-----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, JfRzSAt5BLO1/U0Z2ZFkEIxupyP3ucMCn+VCxEUm/O5R8Uzkn10MQVf2yHlI2MMs w5TcL/8fheNFzYYqBpHD1Q== 0000749748-02-000003.txt : 20020611 0000749748-02-000003.hdr.sgml : 20020611 20020610103305 ACCESSION NUMBER: 0000749748-02-000003 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20020610 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASH ASSETS TRUST CENTRAL INDEX KEY: 0000749748 IRS NUMBER: 136844974 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04066 FILM NUMBER: 02674501 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE STREET 2: SUITE 2300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 1: 380 MADISON AVENUE STREET 2: SUITE 2300 CITY: NEW YORK STATE: NY ZIP: 10017 N-30D 1 catanl2001.txt CASH ASSETS TRUST 3/31/02 ANNUAL REPORT INVESTMENT ADVISER Asset Management Group of Bank of Hawaii Financial Plaza of the Pacific * P.O. Box 3170 Honolulu, Hawaii 96802 ADMINISTRATOR Aquila Management Corporation 380 Madison Avenue, Suite 2300 * New York, New York 10017 BOARD OF TRUSTEES Lacy B. Herrmann, Chairman William M. Cole Thomas W. Courtney Richard W. Gushman, II Stanley W. Hong Theodore T. Mason Russell K. Okata Douglas Philpotts Oswald K. Stender OFFICERS Diana P. Herrmann, President Charles E. Childs, III, Senior Vice President Sherri Foster, Vice President Rose F Marotta, Chief Financial Officer Joseph P. DiMaggio, Treasurer Edward M.W. Hines, Secretary DISTRIBUTOR Aquila Distributors, Inc. 380 Madison Avenue, Suite 2300 * New York, New York 10017 TRANSFER AND SHAREHOLDER SERVICING AGENT PFPC Inc. 400 Bellevue Parkway * Wilmington, Delaware 19809 CUSTODIAN Bank One Trust Company, N.A. 100 East Broad Street * Columbus, Ohio 43271 INDEPENDENT AUDITORS KPMG LLP 757 Third Avenue * New York, New York 10017 Further information is contained in the Prospectus which must precede or accompany this report. ANNUAL REPORT MARCH 31, 2002 THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST PACIFIC CAPITAL CASH ASSETS TRUST PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST [Logo of The Pacific Capital Funds of Cash Assets Trust: a lion standing on a twisted rope] A CASH MANAGEMENT INVESTMENT [Logo of The Pacific Capital Funds of Cash Assets Trust: a lion standing on a twisted rope] THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST ANNUAL REPORT May 17, 2002 Dear Investor: We are pleased to provide you with the Annual Report for The Pacific Capital Funds of Cash Assets Trust for the fiscal year ended March 31, 2002. The Trust is comprised of three separate portfolios - Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust - each with two classes of shares. While each fund adheres to its own investment objective, they all share a common theme. That is, THERE IS ABSOLUTELY NO SUBSTITUTE FOR QUALITY IN MAINTAINING A HIGH LEVEL OF SAFETY FOR THE CASH RESERVES ENTRUSTED TO EACH FUND. ---------- The period under review was marked by extraordinary events, the likes of which couldn't even be imagined. The U.S. economy limped through 2001, entering the second half of the year in a recession. Officially, the National Bureau of Economic Research declared that the U.S. economy was in a recession that had begun in March, 2001. The economic slowdown during 2001 was caused in part by the Federal Reserve's (the "Fed") restrictive monetary policy during the previous year. As the economy struggled, corporate profits continued to suffer, which led to job cuts and slower growth in personal income and consumption. In addition, energy prices rose, the global economy stalled and the U.S. continued to reel from the negative wealth effects due to a declining stock market. Then came the tragic events of September 11th which worsened an already fragile economy. The Fed responded during the year by aggressively slashing its key Federal Funds target rate, 11 times during the 2001. The target on the Federal Funds rate fell from 6.50% to 1.75% The result was a short-lived downturn. The economy rebounded during the fourth quarter as consumer confidence and spending remained remarkably strong during the period. Consumers took advantage of low interest rates as loan refinancing increased providing extra money to consumers. Retail sales held up well as businesses were able to reduce their overstocked inventories, setting the stage for a strong rebound in the economy during the first quarter of 2002. Indeed, the economy surged ahead at an annualized rate of 5.8% for the quarter ending March 31, 2002. Looking ahead, we are optimistic that the economy will continue to expand, albeit at a slower rate than recorded during the first quarter, while the level of inflation should remain moderate as surplus capacity and productivity gains continue to suppress prices. As mentioned in previous report letters, yields on money market funds move in concert with short-term interest rate policy pursued by the Fed. Consequently, as the Fed repeatedly lowered its target for short-term interest rates, the yield to investors in the Pacific Capital Funds of Cash Assets Trust has fallen. Notwithstanding the fact that short-term interest rates are at a 40-YEAR LOW, the Pacific Capital Funds of Cash Assets Trust have consistently provided a return for investors' cash reserves that has been highly competitive under the prevailing market conditions. Over the past couple of years, there has been a fundamental change in the way people look at their investments. Investors will always want competitive returns, yet, with the number of recent problem areas that have developed in our economy, the words most often heard these days are, "How safe is my investment?" This is especially true for investors' cash reserves. It has always been the very strongest belief of the Asset Management Group of the Bank of Hawaii, the Trust's Investment Adviser, that cash reserves of investors is one area with which one specifically does not take any undue risks in order to earn extra yield. Indeed, with investments in each of the funds, the Investment Adviser looks first and foremost to quality. The Investment Adviser has continuously acted with a high level of prudence in examining the creditworthiness and marketability of issuers in order to ensure that consistency in high quality standards will be provided for the safety of investor's cash reserves. All associated with The Pacific Capital Funds of Cash Assets Trust want to thank you for your continued support and confidence. Sincerely, /s/ Diana P. Herrman /s/ Lacy B. Herrmann - --------------------- ---------------------- Diana P. Herrmann Lacy B. Herrmann President Chairman, Board of Trustees PRIVACY NOTICE (UNAUDITED) OUR PRIVACY POLICY. In providing services to you as an individual who owns or is considering investing in shares of a fund of the Aquila(SM) Group of Funds, we collect certain nonpublic personal information about you. Our policy is to keep this information strictly safeguarded and confidential, and to use or disclose it only as necessary to provide services to you or as otherwise permitted by law Our privacy policy applies equally to former shareholders and persons who inquire about a fund. INFORMATION WE COLLECT. "Nonpublic personal information" is personally identifiable financial information about you as an individual or your family. The kinds of nonpublic personal information we have about you may include the information you provide us on your share purchase application or in telephone calls or correspondence with us, and information about your fund transactions and holdings, how you voted your shares and the account where your shares are held. INFORMATION WE DISCLOSE. We disclose nonpublic personal information about you to companies that provide necessary services to your fund, such as the fund's transfer agent, distributor, investment adviser or sub-adviser and to our affiliates, as permitted or required by law, or as authorized by you. We also may disclose the information about you, as described above, to companies that perform marketing services for your fund or to other financial institutions with which we have joint marketing agreements. HOW WE SAFEGUARD YOUR INFORMATION. We restrict access to nonpublic personal information about you to only those persons who need it to provide services to you or who are permitted by law to receive it. We maintain physical, electronic and procedural safeguards to protect the confidentiality of all nonpublic personal information we have about you. If you have any questions regarding our Privacy Policy, please contact us at 1-800-437-1020. [Logo of KPMG LLP: four solid rectangles with the letters KPMG in front of them] INDEPENDENT AUDITORS' REPORT To the Board of Trustees and Shareholders of Cash Assets Trust: We have audited the accompanying statements of assets and liabilities of The Pacific Capital Funds of Cash Assets Trust (the "Trust") (comprised of Cash Fund, Tax-Free Fund and Government Fund), including the statements of investments, as of March 31, 2002, and the related statements of operations for the year then ended, the statements of changes in 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. These financial statements and financial highlights are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of March 31, 2002, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used, and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Trust as of March 31, 2002, 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. KPMG LLP New York, New York May 15, 2002 PACIFIC CAPITAL CASH ASSETS TRUST STATEMENT OF INVESTMENTS MARCH 31, 2002
