o BT INSTITUTIONAL FUNDS o
-------------------
INSTITUTIONAL
TREASURY MONEY FUND
-------------------
ANNUAL REPORT
---------------
DECEMBER o 1997
<PAGE>
Institutional Treasury Money Fund
Table of Contents
Letter to Shareholders 3
Institutional Treasury Money Fund
Statement of Assets and Liabilities 4
Statement of Operations 4
Statement of Changes in Net Assets 5
Financial Highlights 6
Notes to Financial Statements 7
Report of Independent Accountants 8
Treasury Money Portfolio
Schedule of Portfolio Investments 9
Statement of Assets and Liabilities 11
Statement of Operations 11
Statement of Changes in Net Assets 12
Financial Highlights 12
Notes to Financial Statements 13
Report of Independent Accountants 14
2
<PAGE>
Institutional Treasury Money Fund
Letter to Shareholders
By staying disciplined to the purchase of high quality instruments and actively
adjusting duration and sector allocation as market conditions changed, the
manager of the Institutional Treasury Money Fund (the "Fund") was able to
produce competitive yields. In fact, the Fund's annualized 7-day effective yield
of 5.56% as of December 31, 1997 was higher than the 5.33% yield of the IBC
Government Only-Institutional Only Money Funds average.* The 7-day current net
yield was 5.42% for the Fund as of December 31, 1997.
MARKET ACTIVITY
For virtually the entire year, the pace of economic growth remained above-trend
and inflation was low. Unemployment continued to fall, putting pressure on labor
costs, but productivity improvement was strong enough to more than offset the
rising costs. Against this exceptional backdrop, the money markets were rather
quiet, with yields remaining relatively stable and the money market yield curve
reasonably flat.
- ---------------------------------------
Investment Instruments
Direct obligations of U.S. Treasury and
repurchase agreements collateralized by
U.S. Treasury obligations.
- ---------------------------------------
The only real interruption to this stability was early in the year. A rapidly
growing economy in the first quarter, supported by strong consumer spending and
home building, prompted the Federal Reserve Board to increase the Fed Funds rate
from 5.25% to 5.50% on March 25, 1997--the first increase in over two years.
Following this, inflationary pressures did not increase, signs pointed to a
slowing economy, and the Federal Reserve Board remained on hold throughout the
rest of the year. A high level of consumer confidence, strong employment gains
and rising incomes further helped support the low price volatility within the
money markets. During the fourth quarter, developments in the Far East
overshadowed the ongoing favorable performance of the U.S. economy. However, to
date, there has been little evidence of any meaningful impact of the turmoil
abroad on domestic activity.
- -----------------------------------------
Objective
Seeks high current income consistent with
liquidity and preservation of capital.
- -----------------------------------------
INVESTMENT REVIEW
We remained somewhat defensive, with a shorter-than-benchmark average maturity
position, through much of the first quarter of 1997. Once the Federal Reserve
Board raised rates in late March and economic growth began to wane in the second
quarter, we moved to a neutral stance. We maintained a neutral to
shorter-than-benchmark maturity throughout most of the rest of the year for two
primary reasons. First, the Federal Reserve Board was seemingly on hold, and we
saw no benefit in extending maturity along a flat yield curve. Second,
repurchase agreement yields were higher than those of U.S. Treasuries during
this period, and thus we increased the Portfolio's allocation to these
shorter-term instruments. This strategy proved to be effective in producing
highly competitive Fund returns.
- -------------------
Ratings
S&P: AAAm**
Moody's: AAA
- -------------------
MANAGER OUTLOOK
As we enter 1998, the underlying fundamentals impacting the consumer--a tight
labor market, low inflation, low interest rates and strong economic growth--are
similar to those of most of 1997. Current data also supports the notion that the
Federal Reserve Board is on hold. However, the Asian crisis still looms, as the
delayed effect of the retrenchment in the region may still filter into the U.S.
Given this scenario, we expect a continued flight to quality, which will allow
short-term U.S. Treasuries to remain expensive to the repurchase agreement
market for some time. Seeing no reason to extend at this time, we intend to
maintain a short-to-neutral average maturity for the near term.
