<PAGE>
[LOGO OF EXCELSIOR FUNDS, INC. APPEARS HERE]
DOMESTIC EQUITY PORTFOLIOS
SEMI-ANNUAL REPORT
SEPTEMBER 30, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
STATEMENTS OF ASSETS AND LIABILITIES..................................... 1
STATEMENTS OF OPERATIONS................................................. 3
STATEMENTS OF CHANGES IN NET ASSETS...................................... 5
FINANCIAL HIGHLIGHTS -- SELECTED PER SHARE DATA AND RATIOS............... 8
PORTFOLIOS OF INVESTMENTS
Blended Equity Fund (formerly Equity Fund).............................. 10
Income and Growth Fund.................................................. 12
Value and Restructuring Fund (formerly Business and Industrial
Restructuring Fund).................................................... 14
Small Cap Fund (formerly Early Life Cycle Fund)......................... 16
Energy and Natural Resources Fund (formerly Long-Term Supply of Energy
Fund).................................................................. 17
NOTES TO FINANCIAL STATEMENTS............................................ 18
</TABLE>
For shareholder account information, current price and yield quotations, or to
make an initial purchase or obtain a prospectus, call the appropriate telephone
number listed below:
. INITIAL PURCHASE AND PROSPECTUS INFORMATION AND SHAREHOLDER SERVICES 1-800-
446-1012
. CURRENT PRICE AND YIELD INFORMATION 1-800-233-9180
This report must be preceded or accompanied by a current prospectus.
Prospectuses containing more complete information including charges and ex-
penses regarding Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. may
be obtained by contacting the Funds at 1-800-446-1012.
Investors should read the current prospectus carefully prior to investing or
sending money.
Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. are sponsored and
distributed by Edgewood Services, Inc.
You may write to Excelsior Funds, Inc. and Excelsior Tax-Exempt Funds, Inc. at
the following address:
EXCELSIOR FUNDS, INC.
C/O CHASE GLOBAL FUNDS SERVICES COMPANY
P.O. BOX 2798
BOSTON, MA 02208-2798
SHARES IN THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, UNITED STATES TRUST COMPANY OF NEW YORK, ITS PARENT OR AFFILIATES
AND SHARES ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY. INVESTMENTS IN THE FUNDS INVOLVE
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL. FUND SHARES ARE NOT
INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
INCOME AND VALUE AND
BLENDED EQUITY VALUED RESTRUCTURING
FUND RESTRUCTURING FUND (FORMERLY
(FORMERLY GROWTH BUSINESS AND INDUSTRIAL
EQUITY FUND) FUND RESTRUCTURING FUND)
-------------- ------------- -----------------------
<S> <C> <C> <C>
ASSETS:
Investments, at cost--
see accompanying port-
folios................ $365,117,041 $104,955,450 $134,404,739
============ ============ ============
Investments, at value
(Note 1).............. $564,701,272 $158,920,283 $208,602,352
Cash................... 909,259 18,590 6,709
Dividends receivable... 575,008 137,020 161,218
Interest receivable.... 59,594 776,208 10,549
Receivable for invest-
ments sold............ 39,421,316 -- --
Receivable for fund
shares sold........... 361,843 383,372 4,769,248
Withholding tax receiv-
able.................. -- 7,694 4,421
Prepaid expenses....... 7,312 1,918 2,009
Unamortized organiza-
tion costs (Note 5)... -- -- 1,078
------------ ------------ ------------
TOTAL ASSETS........... 606,035,604 160,245,085 213,557,584
LIABILITIES:
Payable for investments
purchased............. 31,738,447 -- 2,823,750
Payable for fund shares
redeemed.............. 6,701,822 1,347,533 11,030
Investment advisory
fees payable (Note
2).................... 325,535 95,792 91,856
Administration fees
payable (Note 2)...... 77,397 17,452 24,415
Administrative service
fees payable (Note
2).................... 18,935 9,670 5,769
Directors' fees payable
(Note 2).............. 6,187 1,450 1,482
Accrued expenses and
other payables........ 129,847 23,421 26,330
------------ ------------ ------------
TOTAL LIABILITIES...... 38,998,170 1,495,318 2,984,632
------------ ------------ ------------
NET ASSETS.............. $567,037,434 $158,749,767 $210,572,952
============ ============ ============
NET ASSETS consist of:
Undistributed net in-
vestment income
(loss)................ $ 535,939 $ 680,427 $ 262,829
Accumulated net real-
ized gain (loss) on
investments........... 25,381,992 13,167,987 3,585,623
Unrealized appreciation
of investments and
foreign
currency translations.. 199,584,231 53,964,174 74,196,778
Par value (Note 4)..... 17,309 8,474 9,654
Paid-in capital in ex-
cess of par value..... 341,517,963 90,928,705 132,518,068
------------ ------------ ------------
TOTAL NET ASSETS........ $567,037,434 $158,749,767 $210,572,952
============ ============ ============
SHARES:
Net Assets............. $566,924,546 $158,749,767 $210,572,952
Shares of Common Stock
Outstanding........... 17,305,530 8,474,494 9,654,242
NET ASSET VALUE PER
SHARE.................. $32.76 $18.73 $21.81
====== ====== ======
TRUST SHARES:
Net Assets............. $ 112,888 -- --
Shares of Common Stock
Outstanding........... 3,450 -- --
NET ASSET VALUE PER
SHARE.................. $32.72 -- --
======
</TABLE>
See Notes to Financial Statements.
1
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF ASSETS AND LIABILITIES (CONTINUED)
SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ENERGY AND NATURAL
SMALL CAP FUND RESOURCES FUND
(FORMERLY EARLY (FORMERLY LONG-TERM
LIFE CYCLE FUND) SUPPLY OF ENERGY FUND)
---------------- ----------------------
<S> <C> <C>
ASSETS:
Investments, at cost--see accompany-
ing portfolios..................... $48,752,389 $32,909,651
=========== ===========
Investments, at value (Note 1)...... $65,942,159 $48,814,019
Cash................................ 812 330,546
Dividends receivable................ 7,100 48,138
Interest receivable................. 19,728 4,103
Receivable for fund shares sold..... 1,520,296 422,823
Prepaid expenses.................... 783 496
Unamortized organization costs (Note
5)................................. 1,078 1,078
----------- -----------
TOTAL ASSETS........................ 67,491,956 49,621,203
LIABILITIES:
Payable for investments purchased... -- 971,648
Payable for fund shares redeemed.... 9,994 62,963
Investment advisory fees payable
(Note 2)........................... 33,012 22,398
Administration fees payable (Note
2)................................. 7,844 5,805
Administrative service fees payable
(Note 2)........................... 3,173 1,236
Directors' fees payable (Note 2).... 675 369
Accrued expenses and other
payables........................... 22,820 14,086
----------- -----------
TOTAL LIABILITIES................... 77,518 1,078,505
----------- -----------
NET ASSETS........................... $67,414,438 $48,542,698
=========== ===========
NET ASSETS consist of:
Undistributed net investment income
(loss)............................. $ (93,902) $ 73,066
Accumulated net realized gain (loss)
on investments..................... (2,516,874) 3,044,667
Unrealized appreciation of invest-
ments and foreign
currency translations.............. 17,189,770 15,904,368
Par value (Note 4).................. 5,498 3,308
Paid-in capital in excess of par
value.............................. 52,829,946 29,517,289
----------- -----------
TOTAL NET ASSETS..................... $67,414,438 $48,542,698
=========== ===========
SHARES:
Net Assets.......................... $67,396,150 $48,542,698
Shares of Common Stock Outstanding.. 5,496,898 3,307,719
NET ASSET VALUE PER SHARE............ $12.26 $14.68
====== ======
TRUST SHARES:
Net Assets.......................... $ 18,288 --
Shares of Common Stock Outstanding.. 1,493 --
NET ASSET VALUE PER SHARE............ $12.25 --
======
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
BLENDED EQUITY VALUE AND RESTRUCTURING
FUND INCOME AND FUND (FORMERLY
(FORMERLY GROWTH BUSINESS AND INDUSTRIAL
EQUITY FUND) FUND RESTRUCTURING FUND)
-------------- ----------- -----------------------
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest income........... $ 362,576 $ 1,371,094 $ 40,607
Dividend income........... 2,487,290 994,850 1,157,835
Less: Foreign taxes
withheld................. -- (3,096) --
------------ ----------- -----------
TOTAL INCOME.............. 2,849,866 2,362,848 1,198,442
EXPENSES:
Investment advisory fees
(Note 2)................. 1,390,409 558,822 482,667
Administration fees (Note
2)....................... 283,643 114,000 123,080
Administrative service
fees (Note 2)............ 69,500 45,027 27,595
Shareholder servicing
agent fees............... 53,213 34,446 22,667
Custodian fees............ 50,281 20,904 27,080
Legal and audit fees...... 23,639 9,413 9,255
Shareholder reports....... 17,114 6,569 7,200
Amortization of
organization costs (Note
5)....................... 10,342 3,835 2,094
Registration and filing
fees..................... 8,897 5,530 10,003
Directors' fees and
expenses (Note 2)........ 8,016 3,373 3,275
Distribution fees--Trust
Shares (Note 2).......... 172 -- 49
Miscellaneous expenses.... 8,738 1,075 4,465
------------ ----------- -----------
TOTAL EXPENSES............ 1,923,964 802,994 719,430
Fees waived by investment
adviser and
administrators (Note 2).. (80,938) (45,027) (27,595)
------------ ----------- -----------
NET EXPENSES.............. 1,843,026 757,967 691,835
------------ ----------- -----------
NET INVESTMENT INCOME
(LOSS).................... 1,006,840 1,604,881 506,607
------------ ----------- -----------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS
(NOTE 1):
Net realized gain (loss):
Security transactions..... 18,344,448 8,206,783 1,742,633
Foreign currency
translations............. -- (7,391) (38,046)
------------ ----------- -----------
Total net realized gain
(loss)................... 18,344,448 8,199,392 1,704,587
Change in unrealized
appreciation/depreciation
on investments and
foreign currency
translations during the
year..................... 133,175,147 21,897,982 48,176,104
------------ ----------- -----------
NET REALIZED AND
UNREALIZED GAIN (LOSS) ON
INVESTMENTS.............. 151,519,595 30,097,374 49,880,691
------------ ----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM
OPERATIONS............... $152,526,435 $31,702,255 $50,387,298
============ =========== ===========
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED SEPTEMBER 30, 1997 (UNAUDITED)
<TABLE>
<CAPTION>
ENERGY AND NATURAL
SMALL CAP FUND RESOURCES FUND (FORMERLY
(FORMERLY EARLY LONG-TERM SUPPLY
LIFE CYCLE FUND) OF ENERGY FUND)
---------------- ------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest income.................. $ 98,585 $ 68,165
Dividend income.................. 61,360 321,016
Less: Foreign taxes withheld..... -- --
----------- -----------
TOTAL INCOME..................... 159,945 389,181
EXPENSES:
Investment advisory fees (Note
2).............................. 161,146 119,013
Administration fees (Note 2)..... 41,092 30,348
Administrative service fees (Note
2).............................. 12,533 6,062
Shareholder servicing agent
fees............................ 19,919 10,212
Custodian fees................... 11,539 8,596
Legal and audit fees............. 3,550 2,460
Shareholder reports.............. 2,513 1,617
Amortization of organization
costs (Note 5).................. 2,094 2,094
Registration and filing fees..... 8,164 6,538
Directors' fees and expenses
(Note 2)........................ 1,258 868
Distribution fees--Trust Shares
(Note 2)........................ 24 --
Miscellaneous expenses........... 2,548 2,490