FACE AMOUNT COMMERCIAL PAPER (45.3%) VALUE - ------------ ------------------------------------------------------- ------------ Banks (18.0%) ------------------------------------------------------- $ 20,000,000 Banco Ita U.S.A., 1.84%, 4/05/02 ..................... $ 19,995,911 LOC: Bayerische Hypo-und Vereinsbank 20,000,000 Formosa Plastics Corp U.S.A., 1.85%, 5/28/02 ......... 19,941,417 LOC: Bank of America NA 25,000,000 UBS Finance (Delaware) LLC, 1.79%, 6/06/02 ............ 24,917,958 25,000,000 Wells Fargo & Co., 1.79%, 4/02/02 ..................... 24,998,758 ------------ 89,854,044 ------------ Brokerage (9.6%) ------------------------------------------------------- 24,000,000 Morgan Stanley Dean Witter & Co., 1.80%, 5/23/02 ...... 23,937,600 24,000,000 Salomon Smith Barney, Inc., 1.79%, 4/12/02 ............ 23,986,873 ------------ 47,924,473 ------------ Education (8.8%) ------------------------------------------------------- 20,000,000 Harvard University, 1.72%, 4/03/02 .................... 19,998,089 24,000,000 Yale University, 1.76%, 4/10/02 ....................... 23,989,440 ------------ 43,987,529 ------------ Finance (8.9%) ------------------------------------------------------- 20,000,000 Abbey National North America Corp., 1.83%, 4/02/02 .... 19,998,983 24,000,000 General Electric Capital Corp., 1.79%, 4/01/02 ........ 24,000,000 ------------ 43,998,983 ------------ Total Commercial Paper ............................. 225,765,029 ------------ U.S. GOVERNMENT AGENCIES (27.0%) ------------------------------------------------------- Federal Farm Credit Bank (8.5%) ------------------------------------------------------- 30,000,000 1.85%, 4/05/02 ........................................ 29,994,133 12,000,000 6.25%, 12/02/02 ....................................... 12,290,901 ------------ 42,285,034 ------------ Federal Home Loan Bank (11.3%) ------------------------------------------------------- $ 2,000,000 6.25%, 11/15/02 ....................................... $ 2,049,606 4,205,000 2.50%, 12/04/02 ....................................... 4,212,875 4,305,000 2.125%, 12/11/02 ...................................... 4,301,225 2,270,000 2.45%, 12/17/02 ....................................... 2,269,848 42,500,000 5.125%, 1/13/03 ....................................... 43,415,407 ------------ 56,248,961 ------------ Federal Home Loan Mortgage Corp. (3.3%) ------------------------------------------------------- 16,000,000 6.25%, 10/15/02 ....................................... 16,351,418 ------------ Student Loan Marketing Association (3.9%) ------------------------------------------------------- 20,000,000 2.11%, 12/18/02 ....................................... 19,694,050 ------------ Total U.S. Government Agencies ..................... 134,579,463 ------------ REPURCHASE AGREEMENTS (23.0%) ------------------------------------------------------- 115,000,000 SG Cowen, 1.85%, 4/01/02 .............................. 115,000,000 ------------ (Proceeds of $115,023,639 to be received at maturity) Collateral: $117,700,000 Fannie Mae Discount Note, due 5/31/02; Collateral Market Value $117,300,000 CORPORATE NOTES (3.0%) ------------------------------------------------------- Peoples Benefit Life Insurance, Variable Rate Note 15,000,000 2.02%, 12/30/02 (1) ................................... 15,000,000 ------------ INVESTMENT COMPANIES (1.6%) ------------------------------------------------------- 8,028,561 One Group Government Money Market Fund (I Shares) ..... 8,028,561 ------------ Total Investments (amortized cost $498,373,053 *) .. 99.9% 498,373,053 Other assets less liabilities ...................... 0.1 557,191 ------ ------------ Net Assets ...................................... 100.0% $498,930,244 ====== ============
* Cost for Federal tax purposes is identical. (1) Illiquid security. The security is considered illiquid because it may not be sold, and may be redeemed only upon at least ninety days' notice to the issuer. As this security is a variable rate note, the rate shown represents the rate in effect at March 31, 2002, and the maturity date reflects the next rate change date. LOC - Letter of Credit See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST STATEMENT OF INVESTMENTS MARCH 31, 2002
RATING FACE MOODY'S/ AMOUNT MUNICIPAL BONDS (99.8%) S&P VALUE - ----------- ------------------------------------------------------- ------------ ------------- CALIFORNIA (0.7%) ------------------------------------------------------- California State, Revenue Anticipation Notes, Series C $ 1,000,000 1.48%, 6/28/02, Weekly Reset* ......................... MIG1/SP-1+ $ 1,000,000 ------------- COLORADO (2.6%) ------------------------------------------------------- Colorado Housing & Finance Authority Revenue Bonds, Series A-1, 3,000,000 2.65%, 10/01/30, SPA: Federal Home Loan Bank .......... VMIG1/A-1+ 3,001,994 Douglas County, CO School District No. 1 Douglas & Elbert County Tax Anticipation Notes, 1,000,000 3.50%, 6/28/02 ........................................ MIG1/NR 1,002,418 ------------- 4,004,412 ------------- FLORIDA (1.0%) ------------------------------------------------------- Florida State, Jacksonville Transportation Revenue Bonds, Senior Lien, 1,500,000 5.90%, 7/01/04, Prerefunded 7/01/02 @ 101 ............. Aaa/AA+ 1,526,624 ------------- GEORGIA (0.7%) ------------------------------------------------------- Albany, GA Sewer System Revenue Bonds, 1,020,000 6.30%, 7/01/03, Prerefunded 7/01/02 @ 101 ............. Aaa/AAA 1,049,384 Insurance: Municipal Bond Insurance Association ------------- HAWAII (42.5%) ------------------------------------------------------- Department of Budget and Finance of the State of Hawaii State Department of Budget & Finance Special Purpose Revenue Bonds (The Queen's Health System), Series A 9,957,000 1.55%, 7/01/26, Weekly Reset* ......................... VMIG1/A-1+ 9,957,000 SPA: Morgan Guaranty Trust Hawaii State Airport System Revenue, Second Series 1,780,000 5.65%, 7/01/02 ........................................ Aaa/AAA 1,792,157 Insurance: Municipal Bond Insurance Association. Hawaii State, General Obligation Bonds, Series BZ, ETM 1,370,000 6.25%, 10/01/02 ....................................... Aa3/AA- 1,397,705 Hawaii State, General Obligation Bonds, Series CC 500,000 5.00%, 2/01/03 ........................................ Aa3/AA- 512,144 Hawaii State, General Obligation Bonds, Series CE, ETM 500,000 5.10%, 6/01/02 ........................................ Aaa/AA- 501,989 Hawaii State, General Obligation Bonds, Series CH 1,000,000 4.20%, 11/01/02 ....................................... Aa3/AA- 1,012,084 Hawaii State, General Obligation Bonds, Series CQ $ 1,305,000 5.00%, 10/01/02 ....................................... Aaa/AAA $ 1,325,536 Insurance: Financial Guaranty Insurance Corporation Hawaii State, Harbor Systems Revenue Bonds, Series A 100,000 3.00%, 7/01/02 ........................................ Aaa/AAA 100,186 Insurance: AMBAC Indemnity Corporation Hawaii State, Harbor Systems Revenue Bonds, Series B 240,000 3.00%, 7/01/02 ........................................ Aaa/AAA 240,338 Insurance: AMBAC Indemnity Corporation Hawaii State, Highway Revenue Bonds, ETM 50,000 4.50%, 7/01/02 ........................................ Aa3/AA 50,285 Hawaii State Housing Finance & Development Corp. Revenue Bonds, (Affordable Rental Housing Program), Series A 8,575,000 1.70%, 7/01/27, Weekly Reset* ......................... VMIG1/NR 8,575,000 Letter of Credit: Banque Nationale Paris Hawaii State Housing Finance & Development Corp. Revenue Bonds (Rental Housing System), Series 89 A, 2,700,000 1.51%, 7/01/27, Weekly Reset*, ........................ VMIG1/NR 2,700,000 Letter of Credit: Banque Nationale Paris Hawaii University System Revenue Bonds, Series B 460,000 3.00%, 10/01/02 ....................................... Aaa/AAA 462,155 Insurance: Financial Security Assurance Honolulu City & County, HI Board of Water Supply Revenue Bonds 500,000 4.00%, 7/01/02 ..................................... Aa3/AA 502,535 Honolulu City & County, HI General Obligation Bonds, Commercial Paper Notes 3,100,000 1.25%, 5/06/02 ..................................... P-1/A-1+ 3,100,000 LOC: Westdeutsche Landesbank Honolulu City & County, HI General Obligation Bonds Series A 500,000 5.00%, 7/01/02 ........................................ Aaa/AAA 503,464 Insurance: Financial Guaranty Insurance Corporation Honolulu City & County, HI General Obligation Bonds Series A 6,000,000 1.35%,1/01/04, Weekly Reset* .......................... VMIG1/A-1+ 6,000,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series A $ 800,000 1.35%, 1/01/05, Weekly Reset* ......................... VMIG1/A-1+ $ 800,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series A 3,150,000 1.35%, 1/01/10, Weekly Reset* ......................... VMIG1/A-1+ 3,150,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series A 1,220,000 1.35%, 1/01/15, Weekly Reset* ......................... VMIG1/A-1+ 1,220,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series A 6,225,000 1.35%, 1/01/16, Weekly Reset* ......................... VMIG1/A-1+ 6,225,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series A 5,645,000 1.35%, 1/01/17, Weekly Reset* ......................... VMIG1/A-1+ 5,645,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series A 1,255,000 1.35%, 1/01/18, Weekly Reset* ......................... VMIG1/A-1+ 1,255,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series A 1,645,000 1.35%, 1/01/19, Weekly Reset* ......................... VMIG1/A-1+ 1,645,000 Letter of Credit: Landesbank Hessen Honolulu City & County, HI General Obligation Bonds Series B, ETM 300,000 5.00%, 11/01/02 ....................................... VMIG1/A-1+ 305,277 Insurance: Financial Guaranty Insurance Corporation Honolulu City & County, HI General Obligation Bonds Series C 3,000,000 2.85%, 12/01/13, Mandatory Put 12/04/02 @ 100 ......... VMIG1/A-1+ 3,015,899 Insurance: Financial Guaranty Insurance Corporation SPA: FGIC-SPI Honolulu City & County, HI General Obligation Bonds Series One 200,000 5.70%, 6/01/02 ........................................ Aa3/AA- 201,017 Secondary Market Services Corp., Hawaii Student Loan Revenue Bonds, Senior Series I $ 1,600,000 1.65%, 9/01/10, Weekly Reset* ......................... VMIG1/A-1+ $ 1,600,000 Letter of Credit: Student Loan Marketing Assoc. Secondary Market Services Corp. Hawaii Student Loan Revenue Bonds, Senior Series II 1,100,000 1.65%, 9/01/35, Weekly Reset* ......................... VMIG1/NR 1,100,000 ------------- Letter of Credit: Student Loan Marketing Assoc. 64,894,771 ------------- IDAHO (3.6%) ------------------------------------------------------- Idaho Health Facilities Authority Revenue Bonds (St. Lukes Regional Medical Center Project) 5,525,000 1.40%, 5/01/22, Daily Reset* .......................... VMIG1/NR 5,525,000 ------------- Letter of Credit: Bayerische Landesbank ILLINOIS (2.0%) ------------------------------------------------------- Madison County, IL Environmental Improvement Revenue Bonds (Shell Wood River Refining Project) 1,910,000 1.60%, 4/01/32, Daily Reset* .......................... VMIG1/A-1+ 1,910,000 Southwestern, IL Environmental Improvement Revenue Bonds (Shell Wood River Refining Project) 1,100,000 1.60%, 11/01/25, Daily Reset* ......................... VMIG1/A-1+ 1,100,000 ------------- 3,010,000 ------------- INDIANA (5.2%) ------------------------------------------------------- Indiana Transportation Finance Authority Revenue Bonds, Series A 2,475,000 6.25%, 11/01/16, Prerefunded 11/01/02 @ 102 ........... Aaa/NR 2,588,223 Indianapolis, IN Economic Development Revenue Bonds (Jewish Federation Campus) 4,780,000 1.50%, 4/01/05, Weekly Reset* ......................... VMIG1/NR 4,780,000 Letter of Credit: NBD Bank Purdue University, IN University Revenue Bonds (Student Fee), Series L 100,000 3.16%, 7/01/02 ........................................ Aa2/AA 100,239 Purdue University, IN University Revenue Bonds (Student Fee), Series L 500,000 3.17%, 7/01/02 ........................................ Aa2/AA 501,198 ------------- 7,969,660 ------------- IOWA (0.7%) ------------------------------------------------------- Iowa Higher Education Loan Authority Revenue Bonds (Loras College Project) $ 1,030,000 1.40%, 11/01/30, Daily Reset* ......................... NR/A-1+ $ 1,030,000 ------------- Letter of Credit: LaSalle Bank N.A. LOUISIANA (2.2%) ------------------------------------------------------- St. Charles Parish, LA Pollution Control Revenue Bonds (Shell Oil Co. Project), Series A 1,000,000 1.60%, 10/01/22 Daily Reset* .......................... VMIG1/A-1+ 1,000,000 St. Charles Parish, LA Pollution Control Revenue Bonds (Shell Oil Co.-Norco Project) 2,300,000 1.60%, 9/01/23, Daily Reset* .......................... NR/A-1+ 2,300,000 ------------- 3,300,000 ------------- MICHIGAN (4.1%) ------------------------------------------------------- Detroit, MI Sewer Disposal Revenue Bonds, Second Lien Series E 1,500,000 2.12%, 7/01/31 ........................................ VMIG1/A-1+ 1,500,000 Insurance: Financial Guaranty Insurance Corporation, SPA: FGIC-SPI Eastern Michigan University, MI University Revenue Bonds 2,250,000 1.45%, 6/01/27, Daily Reset* .......................... Aaa/A-1+ 2,250,000 Insurance: Financial Guaranty Insurance Corporation, SPA: FGIC-SPI Michigan State, Building Authority Revenue Bonds Series I 1,000,000 5.40%, 10/01/03, Prerefunded 10/01/02 @ 102 Aa1/AA+ 1,035,704 Michigan State, Strategic Fund Ltd. Revenue Bonds (Village at Ann Arbor LLC Project), Series A 1,485,000 1.50%, 2/15/34, Weekly Reset* ......................... VMIG1/NR 1,485,000 ------------- Letter of Credit: FannieMae Credit Facility 6,270,704 ------------- MINNESOTA (8.8%) ------------------------------------------------------- Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project) Revenue, Series A 3,200,000 1.40%, 6/01/20, Daily Reset* .......................... NR/A-1+ 3,200,000 Letter of Credit: ABN Amro Bank N.V. Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project) Revenue, Series B $ 875,000 1.40%, 6/01/13, Daily Reset* .......................... NR/A-1+ $ 875,000 Letter of Credit: ABN Amro Bank N.V. Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project) Revenue, Series C 1,450,000 1.40%, 6/01/13, Daily Reset* .......................... NR/A-1+ 1,450,000 Letter of Credit: ABN Amro Bank N.V. Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project) Revenue, Series D 500,000 1.40%, 12/01/07, Daily Reset* ......................... NR/A-1+ 500,000 Letter of Credit: ABN Amro Bank N.V. Hennepin County, MN General Obligation Bonds Series B 190,000 1.40%, 12/01/20, Weekly Reset* ........................ VMIG1/A-1+ 190,000 SPA: Landesbank Hessen Thuringen Hennepin County, MN General Obligation Bonds Series C 955,000 1.40%, 12/01/04, Weekly Reset* ........................ VMIG1/A-1+ 955,000 SPA: Westdeutsche Landesbank Minneapolis, MN General Obligation Bonds 300,000 1.40%, 12/01/10, Weekly Reset* ........................ VMIG1/A-1 300,000 SPA: Bayerische Vereinsbank Minneapolis, MN General Obligation Bonds (Convention Center) 1,890,000 1.40%, 12/01/09, Weekly Reset* ........................ VMIG1/A-1 1,890,000 SPA: Bayerische Vereinsbank Minneapolis, MN General Obligation Bonds (Convention Center) 2,100,000 1.40%, 12/01/18, Weekly Reset* ........................ VMIG1/A-1 2,100,000 SPA: Bayerische Vereinsbank Minneapolis, MN General Obligation Bonds (Convention Center) 345,000 1.40%, 12/01/18, Weekly Reset* ........................ VMIG1/A-1 345,000 SPA: Bayerische Vereinsbank Minneapolis, MN General Obligation Bonds, Series B 195,000 1.40%, 12/01/05, Weekly Reset* ........................ VMIG1/A-1 195,000 SPA: Bayerische Vereinsbank Minneapolis, MN General Obligation Bonds, Series B 515,000 1.40%, 12/01/07, Weekly Reset* ........................ VMIG1/A-1 515,000 SPA: Bayerische Vereinsbank Minneapolis, MN Sales Tax General Obligation Bonds $ 950,000 5.90%, 10/01/02 ....................................... Aa1/AAA $ 970,017 ------------- 13,485,017 ------------- MISSOURI (7.3%) ------------------------------------------------------- Kansas City, MO Industrial Development Authority Revenue Bonds, (Ewing Marion Kaufman Fund) 6,200,000 1.40%, 4/01/27, Daily Reset* .......................... NR/A-1+ 6,200,000 Kansas City, MO Industrial Development Authority Revenue Bonds, Series A 1,090,000 1.40%, 4/01/27, Daily Reset* .......................... NR/A-1+ 1,090,000 Missouri State, Health & Education Facilities Revenue Bonds (St. Louis University), Series A 200,000 1.45%, 10/01/09, Daily Reset* ......................... VMIG1/A-1+ 200,000 SPA: Bank of America N.A. Missouri State, Health & Education Facilities Revenue Bonds (St. Louis University), Series B 3,290,000 1.45%, 10/01/24, Daily Reset* ......................... VMIG1/A-1+ 3,290,000 SPA: Bank of America N.A. Missouri State, Health & Educational Facilities Revenue Bonds (Washington University), Series D 400,000 1.40%, 9/01/30 Daily Reset* ........................... VMIG1/A-1+ 400,000 ------------- SPA: JP Morgan 11,180,000 ------------- MONTANA (1.6%) ------------------------------------------------------- Montana State, Health Facilities Authority Revenue Bonds, Series A, 2,520,000 1.50%, 12/01/15, Weekly Reset* ........................ VMIG1/A-1+ 2,520,000 ------------- Insurance: Financial Guaranty Insurance Corporation SPA: Wells Fargo NEBRASKA (0.7%) ------------------------------------------------------- Douglas County, NE School District No. 17, General Obligation Bonds, 1,000,000 3.00%, 11/15/02 ....................................... Aaa/AAA 1,005,222 ------------- Insurance: Financial Security Assurance NEW JERSEY (0.5%) ------------------------------------------------------- New Jersey Economic Development Authority Revenue Bonds, School Facilities Construction, Series A 700,000 4.00%, 6/15/02 ........................................ Aa2/AA 701,990 ------------- NEW YORK (0.7%) ------------------------------------------------------- New York State, Revenue Anticipation Notes, Series A $ 1,000,000 3.00%, 4/12/02 ........................................ MIG1/SP-1+ $ 1,000,314 ------------- NORTH CAROLINA (2.9%) ------------------------------------------------------- Durham County, NC General Obligation Bonds (Public Improvement Project) 2,975,000 1.45%, 2/01/11, Weekly Reset* ......................... VMIG1/A-1 2,975,000 SPA: Wachovia Bank of North Carolina Durham County, NC General Obligation Bonds (Public Improvement Project) 1,475,000 1.45%, 2/01/13, Weekly Reset* ......................... VMIG1/A-1 1,475,000 SPA: Wachovia Bank of North Carolina ------------- 4,450,000 ------------- OHIO (0.7%) ------------------------------------------------------- Ohio State Building Authority, Adult Correction Facility Revenue Bonds, Series A 1,000,000 5.00%, 10/01/02 ....................................... Aa2/AA 1,015,737 ------------- OREGON (1.2%) ------------------------------------------------------- Oregon State, State Board Higher Education General Obligation Bonds, Series A 900,000 2.50%, 8/01/02 ........................................ Aa2/AA 901,781 Port Morrow, OR Pollution Control Revenue Bonds 1,000,000 6.38%, 4/01/08, Prerefunded 4/01/02 @ 100 Aaa/NR 1,000,000 ------------- 1,901,781 ------------- PENNSYLVANIA (0.7%) ------------------------------------------------------- Bethlehem, PA Water Authority Revenue Bonds Series A 1,100,000 6.10%, 11/15/21, Prerefunded 11/15/02 @ 100 ........... Aaa/AAA 1,130,619 Insurance: Municipal Bond Insurance Association ------------- TEXAS (7.3%) ------------------------------------------------------- Gulf Coast Waste Disposal Authority, TX Revenue Bonds, (Amoco Oil Co. Project) 3,000,000 1.60%, 7/01/27, Daily Reset* .......................... VMIG1/AA+ 3,000,000 Lower Neches Valley Authority, TX Pollution Control Revenue Bonds (Chevron U.S.A., Inc. Project) 1,500,000 1.35%, 2/15/17, Semi-Annual Reset* .................... P-1/A-1+ 1,500,000 Texas State, General Obligation Bonds, Series C $ 1,400,000 5.50%, 4/01/20, Prerefunded 4/01/02 @ 102 NR/AA $ 1,428,000 Texas State, Tax & Revenue Anticipation Notes, Series A 3,000,000 3.75%, 8/29/02 ........................................ MIG1/SP-1+ 3,015,643 West Side Calhoun County, TX Sewer & Solid Waste Disposal Revenue Bonds (BP Chemicals, Inc. Project) 2,200,000 1.60%, 4/01/31, Daily Reset* .......................... P-1/A-1+ 2,200,000 ------------- 11,143,643 ------------- UTAH (0.6%) ------------------------------------------------------- University of Utah, Auxiliary & Campus Facilities Revenue Bonds, Series A 1,000,000 1.45%, 4/01/27, Weekly Reset* ......................... VMIG1/A-1 1,000,000 SPA: Bank of Nova Scotia ------------- WASHINGTON (0.9%) ------------------------------------------------------- Seattle, WA Water System Revenue Bonds 1,000,000 1.34%, 9/01/25, Weekly Reset* ......................... VMIG1/A-1+ 1,000,000 Letter of Credit: Bayerische Landesbank Washington State Health Care Facility Authority Revenue Bonds (Fred Hutchinson Cancer Research Center), Series A 400,000 1.45%, 1/01/18, Daily Reset* .......................... VMIG1/NR 400,000 ------------- Letter of Credit: Morgan Guaranty Trust 1,400,000 ------------- WISCONSIN (0.6%) ------------------------------------------------------- Milwaukee, WI Metropolitan Sewer District General Obligation Bonds, Series A, ETM 950,000 6.70%, 10/01/02 ....................................... Aa1/NR 972,465 ------------- Total Municipal Bonds .............................. 152,487,343 ------------- Total Investments (Amortized Cost $152,487,343**) 99.8% 152,487,343 Other assets less liabilities ...................... 0.2 249,095 ------ ------------- Net Assets ......................................... 100.0% $ 152,736,438 ====== =============
(a) Cost for Federal tax purposes is identical. * Variable rate obligation payable at par on demand at any time on no more than seven days notice. ** Cost for Federal tax purposes is identical. AMBAC - American Municipal Bond Assurance Corp. ETM - Escrowed to Maturity SPA - Standby Bond Purchase Agreement See accompanying notes to financial statements. PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST STATEMENT OF INVESTMENTS MARCH 31, 2002
FACE AMOUNT U.S. GOVERNMENT AGENCIES (88.7%) VALUE - ------------ ------------------------------------------------------- ------------- FEDERAL FARM CREDIT BANK (3.9%) ------------------------------------------------------- $ 25,000,000 1.75%, 4/23/02 ........................................ $ 24,973,264 5,000,000 6.18%, 8/05/02 ........................................ 5,074,078 ------------- 30,047,342 FEDERAL HOME LOAN BANK (75.0%) ------------------------------------------------------- 190,000,000 1.61%, 4/01/02 ........................................ 190,000,000 25,000,000 2.04%, 4/05/02 ........................................ 24,994,334 25,000,000 1.74%, 4/10/02 ........................................ 24,989,125 65,000,000 1.69%, 4/19/02 ........................................ 64,945,075 50,000,000 1.76%, 5/03/02 ........................................ 49,921,778 25,000,000 1.73%, 5/10/02 ........................................ 24,953,281 25,000,000 1.75%, 5/15/02 ........................................ 24,946,528 40,000,000 1.74%, 5/22/02 ........................................ 39,901,400 20,000,000 1.79%, 5/24/02 ........................................ 19,947,294 12,000,000 1.79%, 6/05/02 ........................................ 11,961,217 40,000,000 1.82%, 6/07/02 ........................................ 39,864,511 29,000,000 1.83%, 6/14/02 ........................................ 28,890,912 25,000,000 1.85%, 8/21/02 ........................................ 24,817,569 2,000,000 2.45%, 12/17/02 ....................................... 1,999,866 ------------- 572,132,890 ------------- STUDENT LOAN MARKETING ASSOCIATION (9.8%) ------------------------------------------------------- 45,000,000 1.75%, 10/25/01 ....................................... 44,801,064 20,000,000 2.00%, 9/18/02 ........................................ 19,811,111 10,000,000 2.11%, 12/18/02 ....................................... 9,847,025 ------------- 74,459,200 ------------- Total U.S. Government Agencies .................... 676,639,432 ------------- U.S. TREASURY BILLS (11.1%) ------------------------------------------------------- 85,000,000 1.71%, 4/25/02 ........................................ 84,903,100 ------------- INVESTMENT COMPANY (0.3%) ------------------------------------------------------- 2,708,675 One Group Government Money Market Fund (I Shares) 2,708,675 ------------- Total Investments (amortized cost $764,251,207*). 100.1% 764,251,207 Other assets less liabilities ................... (0.1) (1,046,655) ------ ------------- Net Assets ...................................... 100.0% $ 763,204,552 ====== =============
(*) Cost for Federal tax purposes is identical. See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF ASSETS AND LIABILITIES MARCH 31, 2002
