-----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, PSb2e6zKBCMXiZJFVbe6rYacywjLh5oNVQVaSmg2rIjpvr6znkZ6etGgftsGjYpv TLp6g4WFMaqGP+lChvEztA== 0000898733-03-000432.txt : 20030827 0000898733-03-000432.hdr.sgml : 20030827 20030827162336 ACCESSION NUMBER: 0000898733-03-000432 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030827 EFFECTIVENESS DATE: 20030827 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMAND GOVERNMENT FUND CENTRAL INDEX KEY: 0000355349 IRS NUMBER: 133107088 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03251 FILM NUMBER: 03868842 BUSINESS ADDRESS: STREET 1: 199 WATER ST CITY: NEW YORK STATE: NY ZIP: 10292 BUSINESS PHONE: 2122141250 MAIL ADDRESS: STREET 2: ONE SEAPORT PLZ CITY: NEW YORK STATE: NY ZIP: 10292 FORMER COMPANY: FORMER CONFORMED NAME: EAGLE GOVERNMENT TRUST DATE OF NAME CHANGE: 19820210 N-CSR 1 mf16123gncsr.txt COMMAND GOVERNMENT FUND -- 6/30/2003 ANNUAL UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number: 811-3251 Exact name of registrant as specified in charter: COMMAND Government Fund Address of principal executive offices: Gateway Center 3 100 Mulberry Street Newark, New Jersey 07102 Name and address of agent for service: Jonathan Shain Gateway Center 3 100 Mulberry Street Newark, New Jersey 07102 Registrant's telephone number, including area code: 973-802-6469 Date of fiscal year end: June 30, 2003 Date of reporting period: June 30, 2003 Item 1 -- Reports to Stockholders ANNUAL REPORT JUNE 30, 2003 COMMAND MONEY FUND COMMAND GOVERNMENT FUND COMMAND TAX-FREE FUND FUND TYPE Money market This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus. The views expressed in this report and information about the Funds' portfolio holdings are for the period covered by this report and are subject to change thereafter. COMMAND Funds Annual Report June 30, 2003 FUND OBJECTIVES COMMAND Money Fund and COMMAND Government Fund seek high current income, preservation of capital, and maintenance of liquidity. There can be no assurance that the Funds will achieve their respective investment objectives. COMMAND Tax-Free Fund seeks high current income that is exempt from federal income taxes, consistent with the maintenance of liquidity and preservation of capital. There can be no assurance that the Fund will achieve its investment objective. Fund Facts As of 6/30/03
7-Day Net Asset Weighted Avg. Net Assets Current Yield Value (NAV) Maturity (WAM) (Millions) COMMAND Money Fund 0.70% $1.00 70 Days $11,804 - ----------------------------------------------------------------------------------------- iMoneyNet, Inc. Taxable Prime Retail Avg.1 0.48% N/A 58 Days N/A - ----------------------------------------------------------------------------------------- COMMAND Government Fund 0.54% $1.00 69 Days $1,017 - ----------------------------------------------------------------------------------------- iMoneyNet, Inc. Government & Agency Retail Avg.2 0.49% N/A 54 Days N/A - ----------------------------------------------------------------------------------------- COMMAND Tax-Free Fund 0.54% $1.00 57 Days $1,784 - ----------------------------------------------------------------------------------------- iMoneyNet, Inc. Tax-Free National Retail Avg.3 0.43% N/A 39 Days N/A - -----------------------------------------------------------------------------------------
Note: Yields will fluctuate from time to time and past performance is not indicative of future results. An investment in the Funds is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Funds. 1iMoneyNet, Inc. reports a 7-day current yield and WAM on Tuesdays for taxable retail money funds. This is the data of all funds in the iMoneyNet, Inc. Money Fund Taxable Prime Retail Average category as of June 24, 2003, the closest date to the end of our reporting period. The 7-day current yield is after deduction of expenses. 2iMoneyNet, Inc. reports a 7-day current yield and WAM on Tuesdays for taxable government money funds. This is the data of all funds in the iMoneyNet, Inc. Govt & Agency Retail Average category as of June 24, 2003, the closest date to the end of our reporting period. The 7-day current yield is after deduction of expenses. 3iMoneyNet, Inc. reports a 7-day current yield and WAM on Mondays for tax-free money funds. This is the data of all funds in the iMoneyNet, Inc Tax-Free National Retail Average category as of June 30, 2003. The 7-day current yield is after deduction of expenses. (800) 225-1852 Annual Report June 30, 2003 INVESTMENT ADVISER'S REPORT COMMAND MONEY FUND For investors in money market securities, the 12-month period that began July 1, 2002 was noteworthy because short-term interest rates in the United States declined to their lowest level in many years. Consequently, the average seven-day compound yield for taxable money market funds reached very low levels late in the fiscal year. In this challenging investment environment, we identified high-quality securities that in our opinion offered better relative value by analyzing trends within sectors of the money markets and changes in the slope of the money market yield curve. We believe our strategy helped the COMMAND Money Fund maintain its net asset value (NAV) at $1.00 per share and provide a competitive yield versus the average comparable fund as measured by iMoneyNet, Inc. The Federal Reserve (the Fed) reduced short- term rates in November 2002 and June 2003, which lowered its target for the rate banks charge each other for overnight loans to 1.00%. The rate cuts were intended to promote growth in the United States at a time when corporate governance scandals, a volatile stock market, and geopolitical concerns encouraged a lingering sense of economic uncertainty. IMPACT OF SECTOR SELECTIONS ON THE FUND One sector that we believed had value was federal agency securities, particularly those scheduled to mature in 13 months that could be retired early (or called) by their respective issuers in three months. These callable securities featured attractive yields to compensate investors for this early maturity option. Although many federal agency securities were called as interest rates slid progressively lower, they benefited the COMMAND Money Fund by providing incremental yield during the time they were held in the portfolio. 1 COMMAND Funds Annual Report June 30, 2003 INVESTING AMID HISTORICALLY LOW INTEREST RATES As for managing interest-rate risk, we employed what we believed to be a conservative strategy by investing in a combination of shorter- and longer-term money market securities. Shorter- term securities provided the COMMAND Money Fund with a measure of flexibility as their proceeds could be readily invested during brief intervals when yields temporarily edged higher. Furthermore, we could lock in yields on one- year securities. Later in the reporting period, the trend toward sharply lower yields resumed as sluggish economic conditions in the United States apparently continued. 2 (800) 225-1852 INVESTMENT ADVISER'S REPORT COMMAND GOVERNMENT FUND The 12-month period that began July 1, 2002 was one in which the cost of borrowing money in the United States fell to very low levels. This occurred as the Federal Reserve (the Fed) eased monetary policy in November 2002 and June 2003, reducing its target for the overnight bank lending rate to 1.00%. The rate cuts were intended to promote growth in the United States at a time when corporate governance scandals, a volatile stock market, the United States' involvement in a war in Iraq, high oil prices, and other geopolitical concerns encouraged a lingering sense of economic uncertainty. As the general level of interest rates fell, the average seven-day compound yield for taxable money market funds reached very low levels late in the reporting period. We tried to maximize the COMMAND Government Fund's interest income by investing in certain federal agency securities that provided relatively attractive yields because they could be "called" or retired ahead of schedule. We believe our strategy helped the COMMAND Government Fund maintain its net asset value (NAV) at $1.00 per share and provide a competitive yield versus the average comparable fund as measured by iMoneyNet, Inc. Overall, our investment strategy positioned the COMMAND Government Fund's weighted average maturity (WAM) longer than the average comparable fund as tracked by iMoneyNet, Inc. (WAM, expressed in days, takes into account the maturity and quantity of each security held in a portfolio. It indicates a portfolio's sensitivity to changes in the level of interest rates.) Maintaining a WAM that is longer than average typically helps a portfolio's yield remain higher for a longer period of time as money market yields decline. 3 COMMAND Funds Annual Report June 30, 2003 INVESTMENT ADVISER'S REPORT COMMAND TAX-FREE FUND The investment environment was challenging during the COMMAND Tax-Free Fund's fiscal year that began July 1, 2002. Short-term interest rates fell to very low levels in the United States, complicating the search for high- quality debt securities that provided attractive yields. Nevertheless, the COMMAND Tax-Free Fund maintained its net asset value (NAV) at $1.00 per share and provided a competitive yield versus the average comparable fund as measured by iMoneyNet, Inc. We believe the COMMAND Tax-Free Fund benefited from our strategy that at times favored longer-term municipal money market securities during brief intervals when yields temporarily edged higher, and shorter-term securities as yields declined. The trend toward lower yields reflected anticipation that the Federal Reserve (the Fed) would ease monetary policy in November 2002 and June 2003 in an effort to stimulate growth at a time when corporate governance scandals, a volatile stock market, and geopolitical concerns encouraged a lingering sense of economic uncertainty. Tax revenues have fallen in the lackluster economy, leaving certain states and cities to face large budget deficits. BENEFITING FROM A BRIEF INCREASE IN YIELDS There were times when economic conditions appeared to be improving. For example, in late 2002, a spate of stronger-than-expected economic data led to speculation that the Fed might not need to cut rates further. Consequently, municipal money market yields began to climb. Our strategy was to take advantage of any brief upturn in yields by investing in longer-term money market securities. This strategy helped the COMMAND Tax-Free Fund ride out this year's "January effect," a seasonal decline in yields that typically occurs as increased demand for municipal money market securities temporarily outstrips the supply. 4 (800) 225-1852 IMPACT OF SECTOR SELECTIONS ON THE FUND For the rest of our fiscal year, we generally avoided one-year securities as the level of yields moved progressively lower. Instead, we favored at times tax-exempt commercial paper and variable-rate demand obligations. These two sectors, in our opinion, provided relatively attractive yields compared to the one-year maturity sector. Municipalities generally issue tax-exempt commercial paper to borrow money from 1 day to 270 days. Interest rates are established for various maturity dates, allowing investors to select maturities that suit their specific strategies. Because of this "customized" feature, tax-exempt investors generally receive higher yields versus alternative investments. As for variable-rate demand obligations, we generally favored those with rates that reset either weekly or monthly. In our opinion, these securities provided attractive yields and flexibility in the low-interest-rate environment. If yields rise, we will be able to demand repayment of these securities before their stated maturity dates and reinvest the proceeds in securities that provide higher returns. COMMAND Funds Management Team 5 COMMAND Funds COMMAND Money Fund Portfolio of Investments as of June 30, 2003
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Certificates of Deposit--Canadian 3.6% Toronto Dominion Bank, $ 250,000 1.20%, 10/6/03 $ 250,000,000 50,000 1.20%, 10/7/03 50,000,000 75,000 1.10%, 11/6/03 75,000,000 50,000 1.25%, 3/17/04 50,000,000 --------------- 425,000,000 - ------------------------------------------------------------------------------------- Certificates of Deposit--Yankee 25.8% Abbey National Treasury Services PLC, 250,000 1.60%, 11/25/03 250,000,000 Bayerische Landesbank-Girozentrale, 250,000 1.28%, 12/1/03 250,000,000 BNP Paribas, 196,303 1.38%, 7/1/03 196,303,000 Credit Agricole Indosuez, 200,000 1.15%, 8/11/03 200,000,000 Credit Suisse First Boston, 400,000 1.27%, 7/7/03 400,000,000 Danske Bank, 200,000 1.05%, 7/30/03 200,000,000 150,000 1.32%, 10/23/03 150,000,000 Depfa Bank PLC, 53,000 1.23%, 9/8/03 53,000,000 Deutsche Bank AG, 40,000 1.18%, 11/10/03 40,011,515 Dresdner Bank AG, 274,000 1.30%, 7/3/03(a) 274,000,000 HBOS Treasury Services PLC, 148,000 1.11%, 9/12/03 148,056,773 KBC Bank NV, 45,000 1.21%, 7/3/03 45,000,000 Landesbank Hessen-Thuringren, 130,000 1.10%, 12/8/03 130,000,000 Royal Bank Scotland PLC, 260,000 1.20%, 7/3/03 260,000,000 48,000 1.35%, 4/19/04 48,000,000
