- -------------------------------------------------------------------------------
---------------------------------------
CORTLAND
TRUST, INC.
---------------------------------------
CORTLAND GENERAL
MONEY MARKET
FUND
---------------------------------------
U.S. GOVERNMENT
FUND
---------------------------------------
MUNICIPAL MONEY
MARKET FUND
---------------------------------------
ANNUAL REPORT
MARCH 31, 1996
CORTLAND
600 Fifth Avenue
New York, NY 10020
212-830-5200
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<PAGE>
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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, 1996.
Cortland Trust, Inc.'s Money Market Fund had 156,336 shareholder accounts and
net assets of $1,510,203,194 as of March 31, 1996.
As of March 31, 1996, the U.S. Government Fund had 14,283 shareholder accounts
and net assets of $302,550,247.
As of March 31, 1996, the Municipal Money Market Fund had 9,290 shareholder
accounts and net assets of $266,119,367.
We thank you for your support of Cortland Trust, Inc., and look forward to
continuing to serve your cash management needs.
Sincerely,
/s/ Steven W. Duff
Steven W. Duff
President
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<PAGE>
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CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Banker's Acceptance (2.29%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 35,085,839 Trust Company Bank of Atlanta 06/28/96 5.34% $ 34,633,855 P1 A1+
----------- -----------
35,085,839 Total Banker's Acceptance 34,633,855
----------- -----------
<CAPTION>
Commercial Paper (36.85%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 16,000,000 Asset Securization Corporation 04/18/96 5.20% $ 15,961,089 P1 A1+
10,000,000 Australia New Zealand Bank 05/03/96 5.15 9,954,756 P1 A1
25,000,000 Banque International A Luxembourg (Oil International) 04/23/96 5.37 24,919,028 P1 A1+
15,000,000 Banque International A Luxembourg (Oil International) 05/02/96 5.17 14,934,125 P1 A1+
15,000,000 Banque Paribas 05/23/96 5.16 14,889,500 P1 A1
25,000,000 Bear Stearns Company, Incorporated 05/16/96 5.16 24,841,250 P1 A1
10,000,000 Caisse Centrale Desjardins de Quebec 04/24/96 5.76 9,964,222 P1 A1+
10,000,000 Caisse Centrale Desjardins de Quebec 04/24/96 5.79 9,964,094 P1 A1+
10,000,000 Compagnie Bancaire 04/30/96 5.74 9,955,050 P1 A1
10,600,000 Compagnie Bancaire 05/02/96 5.18 10,553,266 P1 A1
15,000,000 Compagnie Bancaire 05/31/96 5.17 14,872,500 P1 A1
15,000,000 Compagnie Bancaire 05/31/96 5.16 14,872,500 P1 A1
15,000,000 Compagnie Bancaire 06/04/96 5.36 14,858,400 P1 A1
11,000,000 GTE (b) 05/02/96 5.56 10,947,619
20,000,000 General Motors Acceptance Corporation (b) 05/01/96 5.41 19,910,333
30,000,000 General Motors Acceptance Corporation (b) 05/09/96 5.44 29,829,000
15,000,000 International Lease Finance Corporation 04/16/96 5.31 14,967,000 P1 A1
20,000,000 International Lease Finance Corporation 04/26/96 5.38 19,925,694 P1 A1
10,000,000 Kingdom of Sweden 04/04/96 5.68 9,995,375 P1 A1+
20,000,000 Kingdom of Sweden 05/01/96 5.33 19,912,500 P1 A1+
45,000,000 Merrill Lynch & Company, Incorporated 04/17/96 5.43 44,893,000 P1 A1+
20,000,000 Merrill Lynch & Company, Incorporated 04/29/96 5.38 19,916,778 P1 A1+
30,000,000 Morgan Stanley Group Incorporated 05/13/96 5.21 29,819,400 P1 A1+
10,000,000 Ranger Funding Corporation 04/22/96 5.43 9,968,792 P1 A1
20,000,000 Receivables Capital Corporation 04/30/96 5.28 19,916,061 P1 A1
16,131,000 Receivables Capital Corporation 05/16/96 5.23 16,026,753 P1 A1
10,000,000 Sherwood Medical Company
(American Home Products) (b) 05/10/96 5.25 9,943,667 P1
15,000,000 Svenska Handelsbanken 04/17/96 5.25 14,965,200 P1 A1
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Commercial Paper (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 75,000,000 Union Bank of Switzerland Finance, Delaware 04/01/96 5.50% $ 75,000,000 P1 A1+
----------- -----------
558,731,000 Total Commercial Paper 556,476,952
----------- -----------
<CAPTION>
Letter of Credit Commercial Paper (24.58%)
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<C> <C> <C> <C> <C> <C> <C>
$ 11,000,000 Banco Boavista S.A.
LOC Bayerische Vereinsbank, A.G. 04/24/96 5.30% $ 10,962,964 P1 A1+
15,000,000 Banco Bradesco S.A. (Grand Cayman)
LOC Barclays Bank PLC 06/04/96 5.11 14,865,600 P1 A1+
10,000,000 Banco Bradesco S.A. (Grand Cayman)
LOC Barclays Bank PLC 06/06/96 5.59 9,900,083 P1 A1+
20,000,000 Banco Mercantil del Norte, S.A.
LOC Bayerische Vereinsbank, A.G. 08/13/96 5.64 19,596,511 P1 A1+
20,000,000 Banco Nacional de Comerico Exterior
LOC Societe Generale 07/12/96 5.37 19,703,633 P1 A1+
20,000,000 Banco Rio de La Plata
LOC Bayerische Vereinsbank, A.G. 08/23/96 5.03 19,608,000 P1 A1+
10,000,000 Bancomer S.A.
LOC Bank of Montreal 08/13/96 5.65 9,798,255 P1 A1+
10,000,000 Bancomer S.A.
LOC Bank of Montreal 09/30/96 5.37 9,739,133 P1 A1+
15,000,000 Bancomer S.A.
LOC Bank of Montreal 09/30/96 5.38 14,607,563 P1 A1+
20,000,000 Beal Cayman Limited
LOC Westdeutsche Landesbank Girozentrale 06/06/96 5.20 19,812,083 P1 A1+
10,000,000 Beal Cayman Limited
LOC Westdeutsche Landesbank Girozentrale 06/13/96 5.18 9,896,381 P1 A1+
10,000,000 Beal Cayman Limited
LOC Westdeutsche Landesbank Girozentrale 07/03/96 5.38 9,863,083 P1 A1+
20,000,000 Cemex, S.A.
LOC Credit Suisse 04/12/96 5.45 19,967,183 P1 A1+
15,000,000 Cemex, S.A.