- -------------------------------------------
Status at December 31, 1997
Seven day effective yield: 5.56%
Average maturity: 39 days
Net Assets: $1,852.6 million
- -------------------------------------------
Diversification of Portfolio Investments
By Asset Type as of December 31, 1997
(percentages are based on market value)
[Pie Chart Appears Here -- See Percentages Below]
U.S. Treasury
Bills 2%
Repurchase
U.S. Treasury Agreements
Notes 18% 80%
We will, of course, continue to closely observe economic conditions and how they
affect the financial markets, as we seek to provide high current income
consistent with liquidity and capital preservation.
As always, we appreciate your ongoing support of the BT Institutional Treasury
Money Fund, and we look forward to continuing to serve your investment needs for
many years ahead.
/s/ Darlene M. Rasel
--------------------
Darlene M. Rasel
Portfolio Manager of the
Treasury Money Portfolio
December 31, 1997
- ----------------
* Past performance is not indicative of future results. Yields will vary.
Yields quoted for money market funds most closely reflect the fund's current
earnings. Although money market funds seek to maintain a share value of
$1.00, there is no guarantee that they will be able to do so. Mutual funds
are not bank deposits or obligations of any bank, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including possible loss of principal.
** S&P evaluates a number of factors, including credit quality, market price
exposure and management. Aaa ratings by Moody's are judged to be of an
investment quality similar to Aaa-rated fixed income obligations. Ratings are
subject to change and do not remove market risks.
3
<PAGE>
Institutional Treasury Money Fund
Statement of Assets and Liabilities December 31, 1997
<TABLE>
<S><C>
Assets
Investment in Treasury Money Portfolio, at Value $ 1,850,584,969
Prepaid Expenses 3,411
Receivable for Shares of Beneficial Interest Subscribed 2,550,000
---------------
Total Assets 1,853,138,380
---------------
Liabilities
Due to Bankers Trust 77,340
Dividends Payable 253,450
Accrued Expenses 173,892
---------------
Total Liabilities 504,682
---------------
Net Assets $ 1,852,633,698
===============
Shares Outstanding ($0.001 par value per share, unlimited number of shares of beneficial interest authorized) 1,852,468,160
===============
Net Asset Value, Offering and Redemption Price Per Share (net assets divided by shares outstanding) $ 1.00
===============
Composition of Net Assets
Paid-in Capital $ 1,852,468,160
Accumulated Net Realized Gain from Investment Transactions 165,538
---------------
Net Assets, December 31, 1997 $ 1,852,633,698
===============
</TABLE>
- --------------------------------------------------------------------------------
Statement of Operations For the year ended December 31, 1997
Investment Income
Income Allocated from Treasury Money Portfolio, net $ 87,012,164
---------------
Expenses
Administration and Services Fees 819,884
Printing and Shareholder Reports 11,500
Registration Fees 301,387
Professional Fees 9,310
Trustees Fees 8,140
Miscellaneous 26,464
---------------
Total Expenses 1,176,685
Less: Expenses Absorbed by Bankers Trust (356,801)
---------------
Net Expenses 819,884
---------------
Net Investment Income 86,192,280
Net Realized Gain from Investment Transactions 7,796
---------------
Net Increase in Net Assets from Operations $ 86,200,076
===============
See Notes to Financial Statements on Page 7
4
<PAGE>
Institutional Treasury Money Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1997 December 31, 1996
----------------- -----------------
<S><C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment Income $ 86,192,280 $ 65,341,410
Net Realized Gain from Investment Transactions 7,796 145,965
--------------- ----------------
Net Increase in Net Assets from Operations 86,200,076 65,487,375
--------------- ----------------
Distributions to Shareholders
Net Investment Income (86,192,280) (65,341,410)
--------------- ----------------
Total Distributions (86,192,280) (65,341,410)
--------------- ----------------
Capital Transactions in Shares of Beneficial Interest (at Net Asset Value of
$1.00 per share)
Proceeds from Sales of Shares 12,747,952,607 11,700,024,194
Dividend Reinvestments 50,201,504 29,490,927
Cost of Shares Redeemed (12,369,833,138) (11,630,425,440)
--------------- ----------------
Total Increase from Capital Transactions in Shares of Beneficial Interest 428,320,973 99,089,681
--------------- ----------------
Total Increase in Net Assets 428,328,769 99,235,646
Net Assets
Beginning of Year 1,424,304,929 1,325,069,283
--------------- ----------------
End of Year $ 1,852,633,698 $ 1,424,304,929
=============== ================
</TABLE>
See Notes to Financial Statements on Page 7
5
<PAGE>
Institutional Treasury Money Fund
Financial Highlights
Contained below are selected data for a share outstanding, total investment
return, ratios to average net assets and other supplemental data for each of the
years indicated for the Institutional Treasury Money Fund.
