----------------------------------
CORTLAND
TRUST, INC.
----------------------------------
CORTLAND GENERAL
MONEY MARKET
FUND
----------------------------------
U.S. GOVERNMENT
FUND
----------------------------------
MUNICIPAL MONEY
MARKET FUND
----------------------------------
Annual Report
March 31, 1995
CORTLAND
600 Fifth Avenue
New York, NY 10020
212-830-5200
<PAGE>
1
- -------------------------------------------------------------------------------
CORTLAND 600 Fifth Avenue
TRUST, INC. New York, NY 10020
212-830-5200
===============================================================================
Dear Shareholder:
We are pleased to present the annual report of Cortland Trust, Inc. for the year
ended March 31, 1995.
Cortland Trust, Inc.'s Money Market Fund had net assets of $993,853,961 as of
March 31, 1995. Dividends earned on a share of the General Money Market Fund
held throughout the period were $0.038. When adjusted for the compounding effect
of the reinvestment dividends, this represents a yield of 3.91% on an annual
basis.
As of March 31, 1995, the U.S. Government Fund had net assets of $218,307,135.
Dividends earned on a share of the U.S. Government Fund held throughout the
period were $0.038. When adjusted for the compounding effect of the reinvestment
dividends, this represents a yield of 3.84% on an annual basis.
As of March 31, 1995, the Municipal Money Market Fund had net assets of
$224,040,960. Dividends earned on a share of the Municipal Money Market Fund
held throughout the period were $0.026. When adjusted for the compounding effect
of the reinvestment dividends, this represents a yield of 2.58% on an annual
basis.
We thank you for your support of Cortland Trust, Inc., and look forward to
continuing to serve your cash management needs.
Sincerely,
/s/ Kenneth C. Ebbitt /s/ Dennis C. Borecki
KENNETH C. EBBITT DENNIS C. BORECKI
Chairman President
- -------------------------------------------------------------------------------
<PAGE>
2
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
--------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
(Unaudited)
-----------
DOMESTIC SECURITIES (73.12%)
Commercial Paper (20.00%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$33,900,000 American Home Products, Inc. (b) 04/10/95 6.06% $ 33,848,896 P1
10,400,000 American Home Products, Inc. (b) 04/20/95 6.05 10,366,957 P1
40,000,000 Ford Motor Credit Company 05/02/95 6.08 39,792,644 P1 A1
10,000,000 General Motors Acceptance Corp. (b) 04/04/95 6.03 9,995,000
30,000,000 General Motors Acceptance Corp. (b) 04/24/95 6.10 29,883,658
20,000,000 Pitney Bowes Credit Corp. 06/08/95 6.17 19,770,689 P1 A1+
10,000,000 Ranger Funding Corp. 04/05/95 6.03 9,993,333 P1 A1
10,000,000 Receivables Capital Corp. 04/10/95 6.07 9,984,900
25,228,000 Receivables Capital Corp. 04/13/95 6.04 25,177,460
10,000,000 Receivables Capital Corp. 05/01/95 6.08 9,949,582
- ----------- ------------
199,528,000 Total Commercial Paper 198,763,119
- ----------- ------------
<CAPTION>
Certificates of Deposit (3.82%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$13,000,000 American Express Centurian Bank 04/06/95 6.05% $ 13,000,000
25,000,000 American Express Centurian Bank 04/18/95 6.03 24,999,883
- ----------- ------------
38,000,000 Total Certificates of Deposit 37,999,883
- ----------- ------------
<CAPTION>
Letter of Credit Commercial Paper (12.15%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$10,000,000 Enterprise Funding
LOC Bayerische Vereinsbank, A.G 04/18/95 6.06% $ 9,971,572 P1 A1
25,500,000 James River Cogeneration Energy Co.
LOC Banque Paribas 04/11/95 6.03 25,457,500 P1 A1
10,000,000 Konica U.S.A. Corporation
LOC Mitsubishi Bank, Ltd. 04/10/95 6.06 9,984,925 P1 A1+
23,500,000 Multibanco Commermex Co.
LOC Societe Generale 04/21/95 6.24 23,418,794 P1 A1+
20,000,000 Pemex Capital, Inc.
LOC Credit Suisse 05/15/95 6.27 19,849,178 P1 A1+
20,000,000 Queensland Alumina Ltd.
LOC Credit Suisse 04/13/95 6.03 19,960,000 P1 A1+
12,100,000 Vehicle Services of America
LOC NCNB 04/17/95 6.16 12,067,196 P1 A1
- ----------- ------------
121,100,000 Total Letter of Credit Commercial Paper 120,709,165
- ----------- ------------
<CAPTION>
U.S. Government Agencies (2.16%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Federal Home Loan Bank (c) 09/01/95 6.10% $ 1,980,199
2,000,000 Federal Home Loan Bank (c) 09/11/95 6.42 1,978,027
5,000,000 Federal Home Loan Bank (d) 11/18/97 6.50 5,000,000
12,500,000 Federal National Mortgage Association 07/19/95 5.55 12,500,000
- ----------- ------------
21,500,000 Total U.S. Government Agencies 21,458,226
- ----------- ------------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
3
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
(Unaudited)
-----------
Master Notes (8.05%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 40,000,000 Donaldson, Lufkin & Jenrette, Inc. (e) 06/23/95 6.35% $ 40,000,000
40,000,000 J.P. Morgan Securities Inc. (f) 08/18/95 6.60 40,000,000
----------- -----------
80,000,000 Total Master Notes 80,000,000
----------- -----------
<CAPTION>
Medium Term Note (2.51%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 25,000,000 Bank One, Columbus (g) 03/20/96 6.23% $ 25,000,000 P1 A1+
----------- -----------
25,000,000 Total Medium Term Note 25,000,000
----------- -----------
<CAPTION>
Repurchase Agreement, Overnight (17.68%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$175,701,000 Donaldson, Lufkin & Jennette, Inc., dated 3/31/95
(Collateralized by :
$ 26,594,000 U.S. Treasury Notes, 5.875%, due 5/11/95
