(PP LOGO)
WISCONSIN
TAX-EXEMPT
PORTFOLIO
SEMIANNUAL REPORT
TO SHAREHOLDERS
(UNAUDITED)
JUNE 30, 1996
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
PRESIDENT'S LETTER/MANAGEMENT DISCUSSION AND ANALYSIS
SEMIANNUAL REPORT TO SHAREHOLDERS
JUNE 30, 1996
August 28, 1996
Dear Shareholder:
We are pleased to present the semiannual report to the shareholders of the
Wisconsin Tax-Exempt Portfolio. The Portfolio continues to grow in net assets
from the $18,986,246 at December 31, 1995 to $22,888,903 at June 30, 1996.
Overall long term assets of Principal Preservation increased from approximately
$236,500,000 to $241,225,000 during the same period. The number of shareholders
in the Wisconsin Tax-Exempt Portfolio continues to increase as well, enabling
this fund to be reported daily in the newspapers.
At the April Board of Directors meeting, the Board appointed Robert J.
Tuszynski as President and CEO to replace myself. Bob has demonstrated, through
approximately 13 years of service, the leadership qualities to guide the fund
Family in the future. I remain as the Chairman of the Board of Directors of
Principal Preservation. We both express our gratitude for your continued trust
in us.
Sincerely,
/s/ R. D. Ziegler
R. D. Ziegler
Chairman
MANAGEMENT DISCUSSION AND ANALYSIS
The tax-exempt marketplace did not follow much of the price movement
experienced by longer Treasury and Corporate securities had during the first six
months of 1996. As a result, the municipal bond market did not see prices
decline as rapidly as the Treasury securities. The portfolio manager extended
the average maturity of the portfolio from 17.2 years on December 31, 1995 to
18.3 years. The portfolio maintains 34.8% in Wisconsin issues, 19.4% in
territorial paper and the remaining 45.8% in state tax deductible eligible
housing issues from various states around the country. As of June 30, 1996 and
also the date of this report the Wisconsin Tax-Exempt Portfolio continues not to
hold any issue which would be subject to the AMT tax.
The remaining six months of 1996 will be punctuated by the election in
November. Historical precedence indicates, on average, no major moves by the
Federal Reserve to tighten monetary policy. However, the Fed has stated that the
concern over inflation has not been abated and we believe that the Fed may move
to increase the Fed Funds rate late this year. The portfolio manager does not
expect a major move in the bond markets and anticipates purchasing securities in
same general maturity range as the current portfolio.
There are different types of risks associated with any investment. While the
debate is being waged how to define and present risks associated in investing in
various type of mutual funds, an individual shareholder needs to define the
types of risk tolerance they have. With a single state municipal bond fund, a
shareholder should assess various criteria to include market value, credit,
regulatory and volatility risks. Market value risks involves the absolute price
changes of a portfolio both in an up and down manner. Credit risk looks to the
ability of an issuer, as measured against similar investments, to meet its cash
paying obligations. Regulatory risks would, for instance, involve changes to
either the tax code or other government regulations that would impact the
security's valuation. Volatility risk address how the investment performs
against a measurable benchmark, group of similar securities and also across the
broad spectrum. In future reports we will be attempting to analyze the Wisconsin
Tax-Exempt across the risk spectrum. We would appreciate feedback from you, our
shareholders, on which of the above areas are the most important.
