-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OJRJPjHYhvCk8qhLOeYOtvRvFvS6vQnGhH25JZkNXiPblbmWJylt1uXiM1h3zvmF 6FDkmV3X359yXx/1KyJtKA== 0000928816-97-000256.txt : 19970815 0000928816-97-000256.hdr.sgml : 19970815 ACCESSION NUMBER: 0000928816-97-000256 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORPORATE FUND ACCUMULATION PROGRAM INC CENTRAL INDEX KEY: 0000024858 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 132895756 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02642 FILM NUMBER: 97660546 BUSINESS ADDRESS: STREET 1: P O BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543 BUSINESS PHONE: 6092823319 FORMER COMPANY: FORMER CONFORMED NAME: CORPORATE FUND INVESTMENT ACCUMULATION P DATE OF NAME CHANGE: 19771115 N-30D 1 THE CORPORATE FUND ACCUMULATION PROGRAM, INC. THE CORPORATE FUND ACCUMULATION PROGRAM, INC. [FUND LOGO] THE CORPORATE FUND ACCUMULATION PROGRAM, INC.[REPEATED FOR 6 LINES] Semi-Annual Report June 30, 1997 This report is not authorized for use as an offer of sale or a solicitation of an offer to buy shares of the Program unless accompanied or pre-ceded by the Program's current prospectus. Past performance results shown in this report should not be considered a representation of future performance. Investment return and principal value of shares will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Statements and other information herein are as dated and are subject to change. The Corporate Fund Accumulation Program, Inc. Box 9011 [RECYCLE LOGO] Printed on post-consumer recycled paper TO OUR SHAREHOLDERS: For the six-month period ended June 30, 1997, The Corporate Fund Accumulation Program, Inc. provided a total investment return of +2.39%, based on a change in per share net asset value from $20.69 to $20.62, and assuming reinvestment of $0.556 per share income dividends. The Environment Shifting investor perceptions regarding the direction of the US economy brought continued volatility to the US financial markets during much of the six-month period ended June 30, 1997. At the beginning of the year, Federal Reserve Board (FRB) Chairman Alan Greenspan cautioned investors about a possible preemptive strike against inflation. While there were few signs of accelerating inflation in the then-current data, he warned that monetary policy acts with a lag and that it would be easier to tighten policy at that time, as a precaution, rather than tighten later and more sharply once inflation was evident. A mid-January market rally was halted and interest rates began to back up at the beginning of February in anticipation of a central bank move. As Chairman Greenspan warned, the FRB tightened monetary policy on March 25, 1997. Since the March tightening, economic data have been more benign. Retail sales fell, and inflation remained tame. The yield on the long-term bellwether Treasury bond peaked at 7.17% in mid-April and then began to drop to its current level of 6.57%. This market rally was fueled by a significant change in investor expectations regarding the economy and in the outlook for interest rates. In early May there was widespread agreement that the FRB was ready for another tightening of monetary policy, and it was generally assumed that a further tightening would be needed by July. However, the Consumer Price Index rose only 1.4% for the first five months of 1997, compared with a 3.8% increase over the same period in 1996. At the same time, retail sales figures continued to decline. As a result, the May increase in interest rates did not occur, and the bond rally continued to gain momentum. Increasing evidence of noninflationary economic growth boosted investor confidence, which was confirmed further shortly after the