<PAGE>
- --------------------------------------------------------------------------------
CORTLAND
TRUST, INC. 600 Fifth Avenue
New York, NY 10020
212-830-5200
================================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Cortland Trust, Inc. for the
period April 1, 1997 through September 30, 1997.
Cortland Trust, Inc.'s General Money Market Fund had 96,071 shareholder accounts
and net assets of $1,128,802,230 as of September 30, 1997.
As of September 30, 1997, the U.S. Government Fund had 6,814 shareholder
accounts and net assets of $161,315,853.
As of September 30, 1997, the Municipal Money Market Fund had 3,747 shareholder
accounts and net assets of $115,043,948.
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
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- ------ ------- ------
Commercial Paper (25.06%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 20,000,000 Banque International A Luxembourg 10/14/97 5.60% $ 19,960,133 P1 A1+
23,500,000 Banque International A Luxembourg 10/29/97 5.61 23,398,010 P1 A1+
10,000,000 Compagnie Bancaire USA Finance Corporation 10/09/97 5.61 9,987,711 P1 A1
10,000,000 Compagnie Bancaire USA Finance Corporation 11/25/97 5.74 9,914,444 P1 A1
10,000,000 Compagnie Bancaire USA Finance Corporation 03/09/98 5.76 9,752,667 P1 A1
20,000,000 Cregem North America Inc. 10/17/97 5.61 19,950,845 P1 A1+
35,000,000 Merrill Lynch & Co Inc. 10/17/97 5.57 34,913,667 P1 A1+
20,000,000 Receivable Capital Corporation 11/05/97 5.59 19,891,889 P1 A1+
25,000,000 Receivable Capital Corporation 11/25/97 5.60 24,788,021 P1 A1+
20,000,000 Sigma Finance Corporation 10/06/97 5.62 19,984,583 P1 A1+
20,500,000 Special Purpose Accounts Receivable Company 10/27/97 5.60 20,417,533 A1+
20,000,000 Unifunding 10/01/97 5.57 20,000,000 P1 A1
10,000,000 Unifunding 10/06/97 5.67 9,992,236 P1 A1
40,000,000 UBS Finance, Delaware 10/14/97 5.61 39,919,111 P1 A1+
------------ ------------
284,000,000 Total Commercial Paper 282,870,850
------------ ------------
<CAPTION>
Domestic Certificate of Deposit (2.21%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 25,000,000 PNC Bank, N.A. 05/27/98 5.67% $ 24,993,479 P1 A1
------------ ------------
25,000,000 Total Domestic Certificate of Deposit 24,993,479
------------ ------------
<CAPTION>
Eurodollar Certificate of Deposit (2.22%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 25,000,000 Svenskahandelsbanken 10/17/97 5.60% $ 25,000,210 P1 A1
------------ ------------
25,000,000 Total Eurodollar Certificate of Deposit 25,000,210
------------ ------------
<CAPTION>
Loan Participations (3.54%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 10,000,000 Marsh & McLennan Companies (b) 12/23/97 5.73% $ 10,000,000 P1 A1+
30,000,000 Marsh & McLennan Companies (c) 05/26/98 5.70 30,000,000 P1 A1+
------------ ------------
40,000,000 Total Loan Participations 40,000,000
------------ ------------
<CAPTION>
Letter of Credit Commercial Paper (13.37%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 15,000,000 Banco Bandeirantes CI
LOC Barclays Bank PLC 06/24/98 5.95% $ 14,377,116 P1 A1+
15,000,000 Banco Bradesco
LOC Barclays Bank PLC 12/19/97 5.76 14,815,667 P1 A1+
12,000,000 Banco Bradesco
LOC Barclays Bank PLC 06/18/98 5.80 11,517,267 P1 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
------ ---- ----- ------ ------- ------
Letter of Credit Commercial Paper (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 20,000,000 Banco Rio de La Plata, S.A.
LOC Bayerische Vereinsbank, A.G. 10/30/97 5.62% $ 19,913,000 P1 A1+
22,000,000 Banco Rio de La Plata, S.A.
