<PAGE>
Tax Free Reserves Portfolio
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS February 28, 1997 (unaudited)
PRINCIPAL
AMOUNT
ISSUER (000'S OMITTED) VALUE
- --------------------------------------------------------------------------
TAX-EXEMPT COMMERCIAL
PAPER -- 4.0%
Anne Arundel County, Maryland
Economic Revenue,
AMT, 3.55% due 4/4/97 ........... $ 2,000 $ 2,000,000
Dallas, Texas, Area Rapid
Transportation, Series A,
3.40% due 4/14/97 ............... 3,000 3,000,000
Sarasota County, Florida Public
Hospital, 3.40% due 4/14/97 3,950 3,950,000
Sarasota County, Florida Public
Hospital, 3.35% due 5/9/97 ...... 2,000 2,000,000
Venango, Pennsylvania Industrial
Development, AMT,
3.50% due 5/15/97 ............... 2,000 2,000,000
Washington State Health Care,
AMT, 3.75% due 11/1/97 .......... 3,600 3,600,000
-----------
16,550,000
-----------
GENERAL OBLIGATION
BONDS AND NOTES -- 4.7%
Anne Arundel County, Maryland,
5.80% due 3/1/97 ................ 1,150 1,150,000
Chicago, Illinois,
3.60% due 8/1/97 ................ 3,500 3,500,000
Chicago, Illinois,
3.55% due 10/31/97 .............. 5,300 5,300,000
Louisiana State,
5.00% due 8/1/97 ................ 2,000 2,009,594
Maricopa County, Arizona
School District 97,
6.20% due 7/1/97 ................ 1,000 1,017,376
Salt Lake City, Utah School District,
4.40% due 3/1/97 ................ 2,090 2,090,000
Tennessee State,
5.00% due 3/1/97 ................ 1,065 1,065,000
Union County, New Jersey
Revenue, 6.50% due 6/15/97 ...... 3,000 3,021,972
-----------
19,153,942
-----------
ANNUAL AND SEMI-ANNUAL
TENDER REVENUE BONDS, AND
NOTES (PUTS) -- 26.6%
Austin, Texas Water, Sewer &
Electric, 14.25% due 5/15/97 .... 1,500 1,530,791
Arkansas State Development
Finance Authority, AMT,
3.80% due 11/5/97 ............... 2,000 2,000,000
Arizona State Transportation Board,
7.80% due 7/1/97 ................ 3,790 3,913,279
Atlanta, Georgia Urban Residential
Finance Authority,
3.90% due 5/1/97 ................ 3,000 3,000,000
Chicago, Illinois,
3.65% due 2/5/98 ................ 3,800 3,800,000
Cochise County, Arizona Pollution
Control, AMT,
3.70% due 3/1/97 ................ 2,000 2,000,000
Clackmas County, Oregon Hospital
Facilities Authority,
3.75% due 4/1/97 ................ 4,150 4,150,000
Columbus, Ohio Sewer,
9.00% due 9/15/97 ............... 1,000 1,028,265
Clark County, Nevada
Public Safety,
6.00% due 6/1/97 ................ 3,000 3,016,604
Denver, Colorado County,
7.60% due 9/1/97 ................ 1,000 1,028,455
District of Columbia,
3.75% due 12/1/97 ............... 4,000 4,000,000
District of Columbia,
3.90% due 12/1/97 ............... 1,000 1,000,000
Grand River Dam Authority,
Oklahoma,
6.60% due 6/1/97 ................ 1,000 1,026,932
Hawaii State Department of Budget
and Finance Revenue,
3.65% due 3/3/97 ................ 5,560 5,560,000
Indiana State Housing,
3.60% due 1/2/98 ................ 3,015 3,013,745
Intermountain Power Agency,
Utah, 8.50% due 7/1/97 .......... 3,610 3,735,779
Intermountain Power Agency,
Utah, 8.63% due 7/1/97 .......... 2,000 2,070,829
Iowa Municipalities Workers,
4.10% due 7/1/97 ................ 1,000 1,000,000
Jackson County, Mississippi,
3.55% due 8/1/97 ................ 1,400 1,400,000
Lower Neches Valley, Texas
Pollution Control Revenue,
3.50% due 8/15/97 ............... 2,000 2,000,000
Marion County, Tennessee
Industrial Environmental, AMT,
3.65% due 8/1/97 ................ 3,000 3,000,000
Maryland State Community
Development Administration, AMT,
4.00% due 9/1/97 ................ 1,500 1,500,000
Massachusetts Bay Transportation
Authority, 7.00% due 3/1/97 ..... 2,160 2,160,000
Massachusetts Municipal
Wholesale Electric,
8.75% due 7/1/97 ................ 5,000 5,177,657
Metropolitan Government Nashville,
Tennessee, AMT, 3.75% due 5/1/97 1,500 1,500,000
Minnesota Public Facilities
Authorities, 6.50% due 3/1/97 ... 1,000 1,000,000
New Mexico Mortgage Finance