Shown below is a table of average annualized total returns for the Wisconsin
Tax-Exempt Portfolio:
FOR THE PERIODS ENDING
JUNE 30, 1996 WITH A SALES CHARGE WITHOUT A SALES CHARGE
----------------------- ------------------ -----------------------
Year to Date............. -3.73% -1.26%
One Year................. 2.11% 4.73%
Since Inception.......... 2.24% 3.51%
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
FINANCIAL HIGHLIGHTS
The following presents information relating to a share of capital stock of
Principal Preservation Portfolios, Inc. Wisconsin Tax-Exempt Portfolio
outstanding for the following period presented, which should be read in
conjunction with the financial statements and related notes:
WISCONSIN
TAX-EXEMPT PORTFOLIO
------------------------------------------
For the six For the For the period from
months ended year ended June 13, 1994
June 30, 1996 December 31, (commencement of
operations)
(Unaudited) 1995 to December 31, 1994
----------- ----- --------------------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF PERIOD $10.05 $9.10 $10.00
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .24 .50 .25
Net realized and unrealized gains
(losses) on investments (.37) .95 (.90)
------ ------ ------
TOTAL FROM INVESTMENT OPERATIONS (.13) 1.45 (.65)
------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment income (.24) (.50) (.25)
------ ------ ------
TOTAL DISTRIBUTIONS (.24) (.50) (.25)
------ ------ ------
NET ASSET VALUE, END OF PERIOD $9.68 $10.05 $ 9.10
------ ------ ------
------ ------ ------
TOTAL RETURN**<F2> (1.3)% 16.3% (6.5)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(to nearest thousand) $22,889 $18,986 $8,116
Ratio of expenses to average net assets 0.5%*<F1>+<F3>0.3%+<F3> 0.2%*<F1>+<F3>
Ratio of net investment income
to average net assets 4.9%*<F1>+<F3>5.1%+<F3> 4.4%*<F1>+<F3>
Portfolio turnover rate 12.7% 7.5% 23.4%
*<F1>Annualized.
**<F2>The Fund's sales charge is not reflected in total return as set forth in
the table.
+ <F3>Reflects a voluntary reimbursement of fund expenses of 0.5% through
June 30, 1996, 0.8% in 1995 and 1.4% in 1994.
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
BALANCE SHEET
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
WISCONSIN
TAX-EXEMPT PORTFOLIO
--------------------
ASSETS:
Investments:
Long-term investments in securities,
(See Schedule of Investments) $22,572,880
-----------
Total investments 22,572,880
Cash 97
Receivables:
Capital shares sold 73,538
Interest 357,178
-----------
Total receivables 430,716
Other assets 8,140
-----------
Total assets $23,011,833
-----------
-----------
LIABILITIES:
Payables:
Distributions to shareholders $29,191
Expenses 23,645
Other liabilities 70,094
-----------
Total liabilities 122,930
-----------
NET ASSETS:
Capital stock 22,830,759
Undistributed net investment income 4,846
Undistributed net realized gains on investments 15,398
Net unrealized appreciation on investments 37,900
-----------
Total net assets 22,888,903
-----------
Total liabilities and net assets $23,011,833
-----------
-----------
NET ASSET VALUE AND REDEMPTION PRICE PER SHARE $9.68
-----------
-----------
MAXIMUM OFFERING PRICE PER SHARE $9.93
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED)
WISCONSIN
TAX-EXEMPT PORTFOLIO
--------------------
INVESTMENT INCOME:
Interest $566,829
---------
Total investment income 566,829
---------
EXPENSES:
Investment advisory fees 51,002
Custodian fees 3,276
Transfer agent fees 4,732
Broker service fees 25,444
Professional fees 13,468
Registration 364
Communication 728
Director fees 2,138
Pricing of investments 2,912
Deferred organization expense 1,296
Other 2,302
---------
Total expenses 107,662
Less expenses absorbed by advisor (51,801)
---------
Net expenses 55,861
---------
NET INVESTMENT INCOME 510,968
---------
NET REALIZED GAINS ON INVESTMENTS 74,554
CHANGE IN UNREALIZED APPRECIATION ON INVESTMENTS FOR THE YEAR (803,636)
---------
Net gains on investments (729,082)
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $(218,114)
---------
---------
The accompanying notes to financial statements are an integral part of this
statement.