LOC Credit Suisse 04/26/96 5.23 14,946,042 P1 A1+
10,000,000 Corporacion Andina de Fomento
LOC Barclays Bank PLC 04/25/96 5.40 9,964,200 P1 A1+
5,000,000 Guangong Enterprise Limited
LOC Credit Suisse 05/29/96 5.32 4,957,950 P1 A1+
15,000,000 Guangong Enterprise Limited
LOC Credit Suisse 08/30/96 5.15 14,684,158 P1 A1+
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Letter of Credit Commercial Paper (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 14,000,000 James River Cogeneration
LOC Banque Paribas 04/19/96 5.37% $ 13,962,550 P1 A1
14,000,000 James River Cogeneration
LOC Banque Paribas 04/25/96 5.38 13,950,067 P1 A1
15,000,000 Pemex Capital, Incorporated
LOC Swiss Bank Corp. 04/16/96 5.41 14,966,625 P1 A1+
25,000,000 Petroleo Brasileiro S.A.
LOC Barclays Bank PLC 05/21/96 5.66 24,809,028 P1 A1+
15,000,000 Petroleo Brasileiro S.A.
LOC Barclays Bank PLC 08/19/96 5.08 14,710,667 P1 A1+
16,000,000 SCI Systems
LOC ABN AMRO Bank N.V. 04/25/96 5.39 15,942,827 P1 A1+
10,000,000 Sinochem American Holdings Incorporated
LOC Credit Suisse 05/22/96 5.38 9,924,492 P1 A1+
15,000,000 Unibanco - Uniao de Bancos Grand Cayman
LOC Westdeutsche Landesbank Girozentrale 04/01/96 5.69 15,000,000 P1 A1+
15,100,000 Vehicle Services of America
LOC Nations Bank 04/16/96 5.25 15,067,283 P1 A1
----------- -----------
375,100,000 Total Letter of Credit Commercial Paper 371,206,361
----------- -----------
<CAPTION>
U.S. Government Agency (0.33%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 5,000,000 Federal Home Loan Bank (c) 11/18/97 5.75% $ 5,000,000
----------- -----------
5,000,000 Total U.S. Government Agency 5,000,000
----------- -----------
<CAPTION>
Master Notes (3.64%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 25,000,000 Donaldson, Lufkin & Jenrette, Inc. (d) 02/06/97 5.36% $ 25,000,000
30,000,000 Morgan (J.P.) Securities Incorporated (e) 10/11/96 5.44 30,000,000
----------- -----------
55,000,000 Total Master Notes 55,000,000
----------- -----------
<CAPTION>
Medium Term Notes (4.64%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 50,000,000 First U.S.A.Credit Master Trust-Series 1995-96
Class A (Steers) (f) 12/10/96 5.33% $ 50,000,000 Aaa AAA
20,000,000 Royal Bank of Canada (g) 09/25/96 5.43 19,998,066 P1 A1+
----------- -----------
70,000,000 Total Medium Term Notes 69,998,066
----------- -----------
<CAPTION>
Other Notes (8.57%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
$ 10,000,000 City of New York GO Municipal,
NY (Fiscal 1996) - Series A-2
LOC Societe Generale 08/21/96 5.35% $ 10,000,000 A1+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Other Notes (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 33,900,000 City of New York Taxable Municipal,
NY (Fiscal 1996) - Series A-2
LOC Societe Generale 08/14/96 5.20% $ 33,900,000 A1+
24,700,000 General Electric Engine Receivables 1995-1
Trust VR Guaranteed Notes (h)
LOC General Electric Capital Corp. 02/14/00 5.51 24,700,000 P1 A1+
8,000,000 Mississippi Business Finance Corporation IDRB
(Howard Industries, Inc.) - Series 1995 (h)
LOC National Bank of Detroit 06/01/10 5.65 8,000,000 P1
19,000,000 State of Missouri HEFA
(SSM Health Care System) 1995 - Series D (h)
MBIA Insured 06/01/24 5.50 19,000,000 Aaa AAA
26,000,000 State of Oregon Taxable Economic Development RB
(Georgia-Pacific Corporation) - Series 1995B
LOC Commerzbank A.G. 04/15/96 5.38 26,000,000 P1 A1+
7,800,000 Stone Creek, L.L.C. Taxable VR Securities - Series 1995 (h)
LOC Columbus Bank & Trust Company 08/01/20 5.65 7,800,000 P1
----------- -----------
129,400,000 Total Other Notes 129,400,000
----------- -----------
<CAPTION>
Repurchase Agreements, Overnight (5.50%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 83,000,000 Donaldson, Lufkin & Jenrette, Inc., dated 3/29/96
(Collateralized by:
$42,235,000 U.S.Treasury Bills,0.000%,due 4/18/96 to 6/13/96
$42,654,000 U.S.Treasury Notes,5.625%,due 11/30/00
$ 155,000 U.S.Treasury Bonds,12.000%,due 8/15/13);
proceeds - $83,037,212 04/01/96 5.38% $ 83,000,000
----------- -----------
83,000,000 Total Repurchase Agreements, Overnight 83,000,000
----------- -----------
<CAPTION>
U.S. Government Obligations (0.27%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 803,981 Small Business Administration Variable Rate Loan 08/25/99 6.63% $ 803,981
341,089 Small Business Administration Variable Rate Loan 09/25/99 6.38 341,089
2,354,026 Small Business Administration Variable Rate Loan 09/25/02 6.63 2,354,026
644,181 Small Business Administration Variable Rate Loan 10/25/02 6.38 644,181
----------- -----------
4,143,277 Total U.S. Government Obligations 4,143,277
----------- -----------
<CAPTION>
U.S. Treasury Bills (1.30%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 10,000,000 U.S. Treasury Bills 08/08/96 4.89% $ 9,828,896
10,000,000 U.S. Treasury Bills 07/11/96 5.04 9,861,966
----------- -----------
20,000,000 Total U.S. Treasury Bills 19,690,862
----------- -----------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Eurodollar Certificates of Deposit (5.30%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 15,000,000 Banque Nationale de Paris 08/08/96 5.00% $ 15,002,097 P1 A1+
30,000,000 Morgan Guaranty Trust Company, New York 07/15/96 5.33 30,001,704 P1 A1+
20,000,000 Morgan Guaranty Trust Company, New York 08/20/96 5.00 20,000,764 P1 A1+
15,000,000 Rabobank Nederland 08/22/96 5.02 15,000,000 P1 A1+
----------- -----------
80,000,000 Total Eurodollar Certificates of Deposit 80,004,565
----------- -----------
Yankee Certificates of Deposit (7.61%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 25,000,000 American Express Centurian Bank 04/23/96 5.40% $ 24,999,154 P1 A1
20,000,000 Bank of Nova Scotia 08/06/96 4.97 20,001,734 P1 A1+
20,000,000 Banque Nationale de Paris 06/14/96 5.44 20,003,369 P1 A1+
10,000,000 Canadian Imperial Bank of Commerce 04/04/96 5.35 10,000,000 P1 A1+
20,000,000 Commerzbank A.G. 04/30/96 5.26 20,000,159 P1 A1+
20,000,000 Dresdner Bank A.G. 11/22/96 5.15 19,997,406 P1 A1+
----------- -------------
115,000,000 Total Yankee Certificates of Deposit 115,001,822
----------- -------------
Total Investments (100.88%)(Cost $1,523,555,760+) 1,523,555,760
Liabilities in Excess of Cash and Other Assets (-.88%) ( 13,352,566)
-------------
Net Assets (100.00%) $1,510,203,194
=============
+ Aggregate cost for federal income tax purpose is identical.