$ 28,570,000 U.S Treasury Bill, due 6/8/95
$105,407,000 U.S Treasury Bonds, 7.125% - 11.625%,
due 11/15/04 - 2/15/23) 04/03/95 6.15% $ 175,701,000
----------- -----------
175,701,000 Total Repurchase Agreement, Overnight 175,701,000
----------- -----------
<CAPTION>
Short Term Bank Note (3.12%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 31,000,000 Boatman's National Bank of St. Louis (h) 08/17/95 6.12% $ 31,000,000 P1 A1
----------- -----------
31,000,000 Total Short Term Bank Note 31,000,000
----------- -----------
<CAPTION>
U.S. Government Obligations (3.63%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,166,635 Small Business Administration Variable Loan (i) 08/25/99 6.63% $ 1,166,635
426,639 Small Business Administration Variable Loan (i) 09/25/99 7.13 426,639
2,792,749 Small Business Administration Variable Loan (i) 09/25/02 6.63 2,792,749
920,519 Small Business Administration Variable Loan (i) 10/25/02 7.13 920,519
3,719,543 Small Business Administration Variable Loan (i) 12/25/09 6.63 3,719,543
18,624,423 Small Business Administration Variable Loan (i) 03/25/17 6.47 18,840,764
8,143,957 Small Business Administration Variable Loan (i) 09/25/17 6.58 8,162,268
- ----------- -----------
35,794,465 Total U.S. Government Obligations 36,029,117
- ----------- -----------
Total Domestic Securities 726,660,510
-----------
<CAPTION>
FOREIGN SECURITIES (27.68%)
Foreign Commercial Paper (15.60%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$10,000,000 Barclay's Bank of Canada 05/10/95 6.10% $ 9,934,567 P1 A1+
15,000,000 Caisse Centrale Desjardin de Quebec 06/06/95 6.22 14,831,700 P1 A1+
10,000,000 Canadian Imperial Bank of Commerce 04/17/95 6.01 9,973,422 P1 A1+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
4
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
(Unaudited)
Foreign Commercial Paper (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 20,000,000 Canadian Imperial Bank of Commerce 04/25/95 6.02% $ 19,920,133 P1 A1+
20,000,000 Compagnie Bancaire USA Funding Corp. 04/20/95 6.03 19,936,667 P1 A1
7,250,000 Compagnie Bancaire USA Funding Corp. 05/15/95 6.12 7,196,302 P1 A1
20,000,000 Compagnie Bancaire USA Funding Corp. 07/05/95 6.20 19,678,056 P1 A1
7,640,000 Kredietbank 04/18/95 6.22 7,617,632 P1 A1+
46,000,000 Union Bank of Switzerland 04/03/95 6.34 45,983,900 P1 A1+
----------- ------------
155,890,000 Total Foreign Commercial Paper 155,072,379
----------- ------------
<CAPTION>
Japanese Eurodollar Certificate of Deposit (1.01%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 10,000,000 Sumitomo Bank 05/02/95 6.11% $ 10,000,376 P1 A1
----------- ------------
10,000,000 Total Japanese Eurodollar Certificate of Deposit 10,000,376
----------- ------------
<CAPTION>
Japanese Yankee Certificates of Deposit (3.02%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 10,000,000 Mitsubishi Bank Ltd. 04/03/95 6.05% $ 10,000,000 P1 A1+
10,000,000 Sumitomo Bank 04/03/95 6.06 10,000,006 P1 A1
10,000,000 Fuji Bank, Ltd. 04/17/95 6.07 10,000,083 P1 A1
----------- -----------
30,000,000 Total Japanese Yankee Certificates of Deposit 30,000,089
----------- -----------
<CAPTION>
Yankee Certificates of Deposit (8.05%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 20,000,000 Bank of Montreal 04/06/95 6.01% $ 20,000,028 P1 A1+
10,000,000 Banque Indosuez 04/12/95 6.12 10,000,080 P1 A1
10,000,000 Banque Nationale de Paris 05/02/95 6.04 10,000,086 P1 A1+
10,000,000 Banque Nationale de Paris 05/08/95 6.10 10,000,304 P1 A1+
20,000,000 Banque Nationale de Paris 05/09/95 6.08 20,000,750 P1 A1+
10,000,000 Canadian Imperial Bank of Commerce 04/04/95 6.02 10,000,000 P1 A1+
----------- --------------
80,000,000 Total Yankee Certificates of Deposit 80,001,248
----------- --------------
Total Foreign Securities 275,074,092
--------------
Total Investments(100.80%) (Cost $1,001,734,602+) 1,001,734,602
Liabilities, in Excess of Cash and Other Assets (.80%) ( 7,880,641)
--------------
Net Assets (100.00%) $ 993,853,961
==============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
5
- -------------------------------------------------------------------------------
===============================================================================
FOOTNOTES:
(a) The ratings noted for instruments secured by a letter of credit are those of
the holding company of the bank whose letter of credit secures such
instruments. P1 and A1+ are the highest ratings for commercial paper.
Securities that are not rated have been determined by the Fund's Board of
Directors to be of comparable quality to those rated securities in which the
Fund may invest.
(b) These are split rated securities, given the highest ratings by at least two
of the four nationally recognized rating agencies.
(c) This is a variable rate Federal Home Loan Bank Note. The interest rate is
adjusted monthly based upon the 11th district COFFI index.
(d) This is a variable rate Federal Home Loan Bank Note. The interest rate is
adjusted daily based upon the prime rate minus a fixed number of basis
points.
(e) This is a Master Note. The interest rate is adjusted weekly based upon the
one week LIBOR rate.
(f) This is a Master Note. The interest rate is adjusted daily based upon the
federal funds rate.
(g) This is a Medium Term Note. The interest rate is adjusted daily based upon
the prime rate minus 2.77%.
(h) This is a Short Term Bank Note. The interest rate is adjusted weekly based
upon the federal funds rate.
(i) This is a Small Business Administration variable pool certificate. The
interest rate is adjusted periodically based upon the prime rate.
