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Previous: FINANCIAL FEDERAL CORP, SC 13G/A, 1999-02-09 |
Next: CROWLEY PORTFOLIO GROUP INC, N-30D, 1999-02-09 |
THE CROWLEY PORTFOLIO GROUP, INC.
FINANCIAL STATEMENTS
(Unaudited)
MAY 31, 1998
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
May 31, 1998 (Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
PREFERRED STOCKS
<S> <C> <C> <C>
4,000 Georgia Power, Series 7.75% .87% $ 102,252
8,000 Hartford Capital, Series A 1.75 204,504
6,000 Lincoln National Capital, Series 8.75% 1.35 157,878
10,000 Pacific Telesis, 7.56% 2.15 252,500
10,000 Pacificorp Capital, 8.25% 2.22 260,630
8,000 Travelers Capital I, 8.00% 1.78 209,000
------- -------------
Total Preferred Stocks (Cost $1,148,452) 10.12 1,186,764
------- -------------
CORPORATE BONDS & NOTES
Par Value
Auto & Truck
$ 500,000 Ford Holdings
7.35%, 11/07/11 4.44 520,400
60,000 Ford Motor Credit Co. Note
8.720%, 07/22/99 .53 61,800
30,000 Ford Motor Credit Co. Note
8.000%, 01/15/99 .24 30,365
300,000 General Motors
Corp. Note 7.700%, 04/15/16 2.85 334,263
50,000 General Motors
Corp. Note 9.625%, 12/01/00 .46 54,273
------- -------------
8.52 1,001,101
------- -------------
Banking
60,000 BankAmerica
Corp. Note 7.750%, 07/15/02 .54 63,534
30,000 BankAmerica
Corp. Note 7.875%, 12/01/02 .27 32,063
80,000 Bankers Trust New York
Corp. Note 9.500%, 06/14/00 .73 85,087
20,000 Bankers Trust New York
Corp. Note 9.400%, 03/01/01 .18 21,653
95,000 Banque Paribas New York
Note. 6.875%, 03/01/09 .82 96,395
40,000 Barclays American
Corp. Note 7.875%, 08/15/98 .34 40,162
20,000 Chase Manhattan
Note 10.125%, 11/01/00 .19 21,800
- -------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1998 (Unaudited)
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
Banking - (Continued)
$ 300,000 Chase Manhattan
Zero Coupon, 08/15/17 .59% $ 69,000
40,000 First Union Corp.
9.450%, 06/15/99 .35 41,368
100,000 First Union Corp.
Note 9.890%, 03/13/01 .94 109,755
20,000 Heller Financial Inc.
Note 8.000%, 12/15/98 .17 20,203
------- -------------
5.12 601,020
------- -------------
Broadcasting & Cable T.V.
50,000 Cox Communications, Inc.
Note 8.875%, 03/01/01 .46 53,523
------- -------------
Chemical (Basic)
400,000 DuPont E.I.
Note 8.250%, 1/15/22 3.73 437,184
------- -------------
Chemical (Diversified)
80,000 ICI Wilmington
Note 9.500%, 11/15/00 .73 85,989
------- -------------
Electric Utility
50,000 Alabama Power Company
1st Mortgage, 8.500%, 05/01/22 .45 52,851
70,000 Alabama Power Company
1st Mortgage, 8.300%, 07/01/22 .63 73,576
510,000 Appalachian Power Company
8.50%, 12/01/22 4.65 545,802
250,000 Duquesne Lighting Company
Note 7.625%, 04/15/23 2.25 263,670
217,000 Houston Lighting & Power
Note 7.750%, 03/15/23 1.95 229,070
35,000 Mississippi Power & Light Co.
General Ref Mortgage
8.500%, 01/05/23 .32 36,999
100,000 Ohio Power Co.
Note 6.875%, 06/01/03 .87 101,998
250,000 Virginia Electric & Power Co.
Note 7.50%, 06/01/23 2.22 260,702
29,000 Washington Gas Light Co.
1st Mortgage 8.625%, 03/01/17 .26 30,436
400,000 Wisconsin Power & Light Company
1st Mortgage, 9.30%, 12/01/25 3.59 421,684
- -----------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1998 (Unaudited)
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
Electric Utility - (Continued)
$ 245,000 Wisconsin Electric Power
1st Mortgage, 7.75%, 01/15/23 2.22% $ 260,082
------- -------------
19.41 2,276,870
------- -------------
<PAGE>
Electrical Equipment Industry
100,000 General Electric Capital Corp.
