<PAGE>
AMBAC TREASURERS TRUST
U.S. TREASURY MONEY MARKET FUND
U.S. GOVERNMENT MONEY MARKET FUND
SEMI ANNUAL REPORT
FOR THE SIX MONTHS ENDED APRIL 30, 1997
<PAGE>
TRUSTEES
AND OFFICERS
William T. Sullivan, Jr.
Chairman of the Board of Trustees
and President
Russell E. Galipo
Trustee
Donald W. Green
Trustee
Eugene J. McDonald
Trustee
C. Roderick O'Neil
Trustee
Brian Clark
Treasurer & Principal Accounting Officer
Richard Rose
Assistant Treasurer
Richard B. Gross
Secretary
Anne G. Gill
Assistant Secretary
Gail A. Hanson
Assistant Secretary
Therese M. Hogan
Assistant Secretary
INVESTMENT ADVISER
Cadre Financial Services, Inc.
905 Marconi Avenue
Ronkonkoma, New York 11779
ADMINISTRATOR AND TRANSFER AGENT
First Data Investor Services Group, Inc.
One Exchange Place
Boston, Massachusetts 02109
DISTRIBUTOR
First Data Distributors, Inc.
4400 Computer Drive
Westborough, Massachusetts 01581
CUSTODIAN
Bankers Trust Company
130 Liberty Street
New York, New York 10006
INDEPENDENT PUBLIC ACCOUNTANTS
KPMG Peat Marwick LLP
99 High Street
Boston, Massachusetts 02110
LEGAL COUNSEL
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
<PAGE>
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with the semi-annual report for the AMBAC
Treasurers Trust Funds for the six month period ended April 30, 1997.
The AMBAC Treasurers Trust family of funds currently manages in excess of $130
million. Our assets under management have grown approximately 30% since October
of last year. The substantial growth in our funds is due in large part to
extensive marketing efforts and legislative changes regarding the investment of
public funds in money market mutual funds.
Over the past six months, the economy's show of strength outpaced the financial
market's expectations. However, the recent cooling of demand has calmed the
inflation fears that clouded the first quarter. The markets now realize that,
while unemployment is down to historically low levels, inflation remains benign
and the economy is not growing at an unsustainable pace. The Federal Reserve
(Fed) raised interest rates at its March FOMC meeting by 25 basis points. Since
that meeting, economic data has pointed to a slowing in the Gross Domestic
Product (GDP) allowing the Fed to maintain a steady monetary policy. In light of
these factors, the funds have shifted from a defensive posture to a more neutral
posture with a weighted average maturity (WAM) of 35 - 45 days.
Thank you for your interest in the AMBAC Treasurers Trust Funds. As you know
from my recent letter, we are implementing a number of changes to enable us to
offer you more complete cash management services. We are committed to
understanding the needs of the investor and to providing the means to address
those needs. Should you have any questions or suggestions regarding the AMBAC
Treasurers Trust Funds, please do not hesitate to contact your fund
representative or me at 1-(800) 311-2622 or 1-(800) 221-4524, respectively.
Sincerely,
William T. Sullivan, Jr.
