INVESTMENT ADVISER
STCM MANAGEMENT COMPANY, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
ADMINISTRATOR
AQUILA MANAGEMENT CORPORATION
380 Madison Avenue, Suite 2300
New York, New York 10017
DISTRIBUTOR
AQUILA DISTRIBUTORS, INC.
380 Madison Avenue, Suite 2300
New York, New York 10017
TRUSTEES
Lacy B. Herrmann, Chairman
Theodore T. Mason, Vice Chairman
Paul Y. Clinton
Diana P. Herrmann
Anne J. Mills
Cornelius T. Ryan
OFFICERS
Lacy B. Herrmann, President
Charles E. Childs, III, Senior Vice President
Diana P. Herrmann, Vice President
John M. Herndon, Vice President & Assistant Secretary
Rose F. Marotta, Chief Financial Officer
Richard F. West, Treasurer
Edward M.W. Hines, Secretary
Patricia A. Craven, Assistant Secretary
TRANSFER AND SHAREHOLDER SERVICING AGENT
PFPC INC.
400 Bellevue Parkway
Wilmington, Delaware 19809
CUSTODIAN
BANK ONE TRUST COMPANY, N.A.
100 East Broad Street
Columbus, Ohio 43271
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
345 Park Avenue
New York, New York 10154
Further information is contained in the Prospectus,
which must precede or accompany this report.
SEMI-ANNUAL
REPORT
DECEMBER 31, 1997
A CASH MANAGEMENT INVESTMENT
CAPITAL CASH
MANAGEMENT TRUST
(Logo of Capital Cash Management Trust)
(Logo of Aquila Group of Funds: eagle's head)
ONE OF THE
AQUILAsm GROUP OF FUNDS
<PAGE>
Capital Cash Management Trust
SEMI-ANNUAL REPORT
February 13, 1998
Dear Investor:
We are pleased to provide you with the Semi-Annual Report for Capital
Cash Management Trust for the six-month period ended December 31, 1997.
Domestic economic activity continues to exhibit few signs of a marked
slowdown. Indeed, real Gross Domestic Product - the total U.S. output of
goods and service - grew a robust 4.3% in the fourth quarter of 1997, while
the pace of job creation accelerated and the nations unemployment rate stood
at a remarkably low 4.7%. Consumer confidence remains near record high
levels while personal consumption continues to be stronger than expected due
partially to the explosive growth in home refinancing which has been aided
by the low interest rate environment.
Federal Reserve Board Chairman, Alan Greenspan, has not given up warning
that inflation remains a threat to the 7-year economic expansion, but his
recent comments suggest that the expected impact of Asia's financial woes
on U.S. growth and inflation may be enough to forestall any tightening of
monetary policy by the Federal Reserve until later in 1998.
While the securities markets remain volatile, Capital Cash Management
Trust continues to provide competitive returns to alternative short-term
investment opportunities without wavering from its conservative investment
approach. As of the end of the six-month period, the Trust's seven-day
yield was 5.39% compared to 4.86% for the same period ended December 31,
1996 and 4.97% as of June 30, 1997.
Looking forward, we are optimistic that the Trust will continue to
provide investors attractive yields compared to alternative money market
investments. Through alertness to market opportunities, the Trust can
produce a highly competitive return for its investors without compromising
safety.
All associated with Capital Cash Management Trust pledge to you our
continued diligence in the operation of the Trust for your benefit. Your
confidence in Capital Cash Management Trust is most valued and appreciated.