<TABLE>
<CAPTION>
For the years ended December 31,
---------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S><C>
Per Share Operating Performance:
Net Asset Value, Beginning of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------- ------- ------- -------- --------
Income from Investment Operations
Net Investment Income 0.05 0.05 0.06 0.04 0.03
Net Realized Gain (Loss) from Investment Transactions 0.00+ 0.00+ 0.00+ (0.00)+ 0.00+
------- ------- ------- -------- --------
Total from Investment Operations 0.05 0.05 0.06 0.04 0.03
------- ------- ------- -------- --------
Distributions to Shareholders
Net Investment Income (0.05) (0.05) (0.06) (0.04) (0.03)
Net Realized Gain from Investment Transactions -- -- (0.00)+ -- (0.00)+
------- ------- ------- -------- --------
Total Distributions (0.05) (0.05) (0.06) (0.04) (0.03)
------- ------- ------- -------- --------
Net Asset Value, End of Year $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======= ======= ======== ========
Total Investment Return 5.42% 5.22% 5.71% 3.92% 2.94%
Supplemental Data and Ratios:
Net Assets, End of Year (000s omitted) $1,852,634 $1,424,305 $1,325,069 $ 182,101 $ 143,966
Ratios to Average Net Assets:
Net Investment Income 5.26% 5.10% 5.53% 3.97% 2.88%
Expenses, Including Expenses of the
Treasury Money Portfolio 0.25% 0.25% 0.25% 0.25% 0.25%
Decrease Reflected in Above Expense Ratio Due
to Absorption of Expenses by Bankers Trust 0.02% 0.01% 0.07% 0.04% 0.03%
</TABLE>
- --------------
+ Less than $0.01 per share.
See Notes to Financial Statements on Page 7
6
<PAGE>
Institutional Treasury Money Fund
Notes to Financial Statements
Note 1--Organization and Significant Accounting Policies
A. Organization
BT Institutional Funds (the "Trust") is registered under the Investment Company
Act of 1940 (the "Act"), as amended, as an open-end management investment
company. The Trust was organized on March 26, 1990, as an unincorporated
business trust under the laws of the Commonwealth of Massachusetts. The
Institutional Treasury Money Fund (the "Fund") is one of the institutional funds
offered to investors by the Trust. The Fund commenced operations and began
offering shares of beneficial interest on July 25, 1990. The Fund invests
substantially all of its assets in the Treasury Money Portfolio (the
"Portfolio"). The Portfolio is an open-end management investment company
registered under the Act. The Fund seeks to achieve its investment objective by
investing all of its investable assets in the Portfolio. The value of such
investment in the Portfolio reflects the Fund's proportionate interest in the
net assets of the Portfolio. At December 31, 1997, the Fund's investment was
approximately 87% of the Portfolio.
The financial statements of the Portfolio, including the Schedule of Portfolio
Investments, are contained elsewhere in this report.
B. Investment Income
The Fund earns income, net of expenses, daily on its investment in the
Portfolio. All of the net investment income and realized and unrealized gains
and losses from the security transactions of the Portfolio are allocated pro
rata among the investors in the Portfolio at the time of such determination.
C. Dividends
It is the Fund's policy to declare dividends daily and pay monthly to
shareholders from net investment income. Dividends payable to shareholders are
recorded by the Fund on the ex-dividend date. Distributions of net realized
short-term and long-term capital gains, if any, earned by the Fund will be made
annually.
