THE TREASURER'S FUND
19 Old Kings Highway South
Darien, CT 06820
1-800-TSR-FUND (877-3863)
www.gabelli.com
BOARD OF DIRECTORS
Felix J. Christiana
FORMER SENIOR VICE PRESIDENT
DOLLAR DRY DOCK SAVINGS BANK
Anthony J. Colavita
ATTORNEY-AT-LAW
ANTHONY J. COLAVITA, P.C.
Richard N. Daniel
CHAIRMAN AND CHIEF
EXECUTIVE OFFICER
HANDY & HARMAN
Mary E. Hauck
(RETIRED) SENIOR PORTFOLIO MANAGER
GABELLI-O'CONNOR FIXED INCOME
MUTUAL FUND MANAGEMENT CO.
Robert C. Kolodny, MD
PHYSICIAN, AUTHOR AND LECTURER
GENERAL PARTNER OF KBS PARTNERSHIP
Thomas E. O'Connor
CONSULTANT
GABELLI FIXED INCOME LLC
Karl Otto Pohl
FORMER PRESIDENT
DEUTSCHE BUNDESBANK
Anthony R. Pustorino
CERTIFIED PUBLIC ACCOUNTANT
PROFESSOR, PACE UNIVERSITY
Werner J. Roeder, MD
DIRECTOR OF SURGERY
LAWRENCE HOSPITAL
Anthonie C. Van Eckris
MANAGING DIRECTOR
BALMAC INTERNATIONAL, INC.
OFFICERS
Ronald S. Eaker
PRESIDENT AND
CHIEF INVESTMENT OFFICER
Henley L. Smith
VICE PRESIDENT AND
INVESTMENT OFFICER
Bruce N. Alpert
VICE PRESIDENT
Judith A. Raneri
SECRETARY, TREASURER AND
INVESTMENT OFFICER
Georgette Horton
VICE PRESIDENT
Lisa Ling
VICE PRESIDENT
INVESTMENT ADVISOR
------------------
GABELLI FIXED INCOME LLC
19 Old Kings Highway South
Darien, CT 06820
ADMINISTRATOR
-------------
GABELLI FUNDS, INC.
One Corporate Center
Rye, NY 10580
DISTRIBUTOR
-----------
GABELLI FIXED INCOME
DISTRIBUTORS, INC.
19 Old Kings Highway South
Darien, CT 06820
CUSTODIAN
---------
CUSTODIAL TRUST COMPANY
101 Carnegie Center
Princeton, NJ 08540
LEGAL COUNSEL
-------------
BATTLE FOWLER LLP
75 East 55th Street
New York, NY 10022
- --------------------------------------------------------------------------------
This report is submitted for the general information of the shareholders of The
Treasurer's Fund. It is not authorized for distribution to prospective investors
unless preceded or accompanied by an effective prospectus.
- --------------------------------------------------------------------------------
THE
TREASURER'S
FUND
Money Market Portfolios
- --------------------------------------------------------------------------------
Domestic Prime
Tax Exempt
U.S. Treasury
ANNUAL REPORT
OCTOBER 31, 1997
<PAGE>
THE TREASURER'S FUND
19 Old Kings Highway South
Darien, Ct 06820
1-800-TSR-FUND (877-3863)
ANNUAL REPORT
OCTOBER 31, 1997
DEAR FELLOW SHAREHOLDER,
We are pleased to present the annual report of The Treasurer's Fund for
the fiscal year ended October 31, 1997. The total net assets of The Treasurer's
Fund portfolios on October 31, 1997 (in millions) were:
WEIGHTED
NET ASSETS AVERAGE MATURITY
---------- ----------------
Domestic Prime Money Market Portfolio $280.3 22 days
Tax Exempt Money Market Portfolio 192.8 28 days
U.S. Treasury Money Market Portfolio 85.2 68 days
The portfolios continue to hold investments in very high quality money
market securities of domestic, corporate and municipal issuers and U.S.
Government obligations. The weighted average maturities of the portfolios were
well within the permitted maximum of 90 days.
COMMENTARY
U.S. bond markets continue to cast off strong domestic economic news and
follow the volatility of the global equity markets as investors seek the safety
of U.S. Treasuries. A strong third quarter GDP of 3.5% poses no trouble as the
fear of worldwide collapse takes center stage. The latest data from the consumer
sector continues to be positive. November retail sales ex-autos was up .02%,
while consumer confidence for November posted a strong gain. The housing market
continues its advance with new and existing home sales the strongest in months.
Manufacturing remains strong with capacity utilization moving into the mid 80%
range and the National Association of Purchasing Managers Index last reported at
a positive 56%--another sign of solid growth. However, even with all the
domestic strength, the credit markets continue to follow overseas events. Some
economists now say that the situation will pare U.S. growth by .25% to .50% in
1998. The closing of Yamaichi Securities proved to be another domino in the
Asian crisis and until the situation stabilizes and the market divorces itself
from the turmoil, we will continue to trade on emotion and fear and ignore the
fundamentals.
Despite strong payroll and household employment reports underscoring the
strength of the domestic economy and the tightness of the U.S. labor markets,
the Fed kept interest rates unchanged at the December 16th meeting. This
decision was also based on the disturbing instability of global financial
markets and the potential effects on the domestic economy. Any further
adjustments to the Fed Funds target will be made in 1998.
<PAGE>
OUTLOOK
All things considered, we view this market as fundamentally overvalued,
and have taken the opportunity to raise cash levels in anticipation of a return
to normal market spreads. Even with the massive flight to quality that occurred
with the correction in global equity markets and the continued sense of
uncertainty, we believe that the short end of the curve is to expensive, with
little room for yields to go lower without a FOMC easing.
GABELLI FIXED INCOME LLC
With investment interests in fixed income securities rising and expected
to grow well into the 21st century, we are especially pleased that Gabelli
Funds, Inc. transformed its decade long financial partnership with the Fund's
Adviser, Gabelli-O'Connor Fixed Income Mutual Fund Management Co., into a
strategic one. Effective April 14, 1997 Gabelli-O'Connor's operations were
combined with Gabelli Funds' other fixed income products to create Gabelli Fixed
Income LLC. Gabelli Fixed Income's style of management is a straightforward,
total rate of return approach, providing protection of principle, daily
liquidity and competitive results through the active management within the
short-term fixed income markets. The style and philosophy of the new firm
continues its goal to provide the best possible return within a conservative
framework of safety and liquidity.
SPECIAL MEETING
A special meeting was held on April 14, 1997 to approve the change in
Advisor of the Fund from Gabelli-O'Connor Fixed Income Mutual Funds Management
Co. to Gabelli Fixed Income LLC. Presented in person or represented by proxy at
the meeting were holders of 511,872,226 shares of the Fund, who represented a
majority and consequently a quorum of the 563,225,486 outstanding shares.
506,780,937 shares voted for the change, 3,299,804 shares voted against the
change, and 1,791,487 shares abstained. At the same meeting, there was approval
of the election of the thirteen directors of the Fund. 510,412,686 shares voted
for approval of each of the directors and 1,459,540 abstained. Shareholders also
ratified the selection of Ernst & Young LLP as independent accountants for the
Fund. 508,755,497 shares voted for ratification, 2,401,105 shares voted against
ratification, and 705,622 abstained.