FOOTNOTES:
(a) The ratings (which are unaudited) 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 daily based upon the prime rate minus 2.50 basis points.
(d) This is a Master Note. The interest rate is adjusted monthly based upon the
one month LIBOR rate plus 5 basis points, 30 day put option.
(e) This is a Master Note. The interest rate is adjusted monthly based upon the
one month LIBOR flat, daily put option.
(f) This is a Medium Term Note. The interest rate is reset monthly based upon
the one month LIBOR plus 2 basis points.
(g) This is a Medium Term Note. The interest rate is reset daily based upon the
Federal funds rate plus 10 basis points.
(h) These securities have a 7 day put feature exercisable by the Fund at par
value.
</TABLE>
<TABLE>
KEY:
<S> <C> <C> <C> <C> <C>
GO = General Obligations MBIA = Municipal Bond Insurance Association
HEFA = Health and Education Facilities Authority RB = Revenue Bond
IDRB = Industrial Development Revenue Bond VR = Variable Rate
LOC = Letter of Credit
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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CORTLAND TRUST, INC.
U.S. GOVERNMENT FUND
STATEMENT OF INVESTMENTS
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 2)
------ ---- ----- --------
U.S. Government Agencies (69.42%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 5,000,000 Federal Farm Credit Bank 04/16/96 5.60% $ 4,988,646
7,600,000 Federal Farm Credit Bank 04/25/96 5.14 7,574,160
5,000,000 Federal Farm Credit Bank 04/29/96 5.13 4,980,205
10,000,000 Federal Farm Credit Bank 05/01/96 5.25 10,000,000
10,000,000 Federal Farm Credit Bank 03/14/97 5.30 10,000,000
10,000,000 Federal Home Loan Bank 05/06/96 5.04 9,951,583
4,360,000 Federal Home Loan Bank 05/06/96 5.06 4,338,763
10,880,000 Federal Home Loan Bank 05/09/96 5.23 10,820,855
10,000,000 Federal Home Loan Bank 06/12/96 4.96 9,902,400
5,000,000 Federal Home Loan Bank 06/19/96 5.29 4,943,493
5,000,000 Federal Home Loan Bank 07/08/96 5.22 4,930,856
5,000,000 Federal Home Loan Bank 07/12/96 5.13 4,929,025
13,515,000 Federal Home Loan Bank 07/17/96 5.13 13,314,152
5,000,000 Federal Home Loan Bank 02/07/97 5.18 4,999,334
5,000,000 Federal Home Loan Mortgage Corporation 04/03/96 5.34 4,998,536
10,000,000 Federal Home Loan Mortgage Corporation 04/22/96 5.30 9,969,258
5,000,000 Federal Home Loan Mortgage Corporation 05/07/96 5.05 4,975,050
5,000,000 Federal Home Loan Mortgage Corporation 06/05/96 5.11 4,954,500
5,000,000 Federal Home Loan Mortgage Corporation 10/01/96 5.31 4,868,596
5,000,000 Federal National Mortgage Association 04/04/96 5.37 4,997,796
5,000,000 Federal National Mortgage Association 04/12/96 5.36 4,991,926
5,000,000 Federal National Mortgage Association 05/24/96 5.31 4,961,796
5,000,000 Federal National Mortgage Association 05/29/96 5.06 4,959,722
5,000,000 Federal National Mortgage Association 06/07/96 5.11 4,953,100
5,000,000 Federal National Mortgage Association 06/12/96 5.13 4,949,700
5,000,000 Federal National Mortgage Association 06/25/96 5.13 4,940,736
5,000,000 Federal National Mortgage Association 09/03/96 5.71 4,998,547
5,000,000 Federal National Mortgage Association 09/20/96 5.28 4,876,972
5,000,000 Federal National Mortgage Association 04/04/97 5.01 4,996,614
5,000,000 Student Loan Marketing Association (a) 08/08/96 5.32 5,000,000
5,000,000 Student Loan Marketing Association (a) 09/12/96 5.27 5,000,000
5,000,000 Student Loan Marketing Association (a) 09/12/96 5.27 5,000,000
5,000,000 Student Loan Marketing Association (a) 10/04/96 5.41 5,000,000
5,000,000 Tennesse Valley Authority 05/08/96 5.22 4,973,381
----------- -----------
211,355,000 Total U.S. Government Agencies 210,039,702
----------- -----------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
U.S. GOVERNMENT FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 2)
------ ---- ----- --------
U.S. Treasury Bills (3.20%)
- ---------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 10,000,000 U.S. Treasury Bills 11/14/96 5.03% $ 9,694,180
----------- -----------
10,000,000 Total U.S. Treasury Bills 9,694,180
----------- -----------
<CAPTION>
Repurchase Agreement, Overnight (28.43%)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 86,000,000 Morgan (J.P.) Securities, Inc., dated 3/31/96
(Collateralized by $90,010,000
U.S. Treasury Bill, 0.00%, due 9/26/96);
proceeds - $86,038,700 04/01/96 5.40% $ 86,000,000
----------- -----------
86,000,000 Total Repurchase Agreement, Overnight 86,000,000
----------- -----------
Total Investments (101.05%) (Cost $305,733,882+) 305,733,882
Liabilities, in Excess of Cash and Other Assets(1.05%) ( 3,183,635)
-----------
Net Assets (100.00%) $302,550,247
===========
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
FOOTNOTE:
(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.
