<PAGE> 1
[LOGO]
THE
RESERVE
FUNDS
Founders of
"America's First
Money Fund"
810 Seventh Avenue, New York, NY 10019-5868
GENERAL INFORMATION AND 24-HOUR YIELD AND BALANCE INFORMATION
800-637-1700
This literature is not authorized for distribution to prospective investors
unless
preceded or accompanied by an appropriate current prospectus.
Distributor -- Resrv Partners, Inc.
RF/SEMI-ANNUAL 01/99
[LOGO]
THE
RESERVE
FUNDS
Founders of
"America's First
Money Fund"
-------------------------------------------------------------------------
----------
SEMI-ANNUAL REPORT
-------------------------------------------------------------------------
----------
THE RESERVE FUND
PRIMARY FUND
U.S. GOVERNMENT FUND
U.S. TREASURY FUND
NOVEMBER 30, 1998
<PAGE> 2
THE RESERVE FUND--PRIMARY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998--(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT NEGOTIABLE BANK CERTIFICATES OF DEPOSIT -- 76.36% (NOTE 1)
--------- ------------------------------------------------- --------
<C> <S> <C>
DOMESTIC -- 16.90%
$ 87,000,000 BankBoston, NA, 5.20%, 2/16/1999............................ $ 87,000,000
150,000,000 The Chase Manhattan Bank, 5.28%, 2/16/1999.................. 150,000,000
150,000,000 Chase Manhattan Bank U.S.A., Delaware, 5.20%, 2/15/1999..... 150,000,000
68,000,000 Morgan Guaranty Trust Co., N.Y., 5.26%, 2/12/1999........... 68,000,000
100,000,000 PNC Bank N.A., 4.99%, 7/27/1999(a).......................... 99,953,083
--------------
554,953,083
--------------
EURO -- 22.53%
150,000,000 Abbey National PLC, 5.20%, 2/8/1999......................... 150,000,000
150,000,000 ABN/AMRO, 5.25%, 2/12/1999.................................. 150,000,000
50,000,000 Bayerische Hypo-und Vereinsbank, 5.31, 12/9/1998............ 50,000,296
100,000,000 Bayerische Hypo-und Vereinsbank, 5.32%, 2/16/1999........... 100,002,109
150,000,000 Norddeutsche Landesbank, Girozentrale, 5.31%, 2/17/1999..... 150,003,206
140,000,000 Svenska Handelsbanken, 5.31%, 12/2/1998..................... 140,000,039
--------------
740,005,650
--------------
YANKEE -- 36.93%
50,000,000 Banque Nationale de Paris, 5.13%, 2/3/1998.................. 50,000,000
57,000,000 Banque Nationale de Paris, 5.27%, 12/7/1998................. 57,001,262
43,000,000 Banque Nationale de Paris, 5.14%, 2/26/1999................. 43,000,000
150,000,000 BHF Bank AG, 5.23%, 12/7/1998............................... 150,000,000
140,000,000 Canadian Imperial Bank of Commerce, 5.20%, 2/16/1999........ 140,000,000
150,000,000 Commerzbank AG, 5.21%, 2/5/1999............................. 150,000,000
150,000,000 Deutsche Bank, 5.25%, 2/8/1999.............................. 150,000,000
145,000,000 Dresdner Bank, 5.12%, 12/3/1998............................. 145,000,000
73,000,000 Lloyds Bank PLC, 5.31%, 2/16/1999........................... 73,000,770
110,000,000 UBS AG, 5.31%, 2/16/1999.................................... 110,002,320
145,000,000 Westdeutsche Landesbank Girozentrale, 5.12%, 12/3/1998...... 145,000,000
--------------
1,213,004,352
--------------
Total Negotiable Bank Certificates of Deposit............... 2,507,963,085
--------------
COLLATERALIZED PROMISSORY NOTES -- 13.34%(B)
150,000,000 International Nederlanden (US) Funding Corp., 5.07%,
2/26/1999................................................... 148,160,312
150,000,000 Societe Generale North America, Inc., 5.20%, 12/4/1998...... 149,935,063
140,000,000 Toronto-Dominion Holdings (U.S.A.), Inc., 5.26%,
12/2/1998................................................... 139,979,544
--------------
Total Collateralized Promissory Notes,...................... 438,074,919
--------------
REPURCHASE AGREEMENT -- 7.61%
250,000,000 Bear, Stearns & Co. Inc., 5.52%, 12/1/98 (collateralized by
$72,249,304 FGRA, $86,747,837 FGRM, $13,335,849 FNRA,
$75,293,853 FNRA and $13,066,749 FXRA, 5.00% to 7.50%, due
9/15/08 to 8/18/28)......................................... 250,000,000
--------------
TAXABLE MUNICIPAL BONDS -- 2.12%(A)
39,700,000 Florida Housing Finance Agency Housing Revenue Bonds 1993
Series A (LOC UBS AG) 4.96%, 1/1/2034....................... 39,700,000
25,100,000 Illinois Student Assistance, 4.93% (LOC Sallie Mae),
12/1/2022................................................... 25,100,000
5,000,000 New Hampshire Business Finance Authority Revenue Bonds 1992
Series B, 5.49%, 11/1/2017.................................. 5,000,000
--------------