Sincerely,
/s/Ronald S. Eaker
------------------
Ronald S. Eaker
President and Chief Investment Officer
The Domestic Prime Money Market Portfolio, Tax-Exempt Money Market Portfolio,
and U.S. Treasury Money Market Portfolio attempt to maintain a stable net asset
value per share of $1.00. There can be no assurance that the Portfolios will be
successful in this regard. Past performance is not indicative of future results.
Investments in the Portfolios are not insured, nor guaranteed, by the U.S.
Government.
2
<PAGE>
THE TREASURER'S FUND
DOMESTIC PRIME MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL CREDIT YIELD AT DATE MATURITY
AMOUNT RATINGS* OF PURCHASE DATE VALUE
-------- ------- ------------- -------- -----
<S> <C> <C> <C> <C> <C>
COMMERCIAL PAPER - 33.8%
$13,500,000 Alamo Funding L.P. ............................. A1+/P1 5.60% 11/03/97 $13,495,800
13,500,000 National Fleet Funding Corp. ................... A1/P1 5.60% 11/03/97 13,495,800
5,000,000 Ford Motor Credit .............................. A1+/P1 5.60% 11/05/97 4,996,889
4,063,000 B.I. Funding, Inc. ............................. A1/P1 5.55% 11/06/97 4,059,868
13,000,000 First Credit Corp. ............................. A1/P1 5.52% 11/10/97 12,982,060
10,000,000 First Brands Commercial, Inc. .................. A1/P1 5.55% 11/12/97 9,983,042
13,800,000 Island Finance Puerto Rico, Inc. ............... A1/P1 5.51% 11/17/97 13,766,205
10,000,000 Bell Atlantic Financial Services, Inc. ......... A1/P1 5.52% 12/03/97 9,950,933
5,000,000 Avnet, Inc. .................................... A1/P1 5.53% 12/05/97 4,973,886
7,000,000 B.I. Funding, Inc. ............................. A1/NR 5.55% 12/10/97 6,957,913
----------
TOTAL COMMERICAL PAPER ......................... 94,662,396
----------
U.S. TREASURY OBLIGATIONS - 3.5%
10,000,000 U.S. Treasury Bill ............................. 5.24% 01/22/98 9,884,889
----------
INTEREST RATE
-------------
ADJUSTABLE RATE SECURITIES - 5.0%
4,900,000 New Jersey Economic Development
Authority (10/01/21)+......................... NR/NR 5.66% 11/01/97 4,900,000
9,300,000 Health Insurance Plan of Greater New York,
Series B (LOC - Morgan Guaranty Trust),
(07/01/16)+................................... A1+/NR 5.53% 11/05/97 9,300,000
----------
TOTAL ADJUSTABLE RATE SECURITIES 14,200,000
----------
LOAN PARTICIPATIONS - 4.8%
13,500,000 Pacific Financial Asset Management ............. NR/NR 5.63% 11/06/97 13,500,000
----------
U.S. GOVERNMENT AGENCIES - 30.1%
10,000,000 Federal Farm Credit Bank ....................... 5.50% 11/03/97 10,000,000
10,000,000 Federal Farm Credit Bank ....................... 5.51% 12/01/97 10,000,000
14,790,000 Federal Farm Credit Bank ....................... 5.62% 12/01/97 14,789,042
15,000,000 Federal Farm Credit Bank ....................... 5.50% 01/02/98 15,000,000
14,000,000 Federal Farm Credit Bank ....................... 5.65% 02/02/98 14,000,000
5,000,000 Student Loan Marketing Association ............. 7.00% 03/03/98 5,021,020
15,000,000 Federal National Mortgage Association .......... 6.81% 03/17/98 15,570,017
----------
TOTAL U.S. GOVERNMENT AGENCIES 84,380,079
----------
REPURCHASE AGREEMENTS - 31.1% 47,163,183 Bear
Stearns & Co., Inc., dated 10/31/97,
proceeds at maturity $47,185,389 (b) ......... 5.65% 11/03/97 47,163,183
40,000,000 Citibank, dated 10/31/97,
proceeds at maturity $40,018,833 (c) ......... 5.65% 11/03/97 40,000,000
----------
TOTAL REPURCHASE AGREEMENTS 87,163,183
----------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
THE TREASURER'S FUND
DOMESTIC PRIME MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
(CONTINUED)
================================================================================
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $303,790,547) (a) ...................................... 108.3% $303,790,547
PAYABLE TO MANAGER ............................................................. (0.0%) (74,376)
PAYABLE TO ADMINISTRATOR ....................................................... (0.0%) (23,683)
PAYABLE FOR SECURITIES PURCHASED ............................................... (8.5%) (23,884,889)
DIVIDENDS PAYABLE .............................................................. (0.1%) (434,867)
OTHER ASSETS AND LIABILITIES (NET) ............................................. 0.3% 966,084
----- -------------
NET ASSETS (APPLICABLE TO 280,374,218 SHARES OF BENEFICIAL INTEREST
ISSUED AND OUTSTANDING, $0.001 PAR VALUE, TWO BILLION SHARES AUTHORIZED) ..... 100.0% $280,338,816
===== =============
COMPOSITION OF NET ASSETS
Paid-in-capital ................................................................ $280,293,069
Undistributed net investment income ............................................ 13,572
Accumulated realized gain on investments ....................................... 32,175
-------------
NET ASSETS ..................................................................... $280,338,816
=============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ....................... $1.00
=====
</TABLE>
- ----------------------------------------------
+ Variable rate security. Maturity date reflects the next rate change date.
(a) Aggregate cost for Federal tax purposes.
(b) Collateralized by $167,185,000 U.S. Treasury STRIPS, 05/15/98 - 02/15/23,
market value--$48,108,329.
(c) Collateralized by $40,005,000 U.S. Treasury Notes, 5.625%, 11/30/00, market
value--$40,862,366.
LOC - Letter of Credit.
* Credit ratings issued by Standard and Poor's Corporation & Moody's
Investors Service Inc. (unaudited). Standard & Poor's credit rating of A1
and Moody's credit rating of P1 reflect instruments of the highest quality.
Credit ratings of NR indicate that the security is not rated. In the
opinion of the Investment Advisor, such instruments are judged to be of
comparable investment quality to rated securities which may be purchased by
the Portfolios.
See Notes to Financial Statements.