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
6
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
U.S. GOVERNMENT FUND
STATEMENT OF INVESTMENTS
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 2)
------ ---- ----- --------
U.S. Government Agencies (93.77%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 5,000,000 Federal Farm Credit Bank 04/05/95 5.93% $ 4,996,722
5,000,000 Federal Home Loan Bank 04/06/95 5.95 4,995,903
5,000,000 Federal Home Loan Bank 04/14/95 5.99 4,989,293
5,000,000 Federal Home Loan Bank 04/24/95 5.94 4,981,217
5,000,000 Federal Home Loan Mortgage Corp. 04/03/95 5.94 4,998,355
10,000,000 Federal Home Loan Mortgage Corp. 04/04/95 5.95 9,995,083
5,000,000 Federal Home Loan Mortgage Corp. 04/04/95 5.96 4,997,538
5,000,000 Federal Home Loan Mortgage Corp. 05/02/95 6.08 4,974,210
5,000,000 Federal Home Loan Mortgage Corp. 09/07/95 5.60 4,996,211
5,000,000 Federal Home Loan Mortgage Corp. 04/05/95 5.91 4,996,728
5,000,000 Federal Home Loan Mortgage Corp. 04/20/95 5.94 4,984,404
5,000,000 Federal Home Loan Mortgage Corp. 04/24/95 5.96 4,981,057
5,000,000 Federal National Mortgage Association 04/07/95 5.93 4,995,083
5,000,000 Federal National Mortgage Association 04/18/95 5.94 4,986,046
5,000,000 Federal National Mortgage Association 06/12/95 6.10 4,940,000
100,000,000 Student Loan Marketing Association Discount Note 04/03/95 6.17 99,965,722
5,000,000 Student Loan Marketing Association Discount Note 05/15/95 5.99 4,963,822
5,000,000 Student Loan Marketing Association Medium Term Note 06/30/95 5.32 5,000,000
5,000,000 Student Loan Marketing Association Short Term Note (a) 09/14/95 6.00 5,000,000
5,000,000 Student Loan Marketing Association Short Term Note (a) 08/20/98 6.01 5,000,000
5,000,000 Tennessee Valley Authority 05/10/95 6.02 4,967,771
----------- -----------
205,000,000 Total U.S. Government Agencies 204,705,165
----------- -----------
<CAPTION>
Repurchase Agreement, Overnight (6.37%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 13,902,000 Morgan (J. P.) Securities, Inc., dated 3/31/95
(Collateralized by $13,524,000
U.S. Treasury Note, 11.25%, due 5/15/95) 04/03/95 6.10% $ 13,902,000
----------- -----------
13,902,000 Total Repurchase Agreement, Overnight 13,902,000
----------- -----------
Total Investments (100.14%) (Cost $218,607,165+) 218,607,165
Liabilities, in Excess of Cash and Other Assets(.14%) ( 300,030)
-----------
Net Assets (100.00%) $ 218,307,135
===========
+ Aggregate cost for federal income tax purposes is identical.
FOOTNOTES:
(a) This is a variable rate Student Loan Marketing Association Short Term Note.
The Interest rate is adjusted weekly based upon the 3-month Treasury Bill
auction.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
7
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
(Unaudited)
-----------
Tax Exempt Commercial Paper (c) (5.22%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Beaver County, PA IDA PCRB (Duquesne Light Co.)
Series 1990C
LOC Barclays Bank PLC 06/06/95 3.90% $ 1,000,000 P1 A1+
2,000,000 Beaver County, PA IDA PCRB (Duquesne Light Co.)
LOC Union Bank of Switzerland 04/11/95 4.40 2,000,000 VMIG-1 A1+
1,500,000 Burke County, GA (Oglethorpe Power Corp.)
LOC Credit Suisse 05/10/95 4.20 1,500,000 VMIG-1 A1+
2,200,000 Business Finance Authority, New Hampshire (NEPCO) 04/04/95 4.30 2,200,000 VMIG-1 A1
3,000,000 Tooele County, UT
Hazardous Waste Treatment RB (Union Pacific) 04/10/95 4.20 3,000,000 P1 A1
2,000,000 Venango County, PA IDA Resource Recovery RB
(Scrubgrass Project) 1990B
LOC National Westminster Bank PLC 04/05/95 4.15 2,000,000 P1 A1+
- ----------- -----------
11,700,000 Total Tax Exempt Commercial Paper 11,700,000
- ----------- -----------
<CAPTION>
Other Tax Exempt Investments (15.34%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 4,000,000 Central Blair County, PA Sanitary Authority
Sewer Project Revenue Notes 05/15/95 4.19% $ 4,003,004
3,000,000 City of Jersey City, Hudson County, NJ, BAN 11/17/95 4.59 3,010,824 SP-1
1,710,000 City of Wichita, Kansas GO Airport
Renewal and Improvement Note (Series B94) 11/30/95 4.73 1,714,785 VMIG-1 SP-1+
3,670,000 County of Stark, Ohio GO Series 1994-3 10/19/95 4.34 3,675,795
2,000,000 Indiana Bond Bank Advanced Funding Program Notes 07/10/95 4.60 2,003,535 SP-1+
2,000,000 Kenosha County, WI, Unified School District 08/25/95 4.34 2,004,615
7,418,000 Kokomo Center Township Consolidated
School Corp. Howard County, IN 12/29/95 4.93 7,425,812
2,000,000 Los Angeles County, CA, TAN 06/30/95 3.80 2,003,086 MIG-1 SP-1+
3,000,000 State of California RAN 06/28/95 4.13 3,005,673 MIG-1 A1+
2,500,000 State of Maine General Obligation TAN 06/30/95 3.65 2,504,753 MIG-1 SP-1+
3,000,000 State of Michigan General Obligation Notes 09/29/95 4.02 3,013,010 MIG-1 SP-1+
- ----------- -----------
34,298,000 Total Other Tax Exempt Investments 34,364,892
- ----------- -----------
<CAPTION>
Variable Rate Demand Instruments - Participations (b) (2.30%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 626,258 Massachusetts State IDRB (Foil Properties Project)
LOC Chemical Bank 12/01/00 5.85% $ 626,258 P1 A1
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
8
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-------------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
(Unaudited)
-----------
Variable Rate Demand Instruments - Participations (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,000,000 New Jersey State EDA IDRB (Harrison Riverside Project)
LOC Chemical Bank 01/01/02 5.85% $ 1,000,000 P1 A1
1,000,000 New Jersey State EDA IDRB
(Hartz Mountain Industries Project)
LOC Chemical Bank 01/01/02 5.85 1,000,000 P1 A1
483,374 Northhampton County, PA IDA IDRB (Easton Ind. Affiliates)
LOC Chemical Bank 01/01/00 5.85 483,374 P1 A1
2,048,000 Pima County, AZ IDRB
(Apex Microtechnology Expansion Project) - Series B
LOC Citibank 11/01/09 6.03 2,048,000 P1 A1+
---------- ----------
5,157,632 Total Variable Rate Demand Instruments - Participations 5,157,632
---------- ----------
<CAPTION>
Variable Rate Demand Instruments - Private Placements (b) (4.03%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 4,185,000 El Paso Housing Finance Corporation (c)
Multifamily Housing Revenue Bonds 1993
LOC GE Capital Corp. 09/01/95 4.38% $ 4,185,000 A1+
1,170,000 Jefferson County, MO IDA IDRB (Holley Partnership)
LOC Chemical Bank 12/01/04 5.85 1,170,000 P1 A1
1,211,832 New Jersey State EDA IDRB (Heary Modelle & Co.)
LOC Chemical Bank 09/01/00 5.85 1,211,832 P1 A1
2,460,000 York County, PA IDA IDRB
(Manor Care of Kingston Court Inc.)
