-----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, MoEobTYt47jcVBL6Kb2l2ObWrKNH+jeQ425egaMsBMjLsWlzIPibz4P/o7Wt9ykA Cjg45jjtamm+AlNa2xSNog== 0000749748-03-000007.txt : 20030723 0000749748-03-000007.hdr.sgml : 20030723 20030602162725 ACCESSION NUMBER: 0000749748-03-000007 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20030331 FILED AS OF DATE: 20030602 EFFECTIVENESS DATE: 20030602 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: 03728337 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 cats2003anl.txt CASH ASSETS TRUST 3/31/2003 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. 1111 Polaris Parkway * Columbus, Ohio 43240 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, 2003 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 19, 2003 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, 2003. 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 of the three portfolios were specifically created to meet the short-term investment needs of Hawaii Investors and others. Weak economic growth, accommodative short-term interest rates and geopolitical tensions characterized the financial conditions in the U.S during the recent report period. The U.S. economy limped through 2002 as weak corporate spending, rising oil prices and the geopolitical crises surrounding both Iraq and North Korea brought renewed signs that the fragile economy might falter further. Many businesses postponed new capital investments and reduced staff as the geopolitical tensions continued to escalate. Rising oil prices, which act much like a tax increase, also hampered business activity. The slowdown in business investment and a weakening economy helped push unemployment to its highest level since 1994, at 6% in November and December. As unemployment increased, consumer confidence fell to the lowest levels in nearly a decade. In November 2002, the Federal Reserve (the "Fed") responded to the signs of economic trouble with a 0.50% reduction in short-term interest rates, bringing its target for the Federal Funds rate to 1.25% - the lowest level in 40 years. Consumers took advantage of low interest rates as loan refinancing increased providing extra money to consumers. Real estate remained a particular area of strength as housing starts kept rising and mortgage rates stayed low. Looking ahead, we are optimistic that the economy will continue to expand, although at a reduced rate, and will avoid falling back into a recession. Additionally, we expect that the level of inflation should remain moderate as surplus capacity and productivity gains continue to suppress prices. As we have often mentioned, yields on money market funds move in concert with short-term interest rate policy pursued by the Fed. As the Fed once again lowered its target for short-term interest rates, the yield to investors in each of the Trust's investment portfolios has fallen. Notwithstanding the fact that short-term interest rates are at historical low rates, each of the Trust's portfolios have consistently provided a return for investors' cash reserves that has been highly competitive under the declining interest rate conditions while continuing to provide investors with daily liquidity. The Trust's Investment Adviser, the Asset Management Group of Bank of Hawaii, continuous to act with a high level of prudence in examining the creditworthiness and marketability of issuers of securities utilized in each of the Trust's investment portfolios. Investors in the Trust can take comfort in knowing that those securities in each portfolio are chosen on the basis of possessing high quality and minimal credit risk. This is to ensure maximum safety for investors' cash reserves. Your use of The Pacific Capital Funds of Cash Assets Trust is greatly appreciated. You can be assured that every effort will be expended by all associated with the Trust to merit your continued confidence. Sincerely, /s/ Diana P. Herrmann /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 this information to another fund of the Aquila(SM) Group of Funds or its distributor, or to the broker-dealer that holds your fund shares, under agreements that permit them to use the information only to provide you information about your fund, other funds in the Aquila(SM) Group of Funds or new services we are offering which may be of interest to you. Any other use is strictly prohibited. We do not sell information about you or any of our fund shareholders to anyone. 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 Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust, and Pacific Capital U.S. Government Securities Cash Assets Trust), including the statements of investments, as of March 31, 2003, 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, 2003, by correspondence with the custodian. 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, 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. /s/ KPMG LLP - ------------ New York, New York May 14, 2003 PACIFIC CAPITAL CASH ASSETS TRUST STATEMENT OF INVESTMENTS MARCH 31, 2003
FACE AMOUNT COMMERCIAL PAPER (37.1%) VALUE - --------------- ------------------------------------------------------------------------ ------------ BANKS (11.3%) ------------------------------------------------------------------------ $ 20,000,000 Bank of America Corp., 1.27%, 5/20/03, LOC: AES Shady Point LLC ........ $ 19,965,428 20,000,000 Citicorp, 1.19%, 4/23/03 ............................................... 19,985,455 15,000,000 Society Generale N.A., Inc., 1.25%, 5/05/03 ............................ 14,982,363 ------------ 54,933,246 ------------ BROKERAGE (2.1%) ------------------------------------------------------------------------ 10,000,000 Morgan Stanley Dean Witter, 1.23%, 4/14/03 ............................. 9,995,558 ------------ BUILDING PRODUCTS (4.1%) ------------------------------------------------------------------------ 20,000,000 Cemex S.A. de C.V., 1.25%, 4/08/03, LOC: Barclays Bank Plc ............. 19,995,139 ------------ FINANCE (13.4%) ------------------------------------------------------------------------ 15,000,000 American Express Credit Corp., 1.21%, 5/02/03 .......................... 14,984,371 20,000,000 General Electric Capital Corp., 1.20%, 5/16/03 ......................... 19,970,000 15,000,000 PACCAR Financial Corp., 1.22%, 4/03/03 ................................. 14,998,983 15,000,000 UBS Finance (Delaware) LLC, 1.43%, 8/26/03 ............................. 14,912,413 ------------ 64,865,767 ------------ INSURANCE (3.1%) ------------------------------------------------------------------------ 15,000,000 Prudential Funding LLC, 1.27%, 5/09/03 ................................. 14,979,892 ------------ OFFICE EQUIPMENT (3.1%) ------------------------------------------------------------------------ 15,000,000 Pitney Bowes, Inc., 1.21%, 5/05/03 ..................................... 14,982,858 ------------ Total Commercial Paper .............................................. 