Chairman of the Board of Trustees
and President
June 24, 1997
<PAGE>
<TABLE>
U. S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997 (UNAUDITED)
<CAPTION>
ANNUALIZED
YIELD ON
PRINCIPAL DATE OF MATURITY VALUE
AMOUNT PURCHASE DATE (NOTE 2)
- --------- ---------- -------- -----------
<S> <C> <C>
U.S. GOVERNMENT OBLIGATION - 56.69%
U.S. TREASURY BILL - 56.69%
$14,100,000 5.06%, 06/26/97 .......................... $13,990,114
-----------
TOTAL U.S. GOVERNMENT OBLIGATION
(Cost $13,990,114) ....................... 13,990,114
-----------
REPURCHASE AGREEMENTS - 43.72%
3,579,000 BZW Securities, Inc.-Tri Party
5.40%, Due 05/01/97, Dated 04/30/97
Repurchase Price $3,579,537
(Collateralized by $3,627,000
U.S. Treasury Note, 6.13%
Due 03/31/98
Market Value $3,651,520) ................. 3,579,000
1,200,000 Dresdner Securities, Inc. (New York)
5.35%, Due 05/01/97, Dated 04/30/97
Repurchase Price $1,200,178
(Collateralized by $1,221,000
U.S. Treasury Note, 5.25%
Due 07/31/98
Market Value $1,224,359) ................. 1,200,000
1,200,000 HSBC Holdings Plc.,
5.38%, Due 05/01/97, Dated 04/30/97
Repurchase Price $1,200,179
(Collateralized by $1,210,000
U.S. Treasury Note, 6.25%
Due 06/30/98
Market Value $1,237,905) ................. 1,200,000
1,212,000 JP Morgan Securities, Inc.-Tri Party
5.40%, Due 05/01/97, Dated 04/30/97
Repurchase Price $1,212,182
(Collateralized by $927,000
U.S. Treasury Bill
Due 05/03/97;
and by $304,000
U.S. Treasury Note, 6.38%
Due 06/30/97
Market Value $1,236,985) ................. 1,212,000
$2,400,000 Morgan Stanley Group Inc.-Tri
Party 5.49%, Due 05/01/97, Dated 04/30/97
Repurchase Price $2,400,366
(Collateralized by $4,125,000
Government National Mortgage Association,
6.00% Due 05/20/20
Market Value $2,492,063) ................. $ 2,400,000
1,200,000 Sanwa Bank,
5.40%, Due 05/01/97, Dated 04/30/97
Repurchase Price $1,200,180
(Collateralized by $1,217,000
U.S. Treasury Note, 6.50%
Due 08/31/01
Market Value $1,227,649) ................. 1,200,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $10,791,000) ....................... 10,791,000
-----------
</TABLE>
<PAGE>
<TABLE>
<S> <C>
TOTAL INVESTMENTS - 100.41%
(Cost $24,781,114)* ........................................ 24,781,114
-----------
NET OTHER ASSETS AND LIABILITIES - (0.41)% ................. (100,764)
-----------
NET ASSETS - 100.00% ....................................... $24,680,350
===========
- --------------------------------------------------------------------------
* Also aggregate cost for Federal income tax purposes.
U. S. GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
APRIL 30, 1997(UNAUDITED)
<CAPTION>
ANNUALIZED
YIELD ON
PRINCIPAL DATE OF MATURITY VALUE
AMOUNT PURCHASE DATE (NOTE 2)
- --------- ---------- -------- -----------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY OBLIGATIONS - 62.86%
FEDERAL HOME LOAN MORTGAGE CORP.
DISCOUNT NOTES - 20.09%
$ 200,000 5.39%, 05/02/97 .......................... $ 199,971
10,000,000 5.52%, 06/12/97 .......................... 9,937,000
1,190,000 5.64%, 06/26/97 .......................... 1,179,819
1,430,000 5.49%, 06/27/97 .......................... 1,417,570
4,000,000 5.66%, 07/01/97 .......................... 3,962,654
-----------
16,697,014
-----------
FEDERAL HOME LOAN BANK
DISCOUNT NOTES - 16.39%
3,365,000 5.43%, 05/06/97 .......................... 3,362,500
3,380,000 5.44%, 06/12/97 .......................... 3,359,140
2,525,000 5.56%, 06/20/97 .......................... 2,505,922
2,850,000 5.67%, 07/18/97 .......................... 2,816,099
200,000 5.84%, 09/18/97 .......................... 195,629
1,000,000 5.83%, 10/09/97 .......................... 975,000
425,000 5.54%, 10/30/97. ......................... 413,720
-----------
13,628,010
-----------
STUDENT LOAN MARKETING ASSOCIATION
DISCOUNT NOTE - 1.93%
1,615,000 5.63%, 06/30/97 .......................... 1,600,223
-----------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
DISCOUNT NOTES - 24.45%
3,245,000 5.64%, 06/06/97 .......................... 3,227,152
4,955,000 5.84%, 06/24/97 .......................... 4,914,493
2,400,000 5.68%, 07/15/97 .......................... 2,372,400
4,000,000 5.70%, 08/18/97 .......................... 3,933,026
4,000,000 5.74%, 09/05/97 .......................... 3,922,106
2,000,000 5.78%, 09/11/97 .......................... 1,958,918