LOC Chemical Bank 12/01/08 5.85 2,460,000 P1 A1
---------- ----------
9,026,832 Total Variable Rate Demand Instruments - Private Placements 9,026,832
---------- ----------
<CAPTION>
Put Bonds (c) (11.19%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Buffalo County, NE Sisters of Charity Health Care Systems
MBIA Insured 05/01/95 3.60% $ 2,000,000 VMIG-1 SP-1+
3,000,000 California Higher Education Loan Authority
LOC Student Loan Marketing Association 07/01/95 4.00 3,000,000 VMIG-1 A1+
1,285,000 California Housing Finance Agency Home Mortgage
Revenue Bonds II 1994 Series 2 (AMT)
GIC - Bayerische Landesbank 05/01/95 4.30 1,285,000 MIG-1 SP-1+
2,000,000 City of Dayton, Kentucky Industrial Building
Revenue Bonds, Series 1994 (RADAC Corporation)
LOC Fifth Third Bank 04/01/95 4.30 2,000,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
9
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
(Unaudited)
-----------
Put Bonds (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 2,500,000 Greater East Texas Higher Education
Student Loan Authority - Series 93B
LOC Student Loan Marketing Association 06/01/95 3.85% $ 2,500,000 VMIG-1
6,500,000 Harford County, MD IDRB (A.O. Smith)
LOC Bank One Milwaukee, N.A. 09/01/95 4.60 6,500,000
1,200,000 Ohio Water Development Pollution
LOC Barclays Bank PLC 09/01/95 4.25 1,200,000 P1 A1+
1,500,000 Pennsylvania Higher Education Facility Agency
Carnegie-Mellon 05/01/95 3.50 1,500,000 A1+
2,000,000 Pierce County EDC Series 1984
(Sea-Land Corporation Project)
LOC Deutsche Bank A.G. 11/01/95 4.55 2,000,000
3,080,000 Vermont State Educational &
Health Building Finance Agency (Middlebury College) 11/01/95 4.15 3,080,000 A1+
---------- ----------
25,065,000 Total Put Bonds 25,065,000
---------- ----------
<CAPTION>
Revenue Bond (c) (1.34%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 3,000,000 California Housing Finance Agency
Home Mortgage Revenue Bonds 1995 Series E
FGIC Insured 02/01/96 4.60% $ 3,000,000 MIG-1 SP-1+
---------- ----------
3,000,000 Total Revenue Bond 3,000,000
---------- ----------
<CAPTION>
Other Variable Rate Demand Instruments (b) (59.51%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 5,400,000 Arlington County, VA IDA (Air Force Assoc. Project)
LOC Central Fidelity Bank 07/01/98 4.35% $ 5,400,000
1,330,000 Auburn, IN EDRB (R.J. Tower Corp.)
LOC Old Kent Bank & Trust Co. 09/01/00 4.60 1,330,000 A1
900,000 Buncombe County, NC PCRB (Ashville Inc. Project)
LOC Nationsbank 06/01/07 4.45 900,000 P1 A1
1,000,000 Carthage, MO Legget Platt
LOC National Westminster Bank PLC 09/01/30 4.50 1,000,000
1,000,000 Chesapeake, VA Development Authority IDRB
(Volvo Project)
LOC Union Bank of Switzerland 12/01/06 4.25 1,000,000
3,000,000 City of Akron, Ohio Sanitary Sewer System
(Revenue Bonds Series 1994)
LOC Credit Suisse 12/01/14 4.15 3,000,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
10
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- -------
(Unaudited)
---------
Other Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 4,000,000 City of Selma, AL, IDA Revenue Bonds
(Specialty Minerals, Inc. Project)
LOC Wachovia Bank & Trust Co., N.A. 11/01/09 4.55% $ 4,000,000 P1
5,750,000 Columbus, IN EDRB (Rock-Tenn Co., Mill Division Inc.)
LOC Trust Co. Bank of Atlanta 10/01/98 4.35 5,750,000 P1 A1+
2,000,000 County of Alameda, CA IDA
(Scientific Technology Inc. Project)
LOC Banque Nationale de Paris 08/01/24 4.20 2,000,000 A1+
1,500,000 Cullman, AL Industrial Development Board IDRB
(Pressac Project)
LOC National Bank of Detroit 06/01/02 4.35 1,500,000 A1+
200,000 DeKalb County, GA Developemt Authority IDRB
(Joyce International Project)
LOC Chemical Bank 11/01/00 4.00 200,000 P1 A1
1,755,000 Elkhart, IN EDRB (Burger Diary Co. Project)
LOC Old Kent Bank & Trust Co. 12/01/11 4.80 1,755,000 A1
1,000,000 Forsyth, MT Rosebud County PCRB (Pacificorp)
LOC Deutsche Bank A.G. 12/01/16 4.55 1,000,000
3,400,000 Franklin County, GA Industrial Building Authority(Ross)
LOC Comerica Bank 01/01/07 4.60 3,400,000
1,555,000 Fulton County GA Development Authority Revenue Bond
(Darby Printing Co.)
LOC Wachovia Bank & Trust Co., N.A. 04/01/11 4.50 1,555,000
3,500,000 Graves County, KY IDRB (Seaboard Farms)
LOC Bank of New York 12/01/12 4.35 3,500,000 A1
3,000,000 Greater East Texas Higher Education
Student Loan Authority - Series 92B
LOC Student Loan Marketing Association 05/01/42 4.25 3,000,000 VMIG-1 A1+
1,000,000 Greensville County, VA Development Authority IDRB
(Perdue Farms Inc. Project)
LOC Trust Co. Bank of Atlanta 10/01/06 4.35 1,000,000
4,120,000 Hamilton County, OH EDRB (Berman Printing Co.)
LOC Fifth Third Bank 12/01/08 4.40 4,120,000
1,000,000 Harris County, TX IDRB
(Yokohama Tire Corp. Project) - Series 86
LOC Industrial Bank of Japan, Ltd. 12/01/96 4.60 1,000,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
11
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- -------
(Unaudited)
---------
Other Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 2,005,000 Indiana Health Facility Finance Authority RB
(Community Mental Health)
LOC Toronto-Dominion Bank 11/01/20 4.35% $ 2,005,000
1,600,000 Indiana State EDC (Fischer Ent. Ltd. Project)
LOC Citizen's Fidelity Bank & Trust Company 12/01/04 4.35 1,600,000
558,000 Jefferson County, KY IDRB (Belknap Inc.)