4
<PAGE>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL CREDIT INTEREST MATURITY
AMOUNT RATINGS* RATE DATE VALUE
-------- -------- ----------- ------- -----
<S> <C> <C> <C> <C> <C>
SHORT-TERM MUNICIPAL
OBLIGATIONS - 98.7%
ALABAMA - 0.8%
$1,500,000 Huntsville Industrial Development Board,
Avco Corporation Project, Series 1982
(LOC - Bankers Trust) (11/01/99)+................. Aa2/NR 4.15% 11/05/97 $1,500,000
----------
ALASKA - 0.3%
500,000 Anchorage Alaska Tax Anticipation Notes ............ MIG1/SP1+ 4.00% 12/17/97 500,160
----------
ARIZONA - 2.3%
500,000 Arizona Health Facility, Pooled Loan Program,
Series 1985 (FGIC Insured)
(SPA - Chemical Bank) (10/01/15)+................. VMIG/A1 3.65% 11/05/97 500,000
2,000,000 Maricopa County Pollution Control .................. NR/A1+ 3.80% 01/26/98 2,000,000
2,000,000 Pima County Industrial Development
Authority, Tucson Electric Power Company
Project, Series 1982 A (LOC - Bank of
America NT & SA) (07/10/22)+...................... VMIG/A1 3.70% 11/05/97 2,000,000
----------
TOTAL ARIZONA ................................................................................. 4,500,000
----------
COLORADO - 4.3%
1,175,000 Colorado Health Facilities Authority, Boulder
Community Hospital Project, Series C
(MBIA Insured) (SPA - Rabobank Nederland)
(10/01/14)+....................................... VMIG1/A1+ 3.60% 11/05/97 1,175,000
4,200,000 COLORADO STUDENT OBLIGATION BOARD AUTHORITY,
SERIES A (03/01/24)+.............................. VMIG1/AAA 3.70% 11/05/97 4,200,000
3,000,000 Colorado Student Obligation Board Authority,
Student Loan Revenue Adj., Series D
(LOC - SLMA) (07/01/27)+.......................... VMIG1/A1+ 3.70% 11/06/97 3,000,000
----------
TOTAL COLORADO ................................................................................ 8,375,000
----------
CONNECTICUT - 1.6%
3,000,000 Connecticut State Special Assessment
Unemployment Compensation,
Series 1993-C (FGIC Insured)
(11/15/01)+ (b) .................................. VMIG1/A1+/F1+ 3.90% 07/01/98 3,000,000
----------
FLORIDA - 2.5%
4,900,000 Dade County Health Facilities Authority,
Miami Children's Hospital Project,
Series 1990 (LOC - Barnett Bank of
South Florida) (09/01/20)+........................ VMIG1/NR 4.10% 11/03/97 4,900,000
----------
GEORGIA - 5.4%
3,000,000 Burke County Development Authority,
Ogelthorpe Power Corporation,
Series A (AMBAC Insured) ......................... Aaa/AAA 3.60% 12/01/97 3,000,000
4,840,000 Burke County Development Authority,
Ogelthorpe Power Corporation, Series A
(FGIC Insured) (SPA - Canadian Imperial
Bank) (01/01/16)+ (b) ............................ VMIG1/A1+/F1+ 3.60% 11/05/97 4,840,000
</TABLE>
See Notes to Financial Statements.
5
<PAGE>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
(CONTINUED)
===============================================================================
<TABLE>
<CAPTION>
PRINCIPAL CREDIT INTEREST MATURITY
AMOUNT RATINGS* RATE DATE VALUE
-------- ------- ----------- ------- -----
<S> <C> <C> <C> <C> <C>
GEORGIA (CONTINUED)
$ 900,000 Burke County Development Authority,
Georgia Power Company (07/01/24)+................. VMIG1/A1 4.05% 11/03/97 $ 900,000
1,700,000 DeKalb Private Hospital Authority, Egleston
Children's Hospital, Series A
(LOC - Trust Co. Bank) (03/01/24)+................ VMIG1/A1+ 3.65% 11/05/97 1,700,000
----------
TOTAL GEORGIA ................................................................................. 10,440,000
----------
ILLINOIS - 7.5%
2,600,000 Illinois Health Facilities Authority Revenue
Updates, Hospital Sisters Service,
Series E (MBIA Insured)
(SPA - Morgan Guaranty Trust)
(12/01/15)+ ..................................... VMIG1/AAA 3.65% 11/05/97 2,600,000
9,000,000 Illinois Health Facilities, Loyola University
Health Systems, Series B (MBIA Insured)
(SPA - C.S. First Boston) (07/01/24)+............. VMIG1/A1+ 3.60% 11/05/97 9,000,000
2,900,000 Illinois State Toll Highway Authority,
Series B (MBIA Insured)
(LOC - Societe Generale) (01/01/10)+.............. VMIG1/A1+ 3.60% 11/05/97 2,900,000
----------
TOTAL ILLINOIS ................................................................................ 14,500,000
----------
INDIANA - 4.8%
4,000,000 Hospital Authority of Evansville,
St. Mary's Medical Center of Evansville,
Series 1983 ...................................... VMIG1/Aa 3.75% 11/05/97 4,000,000
3,500,000 Hospital Authority of Hamilton County,
St. Vincent's Hospital Care Center, Inc.,
St. Vincent Carmel Hospital, Inc., Series
1983 ............................................. VMIG1/A1 3.75% 11/05/97 3,500,000
1,700,000 Indianapolis Resource Recovery, Ogden
Martin Systems (LOC - Swiss Bank)
(12/01/16)+....................................... VMIG1/A1+ 4.10% 11/03/97 1,700,000
----------
TOTAL INDIANA ................................................................................. 9,200,000
----------
KANSAS - 3.6%
4,000,000 Burlington Pollution Control
(LOC - Toronto Dominion Bank) .................... P1/A1+ 3.60% 11/03/97 4,000,000
3,000,000 Burlington Pollution Control, Kansas City
Power & Light Project, Series A
(LOC - Toronto Dominion Bank) .................... P1/A1+ 3.80% 01/20/98 3,000,000
----------
TOTAL KANSAS .................................................................................. 7,000,000
----------
KENTUCKY - 0.7%
1,255,000 Kentucky Development Finance Authority
Pooled Loan Program, Series A
(FGIC Insured) (SPA - Landesbank Hessen)
(12/01/15)+....................................... VMIG1/A1+ 3.60% 11/05/97 1,255,000
----------
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF NET ASSETS -- OCTOBER 31, 1997
(CONTINUED)
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL CREDIT INTEREST MATURITY
AMOUNT RATINGS* RATE DATE VALUE
-------- -------- ----------- ------- -----
<S> <C> <C> <C> <C> <C>
LOUISIANA - 6.2%
$4,100,000 Parish of East Baton Rouge, Louisiana
Pollution Control Exxon Corporation,
Series 1989 (11/01/97)+........................... P1/A1+ 3.95% 11/03/97 $ 4,100,000
1,500,000 Louisiana Public Facilities Authority, Kenner
Hotel Ltd. (LOC - Deutsche Bank A.G.)
(12/01/15)+....................................... P1/NR 4.00% 11/03/97 1,500,000
1,700,000 Louisiana State Offshore Term Authority,
Deepwater Port Revenue ACES,
Loop Inc. 1st Stage (LOC - Union Bank
of Switzerland) (09/01/06)+....................... VMIG1/NR 4.00% 11/03/97 1,700,000
1,000,000 New Orleans Louisiana Home Mortgage
Authority (12/01/18)++............................ VMIG1/NR 3.92% 06/01/98 1,000,000
3,700,000 Placquemines Port, Harbor & Terminal
District, Series D ............................... P1/A1+ 3.80% 02/02/98 3,700,000
----------
TOTAL LOUISIANA ............................................................................... 12,000,000
----------
MICHIGAN - 4.4%
4,000,000 Michigan Higher Education Student Loan,
Series XII B (AMBAC Insured) (SPA -
Kredietbank N.V.) (10/01/13)+..................... VMIG1/A1 3.70% 11/05/97 4,000,000
3,000,000 Michigan State Hospital Finance Authority,
Docnhs-Providence Hospital,
Series 1994 (11/01/14)+........................... VMIG1/A1+ 3.65% 11/05/97 3,000,000
1,500,000 Wayne Charter County Airport, Detroit
Metropolitan County Project, Series B
(LOC - Bayerische Landesbank)
(10/01/16)+....................................... NR/A1+ 3.65% 11/06/97 1,500,000
----------
TOTAL MICHIGAN ................................................................................ 8,500,000
----------
MINNESOTA - 1.1%
2,160,000 Rochester Health Care Facilities,
Mayo Medical Center, Series 1988-E
(SPA - C.S. First Boston) ........................ NR/A1+ 3.70% 01/07/98 2,160,000
----------
MISSOURI - 1.3%
2,500,000 Missouri State Health & Educational
Facilities Authority, Christian Health
Service, Series A (LOC - Morgan
Guaranty Trust) (11/01/19)+....................... NR/A1+ 3.55% 11/05/97 2,500,000
----------
NEW JERSEY - 0.5%
1,000,000 New Jersey Economic Development
Authority, Thermal Energy Ltd.