LOC Bayerische Vereinsbank, A.G. 10/29/97 5.59 21,908,113 P1 A1+
17,900,000 China International Marine Containers
LOC Societe Generale 10/08/97 5.56 17,880,718 P1 A1+
20,100,000 China National Textile Import & Export
LOC Credit Suisse 10/10/97 5.60 20,071,910 P1 A1+
15,000,000 Demir Funding Corporation
LOC Bayerische Vereinsbank, A.G. 10/14/97 5.60 14,970,100 P1 A1+
15,450,000 Mitsubishi Motor Corporation
LOC Bank of Tokyo - Mitsubishi Bank, Ltd. 10/20/97 5.67 15,403,929 P1 A1+
------------ ------------
152,450,000 Total Letter of Credit Commercial Paper 150,857,820
------------ ------------
<CAPTION>
Master Notes (15.95%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 70,000,000 Donaldson, Lufkin & Jenrette, Inc. (d) 02/06/98 5.71% $ 70,000,000
35,000,000 Morgan (J.P.) Securities, Inc. (e) 04/02/98 5.66 35,000,000
25,000,000 The Goldman Sachs Group L.P. (f) 04/28/98 6.60 25,000,000
50,000,000 Willamette Industries, Inc. (g) 06/18/98 5.69 50,000,000 MIG-1 A1+
------------ ------------
180,000,000 Total Master Notes 180,000,000
------------ ------------
<CAPTION>
Medium Term Notes (6.20%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 50,000,000 First U.S.A. Credit Master Trust - Series 1995-96
Class A (Steers) (h) 12/10/97 5.64% $ 50,000,000
20,000,000 Royal Bank of Canada 01/07/98 5.75 19,999,486 P1 A1+
------------ ------------
70,000,000 Total Medium Term Notes 69,999,486
------------ ------------
<CAPTION>
Other Notes (22.53%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,600,000 2150 Investment Company - Series 1997 (i)
LOC Fifth Third Bank 02/01/17 5.65% $ 2,600,000
4,650,000 Alabama State IDA (Central Casting Corporation) (i)
LOC First Union National Bank of North Carolina 11/01/15 5.60 4,650,000
3,750,000 Albany Dougherty, GA Payroll IDA
(Flint River Service, Inc. Project-B) (i)
LOC Columbus Bank & Trust Company 05/01/17 5.73 3,750,000 A1
5,000,000 CA Department of Water Resources
(Control Valley Project) Water System RB - Series R-V (i)
LOC Canadian Imperial Bank of Commerce 12/01/24 5.90 5,000,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS(CONTINUED)
SEPTEMBER 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Notes (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 6,000,000 Cheney Brothers Inc. (i)
LOC First Union National Bank of North Carolina 12/01/16 5.60% $ 6,000,000
9,575,000 Community DA of the City of Madison, WI RB - Series 1996A
(Blake '89 Project) (i) 01/01/19 5.65 9,575,000
2,050,000 Consolidated Equities, LLC - Series 1995 (i)
LOC Rabobank Nederland 12/01/25 5.68 2,050,000
4,000,000 Cunat Capital Corporation - Series 1997- B
(Cunat Bros., Inc./Irish Parie Limited Partners) (i)
LOC LaSalle National Bank 06/01/27 5.68 4,000,000
2,100,000 Devin F. & Janis L. McCarthy - Series 1997 (i)
LOC Star Bank, N.A. 07/01/17 5.67 2,100,000
5,000,000 FC Bellevue, Inc. (i)
LOC National City Bank 08/01/38 5.60 5,000,000
2,600,000 G&J Land Management - Series 1996 (i)
LOC Fifth Third Bank 12/01/17 5.65 2,600,000
13,759,600 General Electric Engine Receivables 1995-1
Trust VR Guaranteed Notes (j) 02/14/00 5.57 13,759,600 P1 A1+
8,073,987 General Electric Engine Receivables 1996-1
Trust VR Guaranteed Notes (k) 02/14/01 5.64 8,073,987 P1 A1+
7,110,000 Institutional Distributors, Inc. - Series 1997 (i)
LOC Star Bank, N.A. 04/01/17 5.67 7,110,000
9,800,000 Jacksonville Health Charity Group (Baptist/St. Vincent) (i)
MBIA Insured 08/15/19 5.85 9,800,000
1,150,000 KBL Capital Fund, Inc. (BH Reality Limited Partnership) (i)
LOC Old Kent Bank & Trust Co. 05/01/21 5.68 1,150,000 A1
4,280,000 KBL Capital Fund, Inc. - Series 1995A (i)
LOC Old Kent Bank & Trust Co. 07/01/05 5.68 4,280,000 A1
2,000,000 Kit Carson County, CO
Agricultural Development RB - Series 1997
(Midwest Farms, LLC) (i)
LOC Norwest Bank Minneapolis 06/01/27 5.75 2,000,000 A1
4,700,000 Laurel County, KY Industrial Building RB
(Consolidated Biscuit Co. Project) (i)
LOC Fifth Third Bank 03/01/15 6.05 4,700,000
4,000,000 Macroe Properties, Inc. (i)
LOC First Michigan Bank 09/01/27 5.80 4,000,000
4,400,000 Maryland Health & Higher Educational Facilities Authority RB
(North Arundale Hospital) (i)
LOC Mellon Bank, N.A. 07/01/27 5.70 4,400,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Finacial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Notes (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,000,000 Maximum Principle Amount Limited Partnership
(Riverview Medical Office Building) (i)
LOC National City Bank 11/01/17 5.60% $ 3,000,000
6,500,000 Maximum Principle Amount VRDN
(Hancor, Inc. Project) (i)
LOC National City Bank 12/01/07 5.60 6,500,000 A1
16,620,000 Medical Clinic Board of The City Mobile, AL RB
(Springhill Medical Complex) - Series 1996B (i)
LOC Amsouth Bank N.A. 09/01/11 5.65 16,620,000 P1
1,000,000 Miami Valley Steel Service, Inc. - Series 1996 (i)
LOC National City Bank 02/01/16 5.60 1,000,000
2,845,000 Michigan HEFA (i)
LOC Old Kent Bank & Trust Co. 10/01/16 5.68 2,845,000
6,900,000 Mississippi Business Finance Corporation IDRB
(Howard Industries, Inc.) - Series 1995 (i)
LOC National Bank of Detroit 06/01/10 5.70 6,900,000 P1
4,445,000 New Federal Cold Storage, Incorporated Project-Series 1996C(i)
LOC National City Bank 08/01/11 5.60 4,445,000
20,000,000 Oakland - Alameda County Coliseum Authority Lease RB
(Oakland Coliseum Project)
LOC Canadian Imperial Bank of Commerce 12/29/97 5.62 20,000,000
1,975,000 Ontario California RB 1997 (i)
LOC Sumitomo Bank, Ltd. 10/01/27 5.77 1,975,000
5,500,000 Oxnard Financing Authority Refunding Lease RB-Series 1993(i)
LOC Union Bank of California 06/01/06 5.75 5,500,000 A1
1,800,000 Pomeroy Investment, LLC - Series 1997 (i)
LOC Star Bank, N.A. 04/01/17 5.67 1,800,000
4,000,000 Prince William County, VA - Series A (i)
LOC Wachovia Bank & Trust Co., N.A 03/01/17 5.54 4,000,000 VMIG-1
25,000,000 SMM Trust 1997 - L (h) 05/29/98 5.63 25,000,000 P1 A1+
4,500,000 Shepperd Capital L.L.C. (i)
LOC First of America Michigan National 09/15/47 5.80 4,500,000
19,000,000 State of Missouri HEFA
(SSM Health Care System) 1995 - Series D (i)
MBIA Insured 06/01/24 6.00 19,000,000
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
CORTLAND TRUST, INC.