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Tax Exempt Investments (14.46%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 5,000,000 City of Houston, TX TRAN - Series 1995 06/27/96 3.64% $ 5,009,174 MIG-1 SP-1+
4,415,000 Commonwealth of Kentucky State
Property & Building Commission RRB Project #59 11/01/96 3.88 4,428,673 A+
2,000,000 County of Stark, OH GO 10/18/96 3.86 2,002,306
4,000,000 Dorchester County, SC
Waterworks & Sewer System RB BAN 02/06/97 3.69 4,011,454
1,000,000 Evanston, IL GO 12/01/96 3.13 1,003,543
4,000,000 Greater Cleveland Regional Transit Authority
Capital Improvements BAN - Series 1995 04/10/96 3.69 4,000,333 MIG-1
5,000,000 HEFA State of Missouri School District
GIC Bayerische Landesbank Girozentrale 08/19/96 3.88 5,010,077 SP-1+
5,000,000 Illinois State Revenue Anticipation Certificates 05/10/96 3.75 5,003,630 MIG-1 SP-1+
2,000,000 Michigan Municipal Bond Authority RN - Series 1995B 07/03/96 3.74 2,003,425 SP-1+
5,000,000 Pierce County, WA TAN 12/27/96 3.24 5,007,150
1,000,000 Wapello County, IA Ottumwa Community
School District Anticipatory Note - Series 1995 08/08/96 4.37 1,000,566
--------- -----------
38,415,000 Total Tax Exempt Investments 38,480,331
---------- -----------
<CAPTION>
Variable Rate Demand Instruments (b) (63.47%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 5,010,000 Arlington County, VA IDA (Air Force Association Project)
LOC Central Fidelity Bank 07/01/98 3.63% $ 5,010,000
1,070,000 Auburn, IN EDRB (R.J. Tower Corporation)
LOC Old Kent Bank & Trust Co. 09/01/00 3.70 1,070,000 A1
1,300,000 Brazos River Authority Texas PCRB
(Texas Utilities Electric Company) - Series B
LOC Union Bank of Switzerland 06/01/30 3.85 1,300,000 VMIG-1 A1+
2,200,000 Butler County, KS Texaco Solid Waste Disposal
Facilities Texaco Refining 08/01/24 3.85 2,200,000 VMIG-1 A1
3,000,000 California Higher Education Loan Authority
LOC Student Loan Marketing Association 07/01/02 3.45 3,000,000 VMIG-1 A1+
1,000,000 Carthage, MO IDA IDRB (Leggett & Platt, Inc.)
LOC National Westminster Bank PLC 09/01/30 3.90 1,000,000
1,000,000 Chesapeake, VA Development Authority IDRB (Volvo Project)
LOC Union Bank of Switzerland 12/01/06 3.45 1,000,000
800,000 City of Akron, OH Sanitary Sewer System RB - Series 1994
LOC Credit Suisse 12/01/14 3.50 800,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,000,000 City of Selma, AL IDA RB
(Specialty Minerals, Incorporated Project)
LOC Wachovia Bank & Trust Co., N.A. 11/01/09 3.60% $ 4,000,000 P1
6,000,000 City of Stevenson, AL IDRB Environmental Improvements Bds
(Mead Corp Proj) - Series 1996
LOC Societe Generale 01/01/31 3.95 6,000,000 A1+
2,000,000 County of Alameda, CA IDA (Scientific Technology Project)
LOC Banque Nationale De Paris 08/01/24 3.60 2,000,000 A1+
5,200,000 County of Dekalb, GA MHRB
(Cedar Creek Apartments Project) - Series 1995
LOC GE Capital Corp. 12/01/20 3.85 5,200,000
2,400,000 Cullman, AL Industrial Development Board IDRB
(Pressac Project)
LOC National Bank of Detroit 06/01/02 3.70 2,400,000
1,640,000 Elkhart County, IN EDRB
(Burger Diary Corporation Project)
LOC Old Kent Bank & Trust Co. 12/01/11 3.70 1,640,000 A1
3,120,000 Franklin County, GA Industrial Building Authority (Ross)
LOC Comerica Bank 01/01/07 3.70 3,120,000
2,000,000 Franklin County, IA EDRB (J & J Project) - Series 1995
LOC Fifth Third Bank 05/01/10 3.70 2,000,000
1,470,000 Fulton County, GA RDA (Darby Printing Company)
LOC Wachovia Bank & Trust Co., N.A. 04/01/11 3.70 1,470,000
3,500,000 Graves County, KY IDRB (Seaboard Farms)
LOC Bank of New York 12/01/12 3.60 3,500,000 A1
3,000,000 Greater East, TX Higher Education
Student Loan Authority - Series 1992B
LOC Student Loan Marketing Association 05/01/42 3.45 3,000,000 VMIG-1 A1+
1,000,000 Greensville County, VA Development Authority IDRB
(Perdue Farms Incorporated Project)
LOC Trust Co. Bank of Atlanta 10/01/06 3.55 1,000,000 P1 A1+
1,900,000 Gulf Coast IDA Solid Waste Disposal RB
(Citgo Petroleum Corporation Project) - Series 1995
LOC Nations Bank 05/01/25 3.90 1,900,000 VMIG-1
3,735,000 Hamilton County, OH EDRB (Berman Printing Company)
LOC Fifth Third Bank 12/01/08 3.70 3,735,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,900,000 Indiana HEFA RB (Community Mental Health)
LOC Marine Midland Bank, N.A.
Wrapped by Hong Kong Shanghai 11/01/20 3.75% $ 1,900,000 A1
2,000,000 Indiana State EDC
(Fischer Enterprise Limited Project) - Series 1989
LOC PNC Bank 12/01/04 3.60 2,000,000
530,000 Jefferson County, KY IDRB (Belknap Incorporation)
LOC Chemical Bank 12/01/14 3.55 530,000 A1
2,500,000 Kentucky Pollution Abatement & Water
Resources Finance Authority RB
(Toyota Motor Manufacturing)
LOC Toyota Motor Credit 08/13/06 3.95 2,500,000
9,800,000 Lexington - Fayette Urban County Airport Corporation
LOC Credit Locale de France 04/01/24 4.05 9,800,000 P1 A1+
3,600,000 Massachusetts IFA (890 Commonwealth Realty Trust)
LOC Bank of New York 12/01/11 3.70 3,600,000
400,000 Meridian, MI EDC
(Hannah Research & Technology Center)
LOC Barclays Bank PLC 11/15/14 3.50 400,000 A1+
870,000 Michigan State Strategic Fund (260 Brown Street)
LOC Comerica Bank 10/01/15 3.35 870,000 VMIG-1
2,000,000 Michigan State Strategic Fund Long Term Obligation RB
(B&G Realty Incorporate Project)
LOC Bank One Milwaukee, N.A. 10/01/01 3.55 2,000,000
3,000,000 Michigan Strategic Fund
(National Rubber Michigan Incorporated Project)
LOC National Bank of Canada 09/01/11 3.60 3,000,000 P1
3,400,000 Mississippi Business Finance Corporation IDRB
(Schuller International, Inc. Project)
LOC Bank of New York 08/01/07 3.70 3,400,000 P1
4,000,000 Mississippi Business Finance Corporation RB
(ED Smith Gem Incorporation Project)
LOC Amsouth Bank N.A. 06/01/04 3.70 4,000,000 P1
2,000,000 Montgomery County, PA Redevelopment Authority MHRB
(Glenmore Associates Project)
FNMA Collateralized 11/15/25 3.45 2,000,000 A1+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statments.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,600,000 New Hampshire IDA
(Connecticut Light & Power Company Project) - Series 1986
LOC Deutsche Bank A.G. 11/01/16 3.40% $ 4,600,000 VMIG-1
1,900,000 North Carolina Education Facilities
(Guilford College Project)
LOC Wachovia Bank & Trust Co., N.A. 09/01/23 3.65 1,900,000 VMIG-1 A1+
8,600,000 North Carolina Medical Care Commission (Carol Woods)
LOC Bank of Scotland 04/01/21 3.85 8,600,000 VMIG-1
2,600,000 North Carolina Medical Care Commission HRB
(Pooled Finance Project) - Series 1991A
LOC Nations Bank 10/01/20 3.75 2,600,000 VMIG-1
1,500,000 Orange County, FL IDRB
LOC PNC Bank 12/01/03 3.55 1,500,000
1,900,000 Parish of Calcasieu IDRB RB
(Citgo Petroleum Corporation) - Series 95
LOC Banque Nationale de Paris 03/01/25 3.90 1,900,000 VMIG-1