-----------
20,328,095
-----------
TOTAL U.S. GOVERNMENT
AND AGENCY OBLIGATIONS
(Cost $52,253,342) ....................... 52,253,342
-----------
REPURCHASE AGREEMENTS - 37.18%
4,000,000 BZW Securities, Inc.-Tri Party
5.46%, Due 05/01/97, Dated 04/30/97
Repurchase Price $4,000,607
(Collateralized by $4,000,000
Federal National Mortgage
Association Note, 7.85%
Due 09/10/04
Market Value $4,083,908) ................. 4,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ANNUALIZED
YIELD ON
PRINCIPAL DATE OF MATURITY VALUE
AMOUNT PURCHASE DATE (NOTE 2)
- --------- ---------- -------- -----------
<S> <C> <C>
$ 3,913,000 JP Morgan Securities, Inc.-Tri Party
5.41%, Due 05/01/97, Dated 04/30/97
Repurchase Price $3,913,588
(Collateralized by $4,061,000
Student Loan Marketing Association, 5.88%
Due 02/06/01
Market Value $3,992,002) ................... $ 3,913,000
11,500,000 NationsBanc Capital Markets, Inc.-Tri Party
5.50%, Due 05/01/97, Dated 04/30/97
Repurchase Price $11,501,756
(Collateralized by $12,500,000
Federal Home Loan Bank Discount Note,
Due 04/17/98
Market Value $11,808,222) .................. 11,500,000
7,500,000 Morgan Stanley Group Inc.-Tri Party
5.49%, Due 05/01/97, Dated 04/30/97
Repurchase Price $7,501,144
(Collateralized by $8,650,000
Government National Mortgage Association,
7.00% Due 01/01/00
Market Value $7,704,349) ................... 7,500,000
4,000,000 Sanwa Bank,
5.40%, Due 05/01/97, Dated 04/30/97
Repurchase Price $4,000,600
(Collateralized by $3,769,000
U.S. Treasury Note, 8.75%
Due 08/15/00
Market Value $4,086,700) ................... 4,000,000
-----------
TOTAL REPURCHASE AGREEMENTS
(Cost $30,913,000) ......................... 30,913,000
-----------
TOTAL INVESTMENTS - 100.04%
(Cost $83,166,342)* .......................................... 83,166,342
-----------
NET OTHER ASSETS AND LIABILITIES - (0.04)% ................... (36,459)
-----------
NET ASSETS - 100.00% ......................................... $83,129,883
-----------
</TABLE>
- --------------------------------------------------------------------------------
* Also aggregate cost for Federal income tax purposes.
<PAGE>
<TABLE>
STATEMENTS OF ASSETS AND LIABILITIES
APRIL 30, 1997 (UNAUDITED)
<CAPTION>
U. S. TREASURY U. S. GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND
----------------- -----------------
<S> <C> <C>
ASSETS:
Investments (Note 2):
Investments at value ........................................ $ 13,990,114 $ 52,253,342
Repurchase agreements ....................................... 10,791,000 30,913,000
------------ ------------
Total investments at value .............................. 24,781,114 83,166,342
Cash ................................................................ 95 395
Interest receivable ................................................. 3,818 11,536
Organizational costs, net (Note 2) .................................. 21,479 21,479
Receivable from investment adviser .................................. 11,409 17,335
------------ ------------
Total Assets ................................................ $ 24,817,915 $ 83,217,087
============ ============
LIABILITIES:
Dividends payable ............................................... 97,098 13,073
Payable to FDISG (Note 3) ....................................... 13,727 19,773
Trustees' fees and expenses payable (Note 3) .................... 2,667 2,667
Accrued expenses and other payables ............................. 24,073 51,691
------------ ------------
Total Liabilities ........................................... 137,565 87,204
------------ ------------
NET ASSETS .......................................................... $ 24,680,350 $ 83,129,883
============ ============
NET ASSETS CONSIST OF:
Par value (Note 5) .............................................. $ 24,681 $ 83,131
Paid-in capital in excess of par value .......................... 24,656,124 83,047,853
Accumulated net realized loss on investments sold ............... (455) (1,101)
------------ ------------
TOTAL NET ASSETS .................................................... $ 24,680,350 $ 83,129,883
SHARES OF BENEFICIAL INTEREST OUTSTANDING ........................... 24,680,805 83,130,984
NET ASSET VALUE,
Offering and redemption price per share
(Net Assets / Shares Outstanding) ........................... $ 1.00 $ 1.00