6 See Notes to Financial Statements COMMAND Funds COMMAND Money Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Societe Generale, $ 150,000 1.33%, 3/31/04 $ 150,000,000 75,000 1.16%, 4/12/04 74,997,059 UBS AG, 75,000 1.25%, 3/17/04 74,997,326 Wells Fargo Bank NA, 93,000 1.23%, 7/7/03 93,007,105 --------------- 3,037,372,778 - ------------------------------------------------------------------------------------- Commercial Paper 43.3% Asset Securitization Corp., 75,000 1.22%, 7/25/03 74,939,000 100,000 1.18%, 8/4/03 99,888,556 Aventis, 20,000 0.92%, 8/25/03 19,971,889 Barton Capital Corp., 50,000 1.10%, 7/21/03 49,969,444 BASF AG, 73,000 1.03%, 7/30/03 72,939,430 Caisse Nationale Des Caisses D'Espar, 200,000 1.03%, 9/12/03 199,582,278 CDC Commercial Paper Corp., 100,000 1.05%, 7/15/03 99,959,167 60,000 0.93%, 7/25/03 59,962,800 Delaware Funding Corp., 100,000 1.00%, 7/22/03 99,941,667 Den Norske Bank ASA, 50,000 1.21%, 9/5/03 49,889,542 193,000 1.22%, 12/12/03 191,927,349 Dexia Delaware LLC, 174,751 0.93%, 7/21/03 174,660,712 Edison Asset Securitization LLC, 126,570 1.20%, 7/11/03 126,527,810 131,000 1.22%, 9/8/03 130,693,678
See Notes to Financial Statements 7 COMMAND Funds COMMAND Money Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Falcon Asset Securitization Corp., $ 48,948 1.07%, 7/15/03 $ 48,927,632 229,000 1.08%, 7/17/03 228,890,080 10,000 0.96%, 7/29/03 9,992,534 Fcar Owner Trust I, 100,000 1.23%, 7/23/03 99,924,834 79,000 1.22%, 9/19/03 78,785,822 Forrestal Funding Master Trust, 100,208 1.08%, 7/31/03 100,118,230 Goldman Sachs Group, Inc., 11,000 1.28%, 8/29/03 10,976,924 Hamburgische Landesbank Girozentrale, 21,892 1.32%, 10/17/03 21,805,308 17,484 1.26%, 12/22/03 17,377,522 HBOS Treasury Services PLC, 67,900 1.04%, 7/24/03 67,854,884 61,226 1.08%, 9/9/03 61,097,426 HSBC Bank USA, Inc., 110,031 1.14%, 8/13/03 109,881,174 Independence Funding LLC, 60,000 1.06%, 8/11/03 59,927,567 ING America Insurance Holdings, 100,000 1.22%, 7/7/03 99,979,667 Intrepid Funding Master Trust, 55,000 0.95%, 7/22/03 54,969,521 J.P. Morgan Chase & Co., 120,000 1.28%, 7/21/03 119,914,667 220,000 1.28%, 7/22/03 219,835,733 Market Street Funding Corp., 36,330 1.09%, 7/18/03 36,311,300 Morgan Stanley, 200,000 1.00%, 7/3/03 199,988,889 20,000 1.04%, 7/18/03 19,990,178 Nationwide Building Society, 45,000 1.15%, 9/8/03 44,900,813 New Center Asset Trust, 50,000 1.14%, 10/7/03 49,844,833
8 See Notes to Financial Statements COMMAND Funds COMMAND Money Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Nordea North America, Inc., $ 75,000 1.02%, 7/21/03 $ 74,957,500 PB Finance Delaware, Inc., 41,000 1.24%, 7/21/03 40,971,755 100,000 1.25%, 7/30/03 99,899,306 Prudential PLC, 49,220 1.26%, 7/14/03 49,197,605 San Paolo U.S. Finance Co., 75,000 1.24%, 7/10/03 74,976,750 98,000 1.05%, 7/14/03 97,962,841 96,130 1.04%, 7/15/03 96,091,121 Santander Finance, Inc., 100,000 1.24%, 7/11/03 99,965,556 80,000 1.03%, 9/9/03 79,839,778 50,000 1.03%, 9/12/03 49,895,569 Schlumberger Technology Corp., 65,000 1.20%, 9/2/03 64,863,500 Sheffield Receivables Corp., 213,522 1.08%, 7/15/03 213,432,321 Sony Global Treasury Services, 48,665 1.16%, 8/19/03 48,588,163 24,249 1.23%, 8/21/03 24,206,746 Spintab/Swedmortgage AB, 25,000 1.06%, 8/13/03 24,968,347 100,000 1.06%, 8/18/03 99,858,667 Stadshypotek Delaware, Inc., 100,000 1.24%, 7/21/03 99,931,111 53,100 1.22%, 7/25/03 53,056,812 Swedbank, 56,000 1.19%, 8/4/03 55,937,062 68,000 1.20%, 9/2/03 67,857,200 Swiss Re Financial Products Corp., 51,413 1.26%, 7/22/03 51,375,211 Toyota Motor Credit Corp. 55,000 0.91%, 8/8/03 54,947,169 Tulip Funding Corp., 90,000 1.18%, 7/18/03 89,949,850
See Notes to Financial Statements 9 COMMAND Funds COMMAND Money Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Variable Funding Capital Corp., $ 46,000 1.02%, 7/15/03 $ 45,981,753 Volkswagen of America, Inc., 92,437 1.00%, 7/7/03 92,421,594 50,000 0.93%, 7/25/03 49,969,000 --------------- 5,113,251,147 - ------------------------------------------------------------------------------------- Other Corporate Obligations 20.9% American Express Credit Corp., MTN, 90,000 1.35%, 7/7/03(a) 90,000,000 26,000 1.32%, 7/10/03(a) 26,002,179 Bank America Corp., 27,980 5.75%, 3/1/04 28,809,436 Chase Manhattan Corp., MTN, 86,000 1.27%, 9/15/03(a) 86,022,297 GE Capital Assurance Co., 100,000 1.14%, 7/22/03(a)(b) (cost $100,000,000; purchased 7/22/02 ) 100,000,000 General Electric Capital Corp., MTN, 200,000 1.32%, 7/9/03(a) 200,000,000 200,000 1.17%, 7/17/03(a) 200,000,000 Goldman Sachs Group, MTN, 593,000 1.27%, 9/15/03(a) 593,000,000 J.P. Morgan Chase & Co., MTN, 78,000 1.38%, 8/26/03(a) 78,024,403 Merrill Lynch & Co., Inc., MTN, 354,000 1.31%, 7/11/03(a) 354,000,000 Metropolitan Life Insurance Co., 107,000 1.39%, 7/3/03(a)(b) (cost $107,000,000; purchased 10/03/02) 107,000,000 58,000 1.37%, 8/7/03(a)(b) (cost $58,000,000; purchased 2/07/03) 58,000,000 60,000 1.13%, 9/24/03(a)(b) (cost $60,000,000; purchased 10/24/02) 60,000,000 Morgan Stanley, MTN, 297,000 1.28%, 7/15/03(a) 297,000,000
10 See Notes to Financial Statements COMMAND Funds COMMAND Money Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Nyala Funding LLC, $ 35,000 1.28%, 8/18/03 $ 34,940,267 Pacific Life Insurance Co., 38,000 1.32%, 9/11/03(a)(b) (cost $38,000,000; purchased 9/9/02) 38,000,000 Travelers Insurance Co., 51,000 1.36%, 7/8/03(a)(b) (cost $51,000,000; purchased 7/08/02) 51,000,000 25,000 1.38%, 8/25/03(a)(b) (cost $25,000,000; purchased 2/25/03) 25,000,000 United of Omaha Life Insurance Co., 40,000 1.45%, 9/5/03(a)(b) (cost $40,000,000; purchased 12/5/02) 40,000,000 --------------- 2,466,798,582 - ------------------------------------------------------------------------------------- U.S. Government Agency & Instrumentality Obligations 6.0% Federal Home Loan Bank, 229,500 4.88%, 4/16/04 235,980,089 200,000 1.40%, 6/2/04 200,000,000 225,000 1.23%, 7/6/04 225,000,000 Federal National Mortgage Association, 50,000 3.63%, 4/15/04 50,927,844 --------------- 711,907,933 --------------- Total Investments 99.6% (amortized cost $11,754,330,440(c)) 11,754,330,440 Other assets in excess of liabilities 0.4% 49,273,179 --------------- Net Assets 100% $11,803,603,619 --------------- ---------------
See Notes to Financial Statements 11 COMMAND Funds COMMAND Money Fund Portfolio of Investments as of June 30, 2003 Cont'd. The following abbreviations are used in the portfolio descriptions: MTN--Medium Term Note. (a) Variable rate instrument. The maturity date presented for these instruments is the next date on which the rate of interest is adjusted or the date on which the security can be redeemed at par. (b) Indicates illiquid securities. The aggregate cost of such securities was $479,000,000. The aggregate value of $479,000,000 is approximately 4.06% of net assets. (c) The cost for federal income tax purposes is substantially the same as for financial reporting purposes. The industry classification of portfolio holdings and other assets in excess of liabilities as a percentage of net assets as of June 30, 2003 was as follows: Commercial Banks....................................................... 45.1% Asset Backed Securities................................................ 12.9 Security Brokers & Dealers............................................. 12.5 Federal Credit Agencies................................................ 6.0 Short-Term Business Credit............................................. 4.7 Life Insurance......................................................... 4.5 Bank Holding Companies--Domestic....................................... 3.8 Finance Services....................................................... 3.8 Mortgage Bankers....................................................... 2.0 Motor Vehicle Parts.................................................... 1.7 Fire & Marine Casualty Insurance....................................... 1.3 Chemicals & Allied Products............................................ 0.6 Oil & Gas.............................................................. 0.5 Pharmaceuticals........................................................ 0.2 ----- 99.6 Other assets in excess of liabilities.................................. 0.4 ----- 100.0% ----- ----- 12 See Notes to Financial Statements COMMAND Funds COMMAND Money Fund Statement of Assets and Liabilities
June 30, 2003 - --------------------------------------------------------------------------------------- ASSETS Investments, at amortized cost which approximates market value $11,754,330,440 Receivable for Fund shares sold 276,760,776 Interest receivable 14,281,215 Prepaid expenses 88,924 ----------------- Total assets 12,045,461,355 ----------------- LIABILITIES Payable for Fund shares repurchased 234,476,628 Management fee payable 3,585,441 Accrued expenses and other liabilities 1,425,705 Distribution fee payable 1,243,822 Dividends payable 1,125,054 Payable to custodian 1,086 ----------------- Total liabilities 241,857,736 ----------------- NET ASSETS $11,803,603,619 ----------------- ----------------- Net assets were comprised of: Shares of beneficial interest, at par $ 118,036,036 Paid-in capital in excess of par 11,685,567,583 ----------------- Net assets, June 30, 2003 $11,803,603,619 ----------------- ----------------- Class A: Net asset value, offering price and redemption price per share ($11,803,603,619 /11,803,603,619 shares of beneficial interest ($.01 par value) issued and outstanding) $1.00 ----------------- -----------------
See Notes to Financial Statements 13 COMMAND Funds COMMAND Money Fund Statement of Operations
Year Ended June 30, 2003 - --------------------------------------------------------------------------------------- NET INVESTMENT INCOME Income Interest and discount earned $ 225,491,598 ----------------- Expenses Management fee 50,837,881 Distribution fee 17,709,957 Transfer agent's fees and expenses 4,537,000 Registration fees 1,100,000 Reports to shareholders 692,000 Custodian's fees and expenses 650,000 Trustees' fees 91,000 Legal fees and expenses 65,000 Audit fee 38,000 Miscellaneous 246,830 ----------------- Total expenses 75,967,668 ----------------- Net investment income 149,523,930 ----------------- REALIZED GAIN ON INVESTMENTS Net realized gain on investment transactions 99,798 ----------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 149,623,728 ----------------- -----------------
14 See Notes to Financial Statements COMMAND Funds COMMAND Money Fund Statement of Changes in Net Assets
Year Ended June 30, ------------------------------------ 2003 2002 - --------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations Net investment income $ 149,523,930 $ 359,445,064 Net realized gain on investment transactions 99,798 167,400 ---------------- ---------------- Net increase in net assets resulting from operations 149,623,728 359,612,464 ---------------- ---------------- Dividends and distributions to shareholders (Note 1) (149,623,728) (359,612,464) ---------------- ---------------- Fund share transactions (at $1 per share) Net proceeds from shares subscribed 51,648,569,116 55,239,051,509 Net asset value of shares issued in reinvestment of dividends and distributions 143,017,554 359,606,092 Cost of shares reacquired (54,770,474,062) (57,223,752,894) ---------------- ---------------- Net decrease in net assets from Fund share transactions (2,978,887,392) (1,625,095,293) ---------------- ---------------- Total decrease (2,978,887,392) (1,625,095,293) NET ASSETS Beginning of year 14,782,491,011 16,407,586,304 ---------------- ---------------- End of year $ 11,803,603,619 $ 14,782,491,011 ---------------- ---------------- ---------------- ----------------
See Notes to Financial Statements 15 COMMAND Funds COMMAND Money Fund Financial Highlights
Year Ended June 30, 2003 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of year $ 1.000 Net investment income and net realized gains 0.010 Dividends and distributions to shareholders (0.010) ---------------- Net asset value, end of year $ 1.000 ---------------- ---------------- TOTAL RETURN(a): 1.06% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (000) $ 11,803,604 Average net assets (000) $ 14,167,966 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees .54% Expenses, excluding distribution and service (12b-1) fees .41% Net investment income 1.06%
- ------------------------------ (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. 16 See Notes to Financial Statements COMMAND Funds COMMAND Money Fund Financial Highlights Cont'd.
