.02
</TABLE>
See Notes to Financial Statements
5
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
Long-Term Tax-Exempt Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
---------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 82.34%
$5,000,000 Chicago, Illinois, General Obligation Bonds, (FGIC),
5.250%, 01/01/2028.................................. $ 4,631,700
5,000,000 East Bay California Municipal Utility Distribution
Water System Revenue Bonds, (FGIC),
5.000%, 06/01/2026.................................. 4,638,650
5,000,000 Florida State Board of Education Capital Outlay
General Obligation Bonds, Series A,
5.000%, 06/01/2027.................................. 4,485,100
5,000,000 Florida State Turnpike Authority Revenue Bonds,
Series B, (FGIC), 5.000%, 07/01/2027................ 4,528,500
5,000,000 Fulton County, Georgia, Water & Sewer Revenue Bonds,
(FGIC), 4.750%, 01/01/2028.......................... 4,233,550
5,000,000 Gulf Coast Waste Disposal Authority, Texas,
Pollution Control Revenue Bonds, Amoco Oil Co.
Project, 4.150%, 10/01/2017+........................ 5,000,000
5,000,000 Lincoln County, Wyoming, Pollution Control Revenue
Bonds, Exxon Mobil Corp. Project,
4.250%, 08/01/2015+................................. 5,000,000
5,000,000 Long Island Power Authority, New York, Electric
System Revenue Bonds, Series A, (MBIA),
5.250%, 12/01/2026.................................. 4,676,300
5,000,000 Los Angeles, California, Department of Water and
Power Waterworks Revenue Bonds, 4.500%, 10/15/2024.. 4,262,050
5,000,000 Louisville & Jefferson County, Kentucky,
Metropolitan Sewer District Revenue Bonds, Sewer &
Drain Systems, Series A, (FGIC), 4.750%,
05/15/2028.......................................... 4,209,300
5,000,000 Massachusetts State Port Authority Revenue Bonds,
Series A, 5.000%, 07/01/2027........................ 4,409,900
5,000,000 Massachusetts State Turnpike Authority, Metropolitan
Highway Systems Revenue Bonds, Series A, (AMBAC),
5.250%, 01/01/2029.................................. 4,619,700
5,000,000 Metropolitan Transportation Authority, New York,
Commuter Facilities Revenue Bonds, Series B, (FGIC),
4.750%, 07/01/2026.................................. 4,284,600
5,000,000 New Jersey Health Care Facilities Financing
Authority Revenue Bonds, St. Barnabas Health Center,
Series B, (MBIA), 4.750%, 07/01/2028................ 4,201,550
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
---------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$5,000,000 New York City, New York, Municipal Water Finance
Authority, Water & Sewer System Revenue Bonds,
Series A, (AMBAC), 5.125%, 06/15/2021............... $ 4,670,050
5,000,000 New York City, New York, Municipal Water Finance
Authority, Water & Sewer System Revenue Bonds,
Series B, (MBIA), 5.500%, 06/15/2027................ 4,830,000
5,000,000 New York City, New York, Transitional Financing
Authority Revenue Bonds, Future Tax Secured, Series
C, 4.750%, 05/01/2023............................... 4,325,550
5,000,000 Port Seattle, Washington, Revenue Bonds, Series A,
(FGIC), 5.500%, 10/01/2022.......................... 4,881,600
4,900,000 Salt Lake County, Utah, Pollution Control Revenue
Bonds, British Petroleum Service Station Holdings
Project, Series B, 4.250%, 02/01/2008+.............. 4,900,000
5,000,000 University of Michigan, University Revenue Bonds,
Medical Service Plan, Series A,
4.200%, 12/01/2027+................................. 5,000,000
5,000,000 Utah, State Board of Regents, University of Utah
Auxiliary & Campus Revenue Bonds, Series A, (MBIA),
4.750%, 04/01/2025.................................. 4,283,350
------------
96,071,450
------------
TAX-EXEMPT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 12.85%
ABN AMRO BANK N.V.
------------------
5,000,000 Guadalupe, Texas, Blanco River Authority Pollution
Control Revenue Bonds, Central Power and Light
Company Project, 4.200%, 11/01/2015+................ 5,000,000
BANK OF AMERICA N.A.
--------------------
5,000,000 Mecklenburg County, North Carolina, Public
Improvement General Obligation Bonds, Series C,
4.350%, 2/01/2020+.................................. 5,000,000
WESTDEUTSCHE LANDESBANK
-----------------------
5,000,000 Jacksonville, Florida Electric Authority Revenue
Bonds, Electric Systems Revenue Bonds, Series A,
4.300%, 10/01/2010+................................. 5,000,000
------------
15,000,000
------------
</TABLE>
See Notes to Financial Statements
6
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
Long-Term Tax-Exempt Fund -- (continued)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
---------- ------------
<C> <S> <C>
OTHER INVESTMENTS -- 0.41%
478,100 Dreyfus Tax-Exempt Cash Management Fund.............. $ 478,100
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $115,466,179*).................... 95.60% $111,549,550
OTHER ASSETS AND LIABILITIES (NET)........................ 4.40 5,131,054
------ ------------
NET ASSETS................................................ 100.00% $116,680,604
====== ============
</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, 2000, approximately, 13% 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, 2000, approximately, 20% and 12% of the net assets are
invested in New York and Florida 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, 2000 (Unaudited)
Intermediate-Term Tax-Exempt Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 94.73%
$10,000,000 Alabama State Public School & College Authority,
Capital Improvement Revenue Bonds, Series D, (FGIC),
5.750%, 08/01/2010.................................. $ 10,639,700
10,000,000 Arizona State Transportation Board Highway Revenue
Bonds, Series A, 6.000%, 07/01/2008................. 10,794,300
10,000,000 Chicago, Illinois, General Obligation Bonds, Series
A, (FGIC),
5.000%, 01/01/2008.................................. 10,114,300
10,000,000 Colorado Department of Transportation Revenue Bonds,
5.500%, 06/15/2009.................................. 10,492,200
10,000,000 Connecticut State General Obligation Bonds, Series
C, 5.500%, 08/01/2006............................... 10,454,600
10,000,000 Connecticut State Special Tax Obligation Revenue
Bonds, Transportation Infrastructure, Series A,
(FGIC), 5.500%, 10/01/2010.......................... 10,501,800
10,000,000 Florida State Division Board Finance Department,
General Services Revenue Bonds, Series A,
Environmental Protection-Preservation 2000, (FGIC),
5.375%, 07/01/2010.................................. 10,379,400
6,000,000 Harris County, Texas Industrial Development
Corporation, Shell Oil Company Project,
5.500%, 04/01/2027+................................. 6,000,000
10,000,000 Hawaii State General Obligation Bonds, Series CS,
(MBIA), 5.000%, 04/01/2007.......................... 10,143,800