CASH TAX-FREE GOVERNMENT FUND FUND FUND ------------ ------------- ------------ ASSETS: Investments at value (cost $383,373,053, $152,487,343 and $764,251,207, respectively) ..................................................... $383,373,053 $ 152,487,343 $764,251,207 Repurchase agreements (cost $115,000,000) ............................ 115,000,000 -- -- Cash ................................................................. -- 6,326 -- Interest receivable .................................................. 1,374,917 807,039 71,615 Other assets ......................................................... 7,145 370 240 ------------ ------------- ------------ Total Assets ...................................................... 499,755,115 153,301,078 764,323,062 ------------ ------------- ------------ LIABILITIES: Dividends payable .................................................... 521,019 125,134 764,519 Payable for investment securities purchased .......................... -- 340,524 -- Adviser and Administrator fees payable ............................... 193,865 50,049 234,250 Distribution fees payable ............................................ 33,360 11,157 87,923 Accrued expenses ..................................................... 76,627 37,776 31,818 ------------ ------------- ------------ Total Liabilities ................................................. 824,871 564,640 1,118,510 ------------ ------------- ------------ NET ASSETS ........................................................... $498,930,244 $ 152,736,438 $763,204,552 ============ ============= ============ NET ASSETS CONSIST OF: Capital Stock - Authorized an unlimited number of shares, par value $ 01 per share .......................................... $ 4,989,243 $ 1,527,349 $ 7,631,368 Additional paid-in capital ........................................... 493,934,850 151,360,309 755,505,557 Undistributed (overdistributed) net investment income ................ 6,151 (151,220) 67,627 ------------ ------------- ------------ $498,930,244 $ 152,736,438 $763,204,552 ============ ============= ============ SHARES OF BENEFICIAL INTEREST: Original Shares Class: Net Assets ........................................................ $353,305,281 $ 100,399,543 $306,023,836 ============ ============= ============ Shares outstanding ................................................ 353,529,417 100,398,474 305,994,984 ============ ============= ============ Net asset value per share ......................................... $1.00 $1.00 $1.00 ============ ============= ============ Service Shares Class: Net Assets ........................................................ $145,624,963 $ 52,336,895 $457,180,716 ============ ============= ============ Shares outstanding ................................................ 145,394,904 52,336,421 457,141,802 ============ ============= ============ Net asset value per share ......................................... $1.00 $1.00 $1.00 ============ ============= ============
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2002
CASH TAX-FREE GOVERNMENT FUND FUND FUND ------------ ----------- ------------ INVESTMENT INCOME: Interest income ........................................................ $ 16,656,823 $ 3,808,141 $ 19,944,638 ------------ ----------- ------------ EXPENSES: Investment Adviser fees (note 3) ....................................... 1,970,559 447,878 2,137,852 Administrator fees (note 3) ............................................ 698,692 164,093 497,118 Distribution fees (note 3) ............................................. 460,945 154,592 1,018,568 Trustees' fees and expenses ............................................ 129,512 49,737 108,292 Legal fees ............................................................. 65,627 19,694 68,416 Shareholders' reports .................................................. 48,926 8,060 22,860 Transfer and shareholder servicing agent fees .......................... 30,785 22,846 24,285 Fund accounting fees ................................................... 30,013 30,293 30,030 Insurance .............................................................. 27,467 8,207 30,104 Audit and accounting fees .............................................. 25,332 19,262 20,500 Custodian fees ......................................................... 23,127 6,781 11,522 Registration fees and dues ............................................. 15,794 3,743 11,004 Miscellaneous .......................................................... 12,411 6,439 35,167 ------------ ----------- ------------ Total expenses ......................................................... 3,539,190 941,625 4,015,718 Expenses paid indirectly (note 6) ...................................... (13,169) -- (8,130) ------------ ----------- ------------ Net expenses ........................................................... 3,526,021 941,625 4,007,588 ------------ ----------- ------------ Net investment income ..................................................... 13,130,802 2,866,516 15,937,050 Net realized gain from securities transactions ............................ 197,334 45 52,048 ------------ ----------- ------------ Net increase in net assets resulting from operations ...................... $ 13,328,136 $ 2,866,561 $ 15,989,098 ============ =========== ============
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF CHANGES IN NET ASSETS
CASH FUND TAX-FREE FUND ----------------------------------- -------------------------------- Year Year Year Year Ended Ended Ended Ended March 31, 2002 March 31, 2001 March 31, 2002 March 31, 2001 --------------- --------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income ............... $ 13,130,802 $ 34,889,237 $ 2,866,516 $ 4,676,177 Net realized gain (loss) from securities transactions ..... 197,334 180,534 45 9 --------------- --------------- ------------- ------------- Change in net assets resulting from operations ........ 13,328,136 35,069,771 2,866,561 4,676,186 --------------- --------------- ------------- ------------- DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Original Shares .................. (8,757,054) (23,573,272) (1,770,699) (3,045,910) Service Shares ................... (4,373,748) (11,315,968) (1,096,414) (1,630,270) --------------- --------------- ------------- ------------- Total dividends to shareholders from net investment income ....... (13,130,802) (34,889,240) (2,867,113) (4,676,180) --------------- --------------- ------------- ------------- CAPITAL SHARE TRANSACTIONS (at $1.00 per share): Proceeds from shares sold: Original Shares .................. 1,025,896,565 1,189,421,376 161,763,873 220,494,187 Service Shares ................... 332,753,074 551,244,651 76,642,314 78,052,725 --------------- --------------- ------------- ------------- 1,358,649,639 1,740,666,027 238,406,187 298,546,912 --------------- --------------- ------------- ------------- Reinvested dividends and distributions: Original Shares .................. 212,513 440,228 90,335 102,162 Service Shares ................... 5,057,859 11,262,288 1,178,090 1,643,226 --------------- --------------- ------------- ------------- 5,270,372 11,702,516 1,268,425 1,745,388 --------------- --------------- ------------- ------------- Cost of shares redeemed: Original Shares .................. (1,037,201,135) (1,338,658,170) (162,477,738) (219,993,644) Service Shares ................... (413,350,343) (515,858,167) (79,912,782) (75,961,888) --------------- --------------- ------------- ------------- (1,450,551,478) (1,854,516,337) (242,390,520) (295,955,532) --------------- --------------- ------------- ------------- Change in net assets from capital share transactions .. (86,631,467) (102,147,794) (2,715,908) 4,336,768 --------------- --------------- ------------- ------------- Total change in net assets ........... (86,434,133) (101,967,263) (2,716,460) 4,336,774 NET ASSETS: Beginning of period .............. 585,364,377 687,331,640 155,452,898 151,116,124 --------------- --------------- ------------- ------------- End of period .................... $ 498,930,244 $ 585,364,377 $ 152,736,438 $ 155,452,898 =============== =============== ============= =============
GOVERNMENT FUND ----------------------------------- Year Year Ended Ended March 31, 2002 March 31, 2001 --------------- --------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income ............... $ 15,937,050 $ 27,177,574 Net realized gain (loss) from securities transactions ..... 52,048 (1,298) --------------- --------------- Change in net assets resulting from operations ........ 15,989,098 27,176,276 --------------- --------------- DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Original Shares .................. (6,207,800) (8,495,952) Service Shares ................... (9,729,265) (18,681,612) --------------- --------------- Total dividends to shareholders from net investment income ....... (15,937,065) (27,177,564) --------------- --------------- CAPITAL SHARE TRANSACTIONS (at $1.00 per share): Proceeds from shares sold: Original Shares .................. 1,230,686,679 485,087,392 Service Shares ................... 1,436,227,115 1,309,461,793 --------------- --------------- 2,666,913,794 1,794,549,185 --------------- --------------- Reinvested dividends and distributions: Original Shares .................. 113,295 121,323 Service Shares ................... 10,785,899 18,404,173 --------------- --------------- 10,899,194 18,525,496 --------------- --------------- Cost of shares redeemed: Original Shares .................. (1,075,823,438) (499,868,675) Service Shares ................... (1,321,495,959) (1,289,539,902) --------------- --------------- (2,397,319,397) (1,789,408,577) --------------- --------------- Change in net assets from capital share transactions .. 280,493,591 23,666,104 --------------- --------------- Total change in net assets ........... 280,545,624 23,664,816 NET ASSETS: Beginning of period .............. 482,658,928 458,994,112 --------------- --------------- End of period .................... $ 763,204,552 $ 482,658,928 =============== ===============