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED JUNE 30, 1996 (Unaudited)
WISCONSIN
TAX-EXEMPT PORTFOLIO
--------------------
OPERATIONS:
Net investment income $510,968
Net realized gains on investments 74,554
Change in unrealized appreciation on investments for the year (803,636)
----------
Net (decrease) in net assets resulting from operations (218,114)
----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ($0.24 per share) (508,323)
----------
Total distributions (508,323)
----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 5,217,513
Net asset value of shares issued in distributions 355,106
Cost of shares redeemed (943,525)
----------
Net increase in net assets from capital share transactions 4,629,094
----------
Total increase 3,902,657
NET ASSETS:
Balance at beginning of year 18,986,246
----------
Balance at end of year $22,888,903
----------
----------
The accompanying notes to financial statements are an integral part of this
statement.
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEAR ENDED DECEMBER 31, 1995
WISCONSIN
TAX-EXEMPT PORTFOLIO
--------------------
OPERATIONS:
Net investment income $714,924
Net realized (losses) on investments (27,982)
Change in unrealized appreciation on investments for the year 1,218,259
-----------
Net increase in net assets resulting from operations 1,905,201
-----------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income ($0.50 per share) (715,944)
-----------
Total distributions (715,944)
-----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares issued 9,786,055
Net asset value of shares issued in distributions 505,977
Cost of shares redeemed (610,880)
-----------
Net increase in net assets from capital
share transactions 9,681,152
-----------
Total increase 10,870,409
NET ASSETS:
Balance at beginning of year 8,115,837
-----------
Balance at end of year $18,986,246
-----------
-----------
The accompanying notes to financial statements are an integral part of this
statement.
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES --
Principal Preservation Portfolios, Inc. (the "Fund"), registered under the
Investment Company Act of 1940 as an open-end management investment company, is
a series company with eight portfolios: Tax-Exempt Portfolio, Government
Portfolio, S&P100 Plus Portfolio, Dividend Achievers Portfolio, PSE Tech 100
Index Portfolio, Cash Reserve Portfolio, Wisconsin Tax-Exempt Portfolio and the
Select Value Portfolio. This report contains the information for the Wisconsin
Tax-Exempt Portfolio ("the Portfolio"). The other seven portfolios are contained
in three separate reports, one for each of the Cash Reserve Portfolio Retail and
Institutional class of shares and one for the remaining six portfolios. The
assets and liabilities of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which the shareholder owns shares.
The following is a summary of the significant accounting policies of the Fund.
(a) Long-Term Securities
The long-term tax-exempt securities are valued at market or fair value using
quotations by an independent pricing service (the "Service"). When in the
judgment of the Service, quoted bid prices for securities are readily
available and are representative of the bid side of the market, these
investments are valued at the mean between quoted bid prices (as obtained by
the Service from dealers in such securities) and ask prices (as calculated
by the Service based upon its evaluation of the market for such securities).
Securities for which, in the judgment of the Service, there are no readily
obtainable market quotations (which may constitute a majority of the
portfolio's securities) are carried at fair value as determined by the
Service, based on methods which include consideration of yields or prices of
municipal securities of comparable quality, coupon, maturity, type,
indications as to values from dealers, and general market conditions.
Investment transactions are recorded on the trade date.
Premiums on long-term tax-exempt securities are amortized to the shorter of
call date or maturity. The fund does not amortize premiums on taxable long-
term securities. The fund amortizes all discounts on taxable securities and
on original issue discount tax-exempt securities.
(b) Net Realized Gains and Losses and Investment Income
Net realized gains and losses on securities sales are computed on the
identified cost basis. Dividend income is recorded on the ex-dividend date.
Interest income is recorded on an accrual basis. Realized gains of $74,554
occurred for the six months ended June 30, 1996, in the Portfolio.
(c) Federal Income Taxes
Provision has not been made for Federal income taxes since the Portfolio has
elected to be taxed as a "regulated investment company" and intends to
distribute substantially all income to its shareholders and otherwise comply
with the provisions of the Internal Revenue Code applicable to regulated
investment companies. As of December 31, 1995, the Portfolio has Federal
income tax capital loss carry forwards of $31,174 expiring in 2002 and
$27,982 expiring in 2003. It is Management's intention to make no
distribution of any future realized capital gains until the Federal income
tax capital loss carry forward is exhausted.