----------- -----------
TOTAL EXPENSES................... 266,380 190,298
Fees waived by investment adviser
and administrators (Note 2)..... (12,533) (6,062)
----------- -----------
NET EXPENSES..................... 253,847 184,236
----------- -----------
NET INVESTMENT INCOME (LOSS)...... (93,902) 204,945
----------- -----------
REALIZED AND UNREALIZED GAIN
(LOSS) ON
INVESTMENTS (NOTE 1):
Net realized gain (loss):
Security transactions............ 379,024 2,534,767
Foreign currency translations.... -- --
----------- -----------
Total net realized gain (loss)... 379,024 2,534,767
Change in unrealized
appreciation/depreciation on
investments and foreign currency
translations during the year.... 17,233,119 8,846,598
----------- -----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS........... 17,612,143 11,381,365
----------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS....... $17,518,241 $11,586,310
=========== ===========
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
BLENDED EQUITY VALUE AND RESTRUCTURING
FUND INCOME AND FUND (FORMERLY
(FORMERLY GROWTH BUSINESS AND INDUSTRIAL
EQUITY FUND)+ FUND RESTRUCTURING FUND)+
-------------- ------------ -----------------------
<S> <C> <C> <C>
SIX MONTHS ENDED SEPTEMBER
30, 1997 (UNAUDITED)
Net investment income
(loss)................... $ 1,006,840 $ 1,604,881 $ 506,607
Net realized gain (loss)
on investments........... 18,344,448 8,199,392 1,704,587
Change in unrealized
appreciation/depreciation
on investments
and foreign currency
translations during the
year..................... 133,175,147 21,897,982 48,176,104
------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations............... 152,526,435 31,702,255 50,387,298
Distributions to
shareholders:
From net investment
income:
Shares................... (1,110,300) (1,496,354) (389,068)
Trust Shares............. (146) -- (58)
------------ ------------ ------------
Total distributions..... (1,110,446) (1,496,354) (389,126)
------------ ------------ ------------
Increase (decrease) in net
assets from fund share
transactions (Note 4)
Shares................... 108,554,226 (4,223,672) 36,573,236
Trust Shares............. (3,419) -- (61,525)
------------ ------------ ------------
Total from fund share
transactions........... 108,550,807 (4,223,672) 36,511,711
------------ ------------ ------------
Net increase (decrease) in
net assets 259,966,796 25,982,229 86,509,883
NET ASSETS:
Beginning of period...... 307,070,638 132,767,538 124,063,069
------------ ------------ ------------
End of period (1)........ $567,037,434 $158,749,767 $210,572,952
============ ============ ============
--------
(1) Including
undistributed net
investment income....... $ 535,939 $ 680,427 $ 262,829
============ ============ ============
YEAR ENDED MARCH 31, 1997
Net investment income
(loss)................... $ 1,968,077 $ 2,839,449 $ 890,216
Net realized gain (loss)
on investments........... 13,470,108 8,773,424 3,588,792
Change in unrealized
appreciation/depreciation
on investments
and foreign currency
translations during the
year..................... 11,035,720 3,899,616 10,912,205
------------ ------------ ------------
Net increase (decrease) in
net assets resulting from
operations............... 26,473,905 15,512,489 15,391,213
Distributions to
shareholders:
From net investment
income:
Shares................... (1,439,009) (3,036,535) (770,732)
Trust Shares............. (103) -- (133)
From net realized gain on
investments:
Shares................... (11,114,096) (5,519,778) (2,941,935)
Trust Shares............. (27) -- (702)
------------ ------------ ------------
Total distributions..... (12,553,235) (8,556,313) (3,713,502)
------------ ------------ ------------
Increase (decrease) in net
assets from fund share
transactions (Note 4)
Shares................... 104,492,129 (1,683,305) 38,284,744
Trust Shares............. 84,035 -- 48,311
------------ ------------ ------------
Total from fund share
transactions........... 104,576,164 (1,683,305) 38,333,055
------------ ------------ ------------
Net increase (decrease) in
net assets............... 118,496,834 5,272,871 50,010,766
NET ASSETS:
Beginning of year........ 188,573,804 127,494,667 74,052,303
------------ ------------ ------------
End of year (2).......... $307,070,638 $132,767,538 $124,063,069
============ ============ ============
--------
(2) Including
undistributed/
(distributions in
excess of)
net investment income.. $ 639,545 $ 571,900 $ 145,348
============ ============ ============
</TABLE>
+ Excelsior Funds, Inc. began offering Trust Shares on November 12, 1996,
September 19, 1996 and September 6, 1996 for Blended Equity Fund, Value and
Restructuring Fund and Small Cap Fund, respectively.
See Notes to Financial Statements.
5
<PAGE>
EXCELSIOR FUNDS, INC.
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
ENERGY AND NATURAL
SMALL CAP FUND RESOURCES FUND (FORMERLY
(FORMERLY EARLY LONG-TERM SUPPLY
LIFE CYCLE FUND)+ OF ENERGY FUND)
----------------- ------------------------
<S> <C> <C>
SIX MONTHS ENDED SEPTEMBER 30,
1997 (UNAUDITED)
Net investment income (loss)...... $ (93,902) $ 204,945
Net realized gain (loss) on
investments...................... 379,024 2,534,767
Change in unrealized
appreciation/depreciation on
investments
and foreign currency translations
during the year.................. 17,233,119 8,846,598
------------ -----------
Net increase (decrease) in net
assets resulting from
operations....................... 17,518,241 11,586,310
Distributions to shareholders:
From net investment income:
Shares........................... -- (181,716)
Trust Shares..................... -- --
------------ -----------
Total distributions............. -- (181,716)
------------ -----------
Increase (decrease) in net assets
from fund share
transactions (Note 4)
Shares........................... (3,375,422) 3,745,013
Trust Shares..................... 5,530 --
------------ -----------
Total from fund share
transactions................... (3,369,892) 3,745,013
------------ -----------
Net increase (decrease) in net
assets 14,148,349 15,149,607
NET ASSETS:
Beginning of period.............. 53,266,089 33,393,091
------------ -----------
End of period (1)................ $ 67,414,438 $48,542,698
============ ===========
--------
(1) Including undistributed net
investment income................. $ (93,902) $ 73,066
============ ===========
YEAR ENDED MARCH 31, 1997
Net investment income (loss)...... $ (203,038) $ 247,913
Net realized gain (loss) on
investments...................... (1,252,061) 3,066,094
Change in unrealized
appreciation/depreciation on
investments
and foreign currency translations
during the year.................. (10,176,904) 3,501,247
------------ -----------
Net increase (decrease) in net
assets resulting from
operations....................... (11,632,003) 6,815,254
Distributions to shareholders:
From net investment income:
Shares........................... -- (236,119)
From net realized gain on
investments:
Shares........................... (760,083) (2,816,614)
Trust Shares..................... (98) --
In excess of net realized gain on
investments:
Shares........................... (2,895,800) --
------------ -----------
Total distributions............. (3,655,981) (3,052,733)
------------ -----------
Increase (decrease) in net assets
from fund share
transactions (Note 4)
Shares........................... (9,515,807) 6,336,079
Trust Shares..................... 9,034 --
------------ -----------
Total from fund share
transactions................... (9,506,773) 6,336,079
------------ -----------
Net increase (decrease) in net
assets........................... (24,794,757) 10,098,600
NET ASSETS:
Beginning of year................ 78,060,846 23,294,491
------------ -----------
End of year (2).................. $ 53,266,089 $33,393,091
============ ===========
--------
(2) Including undistributed/
(distributions in excess of)
net investment income.......... $ -- $ 49,837
============ ===========
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
7
<PAGE>
EXCELSIOR FUNDS, INC.
FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS
For a Fund share outstanding throughout each period.
<TABLE>
<CAPTION>
NET REALIZED DISTRIBUTIONS
NET ASSET NET AND UNREALIZED DIVIDENDS FROM NET
VALUE, INVESTMENT GAIN (LOSS) TOTAL FROM FROM NET REALIZED GAIN
BEGINNING INCOME ON INVESTMENTS INVESTMENT INVESTMENT ON INVESTMENTS
OF PERIOD (LOSS) AND OPTIONS OPERATIONS INCOME AND OPTIONS
--------- ---------- -------------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
BLENDED EQUITY FUND -- (4/25/85*)
(formerly Equity Fund)
Shares:
Year Ended March 31,
1993.................... $16.28 $ 0.08 $3.01 $3.09 $(0.09) $(0.51)
1994.................... 18.77 0.05 1.16 1.21 (0.08) (0.39)
1995.................... 19.17 0.07 2.67 2.74 (0.04) (0.47)
1996.................... 21.40 0.12 5.21 5.33 (0.11) (2.19)
1997.................... 24.43 0.18 2.50 2.68 (0.14) (1.16)
Six Months Ended
September 30, 1997 (Unaudited) 25.81 0.07 6.97 7.04 (0.09) --
Trust Shares --
(11/26/96*)
Period Ended March 31,
1997................... 26.30 0.04 0.03 0.07 (0.03) (0.56)
Six Months Ended
September 30, 1997 (Unaudited) 25.78 0.03 6.96 6.99 (0.05) --
INCOME AND GROWTH FUND -- (1/6/87*)
Year Ended March 31,
1993.................... $ 9.10 $ 0.27 $2.43 $2.70 $(0.35) --
1994.................... 11.45 0.31 0.46 0.77 (0.27) $(0.01)
1995.................... 11.94 0.38 0.26 0.64 (0.35) (0.41)
1996.................... 11.82 0.39 2.61 3.00 (0.31) (0.06)
1997.................... 14.45 0.33 1.45 1.78 (0.35) (0.63)
Six Months Ended
September 30, 1997 (Unaudited) 15.25 0.19 3.46 3.65 (0.17) --
VALUE AND RESTRUCTURING FUND -- (12/31/92*)
(formerly Business and
Industrial
Restructuring Fund)
Shares:
Period Ended March 31,
1993................... $ 7.00 $ 0.02 $0.69 $0.71 -- --
Year Ended March 31,
1994.................... 7.71 0.06 1.96 2.02 $(0.07) $(0.02)
1995.................... 9.64 0.07 1.02 1.09 (0.06) (0.12)
1996.................... 10.55 0.10 3.71 3.81 (0.09) (0.24)
1997.................... 14.03 0.13 2.36 2.49 (0.12) (0.47)
Six Months Ended
September 30, 1997 (Unaudited) 15.93 0.06 5.87 5.93 (0.05) --
Trust Shares --
(9/19/96*)
Period Ended March 31,
1997................... 14.61 0.05 1.53 1.58 (0.05) (0.23)
Period Ended September
30, 1997 (Unaudited)... 15.91 0.02 2.94 2.96 (0.02) --
SMALL CAP FUND -- (12/31/92*)
(formerly Early Life Cycle Fund)
Shares:
Period Ended March 31,
1993................... $ 7.00 -- $0.40 $0.40 -- --
Year Ended March 31,
1994.................... 7.40 $(0.01) 1.36 1.35 -- $(0.09)
1995.................... 8.66 (0.02) 1.31 1.29 -- (0.18)
1996.................... 9.77 (0.02) 1.72 1.70 -- (0.69)
1997.................... 10.78 (0.03) (1.43) (1.46) -- (0.10)
Six Months Ended
September 30, 1997 (Unaudited) 8.83 (0.02) 3.45 3.43 -- --
Trust Shares --
(9/6/96*)
Period Ended March 31,
1997................... 9.98 (0.03) (0.92) (0.95) -- (0.22)
Six Months Ended
September 30, 1997 (Unaudited) 8.81 (0.03) 3.47 3.44 -- --
ENERGY AND NATURAL RESOURCES FUND --
(12/31/92*)
(formerly Long-Term
Supply of Energy Fund)
Period Ended March 31,
1993................... $ 7.00 $ 0.01 $0.80 $0.81 -- --
Year Ended March 31,
1994.................... 7.81 0.08 (0.12) (0.04) $(0.07) --
1995.................... 7.70 0.09 0.24 0.33 (0.10) $(0.01)
1996.................... 7.92 0.07 1.63 1.70 (0.07) --
1997.................... 9.55 0.09 2.60 2.69 (0.09) (1.03)
Six Months Ended
September 30, 1997 (Unaudited) 11.12 0.06 3.56 3.62 (0.06) --
</TABLE>
* Commencement of operations. **Not Annualized. ***Annualized.