LOC Chemical Bank 12/01/14 4.00 558,000 P1 A1
6,500,000 Kentucky State Pollution Abatement & Water Resources
Finance Authority RB (Toyota Motor Manufacturing)
LOC Toyota Motor Credit 08/13/06 4.55 6,500,000
9,900,000 Lexington - Fayette Urban County Airport Corporation
LOC Credit Locale de France 04/01/24 4.60 9,900,000 P1 A1+
3,000,000 Lockport, IL IDRB (Panduit Corp. Project)
LOC Commerzbank A.G. 04/01/25 4.60 3,000,000 VMIG-1 A1+
3,600,000 Massachusetts IFA (890 Commonwealth Realty Trust)
LOC Bank of New York 12/01/11 4.45 3,600,000 P1 A1
400,000 Meridian, MI EDC
(Hannah Research & Technology Center)
LOC Barclays Bank PLC 11/15/14 3.85 400,000 A1+
920,000 Michigan State Strategic Fund (260 Brown Street)
LOC Comerica Bank 10/01/15 3.75 920,000
4,000,000 Mississippi Business Finance Corp.
Revenue Bonds (ED Smith Gem Inc. Project)
LOC Amsouth Bank N.A. 06/01/04 4.60 4,000,000 P1
4,400,000 New Lenox, IL (Panduit Corp.)
LOC Commerzbank A.G. 07/01/15 4.60 4,400,000 VMIG-1
2,500,000 Ocean Highway & Port Authority, FL Revenue
(Port, Airport & Marina Improvement)
LOC ABN AMRO Bank N.V. 12/01/20 4.55 2,500,000 VMIG-1 A1+
1,200,000 Orange County, FL IDRB
(Orlando Int'l Drive Project)
LOC PNC Bank 12/01/03 4.00 1,200,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
12
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- -------
(Unaudited)
---------
Other Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,115,000 Orrington, ME Resource Recovery RB
(Penobscot Energy Recovery)
LOC Banker's Trust/Canadian Imperial Bank of Commerce
Bank of Nova Scotia/
Toronto Dominion/Long Term Credit Bank 05/01/03 5.25% $ 2,115,000 VMIG-1
4,000,000 Palm Beach County, FL IDRB (Qo Chemicals Inc.)
LOC Sanwa Bank, Ltd. 03/01/02 4.50 4,000,000
1,020,000 Portland, OR IDRB (Oregon Transfer Company)
LOC US National Bank of Oregon 11/01/01 4.75 1,020,000 A1
2,400,000 Portsmouth, VA Redevelopment & Housing Authority
(Chowan Partners)
LOC Central Fidelity Bank 11/01/05 4.35 2,400,000
3,200,000 Prentice, WI IDA Revenue Bonds
(Blount Inc. Project)
LOC Nationsbank 09/01/04 4.50 3,200,000 A1
2,450,000 Redmond, WA IDRB (Integrated Circuits Project)
LOC Bank of America 07/01/03 4.20 2,450,000 VMIG-1
4,000,000 Richmond, VA Redevelopment & Housing Authority
(Tobacco Row)
GIC Bayerische Landesbank Girozentrale 10/01/24 4.85 4,000,000 VMIG-1
3,000,000 Sacramento County, CA Multi-Family Housing RB
(Shadowood Apartments Project)
LOC GE Capital Corp. 12/01/22 4.30 3,000,000 A1
2,100,000 Savannah, GA Multi-Family HRB (Somerset Place)
LOC Amsouth Bank N.A. 10/01/13 4.25 2,100,000 A1+
500,000 Shelby County, TN Health Educational & Housing
(Rhodes College)
LOC National Westminster Bank PLC 08/01/10 4.05 500,000 A1+
7,400,000 St. Lucie County, FL Solid Waste Disposal Revenue Bonds
(FL Power & Light Co. Project) Series 1993 01/01/27 4.75 7,400,000 VMIG-1 A1
2,200,000 State of Alabama IDA (Sunshine Homes)
LOC Amsouth Bank N.A. 09/01/04 4.60 2,200,000 P1 A1
955,000 Sterling Heights, MI EDC (Sterling Shopping Center)
LOC National Bank of Detroit 12/01/10 4.40 955,000 A1+
1,000,000 Texas Capital Health Facilities Development Corp.
(Island of Lake Travis)
LOC Credit Suisse 12/01/16 4.30 1,000,000 A1+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
13
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- -------
(Unaudited)
---------
Other Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,500,000 Town of Parish, AL PCRB
Alabama Power Co. Project 06/01/15 4.45% $ 3,500,000 VMIG-1 SP-1
3,000,000 Vermont State IDA IDRB (Reygate Project)
LOC ABN AMRO Bank N.V. 12/01/15 4.35 3,000,000 VMIG-1
1,500,000 Village of Bolingbrook, IL, (Amberton Apartments)
LOC LaSalle National Bank 11/01/19 4.35 1,500,000 P1 A1+
2,000,000 Yakima County, WA, Public Corporation (Longview Fibre)
LOC ABN AMRO Bank N.V. 01/01/18 4.50 2,000,000
- ------------ -------------
133,333,000 Total Other Variable Rate Demand Instruments 133,333,000
- ------------ -------------
Total Investment (98.93%)(Cost $221,647,356+) 221,647,356
Cash and Other Assets, Net of Liabilities (1.07%) 2,393,604
-------------
Net Assets (100.00%) $ 224,040,960
=============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings noted are the highest ratings assigned for tax exempt
commercial paper. Securities that are not rated have been determined by the
Fund's Board of Directors to be of comparable quality to those rated
securities in which the Fund invests.
(b) Securities payable on demand at par including accrued interest (usually
with seven days notice) and where indicated are unconditionally secured as
to principal and interest by a bank letter of credit. The interest rates
are adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
(c) Maturity dates of these securities are the next available put dates.
<TABLE>
<CAPTION>
KEY:
<S> <C><C> <C> <C><C>
BAN = Bond Anticipation Note IDRB = Industrial Development Revenue Bond
EDA = Economic Development Authority IFA = Industrial Finance Agency
EDC = Economic Development Corporation LOC = Letter of Credit
EDRB = Economic Development Revenue Bond MBIA = Municipal Bond Insurance Association
FGIC = Financial Guaranteed Insurance Company CRB = Pollution Control Revenue Bond
GIC = Guaranteed Investment Contract RAN = Revenue Anticipation Note
GO = General Obligation RB = Revenue Bond
HRB = Hospital Revenue Bond TAN = Tax Anticipation Note
IDA = Industrial Development Authority
</TABLE>
- -------------------------------------------------------------------------------
See Notes To Financial Statements.