Total Taxable Municipal Bonds............................... 69,800,000
--------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $3,264,135,014)..................... 99.43% 3,265,838,004
OTHER ASSETS, LESS LIABILITIES.............................. .57 18,722,018
------ --------------
NET ASSETS.................................................. 100.00% $3,284,560,022
====== ==============
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
BASED ON 3,284,560,022 SHARES OF BENEFICIAL INTEREST $.001
PAR VALUE OUTSTANDING...................................... $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
2
<PAGE> 3
THE RESERVE FUND--U.S. GOVERNMENT FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- REPURCHASE AGREEMENTS -- 99.37% --------
<C> <S> <C>
$205,000,000 Bear, Stearns & Co. Inc., 4.86%, 12/1/1998 (collateralized
by $215,282 GNMA, 6.00% - 7.50%,
due from 11/15/2005 to 11/15/2028)......................... $205,000,000
268,000,000 DLJ Securities Corporation, 5.45%, 12/1/1998 (collateralized
by $276,040,619 GNMA, 6.00% - 10.00%,
due from 9/15/1999 to 9/15/2038)........................... 268,000,000
196,000,000 Prudential Securities Inc., 5.45%, 12/1/1998 (collateralized
by $201,880,000 GNMA, 6.50% - 9.00%,
due from 11/15/2011 to 11/20/2028)......................... 196,000,000
8,000,000 Prudential Securities Inc., 5.45%, 12/1/1998 (collateralized
by $8,240,000 GNMA, 6.50% - 8.00%,
due from 9/15/2011 to 11/15/2028).......................... 8,000,000
50,000,000 Lehman Brothers Inc., 5.42%, 12/1/1998 (collateralized by
$51,494,154 GNMA, 6.76% - 12.00%
due from 6/15/2000 to 11/15/2028).......................... 50,000,000
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $727,000,000)....................... 99.37% 727,000,000
OTHER ASSETS, LESS LIABILITIES.............................. .63 4,616,574
------ --------------
NET ASSETS.................................................. 100.00% $ 731,616,574
====== ==============
</TABLE>
<TABLE>
<C> <S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICES PER SHARE
BASED ON 731,616,574 SHARES OF BENEFICIAL
INTEREST $.001 PAR VALUE OUTSTANDING....................... $1.00
---
---
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
THE RESERVE FUND--U.S. TREASURY FUND
STATEMENT OF NET ASSETS--NOVEMBER 30, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
--------- U.S. GOVERNMENT SECURITIES -- 98.95% --------
<C> <S> <C>
U.S. TREASURY BILLS -- 90.34%
$17,000,000 3.73% - 3.98%, 12/24/1998................................... $ 16,958,147
43,700,000 4.23% - 4.30%, 1/07/1999.................................... 43,510,389
22,500,000 3.89% - 4.58%, 1/21/1999.................................... 22,361,269
24,300,000 3.88% - 4.56%, 2/04/1999.................................... 24,114,053
2,500,000 4.40%, 2/11/1999............................................ 2,478,250
31,000,000 4.48% - 5.12%, 2/18/1999.................................... 30,673,960
40,000,000 4.51%, 2/25/1999............................................ 39,573,822
27,500,000 4.42% - 4.44%, 3/04/1999.................................... 27,188,825
20,000,000 4.57%, 3/11/1999............................................ 19,750,000
20,400,000 4.53%, 4/01/1999............................................ 20,096,593
------------
Total U.S. Treasury Bills................................... 246,705,308
------------
U.S. TREASURY NOTES -- 8.61%
20,000,000 5.13%, 12/31/1998........................................... 20,001,753
3,500,000 6.25%, 3/31/1999............................................ 3,514,324
------------
Total U.S. Treasury Notes................................... 23,516,077
------------
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS (COST $270,271,385)....................... 98.95% $ 270,221,385
OTHER ASSETS, LESS LIABILITIES.............................. 1.05 2,867,415
------ --------------
NET ASSETS.................................................. 100.00% $ 273,088,800
====== ==============
</TABLE>
<TABLE>
<C> <S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
BASED ON 273,088,800 SHARES OF BENEFICIAL
INTEREST $.001 PAR VALUE OUTSTANDING....................... $1.00
---
---
</TABLE>
- ---------------
(a) The interest rate is subject to change periodically. The rates reported are
those as of November 30, 1998. Securities which are payable on demand and
are collateralized by letter of credit, other bank credit agreements or
financial guaranty assurance agencies.