10,000,000 Hawaii State General Obligation Bonds, Series CT,
5.750%, 09/01/2010.................................. 10,612,000
10,000,000 Honolulu, Hawaii, City & County General Obligation
Bonds, Series C, (FGIC),
5.500%, 11/01/2006.................................. 10,428,900
10,000,000 Jacksonville, Florida, Electric Authority Revenue
Bonds, St. Johns River, Issue 2-15,
5.500%, 10/01/2006.................................. 10,445,300
10,000,000 Jefferson County, Colorado School District No. R-001
General Obligation Bonds, (MBIA), 6.500%,
12/15/2011.......................................... 11,346,900
10,000,000 Kentucky State Turnpike Authority, Economic
Development Road Revitalization Projects Revenue
Bonds, (AMBAC), 5.500%, 07/01/2008.................. 10,480,300
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$10,000,000 Long Island Power Authority, New York, Electric
Systems Revenue Bonds, Series A, (AMBAC), 5.500%,
12/01/2009......................................... $ 10,520,700
10,000,000 Lower Colorado River Authority of Texas, Revenue
Bonds, Series B, (FSA),
6.000%, 05/15/2010................................. 10,852,700
10,000,000 Maryland State & Local Facilities, Public
Improvements Correctional Facilities, 3rd Series,
5.700%, 10/15/2006................................. 10,445,700
10,000,000 Metropolitan Atlanta Rapid Transportation
Authority, Georgia, Sales Tax Revenue Bonds, Series
A, (MBIA), 6.250%, 07/01/2007...................... 10,867,800
10,000,000 New Jersey State General Obligation Bonds, Series
D, 6.000%, 02/15/2011.............................. 10,893,400
10,000,000 New Jersey State Transportation Trust Fund
Authority Revenue Bonds, Transportation Systems,
Series B, (MBIA), 6.500%, 06/15/2011............... 11,247,900
10,000,000 New Jersey State Turnpike Authority Revenue Bonds,
Series A, (MBIA), 5.750%, 01/01/2010............... 10,640,100
10,000,000 New York City, New York, City Transitional Finance
Authority, Revenue Bonds, Future Tax Secured,
Series C, 5.500%, 11/01/2010....................... 10,496,500
10,000,000 New York State Dormitory Authority Revenue Bonds,
State University Educational Facilities, Series B,
(FSA), 5.250%, 05/15/2011.......................... 10,261,400
10,000,000 Oklahoma State, Grand River Dam Authority Revenue
Bonds, (AMBAC),
6.250%, 06/01/2011................................. 11,100,900
10,000,000 Salt River Project, Arizona Agricultural
Improvement & Power Distribution, Electric Systems
Revenue Bonds, Series C, 6.500%, 01/01/2009........ 11,123,400
10,000,000 Texas State General Obligation Bonds, Series A,
6.000%, 10/01/2009................................. 10,830,000
10,000,000 Triborough Bridge & Tunnel Authority, New York,
General Purpose Revenue Bonds, Series A, 6.500%,
01/01/2009......................................... 11,101,900
------------
283,215,900
------------
</TABLE>
See Notes to Financial Statements
8
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
Intermediate-Term Tax-Exempt Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 3.36%
FIRST UNION NATIONAL BANK
-------------------------
$10,000,000 Ohio State Air Quality Development Authority
Revenue Bonds, Pollution Control, Ohio Edison
Company, Series C, 5.500%, 06/01/2023+............. $ 10,034,154
------------
<CAPTION>
Shares
-----------
<C> <S> <C>
OTHER INVESTMENTS -- 0.96%
2,886,800 Dreyfus Tax-Exempt Cash Management Fund............ 2,886,800
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $293,089,034*).................... 99.05% $296,136,854
OTHER ASSETS AND LIABILITIES (NET)........................ 0.95 2,833,434
------ ------------
NET ASSETS................................................ 100.00% $298,970,288
====== ============
</TABLE>
--------
* Aggregate cost for Federal tax and book purposes.
+ Variable rate demand bonds and notes are payable upon not more than seven
business days notice.
AMBAC--American Municipal Bond Assurance Corp.
FGIC--Financial Guaranty Insurance Corp.
FSA--Financial Security Assurance
MBIA--Municipal Bond Insurance Assoc.
Note:
These municipal securities meet the three highest ratings assigned by Moody's
Investors Services, Inc. or Standard and Poor's Corporation or, where not
rated, are determined by the Investment Adviser, under the supervision of the
Board of Directors, to be of comparable quality at the time of purchase to
rated instruments that may be acquired by the Fund.
At September 30, 2000, approximately, 14%, 11%, and 10% of the net assets are
invested in New York, New Jersey, and Hawaii 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
9
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
Short-Term Tax-Exempt Securities Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
---------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 97.45%
$2,000,000 Alabama State General Obligation Bonds, Series A,
5.500%, 10/01/2003.................................... $ 2,054,260
2,000,000 Arizona State Transportation Board Excise Tax Revenue
Bonds, Maricopa County Regional Area Project, Series
A, (AMBAC), 5.500%, 07/01/2002........................ 2,035,000
2,000,000 Clark County, Nevada, School District General
Obligation Bonds, (FGIC), 6.000%, 06/15/2002.......... 2,051,300
2,000,000 Clark County, Nevada, School District General
Obligation Bonds, Series A, (MBIA),
5.250%, 06/15/2003.................................... 2,035,520
2,000,000 Dallas, Texas, General Obligation Bonds,
6.000%, 02/15/2002.................................... 2,039,920
2,000,000 Georgia State General Obligation Bonds, Series B,
5.750%, 08/01/2002.................................... 2,044,960
2,000,000 Hawaii State Highway Revenue Bonds, (FGIC),
5.000%, 07/01/2003.................................... 2,023,320
2,000,000 Honolulu, Hawaii, City & County General Obligation
Bonds, Series C, (FGIC),
5.000%, 07/01/2003.................................... 2,023,320
2,000,000 Knoxville, Tennessee, General Obligation Bonds,
5.000%, 06/01/2002.................................... 2,017,920
2,000,000 Massachusetts State General Obligation Bonds, Series
A, 5.500%, 11/01/2001................................. 2,023,400
2,000,000 Mississippi State General Obligation Bonds, Series E,
5.000%, 09/01/2002.................................... 2,017,640
2,000,000 New Hampshire Municipal Bond Bank, Revenue Bonds,
Series A, (AMBAC),
5.250%, 08/15/2002.................................... 2,028,560
2,000,000 New Jersey State General Obligation Bonds, Series D,
5.400%, 02/15/2003.................................... 2,042,980
1,000,000 Omaha Public Power District, Nebraska, Electric
Revenue Bonds, Series A,
5.000%, 02/01/2001.................................... 1,002,240
2,000,000 Shelby County, Tennessee, General Obligation Bonds.