CORTLAND GENERAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1997
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Notes (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 7,740,000 Stone Creek, L.L.C. - Series 1995 (i)
LOC Columbus Bank & Trust Company 08/01/20 5.70% $ 7,740,000 P1
2,550,000 Vista Funding Corporation - Series 1997A (i)
LOC Fifth Third Bank 07/01/15 5.65 2,550,000
1,675,000 Walt Sweeney Ford - Series 1996 (i)
LOC Fifth Third Bank 01/01/12 5.65 1,675,000
3,220,000 Westchester County, NY Industrial Development Agency RB
(B.W.P. Distributors Inc.) (i)
LOC First Union National Bank of North Carolina 10/01/28 5.60 3,220,000
3,500,000 William Thies & Son, Inc. (i)
LOC First Union National Bank of North Carolina 03/01/07 5.60 3,500,000
6,000,000 Winston - Salem, NC COP 10/06/97 5.59 6,000,000 VMIG-1
------------ ------------
254,368,587 Total Other Notes 254,368,587
------------ ------------
<CAPTION>
Repurchase Agreements, Overnight (8.68%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 68,000,000 Donaldson, Lufkin & Jenrette, Inc. 10/01/97 6.05%
(Collateralized by:
$10,500,000 TVA Bond, 5.880%, due 04/01/36
$11,535,000 Fannie Mae Medium Term Debentures, 6.000%,
due 06/30/99
$7,773,000 Fannie Mae Debentures, 5.375% to 6.990%,
due 01/13/98 to 07/09/07
$13,080,000 Federal Home Loan Consol Bond, 5.715%,
due 09/24/98
$25,777,000 Freddie Mac Discount Notes,
due 10/14/97 to 10/17/97 proceeds $68,011,428) $68,000,000
30,000,000 Goldman Sachs Group L.P. 10/01/97 6.25
(Collateralized by $39,094,077, GNMA,
5.000% to 8.500%, due 01/15/09 to 06/20/27, proceeds $30,005,208)
30,000,000
- ----------- -----------
98,000,000 Total Repurchase Agreements, Overnight 98,000,000
- ----------- -----------
<CAPTION>
Yankee Certificate of Deposit (0.89%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$10,000,000 Barclays Bank PLC (l) 04/16/98 5.65% $ 10,000,000 P1 A1+
----------- ------------
10,000,000 Total Yankee Certificate of Deposit 10,000,000
----------- ------------
Total Investments (100.65%) (Cost $1,136,090,432+) 1,136,090,432
Liabilities in Excess of Cash and Other Assets (0.65%) ( 7,288,202)
-------------
Net Assets (100.00%) $1,128,802,230
==============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Finacial Statements.
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
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 & 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 invests.
(b) The interest rate is adjusted quarterly based upon three month LIBOR minus 4
basis points.
(c) The interest rate is adjusted quarterly based upon three month LIBOR minus 2
basis points.
(d) The interest rate is adjusted monthly based upon one month LIBOR plus 5
basis points; 30 day put option.
(e) The interest rate is adjusted monthly based upon one month LIBOR flat; daily
put option.
(f) The interest rate is adjusted daily based upon opening of Federal Funds plus
ten basis points; daily put option.
(g) The interest rate is adjusted monthly based upon one month LIBOR rate plus 3
basis points, 5 day put option.
(h) The interest rate is adjusted monthly based upon one month LIBOR.
(i) These securities have a 7 day put feature exercisable by the Fund at par
value. Rate changes weekly.
(j) The interest rate is adjusted weekly based upon commercial paper composite
plus five basis points; weekly put option.
(k) The interest rate is adjusted weekly based upon one month LIBOR minus one
basis point; weekly put option.
(l) The interest rate is adjusted daily based upon the prime rate.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
COP = Certificate of Participation LOC = Letter of Credit
GNMM = Government National Mortgage Association MBIA = Municipal Bond Insurance Association
HEFA = Health and Education Facilities Authority RB = Revenue Bond
IDA = Industrial Development Authority VR = Variable Rate
IDRB = Industrial Development Revenue Bond VRDN = Variable Rate Demand Note
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
U.S. GOVERNMENT FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Face Maturity Value
Amount Date Yield (Note 2)
------ ---- ----- ------
U.S. Government Agencies (48.86%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 9,000,000 Federal Farm Credit Bank 03/03/98 5.49% $ 9,000,000
5,000,000 Federal Farm Credit Bank (a) 05/27/98 5.51 4,998,435
5,000,000 Federal Home Loan Bank 10/06/97 5.44 4,996,271
5,000,000 Federal Home Loan Mortgage Corporation 10/01/97 5.43 5,000,000
10,000,000 Federal National Mortgage Association 11/17/97 5.57 9,928,847
5,000,000 Federal National Mortgage Association 12/08/97 5.49 4,949,283
5,000,000 Federal National Mortgage Association 12/11/97 5.49 4,947,046
10,000,000 Federal National Mortgage Association 02/13/98 5.49 9,999,627
10,000,000 Federal National Mortgage Association (b) 05/21/98 5.62 9,996,278
5,000,000 Federal National Mortgage Association (c) 06/19/98 5.58 4,997,891
5,000,000 Student Loan Marketing Association Floater (d) 10/16/97 5.17 5,000,000
5,000,000 Student Loan Marketing Association 10/03/97 5.40 5,000,057
----------- -----------
79,000,000 Total U.S. Government Agencies 78,813,735
----------- -----------
<CAPTION>
Letter of Credit Commercial Paper (14.49%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 3,415,000 Kirksville College of Osteopathic Medicine, Inc.