============ ============
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED
APRIL 30, 1997 (UNAUDITED)
U. S. TREASURY U. S. GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND
----------------- -----------------
<S> <C> <C>
INVESTMENT INCOME:
Interest (Note 2) .............................................. $ 653,431 $ 2,003,886
----------- -----------
EXPENSES:
Investment advisory fees (Note 3) .............................. 18,477 55,523
Administration fees (Note 3) ................................... 16,234 45,772
Custodian fees ................................................. -- 11,767
Fund accounting fees (Note 3) .................................. 16,763 23,230
Legal fees ..................................................... 3,055 19,693
Audit fees ..................................................... 13,050 13,050
Transfer agent fees (Note 3) ................................... 31,709 31,709
Trustees' fees and expenses (Note 3) ........................... 10,955 12,646
Amortization of organization costs (Note 2) .................... 2,675 2,675
Registration fees .............................................. -- 12,270
Miscellaneous .................................................. 9,389 7,653
----------- -----------
Total Expenses ............................................. 122,307 235,988
Less: Expense reimbursement/waiver (Note 4) ................ (87,819) (161,957)
----------- -----------
Total Expenses net of reimbursement/waiver ................. 34,488 74,031
----------- -----------
NET INVESTMENT INCOME .............................................. 618,943 1,929,855
----------- -----------
NET REALIZED LOSS ON INVESTMENTS SOLD (Note 2) ..................... (455) (1,101)
----------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS ............... $ 618,488 $ 1,928,754
=========== ===========
</TABLE>
<PAGE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS
<CAPTION>
U. S. TREASURY U. S. GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND
--------------------------------------- ---------------------------------------
FOR THE SIX MONTHS FOR THE PERIOD FOR THE SIX MONTHS FOR THE PERIOD
ENDED APRIL 30, 1997 ENDED ENDED APRIL 30, 1997 ENDED
(UNAUDITED) OCTOBER 31, 1996* (UNAUDITED) OCTOBER 31, 1996*
-------------------- ----------------- -------------------- -----------------
<S> <C> <C> <C> <C>
NET ASSETS AT BEGINNING OF PERIOD .................. $26,204,134 $ -- $ 70,880,667 $ --
----------- ----------- ------------ ------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment income .......................... 618,943 668,024 1,929,855 1,669,733
Net realized gain/(loss) on investments sold ... (455) 562 (1,101) 707
----------- ----------- ------------ ------------
Net increase in net assets resulting from
operations ............................... 618,488 668,586 1,928,754 1,670,440
----------- ----------- ------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income .......................... (618,943) (668,024) (1,929,855) (1,669,733)
Net realized loss on investments ............... (562) -- (707) --
----------- ----------- ------------ ------------
Total dividends ............................ (619,505) (668,024) (1,930,562) (1,669,733)
----------- ----------- ------------ ------------
SHARE TRANSACTIONS:
Net proceeds from sales of shares .............. 200,000 26,133,335 59,951,053 112,569,709
Issued to shareholders in reinvestment of
dividends .................................... 42,029 91,825 1,441,627 1,022,381
Cost of shares repurchased ..................... (1,764,796) (21,588) (49,141,656) (42,712,130)
----------- ----------- ------------ ------------
Net increase/(decrease) from share
transactions ............................. (1,522,767) 26,203,572 12,251,024 70,879,960
----------- ----------- ------------ ------------
Net increase/(decrease) in net assets .. (1,523,784) 26,204,134 12,249,216 70,880,667
----------- ----------- ------------ ------------
NET ASSETS AT END OF PERIOD ........................ $24,680,350 $26,204,134 $ 83,129,883 $ 70,880,667
=========== =========== ============ ============
OTHER INFORMATION:
SHARE TRANSACTIONS:
Sold ........................................... 200,000 26,133,335 59,951,053 112,569,709
Issued to shareholders in reinvestment of
dividends .................................... 42,029 91,825 1,441,627 1,022,381