Series A, 6.750%, 04/01/2003.......................... 2,104,460
5,000,000 South Carolina State Capital Improvement General
Obligation Bonds, Series A, 5.200%, 02/01/2005........ 5,097,350
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
---------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$2,000,000 South Carolina State Capital Improvement General
Obligation Bonds, Series B, 5.750%, 08/01/2002....... $ 2,045,660
2,000,000 South Carolina State Public Services Authority
Revenue Bonds, Series A, 5.000%, 01/01/2003.......... 2,022,660
2,000,000 Stamford, Connecticut, General Obligation Bonds,
5.000%, 07/15/2002................................... 2,020,880
2,000,000 University of Texas, Permanent University Fund
Revenue Bonds, 5.000%, 07/01/2002.................... 2,018,100
2,000,000 University of Texas, University Financing Systems
Revenue Bonds, Series A,
6.000%, 08/15/2002................................... 2,055,100
2,000,000 Utah State General Obligation Bonds, Series A,
5.000%, 07/01/2002................................... 2,018,440
2,000,000 Virgina College Building Authority Educational
Facilities Revenue Bonds, 21st Century College
Program,
5.750%, 02/01/2002................................... 2,033,220
2,000,000 Virginia State Public School Authority Revenue Bonds,
6.000%, 01/01/2002................................... 2,036,880
2,000,000 Wisconsin State General Obligation Bonds, Series A,
6.000%, 05/01/2003................................... 2,071,220
-----------
52,964,310
-----------
TAX-EXEMPT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 1.84%
1,000,000 Valdez, Alaska, Marine Terminal, Exxon Pipeline Co.
Project Revenue Bonds,
5.500%, 10/01/2025+.................................. 1,000,000
-----------
</TABLE>
See Notes to Financial Statements
10
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
Short-Term Tax-Exempt Securities Fund -- (continued)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
---------- -----------
<C> <S> <C>
OTHER INVESTMENTS -- 0.34%
183,000 Dreyfus Tax-Exempt Cash Management Fund............... $ 183,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $53,904,379*)...................... 99.63% $54,147,310
OTHER ASSETS AND LIABILITIES (NET)......................... 0.37 202,001
------ -----------
NET ASSETS................................................. 100.00% $54,349,311
====== ===========
</TABLE>
--------
* Aggregate cost for Federal tax book purposes.
+ Variable rate demand bonds and notes are payable upon not more than seven
business days notice.
AMBAC--American Municipal Bond Assurance Corp.
FGIC--Financial Guaranty Insurance Corp.
FSA--Financial Security Assurance
MBIA--Municipal Bond Insurance Assoc.
Note:
These municipal securities meet the three highest ratings assigned by Moody's
Investors Services, Inc. or Standard and Poor's Corporation or, where not
rated, are determined by the Investment Adviser, under the supervision of the
Board of Directors, to be of comparable quality at the time of purchase to
rated instruments that may be acquired by the Fund.
At September 30, 2000, approximately, 17% and 11% of the net assets are
invested in South Carolina and Texas 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
11
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
New York Intermediate-Term Tax-Exempt Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 84.27%
$ 5,000,000 Hempstead Town, New York, General Obligation Bonds,
(AMBAC),
5.500%, 02/15/2006.................................. $ 5,206,650
10,000,000 Long Island Power Authority, New York, Electric
Systems General Revenue Bonds, Series A, (AMBAC),
5.500%, 12/01/2009.................................. 10,520,700
5,000,000 Metropolitan Transportation Authority of New York,
Dedicated Tax Revenue Bonds, Series A, (FGIC),
5.000%, 04/01/2010.................................. 5,056,500
5,000,000 Metropolitan Transportation Authority of New York,
Transportation Facilities Revenue Bonds, Series M,
(FGIC), 5.500%, 07/01/2008.......................... 5,243,450
5,000,000 Municipal Assistance Corp., City of New York Revenue
Bonds, Series G,
6.000%, 07/01/2006.................................. 5,344,100
10,000,000 New York City, New York, City Transitional Finance
Authority, Future Tax Revenue Bonds, Series A,
5.250%, 08/15/2009.................................. 10,313,900
5,000,000 New York State Dormitory Authority, Columbia
University Revenue Bonds, Series A,
5.750%, 07/01/2008.................................. 5,347,050
5,000,000 New York State Dormitory Authority, Cornell
University Revenue Bonds, 5.125%, 07/01/2006........ 5,130,800
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.......................................... 5,247,650
5,000,000 New York State Local Government Assistance Corp.