(d) Expenses
Fund expenses associated with a specific portfolio are charged to that
portfolio as they are incurred. Common expenses incurred by the Fund are
allocated, as incurred, between the portfolios based upon the ratio of the
net assets of each portfolio to the combined net assets of the Fund.
(e) Distributions to Shareholders
Dividends to shareholders are recorded on the ex-dividend date.
(f) Deferred Organization Costs
Costs incurred with the organization, initial registration and public
offering of shares aggregating $13,000 for the Portfolio have been paid by
the Fund and are being amortized over a five year period.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH RELATED PARTIES --
On January 31, 1996 the Fund's Investment Advisory Agreement (the "Agreement")
with B.C. Ziegler and Company ("Ziegler"), (with whom certain officers and
directors of the Fund are affiliated) to serve as Investment Advisor (the
"Advisor") was assigned to Ziegler Asset Management, Inc. ("ZAMI"). Both Ziegler
and ZAMI are wholly owned subsidiaries of The Ziegler Companies, Inc. and
therefore the Assignment did not constitute a change in control. Under the
Agreement, the Portfolio pays ZAMI a monthly fee based upon the average daily
net assets of the Portfolio at the rate of .50% of the first $250,000,000 of the
Portfolio's average daily net assets, reducing to .40% of the Portfolio's
average daily net assets in excess of $250,000,000.
The Agreement provides that the Advisor's fee will be reduced or the Advisor
will reimburse the Portfolio, by an amount necessary to prevent the total
expenses of the Portfolio from exceeding limits applicable to the Portfolio in
any state in which its shares are qualified for sale.
For the six months ended June 30, 1996, the Advisor voluntarily reimbursed the
Portfolio $51,801. The Advisor is not obligated to continue the voluntary
reimbursement in the future.
On May 17, 1991, the Fund's shareholders approved a Distribution Agreement
under Rule 12b-1. According to this agreement the Fund pays a distribution fee
of up to 0.25% to the distributor and is passed through to the broker/dealer as
a service fee. This fee is calculated on the average daily net assets and is
shown as broker service fees in the Statements of Operations.
Ziegler has an Accounting and Pricing Agreement with the Fund to perform
accounting and pricing services, a Depository Agreement with the Fund to be the
depository for all investment securities and cash, and a Transfer and Dividend
Disbursing and Shareholder Services Agency Agreement with the Fund to provide
Transfer Agent Services. In addition, the Portfolio pays Ziegler commissions on
sales of Portfolio shares. The transfer agent fees, commissions, accounting and
pricing fees and depository fees paid to Ziegler for the six months ended June
30, 1996, were as follows for the Portfolio:
ACCOUNTING
TRANSFER COMMISSIONS AND PRICING DEPOSITORY
AGENT FEES ON PORTFOLIO SHARES FEES FEES
---------- ------------ ------------ ------
Wisconsin Tax-Exempt Portfolio $8,210 $50,190 $9,500 $4,576
3. INVESTMENT TRANSACTIONS --
Purchases and proceeds from sales of securities, excluding short-term
investments, for the six months ended June 30, 1996 consisted of purchases of
$7,259,960 and $2,583,251 in proceeds from the sale of securities.
Net unrealized appreciation on investments as of June 30, 1996, included:
WISCONSIN
TAX-EXEMPT
----------
Gross unrealized appreciation $287,164
Gross unrealized (depreciation) (249,264)
---------
Net unrealized appreciation $37,900
---------
---------
4. LINE OF CREDIT --
The Fund has an available line of credit of $3,000,000. However, each
portfolio's borrowings, by investment restriction, cannot exceed 10% of the
total net assets not including the borrowings. Interest expense incurred in
connection with such borrowings was not material during the year. Borrowings
under this arrangement bear interest approximating the then current Prime Rate.