Authority, AMT, 3.80% due 12/1/97 4,095 4,095,000
North Central Texas Health
Facilities, 7.88% due 7/1/97 .... 2,400 2,478,397
Ohio State Public Facilities
Community, 5.20% due 5/1/97 ..... 1,500 1,503,414
Oklahoma State Water Resource Board
State Loan Revenue,
3.75% due 3/1/97 ................ 5,000 5,000,000
Oklahoma State Water Resource Board
State Loan Revenue,
3.70% due 3/3/97 ................ 3,000 3,000,000
Pennsylvania State Higher Education
Revenue, 3.50% due 5/30/97 ...... 3,000 3,000,000
Phoenix, Arizona Apartment Revenue,
5.05% due 7/1/97 ................ 1,840 1,847,225
Platte County, Missouri Public
Building Corp.,
4.50% due 9/1/97 ................ 1,205 1,208,010
Rhode Island State,
5.00% due 8/1/97 ................ 1,775 1,785,755
Rhode Island Housing & Mortgage
Finance Authority,
3.70% due 12/2/97 ............... 1,500 1,500,000
Shelby County, Tennessee Health,
9.63% due 7/1/97 ................ 2,360 2,402,957
Tennessee State,
5.88% due 7/1/97 ................ 3,500 3,526,514
Tennessee State,
5.90% due 6/1/97 ................ 2,570 2,584,968
University Of Pittsburgh PA,
7.50% due 6/1/97 ................ 1,000 1,009,850
Utah State,
4.90% due 7/1/97 ................ 1,500 1,506,032
Washington State Housing Finance
Commission, AMT,
3.80% due 6/1/97 ................ 1,710 1,710,000
Washington State Public Power
Supply, 7.00% due 7/1/97 ........ 4,400 4,450,037
York County, South Carolina
Pollution Control,
3.80% due 3/15/97 ............... 2,000 2,000,000
-----------
109,220,495
-----------
REVENUE, TAX, BOND AND
TAX REVENUE ANTICIPATION
NOTES -- 6.1%
Arapahoe County, Colorado School
District, TANs,
4.50% due 6/30/97 ............... $2,000 $2,005,574
Bowling Green, Ohio, BANs,
4.00% due 12/4/97 ............... 2,000 2,004,936
Contra Costa, California
Transportation, TRANs
5.00% due 3/1/97 ................ 2,000 2,000,000
Highland, Indiana, TANs,
4.25% due 12/31/97 .............. 1,500 1,504,436
Kankakee, Wyoming, Industrial
School Corp. TANs,
4.10% due 12/30/97 .............. 3,570 3,580,009
Maine State, TANs,
4.50% due 7/1/97 ................ 1,110 1,112,664
Palm Beach County, Florida
School District, TANs,
4.50% due 9/26/97 ............... 4,000 4,014,138
Racine, Wisconsin School District,
TRANs, 4.25% due 8/22/97 ........ 3,000 3,010,793
Richman, Indiana, Dormitory
Community Schools, TANs,
4.10% due 12/31/97 .............. 1,000 1,001,597
Tennessee State Local Development
Authority Revenue, BANs,
4.00% due 5/29/97 ............... 3,000 3,002,617
Texas State, RANS,
4.75% due 8/29/97 ............... 1,000 1,005,682
Will County, Illinois, Community
School District, TANs,
4.42% due 10/17/97 .............. 1,000 1,003,162
-----------
25,245,608
-----------
VARIABLE RATE DEMAND
NOTES* -- 57.7%
Adams County, Colorado, Industrial
Development Revenue,
due 12/1/03 ..................... $5,000 $5,000,000
Beloit, Kansas Industrial
Development, due 12/1/16 ........ 4,000 4,000,000
Baltimore, Maryland, Port Facilities
Authority, due 10/14/11 ......... 1,000 1,000,000
Bexar County, Texas Health
Facilities Development,
due 7/11/11 ..................... 1,000 1,000,000
Bexar County, Texas Housing
Authority, due 9/15/26 .......... 1,900 1,900,000
Boulder County, Colorado Industrial
Development Revenue,
due 12/1/04 ..................... 2,565 2,565,000
Brazos River Harbor, Texas,
due 12/1/19 ..................... 1,100 1,100,000
Brazos, Texas, Harbor Industrial
Development, Authority,
due 12/1/13 ..................... 2,900 2,900,000
Butler County, Kansas Solid Waste,
AMT, due 8/1/24 ................. 900 900,000
Carthege, Missouri Industrial
Development, due 9/1/30 ......... 1,000 1,000,000
Cherokee County, South Carolina
Industrial Revenue, AMT,
due 8/1/19 ...................... 200 200,000
Chicago, Illinois Industrial
Development Revenue,
due 8/1/05 ...................... 4,200 4,200,000
Chicago, Illinois O'Hare