Partnership (LOC - First National Bank
of Chicago) (12/01/09)++.......................... VMIG1/NR 3.60% 11/13/97 1,000,000
----------
NEW YORK - 4.8%
1,200,000 New York City Municipal Water
Finance Authority, Series 1992-C
(FGIC Insured) (SPA - FGIC)
(06/15/22)+....................................... VMIG1/A1+ 4.00% 11/03/97 1,200,000
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
(CONTINUED)
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL CREDIT INTEREST MATURITY
AMOUNT RATINGS* RATE DATE VALUE
-------- -------- ----------- ------- -----
<S> <C> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$1,100,000 New York City Municipal Water
Finance Authority, Series 1994-C
(FGIC Insured) (SPA - FGIC)
(06/15/23)+....................................... VMIG1/A1+ 4.00% 11/03/97 $1,100,000
700,000 State of New York Dormitory Authority,
Beverwyck Inc. Project
(LOC- Banque Paribas) (07/01/25)+................. VMIG1/A1+ 3.75% 11/05/97 700,000
1,300,000 New York City General Obligation Bonds,
Series A8 (LOC - Morgan Guaranty Trust)
(08/01/17)+....................................... VMIG1/A1 4.00% 11/03/97 1,300,000
4,000,000 The City of New York General Obligation
Bonds, Series B7 (AMBAC Insured) (SPA -
Rabobank Nederland) (08/18/18)+................... VMIG1/A1+ 4.00% 11/03/97 4,000,000
1,000,000 Port Authority NY & NJ Cons-One Hundred
Third Series (MBIA Insured) ...................... Aaa/AAA 3.90% 12/15/97 1,000,226
----------
TOTAL NEW YORK ................................................................................ 9,300,226
----------
NORTH CAROLINA - 0.5%
1,000,000 Lenoir County Pollution Control Facilities,
Series 1983, Texasgulf Inc. Project
(LOC - Bank of Nova Scotia)
(12/01/03)+....................................... Aa2/NR 3.78% 11/05/97 1,000,000
----------
OHIO - 0.5%
900,000 Ohio State Student Loan Funding
Corporation, Series A-2 (LOC - National
Westminster Bank PLC) (01/01/07)+................. VMIG1/NR 3.70% 11/06/97 900,000
----------
OREGON - 1.6%
3,000,000 Oregon State Housing & Community
Services Department Single Family
Mortgage Project, Series K ....................... VMIG1/Aa 3.65% 12/11/97 3,000,000
----------
PENNSYLVANIA - 8.1%
1,220,000 Berks County IDA, Sixth & Penn Street
Project (LOC - Meridian Bank)
(11/23/03)+....................................... VMIG1/NR 3.65% 11/05/97 1,220,000
13,050,000 Delaware Valley Regional Financing
Authority (LOC - C.S. First Boston)(08/01/16)+.... VMIG1/NR 3.65% 11/05/97 13,050,000
1,350,000 Pennsylvania Energy Development
Authority, Ebensburg Project (LOC -
Swiss Bank Corp.) (12/01/11)+..................... Aa1/NR 3.70% 11/06/97 1,350,000
----------
TOTAL PENNSYLVANIA ............................................................................ 15,620,000
----------
SOUTH CAROLINA - 2.3%
965,000 Charleston County Certificates of Participation
(MBIA Insured) ................................... Aaa/AAA 4.10% 12/01/97 965,264
800,000 Charleston County, Massey Coal Terminal
Corporation (LOC - Morgan Guaranty
Trust) (01/01/07)+................................ VMIG1/P1 4.00% 11/03/97 800,000
</TABLE>
See Notes to Financial Statements.
8
<PAGE>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
(CONTINUED)
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL CREDIT INTEREST MATURITY
AMOUNT RATINGS* RATE DATE VALUE
-------- ------- ----------- ------- -----
<S> <C> <C> <C> <C> <C>
SOUTH CAROLINA (CONTINUED)
$ 2,600,000 South Carolina Educational Facilities Authority,
Furman University Project Series B
(MBIA Insured) (SPA - Wachovia Bank of
South Carolina) (10/01/26)+....................... VMIG1/AAA 3.55% 11/05/97 $2,600,000
----------
TOTAL SOUTH CAROLINA .......................................................................... 4,365,264
----------
SOUTH DAKOTA - 2.6%
5,000,000 South Dakota Education Loans, Series A
(GTY AGMT - Westdeutsche Landesbank)
(08/01/02)++...................................... NR/NR 3.95% 02/04/98 5,000,000
----------
TENNESSEE - 1.7%
700,000 Clarksville Public Building Authority,
Pooled Financing, Series 1990 (MBIA
Insured) (SPA - C.S. First Boston)
(07/01/13)+....................................... VMIG1/A1+ 3.60% 11/05/97 700,000
1,500,000 Metropolitan Nashville Airport Authority,
American Airlines Project, Series A
(LOC - C.S. First Boston) (10/01/12)+............. NR/A1+ 4.05% 11/03/97 1,500,000
1,000,000 Tennessee Housing Development
Homeownership Program Issue 1
(01/01/28)++...................................... VMIG1/A1+ 3.75% 02/19/98 1,000,000
----------
TOTAL TENNESSEE ............................................................................... 3,200,000
----------
TEXAS - 16.2%
2,750,000 Harris County Texas Housing Financial
Corporation, Idlewood Park Development,
Series A (Loc - New England Mutual Life)
(06/01/05)+....................................... NR/A1+ 3.80% 11/05/97 2,750,000
3,500,000 Harris County Health Facilities Development
Corporation, St. Lukes Episcopal Hospital,
Series A (SPA - Morgan Guaranty Trust,
Toronto Dominion Bank, and NationsBank
of Texas) (02/15/27)+............................. VMIG1/A1+ 4.05% 11/03/97 3,500,000
2,000,000 Houston Texas Water and Sewer
Revenue Notes .................................... NR/NR 3.70% 01/15/98 2,000,000
2,500,000 North Texas Higher Education Authority Inc.
(LOC - SLMA) (03/01/05)+.......................... Aaa/A1+ 3.70% 11/06/97 2,500,000
2,200,000 North Texas Higher Education Authority Inc.,
Series A (LOC-SLMA) (04/01/20)+................... VMIG1/AAA 3.70% 11/05/97 2,200,000
4,300,000 Panhandle Plains Higher Education
Authority Inc., Series A (LOC - SLMA)
(06/01/25)+....................................... VMIG1/NR 3.70% 11/06/97 4,300,000
7,700,000 Panhandle Plains Higher Education
Authority, Inc., Series A (LOC - SLMA)
(06/01/21)+....................................... VMIG1/NR 3.70% 11/06/97 7,700,000
6,300,000 Texas State Tax & Revenue Anticipation
Notes, Series A .................................. MIG1/SP1+ 4.75% 08/31/98 6,346,566
----------
TOTAL TEXAS ................................................................................... 31,296,566
----------
UTAH - 0.5%
900,000 Utah State Board of Regents, Series C
(AMBAC Insured) (11/01/13)+....................... VMIG1/A1 3.70% 11/06/97 900,000
----------
</TABLE>
See Notes to Financial Statements.