D. Federal Income Taxes
It is the Fund's policy to comply with the requirements of the Internal Revenue
Code and distribute its income to shareholders. Therefore, no federal income tax
provision is required.
E. Other
The Trust accounts separately for the assets, liabilities, and operations of the
Fund. Expenses directly attributable to the Fund are charged to that Fund, while
expenses which are attributable to all of the Trust's funds are allocated among
them.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements. Actual results could
differ from those estimates.
Note 2 - Fees and Transactions with Affiliates
The Fund has entered into an Administration and Services Agreement with Bankers
Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Fund in return for a fee computed daily and paid
monthly at an annual rate of 0.05 of 1% of the Fund's average daily net assets.
For the year ended December 31,1997, this fee aggregated $819,884.
On September 30, 1996, the Trust entered into a Distribution Agreement with
Edgewood Services, Inc. ("Edgewood"). Prior to September 30, Signature
Broker-Dealer Services, Inc. ("Signature") was the Trust's distributor. Under
the Distribution Agreement with the Trust, pursuant to Rule 12b-1 of the 1940
Act, Edgewood, and previously Signature, may seek reimbursement at an annual
rate not exceeding 0.10 of 1% of the Fund's average daily net assets, for
expenses incurred in connection with any activities primarily intended to result
in the sale of the Fund's shares. For the year ended December 31, 1997, there
were no reimbursable expenses incurred under this agreement. The Fund does not
intend to charge 12b-1 fees in the future.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Fund, to the extent necessary, to limit all expenses to 0.05 of
1% of the average daily net assets of the Fund, excluding expenses of the
Portfolio and 0.25 of 1% of the average daily net assets of the Fund, including
expenses of the Portfolio. For the year ended December 31, 1997, expenses of the
Fund have been reduced by $356,801.
Certain officers of the Fund are also directors, officers and/or employees of
Edgewood. None of the officers so affiliated received compensation for services
as officers of the Fund.
7
<PAGE>
Institutional Treasury Money Fund
Report of Independent Accountants
To the Trustees of BT Institutional Funds and Shareholders of
the Institutional Treasury Money Fund:
We have audited the accompanying statement of assets and liabilities of the
Institutional Treasury Money Fund (one of the Funds comprising BT Institutional
Funds) as of December 31, 1997, and the related statement of operations for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended and the financial highlights for each of the five
years in the period then ended. 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. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian. 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 the
Institutional Treasury Money Fund as of December 31, 1997, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the five years in the period then ended in conformity with generally accepted
accounting principles.
Coopers & Lybrand L.L.P.
Kansas City, Missouri
February 18, 1998
8
<PAGE>
Treasury Money Portfolio
Schedule of Portfolio Investments December 31, 1997
<TABLE>
<CAPTION>
Principal
Amount Description Value
--------- ----------- -----
<S><C>
UNITED STATES TREASURY BILL - 2.09%
$45,000,000 5.37%, 4/30/98
(Amortized Cost $44,201,212) $ 44,201,212
------------
UNITED STATES TREASURY NOTES - 18.10%
102,000,000 5.875%, 4/30/98 102,118,251
39,000,000 6.125%, 5/15/98 39,088,605
72,000,000 8.25%, 7/15/98 72,992,609
125,000,000 4.75%, 8/31/98 124,286,639
45,000,000 6.125%, 8/31/98 45,132,856
------------
Total U.S. Treasury Notes (Amortized Cost $383,618,960) 383,618,960
------------
REPURCHASE AGREEMENTS - 79.42%
200,000,000 Open Tri-party Repurchase Agreement with Canadian Imperial
Bank, Dated 12/31/97, Daily Variable Rate, Principal amount
of $200,000,000, Interest amount varies dependent on rate,
Due 1/02/98, (Collateralized by U.S. Treasury Notes, Par
Value of $175,715,000, Coupon rates of 5.87% to 7.50%, Due