+ Expense ratios before waiver of fees and reimbursement of expenses (if
any) by adviser and administrators.
++ Total return data for periods prior to March 31, 1997 does not reflect the
sales load payable on purchases of shares. The sales load was eliminated
effective February 14, 1997.
# For fiscal years beginning on or after September 1, 1995 a fund is
required to disclose the average commission rate per share it paid for
portfolio trades, on which commissions were charged, during the period.
See Notes to Financial Statements.
8
<PAGE>
<TABLE>
<CAPTION>
RATIO
DISTRIBUTIONS IN OF NET
EXCESS OF NET NET ASSETS, OPERATING
REALIZED GAIN NET ASSET END EXPENSES
ON INVESTMENTS TOTAL VALUE, END TOTAL OF PERIOD TO AVERAGE
AND OPTIONS DISTRIBUTIONS OF PERIOD RETURN++ (000) NET ASSETS
---------------- ------------- ---------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
BLENDED EQUITY FUND -- (4/25/85*)
(formerly Equity Fund)
Shares:
Year Ended March 31,
1993.................... -- $(0.60) $18.77 19.26% $106,144 1.08%
1994.................... $(0.34) (0.81) 19.17 6.54% 122,262 1.14%
1995.................... -- (0.51) 21.40 14.65% 137,417 1.05%
1996.................... -- (2.30) 24.43 26.45% 188,574 1.05%
1997.................... -- (1.30) 25.81 11.09% 306,990 1.01%
Six Months Ended
September 30, 1997 (Unaudited) -- (0.09) 32.76 27.35%** 566,924 0.99%***
Trust Shares --
(11/26/96*)
Period Ended March 31,
1997................... -- (0.59) 25.78 0.23%** 81 1.36%***
Six Months Ended
September 30, 1997 (Unaudited) -- (0.05) 32.72 27.13%** 113 1.32%***
INCOME AND GROWTH FUND -- (1/6/87*)
Year Ended March 31,
1993.................... -- $(0.35) $11.45 30.45% $ 51,303 1.15%
1994.................... -- (0.28) 11.94 6.69% 96,682 1.17%
1995.................... -- (0.76) 11.82 5.74% 99,925 1.06%
1996.................... -- (0.37) 14.45 25.83% 127,495 1.05%
1997.................... -- (0.98) 15.25 12.61% 132,768 1.03%
Six Months Ended
September 30, 1997 (Unaudited) -- (0.17) 18.73 24.10%** 158,750 1.02%***
VALUE AND RESTRUCTURING FUND -- (12/31/92*)
(formerly Business and
Industrial
Restructuring Fund)
Shares:
Period Ended March 31,
1993................... -- -- $ 7.71 10.14%** $ 1,935 0.99%***
Year Ended March 31,
1994.................... -- $(0.09) 9.64 26.40% 14,440 0.99%
1995.................... -- (0.18) 10.55 11.49% 30,183 0.98%
1996.................... -- (0.33) 14.03 36.48% 74,052 0.91%
1997.................... -- (0.59) 15.93 18.09% 124,011 0.91%
Six Months Ended
September 30, 1997 (Unaudited) -- (0.05) 21.81 37.30%** 210,573 0.86%***
Trust Shares --
(9/19/96*)
Period Ended March 31,
1997................... -- (0.28) 15.91 10.85%** 52 1.26%***
Period Ended September
30, 1997 (Unaudited)... -- (0.02) 18.85 -- -- 1.21%***
SMALL CAP FUND -- (12/31/92*)
(formerly Early Life Cycle Fund)
Shares:
Period Ended March 31,
1993................... -- -- $ 7.40 5.71%** $ 5,512 0.99%***
Year Ended March 31,
1994.................... -- $(0.09) 8.66 18.27% 24,951 0.95%
1995.................... -- (0.18) 9.77 15.16% 47,782 0.96%
1996.................... -- (0.69) 10.78 18.29% 78,061 0.90%
1997.................... $(0.39) (0.49) 8.83 (14.33)% 53,258 0.94%
Six Months Ended
September 30, 1997 (Unaudited) -- -- 12.26 38.84%** 67,396 0.94%***
Trust Shares --
(9/6/96*)
Period Ended March 31,
1997................... -- (0.22) 8.81 (9.77)%** 8 1.29%***
Six Months Ended
September 30, 1997 (Unaudited) -- -- 12.25 39.05%** 18 1.26%***
ENERGY AND NATURAL RESOURCES FUND --
(12/31/92*)
(formerly Long-Term
Supply of Energy Fund)
Period Ended March 31,
1993................... -- -- $ 7.81 11.57%** $ 1,457 0.99%***
Year Ended March 31,
1994.................... -- $(0.07) 7.70 (0.57)% 6,830 0.99%
1995.................... -- (0.11) 7.92 4.28% 15,813 0.98%
1996.................... -- (0.07) 9.55 21.60% 23,294 0.96%
1997.................... -- (1.12) 11.12 28.28% 33,393 0.93%
Six Months Ended
September 30, 1997 (Unaudited) -- (0.06) 14.68 32.65%** 48,543 0.93%***
<CAPTION>
RATIO RATIO
OF GROSS OF NET
OPERATING INVESTMENT
EXPENSES INCOME (LOSS) PORTFOLIO FEE AVERAGE
TO AVERAGE TO AVERAGE TURNOVER WAIVERS COMMISSION
NET ASSETS + NET ASSETS RATE (NOTE 2) RATE#
------------ ------------- --------- -------- ----------
<S> <C> <C> <C> <C> <C>
BLENDED EQUITY FUND -- (4/25/85*)
(formerly Equity Fund)
Shares:
Year Ended March 31,
1993.................... 1.08% 0.51% 24% -- N/A
1994.................... 1.14% 0.25% 17% -- N/A
1995.................... 1.08% 0.36% 23% -- N/A
1996.................... 1.12% 0.55% 27% $0.02 N/A
1997.................... 1.06% 0.71% 39% 0.01 $0.0663
Six Months Ended
September 30, 1997 (Unaudited) 1.03%*** 0.54%*** 22%*** 0.01 0.0348
Trust Shares --
(11/26/96*)
Period Ended March 31,
1997................... 1.41%*** 0.45%*** 39% -- 0.0663
Six Months Ended
September 30, 1997 (Unaudited) 1.35%*** 0.19%*** 22%*** -- 0.0348
INCOME AND GROWTH FUND -- (1/6/87*)
Year Ended March 31,
1993.................... 1.15% 2.76% 28% -- N/A
1994.................... 1.17% 2.77% 28% -- N/A
1995.................... 1.09% 3.31% 36% -- N/A
1996.................... 1.11% 2.95% 22% $0.01 N/A
1997.................... 1.11% 2.17% 25% 0.01 $0.0777
Six Months Ended
September 30, 1997 (Unaudited) 1.08%*** 2.15%*** 36%*** 0.01 0.0648
VALUE AND RESTRUCTURING FUND -- (12/31/92*)
(formerly Business and
Industrial
Restructuring Fund)
Shares:
Period Ended March 31,
1993................... 5.85%*** 2.48%*** 9%*** $0.04 N/A
Year Ended March 31,
1994.................... 1.73% 0.77% 75% 0.06 N/A
1995.................... 1.08% 0.83% 82% 0.01 N/A
1996.................... 0.95% 0.88% 56% -- N/A
1997.................... 0.95% 0.90% 62% 0.01 $0.0755
Six Months Ended
September 30, 1997 (Unaudited) 0.89%*** 0.63%*** 37%*** -- 0.0694
Trust Shares --
(9/19/96*)
Period Ended March 31,
1997................... 1.30%*** 0.54%*** 62% -- 0.0755
Period Ended September
30, 1997 (Unaudited)... 1.25%*** 0.47%*** 37%*** -- 0.0694
SMALL CAP FUND -- (12/31/92*)
(formerly Early Life Cycle Fund)
Shares:
Period Ended March 31,
1993................... 2.70%*** 0.12%*** 4%*** $0.01 N/A
Year Ended March 31,
1994.................... 1.15% (0.25)% 20% 0.01 N/A
1995.................... 1.04% (0.23)% 42% 0.01 N/A
1996.................... 0.98% (0.17)% 38% 0.01 N/A
1997.................... 1.02% (0.26)% 55% 0.01 $0.0433
Six Months Ended
September 30, 1997 (Unaudited) 0.99%*** (0.35)%*** 37%*** -- 0.0515
Trust Shares --
(9/6/96*)
Period Ended March 31,
1997................... 1.40%*** (0.87)%*** 55% -- 0.0433
Six Months Ended
September 30, 1997 (Unaudited) 1.32%*** (0.67)%*** 37%*** -- 0.0515
ENERGY AND NATURAL RESOURCES FUND --
(12/31/92*)
(formerly Long-Term
Supply of Energy Fund)
Period Ended March 31,
1993................... 7.03%*** 1.69%*** -- *** $0.05 N/A
Year Ended March 31,
1994.................... 2.03% 1.21% 6% 0.07 N/A
1995.................... 1.35% 1.18% 31% 0.03 N/A
1996.................... 1.09% 0.88% 43% 0.01 N/A
1997.................... 0.98% 0.84% 87% -- $0.0809
Six Months Ended
September 30, 1997 (Unaudited) 0.96%*** 1.03%*** 54%*** -- 0.0826
</TABLE>
* Commencement of operations. **Not Annualized. ***Annualized.
