<PAGE>
MILLENNIUM INCOME TRUST
TREASURERS' GOVERNMENT MONEY MARKET FUND
ANNUAL REPORT
September 30, 1999
<PAGE>
<PAGE>
November 29, 1999
Dear Shareholder,
We are pleased to provide you with the annual report of the Millennium Income
Trust for the year ended September 30, 1999. During the period the
Treasurers' Government Money Market Fund portfolio registered solid
performance and achieved its objective of providing maximum current income
from high quality money market securities while maintaining stability of
principal.
Thank you for choosing the Treasurers' Government Money Market Fund. We look
forward to the continued opportunity to meet your investment needs.
James A. Casselberry, Jr.
President
<PAGE>
<PAGE>
TREASURERS' GOVERNMENT MONEY MARKET FUND
YIELD SUMMARY
As of 9/30/99
7-day current yield 5.06
7-day effective yield 5.19%
Average maturity 5 days
AVERAGE ANNUAL TOTAL RETURNS
As of 9/30/99
1-year 5.03%
Since inception
(on 10/2/95) 5.27%
Treasurers Government Money Market Fund compared to 3 month
U. S. Treasury bills* from 10/1/98 through 9/30/99
[Line graph]
* Source Federal Reserve Statitiscal Release H15
Past performance is no guarantee of future results.
2
<PAGE>
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1999
ASSETS:
Investment securities, at cost and value (Note 2) $ 65,380,653
Receivables
Accrued income 167,024
Receivable from related party 99,450
Other assets 8,984
---------
Total assets 65,656,111
---------
LIABILITES:
Income distribution payable 84,440
Accrued Expenses 30,897
---------
Total liabilities 115,337
---------
Net assets $ 65,540,774
=========
Net assets consist of
Paid-in capital $ 65,560,153
Accumulated net realized losses from
security transactions (19,379)
=========
Net assets $ 65,540,774
=========
Shares of beneficial interest outstanding
(Unlimited number of shares authorized,
no par value) 65,560,153
=========
Net asset value, redemption price and
offering price per share (Note 2) $ 1.00
====
See accompanying Notes to Financial StatementsSe
3
<PAGE>
<PAGE>
STATEMENT OF OPERATIONS
Year Ended September 30, 1999
INVESTMENT INCOME:
Interest income
U.S. government and agency obligations $ 1,167,989
Repurchase agreements 500,574
-------
Total Income 1,668,563
EXPENSES: (Note 3)
Management fees 64,495
Administration fees 16,124
Service fees 49,914
Professional fees 15,745
Insurance expense 9,167
Trustees fees & expenses 16,485
S & P rating fee 36,667
Registration fees 9,396
Amortization of organization expenses 5,984
-------
Total Expenses 223,977
Less expenses reimbursed by the Manager (Note 3) 143,361
-------
Net Expenses 80,616
-------
NET INVESTMENT INCOME 1,587,947
-------
NET REALIZED LOSSES FROM SECURITY TRANSACTIONS (19,379)
-------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,568,568
=======
See accompanying Notes to Financial Statements
4
<PAGE>
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS
Year Ended September 30,
1999 1998
From operations:
Net investment income $ 1,587,947 $ 673,426
Net realized loss from security transactions (19,379) -
------- -------
Net increase in net assets from operation 1,568,568 -
From dividends:
Dividends to shareholders from net
investment income (1,587,947) (673,426)
From capital share transactions:
Proceeds from shares sold 171,492,461 33,475,179
Shares issued in reinvestment of dividends 841,401 321,417
Less payments for shares redeemed (140,481,515) (200,000)
------- -------
Net increase in net assets due to
capital share transactions 31,852,347 33,596,596
------- -------
Total increase in net assets 31,832,968 33,596,596
Net assets:
Beginning of year (Note 1) 33,707,806 111,210
------- -------
End of year $ 65,540,774 $ 33,707,806
========== ==========
See accompanying Notes to Financial Statements
5
<PAGE>
<PAGE>
SCHEDULE OF INVESTMENTS
September 30, 1999
U. S. GOVERNMENT AGENCY OBLIGATIONS - 23.4%
Par Value
------------ ------------
Federal Farm Credit Bank
5.17% discount rate, due 10/1/99 $ 1,216,000 $ 1,216,000
5.64%, Floating Rate Note, due 10/1/99 2,000,000 2,000,000
Federal Home Loan Bank
5.82%, due 12/2/99 500,000 500,123
7.92%, due 12/23/99 400,000 401,945
Federal Home Loan Mortgage Corp
5.19% discount rate, due 10/1/99 1,120,000 1,120,000
Federal National Mortgage Association
5.20% discount rate, due 10/1/99 1,685,000 1,685,000
5.18% discount rate, due 10/25/99 3,443,000 3,431,018
5.81%, due 10/1/99 700,000 700,000
8.40%, due 10/25/99 1,600,000 1,603,228
5.95%, due 11/5/99 610,000 610,267
Student Loan Marketing Association
5.45%, Floating Rate Note, due 2/17/00 2,000,000 2,000,000
-----------
TOTAL US GOVERNMENT & AGENCY OBLIGATIONS
(Amortized Cost $ 15,267,581) 15,267,581
REPURCHASE AGREEMENTS (1) - 76.6 % Proceeds Value
----------- -----------
Bear Stearns
5.31%, Issue date 9/30/99, due 10/1/99 $ 40,118,988 $ 40,113,072
Lehman Brothers
5.25%, Issue date 9/30/99, due 10/7/99 10,010,209 10,000,000
----------- -----------
TOTAL REPURCHASE AGREEMENTS 50,129,197 50,113,072
----------- -----------
TOTAL INVESTMENTS $ 65,380,653
(Amortized Cost $ 65,380,653) -----------
(1) Repurchase agreements are fully collateralized by U.S. Government
agency securities.