Revenue Bonds, Series A, (FGIC),
5.000%, 04/01/2009.................................. 5,065,550
10,000,000 New York State Power Authority & General Purpose
Revenue Bonds, Series A,
5.000%, 02/15/2007.................................. 10,168,300
5,000,000 New York State Thruway Authority Highway & Bridge
Revenue Bonds, Series C, (FGIC),
5.500%, 04/01/2008.................................. 5,237,250
5,000,000 New York State Urban Development Corp., Correctional
Facilities Revenue Bonds, Series A, 6.500%,
01/01/2010.......................................... 5,521,900
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- ------------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 5,000,000 Puerto Rico Commonwealth Electric Power Authority
Revenue Bonds, Series BB, (MBIA), 6.000%,
07/01/2011......................................... $ 5,547,350
10,000,000 Puerto Rico Commonweath Infrastructure Financing
Authority Redemption Fee, Series A, (AMBAC),
5.000%, 07/01/2014................................. 10,013,900
5,000,000 Suffolk County, New York, Industrial Development
Agency, Southwest Sewer Systems Revenue Bonds,
(FGIC), 6.000%, 02/01/2008......................... 5,385,650
10,000,000 Triborough Bridge & Tunnel Authority, New York,
Revenue and General Purpose Bonds, Series A,
5.000%, 01/01/2008................................. 10,151,000
------------
114,501,700
------------
TAX-EXEMPT SECURITIES -- ESCROWED IN U.S. GOVERNMENTS -- 8.03%
10,000,000 New York City, New York, Municipal Water Finance
Authority Water & Sewer System Revenue Bonds,
Series B, 6.250%, 06/15/2020,
(Prerefunded 06/15/2006 @ 101)..................... 10,910,800
------------
TAX-EXEMPT SECURITIES -- BACKED BY LETTERS OF CREDIT -- 5.23%
BAYERISCHE LANDESBANK
---------------------
4,000,000 Port Authority of New York & New Jersey Special
Obligation Revenue Bonds,
5.450%, 8/01/2024+................................. 4,000,000
MORGAN GUARANTY TRUST
---------------------
3,100,000 New York State Energy Research & Development
Authority, Pollution Control Revenue Bonds,
Electric & Gas, Series C,
3.295%, 06/01/2029+................................ 3,100,000
------------
7,100,000
------------
</TABLE>
See Notes to Financial Statements
12
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
New York Intermediate-Term Tax-Exempt Fund -- (continued)
<TABLE>
<CAPTION>
Value
Shares (Note 1)
----------- ------------
<C> <S> <C>
OTHER INVESTMENTS -- 1.93%
2,624,299 Provident Institutional New York Tax-Exempt Money
Fund............................................... $ 2,624,299
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $134,589,050*).................... 99.46% $135,136,799
OTHER ASSETS AND LIABILITIES (NET)........................ 0.54 733,349
------ ------------
NET ASSETS................................................ 100.00% $135,870,148
====== ============
</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, 2000, approximately, 13% 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, 2000, approximately, 86% and 12% of the net assets are
invested in New York and Commonwealth of Puerto Rico 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
13
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
California Tax-Exempt Income Fund
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- 82.04%
$ 65,000 Anaheim, California, Electric Revenue Bonds, (AMBAC),
4.750%, 10/01/2002................................... $ 65,800
595,000 Berkeley, California, Unified School District,
General Obligation Bonds, (FGIC),
4.375%, 08/01/2006................................... 597,249
605,000 Beverly Hills, California, Public Financing Authority
Lease Revenue Bonds, Series A, (MBIA),
4.000%, 06/01/2002................................... 604,014
250,000 Burbank, California, Unified School District General
Obligation Bonds (FGIC),
4.100%, 08/01/2003................................... 249,658
35,000 California Educational Facilities Authority, Santa
Clara University Revenue Bonds, (MBIA),
4.900%, 09/01/2006................................... 36,084
150,000 California Educational Facilities Authority, St.
Marys College Revenue Bonds,
4.800%, 10/01/2002................................... 151,559
150,000 California Educational Facilities Authority, Stanford
University Revenue Bonds, Series J,
5.900%, 11/01/2003................................... 155,646
225,000 California Health Facilities Financing Authority
Revenue Bonds, Cedars-Sinai Medical Center, Series A,
(MBIA),
4.250%, 08/01/2003................................... 224,989
275,000 California State Department of Transportation,
Certificates of Participation, Series A, (MBIA),
4.400%, 03/01/2004................................... 276,545
250,000 California State Department of Water Resources,
Central Valley Project Revenue Bonds, Series L,
8.000%, 12/01/2001................................... 261,770
500,000 California State Department of Water Resources,
Central Valley Project Revenue Bonds, Series U,
4.000%, 12/01/2006................................... 488,410
250,000 California State Public Works Board, Lease Revenue
Bonds, Department of Corrections, Series D, (MBIA),
4.850%, 09/01/2008................................... 257,772
700,000 California State Public Works Board, Lease Revenue
Bonds, Department of Health Services, Series A,
4.350%, 11/01/2003................................... 687,330
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 500,000 California State Public Works Bonds, Lease Revenue
Bonds, Various California State University
Projects, Series A,
5.600%, 10/01/2001................................. $ 508,675
300,000 California State, General Obligation Bonds,
6.000%, 09/01/2001................................. 305,961
750,000 California State, General Obligation Bonds,
6.100%, 11/01/2001................................. 767,977
750,000 California State, General Obligation Bonds,
6.250%, 04/01/2008................................. 837,735
750,000 California State, General Obligation Bonds, (MBIA),
7.500%, 10/01/2007................................. 888,630
250,000 Central Coast Water Authority, California, Revenue
Bonds, State Water Project Regional Facilities,
Series A, (AMBAC),
4.375%, 10/01/2001................................. 251,508
315,000 Central Coast Water Authority, California, Revenue
Bonds, State Water Project Regional Facilities,
Series A, (AMBAC),
6.000%, 10/01/2005................................. 339,264
500,000 Central Coast Water Authority, California, Revenue
Bonds, State Water Project Regional Facilities,
Series A, (AMBAC), 6.600%, 10/01/2022.............. 532,695
550,000 Central Valley School District Financing Authority,
California, School District General Obligation
Revenue Bonds, Series A, (MBIA), 5.850%,
08/01/2004......................................... 581,322
1,000,000 Central Valley School District Financing Authority,
California, School District General Obligation
Revenue Bonds, Series A, (MBIA), 6.150%,
08/01/2009......................................... 1,120,560
545,000 Chino Basin, California, Regional Financing
Authority Revenue Bonds, Municipal Water District
Sewer System Project, (AMBAC), 7.000%, 08/01/2005.. 606,705
350,000 Contra Costa County, California, Certificates of