+ Expense ratios before waiver of fees and reimbursement of expenses (if
any) by adviser and administrators.
++ Total return data for periods prior to March 31, 1997 does not reflect the
sales load payable on purchases of shares. The sales load was eliminated
effective February 14, 1997.
# For fiscal years beginning on or after September 1, 1995 a fund is
required to disclose the average commission rate per share it paid for
portfolio trades, on which commissions were charged, during the period.
See Notes to Financial Statements
9
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
BLENDED EQUITY FUND
(FORMERLY EQUITY FUND)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 97.21%
FINANCIAL -- 23.26%
15,000 Allstate Corp. ...................................... $ 1,205,625
19,000 American Express Co. ................................ 1,555,625
37,500 American International Group, Inc. .................. 3,869,531
225,400 Associates First Capital Corp. ...................... 14,031,150
37,800 Bank of Boston Corp. ................................ 3,342,938
25,000 Barnett Banks of Florida, Inc. ...................... 1,768,750
20,000 Beneficial Corp. .................................... 1,523,750
27,200 Citicorp............................................. 3,643,100
20,000 First Union Corp. (North Carolina)................... 1,001,250
170,000 Fleet Financial Group, Inc. ......................... 11,145,625
34,240 General Re Corp. .................................... 6,796,640
30,000 Hospitality Properties Trust......................... 1,061,250
90,500 MBIA, Inc. .......................................... 11,352,094
302,076 Mellon Bank Corp. ................................... 16,538,661
294,894 Morgan Stanley, Dean Witter, Discover and Co. ....... 15,942,707
4,000 Norwest Corp. ....................................... 245,000
240,000 State Street Boston Corp. ........................... 14,625,000
35,100 Summit Bancorp (New Jersey).......................... 1,559,756
300,000 United Asset Management Corp. ....................... 8,606,250
264,400 UNUM Corp. .......................................... 12,063,250
------------
131,877,952
------------
CONSUMER STAPLES -- 16.94%
210,000 Abbott Laboratories.................................. 13,426,875
4,000 Air Products & Chemicals, Inc. ...................... 331,750
398,600 +Alliance Pharmaceutical Corp. ...................... 4,733,375
85,500 Coca-Cola Company.................................... 5,210,157
20,000 Conagra, Inc. ....................................... 1,320,000
22,000 CPC International, Inc. ............................. 2,037,750
22,105 CVS Corp. ........................................... 1,257,222
36,610 +Forest Laboratories, Inc. .......................... 1,542,196
64,100 Genzyme Corp. ....................................... 1,906,975
52,000 Gillette Co. ........................................ 4,488,250
61,700 +Healthsouth Corp. .................................. 1,646,619
304,300 Johnson & Johnson.................................... 17,535,287
3,700 Lilly (Eli) & Co. ................................... 445,619
32,500 Mattel, Inc. ........................................ 1,076,563
15,000 Novartis AG ADR...................................... 1,151,643
35,000 PepsiCo, Inc. ....................................... 1,419,687
289,800 Pfizer, Inc. ........................................ 17,406,112
159,300 Philip Morris Companies, Inc. ....................... 6,620,907
62,000 Procter & Gamble Co. ................................ 4,281,875
110,000 Schering-Plough Corp. ............................... 5,665,000
40,500 Stewart Enterprises, Inc., Class A................... 1,766,812
18,700 +Sylvan Learning Systems, Inc. ...................... 818,125
------------
96,088,799
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
TECHNOLOGY -- 16.16%
15,000 +Advanced Lighting Technologies, Inc. ............... $ 397,500
92,000 AMP, Inc. ........................................... 4,927,750
151,570 +Cisco Systems, Inc. ................................ 11,074,083
17,500 +Compaq Computer Corp. .............................. 1,308,125
10,000 Computer Associates International, Inc. ............. 718,125
10,000 Emerson Electric, Co. ............................... 576,250
126,480 Hewlett-Packard Co. ................................. 8,798,265
3,300 Honeywell Corp. ..................................... 221,719
150,000 Intel Corp. ......................................... 13,856,250
37,000 International Business Machines Corp. ............... 3,919,687
46,660 Lucent Technologies, Inc. ........................... 3,796,958
84,620 +Microsoft Corp. .................................... 11,196,284
13,000 Motorola, Inc. ...................................... 934,375
209,000 Tektronix, Inc. ..................................... 14,094,437
18,000 Nokia Corp., Class A, ADR............................ 1,688,625
10,000 Texas Instruments, Inc. ............................. 1,351,250
134,220 Tyco International Ltd. ............................. 11,014,429
23,500 +Unitrode Corp. ..................................... 1,741,937
------------
91,616,049
------------
CONSUMER CYCLICAL -- 15.80%
10,333 +Analog Devices, Inc. ............................... 346,155
98,200 Centex Corp. ........................................ 5,732,425
25,000 Chevron Corp. ....................................... 2,079,687
40,000 Comcast Corp., Class A Special....................... 1,025,000
105,000 Dayton Hudson Corp. ................................. 6,293,438
37,500 Fisher Scientific International...................... 1,760,156
200,000 Ford Motor Co. ...................................... 9,050,000
34,100 General Motors Corp. ................................ 2,282,569
25,000 +Globecomm Systems Inc. ............................. 437,500
28,100 Goodyear Tire and Rubber Co. ........................ 1,931,875
121,400 Heilig-Meyers Co. ................................... 1,866,525
240,000 Houghton Mifflin Co. ................................ 9,060,000
17,700 Lowe's Cos., Inc. ................................... 688,088
66,000 Luxottica Group S.p.A. ADR........................... 3,757,875
19,000 Marriott International, Inc. ........................ 1,350,187
152,834 McDonald's Corp. .................................... 7,278,719
40,000 Meredith Corp. ...................................... 1,325,000
17,000 New York Times Co., Class A.......................... 892,500
315,150 +O'Reilly Automotive, Inc. .......................... 7,090,875
25,000 +Proffitt's, Inc. ................................... 1,481,250
45,000 Reuters Holdings plc ADR............................. 3,206,250
25,000 Sears, Roebuck & Co. ................................ 1,423,438
50,000 Time Warner, Inc. ................................... 2,709,375
25,000 Tribune Co. ......................................... 1,332,813
250,000 Wal-Mart Stores, Inc. ............................... 9,156,250
57,015 Walt Disney Co. ..................................... 4,596,834
37,800 Wiley (John) & Sons, Inc., Class A................... 1,448,213
------------
89,602,997
------------
</TABLE>
See Notes to Financial Statements.
10
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
BLENDED EQUITY FUND -- (CONTINUED)
(FORMERLY EQUITY FUND)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
CAPITAL GOODS -- 10.37%
18,000 Allied Signal, Inc. ................................. $ 765,000
67,000 Boeing Co. .......................................... 3,647,313
12,300 Case Corp. .......................................... 819,487
13,300 Deere & Co. ......................................... 714,875
10,000 Dover Corp. ......................................... 678,750
311,000 General Electric Co. ................................ 21,167,438
7,400 Harsco Corp. ........................................ 335,775
275,266 Illinois Tool Works, Inc. ........................... 13,763,300
30,000 +ITEQ, Inc. ......................................... 414,375
20,000 +Lear Corp. ......................................... 985,000
231,961 +Thermo Electron Corp. .............................. 9,278,440
6,900 +Thermo Fibergen, Inc. .............................. 65,550
65,000 +Thermo Fibergen, Inc., Rights....................... 203,125
6,300 Thiokol Corp. ....................................... 541,800
10,000 +U.S.A. Waste Services, Inc. ........................ 398,750
144,300 Waste Management Inc. ............................... 5,041,481
------------
58,820,459
------------
ENERGY -- 7.80%
41,800 Exxon Corp. ......................................... 2,677,813
110,103 Louisiana Land & Exploration Co. .................... 8,622,441
234,000 Mobil Corp. ......................................... 17,316,000
18,000 +Newpark Resources, Inc. ............................ 707,625
66,000 Royal Dutch Petroleum Co. ........................... 3,663,000
41,100 +United Meridian Corp. .............................. 1,510,425
225,000 Unocal Corp. ........................................ 9,731,250
------------
44,228,554
------------
UTILITIES -- 5.77%
24,000 Ameritech Corp. ..................................... 1,596,000
113,924 AT&T Corp. .......................................... 5,048,257
45,500 Bell Atlantic Corp. ................................. 3,659,906
57,500 Duke Energy Corp. ................................... 2,842,656
115,000 Enron Corp. ......................................... 4,427,500
20,000 GTE Corp. ........................................... 907,500
37,000 +LCI International, Inc. ............................ 985,125
80,000 +NEXTEL Communications, Inc., Class A................ 2,300,000
133,700 Southern Co. ........................................ 3,016,606
38,000 +Teleport Communications Group, Inc., Class A........ 1,705,250
116,400 Texas Utilities Co. ................................. 4,190,400
20,000 Westinghouse Electric Corp. ......................... 541,250
42,000 +Worldcom, Inc. ..................................... 1,483,125
------------
32,703,575
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
RAW/INTERMEDIATE
MATERIALS -- 1.11%
50,600 E.I. du Pont de Nemours &
Co. ........................... $ 3,115,062
5,100 Georgia Pacific Corp. ......... 532,313
7,000 Monsanto Co. .................. 273,000
5,000 Pioneer Hi-Bred International,
Inc. .......................... 455,000
58,200 Sigma-Aldrich Corp. ........... 1,913,325
------------
6,288,700
------------
TOTAL COMMON STOCKS (Cost
$351,770,291).................. 551,227,085
------------
CONVERTIBLE PREFERRED STOCKS -- 0.18%
FINANCIAL -- 0.18%
22,500 Sunamerica Inc. , Preferred
Exchange $1.862
(Cost $904,750)................... 1,032,187
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 2.20%
$2,480,000 Associates Corp. of North
America Master Notes........... 2,480,000
9,962,000 General Electric Co.