period's close when, as widely expected, the FRB chose to leave monetary policy unchanged. This confluence of positive indicators helped produce a significant rally in the US stock market. A slight decline in interest rates resulted in a modest positive total return for US fixed-income investments. Current consensus expectations are for the US economy's rate of growth to lose some momentum. Although gross domestic product growth for the first quarter of the year was revised slightly upward to 5.9%, there are indications that the second quarter's rate of growth will be lower. At the same time, inflationary pressures remain contained, supported by the June employment report showing moderate growth in wages along with a slight increase in unemployment. It remains to be seen whether economic activity moderates enough to rule out future FRB monetary policy tightenings. The US dollar continued to be strong relative to other currencies. In Europe, investors are uncertain regarding the viability of economic and monetary union, while scandals continue to depress investor confidence in Japan. At present, it appears that the US economy is perceived most favorably by investors for its ongoing growth and limited inflationary pressures. If economic data releases continue to support this point of view, the outlook for the US capital markets should remain positive. Portfolio Matters We began to take a more defensive position in the Program toward the end of January. At that time, we reduced the duration from 5.32 years to 4.63 years. In the weeks following the FRB's March 25, 1997 tightening, the bond market's yield rose to its peak of 7.17%. We continued to be defensive and brought the duration to 4.38 years to seek to protect the Program against the erosion of net asset value. We took a more optimistic view of market conditions at the beginning of May, when we began to invest more aggressively, and by the end of June had extended the duration of the portfolio to 4.68 years. Currently, the average portfolio maturity of the Program is 9.2 years. The average credit quality remained the same at AA - as measured by Standard & Poor's Corp. Most of the credit quality risk was taken in financial institutions, followed by industrials and utilities. We hold underweighted positions in Canadian bonds and Yankee bonds. Because we expect a resumption of strength in the third and fourth quarters of 1997, we believe that the FRB may resume a tightening mode in the second half of the year. With the yield curve remaining relatively flat, we expect further duration extensions to be moderate. We do not anticipate any significant changes in the asset allocation mix during the summer. In Conclusion We appreciate your ongoing interest in The Corporate Fund Accumulation Program, Inc., and we look forward to sharing our investment strategy with you in our upcoming annual report to shareholders. Sincerely, /S/ARTHUR ZEIKEL Arthur Zeikel President /S/Jay C. Harbeck Jay C. Harbeck Vice President and Portfolio Manager July 31, 1997 The Corporate Fund Accumulation Program, Inc.
Schedule of Investments June 30, 1997 S&P Moody's Face Value Industry Rating Rating Amount Issue Cost (Note 1a) US Government Obligations US Government US Treasury Notes: Obligations -- AAA Aaa $1,000,000 7.875% due 8/15/2001 $1,072,299 $1,053,910 4.1% AAA Aaa 1,000,000 5.875% due 2/15/2004 981,367 968,910 AAA Aaa 1,000,000 6.50% due 5/15/2005 1,003,415 998,120 ------------- ------------- Total US Government Obligations -- 4.1% 3,057,081 3,020,940 ============= ============= Corporate Bonds & Notes Asset-Backed AAA Aaa 2,000,000 First Bank Corporate Card Securities Securities+ -- Master Trust, 6.40% due 2/15/2003 1,997,683 1,979,420 