<PAGE>
ADMINISTRATOR
AQUILA MANAGEMENT CORPORATION
380 Madison Avenue, Suite 2300
New York, New York 10017
INVESTMENT ADVISER
STCM MANAGEMENT COMPANY, INC.
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
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 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, 1998
(Logo of CCMT: triangle which contains a wave pattern in the left
half and a grain of wheat in the right half and beneath this
triangle are the three words: stability * liquidity * yield)
CAPITAL CASH
MANAGEMENT TRUST
A CASH MANAGEMENT INVESTMENT
(Logo of the Aquila Group of Funds: an eagle's head)
ONE OF THE
AQUILAsm GROUP OF FUNDS
</PAGE>
<PAGE>
(Logo of CCMT: triangle which contains a wave pattern in the left
half and a grain of wheat in the right half and beneath this
triangle are the three words: stability * liquidity * yield)
CAPITAL CASH MANAGEMENT TRUST
SEMI-ANNUAL REPORT
February 18, 1999
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, 1998.
During this period, investors have witnessed much turbulence
in the world's economies. Discomforting news from around the world
caused substantial volatility even in our own financial markets.
Over the past year, we have witnessed the lingering aftershocks of
the Asian economic crisis, the political and economic turmoil
occurring in Russia and the currency devaluation in Brazil.
Yet, despite these global events, U.S. economic activity
continues to exhibit few signs of a marked slowdown. Indeed, real
Gross Domestic Product growth in the fourth quarter of 1998 was a
robust 5.6% while the pace of job creation accelerated and the
nations unemployment rate stood at a remarkably low 4.3%. 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.
Keeping a watchful eye on both foreign and domestic events,
the Federal Reserve lowered the target on the Federal Funds rate -
the rate member banks charge each other for overnight loans - by 25
basis points on September 29th. Then, just over two weeks later in
a surprise move, the Fed again eased monetary policy adding
liquidity to the banking system with an additional 25 basis point
cut in the Fed Funds rate. Driven by the concern that the global
financial crisis was making it hard for companies to raise money,
threatening the long expansion in the U.S., the Fed cut interest
rates 25 basis points for the third time in seven weeks on November
17th. The Federal Funds rate now stands at 4.75%, 75 basis points
lower than it was one year ago.
As mentioned in previous report letters, yields on money
market funds like the Trust, move in concert with rate policies
pursued by the Federal Reserve. As of December 31, 1998, the
Trust's seven-day yield was 4.73% compared to 5.25% for the
seven-day period ending June 30, 1998.
Looking forward, we are optimistic that the Trust will
continue to provide investors attractive yields compared to
alternative money market investments. Undoubtedly, economic
activity and its influence on Federal Reserve monetary policy will
have a direct effect on the Trust's yield over the next year. As
long as the Federal Reserve maintains a gradual approach to
regulating monetary policy, the Trust's Investment Sub-Adviser,
STCM Management Company, Inc., will continue to pursue yield
advantages through alertness to market opportunities by producing
a highly competitive return without compromising safety.
You can be assured that all those associated with the
management of Capital Cash Management Trust will consistently work
in the interest of your investment in the Trust. We very much value
you as a shareholder and appreciate the confidence you have shown
in Capital Cash Management Trust.