9
<PAGE>
THE TREASURER'S FUND
TAX EXEMPT MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
(CONTINUED)
================================================================================
<TABLE>
<CAPTION>
PRINCIPAL CREDIT INTEREST MATURITY
AMOUNT RATINGS* RATE DATE VALUE
-------- -------- ----------- ------- -----
<S> <C> <C> <C> <C>
VIRGINIA - 2.2%
$4,200,000 Alexandria Industrial Development
Authority (LOC - Westdeutsche
Landesbank) (12/01/16)+........................... VMIG1/A1+ 4.10% 11/03/97 $ 4,200,000
------------
WISCONSIN - 5.5%
5,000,000 Wisconsin Health and Education Facilities,
Daughters of Charity Health (11/02/22)+........... VMIG1/A1+ 3.75% 11/05/97 5,000,000
5,700,000 Wisconsin Health Facilities Authority,
St. Mary's Hospital (11/01/16)+................... VMIG1/A+ 3.75% 11/05/97 5,700,000
------------
TOTAL WISCONSIN ............................................................................... 10,700.000
------------
WYOMING - 4.9%
2,600,000 Lincoln County, Exxon Corporation Project,
Series 1987-C (11/01/14)+......................... P1/A1+ 3.95% 11/03/97 2,600,000
1,000,000 Lincoln County, Exxon Corporation Project,
Series 1987-B (07/01/17)+......................... P1/A1+ 4.10% 11/03/97 1,000,000
5,100,000 Lincoln County, Pacificorp Project
(LOC - Union Bank of Switzerland) ................ P1/A1+ 3.70% 11/06/97 5,100,000
800,000 Platte County, Tri-State Generator &
Transmission Project, Series 1984-B
(LOC - Societe Generale) (07/01/14)+.............. P1/NR 3.95% 11/03/97 800,000
------------
TOTAL WYOMING ................................................................................. 9,500,000
------------
TOTAL SHORT-TERM MUNICIPAL OBLIGATIONS ........................................................ 190,312,216
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $190,312,216) (a) ........................................................ 98.7% 190,312,216
PAYABLE TO MANAGER ............................................................................... (0.0%) (49,652)
PAYABLE TO ADMINISTRATOR ......................................................................... (0.0%) (15,810)
DIVIDENDS PAYABLE ................................................................................ (0.1%) (173,146)
OTHER ASSETS AND LIABILITIES (NET) ............................................................... 1.4% 2,760,826
----- -------------
NET ASSETS (APPLICABLE TO 192,885,707 SHARES OF BENEFICIAL INTEREST ISSUED AND OUTSTANDING,
$0.001 PAR VALUE, TWO BILLION SHARES AUTHORIZED) ............................................... 100.0% $ 192,834,434
===== =============
COMPOSITION OF NET ASSETS
Paid-in-capital .................................................................................. $ 192,845,011
Undistributed net investment income .............................................................. 3,430
Accumulated realized gain on investments ......................................................... (14,007)
-------------
NET ASSETS ....................................................................................... $ 19,834,434
=============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ......................................... $1.00
=====
</TABLE>
- ----------------------------------------------
+ Variable rate security. Maturity date reflects the next rate change date.
++ Put bond. Maturity date reflects the next put date.
(a) Aggregate cost for Federal tax purposes.
(b) Credit ratings of F1 by Fitch Investors Service, Inc. are deemed to be of
the highest quality (unaudited).
ACES - Adjustable Convertible Extendable Securities, AMBAC - AMBAC Indemnity
Corporation, FGIC - Financial Guaranty Insurance Company, GTY AGMT -
Guarantee Agreement, LOC - Letter of Credit, MBIA - Municipal Bond
Insurance Association, SLMA - Student Loan Marketing Association, SPA -
Standby Purchase Agreement.
* Credit ratings issued by Standard & Poor's Corporation and Moody's
Investors Service Inc. (unaudited). Standard & Poor's credit ratings of A1,
SP1 and AAA and Moody's credit ratings of P1, VMIG1 and Aaa reflect
instruments of highest quality. S & P credit ratings of AA and Moody's
credit ratings of Aa reflect instruments judged to be of high quality by
all standards. Credit ratings of NR indicate that the security is not
rated. In the opinion of the Investment Advisor, such instruments are
judged to be of comparable investment quality to rated securities which may
be purchased by the Portfolios
See Notes to Financial Statements.
10
<PAGE>
THE TREASURER'S FUND
U.S. TREASURY MONEY MARKET PORTFOLIO--STATEMENT OF NET ASSETS--OCTOBER 31, 1997
================================================================================
<TABLE>
<CAPTION>
ANNUALIZED
PRINCIPAL YIELD AT DATE MATURITY
AMOUNT OF PURCHASE DATE VALUE
--------- ------------- -------- -----
<S> <C> <C> <C>
U.S. TREASURY OBLIGATIONS -- 61.7%
U.S. TREASURY BILLS -- 40.5%
$35,000,000 U.S. Treasury Bills ........................... 5.04 to 5.15% 01/22/98-01/29/98 $34,578,489
-----------
INTEREST RATE
-------------
U.S. TREASURY NOTES -- 21.2%
18,000,000 U.S. Treasury Notes ........................... 6.125% 3/31/98 18,054,332
-----------
TOTAL U.S. TREASURY OBLIGATIONS 52,632,821
-----------
REPURCHASE AGREEMENTS -- 38.4%
16,001,924 Bear Stearns & Co., Inc. dated 10/31/97,
proceeds at maturity $16,009,458 (b) ........ 5.65% 11/03/97 16,001,924
16,700,000 Citibank, dated 10/31/97, proceeds at
maturity $16,707,863 (c) ..................... 5.65% 11/03/97 16,700,000
-----------
TOTAL U.S. TREASURY AGREEMENTS 32,701,924
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (COST $85,334,745)(a) .................................................... 100.1% 85,334,745
PAYABLE TO MANAGER ......................................................................... (0.0%) (21,963)
PAYABLE TO ADMINISTRATOR ................................................................... (0.0%) (6,995)
DIVIDENDS PAYABLE .......................................................................... (0.1%) (83,666)
OTHER ASSETS AND LIABILITIES (NET) ......................................................... (0.0%) (17,652)
----- ------------
NET ASSETS(APPLICABLE TO 85,204,469 SHARES OF BENEFICIAL INTEREST
ISSUED AND OUTSTANDING, $0.001 PAR VALUE, TWO BILLION SHARES AUTHORIZED) ................. 100.0% $85,204,469
===== ============
COMPOSITION OF NET ASSETS
Paid-in-capital ............................................................................ $85,204,469
Undistributed net investment income ........................................................ --
Accumulated realized gain on investments ................................................... --
------------
NET ASSETS ................................................................................. $85,204,469
============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE ................................... $1.00
=====
- ----------------------------------------------
(a) Aggregate cost for Federal tax purposes.