179,752,460 ------------ CORPORATE NOTE (3.1%) ------------------------------------------------------------------------ INSURANCE (3.1%) ------------------------------------------------------------------------ Peoples Benefit Life Insurance, Variable Rate Note, 15,000,000 1.49%, 12/31/03 (1) ................................................. 15,000,000 ------------ U.S. GOVERNMENT AGENCIES (47.6%) ------------------------------------------------------------------------ FEDERAL FARM CREDIT BANK (9.3%) ------------------------------------------------------------------------ 30,000,000 1.28%, 4/01/03 ......................................................... 30,000,000 10,000,000 1.22%, 6/09/03 ......................................................... 9,976,616 5,000,000 1.22%, 6/24/03 ......................................................... 4,985,767 ------------ 44,962,383 ------------ FEDERAL HOME LOAN BANK (29.8%) ------------------------------------------------------------------------ $ 25,000,000 1.22%, 4/11/03 ......................................................... $ 24,991,528 40,000,000 1.15%, 4/15/03 ......................................................... 39,982,111 39,259,000 1.16%, 4/17/03 ......................................................... 39,238,760 20,000,000 1.21%, 4/23/03 ......................................................... 19,985,211 20,000,000 1.22%, 6/27/03 ......................................................... 19,941,033 ------------ 144,138,643 ------------ FEDERAL NATIONAL MORTGAGE ASSOCIATION (5.4%) ------------------------------------------------------------------------ 26,500,000 1.30%, 5/14/03 ......................................................... 26,458,851 ------------ STUDENT LOAN MARKETING ASSOCIATION (3.1%) ------------------------------------------------------------------------ 15,000,000 1.20%, 4/25/03 ......................................................... 14,988,000 ------------ Total U.S. Government Agencies ...................................... 230,547,877 ------------ REPURCHASE AGREEMENT (9.3%) ------------------------------------------------------------------------ 45,000,000 SG Cowen, 1.34%, 4/01/03, .............................................. 45,000,000 (Proceeds of $45,001,675 to be received at maturity), ------------ Collateral: $46,060,000 FNMA Note, due 6/30/03; Collateral Market Value $45,900,000 SHARES - --------------- INVESTMENT COMPANY (3.0%) ------------------------------------------------------------------------ 14,283,768 One Group Government Money Market Fund (I Shares) ...................... 14,283,768 ------------ Total Investments (Amortized Cost $484,584,105*) ............. 100.1% 484,584,105 Other assets less liabilities ................................ (0.1)% (526,535) ------- ------------ Net Assets ................................................... 100.0% $484,057,570 ====== ============
* 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, 2003, 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, 2003
RATING FACE MOODY'S/ AMOUNT MUNICIPAL BONDS (94.1%) S&P VALUE - ------------- ---------------------------------------------------------- ---------- ------------- ARIZONA (0.1%) ---------------------------------------------------------- $ 230,000 Maricopa County, AZ Industrial Development Authority, Multifamily Housing Revenue Bonds (Grand Victoria Housing Project LLC), Series A, 1.15%, 4/15/30, Weekly Reset VRDN*, LOC: FNMA ........................ NR/A-1+ $ 230,000 ------------- COLORADO (6.0%) ---------------------------------------------------------- 8,100,000 Colorado Housing & Financial Authority Revenue Bonds, Class I, Series A-1, 1.20%, 10/01/30, Weekly Reset VRDN*, SPA: FHLB ........................ VMIG1/A-1+ 8,100,000 2,000,000 Colorado State General Fund Tax & Revenue Anticipation Notes, Series A, 3.00%, 6/27/03 ......... NR/SP-1+ 2,006,684 1,000,000 Metropolitan Wastewater Reclamation District, CO Sewer Revenue Bonds, Series A, 5.25%, 4/01/03 ........ Aa2/AA 1,000,000 ------------- 11,106,684 ------------- CONNECTICUT (2.7%) ---------------------------------------------------------- 5,000,000 Connecticut State Health & Educational Facilities Authority Revenue Bonds (Yale University), Series V-2, 1.15%, 7/01/36, Daily Reset VRDN* ........ VMIG1/A-1+ 5,000,000 ------------- FLORIDA (1.1%) ---------------------------------------------------------- 2,000,000 Florida State Board of Education Capital Outlay General Obligation Bonds, Series C, 5.25%, 6/01/05, Prerefunded 6/01/03 @ 101 ................... Aaa/AAA 2,031,740 ------------- HAWAII (30.4%) ---------------------------------------------------------- 7,000,000 Department of Budget and Finance of the State of Hawaii Special Purpose Revenue Bonds (The Queen's Health System), Series A, 1.20%, 7/01/26, Weekly Reset VRDN*, SPA:Bank of Nova Scotia .......... VMIG1/A-1 7,000,000 1,550,000 Hawaii State, General Obligation Bonds, Series CE, 5.25%, 6/01/07, Prerefunded 6/01/03 @ 101 ............ Aaa/AA- 1,575,302 2,600,000 Hawaii State, Housing Finance & Development Corp. Revenue Bonds (Rental Housing System), Series 89 A, 1.17%, 7/01/24, Weekly Reset VRDN*, LOC: Banque Nationale Paris .......................... VMIG1/NR 2,600,000 $ 4,075,000 Hawaii State, Housing Finance & Development Corp. Revenue Bonds, (Affordable Rental Housing Program), Series A, 1.30%, 7/01/27, Weekly Reset VRDN*, LOC: Banque Nationale Paris ................... VMIG1/NR $ 4,075,000 500,000 Honolulu City & County, HI General Obligation Bonds, Series A, 7.30%, 7/01/03 ...................... Aa3/AA- 506,786 4,500,000 Honolulu City & County, HI General Obligation Bonds, Series A, 1.10%, 1/01/04, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen .............. VMIG1/A-1+ 4,500,000 800,000 Honolulu City & County, HI General Obligation Bonds, Series A, 1.10%, 1/01/04, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 800,000 3,250,000 Honolulu City & County, HI General Obligation Bonds, Series A, 1.10%, 1/01/10, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 3,250,000 1,520,000 Honolulu City & County, HI General Obligation Bonds, Series A, 1.10%, 1/01/15, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 1,520,000 6,225,000 Honolulu City & County, HI General Obligation Bonds, Series A, 1.10%, 1/01/16, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 6,225,000 5,645,000 Honolulu City & County, HI General Obligation Bonds, Series A, 1.10%, 1/01/17, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 5,645,000 1,645,000 Honolulu City & County, HI General Obligation Bonds, Series A, 1.10%, 1/01/19, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 1,645,000 1,400,000 Honolulu City & County, HI General Obligation Bonds, Series B, 5.00%, 10/01/03 ............................ Aa3/AA- 1,427,264 3,600,000 Honolulu City & County, HI General Obligation Bonds, Series B, 1.10%, 1/01/05, Weekly Reset VRDN*, LOC: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 3,600,000 500,000 Honolulu City & County, HI General Obligation Bonds, Series C, 5.00%, 7/01/03, FGIC Insured ............... Aaa/AAA 504,246 2,000,000 Honolulu City & County, HI General Obligation Bonds, Series C, 1.30%, 12/01/06, Putable 12/04/03 @ 100, FGIC Insured ....................................... VMIG1/A-1+ 2,000,000 $ 3,000,000 Honolulu City & County, HI General Obligation Bonds, Series C, 1.30%, 12/01/13, Putable 12/04/03 @ 100, FGIC Insured ......................................... VMIG1/A-1+ $ 3,000,000 4,250,000 Honolulu City & County, HI Multifamily Housing Revenue Bonds (Moanalua Hillside Apartments), AMT, 1.20%, 9/15/32, Weekly Reset VRDN*, LOC: FNMA ........ NR/A-1+ 4,250,000 1,090,000 Honolulu City & County, HI Water System Revenue Bonds, 4.00%, 7/01/03 ................................ Aa3/AA 1,097,502 1,035,000 Maui County, HI General Obligation Bonds, Series B, 2.50%, 9/01/03, MBIA Insured ...................... Aaa/AAA 1,039,720 485,000 Maui County, HI General Obligation Bonds, Series C, 2.50%, 9/01/03, MBIA Insured ...................... Aaa/AAA 487,211 ------------- 56,748,031 ------------- IDAHO (4.4%) ---------------------------------------------------------- 8,130,000 Idaho Health Facilities Authority Revenue Bonds (St. Lukes Regional Medical Center Project), 1.15%, 5/01/22, Daily Reset VRDN*, LOC: Bayerische Landesbank ........................... VMIG1/NR 8,130,000 ------------- ILLINOIS (4.5%) ---------------------------------------------------------- 3,000,000 Chicago, IL General Obligation Bonds, Series B, 1.17%, 1/01/37, Weekly Reset VRDN*, FGIC Insured ............ VMIG1/A-1+ 3,000,000 1,850,000 Illinois State, General Obligation Bonds, 5.00%, 4/01/03, FSA Insured ................................. Aaa/AAA 1,850,000 1,910,000 Madison County, IL Environmental Improvement Revenue Bonds (Shell Wood River Refining Project), AMT, 1.20%, 4/01/32, Daily Reset VRDN* ............... VMIG1/A-1+ 1,910,000 600,000 Madison County, IL Environmental Improvement Revenue Bonds, Series A-AMT, 1.20%, 3/01/33, Daily Reset VRDN* .................................... VMIG1/A-1+ 600,000 1,100,000 Southwestern, IL Environmental Improvement Revenue Bonds (Shell Wood River Refining Project), AMT, 1.20%, 11/01/25, Daily Reset VRDN* ................... VMIG1/A-1+ 1,100,000 ------------- 8,460,000 ------------- INDIANA (2.3%) ---------------------------------------------------------- $ 4,280,000 Indianapolis, IN Economic Development Revenue Bonds (Jewish Federation Campus), 1.15%, 4/01/05, Weekly Reset VRDN*, LOC: Fifth Third Bank ............ VMIG1/NR $ 4,280,000 ------------- LOUISIANA (1.8%) ---------------------------------------------------------- 1,000,000 St. Charles Parish, LA Pollution Control Revenue Bonds (Shell Oil Co. Project), Series A-AMT, 1.20%, 10/01/22, Daily Reset VRDN* ................... VMIG1/A-1+ 1,000,000 2,300,000 St. Charles Parish, LA Pollution Control Revenue Bonds (Shell Oil Co.-Norco Project), AMT, 1.20%, 9/01/23, Daily Reset VRDN* .................... NR/A-1+ 2,300,000 ------------- 3,300,000 ------------- MAINE (0.8%) ---------------------------------------------------------- 1,500,000 Maine State, General Obligation Bonds, 3.00%, 6/15/03 ....................................... Aa2/AA+ 1,503,894 ------------- MICHIGAN (3.5%) ---------------------------------------------------------- 3,000,000 Eastern Michigan University, MI University Revenue Bonds, 1.20%, 6/01/27, Daily Reset*, FGIC Insured .... Aaa/A-1+ 3,000,000 1,585,000 Michigan State, Strategic Fund Ltd. 0 Revenue Bonds (Village at Ann Arbor LLC Project), Series A, 1.15%, 2/15/34, Weekly Reset VRDN*, LOC: FNMA ............... VMIG1/NR 1,585,000 500,000 Michigan State, Strategic Fund Ltd., Revenue Bonds (Village at Fort Gratiot LLC), Series A, 1.15%, 2/15/34, Weekly Reset VRDN*, LOC: FNMA ............... VMIG1/NR 500,000 1,400,000 Northern Michigan University Revenue Bonds, 1.20%, 6/01/31, Daily Reset VRDN*, FGIC Insured ............. VMIG1/A-1+ 1,400,000 ------------- 6,485,000 ------------- MINNESOTA (5.9%) ---------------------------------------------------------- 2,520,000 Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project), Series A, 1.15%, 6/01/20, Daily Reset VRDN*, LOC: ABN Amro Bank N.V. ................. NR/A-1+ 2,520,000 2,200,000 Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project), Series B, 1.15%, 6/01/13, Daily Reset VRDN*, LOC: ABN Amro Bank N.V. ................. NR/A-1+ 2,200,000 $ 450,000 Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project), Series C, 1.15%, 6/01/13, Daily Reset VRDN*, LOC: ABN Amro Bank N.V. ................. NR/A-1+ $ 450,000 1,790,000 Cohasset, MN Revenue Bonds (Minnesota Power & Light Co. Project), Series D, 1.15%, 12/01/07, Daily Reset VRDN*, LOC: ABN Amro Bank N.V. ........... NR/A-1+ 1,790,000 930,000 Hennepin County, MN General Obligation Bonds, Series B, 1.00%, 12/01/20, Weekly Reset VRDN*, SPA: Landesbank Hessen Thuringen ..................... VMIG1/A-1+ 930,000 555,000 Hennepin County, MN General Obligation Bonds, Series C, 1.00%, 12/01/04, Weekly Reset VRDN*, SPA: Westdeutsche Landesbank ......................... VMIG1/A-1+ 555,000 2,545,000 Hennepin County, MN General Obligation Bonds, Series C, 1.00%, 12/01/10, Weekly Reset VRDN*, SPA: Westdeutsche Landesbank ......................... VMIG1/A-1+ 2,545,000 ------------- 10,990,000 ------------- MISSOURI (13.8%) ---------------------------------------------------------- 1,595,000 Kansas City, MO Industrial Development Authority Revenue Bonds, (Ewing Marion Kauffman Foundation), Series A, 1.15%, 4/01/27, Daily Reset VRDN* .......... NR/A-1+ 1,595,000 7,490,000 Kansas City, MO Industrial Development Authority Revenue Bonds, (Ewing Marion Kaufman Foundation), 1.15%, 4/01/27, Daily Reset VRDN* .................... NR/A-1+ 7,490,000 1,700,000 Missouri State, Health & Educational Facilities Authority Revenue Bonds (St. Louis University), Series A, 1.15%, 10/01/09, Daily Reset VRDN*, SPA: Bank of America N.A. ............................ VMIG1/A-1+ 1,700,000 6,235,000 Missouri State, Health & Educational Facilities Authority Revenue Bonds (St. Louis University), Series B, 1.20%, 10/01/24, Daily Reset VRDN*, SPA: Bank of America N.A. ............................ VMIG1/A-1+ 6,235,000 2,000,000 Missouri State, Health & Educational Facilities Authority Revenue Bonds (Washington University), Series C, 1.15%, 9/01/30, Daily Reset VRDN*, SPA: JP Morgan Chase Bank ............................ VMIG1/A-1+ 2,000,000 $ 3,000,000 Missouri State, Health & Educational Facilities Authority Revenue Bonds (Washington University), Series C, 1.15%, 3/01/40, Daily Reset VRDN*, SPA: JP Morgan Chase Bank ............................ VMIG1/A-1+ $ 3,000,000 3,800,000 Missouri State, Health & Educational Facilities Authority Revenue Bonds (Washington University), Series D, 1.15%, 9/01/30, Daily Reset VRDN*, SPA: JP Morgan Chase Bank ............................ VMIG1/A-1+ 3,800,000 ------------- 25,820,000 ------------- MONTANA (3.0%) ---------------------------------------------------------- 5,620,000 Montana State, Health Facilities Authority Revenue Bonds, Series A, 1.15%, 12/01/15, Weekly Reset VRDN*, FGIC Insured, SPA: Wells Fargo .................. VMIG1/A-1+ 5,620,000 ------------- NEW YORK (1.1%) ---------------------------------------------------------- 2,000,000 New York, NY General Obligation Bonds, Series B, 1.05%, 10/01/20, Daily Reset VRDN*, FGIC Insured ....... VMIG1/A-1+ 2,000,000 ------------- NORTH CAROLINA (2.4%) ---------------------------------------------------------- 2,975,000 Durham County, NC General Obligation Bonds (Public Improvement Project), 1.20%, 2/01/11, Weekly Reset VRDN*, SPA: Wachovia Bank of North Carolina .......... VMIG1/A-1 2,975,000 1,475,000 Durham County, NC General Obligation Bonds (Public Improvement Project), 1.20%, 2/01/13, Weekly Reset VRDN*, SPA: Wachovia Bank of North Carolina .......... VMIG1/A-1 1,475,000 ------------- 4,450,000 ------------- OHIO (2.7%) ---------------------------------------------------------- 4,000,000 Ohio Housing Finance Agency Mortgage Revenue Bonds (Residential Mortgage), Series E-AMT, 1.20%, 9/01/34, Weekly Reset VRDN*, SPA: FHLB ............... VMIG1/NR 4,000,000 1,000,000 Ohio State Building Authority, State Juvenile Correctional Facility Revenue Bonds, Series A, 4.00%, 4/01/03 ....................................... Aa2/AA 1,000,000 ------------- 5,000,000 ------------- OREGON (0.5%) ---------------------------------------------------------- 1,000,000 Oregon State Tax & Revenue Anticipation Notes, Series A, 3.25%, 5/01/03 ............................. MIG1/SP-1+ 1,001,007 ------------- TENNESSEE (0.3%) ---------------------------------------------------------- $ 645,000 Knox County, TN General Obligation Bonds, 3.50%, 4/01/03 ....................................... Aa2/AA $ 645,000 ------------- TEXAS (4.9%) ---------------------------------------------------------- 3,000,000 Gulf Coast Waste Disposal Authority, TX Revenue Bonds, (Amoco Oil Co. Project), AMT, 1.20%, 7/01/27, Daily Reset VRDN* ........................... VMIG1/AA+ 3,000,000 4,000,000 Texas State Tax & Revenue Anticipation Notes, 2.75%, 8/29/03 ....................................... MIG1/SP-1+ 4,021,295 2,200,000 West Side Calhoun County, TX Sewer & Solid Waste Disposal Revenue Bonds (BP Chemicals, Inc. Project), AMT, 1.20%, 4/01/31, Daily Reset VRDN* ............... P-1/A-1+ 2,200,000 ------------- 9,221,295 ------------- UTAH (1.9%) ---------------------------------------------------------- 3,450,000 University of Utah, Auxiliary & Campus Facilities Revenue Bonds, Series A, 1.20%, 4/01/27, Weekly Reset VRDN*, SPA: Bank of Nova Scotia ................ VMIG1/A-1 3,450,000 ------------- Total Municipal Bonds ............................. 175,472,651 ------------- TAX EXEMPT COMMERCIAL PAPER (5.7%) ---------------------------------------------------------- HAWAII (5.7%) ---------------------------------------------------------- 10,600,000 Honolulu City & County, HI General Obligation Notes, 1.05%, 5/08/03 ................................ P-1/A-1+ 10,600,000 ------------- Total Investments (Amortized Cost $186,072,651**) .................................. 99.8% 186,072,651 Other assets less liabilities ..................... 0.2% 396,607 ------ ------------- Net Assets ........................................ 100.0% $ 186,469,258 ====== =============
* Variable rate demand notes (VRDNs) are tax-exempt obligations which contain a floating or variable rate adjustment formula and an unconditional right of demand to receive payment of the principal plus interest at specific dates. ** Cost for Federal tax purposes is identical. AMT - Alternative Minimum Tax FGIC - Financial Guaranty Insurance Corp. FHLB - Federal Home Loan Bank FNMA - Federal National Mortgage Association FSA - Financial Security Assurance LOC - Letter of Credit MBIA - MBIA, Inc. 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, 2003
FACE AMOUNT U.S. GOVERNMENT AGENCIES (97.7%) VALUE - --------------- -------------------------------------------------------------------- -------------- FEDERAL FARM CREDIT BANK (9.8%) -------------------------------------------------------------------- $ 45,000,000 1.28%, 4/01/03 ..................................................... $ 45,000,000 20,000,000 1.22%, 6/09/03 ..................................................... 19,953,233 5,000,000 1.22%, 6/24/03 ..................................................... 4,985,767 -------------- 69,939,000 -------------- FEDERAL HOME LOAN BANK (77.5%) -------------------------------------------------------------------- 50,000,000 1.20%, 4/02/03 ..................................................... 49,998,326 80,000,000 1.15%, 4/04/03 ..................................................... 79,992,332 20,000,000 1.23%, 4/09/03 ..................................................... 19,994,533 40,000,000 1.16%, 4/11/03 ..................................................... 39,987,111 60,000,000 1.15%, 4/15/03 ..................................................... 59,973,167 25,000,000 1.23%, 4/16/03 ..................................................... 24,987,188 45,000,000 1.19%, 4/21/03 ..................................................... 44,970,250 30,000,000 1.16%, 4/22/03 ..................................................... 29,979,700 30,000,000 1.21%, 4/23/03 ..................................................... 29,977,817 25,000,000 1.44%, 4/25/03 ..................................................... 24,976,000 50,000,000 1.20%, 4/30/03 ..................................................... 49,951,667 30,000,000 1.17%, 5/21/03 ..................................................... 29,951,250 27,000,000 1.10%, 6/11/03 ..................................................... 26,941,425 45,000,000 1.17%, 6/27/03 ..................................................... 44,872,763 -------------- 556,553,529 -------------- STUDENT LOAN MARKETING ASSOCIATION (10.4%) -------------------------------------------------------------------- 75,000,000 1.19%, 4/25/03 ..................................................... 74,940,533 -------------- Total U.S. Government Agencies .................................. 701,433,062 -------------- SHARES - --------------- INVESTMENT COMPANY (2.4%) -------------------------------------------------------------------- 17,058,916 One Group Government Money Market Fund (I Shares) .................. 17,058,916 -------------- Total Investments (Amortized Cost $718,491,978*) ... 100.1% 718,491,978 Other assets less liabilities ...................... (0.1)% (698,752) ------- -------------- Net Assets ......................................... 100.0% $ 717,793,226 ======= ==============
(*) 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, 2003