Educational Loan Revenue Notes - Series A
LOC Student Loan Marketing Association 12/11/97 5.56% $ 3,378,091
20,000,000 Western Finance
LOC Federal Home Loan Bank 10/02/97 5.60 19,996,894
----------- ------------
23,415,000 Total Letter of Credit Commercial Paper 23,374,985
----------- ------------
<CAPTION>
Repurchase Agreements, Overnight (35.95%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$30,000,000 Goldman Sachs Group L.P. (Collateralized by $83,575,323 GNMA,
6.5000% to 10.000%, due 01/01/00 to 03/15/27, proceeds $30,005,208) 10/01/97 6.25% $ 30,000,000
28,000,000 Morgan (J.P.) Securities, Inc.(Collateralized by $25,353,000 TVA Bond,
8.6250%, due 11/15/29, proceeds $28,004,690) 10/01/97 6.03 28,000,000
----------- ------------
58,000,000 Total Repurchase Agreements, Overnight 58,000,000
----------- ------------
Total Investments (99.30%) (Cost $160,188,720+) 160,188,720
Cash and Other Assets, Net of Liabilities (0.70%) 1,127,133
------------
Net Assets (100.00%) $161,315,853
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
FOOTNOTES:
(a) This is a variable rate Federal Farm Credit Bank Floating Rate Note. The
interest rate is adjusted daily based upon the prime rate minus 2.96.
(b) This is a variable rate Federal National Mortgage Association Floating Rate
Note. The interest rate is adjusted daily based upon the prime rate minus
2.94.
(c) This is a variable rate Federal National Mortgage Association Floating Rate
Note. The interest rate is adjusted daily based upon the prime rate minus
2.98.
(d) 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 plus 2 basis points.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C>
LOC = Letter of Credit
GNMM = Government National Mortgage Association
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Tax Exempt Investments (30.86%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,028,000 Borough of Somerville, NJ (County of Somerset) BAN 02/19/98 3.67% $ 4,031,595
900,000 City of Burlington, VT RAN 06/26/98 4.15 908,641
1,699,000 Dansville, NY BAN 06/26/98 3.85 1,703,191
5,000,000 East Allen, IN School Corporation TAW 12/31/97 3.78 5,000,000
5,000,000 Jersey City, NJ BAN 02/05/98 3.74 5,000,992 SP-1
5,000,000 School District of Greenville County, SC GO Bonds - Series 1997 03/01/98 3.72 5,017,042
1,000,000 School District of The City of Detroit State School Aid Notes
(Wayne County) 05/01/98 3.85 1,003,374 SP-1+
5,000,000 Strafford County, NH TAN 12/30/97 3.75 5,006,009
7,800,000 Sun Prairie Area School District 08/24/98 3.95 7,833,564
----------- -----------
35,427,000 Total Other Tax Exempt Investments 35,504,408
----------- -----------
<CAPTION>
Other Variable Rate Demand Instruments (b) (39.24%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 4,110,000 Arlington County, VA IDA (Air Force Association Project)
LOC Central Fidelity Bank 07/01/98 4.00% $ 4,110,000
4,200,000 Forsyth, MT PCRB (Portland General Electric Company)
LOC Banque Nationale de Paris 12/01/16 3.85 4,200,000 VMIG-1
1,290,000 Fulton County, GA RDA (Darby Printing Company)
LOC Wachovia Bank & Trust Co., N.A. 04/01/11 4.25 1,290,000
2,500,000 Gulf Coast IDA Solid Waste Disposal RB
(Citgo Petroleum Corporation Project) - Series 1994
LOC Wachovia Bank & Trust Co., N.A. 04/01/26 4.05 2,500,000 VMIG-1 A1+
9,400,000 Gulf Coast IDA Solid Waste Disposal RB
(Citgo Petroleum Corporation Project) - Series 1995
LOC Nations Bank 05/01/25 4.05 9,400,000 VMIG-1
1,600,000 Industrial Board of the City of Phenix, AL
(Mead Coated Board Project A)
LOC Toronto-Dominion Bank 06/01/28 3.95 1,600,000 A1+
2,600,000 King George County, VA (Birchwood Power Project) - Series A
LOC Credit Suisse 04/01/26 4.05 2,600,000 A1+
1,000,000 Lewisville, IDA Incorporated VR IDRB
(Benedict Optical Incorporated Project)
LOC Comerica Bank 05/01/08 4.55 1,000,000
1,300,000 Michigan Strategic Fund PCRB
(Consumers Power Company Project) - Series 1993A
LOC Canadian Imperial Bank of Commerce 06/15/10 3.80 1,300,000 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
------ ---- ----- ------ ------- ------
Other Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 New York State Energy Research and Development Authority PCRB
(Niagara Mohawk Power Corporation) - Series 1987A
LOC Toronto-Dominion Bank 03/01/27 3.80% $ 2,000,000
5,000,000 North Carolina Medical Care Commission Hospital
(Pooled Equipment Financing Project) - Series 8
MBIA Insured 12/01/25 3.85 5,000,000 VMIG-1 A
1,000,000 North Carolina Medical Care Commission
Retirement Community RB - Series B
LOC LaSalle National Bank 11/15/09 4.10 1,000,000 A1+
2,700,000 Parish of Calcasieu IDRB
(Citgo Petroleum Corporation) - Series 1995
LOC Banque Nationale de Paris 03/01/25 4.05 2,700,000 VMIG-1
1,900,000 Portland, OR IDRB (Oregon Transfer Company)
LOC US National Bank of Oregon 11/01/01 4.68 1,900,000 A1
1,350,000 Sewickley Valley Hospital Authority, PA RN