3,495,000 PeachTree City Refunding RB
(Equitable - PCDC Associates III Project) - Series 1988
LOC Nations Bank 07/01/10 3.40 3,495,000 A1
1,000,000 Pleasant Prairie, WI IDRB (Nucon Corporation Project)
LOC American National Bank & Trust 02/01/22 3.60 1,000,000 A1+
2,200,000 Portland, OR IDRB (Oregon Transfer Company)
LOC US National Bank of Oregon 11/01/01 3.93 2,200,000 A1
2,340,000 Portsmouth, VA Redevelopment & Housing Authority
(Chowan Partners)
LOC Central Fidelity Bank 11/01/05 3.63 2,340,000
3,200,000 Prentice, WI IDRB (Blount Incorporation Project)
LOC Nations Bank 09/01/04 3.70 3,200,000 A1
2,250,000 Redmond, WA IDRB (Integrated Circuits Project)
LOC Security Pacific Bank Washington, N.A. 07/01/03 3.45 2,250,000 VMIG-1
4,000,000 Richmond, VA Redevelopment & Housing Authority
(Tobacco Row)
LOC Bayerische Landesbank Girozentrale 10/01/24 3.60 4,000,000 VMIG-1
2,500,000 Rosebud County, Forsyth, MT PCRB (Pacificorp)
LOC Deutsche Bank A.G. 12/01/16 3.95 2,500,000
3,000,000 Sacramento County, CA MHRB
(Shadowood Apartments Project)
LOC GE Capital Corp. 12/01/22 3.55 3,000,000 A1+
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,100,000 Savannah, GA MHRB (Somerset Place)
LOC Amsouth Bank N.A. 10/01/13 3.50% $ 2,100,000 A1+
4,000,000 Schuylkill County, PA IDA RRB
(Northeastern Power Company) - Series 1985
LOC Sumitomo Bank, Ltd. 12/01/11 3.90 4,000,000 A1
1,350,000 Sewickley Valley Hospital Authority, PA RN
(D.T. Watson Rehabilitation Hospital)
LOC PNC Bank 10/01/97 4.13 1,350,000
500,000 Shelby County, TN Health Educational & Housing
(Rhodes College)
LOC National Westminster Bank PLC 08/01/10 3.55 500,000 A1+
1,980,000 State of Alabama IDA (Sunshine Homes)
LOC Amsouth Bank N.A. 09/01/04 3.70 1,980,000 P1
940,000 Sterling Heights, MI EDC (Sterling Shopping Center)
LOC National Bank of Detroit 12/01/10 3.50 940,000 A1+
5,750,000 The City of Columbus, IA EDRB
(Rock-Tenn Company, Mill Division, Incorporated Project)
LOC Trust Co. Bank of Atlanta 05/01/15 3.55 5,750,000 P1 A1+
6,000,000 Utah HFA Single Family Mortgage Series 4
GIC - Trinity 07/01/28 3.55 6,000,000 VMIG-1
3,000,000 Vermont State IDA IDRB (Reygate Project)
LOC ABN AMRO Bank N.V. 12/01/15 3.55 3,000,000 VMIG-1
1,500,000 Village of Bolingbrook
LOC LaSalle National Bank 11/01/19 3.50 1,500,000
2,350,000 Whitfield County AMC International
(AMC International Incorporated)
LOC Southtrust Bank of Alabama 02/01/11 3.70 2,350,000 A1
2,000,000 Yakima County, WA Public Corporation (Longview Fibre)
LOC ABN AMRO Bank N.V. 01/01/18 3.70 2,000,000
----------- -----------
168,900,000 Total Variable Rate Demand Instruments 168,900,000
----------- -----------
Put Bonds (c) (10.17%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C>
$ 1,930,000 City of Dayton, KY Industrial Building RB
(RADAC Corporation) - Series 1994
LOC Fifth Third Bank 04/01/96 4.20% $ 1,930,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Put Bonds (c) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,500,000 Greater East, TX Higher Education
Student Loan Authority - Series 1993B
LOC Student Loan Marketing Association 06/03/96 4.10% $ 2,500,000 VMIG-1
6,500,000 Hartford County, MD IDRB (A.O. Smith)
LOC Bank One Milwaukee, N.A. 03/01/97 3.60 6,500,000
4,000,000 New Mexico Mtge Finance Authority
Single Family Mtge Program - Series 1996A
GIC Westdeutsche Landesbank Girozentrale 12/31/96 3.25 4,000,000 SP-1+
3,845,000 New Mexico Mtge Finance Authority
Single Family Mtge Program -Series 1996B-2
FGIC Insured 02/28/97 3.25 3,845,000 SP-1+
2,000,000 Pierce County, WA EDC
(Sea-Land Corporation Project) - Series 1984
LOC Deutsche Bank A.G. 11/01/96 3.90 2,000,000
2,000,000 Putnam County, FL Developement Authority
(Seminole Electric) - Series H-3
LOC National Rural Utilities 03/15/97 3.25 2,000,000 VMIG-1 A1+
3,060,000 Vermont State Educational & Health Building Finance Agency
(Middlebury College) 11/01/96 3.80 3,060,000 A1+
1,230,000 Washington State Housing Finance Commission
Single - Family Program Bonds - Series 1995A
FGIC Insured 06/01/96 4.10 1,230,000 P1 A1+
----------- -----------
27,065,000 Total Put Bonds 27,065,000
----------- -----------
<CAPTION>
Tax Exempt Commercial Paper (4.66%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,200,000 Beaver County, PA IDA PCRB
(Duquesne Light Company)
LOC Union Bank of Switzerland 06/27/96 3.30% $ 1,200,000 VMIG-1 A1+
1,000,000 Beaver County, PA IDA PCRB
(Duquesne Light Company) - Series 1990C
LOC Union Bank of Switzerland 05/15/96 3.15 1,000,000 VMIG-1 A1+
1,500,000 Burke County, GA
(Oglethorpe Power Corporation) Project A
LOC Credit Suisse 06/12/96 3.20 1,500,000 VMIG-1 A1+
2,200,000 Business Finance Authority State of New Hampshire Bonds
(New England Power Co. Project) 05/15/96 3.35 2,200,000 A1
3,000,000 Cook County, IL Health County Hospital 04/03/96 3.20 3,000,000 VMIG-1 SP-1
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- -------- ------- ------
Tax Exempt Commercial Paper (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 1,500,000 Mashantucket (Western) Pequot Tribe - Series 1996
LOC Bank of America 10/24/96 3.40% $ 1,500,000 P1 A1+
2,000,000 Venango County, PA IDA RRB
(Scrubgrass Project) - Series A
LOC National Westminster Bank PLC 08/08/96 3.25 2,000,000 P1 A1+
----------- -----------
12,400,000 Total Tax Exempt Commercial Paper 12,400,000
----------- -----------
<CAPTION>
Variable Rate Demand Instruments - Participations (b) (5.13%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 5,185,000 El Paso Housing Finance Corporation MHRB 1993
LOC GE Capital Corp. 09/01/96 4.25% $ 5,185,000 A1+
1,050,000 Jefferson County, MO IDA IDRB (Holley Partnership)
LOC Chemical Bank 12/01/04 5.36 1,050,000 P1 A1
1,000,000 New Jersey State EDA IDRB
(Hartz Mountain Industries Project)
LOC Chemical Bank 01/01/02 5.36 1,000,000 P1 A1
1,000,000 New Jersey State EDA IDRB
(Harrison Riverside)
LOC Chemical Bank 01/01/02 5.36 1,000,000 P1 A1
991,493 New Jersey State EDA IDRB (Heary Modelle & Company)
LOC Chemical Bank 09/01/00 5.36 991,493 P1 A1
383,378 Northhampton County, PA IDA IDRB
(East Industrial Affiliates)
LOC Chemical Bank 01/01/00 5.36 383,378 P1 A1
1,400,000 Tyler House Certificate Trust Variable Rate
Certificates of Participation - Series 1995A
LOC PNC Bank 08/01/25 3.70 1,400,000 VMIG-1
2,375,000 York County, PA IDA IDRB
(Manor Care of Kingston Court Incorporated)
LOC Chemical Bank 12/01/08 5.36 2,375,000 P1 A1
----------- -----------
13,384,871 Total Variable Rate Demand Instruments - Participations 13,384,871
----------- -----------
260,164,871 Total Investments (97.79%) (Cost 260,230,202+) 260,230,202
-----------
Cash and Other Assets, Net of Liabilities (2.21%) 5,889,165
-----------