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST NOTES TO FINANCIAL STATEMENTS 1. ORGANIZATION Cash Assets Trust (the "Trust") was organized on May 7, 1984 as a Massachusetts business trust and is registered under the Investment Company Act of 1940 (the "1940 Act") as an open-end investment company. The Trust consists of the following three investment portfolios (referred to individually as a "Fund" and collectively as the "Funds"): Pacific Capital Cash Assets Trust (a diversified portfolio which commenced operations on December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust (a non-diversified portfolio which commenced operations on April 4, 1989), and Pacific Capital U.S. Government Securities Cash Assets Trust (a diversified portfolio which commenced operations on April 4, 1989). The Trust is authorized to issue for each Fund an unlimited number of shares of $.01 par value in two classes of shares; the Original Shares Class and the Service Shares Class. The Original Shares Class includes all currently outstanding shares of each Fund that were issued prior to January 20, 1995, the date on which the Capital structure was changed to include two classes rather than one. The two classes of shares are substantially identical, except that Service Shares bear the fees that are payable under the Trust's Distribution Plan. 2. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America for investment companies. a) PORTFOLIO VALUATION: Each Fund's portfolio securities are valued by the amortized cost method permitted in accordance with Rule 2a-7 under the 1940 Act, which, after considering accrued interest thereon, approximates market. Under this method, a portfolio security is valued at cost adjusted for amortization of premiums and accretion of discounts. Amortization of premiums and accretion of discounts are included in interest income. b) SECURITIES TRANSACTIONS AND RELATED INVESTMENT INCOME: Securities transactions are recorded on the trade date. Realized gains and losses from securities transactions are reported on the identified cost basis. Interest income is recorded daily on the accrual basis and is adjusted for amortization of premiums and accretion of discounts as discussed in the preceding paragraph. c) DETERMINATION OF NET ASSET VALUE AND CALCULATION OF EXPENSES: The net asset value per share for each class of the Funds' shares is determined as of 4:00 p.m. New York time on each day that the New York Stock Exchange and the custodian are open by dividing the value of the assets of the Fund allocable to that class less Fund liabilities allocable to the class and any liabilities charged directly to the class, exclusive of surplus, by the total number of shares of the class outstanding. Investment income, realized and unrealized gains and losses, if any, and expenses other than class specific expenses, are allocated daily to each class of shares based upon the proportion of net assets of each class. Class specific expenses are borne by the affected class. Service fee payments under Rule 12b-1 are borne solely by and charged to the Service Shares based on net assets of that class. d) FEDERAL INCOME TAXES: It is the policy of each Fund to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code applicable to certain investment companies. Each Fund intends to make distributions of income and securities profits sufficient to relieve it from all, or substantially all, Federal income and excise taxes. e) REPURCHASE AGREEMENTS: It is each Fund's policy to monitor closely the creditworthiness of all firms with which it enters into repurchase agreements, and to take possession of, or otherwise perfect its security interest in, securities purchased under agreements to resell. The securities purchased under agreements to resell are marked to market every business day in order to compare the value of the collateral to the amount of the "loan" (repurchase agreements being defined as "loans" in the 1940 Act), including the accrued interest earned thereon. If the value of the collateral is less than 102% of the loan plus the accrued interest thereon, additional collateral is required from the borrower. f) USE OF ESTIMATES: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. 3. FEES AND RELATED PARTY TRANSACTIONS a) MANAGEMENT ARRANGEMENTS: Asset Management Group of Bank of Hawaii (formerly Pacific Century Trust) (the "Adviser"), serves as Investment Adviser to the Trust. In this role, under Investment Advisory Agreements, the Adviser supervises the Funds' investments and provides various services. The Funds also have Administration Agreements with Aquila Management Corporation (the "Administrator") to provide all administrative services to the Funds other than those relating to the investment portfolio and the maintenance of the accounting books and records. Specific details as to the nature and extent of the services provided by the Adviser and the Administrator are more fully defined in the Prospectus and Statement of Additional Information of the Funds. For their services, the Adviser and the Administrator each receive a fee which is payable monthly and computed as of the close of business each day on the net assets of each Fund at the following annual rates: Pacific Capital Cash Assets Trust - On net assets up to $325 million, the fee is paid to the Adviser and the Administrator at the annual rate of 0.33% and 0.17%, respectively, and on net assets above that amount at the annual rate of 0.43% and 0.07%, respectively. Pacific Capital Tax-Free Cash Assets Trust - On net assets up to $95 million, the fee is paid to the Adviser and the Administrator at the annual rate of 0.27% and 0.13%, respectively, and on net assets above that amount at the annual rate of 0.33% and 0.07%, respectively. Pacific Capital U.S. Government Securities Cash Assets Trust - On net assets up to $60 million, the fee is paid to the Adviser and the Administrator at the annual rate of 0.27% and 0.13%, respectively, and on net assets above that amount at the annual rate of 0.33% and 0.07%, respectively. The Adviser and the Administrator each agrees that the above fees shall be reduced, but not below zero, by an amount equal to its proportionate share (determined on the basis of the respective fees computed as described above) of the amount, if any, by which the total expenses of a Fund in any fiscal year, exclusive of taxes, interest and brokerage fees, shall exceed the lesser of (i) 2.5% of the first $30 million of average annual net assets of the Fund plus 2% of the next $70 million of such assets and 1.5% of its average annual net assets in excess of $100 million, or (ii) 25% of the Fund's total annual investment income. The payment of the above fees at the end of any month will be reduced or postponed so that at no time will there be any accrued but unpaid liability under this expense limitation. No such reduction in fees was required during the year ended March 31, 2002. b) DISTRIBUTION AND SERVICE FEES: Each Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act. A part of the Plan authorizes payment of certain distribution or service fees by the Service Shares Class of the Fund. Such payments are made to "Designated Payees"- broker-dealers, other financial institutions and service providers who have entered into appropriate agreements with the Distributor and which have rendered assistance in the distribution and/or retention of the Funds' Service Shares or in the servicing of Service Share accounts. The total payments under this part of a Fund's Plan may not exceed 0.25% of its average annual assets represented by Service Shares. No such payments will be made by the Original Share Class. Specific details about each Plan are more fully defined in the Prospectus and Statement of Additional Information of the Funds. Under a Distribution Agreement, Aquila Distributors, Inc. (the "Distributor") serves as the exclusive distributor of the Funds' shares. No compensation or fees are paid to the Distributor for such share distribution. c) OTHER RELATED PARTY TRANSACTIONS: For the year ended March 31, 2002, the following amounts were accrued for legal fees: Cash Fund $65,627; Tax-Free Fund $19,694; Government Fund $68,416. Of these amounts, $63,214, $19,052 and $66,125, respectively, were allocable to Hollyer Brady Smith & Hines LLP, counsel to the Fund, for legal services in conjunction with the Fund's ongoing operations. The Secretary of the Fund is a Partner of Hollyer Brady Smith & Hines LLP. 4. DISTRIBUTIONS The Funds declare dividends daily from net investment income and make payments monthly in additional shares at the net asset value per share, in cash, or a combination of both, at the shareholder's option. 