<PAGE>
14
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Cortland General U.S. Government Municipal Money
Money Market Fund Fund Market Fund
----------------- --------------- ---------------
ASSETS:
<S> <C> <C> <C>
Investments in securities*......... $ 1,001,734,602 $ 218,607,165 $ 221,647,356
Cash............................... 24,311 -- 911,765
Interest receivable................ 2,397,918 140,738 1,759,525
Receivable for principal paydown... 832,155 -- --
--------------- ------------- -------------
Total Assets................... 1,004,988,986 218,747,903 224,318,646
<CAPTION>
LIABILITIES:
<S> <C> <C> <C>
Dividends payable.................. 140,964 30,334 20,756
Management fee payable............. 641,826 145,582 146,749
Payable for securities purchased... 10,005,509 -- --
Other accounts payable............. 346,726 264,852 110,181
--------------- ------------- -------------
Total Liabilities.............. 11,135,025 440,768 277,686
--------------- ------------- -------------
<CAPTION>
<S> <C> <C> <C>
NET ASSETS....................... $ 993,853,961 $ 218,307,135 $224,040,960
<CAPTION>
=============== ============= ============
NET ASSET VALUE:
Offering and Redemption price per share:
<S> <C> <C> <C>
($ 993,853,961 / 996,409,993 shares) $ 1.00
========
($ 218,307,135 / 218,984,180 shares) $ 1.00
========
($ 224,040,960 / 224,068,398 shares) $ 1.00
========
* Including repurchase agreements amounting to $175,701,000 and $13,902,000
for the Cortland General Money Market Fund and U.S. Government Fund,
respectively.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
15
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1995
===============================================================================
<TABLE>
<CAPTION>
Cortland General U.S. Government Municipal Money
Money Market Fund Fund Market Fund
----------------- --------------- -----------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest Income.................. $ 45,166,079 $10,486,729 $ 7,982,225
------------ ---------- ------------
Expenses:
Management fee--Note 3(a)...... 7,188,114 1,704,092 1,755,183
Distribution support and services
----Note 3(c)................ 2,311,650 548,036 564,594
Directors' fees and expenses
----Note 3(b)................ 14,787 14,787 14,786
Other expenses................. 160,143 38,394 38,489
------------ ---------- ------------
Total Expenses............. 9,674,694 2,305,309 2,373,052
Expenses waived by
Manager--Note 3(a) and (c)..... ( 152,602) ( 17,874) ( 127,620)
------------ ---------- ------------
Net Expenses............... 9,522,092 2,287,435 2,245,432
------------ ---------- ------------
Net Investment Income............ 35,643,987 8,199,294 5,736,793
<CAPTION>
NET REALIZED GAIN (LOSS)
ON INVESTMENTS
<S> <C> <C> <C>
Net realized gain (loss) on investments ( 7,013,370) ( 2,047,537) ( 754)
------------ ------------ -----------
Increase in net assets from operations $28,630,617 $ 6,151,757 $5,736,039
============ ============ ===========
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
16
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
STATEMENTS OF CHANGES IN NET ASSETS
===============================================================================
<TABLE>
<CAPTION>
Cortland General U.S. Government Municipal Money
Money Market Fund Fund Market Fund
----------------- ---- -----------
For the Year Ended March 31, For the Year Ended March 31, For the Year Ended March 31,
1995 1994 1995 1994 1995 1994
----------- ------------ ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income $35,643,987 $22,719,178 $8,199,294 $5,912,775 $5,736,793 $4,096,762
Net realized gain (loss) on
investments...... ( 7,013,370) 188,433 ( 2,047,537) 127,714 ( 754) ( 14,143)
---------- ----------- ---------- --------- --------- ---------
Increase in net assets
from operations.. 28,630,617 22,907,611 6,151,757 6,040,489 5,736,039 4,082,619
Distributions
to shareholders from:
Net investment income ( 35,628,040) ( 22,719,178) ( 8,199,294) ( 5,912,775) ( 5,736,793) ( 4,096,762)
Net realized gain
on investments. -- ( 188,433) -- ( 127,714) -- --
Capital share
transactions net (Note 4) 70,010,177 21,665,243 (15,098,141) ( 8,116,951) (16,528,510) 30,062,963
Contribution of capital from
investment manager (Note 3d) 4,441,391 -- 1,370,492 -- -- --
----------- ----------- ------------ ----------- ------------ -----------
Total increase (decrease) 67,454,145 21,665,243 (15,775,186) ( 8,116,951) (16,529,264) 30,048,820
Net assets:
Beginning of year.... 926,399,816 904,734,573 234,082,321 242,199,272 240,570,224 210,521,404
----------- ----------- ----------- ----------- ----------- -----------
End of year*......... $993,853,961 $926,399,816 $218,307,135 $234,082,321 $224,040,960 $240,570,224
=========== =========== =========== =========== =========== ===========
*Includes undistributed net investment income of $15,947 in Cortland General
Money Market Fund at March 31, 1995.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
17
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
===============================================================================
Note 1-General:
Cortland Trust, Inc. (the "Company") is registered under the Investment Company
Act of 1940, as amended (the "Act"), as a no-load, diversified, open-end
management company. The Company consists of three money market funds: the
Cortland General Money Market Fund ("Cortland General Fund"), the U.S.
Government Fund, and the Municipal Money Market Fund ("Municipal Fund"). The
Company accounts separately for the assets, liabilities and operations of each
Fund. Each Fund's fiscal year ends March 31.
It is the Company's policy to maintain a continuous net asset value per share of
$1.00 for each Fund; the Company has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so.
The Cortland General Fund includes the Pilgrim Money Market Class of Shares (
the "Pilgrim Shares"). Pilgrim Shares are identical to the other shares of the
Cortland General Fund with respect to investment objectives, voting rights and
yield, but differ with respect to certain other matters relating primarily to
exchange privileges. At March 31, 1995, there were 12,197,880 Pilgrim Shares
outstanding.
Note 2-Significant Accounting Policies:
(a) Valuation of investments: Investments are valued at amortized cost, which
approximates market value and has been determined by the Company's Board of
Directors to represent the fair value of each Fund's investments.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Interest income is
recognized on the accrual basis.
The Cortland General and U.S. Government Funds may enter into repurchase
agreements for securities held by these Funds with financial institutions
deemed to be creditworthy by the Funds' Advisor, subject to the seller's
agreement to repurchase and the Funds' agreement to resell such securities at
a mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Funds' custodian and must have an aggregate
market value greater than or equal to the repurchase price plus accrued
interest at all times. In the event that the seller of the agreement defaults
on its repurchase obligation, the Fund maintains the right to sell the
underlying securities at market value.
(c) Dividends to Shareholders: It is the policy of the Company, with respect
to each Fund, to declare dividends from the net investment income earned by
each Fund daily; such dividends are distributed to each Fund's shareholders
on the subsequent business day. Dividends from net realized capital gains,
offset by capital loss carryovers, if any, are generally declared and paid
when realized.