Year Ended June 30, - ----------------------------------------------------------------- 2002 2001 2000 1999 - ----------------------------------------------------------------- $ 1.000 $ 1.000 $ 1.000 $ 1.000 0.022 0.055 0.053 0.048 (0.022) (0.055) (0.053) (0.048) - ----------- ----------- ----------- ----------- $ 1.000 $ 1.000 $ 1.000 $ 1.000 - ----------- ----------- ----------- ----------- - ----------- ----------- ----------- ----------- 2.23% 5.72% 5.42% 4.85% $14,782,491 $16,407,586 $13,489,038 $12,246,946 $16,400,541 $15,543,950 $13,178,334 $11,965,069 .53% .53% .53% .54% .41% .41% .41% .41% 2.19% 5.50% 5.32% 4.73%
See Notes to Financial Statements 17 COMMAND Funds COMMAND Money Fund Report of Independent Auditors To the Shareholders and Trustees of COMMAND Money Fund In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of COMMAND Money Fund (the 'Fund') at June 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as 'financial statements') are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2003 by correspondence with the custodian, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York August 18, 2003 18 COMMAND Funds COMMAND Government Fund Portfolio of Investments as of June 30, 2003
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCIES 84.0% Federal Farm Credit Bank 10.7% $ 100,000 1.165%, 7/7/03(a) $ 99,963,312 2,020 3.125%, 10/1/03 2,029,370 2,000 5.00%, 10/2/03 2,018,750 175 6.25%, 11/19/03 178,325 208 5.15%, 12/2/03 211,367 4,000 5.07%, 12/15/03 4,073,238 --------------- 108,474,362 - ------------------------------------------------------------------------------------- Federal Home Loan Bank 31.2% 9,650 4.50%, 7/7/03 9,655,203 57,000 1.14%, 7/14/03(a) 56,973,735 50,000 0.931%, 7/25/03(a) 49,983,121 4,000 4.125%, 8/15/03 4,014,898 20,615 0.959%, 9/15/03(a) 20,614,502 1,395 5.125%, 9/15/03 1,406,734 450 2.50%, 11/14/03 452,043 250 3.125%, 11/14/03 251,709 2,915 6.375%, 11/14/03 2,970,722 5,000 6.375%, 11/15/03 5,094,390 1,285 5.375%, 1/5/04 1,311,804 33,000 1.425%, 3/8/04 33,000,000 10,000 4.875%, 4/16/04 10,284,127 1,000 3.63%, 4/26/04 1,018,137 10,000 1.40%, 5/12/04 10,000,000 25,000 1.30%, 6/1/04 25,000,000 22,000 1.40%, 6/2/04 22,000,000 15,000 1.30%, 6/7/04 15,000,000 15,000 1.25%, 6/21/04 15,000,000 10,000 1.30%, 6/28/04 10,000,000 23,000 1.25%, 7/2/04 23,000,000 --------------- 317,031,125
See Notes to Financial Statements 19 COMMAND Funds COMMAND Government Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Federal Home Loan Mortgage Corporation 3.5% $ 30,000 1.00%, 8/26/03 $ 29,953,333 1,000 5.99%, 12/1/03 1,019,683 4,271 5.00%, 5/15/04 4,410,661 --------------- 35,383,677 - ------------------------------------------------------------------------------------- Federal National Mortgage Association 37.0% 90,000 1.10%, 7/1/03(a) 90,000,000 10,000 1.12%, 7/1/03 10,000,000 25,000 1.18%, 7/1/03 25,000,000 15,000 0.99%, 7/22/03(a) 14,999,688 1,500 1.169%, 7/22/03(a) 1,499,564 31,000 1.00%, 7/28/03(a) 30,988,593 53,800 1.13%, 8/1/03(a) 53,796,993 40,000 1.19%, 8/1/03 39,959,011 15,000 1.21%, 8/1/03 14,984,371 1,000 5.91%, 8/25/03 1,006,911 14,000 1.15%, 9/2/03 13,971,825 7,000 1.003%, 9/10/03(a) 6,997,684 30,000 0.92%, 10/1/03 29,929,467 10,000 0.94%, 10/1/03 9,975,978 24,330 1.11%, 10/1/03 24,260,784 5,085 4.75%, 11/14/03 5,151,160 4,135 3.125%, 11/15/03 4,152,755 --------------- 376,674,784 - ------------------------------------------------------------------------------------- Student Loan Marketing Association 1.6% 4,500 1.345%, 7/1/03(a) 4,515,006 12,000 2.25%, 7/2/03 11,999,994 --------------- 16,515,000
20 See Notes to Financial Statements COMMAND Funds COMMAND Government Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Principal Amount (000) Description Value (Note 1) - ---------------------------------------------------------------------------------------- Repurchase Agreements(b) 25.1% $ 33,024 Bank of America, 1.07%, dated 6/26/03, due 7/3/03 in the amount of $33,030,871 (cost $33,024,000; the value of the collateral including accrued interest was $33,684,481) $ 33,024,000 55,192 Goldman Sachs, 1.14%, dated 6/27/03, due 7/1/03 in the amount of $55,198,991 (cost $55,192,000; the value of the collateral including accrued interest was $56,295,841) 55,192,000 104,000 Morgan Stanley, 0.94%, dated 6/25/03, due 7/2/03 in the amount of $104,019,009 (cost $104,000,000; the value of the collateral including accrued interest was $106,080,001) 104,000,000 63,730 Joint Repurchase Agreement Account, 1.25%, 7/1/03 (Note 4) 63,730,000 --------------- 255,946,000 --------------- Total Investments 109.1% (amortized cost $1,110,024,948(c)) 1,110,024,948 Liabilities in excess of other assets (9.1%) (92,715,531) --------------- Net Assets 100% $ 1,017,309,417 --------------- ---------------
- ------------------------------ (a) Variable rate instrument. The maturity date presented for these instruments is the next date on which the rate of interest is adjusted or the date on which the security can be redeemed at par. (b) Repurchase agreements are collateralized by United States Treasury or federal agency obligations. (c) The cost for federal income tax purposes is substantially the same as for financial reporting purposes. See Notes to Financial Statements 21 COMMAND Funds COMMAND Government Fund Statement of Assets and Liabilities
June 30, 2003 - --------------------------------------------------------------------------------------- ASSETS Investments excluding repurchase agreements, at amortized cost which approximates market value $ 854,078,948 Repurchase agreements, at amortized cost which approximates market value 255,946,000 Cash 718 Receivable for Fund shares sold 22,495,871 Interest receivable 1,854,765 Prepaid expenses 7,359 ----------------- Total assets 1,134,383,661 ----------------- LIABILITIES Payable for investments purchased 94,119,562 Payable for Fund shares repurchased 22,361,896 Management fee payable 341,389 Distribution fee payable 106,684 Dividends payable 73,512 Accrued expenses and other liabilities 71,201 ----------------- Total liabilities 117,074,244 ----------------- NET ASSETS $ 1,017,309,417 ----------------- ----------------- Net assets were comprised of: Shares of beneficial interest, at par $ 10,173,094 Paid-in capital in excess of par 1,007,136,323 ----------------- Net assets, June 30, 2003 $ 1,017,309,417 ----------------- ----------------- Class A: Net asset value, offering price and redemption price per share ($1,017,309,417 / 1,017,309,417 shares of beneficial interest ($.01 par value) issued and outstanding) $1.00 ----------------- -----------------
22 See Notes to Financial Statements COMMAND Funds COMMAND Government Fund Statement of Operations
Year Ended June 30, 2003 - --------------------------------------------------------------------------------------- NET INVESTMENT INCOME Income Interest and discount earned $15,961,306 ----------------- Expenses Management fee 3,984,684 Distribution fee 1,245,214 Registration fees 337,000 Transfer agent's fees and expenses 112,000 Custodian's fees and expenses 103,000 Audit fee 29,000 Legal fees and expenses 29,000 Reports to shareholders 17,000 Trustees' fees 13,000 Miscellaneous 6,596 ----------------- Total expenses 5,876,494 ----------------- Net investment income 10,084,812 ----------------- REALIZED GAIN ON INVESTMENTS Net realized gain on investment transactions 12,133 ----------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,096,945 ----------------- -----------------
See Notes to Financial Statements 23 COMMAND Funds COMMAND Government Fund Statement of Changes in Net Assets
Year Ended June 30, ---------------------------------- 2003 2002 - ---------------------------------------------------------------------------------- INCREASE IN NET ASSETS Operations Net investment income $ 10,084,812 $ 17,983,208 Net realized gain on investment transactions 12,133 514,618 --------------- --------------- Net increase in net assets resulting from operations 10,096,945 18,497,826 --------------- --------------- Dividends and distributions to shareholders (Note 1) (10,096,945) (18,497,826) --------------- --------------- Fund share transactions (at $1 per share) Net proceeds from shares subscribed 4,975,047,494 3,813,414,912 Net asset value of shares issued in reinvestment of dividends and distributions 9,929,182 18,503,678 Cost of shares reacquired (4,876,025,207) (3,705,800,462) --------------- --------------- Net increase in net assets from Fund share transactions 108,951,469 126,118,128 --------------- --------------- Total increase 108,951,469 126,118,128 NET ASSETS Beginning of year 908,357,948 782,239,820 --------------- --------------- End of year $ 1,017,309,417 $ 908,357,948 --------------- --------------- --------------- ---------------
24 See Notes to Financial Statements ANNUAL REPORT JUNE 30, 2003 COMMAND GOVERNMENT FUND - -------------------------------------------------------------------------------- FINANCIAL HIGHLIGHTS COMMAND Funds COMMAND Government Fund Financial Highlights
Year Ended June 30, 2003 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of year $ 1.000 Net investment income and net realized gains 0.010 Dividends and distributions to shareholders (0.010) ---------------- Net asset value, end of year $ 1.000 ---------------- ---------------- TOTAL RETURN(a) 1.04% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (000) $1,017,309 Average net assets (000) $ 996,171 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees .59% Expenses, excluding distribution and service (12b-1) fees .46% Net investment income 1.01%
- ------------------------------ (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. 26 See Notes to Financial Statements COMMAND Funds COMMAND Government Fund Financial Highlights Cont'd.