International Airport Revenue,
due 1/1/15 ...................... 1,985 1,985,000
Columbia, Missouri Water and Electric
Revenue, due 8/15/99 ............ 500 500,000
Columbus Indiana, Economic
Development Revenue, AMT,
due 1/1/00 ...................... 1,440 1,440,000
De Kalb County, Georgia Multifamily
Housing Revenue, due 6/1/25 ..... 4,050 4,050,000
District of Columbia, due 10/1/15 .. 500 500,000
East Baton Rouge, Louisiana,
Pollution Control Revenue,
due 11/1/19 ..................... 2,100 2,100,000
Eloy, Arizona Industrial Development
Authority Revenue, AMT,
due 8/1/20 ...................... 1,000 1,000,000
Farmington, New Mexico, Pollution
Control Revenue, due 9/1/24 ..... 600 600,000
Fayetteville, Arkansas Industrial
Development, AMT, due 12/1/04 ... 1,100 1,100,000
Florida Housing Finance Authority,
due 12/1/08 ..................... 600 600,000
Florida Housing Finance Authority,
AMT, due 9/1/26 ................. 2,875 2,875,000
Floyd County, Georgia Pollution
Authority, due 9/1/26 ........... 200 200,000
Forsyth County, Georgia Development
Authority Industrial, due 1/1/07 2,000 2,000,000
Fort Wayne, Indiana Economic
Development Revenue, due 12/1/03 1,000 1,000,000
Franklin County, Kentucky Industrial
Building Revenue, AMT,
due 9/1/16 ...................... 5,545 5,545,000
Franklin County, Ohio Health Systems
Revenue, due 7/1/15 ............. 100 100,000
Fulton County, Georgia Residential
Care Facilities, due 1/1/18 ..... 1,500 1,500,000
Grapevine, Texas, Industrial
Development Corp. Revenue,
due 12/1/24 ..................... 2,800 2,800,000
Gulf Coast, Texas Industrial
Development Authority, AMT,
due 5/1/24 ...................... 300 300,000
Gwinett County, Georgia Industrial
Development Revenue,
AMT, due 6/1/05 ................. 1,500 1,500,000
Hampton, Virginia, Redevelopment &
Housing Authority, due 6/15/26 .. 900 900,000
Henrico County, Virginia Industrial
Development, due 5/1/24 ......... 500 500,000
Hopewell, Virginia, Industrial
Development Authority Revenue,
AMT, due 4/1/15 ................. 1,000 1,000,000
Howard County, Maryland Multifamily
Housing Revenue, due 6/15/26 .... 2,000 2,000,000
Illinois Health Facilities Authority
Revenue, due 7/1/25 ............. 1,700 1,700,000
Indiana State Educational Facilities
Authority, 3/1/25 ............... 1,300 1,300,000
Jackson County, Mississippi Pollution
Control Revenue, due 6/1/23 ..... 3,000 3,000,000
Jackson, Mississippi Industrial
Development Revenue, due 12/1/15 2,650 2,650,000
Jefferson Parish, Louisiana Hospital
District 2, due 12/1/15 ......... 2,700 2,700,000
Kansas City, Missouri, Industrial
Development Hospital Revenue,
due 10/15/14 .................... 400 400,000
Los Angeles, California Regional
Apartment Lease, due 12/1/25 .... 200 200,000
Maricopa County, Arizona Pollution
Control, due 5/1/29 ............. 400 400,000
Missisippi State, due 11/15/09 ..... 9,325 9,325,000
Missouri State Health and Educational
Facilities Authority, due 9/1/30 500 500,000
Morton, Illinois Industrial
Development, AMT, due 4/1/16 .... 1,000 1,000,000
Nash County, North Carolina,
due 12/1/14 ..................... 1,000 1,000,000
New Hanover County, North Carolina,
due 3/1/14 ...................... 2,250 2,250,000
Nevada Housing Division, AMT,
due 4/1/20 ...................... 1,000 1,000,000
New Mexico State Highway,
due 6/15/11 ..................... 5,000 5,000,000
New York State Job Development
Authority, due 3/1/03 ........... 95 95,000
North Carolina Medical Care Hospital
Authority, due 10/1/13 .......... 1,200 1,200,000
North Texas Higher Education
Authority, due 4/1/36 ........... 1,100 1,100,000
Orange County, Florida Industrial
Development Authority, due 1/1/11 1,500 1,500,000
Orange County, Florida Health
Facilities Authority,
due 11/15/26 .................... 1,000 1,000,000
Palatine, Illinois Industrial
Development, due 1/1/16 ......... 1,120 1,120,000