Corp. Deb. Variable Rate, 05/01/18 .86 101,359
------- -------------
Food Processing
100,000 Quaker Oats Co.
Medium-Term Note 9.000%, 12/17/01 .93 109,130
------- -------------
Insurance (Diversified)
185,000 Aetna Services, Inc.
Note 7.625%, 08/15/26 1.67 196,272
------- -------------
Machinery (Construction & Mining)
200,000 Caterpillar Inc.
Note 6.810%, 08/24/99 1.73 202,476
------- -------------
Oil & Gas
50,000 Societe Nat. Elf Aquitaine
Note 7.750%, 05/01/99 .43 50,807
------- -------------
Paper and Forest Products
50,000 International Paper Company
Deb. 9.700%, 03/15/00 .45 53,000
------- -------------
Retail Building Supply Industry
300,000 Loews Corp.
Note 7.625%, 06/01/23 2.66 311,952
------- -------------
Retail Store Industry
50,000 Dayton Hudson Corp.
Note 10.000%, 12/01/00 .46 54,555
100,000 K mart Corp.
Pass Thru Sec K-1 8.990%, 07/05/10 .90 105,250
30,000 Wal Mart Stores
Note 9.100%, 07/15/00 .27 31,926
------- -------------
1.63 191,731
------- -------------
- ------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1998 (Unaudited)
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
Savings & Loan Industry
$ 200,000 Cap. Secs Series, 8.206%, 02/01/27 1.85% 216,500
------- -------------
Securities Brokerage Industry
35,000 Bear Stearns Companies
Note 9.375%, 06/01/01 .33 38,161
400,000 Bear Stearns Companies
Note 7.500%, 12/16/16 3.44 404,000
200,000 Bear Stearns Companies
Note 7.000%, 04/02/18 1.72 202,000
200,000 Lehman Bros Holding Inc.
Note 8.500%, 08/01/07 1.93 226,406
40,000 Morgan Stanley Group
Note 7.875%, 12/15/98 .34 40,401
30,000 Morgan Stanley Group
Note 8.100%, 06/24/02 .28 32,044
------- -------------
8.04 943,012
------- -------------
Telecommunications Service Industry
150,000 GTE North, Inc.
Note, 7.625%, 05/15/26 1.34 156,984
100,000 Illinois Bell Telephone Co.
Deb. 8.500%, 04/22/26 .89 104,031
250,000 U.S. West Capital Funding, Inc.
Note, 6.750%, 10/01/05 2.20 258,593
------- -------------
4.43 519,608
------- -------------
Tobacco
100,000 Philip Morris
8.250%, 10/15/03 .92 108,156
130,000 Philip Morris
Note 7.750%, 05/01/99 1.13 131,868
------- -------------
2.05 240,024
------- -------------
Total Corporate Bonds & Notes (Cost $7,486,659) 64.70 7,591,558
------- -------------
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements
<PAGE>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1998 (Unaudited)
<TABLE>
Market
Percent of Value
Par Value Net Assets (Note 1-A)
U.S. GOVERNMENT AGENCY
$ 200,000 Federal Home Loan Bank
<S> <C> <C> <C>
Zero Coupon, 07/10/17 .36% $ 42,156
200,000 Federal Home Loan Mortgage Corp.
6.290%, 02/07/06 1.70 200,000
1,000,000 Federal Home Loan Bank
Zero Coupon, 07/28/17 1.90 222,650
80,000 Federal Home Loan Mortgage Corp.
8.325%, 07/15/09 .71 82,224
500,000 Federal Home Loan Bank
7.000%, 01/30/13 4.27 501,250
500,000 Federal Home Loan Mortgage Corp.
Zero Coupon, 05/07/17 .94 110,075
200,000 Federal National Mortgage Association Deb.
8.400%, 10/25/04 1.77 208,000
555,000 Federal Home Loan Mortgage Corp.