CASH TAX-FREE GOVERNMENT FUND FUND FUND ------------ ------------- ------------ ASSETS: Investments at value (cost $439,584,105, $186,072,651 and $718,491,978, respectively) ............................................... $439,584,105 $ 186,072,651 $718,491,978 Repurchase agreements (cost $45,000,000) ....................... 45,000,000 -- -- Cash ........................................................... -- 9,056 -- Interest receivable ............................................ 25,639 582,955 13,322 Other assets ................................................... 1,838 95 62 ------------ ------------- ------------ Total Assets ................................................ 484,611,582 186,664,757 718,505,362 ------------ ------------- ------------ LIABILITIES: Dividends payable .............................................. 374,601 135,554 532,708 Adviser and Administrator fees payable ......................... 68,745 17,749 50,971 Distribution fees payable ...................................... 26,758 12,753 81,171 Accrued expenses ............................................... 83,908 29,443 47,286 ------------ ------------- ------------ Total Liabilities ........................................... 554,012 195,499 712,136 ------------ ------------- ------------ NET ASSETS ..................................................... $484,057,570 $ 186,469,258 $717,793,226 ============ ============= ============ NET ASSETS CONSIST OF: Capital Stock - Authorized an unlimited number of shares, par value $.01 per share .................................... $ 4,840,457 $ 1,864,671 $ 7,177,252 Additional paid-in capital ..................................... 479,204,994 184,729,121 710,548,129 Undistributed (overdistributed) net investment income .......... 12,119 (124,534) 67,845 Undistributed gain (loss) ...................................... -- -- -- ------------ ------------- ------------ $484,057,570 $ 186,469,258 $717,793,226 ============ ============= ============ SHARES OF BENEFICIAL INTEREST: Original Shares Class: Net Assets .................................................. $360,882,796 $ 130,126,762 $270,065,799 ============ ============= ============ Shares outstanding .......................................... 361,102,542 130,125,329 270,036,629 ============ ============= ============ Net asset value per share ................................... $ 1.00 $ 1.00 $ 1.00 ============ ============= ============ Service Shares Class: Net Assets .................................................. $123,174,774 $ 56,342,496 $447,727,427 ============ ============= ============ Shares outstanding .......................................... 122,943,137 56,341,786 447,688,614 ============ ============= ============ 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, 2003
CASH TAX-FREE GOVERNMENT FUND FUND FUND ----------- ----------- ------------ INVESTMENT INCOME: Interest income .............................................. $ 8,136,350 $ 2,378,300 $ 11,127,103 ----------- ----------- ------------ EXPENSES: Investment Adviser fees (note 3) ............................. 1,732,539 500,067 2,290,790 Administrator fees (note 3) .................................. 659,945 175,163 529,560 Distribution fees (note 3) ................................... 330,175 131,253 1,067,315 Trustees' fees and expenses .................................. 124,652 51,533 111,796 Legal fees ................................................... 45,649 14,832 67,656 Insurance .................................................... 38,402 10,464 54,211 Shareholders' reports ........................................ 37,348 6,180 44,463 Fund accounting fees ......................................... 30,792 32,302 30,758 Transfer and shareholder servicing agent fees ................ 29,768 17,972 23,219 Registration fees and dues ................................... 26,089 5,598 29,826 Audit and accounting fees .................................... 21,767 23,841 20,768 Custodian fees ............................................... 7,240 10,538 6,789 Miscellaneous ................................................ 10,037 6,098 49,693 ----------- ----------- ------------ Total expenses ............................................... 3,094,403 985,841 4,326,844 Advisory fees waived (note 3) ................................ (764,768) (287,684) (1,252,871) Administrative fees waived (note 3) .......................... (291,308) (100,769) (289,623) Expenses paid indirectly (note 5) ............................ (4,239) (2,813) (2,574) ----------- ----------- ------------ Net expenses ................................................. 2,034,088 594,575 2,781,776 ----------- ----------- ------------ Net investment income ........................................... 6,102,262 1,783,725 8,345,327 Net realized gain (loss) from securities transactions ........... 5,968 12 218 ----------- ----------- ------------ Net change in net assets resulting from operations .............. $ 6,108,230 $ 1,783,737 $ 8,345,545 =========== =========== ============
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 Ended Year Ended Year Ended Year Ended March 31, 2003 March 31, 2002 March 31, 2003 March 31, 2002 --------------- --------------- -------------- -------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income .................. $ 6,102,262 $ 13,130,802 $ 1,783,725 $ 2,866,516 Net realized gain (loss) from securities transactions ........ 5,968 197,334 12 45 --------------- --------------- -------------- --------------- Change in net assets resulting from operations ........... 6,108,230 13,328,136 1,783,737 2,866,561 --------------- --------------- -------------- --------------- DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Original Shares ..................... (4,649,971) (8,757,054) (1,316,278) (1,770,699) Service Shares ...................... (1,452,291) (4,373,748) (466,859) (1,096,414) --------------- --------------- -------------- --------------- Total dividends to shareholders from net investment income .......... (6,102,262) (13,130,802) (1,783,137) (2,867,113) --------------- --------------- -------------- --------------- CAPITAL SHARE TRANSACTIONS (at $1.00 per share): Proceeds from shares sold: Original Shares ..................... 880,694,410 1,025,896,565 163,052,761 161,763,873 Service Shares ...................... 252,007,742 332,753,074 56,481,358 76,642,314 --------------- --------------- -------------- --------------- 1,132,702,152 1,358,649,639 219,534,119 238,406,187 --------------- --------------- -------------- --------------- Reinvested dividends and distributions: Original Shares ..................... 86,494 212,513 170,364 90,335 Service Shares ...................... 1,514,672 5,057,859 468,256 1,178,090 --------------- --------------- -------------- --------------- 1,601,166 5,270,372 638,620 1,268,425 --------------- --------------- -------------- --------------- Cost of shares redeemed: Original Shares ..................... (873,207,779) (1,037,201,135) (133,496,270) (162,477,738) Service Shares ...................... (275,974,181) (413,350,343) (52,944,249) (79,912,782) --------------- --------------- -------------- --------------- (1,149,181,960) (1,450,551,478) (186,440,519) (242,390,520) --------------- --------------- -------------- --------------- Change in net assets from capital share transactions ..... (14,878,642) (86,631,467) 33,732,220 (2,715,908) --------------- --------------- -------------- --------------- Total change in net assets ............. (14,872,674) (86,434,133) 33,732,820 (2,716,460) NET ASSETS: Beginning of period ................. 498,930,244 585,364,377 152,736,438 155,452,898 --------------- --------------- -------------- --------------- End of period ....................... $ 484,057,570 $ 498,930,244 $ 186,469,258 $ 152,736,438 =============== =============== ============== ===============