(d) Federal income taxes: It is the policy of each Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders by complying with the applicable sections
of the Internal Revenue Code, and to make distributions of income (including
net realized capital gains) sufficient to relieve it from all Federal income
taxes. Accordingly, no provision for Federal income taxes is required. At
March 31, 1995, Cortland General Fund, U.S. Government Fund and Municipal
Fund had unused capital loss carryforwards of approximately $784,749,
$270,309 and $34,910, respectively, available for Federal Income Tax purposes
to be applied against future securities profit, if any.
- -------------------------------------------------------------------------------
<PAGE>
18
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
Note 3-Management Fee and Other Transactions With Affiliates:
(a) Reich & Tang Asset Management, L.P. (the "Manager") serves as the manager of
the Company and its three Funds pursuant to agreements with the Funds dated
September 14, 1993 ("Agreements"). Under the Agreements, the Manager provides
directly, or indirectly through contracts with others, all services required for
the management of the Company. The Manager bears all ordinary operating expenses
associated with the Company's operation except: (a) the fees of the directors
who are not "interested persons" of the Company, as defined by the Act, and the
travel and related expenses of the directors incident to their attending
shareholder's, director's and committee meetings, (b) interest, taxes and
brokerage commissions, (c) extraordinary expenses, (d) shareholder service or
distribution fees which together can represent up to 0.25% of the net assets of
each Fund on an annualized basis, and (e) membership dues of any industry
association. Additionally, the Manager has assumed all expenses associated with
organizing the Company and all expenses of registering or qualifying the
Company's shares under Federal and state securities laws. The Funds pay the
Manager an annual fee, calculated daily and paid monthly, of .80% of the first
$500 million of the Company's average daily net assets, plus .775% of the next
$500 million of the Company's average daily net assets, plus .75% of the next
$500 million of the Company's average daily net assets, plus .725% of the
Company's average daily net assets in excess of $1.5 billion. The management
fees are allocated pro-rata to each Fund based on their average daily net
assets. The Manager has voluntarily waived $124,695 and $17,874 of the
management fee charged to the Cortland General Fund and the U.S. Government
Fund, respectively, for the year ended March 31, 1995.
The Manager has agreed to reduce its aggregate fees for any fiscal year, or
reimburse each of the Funds, to the extent required, so that the amount of the
ordinary expenses incurred by each of the Funds (excluding brokerage
commissions, interest, taxes, distribution support and service expenses and
extraordinary expenses) do not exceed the expense limitations imposed by the
securities laws or regulations of those states or jurisdictions in which the
Funds' shares are registered or qualified for sale. Currently, the only such
expense limitation requires that ordinary Fund expenses (excluding brokerage
commissions, interest, taxes, distribution support and service expenses and
extraordinary expenses) for any fiscal year do not exceed 2.5% of the first $30
million of each Fund's average daily net assets, plus 2% of the next $70 million
of each Fund's average daily net assets, plus 1.5% of each Fund's average daily
net assets in excess of $100 million. No reimbursement was required pursuant to
the expense limitation for the year ended March 31, 1995.
(b) Certain officers and directors of the Company are "affiliated persons", as
defined in the Act, of the Manager. Each director who is not an "affiliated
person" receives from the Company an annual fee of $5,000 for services as a
director and a fee of $1,250 for each Board of Directors' meeting attended. All
directors fees and expenses are allocated equally to each Fund.
(c) Pursuant to a Distribution Plan ("Plan") dated July 31, 1989, subject to
each Fund's expense limitation, each Fund can make payments of up to 0.25% per
annum of it's average daily net assets for assistance in distributing its
shares. The Manager and/or its affiliates have the ability to make additional
payments for distribution assistance. The Manager and/or affiliates have
voluntarily waived $27,907 and $127,620 of the distribution support and services
fee charged to Cortland General and Municipal Funds, respectively, for the year
ended March 31, 1995. The Manager and/or its affiliates bear all other expenses
related to the distribution of the Company's shares.
- -------------------------------------------------------------------------------
<PAGE>
19
- -------------------------------------------------------------------------------
===============================================================================
(d) On November 4,1994, in order to maintain the net asset value of the Cortland
General Fund and U.S. Government Fund at $1.00 per share, the Manager purchased
U.S. Government Agency Securities, from the Cortland General Fund and U.S.
Government Fund for $67,861,655 and $22,920,464, respectively, which was equal
to the respective Portfolio's amortized cost or carrying value on that date. The
securities had a fair value of $63,420,264 and $21,549,972 for the Cortland
General Fund and U.S. Government Fund, respectively, on this date. The excess
over the fair value ($4,441,391 and $1,370,492 for the Cortland General Fund and
U.S. Government Fund, respectively) that was paid by the Manager has been
classified by the Cortland General Fund and U.S. Government Fund as a realized
loss in the Statements of Operations and capital contribution in the Statements
of Changes in Net Assets. These amounts also were reclassified from accumulated
net realized loss to paid in capital due to a permanent book and tax difference.