Participation, Capital Projects Program, (AMBAC),
4.625%, 02/01/2007................................. 355,638
1,000,000 Contra Costa, California, Transportation Authority
Sales Tax Revenue Bonds, Series A, (FGIC), 6.000%,
03/01/2004......................................... 1,055,910
</TABLE>
See Notes to Financial Statements
14
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 550,000 Contra Costa, California, Transportation Authority
Sales Tax Revenue Bonds, Series A, (FGIC), 6.000%,
03/01/2007......................................... $ 600,897
1,000,000 Contra Costa, California, Transportation Authority
Sales Tax Revenue Bonds, Series A, (FGIC), 6.000%,
03/01/2008......................................... 1,101,500
750,000 East Bay, California, Regional Park District
General Obligation Bonds, 5.000%, 09/01/2007....... 779,700
250,000 Escondido, California, Unified School District,
Series A, (FGIC), 5.000%, 09/01/2008............... 260,257
155,000 Fresno, California, Sewer Revenue Bonds, Series A-
1, (AMBAC), 4.800%, 09/01/2006..................... 159,001
695,000 Golden West Schools Financing Authority,
California, School District General Obligation
Revenue Bonds, Series A, (MBIA),
6.200%, 02/01/2003................................. 725,434
200,000 Industry, California, Urban Development Agency, Tax
Allocation Bonds, (MBIA),
4.300%, 05/01/2002................................. 200,598
745,000 Los Altos, California, School District General
Obligation Bonds,
Series A, (FSA),
5.000%, 08/01/2006................................. 771,574
200,000 Los Angeles County, California, Public Works
Financing Authority, Lease Revenue Bonds,
Series A, (MBIA),
6.000%, 09/01/2003................................. 209,750
300,000 Los Angeles County, California, Public Works
Financing Authority, Lease Revenue Bonds,
Series A, (MBIA),
6.000%, 09/01/2004................................. 318,486
655,000 Los Angeles County, California, Public Works
Financing Authority Revenue Bonds, Regional Park &
Open Space District, Series A, 5.000%, 10/01/2004.. 673,589
300,000 Los Angeles County, California, Public Works
Financing Authority Revenue Bonds, Regional Park &
Open Space District, Series A, 5.250%, 10/01/2005.. 313,092
230,000 Los Angeles County, California, Schools
Regionalized Business Services Certificate of
Participation, Series B, (MBIA),
4.400%, 07/01/2003................................. 231,463
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 500,000 Los Angeles, California, Department of Airports,
Airport Revenue Bonds, Series A, (FGIC),
6.000%, 05/15/2005.................................. $ 535,850
250,000 Los Angeles, California, Department of Water &
Power, Electrical Plant Revenue Bonds, (AMBAC),
4.600%, 08/15/2006.................................. 253,248
305,000 Los Angeles, California, Harbor Department Revenue
Bonds, Series C,
4.875%, 11/01/2002.................................. 309,648
250,000 Los Angeles, California, Municipal Improvement
Corporation, Equipment Real Property, Certificates
of Participation, (AMBAC),
4.500%, 12/01/2001.................................. 252,095
400,000 Los Angeles, California, Municipal Improvement
Corporation, Sanitation Equipment Charge Revenue
Bonds, Series B, (AMBAC),
4.300%, 02/01/2004.................................. 400,964
750,000 Los Angeles, California, Municipal Improvement
Corporation, Sanitation Equipment Charge Revenue
Bonds, Series B, (AMBAC),
4.600%, 02/01/2006.................................. 760,567
150,000 Los Angeles, California, Municipal Improvement
Corporation, Sanitation Equipment Charge Revenue
Bonds, Series A, (FSA), 4.875%, 02/01/2006.......... 154,058
400,000 Los Angeles, California, State Building Authority
Lease Revenue Bonds, California Department of
General Services, Series A, 5.600%, 05/01/2004...... 416,508
500,000 Los Angeles, California, Unified School District
General Obligation Bonds, Series A, (FGIC),
4.400%, 07/01/2003.................................. 503,180
1,000,000 Los Angeles, California, Wastewater Systems Revenue
Bonds, Series A, (FGIC),
5.50000%, 06/01/2010................................ 1,077,580
1,000,000 Marin, California Municipal Water District, Water
Revenue Bonds, 5.250%, 07/01/2005................... 1,037,250
100,000 Metropolitan Water District of Southern California,
General Obligaiton Bonds, Series A1, 5.000%,
03/01/2002.......................................... 101,257
</TABLE>
See Notes to Financial Statements
15
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 500,000 Metropolitan Water District of Southern California,
General Obligation Bonds, Series A, 5.250%,
03/01/2008......................................... $ 528,220
1,000,000 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, 5.750%, 07/01/2009....... 1,094,740
250,000 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series A,
4.250%, 07/01/2003................................. 250,628
400,000 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series A,
7.000%, 07/01/2002................................. 418,928
200,000 Metropolitan Water District of Southern California,
Waterworks Revenue Bonds, Series B, (MBIA), 5.250%,
07/01/2007......................................... 210,646
1,000,000 Modesto, California, High School District,
Stanislaus County General Obligation Bonds, (FGIC),
5.000%, 08/01/2001................................. 1,010,010
975,000 Modesto, California, Irrigation District Financing
Authority Revenue Bonds, Series A, (MBIA), 5.450%,
10/01/2007......................................... 1,037,244
350,000 M-S-R Public Power Agency, California, San Juan
Project Revenue Bonds,
Series F, (AMBAC),
5.650%, 07/01/2003................................. 363,447
250,000 Northern California Power Agency, Public Power
Revenue Bonds, Geothermal Project,
Series A, (AMBAC),
5.500%, 07/01/2005................................. 263,055
125,000 Northern California Power Agency, Public Power
Revenue Bonds, Series A, (AMBAC),
5.600%, 07/01/2006................................. 133,509
125,000 Northern California Power Agency, Public Power
Revenue Bonds, Series A, (AMBAC),
5.600%, 07/01/2006................................. 133,181
250,000 Novato, California, General Obligation Bonds,
Series A, (MBIA),
6.250%, 08/01/2007................................. 277,772
175,000 Orange County, California, Local Transportation
Authority Sales Tax Revenue Bonds, 1st Senior,
5.600%, 02/15/2002................................. 178,437
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 1,100,000 Orange County, California, Local Transportation
Authority
Sales Tax Revenue Bonds,
1st Senior, (AMBAC),
6.000%, 02/15/2008................................. $ 1,211,067
1,000,000 Orange County, California, Local Transportation
Authority
Sales Tax Revenue Bonds,
2nd Senior, (FGIC),
6.000%, 02/15/2007................................. 1,091,970
100,000 Orange County, California, Municipal Water
District, Water Facilities Corporation,
Certificates of Participation, (MBIA),
4.800%, 07/01/2003................................. 101,662
250,000 Sacramento County, California, Public Facilities
Project, Certificates of Participation, (MBIA),
4.875%, 02/01/2005................................. 255,900