Sincerely,
/s/ Lacy B. Herrmann /s/ Charles E. Childs, III
Lacy B. Herrmann Charles E. Childs, III
President and Chairman of Senior Vice President and
the Board of Trustees Portfolio Manager
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF INVESTMENTS
December 31, 1997 (unaudited)
<TABLE>
<C> <S> <C>
Face
Amount Commercial Paper - 17.7% Value
Automotive - 3.0%
$45,000 Ford Motor Credit Corp., 5.56%, 02/02/98............. $44,778
Finance - 5.0%
75,000 American General Finance Corp., 5.80%, 01/05/98...... 74,951
Insurance - 5.0%
75,000 Prudential Funding Corp., 5.85%, 01/21/98............. 74,756
Travel & Leisure Services - 4.7%
70,000 American Express Credit Corp., 5.70%, 01/02/98........ 69,989
Total Commercial Paper........................... 264,474
U.S. Government Agency Discount Notes - 83.6%
25,000 Federal Farm Credit Bank, 5.59%, 01/06/98............. 24,981
85,000 Federal Farm Credit Bank, 5.64%, 01/23/98............. 84,707
95,000 Federal Farm Credit Bank, 5.48%, 02/24/98............. 94,219
25,000 Federal Home Loan Mortgage Corporation, 5.34%, 01/06/98 24,982
100,000 Federal Home Loan Mortgage Corporation, 5.48%, 01/08/98 99,894
50,000 Federal Home Loan Mortgage Corporation, 5.70%, 01/12/98 49,912
50,000 Federal Home Loan Mortgage Corporation, 5.70%, 01/14/98 49,897
70,000 Federal Home Loan Mortgage Corporation, 5.70%, 01/20/98 69,790
90,000 Federal Home Loan Mortgage Corporation, 5.65%, 01/29/98 89,605
50,000 Federal Home Loan Mortgage Corporation, 5.65%, 02/17/98 49,631
74,000 Federal Home Loan Mortgage Corporation, 5.65%, 02/25/98 73,361
58,000 Federal National Mortgage Association, 5.49%, 01/09/98 57,929
75,000 Federal National Mortgage Association, 5.49%, 01/15/98 74,840
80,000 Federal National Mortgage Association, 5.70%, 01/15/98 79,822
25,000 Federal National Mortgage Association, 5.90%, 01/20/98 24,922
60,000 Federal National Mortgage Association, 5.62%, 02/05/98 59,672
25,000 Federal National Mortgage Association, 5.65%, 02/05/98 24,863
70,000 Federal National Mortgage Association, 5.65%, 02/06/98 69,605
95,000 Federal National Mortgage Association, 5.62%, 02/12/98 94,377
50,000 Federal National Mortgage Association, 5.65%, 02/18/98 49,623
Total U.S. Government Agency Discount Notes 1,246,632
Total Investments (cost $1,511,106*)....... 101.3% 1,511,106
Liabilities in excess of other assets....... (1.3) (19,110)
Net Assets ................................. 100.0% $1,491,996
<FN> (*) Cost for Federal tax purposes is identical. </FN>
</TABLE>
See accompanying notes to financial statements
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997 (unaudited)
ASSETS
Investments at value (cost $1,511,106) . . . . . . . $ 1,511,106
Cash . . . . .. . . . . . . . . . . . . . . . . . . . 2,741
Due from Administrator for reimbursement of expenses (note 2) 8,031
Other assets. . . . . . . . . . . . . . . . . . . . . 4,017
Total assets . . . . . . . . . . . . . . . . . . 1,525,895
LIABILITIES
Accrued expenses. . . . . . . . . . . . . . . . . . . 26,584
Dividends payable . . . . . . . . . . . . . . . . . . 7,315
Total liabilities. . . . . . . . . . . . . . . . 33,899
NET ASSETS (equivalent to $1.00 per share on 1,491,996 shares
outstanding) $ 1,491,996
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares,
par value $.01 per share $ 14,920
Additional paid-in capital . . . . . . . . . . . 1,477,076
$ 1,491,996
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1997 (unaudited)
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest Income. . . . . . . . . . . . . . . . . $ 42,526
EXPENSES:
Investment Adviser fees (note 2) . . . . . . . . $ 1,523
Administrator fees (note 2). . . . . . . . . . . 1,142
Trustees' fees and expenses . . . . . . . . . . 13,000
Legal fees . . . . . . . . . . . . . . . . . . . 11,000
Audit and accounting fees. . . . . . . . . . . . 9,000
Transfer and shareholder servicing agent fees. . 7,400
Registration fees and dues . . . . . . . . . . . 7,000
Custodian fees (note 4). . . . . . . . . . . . . 3,016
Shareholders' reports and proxy statements . . . 3,000
Miscellaneous. . . . . . . . . . . . . . . . . . 2,000
58,081
Investment Advisory fees waived (note 2) . . . . (1,523)
Administration fees waived (note 2). . . . . . . (1,142)
Reimbursement of expenses by Administrator (note 2) (52,340)
Expenses paid indirectly (note 4). . . . . . . . (31)
Net expenses . . . . . . . . . . . . . . . . . . 3,045
NET INVESTMENT INCOME. . . . . . . . . . . . $ 39,481
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)
<TABLE>
<CAPTION>
Six Months Year
Ended December Ended June
FROM INVESTMENT ACTIVITIES: 31, 1997 30, 1997
<S> <C> <C>
Net investment income . . . . . . . . . . . . $ 39,481 $ 83,783
Dividends to shareholders ($ 0.0218 and $ .0489
per share, respectively) . . . . . . . . . (39,481) (83,783)
Change in net assets derived from investment
activities ---- -----
<CAPTION>
FROM CAPITAL SHARE TRANSACTIONS:
SHARES
Six Months Year
Ended December Ended June
31, 1997 30, 1997
<S> <C> <C> <C> <C>
Proceeds from shares sold 848,744 1,446,854 848,744 1,446,854
Reinvested dividends 37,215 83,694 37,215 83,694
Cost of shares redeemed (829,119) (1,860,327) (829,119) (1,860,327)
Change in shares and net
assets from capital
share transactions 56,840 (329,779) 56,840 (329,779)
Change in net assets 56,840 (329,779)
NET ASSETS:
Beginning of period 1,435,156 1,764,935
End of period $ 1,491,996 $ 1,435,156
</TABLE>
See accompanying notes to financial statements.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
NOTES TO FINANCIAL STATEMENTS
(unaudited)
1. Summary of Significant Accounting Policies
Capital Cash Management Trust (the "Trust") is a Massachusetts business
trust established on August 20, 1976 as a successor to the money-market
fund, the STCM Corporation, which commenced operations on July 8, 1974.