5/31/99 to 5/15/07, Value of $189,646,535; U.S. Treasury
Bonds, Par Value of $8,955,000, Coupon rate 11.25%, Due
2/15/15, Value of $14,356,007) 200,000,000
90,000,000 Tri-party Repurchase Agreement with Chase Manhattan Bank,
Dated 12/31/97, Daily Variable Rate, Principal amount of
$90,000,000, Interest amount varies dependent on rate, Due
1/02/98, (Collateralized by U.S. Treasury Bonds, Par Value
of $62,891,000, Coupon rates of 9.25% to 13.375%, Due from
8/15/01 to 2/15/16, Value of $91,803,492) 90,000,000
50,000,000 Tri-party Repurchase Agreement with Citibank, Dated
12/31/97, 6.35%, Principal & Interest in the amount of
$50,017,639, Due 1/02/98, (Collateralized by U.S. Treasury
Notes, Par Value of $47,495,000, Coupon rates of 8.00% to
9.25%, Due 8/15/98 to 5/15/01, Value of $51,007,225) 50,000,000
90,000,000 Open Tri-party Repurchase Agreement with Deutsche Bank,
Dated 12/30/97, Daily Variable Rate, Principal amount of
$90,000,000, Interest amount varies dependent on rate, Due
12/31/99, (Collateralized by U.S. Treasury Bonds, Par Value
of $2,616,000, Coupon rates of 8.125% to 13.25%, Due from
5/15/14 to 8/15/19, Value of $3,795,588; U.S. Treasury
Notes, Par Value of $83,036,000, Coupon rates of 4.75% to
8.875%, Due from 10/31/98 to 2/15/05, Value of $87,582,676;
U.S. Treasury Strips, Par Value of $1,747,000, Due 5/15/17
to 2/15/25, Value of $422,218) 90,000,000
10,000,000 Tri-party Repurchase Agreement with First Boston, Dated
12/31/97, 5.90%, Principal & Interest in the amount of
$10,003,278, Due 1/02/98 (Collateralized by U.S. Treasury
Strips, Par Value $21,749,100, Due 5/15/10 to 5/15/16, Value
of $10,348,495) 10,000,000
90,000,000 Tri-party Repurchase Agreement with First Boston, Dated
12/04/97, 5.68%, Principal & Interest in the amount of
$90,028,400, Due 1/02/98 (Collateralized by U.S. Treasury
Bonds, Par Value of $86,052,000, Due 11/15/26, Value of
$92,026,724) 90,000,000
60,982,167 Tri-party Repurchase Agreement with Goldman Sachs, Dated
12/31/97, 5.20%, Principal & Interest in the amount of
$60,999,784, Due 1/02/98 (Collateralized by U.S. Treasury
Note, Par Value of $62,300,620, Coupon rates of 5.625% to
6.125%, Due from 12/31/02 to 11/15/27, Value of $62,201,864) 60,982,167
132,282,394 Tri-party Repurchase Agreement with Goldman Sachs, Dated
12/31/97, 5.00%, Principal & Interest in the amount of
$132,319,139, Due 1/02/98 (Collateralized by U.S. Treasury
Note, Par Value of $135,142,380, Coupon rates of 5.625% to
6.125%, Due from 12/31/02 to 11/15/27, Value of
$134,928,160) 132,282,394
</TABLE>
See Notes to Financial Statements on Page 13
9
<PAGE>
Treasury Money Portfolio
Schedule of Portfolio Investments December 31, 1997
<TABLE>
<CAPTION>
Principal
Amount Description Value
--------- ----------- -----
<S><C>
$ 10,000,000 Tri-party Repurchase Agreement with J.P. Morgan, Dated
12/31/97, 5.00%, Principal & Interest in the amount of
$10,002,778, Due 1/02/98, (Collateralized by U.S. Treasury
Bills, Par Value of $10,025,000, Coupon rate of 6.00%, Due
9/30/98, Value of $10,353,305) $ 10,000,000
90,000,000 Tri-party Repurchase Agreement with J.P. Morgan, Dated
12/31/97, 6.25%, Principal & Interest in the amount of
$90,031,250, Due 1/02/98, (Collateralized by U.S. Treasury
Bills, Par Value of $60,645,000, Coupon rate of 12.00%, Due
8/15/13, Value of $94,875,627) 90,000,000
90,000,000 Tri-party Repurchase Agreement with Merrill Lynch, Dated
12/31/97, 6.50%, Principal & Interest in the amount of
$90,032,500, Due 1/02/98, (Collateralized by U.S. Treasury
Bonds, Par Value of $62,691,000, Coupon rates of 9.75% to
13.375%, Due from 8/15/01 to 11/15/17, Value of $91,803,492)
90,000,000
100,000,000 Tri-party Repurchase Agreement with Morgan Stanley, Dated
11/10/97, 5.58%, Principal & Interest in the amount of
$100,031,000, Due 1/09/98, (Collateralized by U.S. Treasury
Notes, Par Value of $100,145,000, Coupon rate of 8.125%, Due
8/31/98, Value of $102,511,653) 100,000,000
90,000,000 Open Tri-party Repurchase Agreement with Nesbitt Burns,
Dated 12/31/97, Daily Variable Rate, Principal in the amount
of $90,000,000, Interest amount varies dependent on rate,
Due 1/02/98, (Collateralized by U.S. Treasury Strips, Par
Value of $4,346,000, Due 5/15/05, Value of $2,832,445; U.S.