Promissory Notes............... 9,962,000
------------
TOTAL DEMAND NOTES
(Cost $12,442,000)............. 12,442,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $365,117,041*).................... 99.59% $564,701,272
OTHER ASSETS AND LIABILITIES (NET)........................ 0.41 2,336,162
------ ------------
NET ASSETS................................................ 100.00% $567,037,434
====== ============
</TABLE>
- --------
* For Federal tax purposes, the tax basis on investments aggregates
$365,117,041.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
11
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
INCOME AND GROWTH FUND
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 71.71%
CONSUMER CYCLICAL -- 16.71%
3,495 Bayerische Motoren Werke AG.......................... $ 2,968,870
44,000 Electronic Data Systems Corp. ....................... 1,562,000
75,000 Herman Miller, Inc. ................................. 4,012,500
50,000 Luxottica Group S.p.A. ADR........................... 2,846,875
75,000 McDonald's Corp. .................................... 3,571,875
180,000 ServiceMaster Ltd. Partnership....................... 5,141,250
125,000 Smart & Final, Inc. ................................. 2,984,375
90,000 Wiley (John) & Sons, Inc., Class A................... 3,448,125
------------
26,535,870
------------
FINANCIAL -- 11.93%
32,625 American International Group, Inc. .................. 3,366,492
12,000 General Re Corp. .................................... 2,382,000
25,000 Household International, Inc. ....................... 2,829,687
95,000 IPC Holdings Ltd. ................................... 2,790,625
60,000 Morgan Stanley, Dean Witter, Discover and Co. ....... 3,243,750
85,000 Mutual Risk Management Ltd. ......................... 4,319,063
------------
18,931,617
------------
CONSUMER STAPLES -- 9.45%
100,000 +Carriage Services, Inc. ............................ 1,725,000
35,000 Gillette Co. ........................................ 3,020,937
60,000 Johnson & Johnson.................................... 3,457,500
75,000 Novo-Nordisk A.S., ADR............................... 4,167,188
35,000 WM. Wrigley Jr. Co. ................................. 2,635,938
------------
15,006,563
------------
ENERGY -- 8.00%
44,000 Exxon Corp. ......................................... 2,818,750
41,000 Norsk Hydro A.S., ADR................................ 2,452,313
50,000 +SEACOR Holdings, Inc. .............................. 3,100,000
65,000 +Transmontaigne Oil Co. ............................. 1,202,500
85,000 +United Meridian Corp. .............................. 3,123,750
------------
12,697,313
------------
RAW/INTERMEDIATE
MATERIALS -- 6.98%
51,000 Nucor Corp. ......................................... 2,687,063
100,000 Pall Corp. .......................................... 2,156,250
42,000 Pioneer Hi-Bred International, Inc. ................. 3,822,000
120,000 Worthington Industries, Inc. ........................ 2,422,500
------------
11,087,813
------------
TECHNOLOGY -- 6.41%
120,000 +Analog Devices, Inc. ............................... 4,020,000
266,000 +Interleaf, Inc. .................................... 764,750
85,500 +SDL, Inc. .......................................... 1,688,625
50,000 +Unitrode Corp. ..................................... 3,706,250
------------
10,179,625
------------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
UTILITIES -- 5.86%
90,000 +AES Corp. ......................................... $ 3,937,500
100,000 +NEXTEL Communications, Inc., Class A............... 2,875,000
90,000 UGI Corp. .......................................... 2,486,250
------------
9,298,750
------------
CAPITAL GOODS -- 4.35%
52,000 Dover Corp. ........................................ 3,529,500
40,000 Raychem Corp. ...................................... 3,380,000
------------
6,909,500
------------
TRANSPORTATION -- 2.02%
40,000 +Federal Express Corp. ............................. 3,200,000
------------
TOTAL COMMON STOCKS (Cost $64,555,042).............. 113,847,051
------------
CONVERTIBLE PREFERRED STOCKS -- 6.08%
FINANCIAL -- 3.94%
325,000 Capstead Mortgage Corp.,
Series B, Preferred
Exchange $1.26...................................... 6,256,250
------------
ENERGY -- 2.14%
80,000 Callon Petroleum Co.,
Series A, Preferred
Exchange $2.125..................................... 3,390,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $6,484,259)................................... 9,646,250
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
CORPORATE BONDS -- 4.01%
MATERIALS -- 1.38%
$2,000,000 Fort Howard Sr. Notes,
9.25%, 03/15/01..................................... 2,190,000
------------
TELECOMMUNICATIONS -- 1.32%
2,000,000 ++Comcast Cellular,
9.50%, 05/01/07..................................... 2,090,000
------------
ENERGY -- 1.31%
2,000,000 Vintage Petro Sr. Sub-Notes, 9.00%, 12/15/05........ 2,085,000
------------
TOTAL CORPORATE BONDS (Cost $6,109,118)............. 6,365,000
------------
U.S. GOVERNMENT OBLIGATIONS -- 5.36%
5,000,000 U.S. Treasury Bond
7.625%, 02/15/07.................................... 5,271,880
3,000,000 U.S. Treasury Bond
7.125%, 02/15/23.................................... 3,234,375
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS
(Cost $8,236,136)................................... 8,506,255
------------
</TABLE>
See Notes to Financial Statements.
12
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
INCOME AND GROWTH FUND -- (CONTINUED)
<TABLE>
<CAPTION>
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- ------------
<C> <S> <C>
CONVERTIBLE BONDS -- (CONTINUED) -- 10.32%
TECHNOLOGY -- 7.18%
$4,024,000 Kollmorgen Corp.,
Sub-Debenture,
8.75%, 05/01/09...................................... $ 4,114,540
4,959,000 Network Equipment Technologies, Inc.,
Sub-Debenture,
7.25%, 05/15/14...................................... 4,649,062
2,500,000 VLSI Technology,
8.25%, 10/01/05...................................... 2,634,375
------------
11,397,977
------------
CONSUMER STAPLES -- 2.05%
3,400,000 Novacare, Inc.,
Sub-Debenture,
5.50%, 01/15/00...................................... 3,259,750
------------
TRANSPORTATION -- 1.09%
2,800,000 World Corp., Inc.,
7.00%, 05/15/04...................................... 1,729,000
------------
TOTAL CONVERTIBLE BONDS (Cost $15,401,895)........... 16,386,727
------------
DEMAND NOTES -- 2.63%
1,910,000 Associates Corp. of North America Master Notes....... 1,910,000
2,259,000 General Electric Co. Promissory Notes................ 2,259,000
------------
TOTAL DEMAND NOTES (Cost $4,169,000)................. 4,169,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS (Cost $104,955,450*).................... 100.11% $158,920,283
OTHER ASSETS AND LIABILITIES (NET)........................ (0.11) (170,516)
------ ------------
NET ASSETS................................................ 100.00% $158,749,767
====== ============
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$104,955,450.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1997 these securities amounted to $2,090,000, or 1.32% of net assets.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
13
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
VALUE AND RESTRUCTURING FUND
(FORMERLY BUSINESS AND INDUSTRIAL RESTRUCTURING FUND)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- 94.41%
TECHNOLOGY -- 21.44%
93,000 Alcatel Alsthom ADR.................................. $ 2,470,313
28,000 Amgen, Inc. ......................................... 1,340,500
92,000 +Bell & Howell Holdings Co. ......................... 2,984,250
36,000 Computer Associates International, Inc. ............. 2,585,250
130,000 Frontier Corp. ...................................... 2,990,000
195,000 +Informix Corp. ..................................... 1,365,000
34,000 International Business Machines Corp. ............... 3,601,875
50,000 Motorola, Inc. ...................................... 3,593,750
40,000 Nokia Corp., Class A, ADR............................ 3,752,500
100,000 +PairGain Technologies, Inc. ........................ 2,843,750
140,000 +Phoenix Technologies Ltd. .......................... 2,065,000
70,000 +Plantronics, Inc. .................................. 2,642,500
111,000 +Smallworldwide plc ADR.............................. 2,275,500
37,000 Texas Instruments, Inc. ............................. 4,999,625
37,000 Thiokol Corp. ....................................... 3,182,000
160,000 +Unisys Corp. ....................................... 2,450,000
------------
45,141,813
------------
FINANCIAL -- 21.10%
30,000 +American Capital Strategies, Ltd. .................. 588,750
115,000 +Amerin Corp. ....................................... 3,284,687
35,500 Amvesco plc ADR...................................... 2,396,250
46,000 Aon Corp. ........................................... 2,432,250
30,000 Associates First Capital Corp. ...................... 1,867,500
158,250 +Bank Plus Corp. .................................... 2,017,687
26,000 Chase Manhattan Corp. ............................... 3,068,000
45,000 Donaldson, Lufkin & Jenrette, Inc. .................. 3,220,313
65,000 Everest Re Holdings, Inc. ........................... 2,665,000
63,000 Fannie Mae .......................................... 2,961,000
62,000 FBL Financial Group, Inc., Class A................... 2,294,000
90,000 +ITLA Capital Corp. ................................. 1,800,000
55,000 Mellon Bank Corp. ................................... 3,011,250
46,000 Mid Ocean Ltd. ...................................... 2,915,250
22,000 Morgan (J.P.) & Co., Inc. ........................... 2,499,750
49,000 PNC Bank Corp. ...................................... 2,391,813
145,539 Prime Retail, Inc. .................................. 2,274,047
40,000 Travelers Group, Inc. ............................... 2,730,000
------------
44,417,547
------------
CONSUMER STAPLES -- 17.85%
50,000 +Amerisource Health Corp., Class A................... 2,921,875
53,000 Avon Products, Inc. ................................. 3,286,000
41,000 Bristol-Myers Squibb Co. ............................ 3,392,750
25,000 CPC International, Inc. ............................. 2,315,625
46,000 Eastman Kodak Co. ................................... 2,987,125
89,375 Fort James Corp. .................................... 4,094,492
36,000 General Mills, Inc. ................................. 2,481,750
149,500 +MAPICS, Inc. ....................................... 1,906,125
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
COMMON STOCKS -- (CONTINUED)
CONSUMER STAPLES -- (CONTINUED)
78,000 Philip Morris Companies, Inc. ....................... $ 3,241,875
84,500 +Suiza Foods Corp. .................................. 4,351,750
76,000 Sunbeam Corp. ....................................... 3,372,500
24,000 Warner Lambert Co. .................................. 3,238,500
------------
37,590,367
------------
CONSUMER CYCLICAL -- 12.04%
100,000 +Data Documents, Inc. ............................... 2,100,000
68,000 Ford Motor Co. ...................................... 3,077,000
46,000 General Motors Corp. ................................ 3,079,125
60,000 Ispat International N.V.--New York Shares............ 1,717,500
60,000 Olin Corp. .......................................... 2,808,750
80,000 +Outdoor Systems, Inc. .............................. 2,100,000
75,000 TV Azteca, S.A. ..................................... 1,687,500
40,000 +Ugly Duckling Corp. ................................ 610,000
103,000 Viad Corp. .......................................... 1,963,437
105,000 Westinghouse Electric Corp. ......................... 2,841,563
40,000 XEROX Corp. ......................................... 3,367,500
------------
25,352,375
------------
CAPITAL GOODS -- 7.69%
65,000 Allied Signal, Inc. ................................. 2,762,500
58,000 +American Standard Cos., Inc. ....................... 2,327,250
56,000 Boeing Co. .......................................... 3,048,500
124,000 Chicago Bridge & Iron Co., N.V. -- New York Shares... 2,573,000
100,000 +Coltec Industries, Inc. ............................ 2,162,500
58,000 Metals USA, Inc. .................................... 895,375
30,000 United Technologies Corp. ........................... 2,430,000
------------
16,199,125
------------
ENERGY -- 6.83%
40,000 Mobil Corp. ......................................... 2,960,000
111,000 +Nabors Industries, Inc. ............................ 4,322,063
64,000 +Ocean Energy, Inc. ................................. 4,416,000
73,000 YPF S.A. ADR......................................... 2,691,875
------------
14,389,938
------------
TRANSPORTATION -- 4.37%
77,000 +Coach USA, Inc. .................................... 2,314,812
90,000 +Hvide Marine, Inc., Class A......................... 2,868,750
130,000 +Kitty Hawk, Inc. ................................... 2,421,250
121,000 +Trailer Bridge, Inc. ............................... 1,588,125
------------
9,192,937
------------
RAW/INTERMEDIATE MATERIALS -- 3.09%
60,000 Cambrex Corp. ....................................... 2,797,500
125,000 +PalEx, Inc. ........................................ 1,875,000
25,000 W.R. Grace & Co. .................................... 1,840,625
------------
6,513,125
------------
TOTAL COMMON STOCKS (Cost $125,267,146).............. 198,797,227
------------
</TABLE>
See Notes to Financial Statements.