See accompanying Notes to Financial Statements
6
<PAGE>
<PAGE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
Year Ended September 30
<S> <C> <C> <C> <C>
1999 1998 1997 1996
------- ------- ------- ------
Per share data for a share outstanding:
Net asset value at beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------
Net investment income 0.049 0.053 0.051 0.052
Distributions from net investment income ( 0.049 ) ( 0.053 ) ( 0.051 ) ( 0.052)
Net asset value at end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000
==== ==== ==== ====
Total Return 5.03% 5.33% 5.06% 5.27%
==== ==== ==== ====
Net assets at end of period (000's) $ 65,541 $ 33,708 $ 111 $ 132
Ratios net of expenses waived or absorbed
by manager (Note 3)
Ratio of net expenses to average net assets 0.25% 0.22% 0.00% 0.00%
Ratio of net investment income to average
net assets 4.92% 5.33% 5.06% 5.25%
Ratios assuming no fee waiver or expense
absorption (Note 3)
Ratio of expenses to average net assets 0.69% 0.80% 30.19% 14.42%
Ratio of net investment income to average
net assets 4.48% 4.74% (25.13%) (9.17%)
</TABLE>
See accompanying Notes to Financial Statements
6
<PAGE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
(1) Organization
The Millennium Income Trust (the "Trust") is registered under the Investment
Company Act of 1940, as amended, as an open-end diversified management
investment company. The Trust was established as a Massachusetts business
trust under a Declaration of Trust dated August 19, 1994. The Trust has
established one fund series, the Treasurers' Government Money Market Fund (the
"Fund"). The Fund had no operations prior to the public offering (which
occurred on October 2, 1995) of shares except for the initial issuance of
shares; accordingly, no financial statement information is presented for the
period prior to fiscal 1996. The Fund's investment objective is to seek high
current income, consistent with protection of capital.
(2) Significant Accounting Policies
The following is a summary of the Fund's significant accounting policies:
Security valuation - Securities are valued on the amortized cost basis, which
approximates market value. This involves initially valuing a security at its
original cost and thereafter assuming a constant amortization to maturity of
any discount or premium. This method of valuation is expected to enable the
Fund to maintain a constant net asset value per share.
Repurchase agreements - Repurchase agreements are collateralized by U.S.
Government securities and are valued at cost which, together with accrued
interest, approximates market. Collateral for repurchase agreements is held in
safekeeping in the the Fund's custodian customer-only account at the Federal
Reserve Bank of Cleveland. At the time the Fund enters into a repurchase
agreement, the seller agrees that the value of the underlying securities,
including accrued interest, will be equal to or exceed the face amount of the
repurchase agreement. In the event of a bankruptcy or other default of the
seller of a repurchase agreement, the Fund could experience both delays in
liquidating the underlying security and losses. These losses would equal the
face amount of the repurchase agreement(s) and accrued interest, net of any
proceeds received in liquidation of the underlying securities. To minimize
the possibility of loss, the Fund enters into repurchase agreements only with
institutions deemed to be creditworthy.
Security transactions - Investment transactions are accounted for on the
trade date. Securities sold are valued on a specific identification basis.
Fund share valuation, investment income and distributions to shareholders -
The net asset value per share of the Fund is calculated twice a day by
dividing the total value of the Fund's assets, less liabilities, by the number
of shares outstanding. Interest income is accrued as earned. Distributions
from net investment income are declared daily and paid on or about the first
business day of each month.
Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities at
the date of the financial statements and the reported amount of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
7
<PAGE>
<PAGE>
Federal income tax - It is the Fund's policy to comply with the special
provisions of the Internal Revenue Code applicable to regulated investment
companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable net income, the Fund
(but not the shareholders) will be relieved of Federal income tax on the
income distributed.
Accordingly, no provision for income taxes has been made. In order to avoid
imposition of the excise tax applicable to regulated investment companies, it
is also the Fund's intention to declare as dividends in each calendar year at
least 98% of its net investment income (earned during the calendar year) and
98% of its net realized capital gains (earned during the twelve months ended
October 31) plus undistributed amounts from prior years.
(3) Transactions with Affiliates
The President of the Trust is the chairman and controlling shareholder of
Trias Capital Management, Inc. ("Trias"), the Trust's investment manager. The
Secretary/Treasurer of the Trust is the chairman and controlling member of
Millennium Financial LLC ("MFL"), the Trust's administrator, and Millennium
Capital LLC ("MCL"), the Trust's principal underwriter.
Investment Management Agreement - The Fund's investments are managed by Trias
pursuant to the terms of a management agreement. Under the terms of the
management agreement, the Fund pays Trias a fee, which is computed and accrued
daily and paid monthly at the annual rate of .20% of its average daily net
assets. For fiscal 1999 Trias agreed to reimburse the Fund the amount by which
its total operating expenses exceeded .25% of average daily net assets. For
the year ended September 30, 1999, the total of such reimbursements were
$ 143,361.
Administration Agreement - The Fund's business affairs are managed by MFL
pursuant to the terms of an administration agreement. Under the terms of the
administration agreement, the Fund pays MFL a fee, which is computed and
accrued daily and paid monthly at the annual rate of .05% of its average daily
net assets.
Transfer Agent and Shareholder Service Agreement - The Fund has a Transfer,
Dividend Disbursing, Shareholder Service and Plan Agency Agreement with
Countrywide Fund Services, Inc. ("CFS"). For the services provided under this
agreement, CFS receives a monthly fee at an annual rate of $20 per shareholder
account, subject to a minimum monthly fee not to exceed $1,500. In addition,
the Fund pays CFS' out-of-pocket expenses including, but not limited to,
postage and supplies.
Accounting Services Agreement - The Fund has an Accounting Services Agreement
with CFS. For the services provided under this agreement CFS receives a
monthly fee. Based on current asset levels this fee is $2,000 per month.
Organizational Expenses - Expenses paid by MFL amounting to $23,500, were
incurred in connection with the organization of the Trust and the initial
offering of shares. Such organizational expenses were capitalized and
amortized on a straight-line basis over the last five years.
8
<PAGE>
<PAGE>
Report of Independent Public Accountants
To the Shareholders and Board of Trustees of the
Treasurers' Government Money Market Fund of Millennium Income Trust:
We have audited the accompanying statement of assets and liabilities of the
Treasurers' Government Money Market Fund of Millennium Income Trust (a
Massachusetts business trust), including the schedule of investments as of
September 30, 1999, and the related statement of operations, the statements
of changes in net assets, and the financial highlights for the periods
indicated thereon. These financial statements and financial highlights are
the responsibility of the Trust's management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
investments owned as of September 30, 1999, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of the Treasurers' Government Money Market Fund of the Millennium Income
Trust as of September 30, 1999, the results of its operations, the changes
in its net assets, and the financial highlights for the periods indicated
thereon, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Cincinnati, Ohio,
November 29, 1999
<TABLE> <S> <C>
<ARTICLE> 6
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-END> SEP-30-1999
<INVESTMENTS-AT-COST> 65,380,653
<INVESTMENTS-AT-VALUE> 65,380,653
<RECEIVABLES> 266,474
<ASSETS-OTHER> 8,984
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 65,656,111
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 115,337
<TOTAL-LIABILITIES> 115,337
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 65,560,153
<SHARES-COMMON-STOCK> 65,560,153
<SHARES-COMMON-PRIOR> 33,707,806
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 65,540,774
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,668,563
<OTHER-INCOME> 0
<EXPENSES-NET> 80,616
<NET-INVESTMENT-INCOME> 1,587,947
<REALIZED-GAINS-CURRENT> (19,379)
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 1,568,568
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,587,947
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 171,492,461
<NUMBER-OF-SHARES-REDEEMED> (140,481,515)
<SHARES-REINVESTED> 841,401
<NET-CHANGE-IN-ASSETS> 31,832,968
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 64,495
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 223,977
<AVERAGE-NET-ASSETS> 33,406,547
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .049
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.049)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .25
</TABLE>