400,000 Sacramento County, California, Sanitation District
Financing Authority Revenue Bonds,
5.500%, 12/01/2005................................. 423,488
255,000 Sacramento, California, City Financing Authority
Lease Revenue Bonds, Series A, (AMBAC), 5.050%,
11/01/2006......................................... 265,121
250,000 Sacramento, California, Municipal Utilities
District Electric Revenue Bonds, Series Z, (FGIC),
6.000%, 07/01/2001................................. 254,153
300,000 San Bernardino County, California, Certificates of
Participation, Medical Center Financing Project,
(MBIA),
5.500%, 08/01/2007................................. 318,708
200,000 San Bernardino County, California, Transportation
Authority Sales Tax Revenue Bonds, Series A, (FSA),
4.500%, 03/01/2006................................. 201,904
255,000 San Bernardino County, California, Transportation
Authority Sales Tax Revenue Bonds, Series A,
(MBIA), 4.625%, 03/01/2005......................... 258,593
150,000 San Diego County, California, Regional
Transportation Commission, Sales Tax Revenue Bonds,
2nd Senior, Series A, (FGIC),
5.250%, 04/01/2006................................. 156,905
200,000 San Diego County, California, Regional
Transportation Commission, Sales Tax Revenue Bonds,
2nd Senior, Series A, (FGIC),
5.500%, 04/01/2004................................. 208,230
</TABLE>
See Notes to Financial Statements
16
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 750,000 San Diego, California, Metropolitan Transportation
District Board Authority Lease Revenue Bonds,
5.100%, 09/01/2003.................................. $ 769,305
175,000 San Diego, California, Open Space Park Facilities
District No. 1, General Obligation Bonds,
5.500%, 01/01/2004.................................. 181,708
300,000 San Diego, California, Public Facilities Financing
Authority, Sewer Revenue Bonds, Series B, (FGIC),
5.000%, 05/15/2008.................................. 311,919
250,000 San Diego, California, Public Safety Communications
Project, General Obligation Bonds,
6.500%, 07/15/2008.................................. 283,725
875,000 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Bonds,
5.500%, 07/01/2007.................................. 934,237
1,500,000 San Francisco, California, City and County Airport
Commission, International Airport Revenue Bonds,
Series 20, (MBIA), 5.000%, 05/01/2006............... 1,551,510
680,000 San Francisco, California, City and County General
Obligation Bonds, Series 1, (FGIC),
4.500%, 06/15/2005.................................. 686,555
1,020,000 San Francisco, California, City and County Parking
Authority, Parking Meter Revenue Bonds, Series 1,
(FGIC),
4.000%, 06/01/2006.................................. 997,846
325,000 San Francisco, California, City and County Public
Utilities Commission, Water Revenue Bonds, Series A,
6.500%, 11/01/2004.................................. 350,571
100,000 San Jose, California, Airport Revenue Bonds, (FGIC),
5.500%, 03/01/2002.................................. 101,893
625,000 San Jose, California, Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment Project,
(AMBAC), 4.750%, 08/01/2005......................... 637,919
200,000 San Jose, California, Redevelopment Agency Tax
Allocation Revenue Bonds, Merged Area Redevelopment
Project, (MBIA), 4.750%, 08/01/2003................. 203,156
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 500,000 San Jose, California, Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment
Project, (AMBAC), 5.000%, 08/01/2007............... $ 519,585
325,000 San Jose, California, Redevelopment Agency Tax
Allocation Bonds, Merged Area Redevelopment
Project, (MBIA), 5.375%, 08/01/2004................ 338,110
250,000 San Jose, California, Unified School District,
Santa Clara County General Obligation Bonds,
Series A, (FGIC),
4.400%, 08/01/2005................................. 251,390
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................................. 313,239
500,000 San Mateo County, California, Transportation
Authority Revenue Bonds, Series A, (MBIA),
4.200%, 06/01/2004................................. 499,640
750,000 San Mateo County, California, Transportation
District Sales Tax Revenue Bonds, Series A, (FSA),
5.000%, 06/01/2009................................. 780,420
150,000 Santa Barbara County, California, Local
Transportation Authority Sales Tax Revenue Bonds,
(FGIC), 4.900%, 04/01/2006......................... 154,182
100,000 Santa Clara County, California, Financing Authority
Lease Revenue Bonds, Series A, (AMBAC), 4.200%,
11/15/2002......................................... 100,197
175,000 Santa Clara County, California, Financing Authority
Lease Revenue Bonds, Series A, (AMBAC), 4.300%,
11/15/2003......................................... 175,753
500,000 Santa Clara County, California, Transportation
District Sales Tax Revenue Bonds, Series A,
4.500%, 06/01/2006................................. 503,700
200,000 Southern California Public Power Authority Revenue
Bonds, Palo Verde Project, Series A, (AMBAC),
5.500%, 07/01/2004................................. 208,762
1,000,000 Southern California Public Power Authority,
Southern Transmission Project Revenue Bonds,
(MBIA),
5.250%, 07/01/2009................................. 1,058,830
</TABLE>
See Notes to Financial Statements
17
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (Unaudited)
California Tax-Exempt Income Fund -- (continued)
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1)
----------- -----------
<C> <S> <C>
TAX-EXEMPT SECURITIES -- (continued)
$ 1,000,000 University of California Revenue Bonds, Multiple
Purpose Projects, Series A, (MBIA),
6.000%, 09/01/2002................................. $ 1,033,560
150,000 University of California Revenue Bonds, Multiple
Purpose Projects, Series C, (AMBAC),
4.600%, 09/01/2005................................. 152,166
600,000 University of California Revenue Bonds, Multiple
Purpose Projects, Series F, (FGIC),
5.000%, 09/01/2008................................. 623,802
500,000 Ventura County, California, Community College
District, Certificates of Participation, (AMBAC),
4.000%, 12/01/2002................................. 498,955
250,000 West & Central Basin Financing Authority,
California,
Revenue Bonds, (AMBAC),
5.500%, 08/01/2001................................. 253,303
250,000 West Basin, California, Municipal Water District,
Certificates of Participation,
Series A, (AMBAC),
3.875%, 08/01/2002................................. 248,500
-----------
49,728,908
-----------
TAX-EXEMPT SECURITIES -- ESCROWED IN
U.S. GOVERNMENTS -- 15.70%
60,000 Anaheim, California, Electric Revenue Bonds,
(AMBAC),
4.750%, 10/01/2002
(Prerefunded 10/01/2002 @100)...................... 60,716
100,000 California Educational Facilities Authority, Santa
Clara University Revenue Bonds, (MBIA),
4.900%, 09/01/2006
(Prerefunded 09/01/2006 @100)...................... 103,361
300,000 California State Public Works Board, Lease Revenue
Bonds,
Secretary of State, Series A,
6.750%, 12/01/2012
(Prerefunded 12/01/2002 @102)...................... 321,609
750,000 California State General Obligation Bonds, (FGIC),
6.000%, 08/01/2019