Treasury Principal Strip, Par Value of $115,536,000, Due
from 11/15/01 to 5/15/05, Value of $88,967,860) 90,000,000
150,000,000 Tri-party Repurchase Agreement with Swiss Bank, Dated
12/31/97, 6.50%, Principal & Interest in the amount of
$150,054,167, Due 1/02/98, (Collateralized by U.S. Treasury
Notes, Par Value of $1,100,000, Coupon rate of 6.75%, Due
4/30/00, Value of $1,136,215; U.S. Treasury Bonds, Par Value
of $80,022,000, Coupon rates of 6.25% to 12.50%, Due from
11/15/09 to 11/15/26, Value of $101,238,567; U.S. Treasury
Bills, Par Value of $5,289,000, Due from 2/05/98 to
11/12/98, Value of $5,078,358.28; U.S. Treasury Strips, Par
Value of $69,393,000, Due from 5/15/01 to 2/15/08, Value of
$46,578,621) 150,000,000
90,000,000 Tri-party Repurchase Agreement with Swiss Bank, Dated
12/31/97, 6.55%, Principal & Interest in the amount of
$90,032,750, Due 1/02/98, (Collateralized by U.S. Treasury
Strips, Par Value of $59,203,000, Due from 8/15/01 to
2/15/05, Value of $42,091,702; U.S. Treasury Principal
Strip, Par Value of $50,000,000, Due 2/15/98, Value of
$49,644,150) 90,000,000
250,000,000 Tri-party Repurchase Agreement with UBS, Dated 12/31/97,
6.50%, Principal & Interest in the amount of $250,090,278,
Due 1/02/98, (Collateralized by U.S. Treasury Notes, Par
Value of $252,113,000, Coupon rates of 5.625% to 7.875%, Due
from 10/15/99 to 12/31/99, Value of $255,000,007) 250,000,000
90,000,000 Tri-party Repurchase Agreement with Westdeutsche, Dated
12/31/97, 6.65%, Principal & Interest in the amount of
$90,033,250, Due 1/02/98, (Collateralized by U.S. Treasury
Notes, Par Value of $91,500,000, Coupon rate of 6.25%, Due
6/30/98, Value of $91,830,315) 90,000,000
--------------
Total Repurchase Agreements (Amortized Cost $1,683,264,561) 1,683,264,561
--------------
Total Investments
(Amortized Cost $2,111,084,733) 99.61% $2,111,084,733
Other Assets Less Liabilities 0.39% 8,215,204
------ --------------
Net Assets 100.00% $2,119,299,937
====== ==============
</TABLE>
See Notes to Financial Statements on Page 13
10
<PAGE>
Treasury Money Portfolio
Statement of Assets and Liabilities December 31, 1997
<TABLE>
<S><C>
Assets
Investments, at Value (including repurchase agreements amounting to $1,683,264,561) $ 2,111,084,733
Cash 80,704
Interest Receivable 8,513,056
Prepaid Expenses and Other 17,528
---------------
Total Assets 2,119,696,021
---------------
Liabilities
Due to Bankers Trust 381,261
Accrued Expenses and Other 14,823
---------------
Total Liabilities 396,084
---------------
Net Assets $ 2,119,299,937
===============
Composition of Net Assets
Paid-in capital $ 2,119,299,937
---------------
Net Assets, December 31, 1997 $ 2,119,299,937
===============
</TABLE>
- --------------------------------------------------------------------------------
Statement of Operations For the year ended December 31, 1997
<TABLE>
<S><C>
Investment Income
Interest $ 112,303,220
---------------
Expenses
Advisory Fees 3,067,422
Administration and Services Fees 1,022,474
Professional Fees 28,450
Trustees Fees 2,075
Miscellaneous 30,088
---------------
Total Expenses 4,150,509
Less: Expenses Absorbed by Bankers Trust (60,612)
---------------
Net Expenses 4,089,897