2.7% Banks & AA Aa2 1,500,000 BP America, 9.375% due 11/01/2000 1,617,064 1,625,115 Thrifts -- 14.6% A+ A1 2,000,000 BankAmerica Corp., 7.125% due 5/12/2005 1,977,173 2,001,700 A- A1 1,500,000 Chase Manhattan Bank Corp., 8.65% due 2/13/1999 1,545,674 1,554,645 A- A2 2,000,000 First Interstate Bancorp, 9.90% due 11/15/2001 2,238,188 2,226,980 BBB A2 1,250,000 Fleet Capital Trust II, 7.92% due 12/11/2026 1,238,701 1,230,300 BBB+ A2 1,000,000 Mellon Capital II, 7.995% due 1/15/2027 953,842 998,800 AA - Aa3 1,000,000 Norwest Corp., 6.25% due 4/15/1999 998,023 999,380 ------------- ------------- 10,568,665 10,636,920 Financial A- A3 500,000 Chrysler Corporation, 7.45% due 3/01/2027 497,596 493,520 Services -- A+ A1 1,000,000 Ford Motor Credit Co., 7.75% due 3/15/2005 999,296 1,037,530 Captive -- 5.5% A- A3 1,000,000 General Motors Acceptance Corp., 6.625% due 10/01/2002 998,646 991,100 A- Baa1 1,500,000 McDonnell Douglas Financial Corp., 6.13% due 12/23/1998 1,497,452 1,470,645 ------------- ------------- 3,992,990 3,992,795 Financial A+ A1 1,000,000 American General Finance Corp., 7.70% Services -- due 11/15/1997 998,575 1,005,880 Consumer -- AA- Aa3 2,000,000 Associates Corp. of North America, 5.25% 11.6% due 9/01/1998 1,977,421 1,978,920 A A2 1,000,000 Beneficial Corporation, 6.42% due 1/15/2002 984,669 984,810 A+ Aa3 1,000,000 CIT Group Holdings, Inc., 6.50% due 7/13/1998 1,003,334 1,002,840 A+ A1 1,000,000 Commercial Credit Corp., 6% due 4/15/2000 983,018 984,510 Equitable Life Assurance Society of the US ++++: A A2 500,000 6.95% due 12/01/2005 475,019 491,240 A A2 1,000,000 7.70% due 12/01/2015 993,411 998,700 A+ A2 1,000,000 Transamerica Finance Corp., 6.80% due 3/15/1999 999,907 1,007,170 ------------- ------------- 8,415,354 8,454,070 Financial Bear Stearns Companies, Inc.: Services -- A A2 500,000 6.50% due 7/05/2000 499,090 499,090 Other -- 11.2% A A2 1,000,000 6.75% due 5/01/2001 997,582 999,250 A A2 500,000 6.70% due 8/01/2003 465,155 492,000 A+ A1 2,000,000 Dean Witter, Discover & Co., 6.75% due 8/15/2000 1,995,284 2,005,200 BBB+ Baa1 1,000,000 PaineWebber Group Inc., 8.875% due 3/15/2005 996,864 1,087,750 A A2 1,000,000 Smith Barney Holdings, Inc., 7.375% due 5/15/2007 1,000,647 1,008,150 A+ A1 2,000,000 Travelers Corp. (The), 7.875% due 5/15/2025 2,027,290 2,050,640 ------------- ------------- 7,981,912 8,142,080 Industrial -- A+ A1 2,000,000 Bass America, Inc., 6.625% due 3/01/2003 1,927,809 1,980,000 Consumer A A2 498,079 +Disney Enterprises Inc., 6.85% due Goods -- 11.2% 1/10/2007++ 497,758 493,646 A A2 1,000,000 First Data Corporation, 6.75% due 7/15/2005 974,270 983,680 AAA Aaa 2,000,000 Johnson & Johnson, 8.72% due 11/01/2024 2,018,737 2,191,180 A A2 1,125,000 May Department Stores Company (The), 10.625% due 11/01/2010 1,339,208 1,444,298 A A2 1,000,000 Philip Morris Companies, Inc., 9% due 1/01/2001 1,013,292 1,064,060 ------------- ------------- 7,771,074 8,156,864 Industrial -- A- Aa3 500,000 Dresser Industries, Inc., 7.60% due Energy -- 0.7% 8/15/2096 498,558 509,305 Industrial -- Lockheed Martin Corp.: Other -- 2.7% BBB+ A3 1,000,000 6.625% due 6/15/1998 999,937 1,004,930 BBB+ A3 1,000,000 6.55% due 5/15/1999 999,700 1,001,590 ------------- ------------- 1,999,637 2,006,520 Transportation -- Southwest Airlines Co.: 3.7% A- A3 1,500,000 9.40% due 7/01/2001 1,676,406 1,631,115 A- A3 1,000,000 7.875% due 9/01/2007 994,974 1,050,950 ------------- ------------- 2,671,380 2,682,065 Utilities -- GTE Corporation: Communica- A A3 1,000,000 8.85% due 3/01/1998 1,018,592 1,017,610 tions -- 7.0% A A3 500,000 9.10% due 6/01/2003 546,281 553,055 A A3 1,000,000 10.30% due 11/15/2017 1,062,955 1,062,960 AAA Aaa 500,000 Indiana Bell Telephone Co., Inc., 