(b) Collateralized by $49,180,000 U.S. Treasury Securities, 0.00%-9.375%, 11/06/97-08/15/26, market value--$16,323,399.
(c) Collateralized by $16,420,000 U.S. Treasury Notes, 6.875%, 7/31/99, market value--$17,042,112.
</TABLE>
See Notes to Financial Statements.
11
<PAGE>
THE TREASURER'S FUND
STATEMENT OF OPERATIONS -- YEAR ENDED OCTOBER 31, 1997
===============================================================================
<TABLE>
<CAPTION>
DOMESTIC PRIME TAX-EXEMPT U.S. TREASURY
MONEY MARKET MONEY MARKET MONEY MARKET
PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------ ------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest Income .............................................. $15,189,151 $6,483,482 $5,541,497
----------- ---------- ----------
EXPENSES:
Management fees .............................................. 827,784 541,424 311,763
Administration fees .......................................... 265,635 173,105 101,926
Transfer agent fees .......................................... 110,978 49,479 29,603
Accounting fees .............................................. 25,658 36,331 25,169
Audit fees ................................................... 22,833 22,833 22,833
Directors' fees .............................................. 16,094 15,849 15,584
Other ........................................................ 160,716 125,687 127,345
----------- ---------- ----------
Total expenses before reductions by third parties ........... 1,429,698 964,708 634,223
Expense reductions by third parties -- (31,153) (13,722)
----------- ---------- ----------
Total Expenses - Net ........................................ 1,429,698 933,555 620,501
----------- ---------- ----------
NET INVESTMENT INCOME ......................................... 13,759,453 5,549,927 4,920,996
NET REALIZED GAIN ON INVESTMENTS .............................. 77,010 -- 70,988
----------- ---------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .......... $13,836,463 $5,549,927 $4,991,984
=========== ========== ==========
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
THE TREASURER'S FUND
DOMESTIC PRIME MONEY MARKET PORTFOLIO--STATEMENT OF CHANGES IN NET ASSETS
===============================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/97 10/31/96
---------------- --------------
<S> <C> <C>
Net investment income .................................................. $ 13,759,453 $ 10,803,526
Net realized gain on investments ....................................... 77,010 390,740
------------ ------------
Net increase in net assets resulting from operations ................... 13,836,463 11,194,266
Distributions to shareholders from:
Net investment income ............................................... (13,759,453) (10,803,526)
Net realized gain on investments .................................... (224,251)(a) (55,898)
Share transactions ($1.00 per share):
Shares sold ......................................................... 958,464,195 834,654,747
Shares issued upon reinvestment of dividends and distributions ...... 13,704,346 10,497,986
Shares redeemed ..................................................... (928,494,124) (777,973,428)
------------ ------------
Net decrease in net assets ............................................. 43,527,176 67,514,147
NET ASSETS
Beginning of year ...................................................... 236,811,640 169,297,493
------------ ------------
End of year (including undistributed net investment income
of $13,572 and ($11,680), respectively) ................................ $280,338,816 $236,811,640
============ ============
- ----------------------------------------------
(a) $179,416 of the capital gains distributed pertain to prior year realized capital gains as dictated by IRS code section 855.
</TABLE>
FINANCIAL HIGHLIGHTS
================================================================================
Per share amounts for a Portfolio share outstanding throughout each year ended
October 31,
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
---- ---- ---- ---- -----
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of year ........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Net Investment Income (b) .................................... 0.050 0.049 0.054 0.035 0.028
Net gain on investments ...................................... 0.000 -- (0.002) -- --
------- ------- ------- ------- -------
Total from investment operations ............................. 0.050 0.049 0.052 0.035 0.028
------- ------- ------- ------- -------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ..................................... (0.049) (0.049) (0.054) (0.035) (0.028)
Net realized gains (c) .................................... (0.001) -- -- -- --
------- ------- ------- ------- -------
Total distributions ....................................... (0.050) (0.049) (0.054) (0.035) (0.028)
------- ------- ------- ------- -------
Contributions from affiliate (d) ............................. -- -- 0.002 -- --
------- ------- ------- ------- -------
Net asset value, end of year ................................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return+................................................. 5.19% 5.12% 5.50% 3.56% 2.90%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) ........................... $280,339 $236,812 $169,297 $143,744 $145,021
Ratio of net investment income to average net assets ......... 4.99% 4.93% 5.33% 3.49% 2.82%
Ratio of operating expenses to average net assets (e) ........ 0.52% 0.52% 0.50% 0.53% 0.62%
Ratio of interest expense to average net assets .............. -- 0.01% 0.02% 0.13% --
- ----------------------------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends.
(b) Net investment income before fees waived by the administrator for the years
ended October 31, 1996, 1995 and 1994 was $0.048, $0.053 and $0.034,
respectively.
(c) $0.001 of the capital gain distributions in the year ended October 31, 1997
pertained to prior year realized capital gains as dictated by IRS code
section 855.
(d) During the year ended October 31, 1995, the Portfolio realized losses on
the sale of certain securities. Pursuant to an undertaking, losses in the
amount of $262,913 were reimbursed to the Portfolio by the former Adviser.
(e) Operating expense ratios before custodian fee credits on cash balances
maintained with the custodian and fees waived by the administrator for the
years ended October 31, 1996 and 1995 were 0.54% and 0.53%, respectively.
The operating expense ratio before fees waived by the administrator for the
year ended October 31, 1994 was 0.53%.
</TABLE>
See Notes to Financial Statements.
13
<PAGE>
THE TREASURER'S FUND
TAX-EXEMPT MONEY MARKET PORTFOLIO -- STATEMENT OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/97 10/31/96
------------ -------------
<S> <C> <C>
Net investment income ..................................................... $ 5,549,927 $ 4,550,893
Net realized gain on investments .......................................... -- 11,161
------------ -------------
Net increase in net assets resulting from operations ...................... 5,549,927 4,562,054
Distributions to shareholders from:
Net investment income .................................................. (5,549,927) (4,550,893)
Share transactions ($1.00 per share):
Shares sold ............................................................ 545,916,653 457,529,068
Shares issued upon reinvestment of dividends and distributions ......... 5,441,069 4,428,441
Shares redeemed ........................................................ (517,030,222) (444,287,325)
------------ -------------
Net increase in net assets ................................................ 34,327,500 17,681,345
NET ASSETS
Beginning of year ......................................................... 158,506,934 140,825,589
------------ -------------
End of year (including undistributed net investment income
of $3,430 for both years) ................................................. $192,834,434 $ 158,506,934
============ =============
</TABLE>
FINANCIAL HIGHLIGHTS
===============================================================================
Per share amounts for a Portfolio share outstanding throughout each year ended
October 31,
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of year .................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- ------- -------
Net investment income (a) ............................. 0.031 0.030 0.034 0.022 0.021
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income .............................. (0.031) (0.030) (0.034) (0.022) (0.021)
Net asset value, end of year .......................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======= =======
Total return+.......................................... 3.12% 3.04% 3.42% 2.21% 2.16%
======= ======= ======= ======= =======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) .................... $192,834 $158,507 $140,826 $133,951 $117,751
Ratio of net investment income to average net assets .. 3.07% 3.00% 3.35% 2.18% 2.15%
Ratio of operating expenses to average net assets (b) . 0.52% 0.52% 0.50% 0.53% 0.57%
- ----------------------------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends.