Pasco County, Florida School
District, due 8/1/26 ............ 20,370 20,370,000
Pennsylvania State Higher Education
Student Loan, due 7/1/18 ........ 2,000 2,000,000
Pennsylvania State Higher Education
Student Loan, AMT, due 12/1/24 .. 2,000 2,000,000
Person County, North Carolina
Pollution Control Authority,
due 11/1/19 ..................... 3,000 3,000,000
Phenix City, Alabama Environmental
Revenue, due 3/1/31 ............. 200 200,000
Piedmont, South Carolina, Municipal
Power Agency Revenue,
due 1/1/22 ...................... 900 900,000
Pinal County, Arizona Pollution
Control Revenue, due 12/1/09 .... 700 700,000
Pinellas County, Florida Health
Facilities Authority,
due 12/1/15 ..................... 900 900,000
Port Arthur, Texas Navigation
District, AMT, due 4/1/14 ....... 1,000 1,000,000
Port Arthur, Texas Navigation
District, due 10/1/24 ........... 300 300,000
Putnam County, West Virginia
Industrial Development Revenue,
due 10/1/11 ..................... $ 600 $ 600,000
Quakertown, Pennsylvania General
Authority Revenue, due 7/1/26 ... 2,200 2,200,000
Rhode Island State Industrial
Facilities Corp., AMT, due 6/1/05 4,950 4,950,000
Rhode Island State Industrial
Facilities Corp., due 11/1/05 ... 4,770 4,770,000
Rutherford County, Tennessee
Industrial Development,
due 12/1/03 ..................... 1,500 1,500,000
San Antonio, Texas Electric & Gas,
due 2/1/18 ...................... 7,455 7,455,000
Savannah, Illinois Industrial
Development Revenue, due 6/1/04 . 600 600,000
Seattle, Washington Municipal Light &
Power Authority, due 6/1/21 2,600 2,600,000
Shelby County, Tennessee,
due 12/1/10 ..................... 11,725 11,725,000
Sikeston, Missouri, Electric Revenue
Authority, due 6/1/22 ........... 10,098 10,098,000
South Carolina Educational Facilities
Authority, due 10/1/26 .......... 4,900 4,900,000
South Carolina Jobs, due 11/1/25 ... 1,400 1,400,000
Southeastern Oklahoma Industrial
Authorities, due 6/1/16 ......... 3,400 3,400,000
St. Charles County, Missouri
Industrial Development Authority,
due 12/1/07 ..................... 1,000 1,000,000
Southwestern Illinois Development
Authority, AMT, due 11/1/25 ..... 300 300,000
Tipton, Indiana Economic Development
Revenue, due 7/1/22 ............. 1,085 1,085,000
Traill County, North Dakota Industrial
Development, AMT, due 12/1/11 ... 1,000 1,000,000
Traill County, North Dakota Solid
Waste, AMT, due 12/1/11 ......... 16,000 16,000,000
Traill County, North Dakota Solid
Waste, AMT, due 12/11/11 ........ 1,000 1,000,000
Unita County, Wyoming Control
Revenue, due 12/1/22 ............ 500 500,000
Utah State Board of Regents,
due 11/1/00 ..................... 1,100 1,100,000
Utah State Board of Regents,
due 11/1/25 ..................... 900 900,000
Utah State Board of Regents, AMT,
due 11/1/31 ..................... 6,000 6,000,000
Vermont Industrial Development
Authority, AMT, due 12/1/11 ..... 800 800,000
Volusia County, Florida Health
Facilities Authority, due 9/1/20 1,500 1,500,000
Wake County, North Carolina
Industrial Pollution Control,
due 9/1/15 ...................... 3,000 3,000,000
Washington State Health Care
Facilities, due 10/1/05 ......... 1,300 1,300,000
Washington State Public Power
Supply, due 7/1/15 .............. 7,240 7,240,000
Winchester, Kentucky Industrial
Building, due 10/1/18 ........... 1,700 1,700,000
Wisconsin Housing & Economic
Development, due 9/1/26 ......... 4,000 4,000,000
Wisconsin State, due 5/1/04 ........ 1,000 1,000,000
-----------
237,293,000
-----------
TOTAL INVESTMENTS
AT AMORTIZED COST ............... 99.1% 407,463,045
OTHER ASSETS, LESS LIABILITIES 0.9 3,586,468
----- ------------
NET ASSETS ......................... 100.0% $411,049,513
===== ============
AMT-Subject to Alternative Minimum Tax
* Variable rate demand notes have a demand feature under which the fund could
tender them back to the issuer on no more than 7 days' notice.