7.30% due 8/15/2026 499,170 498,135 AA Aa3 2,000,000 Southwestern Bell Telecommunications, Inc., 6.125% due 3/01/2000 2,004,314 1,982,320 ------------- ------------- 5,131,312 5,114,080 Utilities -- A+ A1 3,000,000 Georgia Power Co., 6.125% due 9/01/1999 2,987,448 2,982,060 Electric-- 7.6% AA- A1 1,000,000 Northern States Power Co., 7.125% due 7/01/2025 1,060,164 975,440 A- A3 500,000 Pennsylvania Power & Light Co., 6.875% due 2/01/2003 507,716 499,870 A A2 1,000,000 Virginia Electric & Power Co., 8.625% due 10/01/2024 982,455 1,067,210 ------------- ------------- 5,537,783 5,524,580 Yankee A- A3 1,000,000 British Aerospace PLC, 7.50% due Corporates* -- 7/01/2027 (d)++++ 991,280 991,280 11.9% A+ NR++ 2,000,000 China Light & Power Company, Ltd., 7.50% due 4/15/2006 (d) 1,995,647 2,033,500 A+ A1 1,000,000 Ford Capital B.V., 9.50% due 6/01/2010 (b) 1,098,013 1,176,010 A - Baa1 1,000,000 HSBC Americas Inc., 7% due 11/01/2006 (b) 992,148 982,030 A+ A2 2,000,000 Hydro-Quebec, 7.375% due 2/01/2003 (d) 2,036,635 2,036,520 A+ A1 1,000,000 Petroliam Nasional Berhad, 6.875% due 7/01/2003 (d)++++ 991,559 997,816 A A2 500,000 Western Mining Corp., 7.25% due 11/15/2013 (c) 506,214 490,560 ------------- ------------- 8,611,496 8,707,716 Yankee A+ A2 500,000 Province of Quebec, 8.80% due Sovereign* -- 4/15/2003 (a) 553,307 544,115 0.7% ------------- ------------- Total Corporate Bonds & Notes -- 91.1% 65,731,151 66,450,530 ============= ============= Short-Term Securities Commercial 1,000,000 General Electric Capital Corp., 5.62% Paper** -- 1.4% due 7/07/1997 999,063 999,063 Repurchase 2,993,000 Morgan (J.P.) & Company Inc., purchased on Agreements*** -- 4.1% 6/30/1997 to yield 6% to 7/01/1997 2,993,000 2,993,000 ------------- ------------- Total Short-Term Securities -- 5.5% 3,992,063 3,992,063 ============= ============= Total Investments -- 100.7% $72,780,295 73,463,533 ============= Liabilities in Excess of Other Assets -- (0.7%) (492,815) ------------- Net Assets -- 100.0% $72,970,718 ============= * Corresponding industry groups for foreign bonds which are denominated in US dollars: (a) Government entity. (b) Financial institution. (c) Industrial; mining. (d) Industrial; other. ** Commercial Paper is traded on a discount basis; the interest rate shown is the discount rate paid at the time of purchase by the Program. *** Repurchase Agreements are fully collateralized by US Government Obligations. + Subject to principal paydowns. ++ Not rated. ++++ The security may be offered and sold to "qualified institutional buyers" under Rule 144A of the Securities Act of 1933. See Notes to Financial Statements.
The Corporate Fund Accumulation Program, Inc. Statement of Assets and Liabilities as of June 30, 1997 Assets: Investments, at value (identified cost -- $72,780,295) (Note 1a) $73,463,533 Interest receivable 1,275,813 Prepaid registration fees and other assets (Note 1d) 53,110 -------------- Total assets 74,792,456 -------------- Liabilities: Payables: Securities purchased $1,490,370 Capital shares redeemed 95,732 Investment adviser (Note 2) 30,939 1,617,041 -------------- Accrued expenses and other liabilities 204,697 -------------- Total liabilities 1,821,738 -------------- Net Assets $72,970,718 ============== Net Assets Consist of: Common Stock, $.01 par value, 50,000,000 shares authorized $35,394 Paid-in capital in excess of par 74,058,077 Undistributed investment income -- net 162,162 Accumulated realized capital losses on investments -- net (Note 5) (1,968,153) Unrealized appreciation on investments -- net 683,238 -------------- Net Assets -- Equivalent to $20.62 per share based on 3,539,399 shares outstanding $72,970,718 ============== See Notes to Financial Statements.