14
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
VALUE AND RESTRUCTURING FUND -- (CONTINUED)
(FORMERLY BUSINESS AND INDUSTRIAL RESTRUCTURING FUND)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- ------------
<C> <S> <C>
CONVERTIBLE PREFERRED STOCKS -- 1.83%
CONSUMER CYCLICAL -- 1.11%
40,000 Kmart Financing, Inc.,
Preferred Exchange $3.88............................ $ 2,340,000
TECHNOLOGY -- 0.72%
45,000 ++Intermedia Communications, Series D,
Preferred, Exchange, 7.00%.......................... 1,513,125
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $3,185,593)................................... 3,853,125
------------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 2.83%
$2,809,000 Associates Corp. of North America Master Notes...... 2,809,000
3,143,000 General Electric Co. Promissory Notes............... 3,143,000
------------
TOTAL DEMAND NOTES (Cost $5,952,000)................ 5,952,000
------------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $134,404,739*)...................................... 99.07% $208,602,352
OTHER ASSETS AND LIABILITIES (NET)........................ 0.93 1,970,600
------ ------------
NET ASSETS................................................ 100.00% $210,572,952
====== ============
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$134,404,739.
+ Non-income producing security.
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At September 30,
1997 these securities amounted to $1,513,125, or 0.72% of net assets.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
15
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
SMALL CAP FUND
(FORMERLY EARLY LIFE CYCLE FUND)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- 89.95%
CAPITAL GOODS -- 17.55%
48,700 +BE Aerospace, Inc. ........................... $ 1,753,200
75,000 Juno Lighting, Inc. ........................... 1,284,375
52,500 Lindsay Manufacturing Co. ..................... 2,231,250
100,000 +Morrison Knudsen Corp. ....................... 1,212,500
53,000 Teleflex, Inc. ................................ 1,835,125
70,000 +Thermedics, Inc. ............................. 1,321,250
25,500 Thiokol Corp. ................................. 2,193,000
-----------
11,830,700
-----------
TECHNOLOGY -- 18.57%
60,000 +Asyst Technologies, Inc. ..................... 2,647,500
10,000 +Cisco Systems, Inc. .......................... 730,625
30,000 First Data Corp. .............................. 1,126,875
35,000 +Glenayre Technologies, Inc. .................. 584,063
43,000 +Informix Corp. ............................... 301,000
295,200 +Interleaf, Inc. .............................. 848,700
26,100 +MICROS Systems, Inc. ......................... 1,295,212
50,000 +Perceptron, Inc. ............................. 1,493,750
110,000 +Phoenix Technologies Ltd. .................... 1,622,500
75,000 +Premenos Technology Corp. .................... 1,078,125
40,000 +SDL, Inc. .................................... 790,000
-----------
12,518,350
-----------
CONSUMER CYCLICAL -- 15.86%
20,000 Danaher Corp. ................................. 1,160,000
22,500 Fair Isaac & Co., Inc. ........................ 995,625
50,000 +Global Motorsport Group Inc. ................. 800,000
56,250 +Paxar Corp. .................................. 1,107,422
42,000 RDO Equipment Co., Class A..................... 966,000
60,000 +Recovery Engineering, Inc. ................... 1,635,000
80,000 +Renters Choice, Inc. ......................... 1,800,000
60,000 +Scientific Games Holdings Corp. .............. 1,305,000
22,500 +WestPoint Stevens, Inc. ...................... 922,500
-----------
10,691,547
-----------
FINANCIAL -- 12.86%
80,000 +Americredit Corp. ............................ 2,280,000
45,000 Cullen/Frost Bankers, Inc. .................... 2,131,875
50,000 First American Corp. (Tennessee).................. 2,443,750
35,000 Sirrom Capital Corp. .......................... 1,815,625
-----------
8,671,250
-----------
TELECOMMUNICATION -- 6.99%
78,700 +Allen Telecom, Inc. .......................... 2,242,950
55,000 +Teleport Communications Group, Inc., Class A.. 2,468,125
-----------
4,711,075
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
ENERGY -- 6.61%
70,000 +Seagull Energy Corp. .......... $ 1,785,000
60,000 +TETRA Technologies, Inc. ...... 1,387,500
35,000 +United Meridian Corp. ......... 1,286,250
-----------
4,458,750
-----------
CONSUMER STAPLES -- 4.96%
10,000 Novo-Nordisk A.S., ADR.......... 555,625
170,000 +Pepsi-Cola Puerto Rico Bottling
Co., Class B.................... 1,179,375
14,000 +Pharmacopeia, Inc. ............ 315,000
30,000 +Respironics, Inc. ............. 825,000
30,000 +Sunrise Medical, Inc. ......... 468,750
-----------
3,343,750
-----------
TRANSPORTATION -- 3.73%
69,000 Air Express International
Corp. .......................... 2,509,875
-----------
UTILITIES--1.95%
30,000 +AES Corp. ..................... 1,312,500
-----------
RAW/INTERMEDIATE MATERIALS --
0.87%
25,000 +Steel Dynamics, Inc. .......... 589,062
-----------
TOTAL COMMON STOCKS (Cost
$43,447,089)....................... 60,636,859
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 7.87%
$1,773,000 Associates Corp. of North
America Master Notes............ 1,773,000
3,532,300 General Electric Co. Promissory
Notes........................... 3,532,300
-----------
TOTAL DEMAND NOTES
(Cost $5,305,300).................. 5,305,300
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $48,752,389*)......................................... 97.82% $65,942,159
OTHER ASSETS AND
LIABILITIES (NET)........................................... 2.18 1,472,279
------ -----------
NET ASSETS.................................................. 100.00% $67,414,438
====== ===========
</TABLE>
- --------
* For federal tax purposes, the tax basis of investments aggregates
$48,752,389.
+ Non-income producing security.
See Notes to Financial Statements.
16
<PAGE>
EXCELSIOR FUNDS, INC.
PORTFOLIO OF INVESTMENTS SEPTEMBER 30, 1997 (UNAUDITED)
ENERGY AND NATURAL RESOURCES FUND
(FORMERLY LONG-TERM SUPPLY OF ENERGY FUND)
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS -- 93.82%
ENERGY -- 88.27%
20,000 Amoco Corp. .......................................... $ 1,927,500
15,000 Anadarko Petroleum Corp. ............................. 1,077,187
13,000 +Atwood Oceanics, Inc. ............................... 1,464,125
8,000 +BJ Services Co. ..................................... 594,000
28,000 British Petroleum Company plc ADR..................... 2,542,750
12,000 Chevron Corp. ........................................ 998,250
10,000 Coflexip, S.A. ....................................... 560,000
10,000 +Cooper Cameron Corp. ................................ 718,125
20,000 Diamond Offshore Drilling, Inc. ...................... 1,103,750
20,888 Duke Energy Corp. .................................... 1,032,650
30,700 Eagle Geophysical, Inc. .............................. 606,325
20,000 ENI S.p.A. ADR........................................ 1,256,250
42,000 Exxon Corp. .......................................... 2,690,625
46,000 +Falcon Drilling Company, Inc. ....................... 1,624,375
25,000 +J. Ray McDermott, S.A. .............................. 1,225,000
11,000 Louisiana Land & Exploration Co. ..................... 861,438
30,000 Mobil Corp. .......................................... 2,220,000
28,800 +Nabors Industries, Inc. ............................. 1,121,400
20,000 +Noble Drilling Corp. ................................ 645,000
21,000 +Ocean Energy, Inc. .................................. 1,449,000
15,000 +Patterson Energy, Inc. .............................. 785,625
20,000 +Precision Drilling Corp. ............................ 1,277,500
46,000 Royal Dutch Petroleum Co. ............................ 2,553,000
14,000 Santa Fe International Corp. ......................... 651,000
18,000 Schlumberger Ltd. .................................... 1,515,375
14,000 +SEACOR Holdings, Inc. ............................... 868,000
20,000 +TETRA Technologies, Inc. ............................ 462,500
20,000 Texaco, Inc. ......................................... 1,228,750
30,000 Tosco Corp. .......................................... 1,044,375
16,500 Total S.A. ADR........................................ 945,656
20,000 +Transmontaigne Oil Co. .............................. 370,000
35,000 +United Meridian Corp. ............................... 1,286,250
20,000 Unocal Corp. ......................................... 865,000
35,000 USX-Marathon Group, Inc. ............................. 1,301,563
6,800 +UTI Energy Corp. .................................... 280,925
12,000 +Weatherford Enterra, Inc. ........................... 639,750
12,000 +Western Atlas, Inc. ................................. 1,056,000
-----------
42,849,019
-----------
UTILITIES -- 3.61%
40,000 +AES Corp. ........................................... 1,750,000
-----------
</TABLE>
<TABLE>
<CAPTION>
VALUE
SHARES (NOTE 1)
---------- -----------
<C> <S> <C>
COMMON STOCKS (CONTINUED)
RAW/INTERMEDIATE MATERIALS -- 1.94%
12,000 Potash Corp. of Saskatchewan, Inc. ................... $ 942,000
-----------
TOTAL COMMON STOCKS
(Cost $29,636,651).................................... 45,541,019
-----------
<CAPTION>
PRINCIPAL
AMOUNT
----------
<C> <S> <C>
DEMAND NOTES -- 6.74%
$1,323,000 Associates Corp. of North America Master Notes........ 1,323,000
1,950,000 General Electric Co. Promissory Notes................. 1,950,000
-----------
TOTAL DEMAND NOTES
(Cost $3,273,000)..................................... 3,273,000
-----------
</TABLE>
<TABLE>
<S> <C> <C>
TOTAL INVESTMENTS
(Cost $32,909,651*)........................................ 100.56% $48,814,019
OTHER ASSETS AND
LIABILITIES (NET).......................................... (0.56) (271,321)
------ -----------
NET ASSETS................................................. 100.00% $48,542,698
====== ===========
</TABLE>
- --------
* For Federal tax purposes, the tax basis of investments aggregates
$32,909,651.