5. GUARANTEES OF CERTAIN COMMERCIAL PAPER Various banks and other institutions have issued irrevocable letters of credit or guarantees for the benefit of the holders of certain commercial paper. Payment at maturity of principal and interest of certain commercial paper held by the Funds is supported by such letters of credit or guarantees. 6. EXPENSES The Funds have negotiated an expense offset arrangement with their custodian, wherein they receive credit toward the reduction of custodian fees and other expenses whenever there are uninvested cash balances. The Statements of Operations reflect the total expenses before any offset, the amount of offset and the net expenses. It is the general intention of the Funds to invest, to the extent practicable, some or all of cash balances in income-producing assets rather than leave cash on deposit. 7. PORTFOLIO ORIENTATION Since the Pacific Capital Tax-Free Cash Assets Trust has a significant portion of its investments in obligations of issuers within Hawaii, it is subject to possible risks associated with economic, political, or legal developments or industrial or regional matters specifically affecting Hawaii and whatever effects these may have upon Hawaii issuers ability to meet their obligations. PACIFIC CAPITAL CASH ASSETS TRUST FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD - ----------------------------------------------
ORIGINAL SHARES SERVICE SHARES --------------------------------------- ---------------------------------------- Year Ended March 31, Year Ended March 31, --------------------------------------- ---------------------------------------- 2002 2001 2000 1999 1998 2002 2001 2000 1999 1998 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net asset value, beginning of period ....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Income from investment operations: Net investment income ................... 0.03 0.06 0.05 0.05 0.05 0.02 0.05 0.05 0.05 0.05 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Less distributions: Dividends from net investment income .... (0.03) (0.06) (0.05) (0.05) (0.05) (0.02) (0.05) (0.05) (0.05) (0.05) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net asset value, end of period ............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== ===== ===== ===== ===== Total return ............................... 2.52% 5.90% 4.89% 4.90% 5.15% 2.27% 5.63% 4.63% 4.64% 4.88% Ratios/supplemental data Net assets, end of period (in millions) . $353 $364 $513 $418 $419 $146 $221 $174 $163 $113 Ratio of expenses to average net assets . 0.58% 0.57% 0.56% 0.57% 0.58% 0.83% 0.82% 0.81% 0.81% 0.83% Ratio of net investment income to average net assets ................... 2.51% 5.77% 4.80% 4.79% 5.03% 2.36% 5.49% 4.53% 4.51% 4.77% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets . 0.57% 0.57% 0.56% 0.56% 0.57% 0.82% 0.82% 0.81% 0.81% 0.82%
See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD - ----------------------------------------------
ORIGINAL SHARES SERVICE SHARES --------------------------------------- ------------------------------------- Year Ended March 31, Year Ended March 31, --------------------------------------- ------------------------------------- 2002 2001 2000 1999 1998 2002 2001 2000 1999 1998 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net asset value, beginning of period ............ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Income from investment operations: Net investment income ........................ 0.02 0.04 0.03 0.03 0.03 0.02 0.03 0.03 0.03 0.03 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Less distributions: Dividends from net investment income ......... (0.02) (0.04) (0.03) (0.03) (0.03) (0.02) (0.03) (0.03) (0.03) (0.03) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net asset value, end of period .................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== ===== ===== ===== ===== Total return .................................... 2.00% 3.58% 2.95% 2.91% 3.08% 1.75% 3.32% 2.70% 2.65% 2.83% Ratios/supplemental data Net assets, end of period (in millions) ...... $100 $101 $100 $83 $77 $52 $54 $51 $48 $37 Ratio of expenses to average net assets ..... 0.51% 0.53% 0.52% 0.54% 0.63% 0.77% 0.78% 0.77% 0.79% 0.88% Ratio of net investment income to average net assets ..................................... 1.94% 3.50% 2.93% 2.85% 3.04% 1.77% 3.26% 2.66% 2.64% 2.79% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ...... 0.51% 0.53% 0.52% 0.53% 0.63% 0.77% 0.78% 0.77% 0.78% 0.88%
See accompanying notes to financial statements. PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD - ----------------------------------------------
ORIGINAL SHARES SERVICE SHARES --------------------------------------- ------------------------------------- Year Ended March 31, Year Ended March 31, --------------------------------------- ------------------------------------- 2002 2001 2000 1999 1998 2002 2001 2000 1999 1998 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net asset value, beginning of period ............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Income from investment operations: Net investment income ......................... 0.03 0.06 0.05 0.04 0.05 0.02 0.05 0.04 0.04 0.05 ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Less distributions: Dividends from net investment income .......... (0.03) (0.06) (0.05) (0.04) (0.05) (0.02) (0.05) (0.04) (0.04) (0.05) ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- Net asset value, end of period ................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 ===== ===== ===== ===== ===== ===== ===== ===== ===== ===== Total return ..................................... 2.73% 5.88% 4.83% 4.80% 4.95% 2.48% 5.62% 4.56% 4.54% 4.69% Ratios/supplemental data Net assets, end of period (in millions) ....... $306 $151 $166 $140 $101 $457 $332 $293 $214 $150 Ratio of expenses to average net assets ....... 0.45% 0.47% 0.49% 0.49% 0.52% 0.70% 0.72% 0.74% 0.74% 0.77% Ratio of net investment income to average net assets ...................................... 2.47% 5.73% 4.73% 4.70% 4.85% 2.39% 5.47% 4.50% 4.42% 4.60% The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ....... 0.45% 0.47% 0.49% 0.49% 0.52% 0.70% 0.72% 0.74% 0.74% 0.77%
See accompanying notes to financial statements. ADDITIONAL INFORMATION (UNAUDITED) TRUSTEES(1) AND OFFICERS
NUMBER OF POSITIONS PORTFOLIOS HELD WITH IN FUND NAME, TRUST AND PRINCIPAL COMPLEX OTHER ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN DIRECTORSHIPS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE - ----------------- ---------- ------------------- ---------- --------------- INTERESTED TRUSTEES(4) Lacy B. Herrmann Chairman of the Founder and Chairman of the Board, Aquila 14 Director or trustee, OCC New York, NY Board of Trustees Management Corporation, the sponsoring Cash Reserves, Inc., OCC (05/12/29) since 1984 organization and Manager or Administrator Accumulation Trust, and/or Adviser or Sub-Adviser to each fund Oppenheimer Quest in the Aquilasm Group of Funds(5) and Value Funds Group, Founder, Chairman of the Board of Trustees Oppenheimer Small Cap and (currently or until 1998) President of Value Fund,Oppenheimer each since its establishment, beginning in Midcap Fund, and 1984; Director, Aquila Distributors, Inc., Oppenheimer Rochester distributor of the above funds, since 1981 Group of Funds. and formerly Vice President or Secretary, 1981-1998; President and a Director, STCM Management Company, Inc., sponsor and investment adviser to Capital Cash Management Trust and Capital Cash U.S. Government Securities Trust; Trustee Emeritus, Brown University and active in university, school and charitable organizations. Douglas Philpotts Trustee since 1992 Retired; formerly Director, Chairman of 4 Director, Victoria Ward, Honolulu, HI the Board and President of Hawaiian Trust Limited; Trustee, Pacific (11/21/31) Company, Limited; present or former Capital Funds, which director of various Hawaii-based civic and includes 8 bond and charitable organizations. stock funds. NON-INTERESTED TRUSTEES William M. Cole Trustee since 1984 President, Cole International, Inc., 4 None Westfield, NJ financial and shipping consultants, since (05/21/31) 1974; Chairman, Cole Group, a financial consulting and real estate firm. Thomas W. Courtney Trustee since 1984 President, Courtney Associates, Inc., a 5 Director or trustee, OCC Sewickley, PA venture capital firm, since 