---------------
Net Investment Income 108,213,323
---------------
Net Realized Gain from Investment Transactions 7,627
---------------
Net Increase in Net Assets from Operations $ 108,220,950
===============
</TABLE>
See Notes to Financial Statements on Page 13
11
<PAGE>
Treasury Money Portfolio
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
For the For the
year ended year ended
December 31, 1997 December 31, 1996
----------------- -----------------
<S><C>
Increase (Decrease) in Net Assets from:
Operations
Net Investment Income $ 108,213,323 $ 95,531,341
Net Realized Gain from Investment Transactions 7,627 217,057
---------------- ----------------
Net Increase in Net Assets from Operations 108,220,950 95,748,398
---------------- ----------------
Capital Transactions
Proceeds from Capital Invested 12,977,569,030 13,280,023,129
Value of Capital Withdrawn (12,946,202,889) (13,337,140,277)
---------------- ----------------
Net Increase (Decrease) in Net Assets from Capital Transactions 31,366,141 (57,117,148)
---------------- ----------------
Total Increase in Net Assets 139,587,091 38,631,250
Net Assets
Beginning of Year 1,979,712,846 1,941,081,596
---------------- ----------------
End of Year $ 2,119,299,937 $ 1,979,712,846
================ ================
</TABLE>
- --------------------------------------------------------------------------------
Financial Highlights
Contained below are selected ratios and supplemental data for each of the years
indicated for the Treasury Money Portfolio.
<TABLE>
<CAPTION>
For the years ended December 31,
--------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S><C>
Supplemental Data and Ratios:
Net Assets, End of Year (000s omitted) $2,119,300 $1,979,713 $1,941,082 $ 882,775 $789,479
Ratios to Average Net Assets:
Net Investment Income 5.29% 5.14% 5.58% 3.93% 2.93%
Expenses 0.20% 0.20% 0.20% 0.20% 0.20%
Decrease Reflected in Above Expense Ratio Due
to Absorption of Expenses by Bankers Trust 0.00%+ 0.00%+ 0.01% 0.01% 0.01%
</TABLE>
- ------------
+ Less than 0.01%.
See Notes to Financial Statements on Page 13
12
<PAGE>
Treasury Money Portfolio
Notes to Financial Statements
Note 1--Organization and Significant Accounting Policies
A. Organization
The Treasury Money Portfolio (the "Portfolio") is registered under the
Investment Company Act of 1940 (the "Act"), as amended, as an open-end
management investment company. The Portfolio was organized on March 26,1990, as
an unincorporated trust under the laws of New York, and commenced operations on
July 23, 1990. The Declaration of Trust permits the Board of Trustees (the
"Trustees") to issue beneficial interests in the Portfolio.
B. Security Valuation
Investments are valued at amortized cost, which is in accordance with Rule 2a-7
of the Investment Company Act of 1940 and represents the fair value of the
Portfolio's investments.
C. Security Transactions and Interest Income
Security transactions are accounted for on a trade date basis. Interest income
is recorded on the accrual basis and includes amortization of premium and
discount on investments. Realized gains and losses from securities transactions
are recorded on the identified cost basis.