7.05%, 11/21/11 4.77 559,595
------- -------------
Total U.S. Government Agency (Cost $1,919,739) 16.42 1,925,950
------- -------------
Total Investments (Cost $10,554,850) (a) 91.24% 10,704,272
Other Assets in excess of Liabilities 8.76% 1,028,101
------- -------------
Net Assets 100.00% $ 11,732,373
======= =============
(a) Aggregate cost for federal income tax purposes is $10,554,850.
At May 31, 1998, unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Unrealized appreciation $218,472
Unrealized depreciation (69,050)
---------
Net unrealized appreciation $149,422
========
</TABLE>
- ------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
May 31, 1998 (Unaudited)
<TABLE>
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
GENERAL EQUITY FUNDS
Aggressive Growth
<S> <C> <C> <C>
2,323 Strong Opportunity 1.47% $ 95,283
3,230 Twentieth Century Ultra 1.58 101,949
3,402 Wasatch Aggressive Equity 1.40 90,854
------- ------------
4.45 288,086
------- ------------
Balanced
3,309 Columbia Balanced 1.17 76,003
1,092 Dodge & Cox Balanced 1.18 76,124
------- ------------
2.35 152,127
------- ------------
Corporate - High Yield
9,294 Federated High Yield Trust 1.38 89,499
8,939 Fidelity Capital & Income 1.46 94,749
6,729 Strong High Yield 1.26 81,283
4,980 T. Rowe Price High Yield .68 44,071
------- ------------
4.78 309,602
------- ------------
Growth
2,759 Fidelity Stock Selection 1.29 83,403
3,003 Harbor Capital Appreciation 1.58 101,947
3,055 Longleaf Partners 1.41 91,244
1,084 Nicholas 1.49 96,523
2,079 Oakmark 1.39 90,127
3,958 Scudder Value 1.51 97,838
3,310 Soundshore 1.56 101,040
3,292 Warburg Capital Appreciation 1.03 66,770
------- ------------
11.26 728,892
------- ------------
Growth/Income
1,939 Babson Value 1.53 99,050
1,008 Dodge & Cox Stock 1.57 101,361
6,062 Mutual Beacon 1.47 95,048
3,213 Neuberger & Berman Guardian 1.44 93,070
5,812 Pelican 1.66 107,524
4,036 Steinroe Growth & Income 1.55 100,083
3,696 American Century Growth & Income 1.55 100,898
------- ------------
10.77 697,034
------- ------------
- ------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 1998 (Unaudited)
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
GENERAL EQUITY FUNDS
Income
8,120 Berwyn Income 1.59% $ 102,715
3,786 Lindner Dividend 1.63 105,257
6,043 Gabelli Equity Income 1.64 106,832
------- ------------
4.86 314,804
------- ------------
Small Company
2,826 Heartland Value 1.59 102,617
3,080 Meridian 1.56 101,210
2,034 PBGH Growth .81 52,360
1,276 Parkstone Small Cap. Series "B" .49 31,938
------- ------------
4.45 288,125
------- ------------
INTERNATIONAL EQUITY FUNDS
Foreign Equity
1,869 Managers International Equity 1.54 99,884
10,015 Twentieth Century International Equity 1.58 102,054
------- ------------
3.12 201,938
------- ------------
Global Equity
4,561 Founders Worldwide Growth 1.73 112,057
2,946 Janus Worldwide Fund 2.10 135,813
------- ------------
3.83 247,870
------- ------------
Pacific Equity
6,655 T. Rowe Price - New Asia .51 32,477
------- ------------
Total Investments (Cost $2,919,251) (a) 50.38% 3,260,955
Other Assets Less Liabilities 49.62% 3,211,276
------- ------------
Net Assets 100.00% $ 6,472,231
======= ============
(a) Aggregate cost for federal income tax purposes is $2,919,251.
At May 31, 1998 unrealized appreciation (depreciation)
securities for federal income tax purposes is as follows:
Unrealized appreciation $388,960
Unrealized depreciation (47,256)
Net unrealized appreciation $341,704
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements
<PAGE>
THE CROWLEY PORTFOLIO GROUP, INC.