Year Ended June 30, - ------------------------------------------------------- 2002 2001 2000 1999 - ------------------------------------------------------- $ 1.000 $ 1.000 $ 1.000 $ 1.000 0.020 0.054 0.051 0.046 (0.020) (0.054) (0.051) (0.046) - ---------- ---------- ---------- ---------- $ 1.000 $ 1.000 $ 1.000 $ 1.000 - ---------- ---------- ---------- ---------- - ---------- ---------- ---------- ---------- 2.11% 5.52% 5.23% 4.74% $908,358 $782,240 $687,364 $714,390 $916,475 $756,716 $714,655 $739,779 .56% .57% .58% .56% .43% .45% .45% .44% 1.96% 5.30% 5.12% 4.63%
See Notes to Financial Statements 27 COMMAND Funds COMMAND Government Fund Report of Independent Auditors To the Shareholders and Trustees of COMMAND Government Fund In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of COMMAND Government Fund (the 'Fund') at June 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as 'financial statements') are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York August 18, 2003 28 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- ALASKA 0.9% Valdez Marine Terminal Phillips, A.N.N.M.T., VMIG2 $ 5,000 2.00%, 7/1/03, Ser. 1994A $ 5,012,347 VMIG2 6,250 2.00%, 7/1/03, Ser. 1994B 6,265,439 VMIG2 4,500 2.00%, 7/1/03, Ser. 1994C 4,511,113 -------------- 15,788,899 - ------------------------------------------------------------------------------------- ARIZONA 3.3% Pima Cnty. Ind. Dev. Auth. Sngl. Fam. Mtge. Rev., Draw Down Bds., A.M.T., NR 44,985 1.01%, 7/25/03, Ser. 2002 44,985,000 Roaring Fork Mun. Prods. LLC, Tucson & Pima Co., A.M.T., F.R.W.D., A-1+(e) 4,575 1.23%, 7/3/03, Ser. 02-9 4,575,000 Tempe Ind. Dev. Auth. Sr. Rev., Friendship Village Proj., F.R.W.D., NR 10,000 1.00%, 7/3/03, Ser. 2002C 10,000,000 -------------- 59,560,000 - ------------------------------------------------------------------------------------- ARKANSAS 0.9% Roaring Fork Mun. Prods. LLC, Hsg. Fin. Corp. Mtge., F.R.W.D., VMIG1 15,990 1.16%, 7/3/03, Ser. 02-15 15,990,000 - ------------------------------------------------------------------------------------- CALIFORNIA 1.4% California Statewide Cmntys. Dev. Auth. Rev. Kaiser Permanente, VMIG2 6,500 1.70%, 7/1/03, Ser. 2001B 6,500,000 VMIG2 10,000 1.38%, 1/2/04, Ser. 2001A 10,000,000 El Monte Cert. Partn, Cmnty. Impvt Proj., F.R.W.D., A-1+(e) 4,000 1.00%, 7/3/03, Ser. 2003A 4,000,000 Long Beach Hbr. Rev., A.M.T., VMIG1 4,000 4.00%, 5/14/04, Ser. 2002A 4,096,460 -------------- 24,596,460 - ------------------------------------------------------------------------------------- COLORADO 1.9% Adams Cnty. Hosp. Rev., Adj-Impt-Platte Valley Med. Ctr. B, F.R.W.D., A-1(e) 9,310 1.08%, 7/2/03, Ser. 2000B 9,310,000
See Notes to Financial Statements 29 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Colorado Hsg. & Fin. Auth., Sngl. Fam., R.A.N., MIG1 $ 20,000 1.55%, 11/3/03, Ser. C6 $ 20,000,000 Denver Cnty. Hsg., Circle Vlge. Proj., F.R.W.D., A-1(e) 2,365 1.05%, 7/2/03, Ser. 2000 2,365,000 Dove Valley Metro. Dist. Arapahoe Cnty., G.O., A-1(e) 2,545 1.90%, 11/1/03, Ser. 2002 2,545,000 -------------- 34,220,000 - ------------------------------------------------------------------------------------- DELAWARE 0.3% Delaware St. Econ. Dev. Auth. Rev., Delmarva Pwr. & Lt. Co. Proj., A.M.T., F.R.D.D., VMIG1 4,700 1.09%, 7/1/03, Ser 87A 4,700,000 - ------------------------------------------------------------------------------------- DISTRICT OF COLUMBIA 3.3% District of Columbia Hsg. Fin. Agcy. Rev., Sngl. Fam. Mtge., A.M.T., A-1+(e) 58,430 1.02%, 7/25/03, Ser. 2002 58,430,000 - ------------------------------------------------------------------------------------- FLORIDA 8.2% Brevard Cnty. Hlth. Facs. Auth., Wuesthoff Mem. Hosp. Proj., F.R.W.D., A-1(e) 29,000 1.00%, 7/3/03, Ser. 2001 29,000,000 Dade Cnty. Spec. Oblig., Aaa 3,000 Zero Coupon, 10/1/03, Ser. 1996B 2,991,037 Florida St. Brd. of Ed., Pub. Ed. Cap. Outlay, F.R.D.D., A-1+(e) 3,300 1.03%, 7/1/03, Ser. SGA 102 3,300,000 Florida St. Mun. Secs. Trust Cert., F.R.D.D., A-1(e) 8,600 1.03%, 7/1/03, Ser. 131 8,600,000 Orange Cnty. Hlth. Facs. Auth. Rev., Adventist Hlth. Sys. Sunbelt, F.R.W.D., F.S.A., A-1(e) 46,350 1.13%, 7/3/03, Ser. 98171 46,350,000 Sarasota Cnty. Hosp. Dist. VMIG1 5,850 1.00%, 8/15/03, Ser. B 5,850,000
30 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Sunshine St. Govt. Fin. Rev. Notes A.M.B.A.C., P-1 $ 28,888 1.10%, 7/17/03, Ser. D $ 28,888,000 P-1 21,155 1.10%, 8/12/03, Ser. G 21,155,000 -------------- 146,134,037 - ------------------------------------------------------------------------------------- GEORGIA 4.4% Crisp Cnty., Solid Waste Mgmt. Auth. Rev., A.M.T., F.S.A., F.R.W.D., VMIG1 4,735 1.47%, 7/3/03, Ser. 98 4,735,000 Dalton, T.A.N., NR 7,000 1.25%, 12/31/03 7,008,713 Dalton Util. Rev., F.R.W.D., M.E.R.L.O.T., VMIG1 5,000 1.08%, 7/2/03, Ser. 2003A2 5,000,000 De Kalb Cnty. Hosp. Auth. Rev., Dekalb Med. Ctr. Inc. Proj. B., F.R.W.D., VMIG1 12,300 1.00%, 7/3/03, Ser. 1999B 12,300,000 Georgia Mun. Gas Auth. Rev., Gas Portfolio Proj., F.R.W.D., A-1(e) 28,330 1.05%, 7/2/03, Ser. A 28,330,000 Richmond Cnty. Hosp. Auth., Univ. Hlth. Svcs., F.R.W.D., VMIG1 13,000 1.00%, 7/2/03, Ser. 2003 13,000,000 Rockdale Cnty., T.A.N. NR 8,500 1.50%, 12/31/03, Ser. 2003 8,514,751 -------------- 78,888,464 - ------------------------------------------------------------------------------------- HAWAII 0.4% Hawaii St. G.O., F.S.A., F.R.W.D., VMIG1 3,795 1.18%, 7/3/03, Ser. ZTC 43 3,795,000 VMIG1 3,750 1.18%, 7/3/03, Ser. ZTC 44 3,750,000 -------------- 7,545,000 - ------------------------------------------------------------------------------------- ILLINOIS 8.4% Channahon Il Rev., Morris Hosp., F.R.W.D., A-1(e) 5,670 1.08%, 7/3/03, Ser. 2003B 5,670,000 Chicago Park Dist., F.R.W.D., VMIG1 10,195 1.18%, 7/3/03, Ser. ZTC 23 10,195,000
See Notes to Financial Statements 31 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Chicago Hsg. Auth. Cap. Prog. Rev., F.R.W.D., A-1(e) $ 5,235 1.23%, 7/3/03, Ser. 2001-576 $ 5,235,000 Chicago Park Dist., F.R.W.D., VMIG1 3,360 1.18%, 7/3/03, Ser. ZTC 46 3,360,000 Chicago Wtr. Rev., F.R.W.D., M.E.R.L.O.T., VMIG1 14,385 1.08%, 7/2/03, Ser. 00TT 14,385,000 Chicago,, Stockyards Ind Proj., F.R.W.D., A1+(e) 10,870 1.07%, 7/2/03, Ser. 96A 10,870,000 Elmhurst Rev., Cmnty. Healthcare, F.R.W.D., VMIG1 13,895 0.95%, 7/3/03, Ser. 1988 13,895,000 Illinois Dev. Fin. Auth. Rev., Amer. Coll. of Surgeons, F.R.W.D., A-1+(e) 15,200 1.15%, 7/7/03, Ser. 96 15,200,000 Illinois Hlth. Facs. Auth. Rev., Little Co. of Mary Hosp., F.R.W.D., A-1(e) 5,000 1.08%, 7/3/03, Ser. 2001 5,000,000 Illinois Hsg. Dev. Auth. Rev., Homeowner Mtge., MIG1 5,095 1.13%, 4/29/04, Ser. 2003A-1 5,095,000 Illinois St. Sales Tax Rev. F.R.W.D., VMIG1 9,650 1.18%, 7/3/03, Ser. ZTC 32 9,650,000 VMIG1 4,950 1.18%, 7/3/03, Ser. ZTC 45 4,950,000 Morton Ind. Dev. Rev., Morton Welding Co., Inc. Proj., A.M.T., F.R.W.D., NR 4,000 1.14%, 7/3/03, Ser. 2002 4,000,000 Peoria Cnty. Swge. Fac. Rev., Caterpillar, Inc. Proj., A.M.T., F.R.W.D., P-1 4,300 1.23%, 7/3/03, Ser. 2000 4,300,000 Wheeling Multi-Fam. Hsg. Rev., Woodland Creek Proj., F.R.W.D., A-1+(e) 17,655 1.10%, 7/3/03, Ser. 2002 17,655,000 Woodridge Multi-Fam. Hsg. Rev., Hinsdale Lake Terr. Apts., F.R.W.D., F.S.A., Aaa 20,760 1.10%, 7/7/03, Ser. 90 20,760,000 -------------- 150,220,000 - ------------------------------------------------------------------------------------- INDIANA 1.6% Indianapolis Local Pub. Impvt. Brd., T.A.N., SP-1+(e) 28,580 1.25%, 8/29/03, Ser. 2003E 28,592,383
32 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- IOWA 0.7% Iowa Fin. Auth. Rev., Burlington Med. Ctr., F.R.D.D., Aaa $ 200 1.05%, 7/1/03, Ser. 1997 $ 200,000 Iowa Higher Ed. Ln. Auth. Rev. Des Moines Univ., F.R.D.D., VMIG1 2,500 1.05%, 7/1/03, Ser. 2003C 2,500,000 Morningside Coll., R.A.N., SP-1(e) 1,500 2.00%, 5/24/04, Ser. 2003G 1,505,282 Sergeant Bluff Ind. Dev. Rev., Sioux City Brick & Tile Proj., A.M.T., F.R.W.D., NR 8,480 1.20%, 7/3/03, Ser. 96 8,480,000 -------------- 12,685,282 - ------------------------------------------------------------------------------------- KENTUCKY 2.8% Breckinridge Cnty. Lease Prog. Rev., F.R.D.D., VMIG1 2,100 1.00%, 7/1/03, Ser. 2002A 2,100,000 Kenton Cnty. Arpt., Airis Cincinnati LLC, A.M.T., F.R.W.D., VMIG1 19,000 1.20%, 7/2/03, Ser. 2003A 19,000,000 Kentucky St. Prpty. & Bldgs. Comm. Rev., F.R.W.D., VMIG1 9,900 1.18%, 7/3/03, Ser. ZTC 34 9,900,000 Ohio Cnty. Poll. Ctrl. Rev., Big Rivers Elec. Corp. Proj., F.R.W.D., VMIG1 20,000 1.00%, 7/2/03, Ser. 83 20,000,000 -------------- 51,000,000 - ------------------------------------------------------------------------------------- LOUISIANA 1.3% Ascension Parish, A.M.T., P-1 10,000 1.20%, 7/15/03, Ser. 99 10,000,000 Louisiana St. Offshore Terminal, Deepwater Port, P-1 5,000 1.10%, 8/13/03, Ser. 1991A 5,000,000
See Notes to Financial Statements 33 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Roaring Fork Mun. Prods. LLC, LA Hsg. Auth., A.M.T., F.R.W.D., VMIG1 $ 7,990 1.23%, 7/3/03, Ser. 00-2 $ 7,990,000 -------------- 22,990,000 - ------------------------------------------------------------------------------------- MAINE 0.3% Dover & Foxcroft Rev., Pleasant River Lumber Co. Proj., A.M.T., F.R.W.D., A-1(e) 2,500 1.30%, 7/2/03, Ser. 02 2,500,000 York Rev., Stonewall Realty LLC Proj., A.M.T., F.R.W.D., VMIG1 2,605 1.55%, 7/3/03, Ser. 99 2,605,000 -------------- 5,105,000 - ------------------------------------------------------------------------------------- MASSACHUSETTS 4.5% Commonwealth of MA, P-1 23,500 1.05%, 7/21/03, Ser. G 23,500,000 P-1 33,000 0.90%, 8/8/03, Ser. F 33,000,000 Comnwlth. of MA, F.R.W.D., VMIG1 9,000 1.18%, 7/3/03, Ser. ZTC 9 9,000,000 Mass. St. Hlth. & Ed. Facs. Auth. Rev., Hallmark Hlth. Sys., F.R.W.D., VMIG1 9,000 1.00%, 7/3/03, Ser. B 9,000,000 Seekonk, B.A.N., G.O., NR 6,000 2.00%, 10/17/03 6,007,851 -------------- 80,507,851 - ------------------------------------------------------------------------------------- MICHIGAN 1.4% Michigan Job Dev. Auth. Rev., Frankenmuth Bavarian Inn, F.R.M.D., A1 6,000 1.20%, 7/1/03, Ser. A 6,000,000 Michigan Pub. Pwr. Agcy. Rev., Belle River, F.R.W.D., VMIG1 5,000 1.18%, 7/3/03, ZTC 42 5,000,000 Michigan Strategic Fd. Ltd., Amer. Litho Proj., A.M.T., F.R.W.D., NR 4,650 1.24%, 7/3/03, Ser. 2002 4,650,000