The following is a summary of significant accounting policies followed
by the Trust in the preparation of its financial statements. The policies
are in conformity with generally accepted accounting principles for
investment companies.
a) Portfolio valuation: The Trust's portfolio securities are valued by the
amortized cost method permitted in accordance with Rule 2a-7 under
the Investment Company Act of 1940 (the "1940 Act"), which, after
considering accrued interest thereon, approximates market. Under this
method, a portfolio security is valued at cost, adjusted for
amortization of premiums and accretion of discounts. Amortization of
premiums and accretion of discounts are included in interest income.
b) Securities transactions and related investment income: Security
transactions are recorded on the trade date. Realized gains and losses
from securities transactions are reported on the identified cost basis.
Interest income is recorded daily on the accrual basis and is adjusted
for amortization of premiums and accretion of discounts as discussed
in the preceding paragraph.
c) Federal income taxes: It is the policy of the Trust to qualify as a
regulated investment company by complying with the provisions of the
Internal Revenue Code applicable to certain investment companies. The
Trust intends to make distributions of income and securities profits
sufficient to relieve it from all, or substantially all, Federal income
and excise taxes.
d) Repurchase agreements: It is the Trust's policy to monitor closely the
creditworthiness of all firms with which it enters into repurchase
agreements, and to take possession of, or otherwise perfect its
security interest in, securities purchased under agreements to resell.
The securities purchased under agreements to resell are marked to
market every business day so that the value of the "collateral" is at
least equal to the value of the "loan" (repurchase agreements being
defined as "loans" in the 1940 Act), including the accrued interest
earned thereon, plus sufficient additional market value as is
considered necessary to provide a margin of safety.
e) Use of estimates. The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period. Actual results
could differ from those estimates.
2. Management Fee and Other Transactions with Affiliates
STCM Management Company, Inc. (the "Adviser") became Investment Adviser
to the Trust in February, 1992. In this role, under an Investment Advisory
Agreement, the Adviser supervises the Trust's investments and provides
various services for which they receive a fee which is payable monthly and
computed on the net assets of the Trust at the annual rate of 0.20% of the
Trust's average daily net assets. The Trust also has an Administration
Agreement with Aquila Management Corporation (the "Administrator") to
provide all administrative services to the Trust other than those relating
to the investment portfolio and the accounting records. The Administrator
receives a fee for such services which is payable monthly and computed on
the net assets of the Trust at the annual rate of 0.15% of the Trust's
average daily net assets. Details regarding the services provided by the
Adviser and the Administrator are provided in the Trust's Prospectus and
Statement of Additional Information.
CAPITAL CASH MANAGEMENT TRUST
NOTES TO FINANCIAL STATEMENTS (continued)
The Adviser and the Administrator each has agreed that the above fees
shall be reduced, but not below zero, by an amount equal to its
proportionate share (determined on the basis of the respective fees computed
as described above) of the amount, if any, by which the total expenses of the
Trust in any fiscal year, exclusive of taxes, interest, and brokerage fees,
shall exceed the lesser of (i) 1.5% of the first $30 million of average
annual net assets of the Trust plus 1% of its average annual net assets
in excess of $30 million, or (ii) 25% of the Trust's total annual investment
income. No such reduction in fees was required during the six months ended
December 31, 1997 inasmuch as the Adviser and the Administrator voluntarily
waived their entire fees in the amount of $1,523 and $1,142, respectively.