(Prerefunded 08/01/2004 @102)...................... 809,992
1,305,000 California State General Obligation Bonds,
5.900%, 04/01/2023
(Prerefunded 04/01/2003 @102)...................... 1,381,447
</TABLE>
<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 State University Projects,
Series A, (AMBAC),
6.400%, 12/01/2016 (Prerefunded 12/01/2002 @102).... $ 212,974
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)....................... 213,792
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)....................... 277,126
250,000 Cupertino, California, Certificates of
Participation, Open Space Acquisition Project,
7.125%, 04/01/2016
(Prerefunded 04/01/2001 @102)....................... 258,730
250,000 East Bay, California, Municipal Utilities District
Wastewater Treatment System Revenue Bonds, (AMBAC),
6.375%, 06/01/2021
(Prerefunded 12/01/2001 @102)....................... 261,503
1,000,000 Long Beach, California, Water Revenue Bonds,
6.250%, 05/01/2024
(Prerefunded 05/01/2004 @102)....................... 1,084,590
175,000 Los Angeles County, California, Transportation
Commission Sales Tax Revenue Bonds, Series A,
6.750%, 07/01/2019
(Prerefunded 07/01/2002 @102)....................... 185,904
125,000 Los Angeles, California, Harbor Department Revenue
Bonds, Series A,
6.500%, 08/01/2025
(Prerefunded 08/01/2002 @102)....................... 132,490
750,000 Richmond, California, Redevelopment Agency Tax
Allocation Revenue Bonds, Harbor Redevelopment
Project, (FSA), 7.000%, 07/01/2009
(Prerefunded 07/01/2002 @102)....................... 799,852
700,000 Sacramento, California, City Financing Authority
Revenue Bonds,
6.800%, 11/01/2020
(Prerefunded 11/01/2001 @102)....................... 734,951
</TABLE>
See Notes to Financial Statements
18
<PAGE>
Excelsior Tax-Exempt Funds, Inc.
Portfolio of Investments September 30, 2000 (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)
$ 825,000 San Bernardino County, California, Medical Center
Financing Project Certificates of Participation,
Series A, (MBIA),
5.500%, 08/01/2022
(Prerefunded 08/01/2005 @102)...................... $ 884,103
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)...................... 479,403
500,000 San Francisco, California, Bay Area Rapid Transit
District, Sales Tax Revenue Bonds, (FGIC),
5.500%, 07/01/2020
(Prerefunded 07/01/2005 @101)...................... 531,310
500,000 Santa Clara, California, Electric Revenue Bonds,
Series A, (MBIA),
6.250%, 07/01/2013
(Prerefunded 07/01/2001 @102)...................... 518,375
250,000 Santa Monica-Malibu, California, Malibu Unified
School District, Public Schools Facilities
Reconstruction Projects,
5.500%, 08/01/2015
(Prerefunded 08/01/2003 @102)...................... 263,207
-----------
9,515,435
-----------
<CAPTION>
Shares
-----------
<C> <S> <C>
OTHER INVESTMENTS -- 1.42%
562,992 Federated California Money Fund.................... 562,992
299,392 Provident California Money Fund.................... 299,392
-----------
862,384
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $60,009,839*)........................................ 99.16% $60,106,727
OTHER ASSETS AND LIABILITIES (NET)......................... 0.84 511,432
------ -----------
NET ASSETS................................................. 100.00% $60,618,159
====== ===========
</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, 2000, approximately, 16% 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, 2000, 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 Long-Term
Tax-Exempt Fund, Intermediate-Term Tax-Exempt Fund, Short-Term Tax-Exempt
Securities Fund, New York Intermediate-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
20
<PAGE>
due to differing treatments for deferral of losses on wash sales and net
capital losses incurred after October 31 and within the taxable year
("Post-October losses").
In order to avoid a Federal excise tax, each Portfolio is required to
distribute certain minimum amounts of net realized capital gain and net
investment income for the respective periods ending October 31 and December
31 in each calendar year.
(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, 2000, 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 2008 Total
-------- ---------- ----------
<S> <C> <C> <C>
Long-Term Tax-Exempt Fund.................... -- $1,690,000 $1,690,000
Intermediate-Term Tax-Exempt Fund............ -- 18,000 18,000
Short-Term Tax-Exempt Securities Fund........ $319,000 66,000 385,000
New York Intermediate-Term Tax-Exempt Fund... -- 1,353,000 1,353,000
California Tax-Exempt Income Fund............ -- 18,000 18,000
</TABLE>
At September 30, 2000, 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
Appreciation Depreciation (Depreciation)
------------ ------------ --------------
<S> <C> <C> <C>
Long-Term Tax-Exempt Fund........ $ 632,267 $(4,548,896) $(3,916,629)
Intermediate-Term Tax-Exempt
Fund............................ 4,343,959 (1,296,139) 3,047,820
Short-Term Tax-Exempt Securities
Fund............................ 262,748 (19,817) 242,931
New York Intermediate Tax-Exempt
Fund............................ 1,654,482 (1,106,733) 547,749
California Tax-Exempt Income
Fund............................ 450,960 (354,072) 96,888
</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
21
<PAGE>
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 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 Corporation is a
wholly-owned subsidiary of The Charles Schwab Corporation ("Schwab").
U.S. Trust Company, Chase Global Funds Services Company, a corporate
affiliate of The Chase Manhattan Bank and Federated Administrative Services
(collectively, the "Administrators") provide administrative services to
Excelsior 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, 2000, administration fees charged by U.S.
Trust Company were as follows:
<TABLE>
<S> <C>
Long-Term Tax-Exempt Fund.............................................. $28,931
Intermediate-Term Tax-Exempt Fund...................................... 73,319
Short-Term Tax Exempt Securities Fund.................................. 13,352
New York Intermediate-Term Tax-Exempt Fund............................. 32,218
California Tax-Exempt Income Fund...................................... 15,013
</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. U.S. Trust has contractually agreed to waive investment
advisory fees and to reimburse other ordinary operating expenses through March
31, 2001 to the extent necessary to keep total operating expenses from
exceeding the following annual percentages of each Portfolio's average daily
net assets:
<TABLE>
<S> <C>
Long-Term Tax-Exempt Fund................................................. 0.80%
Intermediate-Term Tax-Exempt Fund......................................... 0.65%
Short-Term Tax-Exempt Securities Fund..................................... 0.60%
New York Intermediate-Term Tax-Exempt Fund................................ 0.80%
California Tax-Exempt Income Fund......................................... 0.50%
</TABLE>
22
<PAGE>
For the six months ended September 30, 2000, no reimbursements were required
pursuant to the above except with regard to California Tax-Exempt Income Fund
for which U.S. Trust waived investment advisory fees totaling $93,537.