Shares repurchased ............................. (1,764,796) (21,588) (49,141,656) (42,712,130)
----------- ----------- ------------ ------------
Net increase/(decrease) in shares
outstanding .............................. (1,522,767) 26,203,572 12,251,024 70,879,960
=========== =========== ============ ============
</TABLE>
- ------------------------------------
* The Funds commenced investment operations on April 24, 1996.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
<CAPTION>
U. S. TREASURY U. S. GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND
-------------------------------------- --------------------------------------
SIX MONTHS ENDED PERIOD SIX MONTHS ENDED PERIOD
APRIL 30, 1997 ENDED APRIL 30, 1997 ENDED
(UNAUDITED) OCTOBER 31, 1996(1) (UNAUDITED) OCTOBER 31, 1996(1)
---------------- ------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Net Asset Value, beginning of period ................ $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- -------
Income from investment operations:
Net investment income(2) ........................ 0.025 0.026 0.026 0.027
------- ------- ------- -------
Less Dividends:
Dividends from net investment income ............ (0.025) (0.026) (0.026) (0.027)
------- ------- ------- -------
Net increase in net asset value ..................... -- -- -- --
------- ------- ------- -------
Net Asset Value, end of period ...................... $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= =======
Total Return ........................................ 2.54% 2.63%* 2.60% 2.72%*
Ratios/Supplemental Data:
Net Assets, end of period (000s) .................... $24,680 $26,204 $83,130 $70,881
Ratios to average net assets:
Net investment income
including reimbursement/waiver .............. 5.02%** 4.99%** 5.21%** 5.18%**
Operating expenses including reimbursement/
waiver ...................................... 0.28%** 0.27%** 0.20%** 0.20%**
Operating expenses excluding reimbursement/
waiver ...................................... 0.99%** 1.18%** 0.64%** 0.75%**
</TABLE>
- --------------------------------------------------
* Not Annualized
** Annualized
(1) The Funds commenced investment operations on April 24, 1996.
(2) Net investment income per share before reimbursement/waiver of fees and
expenses by the Investment Adviser for the six months ended April 30,
1997 and the period ended October 31, 1996 were $0.021, and $0.021,
respectively, for the U.S. Treasury Money Market Fund and $0.024, and
$0.024, respectively, for the U.S. Government Money Market Fund.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. ORGANIZATION
AMBAC Treasurers Trust (the "Trust") was organized on June 27, 1995, as a
Delaware business trust and is registered under the Investment Company Act of
1940, as amended, (the "1940 Act") as an open-end management investment company.
Cadre Financial Services, Inc., formerly known as AMBAC Investment Management,
Inc., (the "Adviser"), a wholly-owned subsidiary of AMBAC Capital Corporation,
which in turn, is a wholly-owned subsidiary of AMBAC Inc., serves as the Trust's
investment adviser. As of the date of this report, the Trust offered two managed
diversified investment portfolios. The accompanying financial statements and
financial highlights are those of the AMBAC U.S. Treasury Money Market Fund and
AMBAC U.S. Government Money Market Fund (each, a "Fund," and collectively, the
"Funds"). The Funds commenced investment operations on April 24, 1996. Prior to
April 24, 1996, the only business conducted by the Funds was the issuance of
33,335 shares of each Fund in connection with the registration of the Trust. A
third Fund of the Trust, AMBAC Short-Term U.S. Government Income Fund, has not
yet commenced operations.
2. SIGNIFICANT ACCOUNTING POLICIES
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 revenues and expenses during
the reporting period. Actual results could differ from those estimates. The
following is a summary of significant accounting policies in conformity with
generally accepted accounting principles consistently followed by the Funds in
the preparation of their financial statements.
PORTFOLIO VALUATION: Securities owned by the Funds are valued utilizing the
amortized cost valuation method permitted by Rule 2a-7 under the "1940 Act."