Note 4-Capital Share Transactions:
At March 31, 1995, 3 billion shares of $.001 par value shares of the Company
were authorized. Transactions in the shares of each fund were all at $1.00 per
share and are summarized for the period as follows:
<TABLE>
<CAPTION>
Cortland General Money Municipal Money
Market Fund U.S. Government Fund Market Fund
---------------------- -------------------- -----------
For the Year Ended March 31, For the Year Ended March 31, For the Year Ended March 31,
1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Shares sold......... 3,635,190,794 3,433,411,553 896,820,365 893,714,453 885,996,924 937,271,323
Dividends reinvested 35,554,748 22,917,577 8,185,929 6,039,977 5,728,150 4,095,993
------------- ------------- ----------- ----------- ----------- -----------
3,670,745,541 3,456,329,130 905,006,294 899,754,430 891,725,074 941,367,316
Shares redeemed..... (3,600,735,365) (3,434,663,887) (920,104,435) (907,871,381) (908,253,584) (911,304,353)
------------- ------------- ----------- ----------- ----------- -----------
Net increase (decrease) 70,010,177 21,665,243 ( 15,098,141) ( 8,116,951) ( 16,528,510) 30,062,963
============= ============= =========== =========== =========== ===========
</TABLE>
The components of net assets for the years ended March 31, are as follows:
<TABLE>
<CAPTION>
Cortland General Money Municipal Money
Market Fund U.S. Government Fund Market Fund
---------------------- ----------------------- ------------------------
1995 1994 1995 1994 1995 1994
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Paid-in capital ......... 996,409,993 926,399,816 218,984,180 234,082,321 224,068,398 240,596,908
Undistributed realized
capital losses ....... ( 2,571,979) -- ( 677,045) -- ( 27,438) ( 26,684)
Undistributed net
investment income .... 15,947 -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Total net assets ........ 993,853,961 926,399,816 218,307,135 234,082,321 224,040,960 240,570,224
=========== =========== =========== =========== =========== ===========
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
20
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
Note 5-Financial Highlights:
<TABLE>
<CAPTION>
Cortland General Money Market Fund
----------------------------------------------------------------------------
For the Year Ended March 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........... $1.0000 $1.0000 $1.0000 $1.0000 $ .9999
------- ------- ------- ------- -------
Income from investment operations:
Net investment income...................... .0384 .0250 0.0284 0.0470 0.0706
Net realized and unrealized
gain/(loss) on investments............... ( .0026)+ .0001 -- -- 0.0001
--------- --------- --------- --------- ---------
Total from investment operations .0358 .0251 0.0284 0.0470 0.0707
Less distributions:
Dividends from net investment income ( .0384) ( .0250) ( 0.0284) ( 0.0470) ( 0.0706)
Dividends from net realized gain
on investments........................... -- ( .0001) -- -- --
--------- --------- --------- --------- ---------
Total distributions.......................... ( .0384) ( .0251) ( 0.0284) ( 0.0470) ( 0.0706)
--------- --------- --------- --------- ---------
Net asset value, end of year................. $0.9974 $1.0000 $1.0000 $1.0000 $1.0000
========= ========= ========= ========= =========
Total Return................................. 3.91%+ 2.53% 2.88% 4.81% 7.42%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) $993,854 $926,400 $904,735 $906,662 $805,993
Ratios to average net assets:
Expenses*.................................. 1.03% 1.02% 1.00% 1.01% 1.01%
Net investment income...................... 3.84% 2.48% 2.84% 4.67% 7.06%
* Management and distribution support and services fee of .02%, .02%, .04%, .04%
and .04% of average net assets, respectively, were waived during the year.
+ Includes the effect of a capital contribution from the Manager (see Note 3).
Without a capital contribution the net realized loss on investments would have
been $.0070 per share and the total return would have been 2.89%.
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
21
- -------------------------------------------------------------------------------
Note 5-Financial Highlights: (Continued)
<TABLE>
<CAPTION>
U.S. Government Fund
----------------------------------------------------------------------------
For the Year Ended March 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........... $1.0000 $1.0000 $1.0000 $1.0000 $0.9998
-------- -------- -------- -------- --------
Income from investment operations:
Net investment income...................... .0377 .0250 0.0290 0.0466 0.0676
Net realized and unrealized
gain/(loss) on investments............... ( .0031)+ .0002 -- 0.0004 0.0002
-------- ------- -------- ------- -------
Total from investment operations .0346 .0252 0.0290 0.0470 0.0678
Less distributions:
Dividends from net investment income ( .0377) ( .0250) ( 0.0290) ( 0.0466) ( 0.0676)
Dividends from net realized gain
on investments........................... -- ( .0002) -- ( 0.0004) --
-------- -------- -------- -------- --------
Total distributions.......................... ( .0377) ( .0252) ( 0.0290) ( 0.0470) ( 0.0676)
-------- -------- -------- -------- --------
Net asset value, end of year................. $0.9969 $1.0000 $1.0000 $1.0000 $1.0000
======== ======== ======== ======== ========
Total Return................................. 3.84%+ 2.55% 2.94% 4.77% 6.94%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) $218,307 $234,082 $242,199 $230,778 $188,419
Ratios to average net assets:
Expenses*.................................. 1.04% 1.04% 1.01% 1.00% 1.01%
Net investment income...................... 3.74% 2.47% 2.89% 4.63% 6.66%
* Management and distribution support and services fees of .01%, .01%, .04%,
.045% and .045% of average net assets, respectively, were waived during the
year.
+ Includes the effect of a capital contribution from the Manager (see Note
3). Without a capital contribution the net realized loss on investments
would have been $.0094 per share and the total return would have been
2.81%.
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
22
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
Note 5-Financial Highlights: (Continued)
<TABLE>
<CAPTION>
Municipal Money Market Fund
----------------------------------------------------------------------------
For the Year Ended March 31,
----------------------------------------------------------------------------
1995 1994 1993 1992 1991
------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the year)
Net asset value, beginning of year........... $ .9999 $0.9999 $1.0000 $0.9999 $0.9999
------- ------- ------- ------- -------
Income from investment operations:
Net investment income...................... .0255 .0180 0.0224 0.0374 0.0502
Net realized and unrealized
gain/(loss) on investments............... -- -- ( 0.0001) 0.0001 --
------- ------- ------- ------- -------
Total from investment operations .0255 .0180 0.0223 0.0375 0.0502
Less distributions:
Dividends from net investment income ( .0255) ( .0180) ( 0.0224) ( 0.0374) (0.0502)
Dividends from net realized gain
on investments ............................ -- -- -- -- --
------- ------- ------- ------- -------
Total distributions ........................... ( .0255) ( .0180) (0.0224) (0.0374) (0.0502)
------- ------- ------- ------- -------
Net asset value, end of year $0.9999 $0.9999 $0.9999 $1.0000 $0.9999
======= ======= ======= ======= =======
Total Return .................................. 2.58% 1.82% 2.26% 3.81% 5.22%
Ratios/Supplemental Data
Net assets, end of year (000's omitted) $224,041 $240,570 $210,521 $210,948 $166,770
Ratios to average net assets:
Expenses*.................................. .99% .98% .92% .92% .89%
Net investment income...................... 2.54% 1.79% 2.22% 3.70% 5.00%
* Management and distribution support and services fees of .06%, .07%, .13%,
.13% and .13% of average net assets, respectively, were waived during the
year.
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
23
- -------------------------------------------------------------------------------
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
===============================================================================
Shareholders and Board of Directors
Cortland Trust, Inc.
New York, NY
We have audited the accompanying statements of assets and liabilities, including
the statements of investments, of Cortland Trust, Inc. (comprising,
respectively, the Cortland General Money Market Fund, the U.S. Government Fund
and the Municipal Money Market Fund) as of March 31, 1995, and the related
statements of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights (Note 5) for each of the years indicated therein. These financial
statements and financial highlights are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective funds constituting Cortland Trust, Inc. at March 31, 1995, the
results of their operations for the year then ended, the changes in their net
assets for each of the two years in the period then ended, and the financial
highlights (Note 5) for each of the indicated years, in conformity with
generally accepted accounting principles.
/s/Ernst & Young LLP
May 8, 1995
New York, New York
- -------------------------------------------------------------------------------
<PAGE>
24
CORTLAND
600 Fifth Avenue
New York, NY 10020