All borrowings under this line of credit are guaranteed by Ziegler. Each
portfolio's policies allow borrowings for temporary or emergency purposes.
5. CAPITAL SHARE TRANSACTIONS --
(a) The Fund has authorized capital of 1,000,000,000 shares at $.001 par value
per share. The Fund's shares are divided into eight separate portfolios:
Wisconsin Tax-Exempt Portfolio, Government Portfolio, Tax-Exempt Portfolio,
S&P 100 Plus Portfolio, Dividend Achievers Portfolio, Select Value
Portfolio, PSE Tech 100 Index Portfolio and Cash Reserve Portfolio,
consisting of 50 million shares in each of the first seven portfolios and
400 million in the Cash Reserve Portfolio. The shares of the Cash Reserve
Portfolio have been allocated at 200,000,000 shares to Class X Retail and
200,000,000 shares to Class Y Institutional. The remaining 200,000,000 Fund
shares may be allocated to any of the above portfolios or to new portfolios
as determined by the Board of Directors. The shares of each portfolio have
equal rights and privileges with all other shares of that portfolio.
(b) Capital share activity during the period ended December 31, 1994, and the
six months ended June 30, 1995, were as follows:
WISCONSIN
TAX-EXEMPT
----------
SHARES OUTSTANDING AT DECEMBER 31, 1994 891,486
---------
---------
Shares issued 1,007,871
Shares issued in distributions 51,771
Shares redeemed (62,225)
---------
SHARES OUTSTANDING AT DECEMBER 31, 1995 1,888,903
---------
---------
Shares issued 534,704
Shares issued in distributions 36,344
Shares redeemed (96,254)
---------
SHARES OUTSTANDING AT JUNE 30, 1996 2,363,697
---------
---------
(c) Maximum offering price per share is computed based on a maximum sales
charge of 2.5% of the offering price or 2.56% of the net asset value. For
purpose of this computation, the price per share is derived from multiplying
the net asset value and redemption price per share by 100 and then dividing
the product by 97.5.
<TABLE>
PRINCIPAL PRESERVATION PORTFOLIOS, INC.
WISCONSIN TAX-EXEMPT PORTFOLIO
SCHEDULE OF INVESTMENTS
JUNE 30, 1996 (UNAUDITED)
<CAPTION>
PRINCIPAL S&P MOODY'S
AMOUNT DESCRIPTION RATING RATING VALUE
-------- ------------ ------ ------- ------
<S> <C> <C> <C> <C>
LONG-TERM TAX-EXEMPT SECURITIES -- 98.6%
ALABAMA -- 3.1%
$200,000 Birmingham, Alabama, New Public Housing Authority, 5.125%, AAA Aaa $192,750
due 11-01-2009
450,000 Birmingham, Alabama, New Public Housing Authority, 5.00%, AAA Aaa 419,062
due 05-01-2012
100,000 Birmingham, Alabama, New Public Housing Authority, 5.25%, AAA Aaa 96,875
due 05-01-2011
ARKANSAS -- 1.0%
130,000 Hot Springs, Arkansas, New Public Housing Authority, 5.00%, AAA Aaa 128,863
due 09-01-2006
105,000 Little Rock, Arkansas, New Public Housing Authority, 5.25%, AAA Aaa 101,587
due 08-01-2012
CALIFORNIA -- 1.4%
170,000 Sacramento, California, New Public Housing Authority, 5.25%, AAA Aaa 169,788
due 12-01-2011
160,000 Sacramento, California, New Public Housing Authority, 5.25%, AAA Aaa 159,800
due 12-01-2010
FLORIDA -- 0.7%