+ Non-income producing security.
ADR -- American Depositary Receipt.
See Notes to Financial Statements.
17
<PAGE>
EXCELSIOR FUNDS, INC.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES:
Excelsior Funds, Inc. ("Excelsior Fund") was incorporated under the laws of
the State of Maryland on August 2, 1984 and is registered under the Investment
Company Act of 1940 (the "1940 Act"), as amended, as an open-end management
investment company.
Excelsior Fund currently offers shares in seventeen managed investment
portfolios, each having its own investment objectives and policies. The
following is a summary of significant accounting policies for the Blended
Equity Fund (formerly Equity Fund), Income and Growth Fund, Value and
Restructuring Fund (formerly Business and Industrial Restructuring Fund),
Small Cap Fund (formerly Early Life Cycle Fund), Energy and Natural Resources
Fund (formerly Long-Term Supply of Energy Fund) (the "Portfolios"). Such
policies are in conformity with generally accepted accounting principles and
are consistently followed by Excelsior Fund in the preparation of the
financial statements. Generally accepted accounting principles require
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
these estimates. The financial statements for the remaining portfolios of
Excelsior Fund and Excelsior Tax-Exempt Funds, Inc. ("Excelsior Tax-Exempt
Fund") are presented separately.
(A) PORTFOLIO VALUATION:
Investments in securities that are traded on a recognized stock exchange
are valued at the last sale price on the exchange on which such securities
are primarily traded or at the last sale price on the national securities
market. Securities traded over-the-counter are valued each business day on
the basis of the closing over-the-counter bid prices. Securities for which
there were no transactions are valued at the average of the most recent bid
prices (as calculated by an independent pricing service (the "Service")
based upon its evaluation of the market for such securities) when, in the
judgment of the Service, quoted bid prices for securities are readily
available and are representative of the bid side of the market. Portfolio
securities that are primarily traded on foreign securities exchanges are
generally valued at the preceding closing values of such securities on
their respective exchanges, except that when an occurrence subsequent to
the time a value was so established is likely to have changed such value,
then a fair value of those securities will be determined by consideration
of other factors under the direction of the Board of Directors. A security
which is traded on more than one exchange is valued at the quotation on the
exchange determined to be the primary market on which the security is
traded. Securities for which market quotations are not readily available
are valued at fair value, pursuant to guidelines adopted by Excelsior
Fund's Board of Directors. Short-term debt instruments with remaining
maturities of 60 days or less are valued at amortized cost, which
approximates market value.
All other foreign securities are valued at the last current bid quotation
if market quotations are available, or at fair value as determined in
accordance with policies established by the Board of Directors. Investment
valuations, other assets, and liabilities initially expressed in foreign
currencies are converted each business day into U.S. dollars based upon
current exchange rates. Purchases and sales of foreign investments and
income and expenses are converted into U.S. dollars based upon currency
exchange rates prevailing on the respective dates of such transactions.
Gains and losses
18
<PAGE>
attributable to foreign currency exchange rates are recorded for financial
statement purposes as net realized gains and losses on investments. That
portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not
separately disclosed.
Forward foreign currency exchange contracts: The Portfolios'
participation in forward currency exchange contracts will be limited to
hedging involving either specific transactions or portfolio positions.
Transaction hedging involves the purchase or sale of foreign currency with
respect to specific receivables or payables of a Portfolio generally
arising in connection with the purchase or sale of its portfolio
securities. Risk may arise upon entering into these contracts from the
potential inability of counterparties to meet the terms of their contracts
and is generally limited to the amount of unrealized gain on the contracts,
if any, at the date of default. Risk may also arise from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
Contracts are marked-to-market daily and the change in market value is
recorded as unrealized appreciation or depreciation. Realized gains or
losses arising from such transactions are included in net realized gains or
losses from foreign currency transactions.
(B) SECURITY TRANSACTIONS AND INVESTMENT INCOME:
Security transactions are recorded on a trade date basis. Realized gains
and losses on investments sold are recorded on the basis of identified
cost. Interest income, adjusted for amortization of premiums and, when
appropriate, discounts on investments, is recorded on the accrual basis.
Dividend income is recorded on the ex-dividend date.
(C) REPURCHASE AGREEMENTS:
Excelsior Fund may purchase portfolio securities from financial
institutions deemed to be creditworthy by the investment adviser subject to
the seller's agreement to repurchase and Excelsior Fund's agreement to
resell such securities at mutually agreed upon prices. Securities purchased
subject to such repurchase agreements are deposited with Excelsior Fund's
custodian or sub-custodian or are maintained in the Federal
Reserve/Treasury book-entry system and must have, at all times, an
aggregate market value not less than the repurchase price.
If the value of the underlying security, falls below the value of the
repurchase price, Excelsior Fund will require the seller to deposit
additional collateral by the next business day. Default or bankruptcy of
the seller may, however, expose the applicable Portfolio of Excelsior Fund
to possible delay in connection with the disposition of the underlying
securities or loss to the extent that proceeds from a sale of the
underlying securities were less than the repurchase price under the
agreement.
(D) DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income are declared and paid quarterly. Net
realized capital gains are distributed to shareholders at least annually.
Dividends and distributions are determined in accordance with Federal
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
net operating losses, foreign currency transactions, partnership income,
deferral of losses on wash sales and post-October losses.
In order to avoid a Federal excise tax, each Portfolio is required to
distribute certain minimum amounts of net realized capital gain and net
investment income for the respective periods ending October 31 and December
31 in each calendar year.
19
<PAGE>
(E) FEDERAL TAXES:
It is the policy of Excelsior Fund that each Portfolio continue to
qualify as a regulated investment company, if such qualification is in the
best interest of the shareholders, by complying with the requirements of
the Internal Revenue Code applicable to regulated investment companies, and
by distributing substantially all of its taxable earnings to its
shareholders.
At September 30, 1997, aggregate gross unrealized appreciation for all
securities for which there was an excess of value over tax cost and
aggregate gross unrealized depreciation for all securities for which there
was an excess of tax cost over value is as follows:
<TABLE>
<CAPTION>
NET
TAX BASIS TAX BASIS UNREALIZED
UNREALIZED UNREALIZED APPRECIATION
APPRECIATION (DEPRECIATION) (DEPRECIATION)
------------ -------------- --------------
<S> <C> <C> <C>
Blended Equity Fund............. $200,957,175 $(1,372,944) $199,584,231
Income and Growth Fund.......... 55,865,952 (1,901,119) 53,964,833
Value and Restructuring Fund ... 75,267,254 (1,069,641) 74,197,613
Small Cap Fund.................. 19,958,494 (2,768,724) 17,189,770
Energy and Natural Resources
Fund........................... 15,968,780 (64,412) 15,904,368
</TABLE>
(F) EXPENSE ALLOCATION:
Expenses directly attributable to a Portfolio or a class of shares in
such Portfolio are charged to that Portfolio or such share class. Other
expenses are allocated to the respective Portfolios based on average net
assets.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE, DISTRIBUTION EXPENSES AND
RELATED PARTY TRANSACTIONS:
United States Trust Company of New York ("U.S. Trust NY ") and U.S. Trust
Company of Connecticut ("U.S. Trust CT" and, collectively with U.S. Trust NY,
"U.S. Trust") serve as the investment advisers to the Portfolios. For the
services provided pursuant to the Investment Advisory Agreements, U.S. Trust
is entitled to receive a fee, computed daily and paid monthly, at the annual
rates of 0.75% of the average daily net assets of the Blended Equity Fund and
Income and Growth Fund, and 0.60% of the average daily net assets of the Value
and Restructuring Fund, Small Cap Fund and Energy and Natural Resources Fund.
Prior to May 15, 1997, U.S. Trust NY served as the Portfolios' investment
advisor pursuant to investment advisory agreements substantially similar to
those currently in effect for the Portfolios. U.S. Trust NY and U.S. Trust CT
are wholly-owned subsidiaries of U.S. Trust Corporation, a registered bank
holding Company.
U.S. Trust CT, Chase Global Funds Services Company ("CGFSC"), a subsidiary
of The Chase Manhattan Bank and Federated Administrative Services ("FAS")
(collectively, the "Administrators") provide administrative services to
Excelsior Fund. For the services provided to the Portfolios, the
Administrators are entitled jointly to annual fees, computed daily and paid
monthly, based on the combined aggregate average daily net assets of Excelsior
Fund, Excelsior Tax-Exempt Fund and Excelsior Institutional Trust (excluding
the international equity portfolios of Excelsior Fund and Excelsior
Institutional Trust) all of which are affiliated investment companies, as
follows: 0.200% of the
20
<PAGE>
first $200 million, 0.175% of the next $200 million, and 0.150% over $400
million. Administration fees payable by each Portfolio of the three investment
companies are determined in proportion to the relative average daily net
assets of the respective Portfolios for the period paid. Prior to May 15,
1997, U.S. Trust NY, CGFSC and FAS served as the Portfolios' administrators
pursuant to an administration agreement substantially similar to the one
currently in effect for the Portfolios. For the six months ended September 30,
1997, Administration fees charged by U.S. Trust were as follows:
<TABLE>
<S> <C>
Blended Equity Fund.................................................... $48,674
Income and Growth Fund................................................. 19,337
Value and Restructuring Fund........................................... 21,014
Small Cap Fund......................................................... 6,993
Energy and Natural Resources Fund...................................... 5,166
</TABLE>
From time to time, as they may deem appropriate in their sole discretion, or
pursuant to applicable state expense limitations, U.S. Trust and the
Administrators may undertake to waive a portion or all of the fees payable to
them and also may reimburse the Portfolios for a portion of other expenses. In
addition, until further notice to Excelsior Fund, U.S. Trust intends to
voluntarily waive fees to the extent necessary for each of Value and
Restructuring Fund, Small Cap Fund and Energy and Natural Resources Fund to
maintain an annual expense ratio of not more than 0.99%. For the six months
ended September 30, 1997, U.S. Trust waived fees of $11,438 for the Blended
Equity Fund in association with the reorganization.
Excelsior Fund has also entered into administrative servicing agreements
with various service organizations (which may include affiliates of U.S.
Trust) requiring them to provide administrative support services to their
customers owning shares of the Portfolios. As a consideration for the
administrative services provided by each service organization to its
customers, each Portfolio will pay the service organization an administrative
service fee at the annual rate of up to 0.40% of the average daily net asset
value of its shares held by the service organization's customers. Such
services may include assisting in processing purchase, exchange and redemption
requests; transmitting and receiving funds in connection with customer orders
to purchase, exchange or redeem shares; and providing periodic statements.