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1998 (Unaudited)
<TABLE>
Income Diversified
Portfolio Portfolio
ASSETS
Investments at market value
(Identified cost $10,554,850 and $2,919,251
<S> <C> <C>
respectively) (Note1) $ 10,704,272 $ 3,260,955
Cash 862,978 3,212,476
Interest Receivable 175,681 -
-------------- ------------
Total assets 11,742,931 6,473,431
-------------- ------------
LIABILITIES
Accrued expenses 10,558 1,200
-------------- ------------
Total liabilities 10,558 1,200
-------------- ------------
NET ASSETS
(500 million shares of $.01 par value common stock
authorized; 1,104,170 and 471,676 shares issued
and outstanding, respectively) $ 11,732,373 $ 6,472,231
============== ============
NET ASSET VALUE
Offering and redemption price per share
(Net assets/shares outstanding) $10.63 $13.72
====== ======
At May 31, 1998, net assets consisted of:
Paid-in capital $ 11,629,227 $ 6,006,636
Distributions in excess of net investment income (58,291) (11,253)
Accumulated undistributed net realized gains 12,015 135,144
Net unrealized appreciation of investments 149,422 341,704
-------------- ------------
$ 11,732,373 $ 6,472,231
============== ============
</TABLE>
- ------------------------------------------------------------------------------
See accompanying notes to financial statements
<PAGE>
THE CROWLEY PORTFOLIO GROUP, INC.
STATEMENT OF OPERATIONS
Six Months ended May 31, 1998 (Unaudited)
<TABLE>
Income Diversified
Portfolio Portfolio
INVESTMENT INCOME
<S> <C> <C>
Interest income $ 273,720 $ 817
Dividend income 45,900 30,893
Other income - 34
----------- --------
Total income 319,620 31,744
---------- ----------
EXPENSES
Investment advisory fees (Note 2) 28,872 15,410
Other Expenses 37,751 14,329
---------- ----------
Total expenses 66,623 29,739
---------- ----------
Investment income - net 252,997 2,005
---------- ----------
REALIZED AND UNREALIZED GAIN
ON INVESTMENTS
Net realized gain from security transactions 12,015 -
Capital gain distribution from regulated
investment companies - 135,144
Change in unrealized appreciation of
investments for the year 18,399 64,761
---------- ----------
Net gain on investments 30,414 199,905
---------- ----------
Net increase in net assets resulting from operations $ 283,411 $ 201,910
========== ==========
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
Six Months Ended Year Ended
May 31, 1998 November 30,
(Unaudited) 1997
OPERATIONS
<S> <C> <C>
Investment income - net $ 252,997 $ 577,011
Net realized gain (loss) on investments 12,015 (47,021)
Change in unrealized appreciation 18,399 122,332
------------- ------------
Net increase in net assets resulting from operations 283,411 652,322
DISTRIBUTIONS TO SHAREHOLDERS
From investment income - net ($.68 and $.65 per share) (569,758) (556,624)
CAPITAL SHARE TRANSACTIONS (a) 2,645,366 (251,109)
------------- ------------
Total increase (decrease) 2,359,019 (155,411)
NET ASSETS
Beginning of period 9,373,354 9,528,765
------------- ------------
End of Period
(including undistributed (distributions in excess of)
net investment income of $(58,291) and $513,212,
respectively) $ 11,732,373 $ 9,373,354
============= ============
</TABLE>
(a) Summary of capital share activity follows:
<TABLE>
Six Months Ended Year Ended
May 31, 1998 November 30,
(Unaudited) 1997
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 275,319 $ 2,902,406 51,646 $ 545,779
Shares issued in reinvestment of distributions 54,837 569,758 54,518 556,624
--------- ------------ ---------- -------------
330,156 3,472,164 106,164 1,102,403
Shares redeemed (77,787) (826,798) (128,371) (1,353,512)
--------------------------------- ----------- ----------- ----------- -------------
Net increase (decrease) 252,369 $ 2,645,366 (22,207) $ (251,109)
========= ============ ========== =============
</TABLE>
- ------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
Six Months Ended Year Ended
May 31, 1998 November 30,
(Unaudited) 1997
OPERATIONS
<S> <C> <C>
Investment income - net $ 2,005 $ 20,512
Capital gain distribution from regulated
investment companies 135,144 55,919
Change in unrealized appreciation 64,761 132,478
------------ ------------
Net increase in net assets resulting from operations 201,910 208,909