1988. Cash Reserves, Inc., OCC (08/17/33) Accumulation Trust, Oppenheimer Quest Value Funds Group, Oppenheimer Small Cap Value Fund, Oppenheimer Midcap Fund, and Oppenheimer Rochester Group of Funds. Richard W. Gushman, II Trustee since 1993 President and Chief Executive Officer, 4 Trustee, Pacific Capital Honolulu, HI OKOA, Inc., a diversified Hawaii-based Funds, which includes 8 (02/28/46) real estate organization with activities bond and stock funds; in the western U.S. and the Pacific Basin, director, Outrigger Hotels since 1972; Managing Partner of Summit since 2000; director, Financial Resources, a Salt Lake City, Servco Pacific, Inc. and Utah-based financial services company; Oceanic Time-Warner since trustee, the Estate of James Campbell 1998; director, American since 2000 and Chairman of the Board of Savings Bank since 2002. Trustees since 2002; trustee, University of Hawaii Foundation and Hawaii Pacific University since 1997; director, United Way of America since 1998; board member of the Boys & Girls Club of Honolulu, Aloha United Way, and other charitable and civic organizations. Stanley W. Hong Trustee since 1993 Vice President, Hawaii Area, Waste 4 Trustee, Pacific Capital Honolulu, HI Management, Inc. since 2002; trustee, The Funds, which includes (04/05/36) King William Charles Lunalilo Trust Estate 8 bond and stock since 2001; President and Chief Executive funds; director, Central Officer, The Chamber of Commerce of Pacific Bank. Hawaii, 1996-2001; business consultant since 1994; director, Hawaii Public Television Foundation since 1998; Regent, Chaminade University of Honolulu and director of several community organizations. Theodore T. Mason Trustee since 1984 Executive Director, East Wind Power 7 Trustee, OCC Cash New York, NY Partners LTD since 1994 and Louisiana Reserves, Inc. and OCC (11/24/35) Power Partners, LLC since 1999; President, Accumulation Trust. Alumni Association of SUNY Maritime College since 2002 (First Vice President, 2000-2001, Second Vice President, 1998-2000) and Director of the same organization since 1997; Director, STCM Management Company, Inc., since 1973; twice national officer of Naval Reserve Association, Commanding Officer of four naval reserve units and Captain, USNR (Ret); director, The Navy League of the United States New York Council since 2002; trustee, The Maritime Industry Museum at Fort Schuyler and the Maritime College at Fort Schuyler Foundation, Inc. since 2000. Russell K. Okata Trustee since 1993 Executive Director, Hawaii Government 4 Trustee, Pacific Capital Honolulu, HI Employees Association AFSCME Local 152, Funds, which includes 8 (03/22/44) AFL-CIO since 1970; International Vice bond and stock funds; President, American Federation of State, Chairman, Royal State County and Municipal Employees, AFL-CIO Insurance Group. since 1981; director of various civic and charitable organizations. Oswald K. Stender Trustee since 1993 Director, Hawaiian Electric Industries, 4 Trustee, Pacific Capital Honolulu, HI Inc., a public utility holding company, Funds, which includes 8 (10/08/31) since 1993; Trustee, the Bernice Pauahi bond and stock funds. Bishop Estate 1990-1999; Trustee, Office of Hawaiian Affairs and a member or trustee of several community organizations. OFFICERS Diana P. Herrmann President President and Chief Operating Officer of 9 None New York, NY since 1998 the Manager since 1997, a Director since (02/25/58) 1984, Secretary since 1986 and previously its Executive Vice President, Senior Vice President or Vice President, 1986-1997; President, Senior Vice President or Executive Vice President of the Aquilasm Group of Funds since 1986; Director of the Distributor since 1997; trustee, Reserve Money-Market Funds, 1999-2000 and Reserve Private Equity Series, 1998-2000; active in mutual fund and trade organizations and in charitable and volunteer organizations. Charles E. Childs III Senior Vice Senior Vice President, corporate N/A N/A New York, NY President since development, formerly Vice President, (04/01/57) 1988 Assistant Vice President and Associate of the Manager/Administrator since 1987; Senior Vice President, Vice President or Assistant Vice President of the Money-Market Funds since 1988. Sherri Foster Vice President Senior Vice President, Hawaiian Tax-Free N/A N/A Lahaina, HI since 1997 Trust since 1993; Vice President or (07/27/50) Assistant Vice President of four Aquila Cash and Equity Funds; Registered Representative of the Distributor since 1985. John M. Herndon Vice President Assistant Secretary of the Aquilasm Group N/A N/A New York, NY since 1990 and of Funds since 1995 and Vice President of (12/17/39) Assistant Secretary the five Aquila Money-Market Funds since since 1995 1990; Vice President of the Manager since 1990. Rose F. Marotta Chief Financial Chief Financial Officer of the Aquilasm N/A N/A New York, NY Officer since Group of Funds since 1991 and Treasurer, 05/08/24) 1991 1981-1991; Treasurer and Director, STCM Management Company, Inc., since 1974; Treasurer of the Manager since 1984 and of the Distributor, 1985-2000. Joseph P. DiMaggio Treasurer since Treasurer of the Aquilasm Group of Funds N/A N/A New York, NY 2000 and the Distributor since 2000; (11/06/56) Controller, Van Eck Global Funds, 1993-2000. Edward M. W. Hines Secretary since Partner, Hollyer Brady Smith & Hines LLP, N/A N/A New York, NY 1984 legal counsel to the Trust, since 1989; (12/16/39) Secretary of the Aquilasm Group of Funds. Robert W. Anderson Assistant Secretary Compliance Officer of the Manager since N/A N/A New York, NY since 2000 1998 and Assistant Secretary of the (08/23/40) Aquilasm Group of Funds since 2000; Consultant, The Wadsworth Group, 1995-1998. Lori A. Vindigni Assistant Treasurer Assistant Treasurer of the Aquilasm Group N/A N/A New York, NY since 2000 of Funds since 2000; Assistant Vice (11/02/66) President of the Manager since 1998; Fund Accountant for the Aquilasm Group of Funds, 1995-1998.
- ---------- (1) The Trust's Statement of Additional Information includes additional information about the Trustees and is available, without charge, upon request by calling 800-437-1020 (toll free). (2) The mailing address of each Trustee and officer is c/o Pacific Capital Funds of Cash Assets Trust, 380 Madison Avenue, New York, NY 10017 (3) Each Trustee holds office until the next annual meeting of shareholders or until his successor is elected and qualifies. The term of office of each officer is one year. (4) Mr. Herrmann is an interested person of the Trust as that term is defined in the Investment Company Act of 1940 (the "1940 Act") as an officer of the Trust and a director, officer and shareholder of the Distributor. Mr. Philpotts is an interested person of the Trust, as that term is so defined, as a shareholder of the Adviser's corporate parent. (5) In this material Pacific Capital Cash Assets Trust, Pacific Capital U.S. Government Securities Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust, Capital Cash Management Trust and Capital Cash U.S. Government Securities Trust, each of which is a money-market fund, are called the "Aquila Money-Market Funds"; Hawaiian Tax-Free Trust, Tax-Free Trust of Arizona, Tax-Free Trust of Oregon, Tax-Free Fund of Colorado, Churchill Tax-Free Fund of Kentucky, Narragansett Insured Tax-Free Income Fund and Tax-Free Fund For Utah, each of which is a tax-free municipal bond fund, are called the "Aquila Bond Funds"; and Aquila Cascadia Equity Fund and Aquila Rocky Mountain Equity Fund are called the "Aquila Equity Funds"; considered together, these 14 funds are called the "Aquilasm Group of Funds." In this material, the Asset Management Group of Bank of Hawaii, investment adviser to the Trust, is called the "Adviser"; Aquila Management Corporation, the Administrator of the Trust, is called the "Manager" and Aquila Distributors, Inc., the Distributor of the Trust, is called the "Distributor." FEDERAL TAX STATUS OF DISTRIBUTIONS (UNAUDITED) This information is presented in order to comply with a requirement of the Internal Revenue Code AND NO CURRENT ACTION ON THE PART OF SHAREHOLDERS IS REQUIRED. For the fiscal year ended March 31, 2002, the Federal tax status of the total amount of dividends paid by each of the investment portfolios comprising Cash Assets Trust is as follows: FUND FEDERAL TAX STATUS - ------------------------------------------- ------------------------ Pacific Capital Cash Assets Trust Ordinary dividend income Pacific Capital Tax-Free Cash Assets Trust * Pacific Capital U.S. Government Securities Cash Assets Trust Ordinary dividend income Prior to January 31, 2002, shareholders were mailed IRS Form 1099-DIV which contained information on the status of distributions paid for the 2001 CALENDAR YEAR. * Substantially all dividends paid by this Fund constitutes exempt interest dividends. -----END PRIVACY-ENHANCED MESSAGE-----