This method involves valuing a portfolio security initially at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
accounted for on a trade date basis. Net realized gains or losses on sales of
securities are determined by the identified cost method. Interest income is
recorded on the accrual basis.
DIVIDENDS TO SHAREHOLDERS: Dividends from net investment income are declared
and accrued daily and paid monthly. Net realized long-term capital gains, if
any, are distributed at least annually.
Income dividends and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted accounting
principles.
FEDERAL INCOME TAXES: The Trust treats each Fund as a separate entity for
Federal income tax purposes. Each Fund intends to qualify each year as a
"regulated investment company" under Sub-chapter M of the Internal Revenue Code
of 1986, as amended. By so qualifying, each Fund will not be subject to Federal
income taxes to the extent that it distributes substantially all of its taxable
income, if any, for its tax year ending October 31. In addition, by distributing
in each calendar year substantially all of its net investment income, capital
gains, and certain other amounts, if any, each Fund will not be subject to a
Federal excise tax. Therefore, no Federal income tax provision is required.
REPURCHASE AGREEMENTS: Each Fund may engage in repurchase agreement
transactions with institutions that the Adviser has determined are creditworthy
pursuant to guidelines established by the Trust's Board of Trustees. Each
repurchase agreement transaction is recorded at cost. Each Fund requires that
the securities purchased in a repurchase agreement transaction be transferred to
the Trust's Custodian (or sub-custodian) in a manner that is intended to enable
the Fund to realize the value of the securities in the event of a counterparty
default. The Adviser monitors the value of the securities, including accrued
interest, daily to ensure that the value of the collateral equals or exceeds
amounts due under the repurchase agreement. Repurchase agreement transactions
involve certain risks in the event of default or insolvency of the counterparty,
including possible delays or restrictions upon a Fund's ability to dispose of
the underlying securities, and a possible decline in the value of the underlying
securities during the period while the Fund seeks to assert its rights.
EXPENSES: The Trust accounts separately for the assets, liabilities and
operations of each Fund. Expenses directly attributable to a Fund are charged to
the Fund, while expenses which are attributable to more than one Fund of the
Trust are allocated among the respective Funds based on the average net assets
of each Fund.
ORGANIZATION COSTS: Each Fund bears certain costs in connection with its
organization, including the fees and expenses of registering and qualifying its
initial shares for distribution under Federal and state securities laws. All
such costs are amortized
<PAGE>
using the straight-line method over a period of five years beginning with each
Fund's commencement of operations. In the event that any of the initial shares
of a Fund purchased by the Adviser are redeemed by any holder thereof during the
period of amortization of organization costs, the redemption proceeds will be
reduced by the pro-rata amount of unamortized organization costs based on the
number of initial shares being redeemed to the number of initial shares
outstanding at the time of the redemption. These costs were paid by the Adviser
and will be reimbursed by the respective Funds.
3. INVESTMENT ADVISORY, ADMINISTRATION, AND OTHER FEES
The Trust and the Adviser are parties to an investment advisory agreement
under which the Adviser provides services for a fee, computed daily and paid
monthly, at the annual rates of 0.15% of the average daily net assets with
respect to AMBAC U.S. Treasury Money Market Fund and AMBAC U.S. Government Money
Market Fund. The Adviser has voluntarily agreed to waive its fee or reimburse
expenses of the Funds to the extent necessary to assure that the ordinary
operating expenses do not exceed 0.28% and 0.20% of the average daily net assets
of the AMBAC U.S. Treasury Money Market Fund and AMBAC U.S. Government Money
Market Fund, respectively. The Adviser reserves the right to modify or terminate
at any time its agreements to waive fees and reimburse expenses.
On December 31, 1996, the Adviser changed its name from AMBAC Investment
Management, Inc. to Cadre Financial Services, Inc.