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 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 $204,274 for the six months ended September 30, 2000.
Through July 31, 2000, U.S. Trust and the Administrators voluntarily agreed to
waive investment advisory and administrative fees payable by each Portfolio in
an amount equal to the administrative service fees expense (including fees
paid to affiliates of U. S. Trust) by such Portfolio. Effective August 1,
2000, U.S. Trust has voluntarily agreed to continue waiving investment
advisory and administrative fees payable by each Portfolio in an amount equal
to the administrative service fee expense paid to subsidiaries of U.S. Trust
Corporation. For the six months ended September 30, 2000, U.S. Trust and the
Administrators waived investment advisory and administrative fees in amounts
equal to administrative service fees for the Portfolios as set forth below:
<TABLE>
<CAPTION>
U.S. Trust Administrators
---------- --------------
<S> <C> <C>
Long-Term Tax-Exempt Fund............................. $34,124 $3,759
Intermediate-Term Tax-Exempt Fund..................... 91,182 295
Short-Term Tax-Exempt Securities Fund................. 19,976 85
New York Intermediate-Term Tax-Exempt Fund............ 13,476 84
California Tax-Exempt Income Fund..................... 55,725 --
</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. Each member of the Nominating Committee receives an
annual fee of $2,000 for services in connection with this committee.
23
<PAGE>
3. Purchases and Sales of Securities
For the six months ended September 30, 2000, purchases and sales and
maturities of securities, excluding short-term investments, for the Portfolios
aggregated:
<TABLE>
<CAPTION>
Purchases Sales
------------ ------------
<S> <C> <C>
Long-Term Tax-Exempt Fund............................ $ 32,453,150 $ 45,414,950
Intermediate-Term Tax-Exempt Fund.................... 177,897,900 170,447,130
Short-Term Tax-Exempt Securities Fund................ 19,365,840 18,879,627
New York Intermediate-Term Tax-Exempt Fund........... 31,179,250 28,580,650
California Tax-Exempt Income Fund.................... 2,214,470 4,864,299
</TABLE>
4. Common Stock:
Excelsior Tax-Exempt Fund currently has authorized capital of 24 billion
shares of Common Stock, 14 billion of which is currently classified to
represent interests in one of seven separate investment portfolios. Authorized
capital currently classified for each Portfolio is as follows: 500 million
shares each of Long-Term Tax-Exempt Fund, Intermediate-Term Tax-Exempt Fund,
Short-Term Tax-Exempt Securities Fund, New York Intermediate-Term Tax-Exempt
Fund, and California Tax-Exempt Income 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.
<TABLE>
<CAPTION>
Long-Term Tax-Exempt Fund
----------------------------------------------------
Six Months Ended Year Ended
09/30/00 03/31/00
------------------------ --------------------------
Shares Amount Shares Amount
---------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Sold.................... 2,025,661 $ 18,435,839 4,796,719 $ 43,954,116
Issued as reinvestment
of dividends........... 65,524 590,215 175,131 1,600,713
Redeemed................ (2,861,434) (25,647,174) (9,896,677) (89,469,040)
---------- ------------ ----------- -------------
Net Decrease............ (770,249) $ (6,621,120) (4,924,827) $ (43,914,211)
========== ============ =========== =============
<CAPTION>
Intermediate-Term Tax-Exempt Fund
----------------------------------------------------
Six Months Ended Year Ended
09/30/00 03/31/00
------------------------ --------------------------
Shares Amount Shares Amount
---------- ------------ ----------- -------------
<S> <C> <C> <C> <C>
Sold.................... 5,182,079 $ 47,222,781 10,371,591 $ 94,757,413
Issued as reinvestment
of dividends........... 37,256 338,809 73,949 674,958
Redeemed................ (4,973,473) (45,272,782) (12,262,909) (111,689,795)
---------- ------------ ----------- -------------
Net Increase
(Decrease)............. 245,862 $ 2,288,808 (1,817,369) $ (16,257,424)
========== ============ =========== =============
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
Short-Term Tax-Exempt Securities Fund
---------------------------------------------------
Six Months Ended Year Ended
09/30/00 03/31/00
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 1,200,530 $ 8,433,943 5,815,331 $ 40,964,486
Issued as reinvestment of
dividends............... 9,024 63,369 15,153 107,218
Redeemed................. (1,219,153) (8,559,547) (4,399,976) (31,069,136)
---------- ------------ ----------- ------------
Net Increase (Decrease).. (9,599) $ (62,235) 1,430,508 $ 10,002,568
========== ============ =========== ============
<CAPTION>
New York Intermediate-Term Tax-Exempt Fund
---------------------------------------------------
Six Months Ended Year Ended
09/30/00 03/31/00
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 2,273,263 $ 19,058,367 7,826,206 $ 66,787,349
Issued as reinvestment of
dividends............... 18,800 158,256 79,644 674,800
Redeemed................. (1,416,807) (11,831,895) (10,349,466) (87,417,641)
---------- ------------ ----------- ------------
Net Increase (Decrease).. 875,256 $ 7,384,728 (2,443,616) $(19,955,492)
========== ============ =========== ============
<CAPTION>
California Tax-Exempt Income Fund
---------------------------------------------------
Six Months Ended Year Ended
09/30/00 03/31/00
------------------------ -------------------------
Shares Amount Shares Amount
---------- ------------ ----------- ------------
<S> <C> <C> <C> <C>
Sold..................... 759,443 $ 5,414,035 3,813,698 $ 27,079,234
Issued as reinvestment of
dividends............... 2,235 15,862 3,378 23,890
Redeemed................. (1,466,378) (10,387,477) (3,565,420) (25,328,436)
---------- ------------ ----------- ------------
Net Increase (Decrease).. (704,700) $ (4,957,580) 251,656 $ 1,774,688
========== ============ =========== ============
</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, 2000, the Portfolios had
no borrowings under the agreement.
25