(D.T. Watson Rehabilitation Hospital)
LOC PNC Bank 10/01/97 4.25 1,350,000
3,200,000 West Side Calhoun County, NAV District
Sewer & Solid Waste Disposal
(BP Chemicals Inc.) 04/01/31 4.05 3,200,000 A1+
----------- -----------
45,150,000 Total Other Variable Rate Demand Instruments 45,150,000
----------- -----------
<CAPTION>
Put Bonds (c) (12.31%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Connecticut State Special Assessment
Unemployment Compensation Advance Fund RB - Series 93C
FGIC Insured 07/01/98 3.90% $ 2,000,000 VMIG-1 A1+
1,780,000 Dayton, KY Industrial Building RB (Radac Corp) - Series 1994
LOC Fifth Third Bank 10/01/97 4.00 1,780,000
1,000,000 Education Loans Inc. Student Loan RB Senior Class 1997 A
LOC Westdeutsche Landesbank Girozentrale 11/05/97 3.95 1,000,000
3,340,000 Illinois Housing Development Authority
(Homeowners Mortgage) RB - Series - F2 12/18/97 3.70 3,340,000
3,000,000 Tennessee Housing Development Agency
(Home Ownership Program) 02/19/98 3.75 3,000,000 VMIG-1 A1+
3,040,000 Vermont State Educational & Health Building Finance Agency
(Middlebury College) 11/01/97 3.75 3,040,000 A1+
----------- -----------
14,160,000 Total Put Bonds 14,160,000
----------- -----------
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED)
SEPTEMBER 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Value Standard
Amount Date Yield (Note 2) Moody's & Poor's
------ ---- ----- ------ ------- ------
Tax Exempt Commercial Paper (1.74%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 City of Burlington, KS
LOC Deutsche Bank A.G. 11/19/97 3.75% $ 2,000,000 P1 A1+
----------- -----------
2,000,000 Total Tax Exempt Commercial Paper 2,000,000
----------- -----------
<CAPTION>
Variable Rate Demand Instruments - Participations (b) (1.74%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 New Jersey State EDA IDRB (Hartz Mountain Industries Project)
LOC Chase Manhattan Bank, N.A. 01/01/02 5.53% $ 1,000,000 P1 A1
1,000,000 New Jersey State EDA IDRB (Hartz Mountain Industries Project)
LOC Chase Manhattan Bank, N.A. 01/01/02 5.53 1,000,000 P1 A1
----------- -----------
2,000,000 Total Variable Rate Demand Instruments - Participations 2,000,000
----------- -----------
<CAPTION>
Variable Rate Demand Instruments - Private Placements (b) (12.44%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 9,100,000 Bastrop, TX Industrial Development Corp. VRD Industrial RB
(Blocrest Partners, LP Project)
LOC Union Bank of California 04/01/22 4.25% $ 9,100,000
870,000 Jefferson County, MO IDA IDRB (Holley Partnership)
LOC Chase Manhattan Bank, N.A. 12/01/04 5.53 870,000 P1 A1
660,985 New Jersey State EDA IDRB (Heary Modelle & Company)
LOC Chase Manhattan Bank, N.A. 09/01/00 5.53 660,985 P1 A1
1,400,000 Tyler House Certificate Trust Variable Rate
Certificates of Participation - Series 1995A
LOC PNC Bank 08/01/25 4.35 1,400,000 VMIG-1
2,281,000 York County, PA IDA IDRB
(Manor Care of Kingston Court Incorporated)
LOC Chase Manhattan Bank, N.A. 12/01/08 5.53 2,281,000 P1 A1
------------ ------------
14,311,985 Total Variable Rate Demand Instruments - Private Placements 14,311,985
------------ -------------
Total Investments (98.33%) (Cost $113,126,393+) 113,126,393
Cash and Other Assets, Net of Liabilities (1.67%) 1,917,555
------------
Net Assets (100.00%) $115,043,948
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
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 & 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 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>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
BAN = Bond Anticipation Note RAN = Revenue Anticipation Note
EDA = Economic Development Authority RB = Revenue Bond
FGIC = Financial Guaranteed Insurance Company RDA = Revenue Development Authority
GO = General Obligation RN = Revenue Note
IDA = Industrial Development Authority TAN = Tax Anticipation Note
IDRB = Industrial Development Revenue Bond TAW = Tax Anticipation Warrant
LOC = Letter of Credit VR = Variable Rate
MBIA = Municipal Bond Insurance Association VRD = Variable Rate Demand
PCRB = Pollution Control Revenue Bond
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Cortland General U.S. Government Municipal Money
Money Market Fund Fund Market Fund
----------------- --------------- ---------------
ASSETS:
<S> <C> <C> <C>
Investments in securities*............ $ 1,136,090,432 $ 160,188,720 $ 113,126,393
Cash.................................. 1,536,773 601,344 935,104
Interest receivable................... 3,817,806 443,169 1,119,238
Due from Manager...................... -0- 153,013 -0-
----------------- --------------- ---------------
Total Assets...................... 1,141,445,011 161,386,246 115,180,735
<CAPTION>
LIABILITIES:
<S> <C> <C> <C>
Dividends payable..................... 148,004 21,120 9,358
Management fee payable................ 570,289 -0- 109,737
Payable for securities purchased...... 11,517,267 -0- -0-