150,000 Gainesville, Florida, New Public Housing Authority, 5.25%, AAA Aaa 149,812
due 02-01-2008
GEORGIA -- 3.2%
325,000 Atlanta, Georgia, New Public Housing Authority, 5.00%, AAA Aaa 331,042
due 05-01-2007
150,000 Newnan, Georgia, New Public Housing Authority, 5.25%, AAA Aaa 153,375
due 05-01-2007
250,000 Newnan, Georgia, New Public Housing Authority, 5.00%, AAA Aaa 243,750
due 04-01-2012
GUAM -- 5.4%
650,000 Guam Government Limited Obligation Highway Bonds, Series A, AAA Aaa 682,500
6.30%, due 05-01-2012
515,000 Guam Power Authority Revenue Bonds, Series A, 6.375%, AAA Aaa 551,050
due 10-01-2008
ILLINOIS -- 2.6%
200,000 Cook County, Illinois, New Public Housing Authority, 5.25%, AAA Aaa 196,000
due 04-01-2010
125,000 Cook County, Illinois, New Public Housing Authority, 5.75%, AAA Aaa 127,626
due 04-01-2008
300,000 Peoria, Illinois, New Public Housing Authority, 5.00%, due 06-01-2012 AAA Aaa 282,375
KANSAS -- 0.6%
125,000 Kansas City, Kansas, New Public Housing Authority, 5.125%, AAA Aaa 124,844
due 10-01-2006
LOUISIANA -- 0.4%
100,000 Lake Charles, Louisiana, New Public Housing Authority, 5.125%, AAA Aaa 94,000
due 08-01-2013
MASSACHUSETTS -- 3.6%
460,000 Massachusetts State Housing Finance Agency, Multi-Family Housing AAA A1 511,750
Bonds, First Issue, 1979 Series A, 7.00%, due 04-01-2021
315,000 Worcester, Massachusetts, New Public Housing Authority, 5.25%, AAA Aaa 318,544
due 08-01-2006
MISSISSIPPI -- 0.6%
135,000 Biloxi, Mississippi, New Public Housing Authority, 5.25%, AAA Aaa 130,781
due 08-01-2011
NEVADA -- 1.0%
255,000 Las Vegas, Nevada, New Public Housing Authority, 5.00%, AAA Aaa 239,063
due 01-01-2012
NEW JERSEY -- 4.0%
100,000 Hoboken, New Jersey, New Public Housing Authority, 6.00%, AAA Aaa 103,027
due 09-01-2011
250,000 Newark, New Jersey, New Public Housing Authority, 4.50%, AAA Aaa 236,562
due 04-01-2008
435,000 Newark, New Jersey, New Public Housing Authority, 5.25%, AAA Aaa 428,475
due 04-01-2009
150,000 Newark, New Jersey, New Public Housing Authority, 5.25%, AAA Aaa 152,699
due 04-01-2006
NEW YORK -- 3.1%
200,000 New York, New York, New Public Housing Authority, 5.125%, AAA Aaa 197,500
due 01-01-2008
135,000 New York, New York, New Public Housing Authority, 6.000%, AAA Aaa 137,919
due 01-01-2010
200,000 New York, New York, New Public Housing Authority, 5.375%, AAA Aaa 197,250
due 01-01-2012
200,000 New York, New York, New Public Housing Authority, 5.00%, AAA Aaa 186,500
due 01-01-2012
NORTH CAROLINA -- 2.4%
165,000 Durham, North Carolina, New Public Housing Authority, 5.25%, AAA Aaa 163,144
due 12-01-2009
400,000 Durham, North Carolina, New Public Housing Authority, 5.00%, AAA Aaa 376,500
due 02-01-2012
NORTH DAKOTA -- 1.6%
200,000 Burleigh County, North Dakota, New Public Housing Authority, AAA Aaa 189,750
4.875%, due 01-01-2009
185,000 Burleigh County, North Dakota, New Public Housing Authority, AAA Aaa 177,369
4.875%, due 01-01-2010
OHIO -- 5.2%
500,000 Youngstown, Ohio, New Public Housing Authority, 5.00%, AAA Aaa 476,875
due 05-01-2011
250,000 Youngstown, Ohio, New Public Housing Authority, 4.875%, AAA Aaa 242,500