Net Assets (100.00%) $266,119,367
===========
+ Aggregate cost for federal income tax purpose is identical.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
MARCH 31, 1996
===============================================================================
FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings noted (unaudited) 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.
Interest rates adjust periodically.
<TABLE>
KEY:
<S> <C> <C> <C> <C> <C>
BAN = Bond Anticipation Note IFA = Industrial Financing Authority
EDA = Economic Development Authority LOC = Letter of Credit
EDC = Economic Development Corporation MHRB = Multi-Family Housing Revenue Bond
EDRB = Economic Development Revenue Bond PCRB = Pollution Control Revenue Bond
FGIC = Financial Guaranteed Insurance Company RB = Revenue Bond
GIC = Guaranteed Investment Contract RDA = Revenue Development Authority
GO = General Obligation RRB = Resource Recovery Bonds
HRB = Hospital Revenue Bond RN = Revenue Note
HEFA = Health Facility Finance Authority TAN = Tax Anticipation Note
IDA = Industrial Development Authority TRAN = Tax and Revenue Anticipation Note
IDRB = Industrial Development Revenue Bond
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
STATEMENTS OF ASSETS AND LIABILITIES
MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Cortland General U.S. Government Municipal Money
Money Market Fund Fund Market Fund
----------------- ------------------ --------------------
ASSETS:
<S> <C> <C> <C>
Investments in securities*........... $ 1,523,555,760 $ 305,733,882 $ 260,230,202
Cash................................. 27,544 1,826,808 418,276
Interest receivable.................. 3,283,157 421,489 1,842,403
Receivable for securities sold....... -- -- 4,002,705
Receivable for principal paydown..... 112,558 -- --
------------------ ----------------- -------------------
Total Assets..................... 1,526,979,019 307,982,179 266,493,586
<CAPTION>
LIABILITIES:
<S> <C> <C> <C>
Dividends payable.................... 548,226 106,908 59,203
Management fee payable............... 978,587 189,874 174,761
Payable for securities purchased..... 14,858,400 4,996,613 --
Other accounts payable............... 390,612 138,537 140,255
------------------ ----------------- ------------------
Total Liabilities................ 16,775,825 5,431,932 374,219
------------------ ----------------- ------------------
NET ASSETS............................. $ 1,510,203,194 $ 302,550,247 $ 266,119,367
================== ================= ==================
<CAPTION>
NET ASSET VALUE:
<C> <C> <C> <C>
Offering and Redemption price per share:
Cortland Shares
($1,159,172,914 / 1,161,457,996 shares) $ 1.00
========
($ 255,221,963 / 255,893,045 shares) $ 1.00
=======
($ 216,456,286 / 216,469,263 shares) $ 1.00
========
Live Oak Shares
($ 351,030,280 / 350,984,639 shares) $ 1.00
========
($ 47,328,284 / 47,325,295 shares) $ 1.00
=======
($ 49,663,081 / 49,660,294 shares) $ 1.00
========
* Including repurchase agreements amounting to $83,000,000 and $86,000,000
for the Cortland General Money Market Fund and U.S. Government Fund,
respectively.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
STATEMENTS OF OPERATIONS
YEAR ENDED MARCH 31, 1996
===============================================================================
<TABLE>
<CAPTION>
Cortland General U.S. Government Municipal Money
Money Market Fund Fund Market Fund
----------------- --------------- ---------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest Income......................... $ 75,588,025 $ 14,707,862 $ 10,442,208
---------------- --------------- ----------------
Expenses:
Management fee--Note 3(a)............ 9,878,992 1,964,097 1,981,507
Distribution support and services
----Note 3(c):
Cortland shares.................. 2,925,712 599,069 600,822
Live Oak shares.................. 237,121 33,086 36,175
Directors' fees and expenses
----Note 3(b)........................ 18,996 18,996 18,996
Other expenses....................... 137,341 31,133 20,836
---------------- --------------- ----------------
Total Expenses................... 13,198,162 2,646,381 2,658,336
Expenses waived by
Manager--Note 3(a) and (c).......... ( 19,788) ( 17,756) ( 5,196)
---------------- --------------- ----------------
Net Expenses..................... 13,178,374 2,628,625 2,653,140
---------------- --------------- ----------------
Net Investment Income................... 62,409,651 12,079,237 7,789,068
<CAPTION>
NET REALIZED GAIN (LOSS)
ON INVESTMENTS
<S> <C> <C> <C>
Net realized gain (loss) on investments. 182,364 ( 22,060) 2,754
---------------- --------------- ----------------
Increase in net assets from operations.. $ 62,592,015 $ 12,057,177 $ 7,791,822
================ =============== ================
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
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,
1996 1995 1996 1995 1996 1995
------------ ----------- ------------ ------------ ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income... $62,409,651 $35,643,987 $12,079,237 $8,199,294 $7,789,068 $5,736,792
Net realized gain (loss) on
investments......... 182,364 (7,013,370) ( 22,060) (2,047,537) 2,754 ( 754)
----------- ---------- --------- --------- ----------- ---------
Increase in net assets
from operations..... 62,592,015 28,630,617 12,057,177 6,151,757 7,791,822 5,736,038
Distributions
to shareholders from:
Net investment income:
Cortland shares....... (56,739,267) (35,628,040) (11,281,834) ( 8,199,294) (7,250,573)+ ( 5,736,793)+
Live Oak shares....... (5,536,157) -- ( 766,391) -- ( 524,001)+ --
Capital share
transactions net (Note 4):
Cortland shares....... 165,048,002 70,010,177 36,908,866 (15,098,141) (7,599,135) ( 16,528,509)
Live Oak shares....... 350,984,640 -- 47,325,294 -- 49,660,294 --
Contribution of capital from
investment manager (Note 3d) -- 4,441,391 -- 1,370,492 -- --
----------- ---------- ---------- ----------- ------------ ----------
Total increase (decrease ) 516,349,233 67,454,145 84,243,112 (15,775,186) 42,078,407 (16,529,264)
Net assets:
Beginning of year....... 993,853,961 926,399,816 218,307,135 234,082,321 224,040,960 240,570,224
------------ ----------- ----------- ----------- ----------- -----------
End of year*............ $1,510,203,194 $993,853,961 $302,550,247 $218,307,135 $266,119,367 $224,040,960
============= =========== =========== =========== =========== ===========
* Includes undistributed net investment income of $150,174 and $15,947 in
Cortland General Money Market Fund at March 31, 1996 and March 31, 1995,
respectively. Includes undistributed net investment income of $31,012 and
$14,494 at March 31, 1996 for the U.S. Government Fund and Municipal Money
Market Fund, respectively.
+ Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
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"). Each
Fund has two classes of stock authorized, Cortland shares and Live Oak shares.
The Cortland shares are subject to a service fee of .25% of its average net
assets pursuant to the Distribution Plan. The Live Oak shares are subject to a
service fee of .20% of its average net assets. In all other respects, the
Cortland shares and Live Oak shares represent the same interest in the income
and assets of the Fund. Each class of shares have identical voting, dividend,
liquidation and other rights, except that each class bears different
distribution expenses and has exclusive voting rights with respect to its
distribution plan. Distribution of Live Oak shares commenced November 16, 1995.
The Company accounts separately for the assets, liabilities and operations of
each Fund. Each Fund's fiscal year ends on 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, 1996, there were 5,823,789 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) Use of Estimates: The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that effect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
Note 2-Significant Accounting Policies: (Continued)
(e) 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, 1996, Cortland General Fund, U.S. Government Fund and Municipal Fund
had unused capital loss carryforwards of approximately $2,389,615, $699,105
and $24,684, respectively, available for Federal income tax purposes to be
applied against future securities profit, if any.
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% with respect to the
Cortland shares and up to 0.20% with respect to the Live Oak shares 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 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, 1996.
The Manager is a wholly-owned subsidiary of New England Investment Companies,
L.P. ("NEIC"). On August 16, 1995, New England Mutual Life Insurance Company
("The New England"), the owner of NEIC's general partner and a majority owner of
the limited partnership interest in NEIC, entered into an agreement to merge
with Metropolitan Life Insurance Company ("MetLife"), with MetLife to be the
survivor of the merger. The merger is subject to several conditions, including
the required approval, by shareholders of the
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<PAGE>
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CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
Note 3-Management Fee and Other Transactions with Affiliates: (Continued)
Fund of a proposed new investment advisory agreement, intended to take effect at
the time of the merger. The new agreement will be substantially similar to the
existing agreement.
(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, each Fund can
make payments of up to 0.25% per annum of its average daily net assets with
respect to Cortland shares of the Fund 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 its affiliates bear all
other expenses related to the distribution of the company's shares.
Pursuant to a Distribution Plan approved by the Company's Board on November 9,
1995, each Fund can make payments of up to 0.20% per annum of it's average daily
net assets with respect to the Live Oak shares of the Fund for assistance in
distributing its shares.
During the year ended March 31, 1996, the Distributor waived Distribution
support and services fees of $19,788, $17,756 and $5,196 for the Live Oak shares
of the Cortland General Fund, U.S. Government Fund and Municipal Fund,
respectively.
(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. The realized losses were reclassified from
accumulated net realized loss to paid in capital due to a permanent book and tax
difference.
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<PAGE>
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===============================================================================
Note 4-Capital Share Transactions:
At March 31, 1996, 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,
1996 1995 1996 1995 1996 1995
------------- ------------ ------------- ----------- ----------- ----------
Cortland Shares
<S> <C> <C> <C> <C> <C> <C>
Shares sold........ 5,692,461,972 3,635,190,794 1,147,151,347 896,820,365 1,118,581,921 885,996,924
Dividends reinvested 56,469,119 35,554,748 11,224,107 8,185,929 7,224,068 5,728,150
-------------- ------------- -------------- ------------ -------------- ------------
5,748,931,091 3,670,745,541 1,158,375,454 905,006,294 1,125,805,989 891,725,074
Shares redeemed.... (5,583,883,089)(3,600,735,365) (1,121,466,588) (920,104,435) (1,133,405,124) (908,253,583)
-------------- ------------- -------------- ------------ -------------- ------------
Net increase (decrease) 165,048,002 70,010,177 36,908,866 (15,098,141) ( 7,599,135) (16,528,509)
============== ============= ============== ============ =============== ============
<CAPTION>
Live Oak Shares*
<S> <C> <C> <C>
Shares sold........ 803,496,773 107,188,689 108,031,220
Dividends reinvested 5,399,043 747,543 512,060
-------------- -------------- --------------
808,895,816 107,936,232 108,543,280
Shares redeemed.... ( 457,911,177) ( 60,610,937) ( 58,882,986)
-------------- -------------- --------------
Net increase....... 350,984,639 47,325,295 49,660,294
============== ============== ==============
*Live Oak Shares commenced distribution on November 16, 1995.