34 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Walled Lake Cons. Sch. Dist., G.O., F.R.W.D., VMIG1 $ 10,000 1.18%, 7/3/03, Ser. ZTC 18 $ 10,000,000 -------------- 25,650,000 - ------------------------------------------------------------------------------------- MINNESOTA 2.6% Bloomington Coml. Dev. Rev. 94th Str. Assoc. Proj., F.R.W.D., Aa1 4,385 1.10%, 7/7/03, Ser. 85 4,385,000 James Avenue Assoc. Proj., F.R.W.D., A-1+(e) 4,265 1.10%, 7/7/03, Ser. 1985 4,265,000 Bloomington Port. Auth. Tax Rev., Ref., Mall of America, F.R.W.D., VMIG1 16,700 1.10%, 7/3/03, Ser. 99B 16,700,000 Chanhassen Multi-Fam. Rev., Hsg. Vlge. Ponds Proj., A.M.T., NR 5,530 1.23%, 7/3/03, Ser. 2003 5,530,000 Chaska Multi-Fam. Hsg. Rev., Clover Field Commons., A.M.T., 1.23%, 7/3/03, Ser. 2002(c) NR 6,800 (cost $6,800,000; purchase 12/3/02) 6,800,000 Duluth Multi-Fam. Hsg. Rev., Irving Townhomes LLC Proj., A.M.T., NR 4,500 1.23%, 7/3/03, Ser. 2002 4,500,000 St. Paul Hsg. & Redev. Auth. Heating Rev., F.R.W.D., A-1+(e) 3,500 1.10%, 7/7/03, Ser. 99D 3,500,000 -------------- 45,680,000 - ------------------------------------------------------------------------------------- MISSISSIPPI 1.3% Roaring Fork Mun. Prods. LLC, A.M.T., 1.35%, 2/26/04, Ser. 01-14(c) VMIG1 9,330 (cost $9,330,000; purchased 3/6/03) 9,330,000 1.25%, 4/1/04, Ser. 02-4(c) VMIG1 5,000 (cost $5,000,000; purchased 6/6/03) 5,000,000 Roaring Fork Mun. Prods. LLC, MS Home Corp., A.M.T., F.R.W.D., VMIG1 8,530 1.23%, 7/3/03, Ser. 00-18 8,530,000 -------------- 22,860,000
See Notes to Financial Statements 35 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- MISSOURI 1.3% Missouri St. Dev. Fin. Util. Prog., F.R.D.D., VMIG1 $ 7,500 1.05%, 7/1/03, Ser. 2003 $ 7,500,000 Missouri St. Hlth. & Edl. Fac. Rev., Valley Coll., F.R.D.D., A-1(e) 1,200 1.05%, 7/1/03, Ser. 2001 1,200,000 Roaring Fork Mun. Prods. LLC, MO Hsg. Dev. Comnty., A.M.T., F.R.W.D., A-1(e) 14,060 1.23%, 7/3/03, Ser. 00-3 14,060,000 -------------- 22,760,000 - ------------------------------------------------------------------------------------- NEBRASKA 0.2% York Ind. Dev. Rev., Kroy Bldg. Prods. Inc. Proj., A.M.T., F.R.W.D., A-1(e) 4,500 1.15%, 7/3/03, Ser. 1998 4,500,000 - ------------------------------------------------------------------------------------- NEVADA 0.8% Clark Cnty., F.R.W.D., VMIG1 15,000 1.18%, 7/3/03, Ser. ZTC 27 15,000,000 - ------------------------------------------------------------------------------------- NEW HAMPSHIRE 0.6% New Hampshire Hlth. & Ed. Facs. Auth. Hosp. Rev., Catholic Med. Ctr., F.R.W.D., VMIG1 10,000 1.00%, 7/3/03, Ser. 2002A 10,000,000 - ------------------------------------------------------------------------------------- NEW JERSEY 0.8% New Jersey St. Mun. Secs. Trust Cert., F.R.D.D., A-1(e) 2,500 0.98%, 7/1/03, Ser. 01-174 2,500,000 Newark, N.J. G.O., B.A.N., MIG1 8,000 2.50%, 8/1/03 8,005,360 Sussex Cnty., B.A.N., NR 2,996 1.50%, 9/5/03 2,998,945 -------------- 13,504,305 - ------------------------------------------------------------------------------------- NEW MEXICO 0.6% Roaring Fork Mun. Prods. LLC, Mtge. Fin. Auth. SFK, A.M.T., F.R.W.D., A-1+(e) 10,765 1.23%, 7/3/03, Ser. 00-1 10,765,000
36 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- NEW YORK 1.7% Metro. Trans. Auth. N.Y., F.R.W.D., M.E.R.L.O.T., VMIG1 $ 5,000 1.04%, 7/2/03, Ser. 00F $ 5,000,000 Metro. Trans. Auth. N.Y., P-1 10,000 1.10%, 9/10/03 10,000,000 New York, NY, F.R.W.D., VMIG1 6,144 1.00%, 7/3/03, Ser. 01-725X 6,143,750 New York, NY City Transitional, Putters, F.R.W.D., A-1+(e) 10,000 1.00%, 7/3/03, Ser. 305 10,000,000 -------------- 31,143,750 - ------------------------------------------------------------------------------------- NORTH CAROLINA 1.4% North Carolina Cap. Facs. Fin. Agcy. Student Ln., F.R.W.D., A-1(e) 17,465 1.00%, 7/3/03, Ser. 2001 17,465,000 Roaring Fork Mun. Prods. LLC, Durham Co. Allstate Vlge., A.M.T., F.R.W.D., A-1+(e) 6,975 1.23%, 7/3/03, Ser. 01-8 6,975,000 -------------- 24,440,000 - ------------------------------------------------------------------------------------- OHIO 2.8% Cuyahoga Cnty. Econ. Dev. Rev., Botanical Garden Proj., F.R.W.D., VMIG1 8,000 1.03%, 7/3/03, Ser. 2001 8,000,000 Cuyahoga Cnty. Hosp. Rev., W.O. Walker Ctr. Inc., A.M.B.A.C., F.R.W.D., A-1(e) 11,690 1.08%, 7/2/03, Ser. 98II 11,690,000 East Lake Ind. Dev. Rev., Astro Model Corp. Proj., A.M.T., F.R.W.D., NR 2,290 1.20%, 7/3/03, Ser. 96 2,290,000 Hamilton Cnty. Parking Sys., F.R.W.D., VMIG1 12,250 1.02%, 7/3/03, Ser. 2001 12,250,000 Ohio Hsg. Fin. Agcy., Multi-Fam. Hsg. Rev., 10 Wilmington Pl. Prog., F.R.W.D., F.S.A., A-1+(e) 8,945 1.10%, 7/7/03, Ser. B 8,945,000
See Notes to Financial Statements 37 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Univ. of Cincinnati, B.A.N., MIG1 $ 6,000 1.75%, 3/18/04, Ser. 2003A $ 6,027,501 -------------- 49,202,501 - ------------------------------------------------------------------------------------- OKLAHOMA 5.0% Canadian Cnty. Home Fin. Auth. Sngl. Fam. Mtge. Rev., Draw Down Joint Pwrs., A.M.T., NR 12,710 1.02%, 7/25/03, Ser. 2003A 12,710,000 Cleveland Cnty. Dev. Auth. Sngl. Fam., A.M.T., NR 7,500 1.28%, 7/25/03, Ser. 2002 7,500,000 Cleveland Cnty. Home Ln. Auth. Mtge., A.M.T., NR 4,860 1.02%, 7/25/03, Ser. 2003A 4,860,000 Oklahoma Cnty. Home Fin. Auth. Sngl. Fam. Mtge., AAA(e) 8,318 1.387%, 7/1/03, Ser. 02A 8,318,192 Oklahoma Hsg. Dev. Auth. Multi-Fam. Rev. Affordable Hsg., F.R.W.D., VMIG1 33,500 1.20%, 7/3/03, Ser. 2002A 33,500,000 VMIG1 10,000 1.20%, 7/3/03, Ser. 2002B 10,000,000 South Western Dev. Auth. Sngl. Fam. Mtge. Rev., A.M.T., A-1+(e) 7,500 1.28%, 7/31/03, Ser. A 7,500,000 Tulsa Pkg. Auth. Rev., Williams Ctr. Proj., S.E.M.M.T., VMIG1 4,460 1.15%, 11/17/03, Ser. 87A 4,460,000 -------------- 88,848,192 - ------------------------------------------------------------------------------------- PENNSYLVANIA 0.4% Fayette Cnty. Hosp. Auth. Sr. Hlth. & Hsg. Facs. Rev., Mount Macrina Manor Proj., F.R.W.D. A-1(e) 4,500 1.08%, 7/3/03, Ser. 2002 4,500,000
38 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Pennsylvania St. Mun. Secs. Trust Cert., F.R.D.D., A-1(e) $ 900 1.03%, 7/1/03, Ser. 01-110 $ 900,000 Union Cnty. Higher Ed. Auth., Bucknell Univ., F.R.W.D., VMIG1 1,610 0.90%, 7/3/03, Ser. 2002B 1,610,000 -------------- 7,010,000 - ------------------------------------------------------------------------------------- RHODE ISLAND 1.2% Providence Hsg. Auth., Cathedral Square, A.M.T., F.R.D.D., A-1(e) 1,000 1.10%, 7/1/03, Ser. 00A 1,000,000 Rhode Island Hlth. & Ed. Bldg. Corp. Edl. Inst. Rev. Hosp. Fin. Care New England-A, F.R.D.D., A-1(e) 12,700 1.00%, 7/1/03, Ser. 2002A 12,700,000 Hosp. Fin. Care Portsmouth Abbey Sch., F.R.D.D., A-1(e) 4,000 1.00%, 7/1/03, Ser. 2001 4,000,000 Hosp. Fin. Care St. Andrews Sch., F.R.D.D., A-1(e) 4,000 1.00%, 7/1/03, Ser. 99 4,000,000 -------------- 21,700,000 - ------------------------------------------------------------------------------------- SOUTH CAROLINA 0.2% Orangeburg Proj. Corp., Cap. Sales & Use Tax Rev., M.B.I.A., Aaa 4,250 3.50%, 10/1/03, Ser. 2002 4,267,986 - ------------------------------------------------------------------------------------- SOUTH DAKOTA 0.4% Grant Cnty. Poll. Ctrl. Rev., Otter Tail Pwr. Co. Proj., F.R.W.D., VMIG1 8,000 1.25%, 7/7/03, Ser. 1993 8,000,000 - ------------------------------------------------------------------------------------- TENNESSEE 2.5% Blount Cnty. Pub. Bldg. Local Govt. Pub. Impvt., F.R.W.D., VMIG1 4,095 1.01%, 7/3/03, Ser. A6B 4,095,000 VMIG1 2,500 1.01%, 7/3/03, Ser. A7A 2,500,000
See Notes to Financial Statements 39 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Chattanooga Hlth. Edl. Phase I, F.R.W.D., A-1(e) $ 10,440 1.00%, 7/3/03, Ser. 2001A $ 10,440,000 Clarksville Pub. Bldg. Auth. F.R.D.D., VMIG1 1,000 1.00%, 7/1/03, Ser. 2001 1,000,000 VMIG1 3,200 1.00%, 7/1/03, Ser. 2003 3,200,000 Jackson Engy. Auth. Gas Sys., F.R.W.D., VMIG1 8,300 1.00%, 7/2/03, Ser. 2002 8,300,000 Montgomery Cnty. Pub. Bldg. Auth., F.R.D.D., VMIG1 14,525 1.00%, 7/1/03, Ser. 2002 14,525,000 -------------- 44,060,000 - ------------------------------------------------------------------------------------- TEXAS 21.6% Austin Combined Util. Sys. Rev. Corp. Proj., T.E.C.P. P-1 8,803 1.10%, 7/11/03, Ser. A 8,803,000 Austin Combined Util. Sys. Rev. Corp. Proj., T.E.C.P. P-1 26,053 1.00%, 8/15/03, Ser. A 26,053,000 Carroll Indpt. Sch. Dist. G.O., Sch. Bldg., S.E.M.M.T., VMIG1 29,800 1.35%, 4/1/04, Ser. 00 29,800,000 City of Houston Wtr. & Swr., T.E.C.P., P-1 5,000 1.05%, 7/9/03, Ser. A 5,000,000 Collin Cnty. Hsg. Fin. Corp. Multi-Fam. Hsg. Rev., Huntington Apts. Proj., F.R.W.D., A-1+(e) 6,155 1.13%, 7/3/03, Ser. 96 6,155,000 Dallas Texas Area Rapid Transit, P-1 20,000 1.05%, 7/16/03, Ser. 2001 20,000,000 Desoto Ind. Dev. Auth., Solar Turbines, Inc. Proj., F.R.W.D., P-1 7,050 1.08%, 7/3/03, Ser. 2000 7,050,000 El Paso, G.O., T.E.C.P., P-1 9,500 1.00%, 8/15/03, Ser. A 9,500,000 Harris Cnty., T.E.C.P., P-1 11,817 1.02%, 7/15/03, Ser. D 11,817,000