due 05-01-2009
300,000 Youngstown, Ohio, New Public Housing Authority, 5.00%, AAA Aaa 292,500
due 05-01-2012
200,000 Youngstown, Ohio, New Public Housing Authority, 4.875%, AAA Aaa 187,750
due 05-01-2010
OKLAHOMA -- 0.5%
110,000 Oklahoma City, Oklahoma, New Public Housing Authority, 5.75%, AAA Aaa 112,743
due 05-01-2005
PENNSYLVANIA -- 0.9%
200,000 Clinton County, Pennsylvania, New Public Housing Authority, AAA Aaa 203,250
5.25%, due 11-01-2007
PUERTO RICO -- 13.9%
200,000 University of Puerto Rico University Revenue Bonds, Series M, AAA Aaa 184,500
5.25%, due 06-01-2025
100,000 Puerto Rico Commonwealth Highway & Transportation Authority, A Baa1 110,250
6.625%, due 07-01-2012
350,000 Puerto Rico Commonwealth Highway & Transportation Authority, A Baa1 385,875
Highway Revenue Unrefunded Balance, Series T, 6.625%,
due 07-01-2018
400,000 Puerto Rico Commonwealth Highway & Transportation Authority, A Baa1 361,500
Highway Revenue Refunding Bonds, Series X, 5.25%,
due 07-01-2021
350,000 Puerto Rico Commonwealth General Obligation Bonds, 6.00%, A Baa1 347,375
due 07-01-2022
325,000 Puerto Rico Commonwealth, Refunding Bonds, Series A, A Baa1 326,625
6.00%, due 07-01-2014
180,000 Puerto Rico Commonwealth Electric & Power Authority, AAA Aaa 184,725
Series R, 6.25%, due 07-01-2017
800,000 Puerto Rico Public Buildings Authority, Guaranteed Public A Baa1 777,000
Education &Health Facilities, Refunding Series M, 5.75%,
due 07-01-2015
150,000 Puerto Rico Telephone Authority, Series L, 5.75%, due 01-01-2011 A+ A2 149,812
350,000 Puerto Rico Telephone Authority, Series L, 6.125%, due 01-01-2022 A+ A2 352,188
SOUTH CAROLINA -- 2.0%
250,000 Florence, South Carolina, New Public Housing Authority, 5.75%, AAA Aaa 255,132
due 08-01-2005
200,000 Marion, South Carolina, New Public Housing Authority, 4.875%, AAA Aaa 196,250
due 09-01-2010
TENNESSEE -- 1.4%
140,000 Memphis, Tennessee, New Public Housing Authority, 5.00%, AAA Aaa 132,825
due 07-01-2011
190,000 Nashville, Tennessee, New Public Housing Authority, 5.00%, AAA Aaa 177,888
due 08-01-2010
TEXAS -- 5.0%
300,000 El Paso, Texas, New Public Housing Authority, 5.00%, AAA Aaa 298,500
due 07-01-2005
160,000 Galveston, Texas, New Public Housing Authority, 5.25%, AAA Aaa 163,438
due 10-01-2008
120,000 Galveston, Texas, New Public Housing Authority, 5.25%, AAA Aaa 113,550
due 10-01-2012
180,000 Sherman, Texas, New Public Housing Authority, 5.25%, AAA Aaa 185,429
due 07-01-2009
200,000 Waco, Texas, New Public Housing Authority, 4.875%, AAA Aaa 193,500
due 12-01-2009
200,000 Waco, Texas, New Public Housing Authority, 4.875%, AAA Aaa 184,250
due 12-01-2012
WASHINGTON -- 0.6%
155,000 Seattle, Washington, New Public Housing Authority, 5.00%, AAA Aaa 149,187
due 03-01-2009
WISCONSIN -- 34.4%
300,000 Community Development Authority of the City of Madison, NR NR 295,125
Wisconsin, Multifamily Housing Revenue Bonds, Series 1995
(Dempsey Manor Project), 6.65%, due 10-01-2025
500,000 Madison, Wisconsin, Community Development Authority, NR NR 510,000