The Corporate Fund Accumulation Program, Inc. Statement of Operations for the Six Months Ended June 30, 1997 Investment Income (Note 1c): Interest and premium and discount earned $2,563,937 Expenses: Investment advisory fees (Note 2) $185,399 Transfer agent fees 97,330 Accounting services (Note 2) 27,268 Registration fees (Note 1d) 25,481 Professional fees 22,450 Printing and shareholder reports 16,571 Directors' fees and expenses 8,642 Custodian fees 2,937 Pricing fees 2,416 Other 2,277 ----------- Total expenses 390,771 ------------ Investment income -- net 2,173,166 ------------ Realized & Unrealized Loss on Investments -- Net (Notes 1c & 3): Realized loss on investments -- net (201,688) Change in unrealized appreciation on investments -- net (264,455) ------------ Net Increase in Net Assets Resulting from Operations $1,707,023 ============ See Notes to Financial Statements
The Corporate Fund Accumulation Program, Inc. Statements of Changes in Net Assets For the Six For the Months Ended Year Ended June 30, December 31, Increase (Decrease) in Net Assets: 1997 1996 Operations: Investment income -- net $2,173,166 $4,746,720 Realized gain (loss) on investments -- net (201,688) 1,212,168 Change in unrealized appreciation on investments -- net (264,455) (4,788,096) ------------- ------------- Net increase in net assets resulting from operations 1,707,023 1,170,792 ------------- ------------- Dividends to Shareholders (Note 1e): Investment income -- net (2,011,004) (4,746,847) ------------- ------------- Net decrease in net assets resulting from dividends to shareholders (2,011,004) (4,746,847) ------------- ------------- Capital Share Transactions (Note 4): Net decrease in net assets resulting from capital share transactions (4,473,722) (4,077,674) ------------- ------------- Net Assets: Total decrease in net assets (4,777,703) (7,653,729) Beginning of period 77,748,421 85,402,150 ------------- ------------- End of period* $72,970,718 $77,748,421 ============= ============= * Undistributed investment income -- net $162,162 $-- ============= ============= See Notes to Financial Statements.
The Corporate Fund Accumulation Program, Inc. Financial Highlights For the Six The following per share data and ratios have been derived Months from information provided in the financial statements. Ended For the Year Ended December 31, June 30, Increase (Decrease) in Net Asset Value: 1997 1996 1995 1994 1993 Per Share Operating Performance: Net asset value, beginning of period $20.69 $21.59 $19.14 $21.55 $21.22 --------- --------- --------- --------- --------- Investment income -- net .61 1.23 1.28 1.18 1.31 Realized and unrealized gain (loss) on investments -- net (.12) (.90) 2.45 (2.41) 1.24 --------- --------- --------- --------- --------- Total from investment operations .49 .33 3.73 (1.23) 2.55 --------- --------- --------- --------- --------- Less dividends and distributions: Investment income -- net (.56) (1.23) (1.28) (1.18) (1.29) Realized gain on investments -- net -- -- -- -- (.93) --------- --------- --------- --------- --------- Total dividends and distributions (.56) (1.23) (1.28) (1.18) (2.22) --------- --------- --------- --------- --------- Net asset value, end of period $20.62 $20.69 $21.59 $19.14 $21.55 ========= ========= ========= ========= ========= Total Investment Return: Based on net asset value per share 2.39%+ 1.69% 20.05% (5.78%) 12.20% ========= ========= ========= ========= ========= Ratios to Average Net Assets: Expenses 1.05%* 1.12% 1.01% 1.10% 1.08% ========= ========= ========= ========= ========= Investment income -- net 5.86%* 5.84% 6.23% 5.80% 5.74% ========= ========= ========= ========= ========= Supplemental Data: Net assets, end of period (in thousands) $72,971 $77,748 $85,402 $82,887 $115,367 ========= ========= ========= ========= ========= Portfolio turnover 46% 77% 104% 122% 132% ========= ========= ========= ========= ========= * Annualized. + Aggregate total investment return. See Notes to Financial Statements.