(b) Collateralized by bank letter of credit.
GLOSSARY
<TABLE>
<S> <C> <C>
FNRA and FXRA = Federal National Mortgage Association Adjustable Rate REMIC
FGRM = Federal Home Loan Mortgage Corp. Gold REMIC
FGRA = Federal Home Loan Mortgage Corp. Gold Adjustable Rate REMIC
</TABLE>
4
<PAGE> 5
SEE NOTES TO FINANCIAL STATEMENTS.
THE RESERVE FUND
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 1998--(UNAUDITED)
<TABLE>
<CAPTION>
U.S. U.S.
PRIMARY GOVERNMENT TREASURY
FUND FUND FUND
----------- ----------- ----------
<S> <C> <C> <C>
INTEREST INCOME (Note 1).................................... $81,432,778 $19,183,409 $6,482,710
----------- ----------- ----------
EXPENSES (Note 2)
Management fee............................................ 6,530,130 1,733,303 --
Comprehensive fee......................................... 1,017,871
Shareholder servicing, administration and general office
expenses................................................ 3,470,751 844,544 --
Distribution assistance................................... 2,660,138 631,329 226,510
Equipment expense......................................... 681,794 100,670 --
Occupancy costs........................................... 676,068 36,962 --
Professional fees......................................... 393,925 90,606 --
Stationery, printing and supplies......................... 218,583 53,391 --
Trustee fees.............................................. 21,083 5,062 --
Other..................................................... 17,192 29,514 --
----------- ----------- ----------
Total Expenses.......................................... 14,669,664 3,525,381 1,244,381
Less: expenses waived (Note 2).......................... -- -- (256,573)
----------- ----------- ----------
Net Expenses............................................ 14,669,664 3,525,381 987,808
----------- ----------- ----------
NET INVESTMENT INCOME, representing Net Increase in Net
Assets from Investment Operations......................... $66,763,114 $15,658,028 $5,494,902
=========== =========== ==========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 6
THE RESERVE FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
PRIMARY FUND U.S. GOVERNMENT FUND
------------------------------------- ------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1998* MAY 31, 1998 NOVEMBER 30, 1998* MAY 31, 1998
------------------ ------------ ------------------ ------------
<S> <C> <C> <C> <C>
INCREASE IN NET ASSETS FROM
INVESTMENT OPERATIONS
Net investment income
paid to shareholders as
dividends (Note 1)..... $ (66,763,114) $ (115,231,501) $ (15,658,028) $ (29,697,721)
--------------- ---------------- --------------- ---------------
FROM CAPITAL SHARE
TRANSACTIONS (at net
asset value of $1.00 per
share):
Net proceeds from sale of
shares................. 6,900,672,837 11,543,024,341 1,683,839,171 3,252,798,210
Dividends reinvested..... 66,763,114 115,231,501 15,658,028 29,697,721
Cost of shares
redeemed............... (6,390,495,992) (11,054,744,831) (1,620,348,247) (3,241,872,625)
--------------- ---------------- --------------- ---------------
Net increase derived from
capital share transactions
and from investment
operations................. 576,939,959 603,511,011 79,148,952 40,623,306
NET ASSETS:
Beginning of period........ 2,707,620,063 2,104,109,052 652,467,622 611,844,316
--------------- ---------------- --------------- ---------------
End of period.............. $ 3,284,560,022 $ 2,707,620,063 $ 731,616,574 $ 652,467,622
=============== ================ =============== ===============
<CAPTION>
U.S. TREASURY FUND
------------------------------------
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1998* MAY 31, 1998
------------------ ------------
<S> <C> <C>
INCREASE IN NET ASSETS FROM
INVESTMENT OPERATIONS
Net investment income
paid to shareholders as
dividends (Note 1)..... $ (5,494,902) $ (9,908,933)
------------- ---------------
FROM CAPITAL SHARE
TRANSACTIONS (at net
asset value of $1.00 per
share):
Net proceeds from sale of
shares................. 534,650,275 1,135,200,601
Dividends reinvested..... 5,494,902 9,908,933
Cost of shares
redeemed............... (506,816,670) (1,074,527,046)
------------- ---------------
Net increase derived from
capital share transactions
and from investment
operations................. 33,328,507 70,582,488
NET ASSETS:
Beginning of period........ 239,760,293 169,177,805
------------- ---------------
End of period.............. $ 273,088,800 $ 239,760,293
============= ===============
</TABLE>
- ---------------
* Unaudited.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)
(1) SIGNIFICANT ACCOUNTING POLICIES:
--------------------------------
The Reserve Fund (the "Fund") is registered under the Investment Company Act
of 1940 as a non-diversified, open-end investment company. The policies
summarized below are consistently followed in the preparation of its
financial statements in conformity with generally accepted accounting
principles.