Until further notice to Excelsior Fund, U.S. Trust and the Administrators have
voluntarily agreed to waive investment advisory and administration fees
payable by each Portfolio in an amount equal to administrative service fees
payable by that Portfolio. For the six months ended September 30, 1997, U.S.
Trust and the Administrators waived investment advisory and administration
fees in amounts equal to the administrative service fees for the Portfolios as
follows:
<TABLE>
<CAPTION>
U.S.
TRUST ADMINISTRATORS
------- --------------
<S> <C> <C>
Blended Equity Fund...................................... $69,172 $328
Income and Growth Fund................................... 44,814 213
Value and Restructuring Fund............................. 26,976 619
Small Cap Fund........................................... 12,498 35
Energy and Natural Resources Fund........................ 5,818 244
</TABLE>
21
<PAGE>
Edgewood Services, Inc. (the "Distributor"), a wholly-owned subsidiary of
Federated Investors, serves as the sponsor and distributor of Excelsior Fund.
Shares of each Portfolio are sold without a sales charge on a continuous basis
by the Distributor.
Under Excelsior Fund's Distribution Plan, adopted pursuant to Rule 12b-1
under the 1940 Act, the Trust Shares of each Portfolio bear the expense of
distribution fees at the maximum annual rate of 0.75% of the average daily net
asset value of the Portfolio's outstanding Trust Shares. Trust Shares of each
Portfolio currently bear the expense of such distribution fees at the annual
rate of 0.35% of the average daily net asset value of the Portfolio's
outstanding Trust Shares. As of August 1, 1997 Trust Shares are no longer
offered.
Each Director of Excelsior Fund receives an annual fee of $9,000, plus a
meeting fee of $1,500 for each meeting attended, and is reimbursed for
expenses incurred for attending meetings. The Chairman receives an additional
annual fee of $5,000.
For the six months ended September 30, 1997, brokerage commissions on
investment transactions paid to UST Securities Corp. were as follows:
<TABLE>
<S> <C>
Value and Restructuring Fund...................................... $18,297
Energy and Natural Resources Fund................................. 630
</TABLE>
UST Securities Corp. is a wholly-owned subsidiary of U.S. Trust Company of
New Jersey which is a wholly-owned subsidiary of U.S. Trust Corporation.
3. PURCHASES AND SALES OF SECURITIES:
For the six months ended September 30, 1997, purchases and sales of
securities, excluding short-term investments, for the Portfolios aggregated:
<TABLE>
<CAPTION>
PURCHASES SALES
----------- -----------
<S> <C> <C>
Blended Equity Fund.................................... $37,589,071 $47,014,985
Income and Growth Fund................................. 25,630,686 26,946,431
Value and Restructuring Fund........................... 58,228,876 29,900,729
Small Cap Fund......................................... 9,780,801 18,763,287
Energy and Natural Resources Fund...................... 13,753,559 10,150,537
</TABLE>
4. COMMON STOCK:
Excelsior Fund currently has authorized capital of 35 billion shares of
Common Stock representing interests in one of seventeen separate investment
portfolios. Authorized capital currently offered for each Portfolio is as
follows: 375 million shares each of the Blended Equity and Income and Growth
Funds and 500 million shares each of the Value and Restructuring Fund, Small
Cap Fund and Energy and Natural Resources Fund. As of August 1, 1997 Trust
Shares are no longer offered.
Each share has a par value of $.001, and represents an equal proportionate
interest in the particular Portfolio with other shares of the same Portfolio,
and is entitled to such dividends and distributions of taxable earnings on the
assets belonging to such Portfolio as are declared at the discretion of
Excelsior Fund's Board of Directors.
22
<PAGE>
<TABLE>
<CAPTION>
BLENDED EQUITY FUND (FORMERLY EQUITY FUND)
----------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Sold:
Shares................ 958,933 $ 31,091,380 2,986,879 $ 76,672,109
Trust Shares.......... 418 -- 3,154 84,440
Issued in connection
with reorganization
(Note 6)
Shares................ 5,809,320 118,382,388 -- --
Contributions in-kind... -- -- 3,211,246 79,831,593
Issued as reinvestment
of dividends
Shares................ 14,524 403,612 195,908 5,042,100
Trust Shares.......... 5 146 5 129
Redeemed
Shares................ (1,371,101) (41,323,154) (2,218,612) (57,053,673)
Trust Shares.......... (117) (3,565) (15) (534)
------------ -------------- ------------ --------------
Net Increase............ 5,411,982 $ 108,550,807 4,178,565 $ 104,576,164
============ ============== ============ ==============
<CAPTION>
INCOME AND GROWTH FUND
----------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Sold.................... 601,573 $ 10,255,995 1,397,170 $ 21,067,243
Issued as reinvestment
of dividends........... 28,765 476,984 175,558 2,635,563
Redeemed................ (861,163) (14,956,651) (1,688,433) (25,386,111)
------------ -------------- ------------ --------------
Net Decrease............ (230,825) $ (4,223,672) (115,705) $ (1,683,305)
============ ============== ============ ==============
<CAPTION>
VALUE AND RESTRUCTURING FUND
(FORMERLY BUSINESS AND INDUSTRIAL RESTRUCTURING FUND)
----------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
---------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
------------- -------------- ------------- --------------
<S> <C> <C> <C> <C>
Sold:
Shares................ 2,446,223 $ 47,169,693 3,573,877 $ 54,756,284
Trust Shares.......... -- -- 3,212 47,503
Issued as reinvestment
of dividends:
Shares................ 3,066 52,296 23,121 351,922
Trust Shares.......... 3 58 54 835
Redeemed:
Shares................ (578,903) (10,648,753) (1,090,887) (16,823,462)
Trust Shares.......... (3,267) (61,583) (2) (27)
------------ -------------- ------------ --------------
Net Increase............ 1,867,122 $ 36,511,711 2,509,375 $ 38,333,055
============ ============== ============ ==============
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
SMALL CAP FUND
(FORMERLY EARLY LIFE CYCLE FUND)
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold:
Shares.................. 790,999 $ 8,779,717 1,632,860 $ 17,229,638
Trust Shares............ 895 9,076 934 9,231
Contributions in-kind..... -- -- 873,834 10,267,561
Issued as reinvestment of
dividends:
Shares.................. -- -- 36,989 400,554
Trust Shares............ -- -- 10 97
Redeemed:
Shares.................. (1,324,848) (12,155,139) (3,753,354) (37,413,560)
Trust Shares............ (316) (3,546) (30) (294)
---------- ------------ ---------- ------------
Net Decrease.............. (533,270) $ (3,369,892) (1,208,757) $ (9,506,773)
========== ============ ========== ============
<CAPTION>
ENERGY AND NATURAL RESOURCES FUND
(FORMERLY LONG-TERM SUPPLY OF ENERGY FUND)
--------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
09/30/97 03/31/97
------------------------ ------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Sold...................... 646,127 $ 7,890,349 1,183,409 $ 13,166,360
Issued as reinvestment of
dividends................ 1,430 17,436 14,801 166,314
Redeemed.................. (342,236) (4,162,772) (635,829) (6,996,595)
---------- ------------ ---------- ------------
Net Increase.............. 305,321 $ 3,745,013 562,381 $ 6,336,079
========== ============ ========== ============
</TABLE>
5. ORGANIZATION COSTS:
Excelsior Fund has borne all costs in connection with the initial
organization of new portfolios, including the fees for registering and
qualifying its shares for distribution under Federal and state securities
regulations. All such costs are being amortized on the straight-line basis over
periods of five years from the dates on which each Portfolio commenced
operations.
6. PLAN OF REORGANIZATION:
On August 18, 1997, shareholders approved a Plan of Reorganization (see Note
7) transfering all of the assets and liabilities of Aging of America Fund,
Communication and Entertainment Fund, Environmentally-Related Products and
Services Fund, Global Competitors Fund, and Productivity Enhancers Fund (the
"Transferor Funds") to the Blended Equity Fund, in exchange for shares of the
Blended Equity Fund corresponding to the same net asset value as shares held in
the respective Transferor Funds. Shares issued in the exchange and their
corresponding net asset value are as follows:
<TABLE>
<CAPTION>
NET
FUND SHARES ASSET VALUE
- ---- --------- -----------
<S> <C> <C>
Aging of America Fund.................................... 1,473,760 $47,071,887
Communication and Entertainment Fund..................... 890,996 28,458,420
Environmentally-Related Products and Services Fund....... 202,661 5,472,980
Global Competitors Fund.................................. 2,736,914 87,417,040
Productivity Enhancers Fund.............................. 504,989 16,129,362
</TABLE>
24
<PAGE>
7. VOTING RESULTS OF SPECIAL MEETING OF SHAREHOLDERS:
The proposals described below were submitted to a vote of shareholders of
Excelsior Funds, Inc. ("Excelsior") at a special meeting of shareholders held
on August 18, 1997 (the "Meeting"):
Proposal No. 1 - Approval of a Plan of Reorganization pursuant to which
Excelsior's Productivity Enhancers, Global Competitors, Environmentally-Related
Products and Services, Aging of America and Communication and Entertainment
Funds (each, a "Fund") will be reorganized into Excelsior's Blended Equity Fund
(formerly, the "Equity Fund"):
At the Meeting, the shareholders of each Fund approved Proposal No. 1 as
follows:
<TABLE>
<CAPTION>
FUND FOR AGAINST ABSTAIN
- ---- --------- ------- -------
<S> <C> <C> <C>
Productivity Enhancers............................... 1,089,093 21,480 73,007
Global Competitors................................... 3,812,756 75,000 211,753
Environmentally-Related Products and Services........ 552,810 4,393 22,378
Aging of America..................................... 2,253,499 73,706 132,560
Communication and Entertainment...................... 1,448,267 62,285 72,989
</TABLE>
Proposal No. 2 - Approval of a change of sub-classification from diversified
to non-diversified and elimination of a related investment limitation for the
Energy and Natural Resources Fund (formerly, the "Long-Term Supply of Energy
Fund"):
At the Meeting, the shareholders of the Energy and Natural Resources Fund
approved Proposal No. 2 as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- ------- -------
<S> <C> <C>
1,645,803 47,238 88,456
</TABLE>
Proposal No. 3 - Approval of a change of fundamental investment policies to
permit the Energy and Natural Resources Fund to invest in precious metal
bullion and coins and futures contracts on commodities:
At the Meeting, the shareholders of the Energy and Natural Resources Fund
approved Proposal No. 3 as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- ------- -------
<S> <C> <C>
1,569,111 119,548 92,838
</TABLE>
Proposal No. 4 - Approval of the adoption of a fundamental investment policy
to allow the Energy and Natural Resources Fund to invest more than 25% of the
value of its total assets in companies in the energy and other natural
resources groups of industries:
At the Meeting, the shareholders of the Energy and Natural Resources Fund
approved Proposal No. 4 as follows:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN
--------- ------- -------
<S> <C> <C>
1,682,507 15,739 83,251
</TABLE>
25