The Trust and First Data Investor Services Group, Inc. ("FDISG"), a
wholly-owned subsidiary of First Data Corporation, are parties to an
administration agreement under which FDISG (the "Administrator") provides
services for a monthly fee calculated at an annual rate of 0.05% of the Trust's
average daily net assets on the first $500 million of net assets of the Trust,
0.04% on the next $500 million of net assets of the Trust and 0.03% on net
assets of the Trust in excess of $1 billion, subject to a minimum monthly fee
paid by the Trust to the Administrator of $10,000. FDISG also provides certain
fund accounting services for which it is paid a monthly fee by each Fund of
$3,000 if the average monthly net assets of a Fund are $50 million or less,
$4,000 if a Fund's average monthly net assets are between $50 million and $200
million, or $5,000 if a Fund's average monthly net assets exceed $200 million.
In addition, FDISG also provides transfer agency services pursuant to certain
fee arrangements.
First Data Distributors, Inc. (the "Distributor"), a wholly-owned subsidiary
of FDISG and an indirect wholly-owned subsidiary of First Data Corporation, acts
as the exclusive distributor of the Trust's shares.
Certain officers of the Trust may be officers of the Adviser, Administrator
and/or Distributor or their affiliates. Such persons receive no compensation
from the Trust for serving in their respective roles. Trustees who are not
employees of the Adviser, Administrator and/or Distributor or their affiliated
companies, are each paid an annual retainer of $5,000 and receive an attendance
fee of $750 for each meeting of the Board of Trustees they attend. Members of
the Audit Committee, of which each of the Independent Trustees is a member,
receive an attendance fee of $750 for each Audit Committee meeting they attend.
The Chairman of the Audit Committee receives an additional $1,000 annual fee.
Officers of the Trust receive no compensation from the Trust.
4. WAIVER OF FEES AND REIMBURSEMENT OF EXPENSES
The Adviser voluntarily agreed to waive a portion of its fees and to
reimburse the Funds for certain expenses so that total expenses would not exceed
certain expense limitations established for each Fund. The Adviser, at its
discretion, may revise or discontinue the voluntary fee waivers and expense
reimbursements. For the six months ended April 30, 1997, the Adviser waived fees
and reimbursed expenses with respect to the Funds in the following amounts:
<TABLE>
<CAPTION>
EXPENSES
FUND FEES WAIVED REIMBURSED
- ---- ----------- ----------
<S> <C> <C>
AMBAC U.S. Treasury
Money Market Fund $18,477 $ 69,342
AMBAC U.S. Government
Money Market Fund 55,523 106,434
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust's Declaration of Trust authorizes the Trustees to issue an
unlimited number of shares of beneficial interest in the Funds, each with a par
value of $0.001.
<PAGE>
6. SUBSEQUENT EVENTS
Effective July 1, 1997, AMBAC Treasurers Trust will change its name to "Cadre
Institutional Investors Trust" and AMBAC U.S. Government Money Market Fund will
be renamed "Liquid Asset Fund." AMBAC U.S. Treasury Money Market Fund will cease
operations as of the close of business on June 30, 1997, and all outstanding
shares will be redeemed.
Cadre Securities, Inc. will become distributor of the Liquid Asset Fund
effective July 1, 1997, and also effective that date, Cadre Financial Services,
Inc., the Fund's investment adviser, has agreed to waive its fees or absorb
expenses to the extent necessary to assure that the ordinary operating expenses
of the Fund do not exceed .45% of the Fund's average daily net assets.
7. RESULTS OF A SPECIAL MEETING OF SHAREHOLDERS
On February 26, 1997, the Trust held a Special Meeting of Shareholders. At
the meeting, the following matters were approved:
Proposal No. 1
<TABLE>
The election of five (5) Trustees of the Trust:
<CAPTION>
For Abstained
------------- ---------
<S> <C> <C>
Stephen Attanasio 62,810,048.86 0
Russell E. Galipo 62,810,048.86 0
Donald W. Green 62,810,048.86 0
Eugene J. McDonald 62,810,048.86 0
C. Roderick O'Neil 62,810,048.86 0
</TABLE>
Proposal No. 2
To ratify the selection of KPMG Peat Marwick LLP as the independent public
accountants of the Trust for the year ending October 31, 1997:
<TABLE>
<CAPTION>
For Against Abstained
------------- ------- ---------
<S> <C> <C>
62,810,048.86 0 0
</TABLE>