A. The Fund's authorized shares of beneficial interest are unlimited. The
Fund's shares are divided into four series: These financial statements and
notes apply only to the Primary, U.S. Government and U.S. Treasury Funds
(collectively the "Funds").
B. Securities are valued at amortized cost, which approximates market value.
The amortized cost method values a security at cost plus accrued interest at
the time of purchase, and thereafter assumes a constant amortization to
maturity of any discount or premium, irrespective of intervening changes in
interest rates or market values. Pursuant to Rule 2a-7, for the purpose of
computing the average-weighted life to maturity, floating or variable rate
instruments, in which the Fund may invest, will be deemed to be: (1) the
notice period required before the Fund is entitled to receive payment of
principal or, (2) the period remaining until the instrument's next interest
rate adjustment.
C. It is the Fund's policy to comply with Subchapter M of the Internal
Revenue Code and to distribute all of its taxable income to its
shareholders. Accordingly, no Federal income tax provision is required.
D. Security transactions are recorded on a trade date basis; interest income
is accrued daily.
E. The Funds' custodian holds the securities owned subject to repurchase
agreements. The Fund's Investment Adviser determines that the resale amount
of the repurchase agreement is fully collateralized.
F. Net investment income on investments is distributed to shareholders daily
and automatically reinvested in additional Fund shares.
G. The Primary and U.S. Government Funds are charged only for their direct
or allocated share of expenses (in proportion to each Fund's net assets or
number of shareholder accounts).
H. The Funds may enter into repurchase agreements with financial
institutions and securities dealers who are deemed credit-worthy pursuant to
guidelines established by the Funds' Board of Trustees. The Investment
Adviser will follow procedures intended to provide that all repurchase
agreements are at least 100% collateralized as to principal and interest.
However, in the event of default or bankruptcy by the seller, realization
and/or retention of the collateral may be subject to legal proceedings.
(2) MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
--------------------------------------------------------
Pursuant to an Investment Management Agreement (the "Agreement") between
Reserve Management Company, Inc. ("RMCI") and the Fund, RMCI serves as the
Fund's Investment Adviser subject to the direction of the Board of Trustees.
Under the Agreement, RMCI is responsible for the supervision of the
day-to-day operations, manages the Fund's investments, effects purchases and
sales thereof, and absorbs certain promotional expenses. For its services as
Investment Adviser, RMCI receives a management fee calculated at an annual
rate of .50% of the first $500 million, .475% of the next $500 million, .45%
of the next $500 million, .425% of the next $500 million, and .40% in excess
of $2 billion of average daily net assets of both Primary Fund and U.S.
Government Fund. For its services as Investment Adviser to U.S. Treasury
Fund, RMCI receives a comprehensive fee, calculated at an annual rate of
.80% of the Fund's average daily net assets. The operating expenses charged
the Funds are limited to an annual rate of 1.00% (excluding brokerage fees
and commissions, interest charges, taxes and extraordinary legal fees and
expenses) of each Fund's average daily net assets. However, RMCI has
voluntarily agreed to reduce the comprehensive fee of U.S. Treasury Fund to
an annual rate of .60% of average net assets. For the six months ended
November 30, 1998, RMCI voluntarily reduced its fee by $256,573.