See notes to financial statements
<PAGE>
Tax Free Reserves Portfolio
================================================================================
STATEMENT OF ASSETS AND LIABILITIES February 28, 1997 (unaudited)
ASSETS:
Investments, at amortized cost and value (Note 1A) ............. $407,463,045
Cash ........................................................... 83,413
Interest receivable ............................................ 3,526,108
------------
Total assets .................................................. 411,072,566
------------
LIABILITIES:
Accrued expenses and other liabilities ......................... 23,053
------------
Total liabilities ............................................. 23,053
------------
NET ASSETS ...................................................... $411,049,513
============
REPRESENTED BY:
Capital paid-in for beneficial interests ........................ $411,049,513
============
See notes to financial statements
<PAGE>
Tax Free Reserves Portfolio
===============================================================================
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 1997 (unaudited)
INVESTMENT INCOME (Note 1B) ..................................... $6,870,174
EXPENSES:
Investment Advisory fees (Note 2A) ................ $380,367
Administrative fees (Note 2B) ..................... 95,092
Custodian fees .................................... 93,301
Auditing fees ..................................... 10,800
Legal fees ........................................ 7,206
Trustee fees ...................................... 5,671
Miscellaneous ..................................... 6,080
-------
Total Expenses ................................... 598,517
Less aggregate amounts waived by Investment Advisor
and Administrator (Notes 2A and 2B) ............. (116,021)
Less fees paid indirectly (Note 1D) ............... (5,294)
-------
Net expenses ................................................... 477,202
----------
Net investment income .......................................... 6,392,972
NET REALIZED GAIN ON INVESTMENTS ................................ 7,128
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............ $6,400,100
==========
See notes to financial statements
<PAGE>
Tax Free Reserves Portfolio
===============================================================================
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
FEBRUARY 28, 1997 YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS FROM (UNAUDITED) AUGUST 31, 1996
----------------- ---------------
<S> <C> <C>
OPERATIONS:
Net investment income .................................................... $ 6,392,972 $ 12,954,867
Net realized gain (loss) on investments .................................. 7,128 (25,753)
------------ -------------
Increase in net assets from operations .................................. 6,400,100 12,929,114
------------ -------------
CAPITAL TRANSACTIONS:
Proceeds from contributions .............................................. 245,971,874 426,786,434
Value of withdrawals ..................................................... (213,493,541) (461,766,719)
------------ ------------
Net increase (decrease) in net assets from capital transactions ......... 32,478,333 (34,980,285)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ......................... 38,878,433 (22,051,171)
NET ASSETS:
Beginning of period ...................................................... 372,171,080 394,222,251
------------ ------------
End of period ............................................................ $411,049,513 $372,171,080
============ ============
Tax Free Reserves Portfolio
</TABLE>
===============================================================================
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED AUGUST 31,
FEBRUARY 28, 1997 -------------------------------------------------------
(UNAUDITED) 1996 1995 1994 1993 1992
-------------- -------- -------- -------- -------- -------
RATIOS/SUPPLEMENTAL DATA:
<S> <C> <C> <C> <C> <C> <C>
Net Assets, end of period (000 omitted) ......... $411,050 $372,171 $394,222 $233,108 $277,593 $212,502
Ratio of expenses to average net assets ......... 0.25%* 0.30% 0.32% 0.31% 0.31% 0.31%
Ratio of net investment income to average
net assets ..................................... 3.36%* 3.31% 3.55% 2.33% 2.35% 3.43%
Note: If Agents of the Portfolio had not voluntarily waived a portion of their fees during the periods indicated, the ratios
would have been as follows:
RATIOS:
Expenses to average net assets .................. 0.31%* 0.32% 0.32% 0.32% 0.33% 0.35%
Net investment income to average net assets ..... 3.30%* 3.29% 3.55% 2.32% 2.32% 3.39%
* Annualized
See notes to financial statements
</TABLE>
<PAGE>
Tax Free Reserves Portfolio
===============================================================================
NOTES TO FINANCIAL STATEMENTS (unaudited)
(1) SIGNIFICANT ACCOUNTING POLICIES Tax Free Reserves Portfolio (the
"Portfolio") is registered under the Investment Company Act of 1940, as amended,
as a no-load, non-diversified, open-end management investment company which was
organized as a trust under the laws of the State of New York. The Declaration of
Trust permits the Trustees to issue beneficial interests in the Portfolio. The
Landmark Funds Broker-Dealer Services, Inc. ("LFBDS") acts as the Portfolio's
Administrator. Citibank, N.A. ("Citibank") acts as the Investment Adviser. 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. Actual
results could differ from those estimates.