Sincerely,
Lacy B. Herrmann
President, Board of Trustees
Charles E. Childs, III
Senior Vice President and
Portfolio Manager
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF INVESTMENTS
DECEMBER 31, 1998 (UNAUDITED)
FACE
AMOUNT COMMERCIAL PAPER - 23.2% VALUE
</CAPTION>
<S> <C> <C>
AUTOMOTIVE - 9.7%
$ 40,000 Ford Motor Credit Corp., 5.20%, 01/11/99 $ 39,942
40,000 Ford Motor Credit Corp., 5.16%, 01/11/99 39,943
75,000 General Motors Acceptance Corp., 5.31%, 01/05/99 74,956
154,841
FINANCE - 5.0%
80,000 Norwest Financial Inc., 5.18%, 01/12/99 79,873
INSURANCE - 4.0%
65,000 Prudential Funding Corp., 5.33%, 01/07/99 64,942
TRAVEL & LEISURE SERVICES - 4.5%
73,000 American Express Credit Corp., 5.05%, 01/29/99 72,713
Total Commercial Paper 372,369
U.S. GOVERNMENT AGENCY DISCOUNT NOTES - 76.2%
100,000 Federal Home Loan Mortgage Corporation, 4.95%, 01/04/99 99,959
47,000 Federal Home Loan Mortgage Corporation, 4.75%, 01/04/99 46,981
50,000 Federal Home Loan Mortgage Corporation, 5.11%, 01/06/99 49,965
67,000 Federal Home Loan Mortgage Corporation, 5.08%, 01/08/99 66,934
149,000 Federal Home Loan Mortgage Corporation, 5.13%, 01/11/99 148,787
70,000 Federal Home Loan Mortgage Corporation, 5.10%, 01/14/99 69,871
82,000 Federal Home Loan Mortgage Corporation, 4.83%, 01/14/99 81,857
70,000 Federal Home Loan Mortgage Corporation, 4.95%, 01/15/99 69,865
80,000 Federal Home Loan Mortgage Corporation, 5.07%, 01/21/99 79,775
65,000 Federal Home Loan Mortgage Corporation, 4.95%, 01/22/99 64,812
50,000 Federal Home Loan Mortgage Corporation, 5.01%, 01/22/99 49,854
35,000 Federal Home Loan Mortgage Corporation, 4.85%, 02/02/99 34,849
90,000 Federal Home Loan Mortgage Corporation, 4.92%, 02/17/99 89,422
90,000 Federal National Mortgage Association, 5.14%, 01/05/99 89,949
45,000 Federal National Mortgage Association, 5.08%, 01/08/99 44,956
20,000 Federal National Mortgage Association, 5.00%, 01/21/99 19,944
25,000 Federal National Mortgage Association, 4.83%, 01/21/99 24,933
88,000 Federal National Mortgage Association, 5.05%, 01/26/99 87,691
Total U.S. Government Agency Discount Notes 1,220,404
Total Investments (cost $1,592,773*) 99.4% 1,592,773
Other assets in excess of liabilities .6 9,925
Net Assets 100.0% $ 1,602,698
(*) Cost for Federal tax purposes is identical.
See accompanying notes to financial statements.
</TABLE>
</PAGE>
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C>
ASSETS
Investments at value (cost $1,592,773) $ 1,592,773
Cash 19,790
Due from Administrator for reimbursement of expenses 4,011
Other assets 3,429
Total assets 1,620,003
LIABILITIES
Accrued expenses 10,606
Dividends payable 6,699
Total liabilities 17,305
NET ASSETS (equivalent to $1.00 per share on 1,602,698 shares outstanding) $ 1,602,698
Net Assets consist of:
Capital Stock - Authorized an unlimited number of shares, par value $.01 per share $ 16,027
Additional paid-in capital 1,586,671
$ 1,602,698
See accompanying notes to financial statements.
</TABLE>
</PAGE>
<PAGE>
CAPITAL CASH MANAGEMENT TRUST
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1998 (UNAUDITED)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME:
Interest Income $ 44,951
Expenses:
Investment Adviser fees (note 2) $ 1,671
Administrator fees (note 2) 1,254
Legal fees 6,500
Shareholders' reports 5,000
Trustees' fees and expenses 4,300
Audit and accounting fees 4,000
Registration fees and dues 3,800
Transfer and shareholder servicing agent fees 2,500
Custodian fees 1,827
Miscellaneous 464
31,316
Investment Advisory fees waived (note 2) (1,671)
Administration fees waived (note 2) (1,254)
Reimbursement of expenses by Administrator (note 2) (25,021)
Expenses paid indirectly (note 4) (27)
Net expenses 3,343
Net investment income $ 41,608
See accompanying notes to financial statements.
</TABLE>
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
STATEMENTS OF CHANGES IN NET ASSETS
(UNAUDITED)
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1998 JUNE 30, 1998
</CAPTION>
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Net investment income $ 41,608 $ 84,332
Dividends to shareholders ($0.0252 and $0.0521 per share,
respectively) (41,608) (84,332)
Change in net assets derived from investment activities - -
FROM CAPITAL SHARE TRANSACTIONS:
SHARES
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1998 JUNE 30, 1998
Proceeds from shares sold 1,029,826 1,888,398 1,029,826 1,888,398
Reinvested dividends 41,549 81,780 41,549 81,780
Cost of shares redeemed (1,081,446) (1,792,565) (1,081,446) (1,792,565)
Change in net assets from
capital share transactions (10,071) 177,613 (10,071) 177,613
Change in net assets (10,071) 177,613
NET ASSETS:
Beginning of period 1,612,769 1,435,156
End of period $ 1,602,698 $ 1,612,769
See accompanying notes to financial statements.