GOVERNMENT FUND ---------------------------------- Year Ended Year Ended March 31, 2003 March 31, 2002 --------------- -------------- INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income .................. $ 8,345,327 $ 15,937,050 Net realized gain (loss) from securities transactions ........ 218 52,048 --------------- --------------- Change in net assets resulting from operations ........... 8,345,545 15,989,098 --------------- --------------- DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Original Shares ..................... (3,725,589) (6,207,800) Service Shares ...................... (4,619,738) (9,729,265) --------------- --------------- Total dividends to shareholders from net investment income .......... (8,345,327) (15,937,065) --------------- --------------- CAPITAL SHARE TRANSACTIONS (at $1.00 per share): Proceeds from shares sold: Original Shares ..................... 759,927,968 1,230,686,679 Service Shares ...................... 1,404,544,075 1,436,227,115 --------------- --------------- 2,164,472,043 2,666,913,794 --------------- --------------- Reinvested dividends and distributions: Original Shares ..................... 52,314 113,295 Service Shares ...................... 4,740,217 10,785,899 --------------- --------------- 4,792,531 10,899,194 --------------- --------------- Cost of shares redeemed: Original Shares ..................... (795,938,638) (1,075,823,438) Service Shares ...................... (1,418,737,480) (1,321,495,959) --------------- --------------- (2,214,676,118) (2,397,319,397) --------------- --------------- Change in net assets from capital share transactions ..... (45,411,544) 280,493,591 --------------- --------------- Total change in net assets ............. (45,411,326) 280,545,624 NET ASSETS: Beginning of period ................. 763,204,552 482,658,928 --------------- --------------- End of period ....................... $ 717,793,226 $ 763,204,552 =============== ===============
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 ("Cash Fund") (a diversified portfolio which commenced operations on December 5, 1984), Pacific Capital Tax-Free Cash Assets Trust ("Tax-Free Fund") (a non-diversified portfolio which commenced operations on April 4, 1989), and Pacific Capital U.S. Government Securities Cash Assets Trust ("Goverment Fund") (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 (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 portfolios. 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. For the year ended March 31, 2003: Pacific Capital Cash Assets Trust incurred advisory and administration fees of $1,732,539 and $659,945, due to the expense limitation such fees were reduced by $764,768 and $291,308, respectively. Pacific Capital Tax-Free Cash Assets Trust incurred advisory and administration fees of $500,067 and $175,163, due to the expense limitation such fees were reduced by $287,684 and $100,769, respectively. Pacific Capital U.S. Government Securities Cash Assets Trust incurred advisory and administration fees of $2,290,790 and $529,560, due to the expense limitation such fees were reduced by $1,252,871 and $289,623, respectively. 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, 2003, the following amounts were accrued for legal fees: Cash Fund $45,649; Tax-Free Fund $14,832; Government Fund $67,656. Of these amounts, $43,680, $14,248 and $64,517, 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. 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. 5. 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. 6. 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. 7. 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. The tax character of distributions paid during 2003 and 2002 were as follows:
CASH FUND TAX-FREE FUND GOVERNMENT FUND --------------------------- -------------------------- --------------------------- 2003 2002 2003 2002 2003 2002 ---------- ----------- ---------- ---------- ---------- ----------- Net tax-exempt income ............ $ -- $ -- $1,772,705 $3,077,676 $ -- $ -- Ordinary income .................. 6,248,680 14,868,378 12 5 8,577,138 17,255,180 Capital gain ..................... -- -- -- 8 -- -- ---------- ----------- ---------- ---------- ---------- ----------- Total ............................ $6,248,680 $14,868,378 $1,772,717 $3,077,689 $8,577,138 $17,255,180 ========== =========== ========== ========== ========== ===========
For the fiscal year ended March 31, 2003, $1,772,705 of dividends paid by the Tax-Free Fund constituting 99.9993% of total dividends paid during calendar 2002 were exempt-interest dividends. 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. Prior to January 31, 2003, shareholders were mailed IRS Form 1099-DIV which contained information on the status of distributions paid for the 2002 calendar year. As of March 31, 2003, the components of distributable earning on a tax basis were as follows: TAX-FREE GOVERNMENT CASH FUND FUND FUND --------- -------- ---------- Undistributed ordinary income ..... $386,720 $ -- $600,553 Undistributed tax-exempt income ... -- 11,020 -- -------- -------- -------- $386,720 $ 11,020 $600,553 ======== ======== ======== RECLASSIFICATION OF CAPITAL ACCOUNTS On the statements of assets and liabilities, as a result of certain differences in the computation of net investment income and net realized capital gains under federal income tax rules and regulations versus generally accepted accounting principles, a reclassification has been made to increase (decrease) undistributed net investment income, undistributed gain (loss) and additional paid -in capital for the Funds as follows: TAX-FREE GOVERNMENT CASH FUND FUND FUND --------- -------- ---------- Paid in Capital ....................... $ -- $(26,086) $ -- Undistributed net investment income ... 5,968 26,098 218 Undistributed gain(loss) .............. (5,968) (12) (218) These reclassifications are primarily due to dividend redesignations. Net assets are not affected by these changes. PACIFIC CAPITAL CASH ASSETS TRUST FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES ------------------------------------------ Year Ended March 31, ------------------------------------------ 2003 2002 2001 2000 1999 ------ ------ ------ ------ ------ Net asset value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income ....................... 0.01 0.03 0.06 0.05 0.05 ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income ........ (0.01) (0.03) (0.06) (0.05) (0.05) ------ ------ ------ ------ ------ Net asset value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 ====== ====== ====== ====== ====== Total return ................................... 1.35% 2.52% 5.90% 4.89% 4.90% Ratios/supplemental data Net assets, end of period (in millions) ..... $361 $353 $364 $513 $418 Ratio of expenses to average net assets ..... 0.36% 0.58% 0.57% 0.56% 0.57% Ratio of net investment income to average net assets ....................... 1.34% 2.51% 5.77% 4.80% 4.79% The expense and net investment income ratios without the effect of the Adviser's and Administrator's waiver of fees for the year ended March 31, 2003 were: Ratio of expenses to average net assets ..... 0.58% -- -- -- -- Ratio of net investment income to average net assets ....................... 1.12% -- -- -- -- The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ..... 0.36% 0.57% 0.57% 0.56% 0.56%