The significant accounting policies consistently followed by the Portfolio are
as follows:
A. VALUATION OF INVESTMENTS -- Money market instruments are valued at amortized
cost, which the Trustees have determined in good faith constitutes fair value.
The Portfolio's use of amortized cost is subject to the Portfolio's compliance
with certain conditions as specified under Rule 2a-7 of the Investment Company
Act of 1940.
B. INTEREST INCOME AND EXPENSES -- Interest income consists of interest accrued
and discount earned (including both original issue and market discount),
adjusted for amortization of premium, on the investments of the Portfolio,
accrued ratably to the date of maturity, plus or minus net realized gain or
loss, if any, on investments. Expenses of the Portfolio are accrued daily.
C. FEDERAL INCOME TAXES -- The Portfolio's policy is to comply with the
applicable provisions of the Internal Revenue Code. Accordingly, no provision
for federal income taxes is necessary.
D. FEES PAID INDIRECTLY -- The Fund's custodian bank calculates its fees based
on the Fund's average daily net assets. The fee is reduced according to a fee
arrangement, which provides for custody fees to be reduced based on a formula
developed to measure the value of cash deposited with the custodian by the Fund.
This amount is shown as a reduction of expenses on the Statement of Operations.
E. OTHER -- Purchases, maturities and sales, of money market instruments are
accounted for on the date of the transaction.
(2) INVESTMENT ADVISORY FEE AND ADMINISTRATIVE FEE
A. INVESTMENT ADVISORY FEE -- The investment advisory fee paid to Citibank, as
compensation for overall investment management services, amounted to $380,367,
of which $100,181 was voluntarily waived for the six months ended February 28,
1997. The investment advisory fee is computed at the annual rate of 0.20% of the
Portfolio's average daily net assets.
B. ADMINISTRATIVE FEE -- Under the terms of an Administrative Services
Agreement, the administrative fee payable to the Administrator, as compensation
for overall administrative services and general office facilities, is computed
at the annual rate of 0.05% of the Portfolio's average daily net assets and
amounted to $95,092 of which $15,840 was voluntarily waived for the six months
ended February 28, 1997. The Portfolio pays no compensation directly to any
Trustee or any officer who is affiliated with the Administrator, all of whom
receive remuneration for their services to the Portfolio from the Administrator
or its affiliates. Certain of the officers and a Trustee of the Portfolio are
officers and a director of the Administrator or its affiliates.
(3) INVESTMENT TRANSACTIONS
Purchases, maturities, and sales of money market instruments, exclusive of
securities purchased subject to repurchase agreements, aggregated $628,506,887
and $604,728,460, respectively, for the six months ended February 28, 1997.
<PAGE>
(4) FEDERAL INCOME TAX BASIS OF INVESTMENT SECURITIES
The cost of investment securities owned at February 28, 1997, for federal income
tax purposes, amounted to $407,463,045.
(5) LINE OF CREDIT
The Portfolio, along with other Landmark Funds, entered into an agreement with a
bank which allows the Funds collectively to borrow up to $40 million for
temporary or emergency purposes. Interest on borrowings, if any, is charged to
the specific fund executing the borrowing at the base rate of the bank. The line
of credit requires a quarterly payment of a commitment fee based on the average
daily unused portion of the line of credit. For the six months ended February
28, 1997, the commitment fee allocated to the Portfolio was $966. Since the line
of credit was established, there have been no borrowings.