Other accounts payable................ 407,221 49,273 17,692
----------------- --------------- ---------------
Total Liabilities................. 12,642,781 70,393 136,787
----------------- --------------- ---------------
<CAPTION>
NET ASSETS.............................. $ 1,128,802,230 $ 161,315,853 $ 115,043,948
================= =============== ===============
<CAPTION>
SHARES OUTSTANDING:
Cortland Shares...................... 628,214,046 102,738,606 65,305,016
Live Oak Shares...................... 502,456,559 58,858,301 49,763,616
Net asset value, offering and redemption
price per share, all classes
(net assets/shares).................. $ 1.00 $ 1.00 $ 1.00
================= =============== ===============
* Including repurchase agreements amounting to $98,000,000 and $58,000,000 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
SIX MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Cortland General U.S. Government Municipal Money
Money Market Fund Fund Market Fund
----------------- --------------- ---------------
INVESTMENT INCOME
<S> <C> <C> <C>
Interest Income......................... $ 49,762,387 $ 6,282,148 $ 3,748,527
--------------- --------------- ----------------
Expenses:
Management fee--Note 3(a)............ 6,697,632 870,261 735,628
Distribution support and services ----Note 3(c):
Cortland shares.................. 1,617,531 215,287 175,807
Live Oak shares.................. 470,066 56,921 53,044
Other expenses....................... 44,101 17,186 4,843
--------------- --------------- ----------------
Total Expenses................... 8,829,330 1,159,655 969,322
Expenses waived by
Manager--Note 3(c).................. ( 479,603) ( 395,927) ( 11,654)
--------------- --------------- ----------------
Net Expenses..................... 8,349,727 763,728 957,668
--------------- --------------- ----------------
Net Investment Income................... 41,412,660 5,518,420 2,790,859
<CAPTION>
NET REALIZED GAIN
ON INVESTMENTS
<S> <C> <C> <C>
Net realized gain on investments........ 1,408 781 -0-
--------------- --------------- ----------------
Increase in net assets from operations.. $ 41,414,068 $ 5,519,201 $ 2,790,859
=============== =============== ================
</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 Six For the For the Six For the For the Six For the
Months Ended Year Months Ended Year Months Ended Year
September 30, Ended September 30, Ended September 30, Ended
1997 March 31, 1997 March 31, 1997 March 31,
(Unaudited) 1997 (Unaudited) 1997 (Unaudited) 1997
--------- ---------- --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Operations:
Net investment income... $ 41,412,660 $ 63,069,731 $ 5,518,420 $ 10,484,601 $ 2,790,859 $ 5,897,429
Net realized gain on
investments......... 1,408 63,635 781 6,270 -0- -0-
----------- ------------ ----------- ---------- ------------ -----------
Increase in net assets
from operations..... 41,414,068 63,133,366 5,519,201 10,490,871 2,790,859 5,897,429
Distributions
to shareholders from:
Net investment income:
Cortland shares....... ( 29,944,246) ( 46,314,882) ( 3,840,022) ( 8,230,482) ( 2,006,912)+ ( 4,436,681)+
Live Oak shares....... ( 11,040,414) ( 16,876,826) ( 1,317,398) ( 2,235,131) ( 783,947)+ ( 1,475,242)+
Capital share
transactions net (Note 4):
Cortland shares....... (533,803,713) 559,763 (62,206,724) (90,947,715) ( 88,035,248) (63,128,999)
Live Oak shares....... 61,366,942 90,104,978 3,639,780 7,893,226 ( 9,037,170) 9,140,492
----------- ----------- ---------- ---------- ----------- ----------
Total increase (decrease) (472,007,363) 90,606,399 (58,205,163) (83,029,231) ( 97,072,418) (54,003,001)
Net assets:
Beginning of year....... 1,600,809,593 1,510,203,194 219,521,016 302,550,247 212,116,366 266,119,367
------------- ------------- ----------- ----------- ----------- -----------
End of year*............ $1,128,802,230 $1,600,809,593 $161,315,853 $219,521,016 $ 115,043,948 $212,116,366
============= ============= =========== =========== ============ ===========
Undistributed net
investment income $ 456,197 $ 28,197 $ 411,000 $ 50,000 $ -0- $ -0-
+ Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
- -------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
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").
Cortland General Fund has two classes of stock authorized, Cortland shares and
Live Oak shares. Both the U.S. Government Fund and the Municipal Fund have three
classes of stock authorized, Cortland shares, Live Oak shares and Bradford
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. The Bradford shares are subject
to a service fee of .25% of its average net assets. In all other respects, the
Cortland shares, Live Oak shares and Bradford shares represent the same interest
in the income and assets of the Fund. Each class of shares has 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.