</TABLE>
The components of net assets at March 31, are as follows:
<TABLE>
<CAPTION>
Cortland General Money Municipal Money
Market Fund U.S. Government Fund Market Fund
----------------------------- ------------------------- ---------------------------
March 31, March 31, March 31,
1996 1995 1996 1995 1996 1995
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Paid-in capital.... $1,512,442,635 $996,409,993 $303,218,340 $218,984,180 $266,129,557 $224,068,398
Accumulated net
realized losses. ( 2,389,615) ( 2,571,979) ( 699,105) ( 677,045) ( 24,684) ( 27,438)
Undistributed net
investment income 150,174 15,947 31,012 -- 14,494 --
------------- ------------ ----------- ----------- ----------- -----------
Total net assets... $1,510,203,194 $ 993,853,961 $ 302,550,247 $218,307,135 $266,119,367 $ 224,040,960
============= ============ =========== =========== =========== ===========
</TABLE>
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<PAGE>
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CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
Note 5-Financial Highlights:
<TABLE>
<CAPTION>
Cortland General Money Market Fund
-------------------------------------------------------------------------------
Live Oak Shares
November 16, 1995 Cortland Shares
(Commencement of distribution) For the Year Ended March 31,
------------------------------------------------------------
to March 31, 1996 1996 1995 1994 1993 1992
----------------- --------- ----- ------- -------- -------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.0000 $ .9974 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income............... .0175 .0485 .0384 .0250 .0284 .0470
Net realized and unrealized
gain/(loss) on investments........ .0001 .0005 ( .0026)+ .0001 -- --
------- ------- ------- ------- -------- -------
Total from investment operations...... .0176 .0490 .0358 .0251 .0284 .0470
Less distributions:
Dividends from net investment income ( .0175) ( .0484) ( .0384) ( .0250) ( .0284) (.0470)
Dividends from net realized gain
on investments.................... -- -- -- ( .0001) -- --
------ ----- ------- ------- ------ -------
Total distributions................... ( .0175) ( .0484) ( .0384) ( .0251) ( .0284) ( .0470)
------- ------- ------- ------- ------- --------
Net asset value, end of period........ $1.0001 $ .9980 $ .9974 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= =======
Total Return.......................... 4.78%++ 4.95% 3.91%+ 2.53% 2.88% 4.81%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $351,030 $1,159,173 $993,854 $926,400 $904,735 $906,662
Ratios to average net assets:
Expenses............................ 0.97%++* 1.03% 1.03%* 1.02%* 1.00%* 1.01%*
Net investment income............... 4.68%++ 4.86% 3.85% 2.48% 2.84% 4.67%
* Management and distribution support and services fees of .02%, .02%, .04%
and .04% of average net assets, respectively, were waived during the years
ended 1995, 1994, 1993 and 1992 for Cortland shares. Distribution support
and service fee of .02% of average net assets was waived during the period
ended March 31, 1996 for Live Oak shares.
+ Includes the effect of a capital contribution from the Manager of $.0044
per share (see Note 3). Without a capital contribution the net realized and
unrealized loss on investments would have been $.0070 per share and the
total return would have been 2.89%.
++ Annualized
</TABLE>
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<PAGE>
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===============================================================================
Note 5-Financial Highlights: (Continued)
<TABLE>
<CAPTION>
U.S. Government Fund
-------------------------------------------------------------------------------------------
Live Oak Shares
November 16, 1995 Cortland Shares
(Commencement of distribution) For the Year Ended March 31,
--------------------------------------------------------------
to March 31, 1996 1996 1995 1994 1993 1992
----------------- --------- ------ ------- -------- -------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.0000 $ .9969 $1.0000 $1.0000 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income............... .0174 .0471 .0377 .0250 .0290 .0466
Net realized and unrealized
gain/(loss) on investments........ .0001 .0004 ( .0031)+ .0002 -- .0004
------- ------- ------- ------- -------- --------
Total from investment operations...... .0175 .0475 .0346 .0252 .0290 .0470
Less distributions:
Dividends from net investment income ( .0174) ( .0470) ( .0377) ( .0250) ( .0290 ) ( .0466)
Dividends from net realized gain
on investments.................... -- -- -- ( .0002) -- ( .0004)
------ ------- ------- ------- -------- --------
Total distributions................... ( .0174) ( .0470) ( .0377) ( .0252) ( .0290) ( .0470)
------- ------- ------- ------- ------- --------
Net asset value, end of period........ $1.0001 $ .9974 $ .9969 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= ========
Total Return.......................... 4.74%++ 4.80% 3.84%+ 2.55% 2.94% 4.77%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $47,328 $255,222 $218,307 $234,082 $242,199 $230,778
Ratios to average net assets:
Expenses............................ .89%++* 1.04% 1.04%* 1.04%* 1.01%* 1.00%*
Net investment income............... 4.64%++ 4.72% 3.74% 2.47% 2.89% 4.63%
* Management and distribution support and services fees of .01%, .01%, .04%
and .045% of average net assets, respectively, were waived during the years
ended 1995, 1994, 1993 and 1992 for Cortland shares. Distribution support
and service fee of .11% of average net net assets was waived during the
period ended March 31, 1996 for Live Oak shares.
+ Includes the effect of a capital contribution from the Manager of $.0063
per share (see Note 3). Without a capital contribution the net realized and
unrealized loss on investments would have been $.0094 per share and the
total return would have been 2.81%.
++ Annualized
</TABLE>
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<PAGE>
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CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
===============================================================================
Note 5-Financial Highlights: (Continued)
<TABLE>
<CAPTION>
Municipal Money Market Fund
-------------------------------------------------------------------------------------------
Live Oak Shares
November 16, 1995 Cortland Shares
(Commencement of distribution) For the Year Ended March 31,
-------------------------------------------------------------
to March 31, 1996 1996 1995 1994 1993 1992
----------------- ----- ----- ------- -------- -------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.0000 $ .9999 $ .9999 $ .9999 $1.0000 $ .9999
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income............... .0110 .0303 .0255 0.0180 0.0224 0.0374
Net realized and unrealized
gain/(loss) on investments........ ( .0001) -- -- -- ( .0001) .0001
------- ------- ------- ------- -------- --------
Total from investment operations...... .0109 .0303 .0255 .0180 0.0223 0.0375
Less distributions:
Dividends from net investment income ( .0109) ( .0302) ( .0255) ( .0180) ( .0224) ( .0374)
Dividends from net realized gain
on investments.................... -- -- -- -- -- --
------- ----- ------- ------- ------- --------
Total distributions................... ( .0109) ( .0302) ( .0255) ( .0180) ( .0224) ( .0374)
------- ------- ------- ------- ------- --------
Net asset value, end of period........ $1.0000 $1.0000 $0.9999 $0.9999 $0.9999 $1.0000
======= ======= ======= ======= ======= ========
Total Return.......................... 2.96%++ 3.06% 2.58% 1.82% 2.26% 3.81%
Ratios/Supplemental Data
Net assets, end of period (000's omitted) $49,663 $216,456 $224,041 $240,570 $210,521 $210,948
Ratios to average net assets:
Expenses............................ .96%++* 1.03% .99%* .98%* .92%* .92%*
Net investment income............... 2.91%++ 3.02% 2.54% 1.79% 2.22% 3.70%
* Management and distribution support and services fees of .06%, .07%, .13% and
.13% of average net assets, respectively, were waived during the years ended
1995, 1994, 1993 and 1992 for Cortland shares. Distribution support and service
fee of .03% of average net assets was waived during the period ended March 31,
1996 for Live Oak shares.
++ Annualized
</TABLE>
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<PAGE>
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REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS
===============================================================================
Shareholders and Board of Directors
Cortland Trust, Inc.
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, 1996, 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, 1996, 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, 1996, 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
April 25, 1996
New York, New York
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