SERVICE SHARES ------------------------------------------ Year Ended March 31, ------------------------------------------ 2003 2002 2001 2000 1999 ------ ------ ------ ------ ------ Net asset value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income ....................... 0.01 0.02 0.05 0.05 0.05 ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income ........ (0.01) (0.02) (0.05) (0.05) (0.05) ------ ------ ------ ------ ------ Net asset value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 ====== ====== ====== ====== ====== Total return ................................... 1.09% 2.27% 5.63% 4.63% 4.64% Ratios/supplemental data Net assets, end of period (in millions) ..... $123 $146 $221 $174 $163 Ratio of expenses to average net assets ..... 0.61% 0.83% 0.82% 0.81% 0.81% Ratio of net investment income to average net assets ....................... 1.10% 2.36% 5.49% 4.53% 4.51% The expense and net investment income ratios without the effect of the Adviser's and Administrator's waiver of fees for the year ended March 31, 2003 were: Ratio of expenses to average net assets ..... 0.83% -- -- -- -- Ratio of net investment income to average net assets ....................... 0.88% -- -- -- -- The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ..... 0.61% 0.82% 0.82% 0.81% 0.81%
See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST FINANCIAL HIGHLIGHTS FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
ORIGINAL SHARES ------------------------------------------ Year Ended March 31, ------------------------------------------ 2003 2002 2001 2000 1999 ------ ------ ------ ------ ------ Net asset value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income ....................... 0.01 0.02 0.04 0.03 0.03 ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income ........ (0.01) (0.02) (0.04) (0.03) (0.03) ------ ------ ------ ------ ------ Net asset value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 ====== ====== ====== ====== ====== Total return ................................... 1.15% 2.00% 3.58% 2.95% 2.91% Ratios/supplemental data Net assets, end of period (in millions) ..... $130 $100 $101 $100 $83 Ratio of expenses to average net assets ..... 0.28% 0.51% 0.53% 0.52% 0.54% Ratio of net investment income to average net assets ....................... 1.13% 1.94% 3.50% 2.93% 2.85% The expense and net investment income ratios without the effect of the Adviser's and Administrator's waiver of fees for the year ended March 31, 2003 were: Ratio of expenses to average net assets ..... 0.50% -- -- -- -- Ratio of net investment income to average net assets ....................... 0.90% -- -- -- -- The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ..... 0.27% 0.51% 0.53% 0.52% 0.53%
SERVICE SHARES ------------------------------------------ Year Ended March 31, ------------------------------------------ 2003 2002 2001 2000 1999 ------ ------ ------ ------ ------ Net asset value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income ....................... 0.01 0.02 0.03 0.03 0.03 ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income ........ (0.01) (0.02) (0.03) (0.03) (0.03) ------ ------ ------ ------ ------ Net asset value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 ====== ====== ====== ====== ====== Total return ................................... 0.90% 1.75% 3.32% 2.70% 2.65% Ratios/supplemental data Net assets, end of period (in millions) ..... $56 $52 $54 $51 $48 Ratio of expenses to average net assets ..... 0.53% 0.77% 0.78% 0.77% 0.79% Ratio of net investment income to average net assets ....................... 0.89% 1.77% 3.26% 2.66% 2.64% The expense and net investment income ratios without the effect of the Adviser's and Administrator's waiver of fees for the year ended March 31, 2003 were: Ratio of expenses to average net assets ..... 0.76% -- -- -- -- Ratio of net investment income to average net assets ....................... 0.66% -- -- -- -- The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ..... 0.52% 0.77% 0.78% 0.77% 0.78%
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 ------------------------------------------ Year Ended March 31, ------------------------------------------ 2003 2002 2001 2000 1999 ------ ------ ------ ------ ------ Net asset value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income ....................... 0.01 0.03 0.06 0.05 0.04 ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income ........ (0.01) (0.03) (0.06) (0.05) (0.04) ------ ------ ------ ------ ------ Net asset value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 ====== ====== ====== ====== ====== Total return ................................... 1.34% 2.73% 5.88% 4.83% 4.80% Ratios/supplemental data Net assets, end of period (in millions) ..... $270 $306 $151 $166 $140 Ratio of expenses to average net assets ..... 0.25% 0.45% 0.47% 0.49% 0.49% Ratio of net investment income to average net assets ....................... 1.34% 2.47% 5.73% 4.73% 4.70% The expense and net investment income ratios without the effect of the Adviser's and Administrator's waiver of fees for the year ended March 31, 2003 were: Ratio of expenses to average net assets ..... 0.46% -- -- -- -- Ratio of net investment income to average net assets ....................... 1.12% -- -- -- -- The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ..... 0.24% 0.45% 0.47% 0.49% 0.49%
SERVICE SHARES ------------------------------------------ Year Ended March 31, ------------------------------------------ 2003 2002 2001 2000 1999 ------ ------ ------ ------ ------ Net asset value, beginning of period ........... $1.00 $1.00 $1.00 $1.00 $1.00 ------ ------ ------ ------ ------ Income from investment operations: Net investment income ....................... 0.01 0.02 0.05 0.04 0.04 ------ ------ ------ ------ ------ Less distributions: Dividends from net investment income ........ (0.01) (0.02) (0.05) (0.04) (0.04) ------ ------ ------ ------ ------ Net asset value, end of period ................. $1.00 $1.00 $1.00 $1.00 $1.00 ====== ====== ====== ====== ====== Total return ................................... 1.09% 2.48% 5.62% 4.56% 4.54% Ratios/supplemental data Net assets, end of period (in millions) ..... $448 $457 $332 $293 $214 Ratio of expenses to average net assets ..... 0.49% 0.70% 0.72% 0.74% 0.74% Ratio of net investment income to average net assets ....................... 1.08% 2.39% 5.47% 4.50% 4.42% The expense and net investment income ratios without the effect of the Adviser's and Administrator's waiver of fees for the year ended March 31, 2003 were: Ratio of expenses to average net assets ..... 0.71% -- -- -- -- Ratio of net investment income to average net assets ....................... 0.86% -- -- -- -- The expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of expenses to average net assets ..... 0.49% 0.70% 0.72% 0.74% 0.74%