DISTRIBUTIONS TO SHAREHOLDERS
From investment income - net
($.08 and $.18 per share) (13,884) (23,277)
From net realized gains on investments
($.32 and $.44 per share) (55,535) (56,464)
CAPITAL SHARE TRANSACTIONS (a) 4,099,871 610,496
------------ ------------
Total increase 4,232,362 739,664
NET ASSETS
Beginning of period 2,239,869 1,500,205
------------ ------------
End of period
(Including undistributed (distribution in excess of)
net investment income of $(11,253) and $0 respectively) $ 6,472,231 $ 2,239,869
============ ============
</TABLE>
<TABLE>
(a) Summary of capital share activity follows:
Six Months Ended Year Ended
May 31, 1998 November 30,
(Unaudited) 1997
Shares Amount Shares Amount
<S> <C> <C> <C> <C>
Shares sold 300,650 $ 4,142,117 62,490 $ 773,189
Shares issued in reinvestment of distributions 5,514 69,419 6,934 79,741
-------- ------------ --------- -----------
306,164 4,211,536 69,424 852,930
Shares redeemed (8,469) (111,665) (18,966) (242,434)
------------------------------------ ----------- ------------ ----------- ----------
Net increase 297,695 $ 4,099,871 50,458 $ 610,496
====================================== ============ ============ =========== ===========
</TABLE>
- -----------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
<TABLE>
Six Months Ended
May 31, 1998 Year Ended November 30,
---------------------------------------------------------------
(Unaudited) 1997 1996 1995 1994 1993
--------------------- ---- ---- ---- ---- ----
NET ASSET VALUE
<S> <C> <C> <C> <C> <C> <C>
Beginning of period $11.00 $10.90 $11.08 $10.69 $11.57 $10.58
------ ------ ------ ------ ------ ------
INCOME FROM
INVESTMENT OPERATIONS
Net investment income .30 .69 .59 .65 .61 .65
Net gains (losses) on securities
(both realized and unrealized) .01 .06 (.15) .37 (.76) .40
--------- -------- ------ -------- -------- ---------
Total from investment operations .31 .75 .44 1.02 (.15) 1.05
--------- -------- -------- ------- -------- --------
LESS DISTRIBUTIONS
Dividends (from net investment income) (.68) (.65) (.62) (.63) (.66) (.06)
Distributions (from realized capital gains) - - - - (.07) -
----------- ----------- ---------- ------- ---- ---------
-
Total distributions (.68) (.65) (.62) (.63) (.73) (.06)
--------- --------- -------- --------- --------- --------
NET ASSET VALUE
End of period $10.63 $11.00 $10.90 $11.08 $10.69 $11.57
====== ====== ====== ====== ====== ======
TOTAL RETURN 2.96% 7.34% 4.16% 10.12% (1.43)% 9.97%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $11,732 $9,373 $9,529 $8,940 $6,654 $5,423
Ratio of expenses to average net assets 1.36% (a) 1.39% 1.39% 1.43% 1.37% 1.23%
Ratio of net investment income to
average net assets 5.20% (a) 6.22% 5.62% 6.43% 6.28% 6.27%
Portfolio turnover rate 43.74% 22.81% 66.18% 31.60% 14.45% 19.17%
(a) Annualized
</TABLE>
- -------------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
<TABLE>
Period
April 1, 1995 (a)
Six Months Ended Year Ended To
May 31, 1998 November 30, November 30,
(Unaudited) 1997 1996 1995
---- ---- -----------------------
NET ASSET VALUE
<S> <C> <C> <C> <C>
Beginning of period $12.87 $12.15 $10.71 $10.00
------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .01 .17 .05 -
Net gains on securities (both realized and unrealized) 1.24 1.17 1.43 .71
-------- -------- -------- ---------
Total from investment operations 1.25 1.34 1.48 .71
-------- -------- -------- ---------
LESS DISTRIBUTIONS
Dividends (from net investment income) (.08) (.18) (.04) -
Distributions (from realized capital gains) (.32) (.44) - -
--------- -------- -------- ----------
Total distributions (.40) (.62) (.04) -
--------- -------- --------- ---------
NET ASSET VALUE
End of period $13.72 $12.87 $12.15 $10.71
====== ====== ====== ======
TOTAL RETURN 9.99% 11.64% 13.87% 7.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $6,472 $2,240 $1,500 $962
Ratio of expenses to average net assets 1.83% (b) 1.87% 2.22% 2.06% (b)
Ratio of net investment income (loss) to
average net assets .12% (b) 1.08% .46% (.09)%(b)
Portfolio turnover rate 11.32% - 20.69% -
(a) Effective date of the Portfolio's initial registration under the Securities
Act of 1933, as amended.