</TABLE>
</PAGE>
<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:
Securities 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 and disclosure of
contingent 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 FEES AND OTHER TRANSACTIONS WITH AFFILIATES
</PAGE>
<PAGE>
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 it
receives 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 asets. 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.
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, 1998 inasmuch as the Adviser and
the Administrator voluntarily waived their entire fees in the
amount of $1,671 and $1,254, respectively. In addition, in order to
comply with this expense limitation, the Administrator reimbursed
expenses in the amount of $17,126. 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 amount of
$6,233. Further, the Administrator voluntarily reimbursed
additional expenses of $1,662. For the six months ended December
31, 1998, these expense reimbursements amounted to
$25,021. Of this amount, $21,010 was paid prior to December 31,
1998 and the balance was paid in early January 1999.
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. EXPENSES
The Trust has negotiated an expense offset arrangement with
its custodian wherein it receives credit toward the reduction of
custodian fees and other Trust expenses whenever there are
uninvested cash balances. The Statement of Operations reflects the
total expenses before any offset, the amount of offset and the net
expenses. 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.
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL CASH MANAGEMENT TRUST
FINANCIAL HIGHLIGHTS
(UNAUDITED)
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
SIX MONTHS
ENDED YEAR ENDED JUNE 30,
12/31/98 1998 1997 1996 1995 1994
</CAPTION>
<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 0.0252 0.0521 0.0489 0.0518 0.0497 0.0309
Less Distributions:
Dividends from net investment income (0.0252) (0.0521) (0.0489) (0.0518) (0.0497) (0.0309)
Net Asset Value, End of Period $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Total Return (%) 2.54+ 5.33 5.00 5.29 5.09 3.14
Ratios/Supplemental Data
Net Assets, End of Period ($ in thousands) 1,603 1,613 1,435 1,765 1,660 1,713
Ratio of Expenses to Average Net Assets (%) 0.40* 0.40 0.41 0.41 0.42 0.30
Ratio of Net Investment Income to Average Net
Assets (%) 4.99* 5.21 4.88 5.16 4.98 3.06
The expense and net investment income ratios without the effect of the
Adviser's and Administrator's voluntary waiver of fees and the
Administrator's expense reimbursement were:
Ratio of Expenses to Average Net Assets (%) 3.75* 5.14 6.48 5.74 5.00 4.71
Ratio of Net Investment Income (Loss) to Average
Net Assets (%) 1.64* 0.47 (1.19) (0.17) (0.40) (1.35)
The expense ratios after giving effect to the waivers, reimbursements and
expense offset for uninvested cash balances were:
Ratio of Expenses to Average Net Assets (%) 0.40* 0.40 0.40 0.40 0.40 0.28
+ Not annualized.
* Annualized.
See accompanying notes to financial statements.
</TABLE>
</PAGE>
<PAGE>
PREPARING FOR YEAR 2000 (UNAUDITED)
The Trustees and officers of the Trust have been
monitoring issues involving preparedness for the turn of the
century for some time in an effort to minimize or eliminate any
potential impact upon the Trust and its shareholders. Our officers
have focussed significant time and effort in order that the various
computerized functions that could affect the Trust are ready
by the beginning of the year 2000.
The Trust is highly reliant on certain mission-critical
suppliers' services. Each supplier of these services has provided
the Trust's officers with assurances that it is actively addressing
potential problems relating to the year 2000. The officers, in
turn, are monitoring and will continue to monitor the progress of
its suppliers.
As you can well understand, we cannot directly control
our supplier operations. We assure you, however, that we recognize
a responsibility to inform our shareholders if in the future we
become aware of any developments which would lead us to believe
that the Trust will be significantly affected by year 2000
problems.
We will continue to keep you up-to-date through future
communications.
</PAGE>