See accompanying notes to financial statements. ADDITIONAL INFORMATION (UNAUDITED) TRUSTEES(1) AND OFFICERS
NUMBER OF POSITIONS PORTFOLIOS OTHER DIRECTORSHIPS HELD WITH IN FUND HELD BY TRUSTEE NAME, TRUST AND PRINCIPAL COMPLEX (THE POSITION HELD IS ADDRESS(2) LENGTH OF OCCUPATION(S) OVERSEEN A DIRECTORSHIP UNLESS AND DATE OF BIRTH SERVICE(3) DURING PAST 5 YEARS BY TRUSTEE INDICATED OTHERWISE.) - ----------------- ---------- ------------------- ---------- --------------------- Lacy B. Herrmann Chairman of Founder and Chairman of the Board, 12 Director or trustee, OCC New York, NY the Board Aquila Management Corporation, the Cash Reserves, Inc., OCC (05/12/29) of Trustees sponsoring organization and Manager or Accumulation Trust, since 1984 Administrator and/or Adviser or Oppenheimer Quest Value Sub-Adviser to each fund of the Funds Group, Oppenheimer Aquila(sm) Group of Funds(5) and Small Cap Value Fund, Founder, Chairman of the Board of Oppenheimer Midcap Fund, Trustees and (currently or until 1998) and Oppenheimer Rochester President of each since its Group of Funds. establishment, beginning in 1984; Director of the Distributor since 1981 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 since 1973; Trustee Emeritus, Brown University and active in university, school and charitable organizations. Douglas Philpotts Trustee since Retired; formerly director, Chairman 4 Trustee, Pacific Capital Honolulu, HI 1992 of the Board and President of Hawaiian Funds, which includes 8 (11/21/31) Trust Company, Limited; present or bond and stock funds. former director of various Hawaii-based civic and charitable organizations. NON-INTERESTED TRUSTEES William M. Cole Trustee since President, Cole International, Inc., 4 None Westfield, NJ 1984 financial and shipping consultants, (05/21/31) since 1974; Chairman, Cole Group, a financial consulting and real estate firm. Thomas W. Courtney Trustee since President, Courtney Associates, Inc., 5 Director or trustee, OCC Sewickley, PA 1984 a 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 President and Chief Executive 4 Trustee, Pacific Capital Honolulu, HI 1993 Officer, OKOA, Inc., a diversified Funds, which includes 8 (02/28/46) Hawaii-based real estate bond and stock funds; organization with activities in the director, Outrigger western U.S. and the Pacific Basin, Hotels since 2000; since 1972; Managing Partner of director, Servco Pacific, Summit Financial Resources, a Salt Inc. and Oceanic Lake City, Utah-based financial Time-Warner since 1998; services company; trustee, the director, American Estate of James Campbell since 2000 Savings Bank since 2002. and Chairman of the Board of 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 President, Waste Management of 4 Trustee, Pacific Capital Honolulu, HI 1993 Hawaii, Inc. since 2002; Corporate Funds, which includes 8 (04/05/36) Vice President, Hawaii Area, Waste bond and stock funds; Management, Inc. since 2002; director, Central Pacific Trustee, The King William Charles Bank and First Insurance Lunalilo Trust Estate since 2001; Co. of Hawaii, Ltd. President and Chief Executive Officer, The Chamber of Commerce of Hawaii, 1996-2001; director, Hawaii Public Television Foundation since 1998; Regent, Chaminade University of Honolulu; Chair - State Judicial Salary Commission since 1998; and director of other corporate and community organizations. Theodore T. Mason Trustee since Executive Director, East Wind Power 6 Trustee, OCC Accumulation New York, NY 1984 Partners LTD since 1994 and Trust. (11/24/35) Louisiana Power Partners, LLC since 1999; President, 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 Executive Director, Hawaii 4 Trustee, Pacific Capital Honolulu, HI 1993 Government Employees Association Funds, which includes 8 (03/22/44) AFSCME Local 152, AFL-CIO since bond and stock funds; 1981; International Vice President, Chairman, Royal State American Federation of State, County Companies. and Municipal Employees, AFL-CIO since 1981; director of various civic and charitable organizations. Oswald K. Stender Trustee since Director, Hawaiian Electric 4 Trustee, Pacific Capital Honolulu, HI 1993 Industries, Inc., a public utility Funds, which includes 8 (10/08/31) holding company, since 1993; bond and stock funds; trustee, the Bernice Pauahi Bishop director, Grace Pacific Estate 1990-1999; trustee, Office of Corporation, an asphalt Hawaiian Affairs and a member or paving company. trustee of several community organizations. OFFICERS Diana P. Herrmann President since President and Chief Operating N/A None New York, NY 1998 Officer of the Manager since 1997, a (02/25/58) Director since 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 funds in the Aquila(sm) 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 (04/01/57) 1988 President, 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 N/A N/A Lahaina, HI since 1997 Tax-Free Trust since 1993; Vice (07/27/50) President or Assistant Vice President of three Aquila Cash Funds; Registered Representative of the Distributor since 1985. John M. Herndon Vice President Assistant Secretary of the N/A N/A New York, NY since 1990 Aquila(sm) Group of Funds since 1995 (12/17/39) and Assistant and Vice President of the four Secretary since Aquila Money-Market Funds since 1995 1990; Vice President of the Manager since 1990. Rose F. Marotta Chief Financial Chief Financial Officer of the N/A N/A New York, NY Officer since Aquila(sm) Group of Funds since 1991 (05/08/24) 1991 and Treasurer, 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 Aquila(sm) Group of N/A N/A New York, NY 2000 Funds and the Distributor since (11/06/56) 2000; Controller, Van Eck Global Funds, 1993-2000. Edward M. W. Hines Secretary since Partner, Hollyer Brady Smith & Hines N/A N/A New York, NY 1984 LLP, legal counsel to the Trust, (12/16/39) since 1989; Secretary of the Aquila(sm) Group of Funds. Robert W. Anderson Assistant Compliance Officer of the Manager N/A N/A New York, NY Secretary since since 1998 and Assistant Secretary (08/23/40) 2000 of the Aquila(sm) Group of Funds since 2000; trustee, Alpha Strategies Fund since July, 2002; Consultant, The Wadsworth Group, 1995-1998. Lori A. Vindigni Assistant Assistant Treasurer of the N/A N/A New York, NY Treasurer since Aquila(sm) Group of Funds since (11/02/66) 2000 2000; Assistant Vice President of the Manager since 1998; Fund Accountant for the Aquila(sm) 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) Because the Fund does not hold annual meetings, each Trustee holds office for an indeterminate term. 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 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 and Capital Cash Management 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"; Aquila Rocky Mountain Equity Fund is an equity fund; considered together, these 12 funds are called the "Aquila(sm) Group of Funds." -----END PRIVACY-ENHANCED MESSAGE-----