(b) Annualized.
</TABLE>
- --------------------------------------------------------------------------
See accompanying notes to financial statements
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 1998 (Unaudited)
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Crowley Portfolio Group, Inc. (the "Fund") is an open-end diversified
investment company currently offering two series of shares: The Crowley
Income Portfolio, and The Crowley Diversified Management Portfolio (each a
"Portfolio").
The objective of The Crowley Income Portfolio is to maximize current
income, consistent with prudent risk, i.e., reasonable risk to principal.
The objective of The Crowley Diversified Management Portfolio is high total
return consistent with reasonable risk. The Portfolios will use a variety
of investment strategies in an effort to balance portfolio risks and to
hedge market risks. There can be no assurance that the objectives of the
Portfolios will be achieved.
SECURITY VALUATION
Portfolio securities, which are fixed income securities, are valued by
using market quotations, prices provided by market-makers or estimates
of market values obtained from yield data relating to instruments or
securities with similar characteristics, in accordance with procedures
established in good faith by the Board of Directors. Securities listed
on an exchange or quoted on a national market system are valued at the
last sales price. Investments in regulated investment companies are
valued at the net asset value per share as quoted by the National
Association of Securities Dealers, Inc. Money market securities with
remaining maturities of less than 60 days are valued on the amortized
cost basis as reflecting fair value. All other securities are valued at
their fair value as determined in good faith by the Board of Directors.
FEDERAL INCOME TAXES
The Portfolios intend to comply with the requirements of the Internal
Revenue Code necessary to qualify as regulated investment companies and
as such will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is
distributed to shareholders. At November 30, 1997, the Income Portfolio
had a capital loss carryforward for Federal income tax purposes of
approximately $254,700, of which $36,100 expires in the year 2002 and
$28,400 in 2003, $143,200 in 2004 and $47,000 in 2005.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS TO
SHAREHOLDERS
As is common in the industry, security transactions are accounted for
on the trade date (the date the securities are purchased or sold).
Interest income is recorded on the accrual basis. Bond premiums and
discounts are amortized in accordance with Federal income tax
regulations. Dividend income and distributions to shareholders are
recorded on the ex-dividend date.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
In preparing financial statements in conformity with generally accepted
accounting principles, management makes estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
- -------------------------------------------------------------------------------
<PAGE>
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
May 31, 1998 (Unaudited)
(2) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Crowley & Crowley Corp. (the "Advisor") provides the Fund with management
and administrative services pursuant to a Management Agreement.
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of 60% of the average
daily net assets of The Crowley Income Portfolio and 1% of the average
daily net assets of The Crowley Diversified Management Portfolio. The
Advisor pays all expenses incurred by it in rendering management services
to the Fund including the costs of accounting, bookkeeping and data
processing services provided in its role as administrator. The Portfolios
bear their costs of operations, which include, but are not limited to:
advisory fees; taxes; brokerage fees; accounting fees; legal fees;
custodian and auditing fees; and printing and other expenses which are not
expressly assumed by the Advisor under the Management Agreement.
The Crowley Financial Group, Inc. ("TCFG") serves as the Portfolio
shareholders' servicing agent. As shareholder servicing agent, TCFG will
act as the Transfer, Dividend Disbursing and Redemption Agent to the
Portfolios. As compensation for its services, TCFG receives a fee computed
daily and payable monthly, at the annualized rate of .40% of the average
daily net assets of each Portfolio. During the six months ended May 31,
1998, TCFG earned fees of $19,251 and $6,164 from the Income Portfolio and
Diversified Management Portfolio, respectively.
Crowley Securities Corp. serves as distributor of the Fund's shares.
Certain officers and directors of the Fund are also officers of Crowley &
Crowley Corp., Crowley Securities Corp. and The Crowley Financial Group,
Inc.
(3) PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments,
aggregated $5,369,241 and $2,136,137, respectively, in the Income Portfolio
and $1,309,424 and $183,691, respectively, in the Crowley Diversified
Management Portfolio.
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