Bradford shares were effective on July 31, 1997. As of September 30, 1997 there
were no shares outstanding for Bradford shares in the U.S. Government Fund and
Municipal Fund. 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 September 30, 1997, there were 5,011,033 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 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>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
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 September 30, 1997, Cortland General Fund, U.S. Government
Fund and Municipal Fund had unused capital loss carryforwards of
approximately $2,325,981, $715,280 and $32,156, respectively, available for
Federal income tax purposes to be applied against future securities profit,
if any. If not applied against future securities profit, $721,115 and
$1,604,866 will expire in the years 2003 and 2004, respectively, for
Cortland General Fund. $264,039 and $451,241 will expire in the years 2003
and 2004, respectively, for U.S. Government Fund. $16,757, $3,530 and
$11,869 will expire in the years 2001, 2002 and 2003, respectively, for
Municipal Fund.
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.
(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 period ended September 30, 1997, the manager voluntarily waived
investment management fees of $294,575 and $133,425 for the Cortland shares and
Live Oak shares, respectively, of the Cortland General Money Market Fund, and
$270,965 and $90,035 for the Cortland shares and Live Oak shares, respectively,
of the Cortland U.S. Government Fund.
During the period ended September 30, 1997, the Distributor waived Distribution
support and services fees of $51,603, and $34,927 and $11,654 for the Live Oak
shares of the Cortland General Fund, U.S. Government Fund and Municipal Fund,
respectively.
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
Note 4-Capital Share Transactions:
At September 30, 1997, 5 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
-------------------------------- -------------------------------- --------------------------------
Six Months For the Year Six Months For the Year Six Months For the Year
Ended Ended Ended Ended Ended Ended
September 30, 1997 March 31, September 30, 1997 March 31, September 30, 1997 March 31,
(Unaudited) 1997 (Unaudited) 1997 (Unaudited) 1997
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Cortland Shares
Shares sold............. 1,620,292,709 3,372,653,022 214,073,242 482,519,139 210,893,076 636,672,511
Dividends reinvested.... 30,034,334 46,616,699 3,850,137 8,302,991 2,015,496 4,476,740
------------- ------------- ------------- ------------- ------------- -------------
1,650,327,043 3,419,269,721 217,923,379 490,822,130 212,908,572 641,149,251
Shares redeemed.........(2,184,130,756) (3,418,709,958) ( 280,130,103) ( 581,769,845) ( 300,943,820) ( 704,278,250)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease).( 533,803,713) 559,763 ( 62,206,724) ( 90,947,715) ( 88,035,248) ( 63,128,999)
============= ============= ============= ============= ============= =============
<S> <C> <C> <C> <C> <C> <C>
Live Oak Shares
Shares sold............. 1,207,432,840 1,692,487,353 114,173,436 198,329,103 91,814,674 195,656,417
Dividends reinvested.... 11,008,175 16,917,952 1,313,995 2,241,698 782,252 1,478,139
------------- ------------- ------------- ------------- ------------- -------------
1,218,441,015 1,709,405,305 115,487,431 200,570,801 92,596,926 197,134,556
Shares redeemed.........(1,157,074,073) (1,619,300,327) ( 111,847,651) ( 192,677,575) ( 101,634,096) ( 187,994,064)
------------- ------------- ------------- ------------- ------------- -------------
Net increase (decrease). 61,366,942 90,104,978 3,639,780 7,893,226 ( 9,037,170) 9,140,492
============= ============= ============= ============= =============
The components of net assets at September 30, are as follows:
Cortland General Money Municipal Money
Market Fund U.S. Government Fund Market Fund
-------------------------------- -------------------------------- --------------------------------
September 30, 1997 September 30, 1997 September 30, 1997
---------------- ---------------- ----------------
<S> <C> <C> <C>
Paid-in capital......... $ 1,130,670,605 $ 161,596,907 $ 115,068,632
Accumulated net
realized losses...... ( 2,324,572) ( 692,054) ( 24,684)
Undistributed net
investment income.... 456,197 411,000 -0-
---------------- --------------- ---------------
Total net assets........ $ 1,128,802,230 $ 161,315,853 $ 115,043,948
================ =============== ===============
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
Note 5-Financial Highlights:
<TABLE>
<CAPTION>
Cortland General Money Market Fund
-----------------------------------------------------------------------------------------------
Live Oak Shares Cortland Shares
----------------------------- ----------------------------------------------------------------
Six Months For the Year Six Months
Ended Ended Ended
September 30, March 31, September 30, For the Year Ended March 31,
----------------- ----------------------------------------------------
1997 1997 1996++ 1997 1997 1996 1995 1994 1993
------- ------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding
throughout the period)
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income....... 0.024 0.045 0.018 0.023 0.044 0.049 0.038 0.025 0.028
Net realized and unrealized
gain/(loss) on investments -- -- -- -- -- 0.001 ( 0.003)+ -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.024 0.045 0.018 0.023 0.044 0.050 0.035 0.025 0.028
Less distributions:
Dividends from net
investment income......... ( 0.024) ( 0.045) ( 0.018) ( 0.023) ( 0.044) ( 0.048) ( 0.038) ( 0.025) ( 0.028)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions......... ( 0.024) ( 0.045) ( 0.018) ( 0.023) ( 0.044) ( 0.048) ( 0.038) ( 0.025) ( 0.028)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return................ 4.81%* 4.59% 4.78%* 4.73%* 4.52% 4.95% 3.91%+ 2.53% 2.88%
Ratios/Supplemental Data
Net assets,
end of period (000's omitted).. $501,699 $440,457 $351,030 $627,103 $1,160,352 $1,159,173 $993,854 $926,400 $904,735
Ratios to average net assets:
Expenses.................... 0.86%* 0.95% 0.97%* 0.98%* 1.02% 1.03% 1.03% 1.02% 1.00%
Net investment income....... 4.78%* 4.48% 4.68%* 4.66%* 4.41% 4.86% 3.85% 2.48% 2.84%
Management and Distribution support
and service fees waived....... 0.08%* 0.02% 0.02%* 0.05%* -- -- 0.02% 0.02% 0.04%
* Annualized
++ Live Oak shares commenced distribution on November 16, 1995.