The Corporate Fund Accumulation Program, Inc. NOTES TO FINANCIAL STATEMENTS 1. Significant Accounting Policies: The Corporate Fund Accumulation Program, Inc. (the "Program") is registered under the Investment Company Act of 1940 as a diver- sified, open-end management investment company. These unaudited financial statements reflect all adjustments which are, in the opinion of management, necessary to a fair statement of the results for the interim period presented. All such adjustments are of a normal recurring nature. The following is a summary of significant accounting policies followed by the Program. (a) Valuation of securities -- Portfolio securities are valued on the basis of prices furnished by one or more pricing services which determine prices for normal, institutional-size trading units. In certain circumstances, portfolio securities are valued at the last sale price on the exchange that is the primary market for such securities, or the last quoted bid price for those securities for which the over-the- counter market is the primary market or for listed securities in which there were no sales during the day. Obligations with remaining maturities of sixty days or less are valued at amortized cost, which approximates market value, unless this method no longer produces fair valuations. Securities for which there exists no price quotations or valuations and all other assets are valued at fair value as determined in good faith by or on behalf of the Board of Directors of the Program. (b) Income taxes -- It is the Program's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no Federal income tax provision is required. (c) Security transactions and investment income -- Security transactions are recorded on the dates the transactions are entered into (the trade dates). Interest income (including amortization of premium and discount) is recognized on the accrual basis. Realized gains and losses on security transactions are determined on the identified cost basis. (d) Prepaid registration fees -- Prepaid registration fees are charged to expense as the related shares are issued. (e) Dividends to shareholders -- Dividends from net investment income are declared and paid monthly. Distributions of capital gains are recorded on the ex-dividend dates. 2. Investment Advisory Agreement and Transactions with Affiliates: The Program has entered into an Investment Advisory Agreement with Fund Asset Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc. ("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the limited partner. FAM is responsible for the management of the Program's portfolio and provides the necessary personnel, facilities, equipment and certain other services necessary to the operations of the Program. For such services, the Program pays a monthly fee of 0.50%, on an annual basis, of the value of the Program's average daily net assets. FAM has entered into an Administrative Agreement with Merrill Lynch, Pierce, Fenner & Smith Inc. ("MLPF&S"), Prudential Securities, Inc., Dean Witter Reynolds Inc., and Smith Barney, Inc. (the "Administrators"), whereby the Administrators perform certain administrative duties on behalf of FAM. The Administrators receive a monthly fee from FAM equal to 0.20%, on an annual basis, of the Program's average daily net assets. During the six months ended June 30, 1997, the Program paid Merrill Lynch Security Pricing Service, an affiliate of MLPF&S, $1,875 for security price quotations to compute the net asset value of the Program. Accounting services are provided to the Program by FAM at cost. Certain officers and/or directors of the Program are officers and/or directors of FAM, PSI, and/or ML & Co. 3. Investments: Purchases and sales of investments, excluding short-term securities, for the six months ended June 30, 1997 were $32,522,595 and $36,779,044, respectively. Net realized and unrealized gains (losses) as of June 30, 1997 were as follows: Realized Unrealized Losses Gains Long-term investments $ (201,688) $ 683,238 ----------- ----------- Total $ (201,688) $ 683,238 =========== =========== As of June 30, 1997, net unrealized appreciation for Federal income tax purposes aggregated $683,238, of which $1,002,623 related to appreciated securities and $319,385 related to depreciated securities. The aggregate cost of investments at June 30, 1997 for Federal income tax purposes was $72,780,295. 4. Capital Share Transactions: Transactions in capital shares were as follows: For the Six Months Dollar Ended June 30, 1997 Shares Amount Shares sold 286,757 $ 5,885,291 Shares issued to shareholders in reinvestment of dividends 91,860 1,886,502 ------------ ------------ Total issued 378,617 7,771,793 Shares redeemed (596,792) (12,245,515) ------------ ------------ Net decrease (218,175) $ (4,473,722) ============ ============ For the Year Ended Dollar December 31, 1996 Shares Amount Shares sold 943,053 $ 19,538,783 Shares issued to shareholders in reinvestment of dividends 221,170 4,567,096 ------------ ------------ Total issued 1,164,223 24,105,879 Shares redeemed (1,362,008) (28,183,553) ------------ ------------ Net decrease (197,785) $ (4,077,674) ============ ============ 5. Capital Loss Carryforward: At December 31, 1996, the Program had a net capital loss carryforward of approximately $1,766,000, all of which expires in 2002. This amount will be available to offset like amounts of any future taxable gains. Officers and Directors Arthur Zeikel -- President and Director Ronald W. Forbes -- Director Cynthia A. Montgomery -- Director Charles C. Reilly -- Director Kevin A. Ryan -- Director Richard R. West -- Director Terry K. Glenn -- Executive Vice President Joseph T. Monagle Jr. -- Senior Vice President Donald C. Burke -- Vice President Jay C. Harbeck -- Vice President Gerald M. Richard -- Treasurer Susan B. Baker -- Secretary Custodian and Transfer Agent The Bank of New York 90 Washington Street New York, NY 10286 -----END PRIVACY-ENHANCED MESSAGE-----