Redevelopment Revenue Bonds, Series 1995, (Meriter Retirement
Project), 6.125%, due 12-01-2019
1,000,000 Madison, Wisconsin, Community Development Authority, Lease NR Aa2 1,047,500
Revenue Bonds, Monona Terrace Community &Convention Center
Project, 6.10%, due 03-01-2010
500,000 Redevelopment Authority of the City of Milwaukee, Wisconsin, NR A1 524,375
Development Revenue Bonds, (Goodwill Industries of Southeastern
Wisconsin Project), 6.35%, due 10-01-2009
1,000,000 Housing Authority of the City of Oak Creek, Wisconsin, Multifamily NR NR 1,010,000
Housing Refunding Revenue Bonds,Series 1994A, (Country Oaks II
Project), 6.30%, due 08-01-2028
600,000 Redevelopment Authority of the Village of Slinger, Wisconsin, NR NR 606,000
Redevelopment Lease Revenue Bonds, Series 1995-A, 6.25%,
due 09-01-2017
100,000 Redevelopment Authority of the City of Superior, Wisconsin, Revenue NR Aa2 100,125
Bonds, Series 1994, (Superior Memorial Hospital, Inc.), 5.80%,
due 05-01-2010
155,000 Redevelopment Authority of the City of Superior, Wisconsin, Revenue NR Aa2 155,969
Bonds, Series 1994, (Superior Memorial Hospital, Inc.), 5.60%,
due 05-01-2007
150,000 Redevelopment Authority of the City of Superior, Wisconsin, Revenue NR Aa2 150,937
Bonds, Series 1994, (Superior Memorial Hospital, Inc.), 5.65%,
due 11-01-2008
600,000 Community Development Authority of the Village of Sussex, NR NR 595,500
Wisconsin, Community Development Revenue Bonds, Series 1995,
6.10%, due 04-01-2015
3,000,000 Wisconsin Center District, Junior Dedicated Tax Revenue Bonds, A NR 2,880,000
Series 1996B, 5.75%, due 12-15-2027 ----------
Total Long-Term Tax-Exempt Securities (Cost $22,534,980) 22,572,880
-----------
Total Investments
$22,572,880
-----------
-----------
</TABLE>
Percentages shown are a percent of net assets.
The accompanying notes to financial statements are an integral part of this
schedule.
PRINCIPAL PRESERVATION
PORTFOLIOS, INC.
215 North Main Street
West Bend, Wisconsin 53095
OFFICERS AND DIRECTORS
R.D. Ziegler, Chairman, Director
Richard H. Aster, M.D., Director
Augustine J. English, Director
Ralph J. Eckert, Director
Robert J. Tuszynski, President, Director
Jay Ferrara, Chief Financial Officer and Treasurer
John Lauderdale, Vice President of Marketing
S. Charles O'Meara, Secretary
INVESTMENT ADVISOR
Ziegler Asset Management, Inc.
215 North Main Street
West Bend, Wisconsin 53095
DISTRIBUTOR, CUSTODIAN AND TRANSFER AND DIVIDEND
DISBURSING AGENT
B.C. Ziegler and Company
215 North Main Street
West Bend, Wisconsin 53095
CUSTODIAN
B.C. Ziegler and Company
215 North Main Street
West Bend, Wisconsin 53095
COUNSEL
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
AUDITOR
Arthur Andersen LLP
100 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
This report has been prepared for the information of shareholders of Principal
Preservation Portfolios, Inc. Wisconsin Tax-Exempt Portfolio, and may not be
used in connection with the offering of securities unless preceded or
accompanied by a current Prospectus.
PP861-8/96