+ Includes the effect of a capital contribution from the Manager of $.004 per
share. Without a capital contribution the net realized and unrealized loss on
investments would have been $.007 per share and the total return would have
been 2.89%.
</TABLE>
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
===============================================================================
Note 5-Financial Highlights: (Continued)
<TABLE>
<CAPTION>
U.S. Government Fund
-----------------------------------------------------------------------------------------------
Live Oak Shares Cortland Shares
----------------------------- ----------------------------------------------------------------
Six Months For the Year Six Months
Ended Ended Ended
September 30, March 31, September 30, For the Year Ended March 31,
----------------- ----------------------------------------------------
1997 1997 1996++ 1997 1997 1996 1995 1994 1993
------- ------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding
throughout the period)
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income....... 0.025 0.044 0.017 0.024 0.043 0.047 0.038 0.025 0.029
Net realized and unrealized
gain/(loss) on investments -- ( 0.001) -- -- ( 0.001) -- ( 0.003)+ -- --
------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.025 0.043 0.017 0.024 0.042 0.047 0.035 0.025 0.029
Less distributions:
Dividends from net
investment income......... ( 0.023) ( 0.044) ( 0.017) ( 0.022) ( 0.043) ( 0.047) ( 0.038) ( 0.025) ( 0.029)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions......... ( 0.023) ( 0.044) ( 0.017) ( 0.022) ( 0.043) ( 0.047) ( 0.038) ( 0.025) ( 0.029)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return................ 4.73%* 4.53% 4.74%* 4.55%* 4.37% 4.80% 3.84%+ 2.55% 2.94%
Ratios/Supplemental Data
Net assets,
end of period (000's omitted).. $58,779 $55,057 $47,328 $102,537 $164,464 $255,222 $218,307 $234,082 $242,199
Ratios to average net assets:
Expenses.................... 0.42%* 0.86% 0.89%* 0.75%* 1.01% 1.04% 1.04% 1.04% 1.01%
Net investment income....... 5.08%* 4.45% 4.64%* 4.73%* 4.30% 4.72% 3.74% 2.47% 2.89%
Management and Distribution support
and service fees waived....... 0.44%* 0.12% 0.11%* 0.31%* 0.02% -- 0.01% 0.01% 0.04%
* Annualized
++ Live Oak shares commenced distribution on November 16, 1995.
+ Includes the effect of a capital contribution from the Manager of $.006 per
share. Without a capital contribution the net realized and unrealized loss on
investments would have been $.009 per share and the total return would have
been 2.81%.
</TABLE>
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<PAGE>
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CORTLAND TRUST, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
Note 5-Financial Highlights: (Continued)
<TABLE>
<CAPTION>
Municipal Money Market
-----------------------------------------------------------------------------------------------
Live Oak Shares Cortland Shares
----------------------------- ----------------------------------------------------------------
Six Months For the Year Six Months
Ended Ended Ended
September 30, March 31, September 30, For the Year Ended March 31,
----------------- ----------------------------------------------------
1997 1997 1996++ 1997 1997 1996 1995 1994 1993
------- ------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding
throughout the period)
Net asset value,
beginning of period.... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income....... 0.015 0.027 0.011 0.014 0.026 0.030 0.026 0.018 0.022
------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations 0.015 0.027 0.011 0.014 0.026 0.030 0.026 0.018 0.022
Less distributions:
Dividends from net
investment income......... ( 0.015) ( 0.027) ( 0.011) ( 0.014) ( 0.026) ( 0.030) ( 0.026) ( 0.018) ( 0.022)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total distributions......... ( 0.015) ( 0.027) ( 0.011) ( 0.014) ( 0.026) ( 0.030) ( 0.026) ( 0.018) ( 0.022)
Net asset value, end of period $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return................ 3.01%* 2.77% 2.96%* 2.91%* 2.68% 3.06% 2.58% 1.82% 2.26%
Ratios/Supplemental Data
Net assets,
end of period (000's omitted).. $49,755 $58,794 $49,663 $65,289 $153,322 $216,456 $224,041 $240,570 $210,521
Ratios to average net assets:
Expenses.................... 0.92%* 0.93% 0.96%* 1.01%* 1.02% 1.03% 0.99% 0.98% 0.92%
Net investment income....... 2.96%* 2.72% 2.91%* 2.85%* 2.64% 3.02% 2.54% 1.79% 2.22%
Management and Distribution support
and service fees waived....... 0.04%* 0.04% 0.03%* -- -- -- 0.06% 0.07% 0.13%
* Annualized
++ Live Oak shares commenced distribution on November 16, 1995.
</TABLE>
<PAGE>
_____________________
CORTLAND
TRUST, INC
_____________________
CORTLAND GENERAL
MONEY MARKET
FUND
_____________________
U.S. GOVERNMENT
FUND
_____________________
MUNICIPAL MONEY
MARKET FUND
_____________________
Semi-annual Report
September 30, 1997
CORTLAND
600 Fifth Avenue
New York, NY 10020
212-830-5200
- --------------------------------------------------------------------------------
<PAGE>