40 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Harris Cnty. Hlth. Facs. Dev., Young Mens Christian Assoc., F.R.D.D., VMIG1 $ 4,300 1.00%, 7/1/03, Ser. 99 $ 4,300,000 Houston Ind. Sch. Dist., F.S.A., F.R.W.D., VMIG1 12,700 1.18%, 7/3/03, Ser. ZTC 21 12,700,000 Houston Wtr. & Swr. Proj., G.O., T.E.C.P., P-1 20,300 1.05%, 7/8/03, Ser. A 20,300,000 P-1 13,000 1.00%, 7/17/03, Ser. A 13,000,000 Irving Texas,, Wtr. & Swr. P-1 22,750 1.05%, 7/17/03, Ser. A 22,750,000 Lower Cnty. River Auth., T.E.C.P., P-1 44,100 0.95%, 9/3/03, Ser. A 44,100,000 North Harris Montgomery Cmnty. Coll. Dist., VMIG1 14,830 1.35%, 4/1/04, Ser. 1997 14,830,000 Port Arthur Nav. Dist. Rev., Motiva Enterprises LLC., A.M.T., F.R.W.D., A-1(e) 5,000 1.25%, 7/2/03, Ser. 2002 5,000,000 Roaring Fork Mun. Prods. LLC, Houston Hsg., F.R.W.D., A-1+(e) 7,000 1.13%, 7/3/03, Ser. 03-3 7,000,000 San Antonio Wtr. Rev., F.R.W.D., M.E.R.L.O.T. VMIG1 17,420 1.08%, 7/2/03, Ser. 00VV 17,420,000 San Jacinto Coll. Dist. Limited Tax, G.O., VMIG1 14,500 1.35%, 4/1/04 14,500,000 Spring Branch Indpt. Sch. Dist., Limited Tax Schoolhouse Bonds, F.R.W.D., VMIG1 11,880 1.18%, 7/3/03, Ser. ZTC28 11,880,000 Texas Dept. Hsg. & Cmnty., A.M.T., T.E.C.P., A-1+(e) 35,205 1.12%, 7/9/03, Ser. A 35,205,000 Texas St. Coll. Student Lns., F.R.W.D., VMIG1 8,000 1.23%, 7/3/03, Ser. ZTC 5 8,000,000 Texas Wtrwrks. & Swr., T.R.A.N., MIG1 30,000 2.75%, 8/29/03, Ser. 2002 30,050,805 -------------- 385,213,805
See Notes to Financial Statements 41 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- UTAH 0.8% Intermountain Pwr. Agcy., VMIG1 $ 6,650 1.00%, 9/15/03, Ser. 85F-2 $ 6,647,908 Salt Lake Cnty., T.R.A.N. NR 8,000 1.50%, 12/30/03, Ser. 2003 8,026,080 -------------- 14,673,988 - ------------------------------------------------------------------------------------- VERMONT 0.9% Vermont Edl. & Hlth. Bldgs. Fin. Agcy. Rev. Middlebury Coll. Proj., A.N.N.M.T., Aa3 8,325 1.80%, 11/1/03, Ser. 2002B 8,325,000 A-1+(e) 7,255 1.80%, 11/1/03, Ser. 88A 7,255,000 -------------- 15,580,000 - ------------------------------------------------------------------------------------- VIRGINIA 1.6% Halifax Cnty. Ind. Dev. Auth. Rev., VA Elec. & Pwr. Corp. Proj., A.M.T., VMIG1 15,000 1.35%, 7/11/03, Ser. 92 15,000,000 Roaring Fork Mun. Prods. LLC, Fairfax Cnty. Red Kingsley, F.R.W.D., A-1+(e) 12,935 1.13%, 7/3/03, Ser. 02-17 12,935,000 -------------- 27,935,000 - ------------------------------------------------------------------------------------- WASHINGTON 1.9% Central Kitsap Sch. Dist. Number 401, F.R.W.D., VMIG1 3,460 1.06%, 7/3/03, Ser. 00-252 3,460,000 Port of Pasco Econ. Dev. Corp., Douglas Fruit Co., A.M.T., F.R.W.D., A-1(e) 3,935 1.15%, 7/3/03, Ser. 96 3,935,000 Washington St. F.R.W.D., VMIG1 12,935 1.18%, 7/3/03, Ser. ZTC 10 12,935,000 VMIG1 13,570 1.18%, 7/3/03, Ser. ZTC 11 13,570,000 -------------- 33,900,000 - ------------------------------------------------------------------------------------- WISCONSIN 3.7% Appleton Area Sch. Dist., T.R.A.N., NR 14,500 1.75%, 9/30/03 14,507,441
42 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd.
Moody's Principal Rating Amount (Unaudited) (000) Description(a) Value (Note 1) - ------------------------------------------------------------------------------------------- Elmbrook Sch. Dist., T.R.A.N., NR $ 11,500 1.55%, 8/21/03 $ 11,500,788 Franklin Pub. Sch. Dist., T.R.A.N., NR 4,900 1.55%, 9/5/03 4,900,515 Greenfield Sch. Dist., G.O., T.R.A.N., NR 4,650 1.90%, 9/30/03 4,653,536 Northland Pines Sch. Dist., T.R.A.N., NR 5,000 1.55%, 9/12/03 5,000,488 Wisconsin St., G.O., F.R.W.D., VMIG1 19,745 1.18%, 7/3/03, Ser. ZTC20 19,745,000 Wisconsin St. Hlth. & Edl. Facs. Lakeland Coll., F.R.D.D., A-1(e) 1,915 1.00%, 7/1/03, Ser. 2000 1,915,000 Riverview Hosp., F.R.D.D., A-1(e) 3,000 1.05%, 7/1/03, Ser. 2001 3,000,000 -------------- 65,222,768 Total Investments 100.3% (cost $1,788,870,671(d)) 1,788,870,671 Liabilities in excess of other assets (0.3%) (5,181,864) -------------- Net Assets 100% $1,783,688,807 -------------- --------------
See Notes to Financial Statements 43 COMMAND Funds COMMAND Tax-Free Fund Portfolio of Investments as of June 30, 2003 Cont'd. (a) The following abbreviations are used in the portfolio descriptions: A.M.B.A.C.--American Municipal Bond Assurance Corporation. A.M.T.--Alternative Minimum Tax. A.N.N.M.T.--Annual Mandatory Tender. B.A.N.--Bond Anticipation Note. F.R.D.D.--Floating Rate (Daily) Demand Note(b). F.R.M.D.--Floating Rate (Monthly) Demand Note(b). F.R.W.D.--Floating Rate (Weekly) Demand Note(b). F.S.A.--Financial Security Assurance. G.O.--General Obligation. LLC--Limited Liability Company. M.B.I.A.--Municipal Bond Insurance Corporation. M.E.R.L.O.T.--Municipal Exempt Receipt- Liquid Optional Tender. R.A.N.--Revenue Anticipation Notes. S.E.M.M.T.--Semi-Annual Mandatory Tender. T.A.N.--Tax Anticipation Note. T.E.C.P.--Tax-Exempt Commercial Paper. T.R.A.N.--Tax and Revenue Anticipation Note. (b) For purposes of amortized cost valuation, the maturity date of Floating Rate Demand Notes considered to be the next date on which the rate of interest is adjusted or the date on which the security can be redeemed at par. (c) Indicates illiquid security. The aggregate cost of such securities was $21,130,000. The aggregate value of $21,130,000 is approximately 1.2% of net assets. (d) Federal income tax basis of portfolio securities is the same as for financial reporting purposes. (e) Standard & Poor's rating. NR--Not Rated by Moody's or Standard & Poor's. 44 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Statement of Assets and Liabilities
June 30, 2003 - -------------------------------------------------------------------------------------- ASSETS Investments, at amortized cost which approximates market value $1,788,870,671 Cash 174,027 Receivable for Fund shares sold 22,325,805 Interest receivable 4,464,023 Prepaid expenses 16,565 -------------- Total assets 1,815,851,091 -------------- LIABILITIES Payable for Fund shares repurchased 23,096,717 Payable for investments purchased 8,026,080 Management fee payable 619,417 Distribution fee payable 182,500 Dividends payable 127,647 Accrued expenses and other liabilities 109,923 -------------- Total liabilities 32,162,284 -------------- NET ASSETS $1,783,688,807 -------------- -------------- Net assets were comprised of: Shares of beneficial interest, at par $ 17,836,888 Paid-in capital in excess of par 1,765,851,919 -------------- Net assets, June 30, 2003 $1,783,688,807 -------------- -------------- Class A: Net asset value, offering price and redemption price per share ($1,783,688,807 / 1,783,688,807 shares of beneficial interest ($.01 par value) issued and outstanding) $1.00 -------------- --------------
See Notes to Financial Statements 45 COMMAND Funds COMMAND Tax-Free Fund Statement of Operations
Year Ended June 30, 2003 - --------------------------------------------------------------------------------------- NET INVESTMENT INCOME Income Interest and discount earned $26,582,528 ----------------- Expenses Management fee 7,815,067 Distribution fee 2,313,356 Transfer agent's fees and expenses 170,000 Registration fees 101,000 Custodian fees and expenses 90,000 Legal fees and expenses 31,000 Audit fee 29,000 Trustees' fees 18,000 Reports to shareholders 6,000 Miscellaneous 4,785 ----------------- Total expenses 10,578,208 Less: custodian fee credit (Note 1) (3,418) ----------------- Net expenses 10,574,790 ----------------- Net investment income 16,007,738 ----------------- REALIZED GAIN ON INVESTMENTS Net realized gain on investment transactions 62,913 ----------------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $16,070,651 ----------------- -----------------
46 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Statement of Changes in Net Assets
Year Ended June 30, ---------------------------------- 2003 2002 - ---------------------------------------------------------------------------------- INCREASE (DECREASE) IN NET ASSETS Operations Net investment income $ 16,007,738 $ 27,201,031 Net realized gain on investment transactions 62,913 42,517 --------------- --------------- Net increase in net assets resulting from operations 16,070,651 27,243,548 --------------- --------------- Dividends and distributions to shareholders (Note 1) (16,070,651) (27,243,548) --------------- --------------- Fund share transactions (at $1 per share) Net proceeds from shares subscribed 5,930,677,397 5,727,746,338 Net asset value of shares issued in reinvestment of dividends and distributions 15,494,915 27,244,695 Cost of shares reacquired (5,902,513,575) (5,759,776,771) --------------- --------------- Net increase (decrease) in net assets from Fund share transactions 43,658,737 (4,785,738) --------------- --------------- Total increase (decrease) 43,658,737 (4,785,738) NET ASSETS Beginning of year 1,740,030,070 1,744,815,808 --------------- --------------- End of year $ 1,783,688,807 $ 1,740,030,070 --------------- --------------- --------------- ---------------
See Notes to Financial Statements 47 COMMAND Funds COMMAND Tax-Free Fund Financial Highlights
Year Ended June 30, 2003 - ---------------------------------------------------------------------------------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of year $ 1.000 Net investment income and net realized gains 0.009 Dividends and distributions to shareholders (0.009) ---------------- Net asset value, end of year $ 1.000 ---------------- ---------------- TOTAL RETURN(a) .88% RATIOS/SUPPLEMENTAL DATA: Net assets, end of year (000) $1,783,689 Average net assets (000) $1,850,684 Ratios to average net assets: Expenses, including distribution and service (12b-1) fees .57% Expenses, excluding distribution and service (12b-1) fees .45% Net investment income .87%
- ------------------------------ (a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions. 48 See Notes to Financial Statements COMMAND Funds COMMAND Tax-Free Fund Financial Highlights Cont'd.