(a) Net investment income before fees waived by the administrator for the years
ended October 31, 1995 and 1994 was $0.033, and $0.021, respectively.
(b) Operating expense ratios before custodian fee credits on cash balances
maintained with the custodian for the years ended October 31, 1997 and 1996
were 0.53% and 0.54, respectively. The operating expense ratio before
custodian fee credits on cash balances maintained with the custodian and
fees waived by the administrator for the year ended October 31, 1995 was
0.53%. The operating expense ratio before fees waived by the administrator
for the year ended October 31, 1994 was 0.54%.
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
THE TREASURER'S FUND
U.S. TREASURY MONEY MARKET PORTFOLIO -- STATEMENT OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
10/31/97 10/31/96
----------- ------------
<S> <C> <C>
Net investment income ................................................. $ 4,920,996 $ 4,134,213
Net realized gain on investments ...................................... 70,988 30,689
------------ ------------
Net increase in net assets resulting from operations .................. 4,991,984 4,164,902
Distributions to shareholders from:
Net investment income .............................................. (4,920,996) (4,134,213)
Net realized gain on investments (70,988) (30,689)
Share transactions ($1.00 per share):
Shares sold ........................................................ 410,743,301 480,104,084
Shares issued upon reinvestment of dividends and distributions ..... 4,767,017 3,922,581
Shares redeemed .................................................... (421,067,311) (488,099,503)
------------ ------------
Net decrease in net assets ............................................ (5,556,993) (4,072,838)
NET ASSETS
Beginning of year ..................................................... 90,761,462 94,834,300
------------ ------------
End of year ........................................................... $ 85,204,469 $ 90,761,462
============ ============
</TABLE>
FINANCIAL HIGHLIGHTS
================================================================================
Per share amounts for a Portfolio share outstanding throughout each year ended
October 31,
<TABLE>
<CAPTION>
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
OPERATING PERFORMANCE:
Net asset value, beginning of year .............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Net investment income ........................................... 0.047 0.047 0.051 0.033 0.026
Net gain investments ............................................ 0.001 -- -- -- --
------ ------ ------ ------ ------
Total from investment operations ................................ 0.048 0.047 0.051 0.033 0.026
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ........................................ (0.047) (0.047) (0.051) (0.033) (0.026)
Net realized gains ........................................... (0.001) -- -- -- --
Total distributions .......................................... (0.048) (0.047) (0.051) (0.033) (0.026)
------ ------ ------ ------ ------
Net asset value, end of year .................................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
====== ====== ====== ====== ======
Total return+ .................................................... 4.91% 4.83% 5.27% 3.31% 2.60%
====== ====== ====== ====== ======
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Net assets, end of year (in 000's) .............................. $85,204 $90,761 $94,834 $138,205 $224,071
Ratio of net investment income to average net assets ............ 4.74% 4.70% 5.10% 3.07% 2.55%
Ratio of operating expenses to average net assets (a) ........... 0.60% 0.60% 0.54% 0.49% 0.47%
- ----------------------------------------------
+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of dividends.
(a) Operating expense ratios before custodian fee credits on securities lending
income for the year ended October 31, 1997 was 0.61%. Operating expense
ratios before custodian fee credits on cash balances maintained with the
custodian for the years ended October 31, 1996 and 1995 were 0.63% and
0.56%, respectively.
</TABLE>
See Notes to Financial Statements.
15
<PAGE>
THE TREASURER'S FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES. The Treasurer's Fund, Inc. (the "Fund) is
an open-end, diversified management investment company registered under the
Investment Company Act of 1940, as amended, (the "Act"). The Fund currently
consists of six separately managed portfolios, three of which are active: the
Domestic Prime Money Market Portfolio, the Tax Exempt Money Market Portfolio and
the U.S. Treasury Money Market Portfolio (collectively, the "Portfolios"). The
Global Money Market Portfolio, the Limited Term Portfolio and the Tax Exempt
Limited Term Portfolio still remain inactive.
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. The
following is a summary of significant accounting policies consistently followed
by the Fund in the preparation of its financial statements:
SECURITY VALUATION. The Portfolios value all portfolio securities by the
amortized cost method which approximates market value in accordance with Rule
2a-7 under the Investment Company Act of 1940, as amended.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME. Securities transactions are
recorded on the trade date. Identified cost of investments sold is used for both
financial statement and Federal income tax purposes. Interest income, including
the amortization of discount or premium, is recorded as earned. When-issued
securities are recorded on the date on which the priced transaction confirmation
is issued.
REPURCHASE AGREEMENTS. Each Portfolio may engage in repurchase agreements, with
respect to any security in which that Portfolio is authorized to invest, with
member banks of the Federal Reserve System and with broker-dealers who are
recognized as primary dealers in U.S. government securities by the Federal
Reserve Bank of New York whose creditworthiness has been reviewed and found
satisfactory by the Fund's Board of Directors. The Portfolios will always
receive securities as collateral whose market value, including accrued interest,
will be at least equal to 100% of the dollar amount invested by the Portfolio in
each agreement, and the Portfolio will make payment for such securities only
upon physical delivery or upon evidence of book entry transfer to the account of
the custodian. If the value of the underlying securities falls below the value
of the repurchase price plus accrued interest, the Fund will require the seller
to deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation the Portfolios maintain the right to sell the underlying securities
at market value and may claim any resulting loss against the seller.
REVERSE REPURCHASE AGREEMENTS. The Portfolios are permitted to enter into
reverse repurchase agreements for liquidity purposes or when it is able to
purchase other securities which will produce more income than the cost of the
agreement. The Portfolios may enter into reverse repurchase agreements only with
those member banks of the Federal Reserve System and broker-dealers who are
recognized as primary dealers in U.S. government securities by the Federal
Reserve Bank of New York and whose creditworthiness has been reviewed and found
satisfactory by the fund's Board of Directors. When engaging in reverse
repurchase transactions, the Portfolios will maintain, in a segregated account
with its Custodian, securities equal in value to those subject to the agreement.
SECURITIES LENDING. The Fund may lend its securities to broker-dealers and other
institutional investors. The Fund's policy is to receive collateral on each loan
equal to, or greater than the market value of the securities on loan plus
accrued interest. The Fund may bear the risk of delay in receiving additional
collateral or in recovering the securities loaned or even a loss of rights in
the collateral should the borrower of the securities
16
<PAGE>
THE TREASURER'S FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
fail financially. The Fund receives compensation for lending its securities in
the form of fees or through the reinvestment of any cash received as collateral.
The Fund also continues to receive interest on the securities loaned, and any
gain loss in the market price of the securities loaned that may occur during the
term of the loan will be for the account of the Fund. At October 31, 1997, there
were no securities on loan. However, there were securities on loan during the
year for the U.S. Treasury Money Market Portfolio and the income earned from the
securities lending totaled $13,722. The securities lending income was used to
reduce the custodian fees charged to the Fund.
DIVIDENDS AND DISTRIBUTIONS. Net investment income, including short-term capital
gains, is declared as dividends daily and paid monthly; however, if an
investor's shares are redeemed during a month, accrued but unpaid dividends are
paid with the redemption proceeds. Dividends are payable to shareholders of
record at the time of declaration.
The amount of dividends from net investment income and of distributions from net
realized gains are determined in accordance with federal income tax regulations
which may differ from generally accepted accounting principles. To the extent
these differences are permanent in nature, such amounts are reclassified within
the composition of net assets based on their federal tax-basis treatment.