In addition, in order to comply with this expense limitation, the
Administrator reimbursed expenses in the amount of $44,754. Also, the
Administrator has undertaken to waive fees or reimburse the Trust to the
extent that annual expenses exceed 0.60 of 1% of average net assets in
any fiscal year and therefore reimbursed expenses in the additional amount
of $6,060. Further, the Administrator voluntarily reimbursed expenses of
$1,526, bringing the total expense reimbursement for the six months ended
December 31, 1997 to $52,340. Of this amount, $44,309 was paid prior to
December 31, 1997 and the balance of $8,031 was paid in early January,
1998.
Under a Distribution Agreement, Aquila Distributors, Inc. (the
"Distributor") serves as the exclusive distributor of the Trust's shares. No
compensation or fees are paid to the Distributor for such share distribution.
3. Distributions
The Trust declares dividends daily from net investment income and
makes payment monthly in additional shares at the net asset value per share
or in cash, at the shareholder's option.
4. Custodian Fees
The Trust has negotiated an expense offset arrangement with its
custodian wherein it receives credit toward the reduction of custodian fees
whenever there are uninvested cash balances. During the six months ended
December 31, 1997, the Trust's custodian fees amounted to $3,016, of which
$31 was offset by such credits. It is the general intention of the Trust to
invest, to the extent practicable, some or all of cash balances in
income-producing assets rather than leave cash on deposit with the
custodian.
Report of the Special Meeting of Shareholders (unaudited)
A special meeting of shareholders of Capital Cash Management Trust
(the "Trust") was held on December 10, 1997.* At the meeting, the following
matters were submitted to a shareholder vote and approved:
(i) the approval of a proposed amendment to the Trust's Declaration of Trust
to authorize creation of classes of shares (votes for: 923,485.85
(97.25%); votes against: 8,781.78 (0.92%); abstentions: 17,308.94 (1.82%);
broker non-votes: 0.00 (0.00%)), and
(ii) the approval of proposed modifications of the Trust's policies regarding
investment of more than 5% of the Trust's assets in the securities of a
single Issuer (votes for: 872,858.61 (91.92%); votes against: 13,749.25
(1.45%); abstentions: 62,968.71 (6.63%); broker non-votes: 0.00 (0.00%)).
* On the record date for this meeting, 1,545,025.62 shares of the Trust were
outstanding and entitled to vote. The holders of 949,576.57 shares (61.46%)
entitled to vote were present in person or by proxy at the meeting.
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
FINANCIAL HIGHLIGHTS
(unaudited)
For a share outstanding throughout each period
<TABLE>
<CAPTION>
Six Months Ended
December 31, Year Ended June 30,
1997 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
Income from Investment
Operations:
Net investment income 0.0218 0.0489 0.0518 0.0497 0.0309 0.0310
Less Distributions:
Dividends from net
investment income (0.0218) (0.0489) (0.0518) (0.0497) (0.0309) (0.0310)
Net Asset Value,
End of Period $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000 $ 1.0000
Total Return 2.64%+ 5.00% 5.29% 5.09% 3.14% 3.14%
Ratios/Supplemental Data
Net Assets, End of
Period
(in thousands) $ 1,492 $1,435 $1,765 $1,660 $1,713 $ 1,744
Ratio of Expenses to
Average Net Assets 0.40%* 0.40% 0.40% 0.40% 0.28% 0.09%
Ratio of Net
Investment Income to
Average Net Assets 5.18%* 4.89% 5.17% 5.00% 3.08% 3.11%
<CAPTION>
Net investment income (loss) per share and the ratios of income and expenses
to average net assets without the Adviser's and Adminstrator's voluntary
waiver of fees, the Adminstrator's expense reimbursement and the expense
offset in custodian fees for uninvested cash balances would have been:
<S> <C> <C> <C> <C> <C> <C>
Net Investment Income
(Loss) ($0.0086)($0.0119)($0.0018)$ 0.0038($0.0137)($0.0221)
Ratio of Expenses to
Average Net Assets 7.62%* 6.49% 5.75% 5.02% 4.73% 5.41%
Ratio of Net Investment
Income (Loss) to
Average Net Assets (2.04%)* (1.19%) (0.18%) 0.38% (1.37%) (2.21%)
<FN> + Not annualized. </FN>
<FN> * Annualized. </FN>
</TABLE>
See accompanying notes to financial statements.