Year Ended June 30, - ------------------------------------------------------------- 2002 2001 2000 1999 - ------------------------------------------------------------- $ 1.000 $ 1.000 $ 1.000 $ 1.000 0.015 0.034 0.032 0.027 (0.015) (0.034) (0.032) (0.027) - ---------- ---------- ---------- ---------- $ 1.000 $ 1.000 $ 1.000 $ 1.000 - ---------- ---------- ---------- ---------- - ---------- ---------- ---------- ---------- 1.51% 3.42% 3.19% 2.77% $1,740,030 $1,744,816 $1,429,087 $1,476,732 $1,839,473 $1,600,345 $1,515,352 $1,549,367 .58% .57% .58% .59% .46% .45% .46% .46% 1.48% 3.32% 3.15% 2.72%
See Notes to Financial Statements 49 COMMAND Funds COMMAND Tax-Free Fund Report of Independent Auditors To the Shareholders and Trustees of COMMAND Tax-Free Fund In our opinion, the accompanying statement of assets and liabilities, including the portfolio of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of COMMAND Tax-Free Fund (the 'Fund') at June 30, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as 'financial statements') are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at June 30, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, New York August 18, 2003 50 COMMAND Funds Notes to Financial Statements COMMAND Money Fund, COMMAND Government Fund and COMMAND Tax-Free Fund (each a 'Fund' and collectively, the 'Funds') are each registered under the Investment Company Act of 1940 as an open-end, diversified management investment company whose shares are offered exclusively to participants in the Prudential Securities COMMAND Funds Program of Prudential Securities Incorporated ('Prudential Securities'). The COMMAND Money Fund seeks high current income, preservation of capital and maintenance of liquidity by investing in a diversified portfolio of money market instruments maturing in 13 months or less. The COMMAND Government Fund seeks high current income, preservation of capital and maintenance of liquidity by investing in a portfolio of U.S. government securities maturing in 13 months or less. The COMMAND Tax-Free Fund seeks high current income that is exempt from federal income taxes, consistent with the preservation of capital and maintenance of liquidity. The Fund invests in a diversified portfolio of short-term, tax-exempt securities with maturities of 13 months or less that are issued by states, municipalities and their agencies (or authorities). Some securities may be subject to the federal alternative minimum tax (AMT). The Funds invest in a portfolio of money market instruments whose ratings are within the two highest ratings categories by a nationally recognized statistical rating agency or, if not rated, are of comparable quality. The ability of the issuers of the securities held by the Funds to meet their obligations may be affected by economic and/or political developments in a specific industry, state or region. Note 1. Accounting Policies The following is a summary of significant generally accepted accounting policies followed by the Funds in the preparation of their financial statements. Securities Valuation: Portfolio securities of the Funds are valued at amortized cost, which approximates market value. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter assuming a constant amortization to maturity of any discount or premium. If the amortized cost method is determined not to represent fair value, the value shall be determined by or under the direction of the Board of Trustees. The Funds may hold up to 10% of their net assets in illiquid securities, including those which are restricted as to disposition under securities law ('restricted securities'). None of the issues of restricted securities held by the Funds at June 30, 2003 include registration rights under which the Fund may demand registration by the issuer. Repurchase Agreements: In connection with transactions in repurchase agreements, it is the Funds' policy that its custodian or designated subcustodians, as the case may be under triparty repurchase agreements, take possession of the underlying collateral securities, the value of which exceeds the principal amount of the 51 COMMAND Funds Notes to Financial Statements Cont'd. repurchase transaction, including accrued interest. To the extent that any repurchase agreement exceeds one business day, the value of collateral is marked-to-market on a daily basis to ensure adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the Funds may be delayed or limited. Securities Transactions and Investment Income: Securities transactions are recorded on the trade date. Realized gains (losses) on sales of securities are calculated on the identified cost basis. Interest income is recorded on the accrual basis. The Funds amortize premiums and accrete discounts on purchases of portfolio securities as adjustments to interest income. Expenses are recorded on the accrual basis, which may require the use of certain estimates by management. Dividends: Each Fund declares daily dividends from net investment income and net realized short-term capital gains or losses. Payment of dividends is made monthly. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Federal Income Taxes: It is each Fund's policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net income to shareholders. Therefore, no federal income tax provision is required. Custody Fee Credits: The COMMAND Tax-Free Fund has an arrangement with its custodian bank, whereby uninvested monies earn credits which reduce the fees charged by the custodian. Such custody fee credits are presented as a reduction of gross expenses in the accompanying statement of operations. Note 2. Agreements Each Fund has a management agreement with Prudential Investments LLC ('PI'). Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadvisor's performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. ('PIM'). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with the management of each Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the compensation of officers of the Funds, occupancy and certain clerical and bookkeeping costs of the Funds. The Funds bear all other costs and expenses. The management fee paid to PI is computed daily and payable monthly on the following basis: 52 COMMAND Funds Notes to Financial Statements Cont'd. Average Daily COMMAND COMMAND COMMAND Net Assets Money Government Tax-Free - --------------------- -------- ----------- -------- First $500 million .500% .400% .500% Second $500 million .425% .400% .425% Third $500 million .375% .375% .375% Excess of $1.5 billion .350% .375% .375% Each Fund has a distribution agreement with Prudential Investment Management Services LLC ('PIMS') which acts as the distributor of the shares of each Fund. Each Fund compensates PIMS for distributing and servicing each Fund's Class A shares, pursuant to the plan of distribution at an annual rate of .125 of 1% of the average daily net assets of each Fund's Class A shares. The distribution fees are accrued daily and payable monthly. PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. ('Prudential'). Effective July 1, 2003, Prudential Securities became a division of Wachovia Securities LLC of which Prudential holds a minority interest. Prior to July 1, 2003, Prudential Securities was an indirect, wholly-owned subsidiary of Prudential. Note 3. Other Transactions with Affiliates Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PI and an indirect, wholly-owned subsidiary of Prudential, serves as the Funds' transfer agent. During the year ended June 30, 2003 the Funds incurred fees for the services of PMFS of approximately: COMMAND Money $4,537,000 COMMAND Government $ 111,900 COMMAND Tax-Free $ 169,500 As of June 30, 2003, the following amounts were due to PMFS from the Funds: COMMAND Money $ 449,100 COMMAND Government $ 15,300 COMMAND Tax-Free $ 16,700 Note 4. Joint Repurchase Agreement Account The COMMAND Government Fund, along with other affiliated registered investment companies, transfers uninvested cash balances into a single joint account, the daily aggregate balance of which is invested in one or more repurchase agreements collateralized by U.S.Treasury or Federal agency obligations. At June 30, 2003, the Fund had an undivided interest of 29.25% in the repurchase agreements in the joint account. The undivided interest for the Fund represented $63,730,000 in principal amount and the value of the collateral therefore was as follows: 53 COMMAND Funds Notes to Financial Statements Cont'd. Bank of America Securities, 1.26% in the principal amount of $72,637,000, repurchase price $72,639,542, due 7/1/03. The value of the collateral including accrued interest was $74,089,740. Bear Stearns Securities Corp., 1.24% in the principal amount of $72,636,000, repurchase price $72,638,502, due 7/1/03. The value of the collateral including accrued interest was $74,089,944. State Street Bank & Trust Co, 1.25% in the principal amount of $72,637,000, repurchase price $72,639,522, due 7/1/03. The value of the collateral including accrued interest was $74,093,502. Note 5. Distributions and Tax Information For the years ended June 30, 2003 and June 30, 2002, the tax character of dividends paid, as reflected in the Statement of Changes in Net Assets and in the table below, was ordinary income: Year Ended June 30, ------------------------------- 2003 2002 ------------ ------------ COMMAND Money $149,623,728 $359,612,464 COMMAND Government $ 10,096,945 $ 18,497,826 For the years ended June 30, 2003 and June 30, 2002, the tax character of dividends paid for COMMAND Tax-Free Fund, as reflected in the Statement of Changes in Net Assets, of $16,070,651 and $27,243,548, respectively, was tax-exempt income. Note 6. Capital The Funds offer Class A shares. The Funds may also offer Class Z and Class S shares (COMMAND Tax-Free Fund may only offer Class S). There are no Class Z or Class S shares currently issued and outstanding. 54 COMMAND Funds Federal Income Tax Information (Unaudited) COMMAND TAX-FREE FUND: We are required by the Internal Revenue Code to advise you within 60 days of the COMMAND Tax-Free Fund's fiscal year-end (June 30, 2003) as to the federal tax status of dividends and distributions paid by the Fund during such fiscal year. Accordingly, we are advising you that for the year ended June 30, 2003, dividends paid from net investment income totaling $.009 per share were all federally tax-exempt interest dividends. COMMAND GOVERNMENT FUND AND COMMAND MONEY FUND: IMPORTANT NOTICE FOR CERTAIN SHAREHOLDERS We are required by Massachusetts, Missouri and Oregon to inform you that dividends which have been derived from interest on federal obligations are not taxable to shareholders, provided the mutual fund meets certain requirements mandated by the respective state's taxing authorities. We are pleased to report that 32% and 2% of the dividends paid by the COMMAND Government Fund and COMMAND Money Fund, respectively, qualify for such deduction. For more detailed information regarding your state and local taxes, you should contact your tax advisor or the state/local taxing authorities. 55 COMMAND Funds Management of the Funds (Unaudited) Information pertaining to the Trustees of the Funds is set forth below. Trustees who are not deemed to be 'interested persons' of the Funds as defined in the Investment Company Act of 1940, as amended (the 1940 Act) are referred to as 'Independent Trustees.' Trustees who are deemed to be 'interested persons' of the Funds are referred to as 'Interested Trustees.' 