At October 31, 1997, the following reclassifications have been made to increase
such accounts with offsetting adjustments made to paid-in-capital.
Accumulated
Undistributed Net Realized Gain (Loss)
Investment Income On Investments
----------------- --------------------
Domestic Prime Money Market Fund $25,252 $55,897
Tax Exempt Money Market Fund -- 40,695
PROVISION FOR INCOME TAXES. It is the Fund's policy to comply with the
requirements of the Internal Revenue Code (the "Code") applicable to regulated
investment companies and to distribute all of its "investment company taxable
income," as defined in the Code, and net capital gains, if any, to its
shareholders. Therefore, no Federal income tax provision is required. The Fund
intends to treat each Portfolio as a separate entity taxable as a corporation
for Federal income tax purposes and to have each Portfolio qualify and elect to
be taxes as a "regulated investment company" under Subchapter M of the Internal
Revenue Code.
At October 31, 1997, the Tax Exempt Money Market Portfolio had net capital loss
carryforwards for Federal income tax purposes of $14,007 with $2,775, $1,391,
$2,039 and $7,802 expiring in 2003, 2002, 2001 and 1998, respectively. At
October 31, 1997, $39,134 of capital loss carryforwards expired.
EXPENSES. Certain administrative expenses are common to, and allocated among,
the Portfolios. Such allocations are made on the basis of each Portfolio's
average net assets or other criteria directly affecting the expenses.
The Tax Exempt Money Market Portfolio maintains a cash balance with its
custodian and receives a reduction of its custody fees and expenses for the
amount of interest earned on such uninvested cash balances. For financial
reporting purposes for the year ended October 31, 1997, custodian fees were
increased by $31,153. There was no effect on net investment income. The
Portfolio could have invested such cash amounts in an income producing asset if
it had not agreed to a reduction of fees or expenses under the expense offset
arrangement with its custodian.
17
<PAGE>
THE TREASURER'S FUND
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
2. AGREEMENTS WITH AFFILIATED PARTIES. The Fund retained Gabelli-O'Connor Fixed
income Mutual Funds Management Co. ("Gabelli-O'Connor") to act as Investment
Advisor. Effective April 14, 1997, Gabelli Fixed Income LLC, a newly created
Maryland limited liability company and a subsidiary of Gabelli Funds, Inc.
became the successor Investment Advisor to Gabelli-O'Connor. The Investment
Advisor supervises all aspects of the Fund's operations and provides investment
advice and portfolio management services to the Fund. Subject to the supervision
of the Fund's Board of Directors, the Advisor makes the Fund's day-to-day
investment decisions, arranges for the execution of portfolio transactions and
generally manages the Fund's investments. The Advisor also provides supervisory
personnel who are responsible for supervising the performance of administrative
services, accounting and related services, net asset value and yield
calculations, reports to and filings with regulatory authorities and services
relating to such functions.
As compensation for its services, the Portfolios pay the Investment Advisor a
fee, computed and accrued daily and payable monthly, equal to 0.30% per annum of
each Portfolio's average daily net assets.
For the year ended October 31, 1997, the Investment Advisors were entitled to
fees of $827,784, $541,424 and $311,763 from the Domestic Prime Money Market
Portfolio, the Tax Exempt Money Market Portfolio and the U.S. Treasury Money
Market Portfolio, respectively.
The Advisor has agreed to reimburse a Portfolio for its expenses (exclusive of
interest, taxes, brokerage, and extraordinary expenses) which in any year exceed
the limits on investment company expenses prescribed in any state in which the
Portfolio's shares are qualified for sale. No such reimbursement was required
during the year ended October 31, 1997, for any of the Portfolios.
Effective April 14, 1997, Gabelli Funds, Inc. assumed responsibility as
Administrator pursuant to an Administrative Services Agreement with each of the
Portfolios, whereby Gabelli provides management and administrative services
necessary for the Fund, other than those provided by the Investment Advisor,
subject to the supervision of the Fund's Board of Directors.
As compensation for its services, the Portfolios pay the Administrator a fee,
computed and accrued daily and payable monthly, in accordance with the following
schedule: i) 0.10% of the first $500 million of aggregate average daily net
assets of the Fund, (ii) 0.065% of the next $250 million of aggregate average
daily net assets of the Fund, (iii) 0.055% of the next $250 million of aggregate
average daily net assets of the Fund, and (iv) 0.050% of all aggregate average
daily net assets of the Fund over $1 billion.
For the period from April 14, 1997 through October 31, 1997, the Administrator
was entitled to fees of $150,417, $97,370 and $52,908 from the Domestic Prime
Money Market Portfolio, the Tax Exempt Money Market Portfolio and the U.S.
Treasury Money Market Portfolio, respectively.
The Fund has adopted a distribution and service plan (the "Plan") pursuant to
Rule 12b-1 under the Investment Company Act of 1940 for each Portfolio of the
Fund. There are no fees or expenses chargeable to the Fund under the Plan and
the Fund's Board of Directors has adopted the Plan in case certain expenses of
the Fund might be considered to constitute indirect payment by the Fund of
distribution expenses. Gabelli Fixed Income Distributors, Inc. (the
"Distributor") serves as the exclusive Distributor of the shares of each
Portfolio pursuant to its Distribution Agreement with the Fund. Gabelli Fixed
Income Distributors, Inc. became the successor Distributor to GOC Fund
Distributors, Inc. effective December 14, 1997.
18
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
================================================================================
SHAREHOLDERS AND BOARD OF DIRECTORS
THE TREASURER'S FUND, INC.
We have audited the accompanying statements of net assets of The Treasurer's
Fund, Inc. (comprising the Domestic Prime Money Market, Tax Exempt Money Market,
and U.S. Treasury Money Market Portfolios) as of October 31, 1997, 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 for each of the years indicated therein. These
financial statements and financial highlights are the responsibility of the
Fund'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 and financial highlights. Our procedures included confirmation of
securities owned as of October 31, 1997 by correspondence with the custodian and
others. 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 portfolios constituting The Treasurer's Fund, Inc. at
October 31, 1997, 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 for each of the indicated years, in conformity with
generally accepted accounting principles.
/s/Ernst & Young LLP
New York, New York
December 18, 1997
- --------------------------------------------------------------------------------
FEDERAL TAX STATUS OF DIVIDENDS (UNAUDITED)
This information is provided to you to meet regulatory requirements and no
current action on your part is needed.
For the fiscal year ended October 31, 1997 dividends paid to you in cash or
reinvested in the amount of $0.049 per share for Domestic Prime Money Market
Portfolio are taxable as ordinary dividend income. None of this amount qualifies
for the dividend received deduction available to corporations. 3.7% of the
income was derived from obligations of the U.S. Treasury.
For the fiscal year October 31, 1997, dividends in the amount of $0.031 per
share for the Tax Exempt Money Market Portfolio are exempt from Federal
taxation. They may not be exempt from state or local taxation. You should
contact your tax adviser as to the state and local status of the dividend you
have received.
For the fiscal year ended October 31, 1997, dividends paid to you in cash or
reinvested in the amount of $0.048 per share for the U.S. Treasury Money Market
Portfolio are taxable as ordinary dividend income. None of this amount qualifies
for the dividend received deduction available to corporations. 50.0% of the
income was derived from obligations of the U.S. Treasury.
- --------------------------------------------------------------------------------
19