All of the net investment income and realized and unrealized gains and losses
from the security transactions of the Portfolio are allocated pro rata among the
investors in the Portfolio at the time of such determination.
D. Repurchase Agreements
The Portfolio may enter into repurchase agreements with financial institutions
deemed to be creditworthy by the Portfolio's Investment Advisor, subject to the
seller's agreement to repurchase such securities at a mutually agreed upon
price. Securities purchased subject to repurchase agreements are deposited with
the Portfolio's custodian, and pursuant to the terms of the repurchase
agreements must have an aggregate market value greater than or equal to the
repurchase price plus all accrued interest at all times. If the value of the
underlying securities falls below the value of the repurchase price plus accrued
interest, the Portfolio 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 Portfolio maintains the
right to sell the underlying securities at market value and may claim any
resulting loss against the seller. However, in the event of default or
bankruptcy by the seller, realization and/or retention of the collateral may be
subject to legal proceedings.
E. Federal Income Taxes
It is the Portfolio's policy to comply with the requirements of the Internal
Revenue Code. Therefore, no federal income tax provision is required.
F. Other
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts in the financial statements. Actual results could
differ from those estimates.
Note 2--Fees and Transactions with Affiliates
The Portfolio has entered into an Administration and Services Agreement with
Bankers Trust Company ("Bankers Trust"). Under this Administration and Services
Agreement, Bankers Trust provides administrative, custody, transfer agency and
shareholder services to the Portfolio in return for a fee computed daily and
paid monthly at an annual rate of 0.05 of 1% of the Portfolio's average daily
net assets. For the year ended December 31, 1997, this fee aggregated
$1,022,474.
The Portfolio has entered into an Advisory Agreement with Bankers Trust. Under
this Advisory Agreement, the Portfolio pays Bankers Trust an advisory fee
computed daily and paid monthly at an annual rate of 0.15 of 1% of the
Portfolio's average daily net assets. For the year ended December 31,1997, this
fee aggregated $3,067,422.
Bankers Trust has voluntarily undertaken to waive its fees and reimburse
expenses of the Portfolio, to the extent necessary, to limit all expenses to
0.20 of 1% of the average daily net assets of the Portfolio. For the year ended
December 31, 1997, expenses of the Portfolio have been reduced by $60,612.
Certain officers of the Portfolio are also directors, officers and/or employees
of Edgewood Services, Inc. distributor of BT Institutional Funds. None of the
officers so affiliated received compensation for services as officers of the
Portfolio.
13
<PAGE>
Treasury Money Portfolio
Report of Independent Accountants
To the Trustees and Holders of Beneficial Interest of the
Treasury Money Portfolio:
We have audited the accompanying statement of assets and liabilities, including
the schedule of portfolio investments, of the Treasury Money Portfolio as of
December 31, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended and the financial highlights for each of the five years in the
period then ended. These financial statements and financial highlights are the
responsibility of the Portfolio'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. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian. 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 the
Treasury Money Portfolio as of December 31, 1997, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended and the financial highlights for each of the five years
in the period then ended, in conformity with generally accepted accounting
principles.
Coopers & Lybrand L.L.P.
Kansas City, Missouri
February 18, 1998
14
<PAGE>
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15
<PAGE>
BT INSTITUTIONAL FUNDS
INSTITUTIONAL TREASURY MONEY FUND
Investment Advisor and Administrator of the Portfolio
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
Distributor
EDGEWOOD SERVICES, INC.
Clearing Operations
P.O. Box 897
Pittsburgh, PA 15230-0897
Custodian and Transfer Agent
BANKERS TRUST COMPANY
130 Liberty Street
New York, NY 10006
Independent Accountants
COOPERS & LYBRAND L.L.P.
1100 Main Street, Suite 900
Kansas City, MO 64105
Counsel
WILLKIE FARR & GALLAGHER
153 East 53rd Street
New York, NY 10022
-------------------------
For information on how to invest, shareholder account information and current
price and yield information, please contact your relationship manager or the BT
Mutual Fund Service Center at (800) 368-4031. This report must be preceded or
accompanied by a current prospectus for the Fund.
-------------------------
Cusip # 055924203
STA480200