DISTRIBUTION ASSISTANCE:
-------------------------
Pursuant to a Plan of Distribution, each Fund may make assistance payments,
at a rate of .20% per annum of the average net asset value, to firms for
distribution assistance and administrative services provided to Fund
shareholders. The Plan requires RMCI to pay an equivalent amount from its
own resources.
(3) MANAGEMENT'S USE OF ESTIMATES:
----------------------------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
the dates of the financial statements and the reported amounts of income and
expenses during the reporting periods. Actual results could differ from
those estimates.
7
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS--(UNAUDITED)--(CONTINUED)
(4) COMPOSITION OF NET ASSETS:
-----------------------------
At November 30, 1998, the composition of each Fund's net assets was as
follows:
<TABLE>
<CAPTION>
PRIMARY U.S. GOVERNMENT U.S. TREASURY
-------------- --------------- -------------
<S> <C> <C> <C>
Par Value................................................... $ 3,284,560 $ 731,617 $ 273,089
Paid-in-Capital............................................. 3,281,275,462 730,884,957 272,815,711
-------------- ------------ ------------
Net Assets.................................................. $3,284,560,022 $731,616,574 $273,088,800
============== ============ ============
</TABLE>
(5) FINANCIAL HIGHLIGHTS:
----------------------
Contained below is per share operating performance data for a share of
beneficial interest outstanding of each Fund for the periods as indicated.
The information should be read in conjunction with the accompanying
financial data and related notes.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED FOR FISCAL YEARS ENDED MAY 31,
NOVEMBER 30, --------------------------------------------------------
PRIMARY FUND 1998(A) 1998 1997 1996 1995 1994
------------ ------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value beginning of period........ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
Net investment income from investment
operations............................... .0227 .0483 .0457 .0490 .0450 .0246
Less dividends from net investment
income................................... (.0227) (.0483) (.0457) (.0490) (.0450) (.0246)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ======== ========
Total Return............................... 4.69%(b) 4.83% 4.57% 4.90% 4.50% 2.46%
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------
Net assets end of period (millions)........ $3,284.6 $2,707.6 $2,104.1 $1,664.1 $1,602.5 $1,415.4
Ratio of expenses to average net assets.... .99%(b) .94% .98% .98% .97% .97%
Ratio of net investment income to average
net assets............................... 4.52%(b) 4.71% 4.47% 4.79% 4.42% 2.44%
U.S. GOVERNMENT FUND
-------------------------------------------
Net asset value beginning of period........ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
Net investment income from investment
operations............................... .0224 .0471 .0449 .0484 .0441 .0237
Less dividends from net investment
income................................... (.0224) (.0471) (.0449) (.0484) (.0441) (.0237)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ======== ========
Total Return............................... 4.61%(b) 4.71% 4.49% 4.84% 4.41% 2.37%
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------
Net assets end of period (millions)........ $ 731.6 $ 652.5 $ 611.8 $ 568.5 $ 721.8 $ 740.7
Ratio of expenses to average net assets.... 1.00%(b) .99% .99% 1.00% .99% .99%
Ratio of net investment income to average
net assets............................... 4.45%(b) 4.63% 4.40% 4.75% 4.31% 2.35%
U.S. TREASURY FUND
-------------------------------------------
Net asset value beginning of period........ $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
-------- -------- -------- -------- -------- --------
Net investment income from investment
operations............................... .0215 .0456 .0443 .0466 .0456 .0240
Less dividends from net investment
income................................... (.0215) (.0456) (.0443) (.0466) (.0456) (.0240)
-------- -------- -------- -------- -------- --------
Net asset value at end of period........... $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
======== ======== ======== ======== ======== ========
Total Return...................... 4.29%(b) 4.56% 4.43% 4.66% 4.56% 2.40%
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------
Net assets end of period (millions)........ $ 273.1 $ 239.8 $ 169.2 $ 142.8 $ 95.2 $ 7.4
Ratio of expenses to average net assets
(c)...................................... .77%(b) .77% .77% .79% .68% .73%
Ratio of net investment income to average
net assets............................... 4.28%(b) 4.46% 4.33% 4,53% 4.64% 2.38%
</TABLE>
- ---------------
(a) Unaudited.
(b) Annualized.
(c) Net of fees and other expenses. Had RMCI not undertaken to reduce expenses,
the actual expense ratios would have amounted to .97%, .97%, .99%, .93% and
.85% for the years ended May 31, 1998, 1997, 1996, 1995 and 1994,
respectively.
8