'Fund Complex'5 consists of the Funds and any other investment companies managed by Prudential Investments LLC (PI). Independent Trustees(2) Delayne Dedrick Gold (65), Trustee since 1982(3) Oversees 129 portfolios in Fund complex Principal occupations (last 5 years): Marketing Consultant (1982-present); formerly Senior Vice President and Member of the Board of Directors, Prudential Bache Securities, Inc. Other Directorships held:(4) None Robert E. La Blanc (69), Trustee since 1996(3) Oversees 107 portfolios in Fund complex Principal occupations (last 5 years): President (since 1981) of Robert E. La Blanc Associates, Inc. (telecommunications); formerly General Partner at Salomon Brothers and Vice-Chairman of Continental Telecom; Trustee of Manhattan College. Other Directorships held:(4) Director of Storage Technology Corporation (since 1979) (technology). Chartered Semiconductor Manufacturing Ltd. (since 1998) (Singapore). Titan Corporation (electronics) (since 1995). Computer Associates International, Inc. (software company) (since 2002); Director (since 1999) of First Financial Fund, Inc. and Director (since April 1999) of The High Yield Plus Fund, Inc. Stephen P. Munn (61), Trustee since 2003(3) Oversees 105 portfolios in Fund complex Principal occupations (last 5 years): Chairman of the Board (since 1994) and formerly Chief Executive Officer (1988-2001) and President of Carlisle Companies Incorporated. Other Directorships held:(4) Chairman of the Board (since January 1991) and Director (since 1988) of Carlisle Companies Incorporated (manufacturer of industrial products); Director of Gannett Co., Inc. (publishing and media). Robin B. Smith (63), Trustee since 1996(3) Oversees 107 portfolios in Fund complex Principal occupations (last 5 years): Chairman of the Board (since January 2003) of Publishers Clearing House (direct marketing), formerly Chairman and Chief Executive Officer (August 1996-December 2003) of Publishers Clearing House. Other Directorships held:(4) Director of BellSouth Corporation (since 1992). 56 COMMAND Funds Management of the Funds (Unaudited) Cont'd. Stephen Stoneburn (60), Trustee since 1982(30 Oversees 105 portfolios in Fund complex Principal occupations (last 5 years): President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (a publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media and Senior Vice President of Fairchild Publications, Inc. (1975-1989). Other Directorships held:(4) None Clay T. Whitehead (64), Trustee since 1999(3) Overseas 104 portfolios in Fund complex Principal occupations (last 5 years): President (since 1983) of National Exchange Inc. (new business development firm). Other Directorships held:(4) Director (since 2000) of First Financial Fund, Inc. and Director (since 2000) of The High Yield Plus Fund, Inc. Interested Trustees(1,2) Robert F. Gunia (56), Trustee and Vice President since 1996(3) Overseas 187 portfolios in Fund complex Principal occupations (last 5 years): Executive Vice President and Chief Administrative Officer (since June 1999) of PI; Executive Vice President and Treasurer (since January 1996) of PI; President (since April 1999) of Prudential Investment Management Services LLC (PIMS); Corporate Vice President (since September 1997) of The Prudential Insurance Company of America (Prudential); Director, Executive Vice President and Chief Administration Officer (since May 2003) of American Skandia Investment Services, Inc., American Skandia Advisory Services, Inc., and American Skandia Fund Services, Inc.; formerly Senior Vice President (March 1987-May 1999) of Prudential Securities. Other Directorships held:(4) Vice President and Director (since May 1989) and Treasurer (since 1999) of The Asia Pacific Fund, Inc. Judy A. Rice (55), Trustee since 2000 and President since 2003(3) Overseas 102 portfolios in Fund complex Principal occupations (last 5 years): President, Chief Executive Officer, Chief Operating Officer and Officer-in-Charge (since 2003) of PI; Director, Officer-in-Charge, President, Chief Executive Officer and Chief Operating Officer (since May 2003) of American Skandia Advisory Services, Inc.; Director, Officer-in-Charge, President, Chief Executive Officer and Chief Operating Officer (since May 2003) of American Skandia Investment Services, Inc.; Director, Officer-in-Charge, President, Chief Executive Officer (since May 2003) of American Skandia Fund Services, Inc.; formerly various positions to Senior Vice President (1992-1999) of Prudential Securities; and various positions to Managing Director (1975-1992) of Salomon Smith Barney; Member of Board of Governors of the Money Management Institute. Other Directorships held:(4) None 57 COMMAND Funds Management of the Funds (Unaudited) Cont'd. Information pertaining to the Officers of the Funds who are not the Trustees is set forth below. Officers(2) Marguerite E.H. Morrison (47), Chief Legal Officer since 2003 and Assistant Secretary since 2002(3) Principal occupations (last 5 years): Vice President and Chief Legal Officer--Mutual Funds and Unit Investment Trusts (since August 2000) of Prudential; Senior Vice President and Secretary (since April 2003) of PI; Senior Vice President and Secretary (since May 2003) of American Skandia Investment Services, Inc., American Skandia Advisory Services, Inc. and American Skandia Fund Services, Inc.; Vice President and Assistant Secretary of PIMS (since October 2001), previously Senior Vice President and Assistant Secretary (February 2001-April 2003) of PI, Vice President and Associate General Counsel (December 1996-February 2001) of PI. Grace C. Torres (44), Treasurer and Principal Financial and Accounting Officer since 1995(3) Principal occupations (last 5 years): Senior Vice President (since January 2000) of PI; Senior Vice President and Assistant Treasurer (since May 2003) of American Skandia Investment Services, Inc. and American Skandia Advisory Services, Inc.; formerly First Vice President (December 1996-January 2000) of PI and First Vice President (March 1993-1999) of Prudential Securities. Jonathan D. Shain (45), Secretary since 2001(3) Principal occupations (last 5 years): Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2003) of American Skandia Investment Services, Inc.; Vice President and Assistant Secretary (since May 2003) of American Skandia Fund Services, Inc.; formerly Attorney with Fleet Bank, N.A. (January 1997-July 1988) and Associate Counsel (August 1994-January 1997) of New York Life Insurance Company. Maryanne Ryan (38), Anti-Money Laundering Compliance Officer since 2002(3) Principal occupations (last 5 years): Vice President, Prudential (since November 1998) and First Vice President, Prudential Securities (March 1997-May 1998); Anti-Money Laundering Officer (since May 2003) of American Skandia Investment Services, Inc., American Skandia Advisory Services, Inc. and American Skandia Marketing, Inc.. 58 COMMAND Funds Management of the Funds (Unaudited) Cont'd. 1 'Interested' Trustee, as defined in the 1940 Act, by reason of employment with the Manager, the Subadviser or the Distributor. 2 Unless otherwise noted, the address of the Trustees and Officers is c/o: Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102. 3 There is no set term of office for Trustees and Officers. The Independent Trustees have adopted a retirement policy, which calls for the retirement of Trustees on December 31 of the year in which they reach the age of 75. This shows the number of years for which they have served as Trustees and/or Officer. 4 This includes only directorships of companies required to register, or file reports with the Commission under the Securities and Exchange Act of 1934 (i.e., 'public companies') or other investment companies registered under the 1940 Act. 5 The Fund Complex consists of all investment companies managed by PI. Effective May 1, 2003, the Funds for which PI serves as manager include JennisonDryden Mutual Funds, Strategic Partners Funds, American Skandia Advisor Funds, Inc. The Prudential Variable Contract Accounts 2, 10, 11, The Target Portfolio Trust, The Prudential Series Fund, Inc., American Skandia Trust, and Prudential's Gibraltar Fund.
Additional information about the Funds' Trustees is included in the Funds' Statement of Additional Information which is available without charge, upon request, by calling (800) 225-1852 or (732) 482-7555 (Calling from outside the U.S.) 59 FOR MORE INFORMATION COMMAND Funds Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 (800) 225-1852 TRUSTEES Delayne Dedrick Gold Robert F. Gunia Robert E. La Blanc Stephen P. Munn Robin B. Smith Stephen D. Stoneburn Clay T. Whitehead OFFICERS Judy A. Rice, President Robert F. Gunia, Vice President Grace C. Torres, Treasurer Marguerite E.H. Morrison, Chief Legal Officer and Assistant Secretary Jonathan D. Shain, Secretary Maryanne Ryan, Anti-Money Laundering Compliance Officer MANAGER Prudential Investments LLC Gateway Center Three 100 Mulberry Street Newark, NJ 07102-4077 INVESTMENT ADVISER Prudential Investment Management, Inc. Gateway Center Two 100 Mulberry Street Newark, NJ 07102 DISTRIBUTOR Prudential Investment Management Services LLC Gateway Center Three, 14th Floor 100 Mulberry Street Newark, NJ 07102-4077 CUSTODIAN State Street Bank and Trust Company One Heritage Drive North Quincy, MA 02171 TRANSFER AGENT Prudential Mutual Fund Services LLC PO Box 8098 Philadelphia, PA 19101 INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 1177 Avenue of the Americas New York, NY 10036 LEGAL COUNSEL Sullivan & Cromwell LLP 125 Broad Street New York, NY 10004-2498 Mutual Funds: ARE NOT INSURED BY THE FDIC OR ANY FEDERAL GOVERNMENT AGENCY MAY LOSE VALUE ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR ANY BANK AFFILIATE Fund Symbols Nasdaq CUSIP COMMAND Money Fund CDMXX 20050F103 COMMAND Tax-Free Fund CDFXX 20050R107 COMMAND Govt Fund CGMXX 20050D108 CFA IFS-A083175 Item 2 -- Code of Ethics -- Not required in this filing Item 3 -- Audit Committee Financial Expert -- Not required in this filing Item 4 -- Principal Accountant Fees and Services -- Not required in this filing Item 5 -- Reserved Item 6 -- Reserved Item 7 -- Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies -- Not required in this filing Item 8 -- Reserved Item 9 -- Controls and Procedures (a) It is the conclusion of the registrant's principal executive officer and principal financial officer that the effectiveness of the registrant's current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission's rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant's principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure. (b) There have been no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Item 10 -- Exhibits (a) Code of Ethics -- Not required in this filing (b) Certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act -- Attached hereto Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COMMAND Government Fund By: /s/ Jonathan D. Shain ---------------------------------------------------------- Jonathan D. Shain Secretary Date: August 26, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Judy A. Rice ---------------------------------------------------------- Judy A. Rice President and Principal Executive Officer Date: August 26, 2003 By: /s/ Grace C. Torres ---------------------------------------------------------- Grace C. Torres Treasurer and Principal Financial Officer Date: August 26, 2003 EX-99.CERT 3 mf16123gex99cert.txt SECTION 302 SARBANES-OXLEY CERTIFICATIONS Item 10 COMMAND Government Fund Annual period ending 06/30/03 File No. 811-3251 CERTIFICATIONS I, Judy A. Rice, certify that: 1. I have reviewed this report on Form N-CSR of COMMAND Government Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 26, 2003 /s/Judy A. Rice ----------------------------------- Judy A. Rice President and Principal Executive Officer Item 10 COMMAND Government Fund Annual period ending 06/30/03 File No. 811-3251 CERTIFICATIONS I, Grace C. Torres, certify that: 1. I have reviewed this report on Form N-CSR of COMMAND Government Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a. designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b. evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c. presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a. all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b. any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 26, 2003 /s/Grace C. Torres ----------------------------------- Grace C. Torres Treasurer and Principal Financial Officer EX-99.906.CERT 4 mf16123gex906cert.txt SECTION 906 SARBANES-OXLEY CERTIFICATIONS Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 Name of Issuer: COMMAND Government Fund In connection with the Report on Form N-CSR of the above-named issuer that is accompanied by this certification, the undersigned hereby certifies, to his or her knowledge, that: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Issuer. Date: August 26, 2003 /s/ Judy A. Rice --------------- ------------------------- Judy A. Rice President and Principal Executive Officer Date: August 26, 2003 /s/ Grace C. Torres --------------- ------------------------- Grace C. Torres Treasurer and Principal Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----