-----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, JNwVXiYgzgPa4V3By/PAeiAu2M+6BGS9+E4HFP4Z4zwzKGoFTp8q7S2DQ+95a6pM me+jjxPBRPlao/HntFcHyw== 0000749748-99-000011.txt : 19991207 0000749748-99-000011.hdr.sgml : 19991207 ACCESSION NUMBER: 0000749748-99-000011 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991206 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CASH ASSETS TRUST CENTRAL INDEX KEY: 0000749748 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 136844974 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-04066 FILM NUMBER: 99769042 BUSINESS ADDRESS: STREET 1: 380 MADISON AVE #300 CITY: NEW YORK STATE: NY ZIP: 10017 BUSINESS PHONE: 2126976666 MAIL ADDRESS: STREET 1: 380 MADISON AVENUE STREET 2: #2300 CITY: NEW YORK STATE: NY ZIP: 10017 N-30D 1 INVESTMENT ADVISER Pacific Century Trust a division 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 Vernon R. Alden Arthur K. Carlson 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 Richard F. West, 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 345 Park Avenue * New York, New York 10154 Further information is contained in the Prospectus which must precede or accompany this report. SEMI- ANNUAL REPORT SEPTEMBER 30, 1999 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 SEMI-ANNUAL REPORT November 19, 1999 Dear Investor: We are pleased to provide you with the Semi-Annual Report for The Pacific Capital Funds of Cash Assets Trust for the six-month period ended September 30, 1999. The enclosed Semi-Annual Report includes the three series of Cash Assets Trust (the "Trust"): Pacific Capital Cash Assets Trust, Pacific Capital Tax-Free Cash Assets Trust and Pacific Capital U.S. Government Securities Cash Assets Trust and its two classes of shares: Original Shares and Service Shares. The economic climate and the Federal Reserve's monetary policy once again had an impact on the short-term debt markets during the Trust's current report period. After a three-stage interest rate reduction last fall, the Federal Reserve became concerned this spring that the U.S. economy might instead be growing too rapidly. Such rate of growth, coupled with low unemployment, could lead to higher levels of inflation. This primarily would result in increased stress on labor markets and would potentially put additional upward pressure on wages and ultimately prices. In testimony before the Joint Economic Committee of Congress, Federal Reserve Chairman Alan Greenspan, noted that the financial markets had recovered from last fall's near paralysis that caused the Fed to cut the federal fund's rate by 0.75 of 1%. He further testified that unless something slows down the economy, a rise in inflation is nearly inevitable. Indeed, on two occasions during the summer of 1999, the Fed voted each time to raise short-term interest rates 0.25 of 1%. Then finally on November 16th, the Fed voted again to raise rates for the third time this year. The current target on the Federal Fund's rate is now 5.50% and the discount rate is 5.00%. In slightly over a 12-month period, we have witnessed a complete market interest rate cycle. First, three rate cuts last fall and then a subsequent increase in rates this year. As mentioned in previous report letters, yields on money market funds like the Trust, move in concert with rate policies pursued by the Federal Reserve. Each of the funds in The Pacific Capital Funds of Cash Assets Trust continues to provide competitive returns to alternative short-term investment opportunities without wavering fr om their conservative investment guidelines. Your use of The Pacific Capital Funds of Cash Assets Trust is greatly appreciated. You can be assured that all those associated with the management of the Trust will consistently work in the interest of your investment. Sincerely, /s/ Diana P. Herrmann - ---------------------- Diana P. Herrmann President /s/ Lacy B. Herrmann - ---------------------- Lacy B. Herrmann Chairman, Board of Trustees PACIFIC CAPITAL CASH ASSETS TRUST STATEMENT OF INVESTMENTS SEPTEMBER 30, 1999 (UNAUDITED) $ 57,214,000 4.40%, due 1/06/00 $ 56,548,288 U.S. GOVERNMENT AGENCY DISCOUNT NOTES (21.8%) 124,573,000 Federal Home Loan Bank, 5.17%, 10/01/99 124,573,000 COMMERCIAL PAPER (66.1%) AUTOMOTIVE (4.3%) 25,000,000 Ford Motor Credit Co., 5.68%, 1/12/00 24,593,722 BANKING/CREDIT UNION (7.4%) 17,500,000 Formosa Plastics, 5.30%, 10/19/99, 17,453,625 25,000,000 UBS Finance, 5.30%, 11/22/99 24,808,611 Letter of Credit - ABN Amro Bank NV Total Banking/Credit Union 42,262,236 BROKERAGE (17.1%) 25,000,000 Bear Stearns, 5.44%, 1/28/00 24,550,444 25,000,000 Goldman Sachs, 5.38%, 1/18/00 24,592,764 25,000,000 Morgan Stanley Dean Witter, 5.75%, 1/26/00 24,532,813 25,000,000 Salomon Smith Barney, 5.72%, 2/01/00 24,511,417 Total Brokerage 98,187,438 DIVERSIFIED (0.8%) 5,000,000 Cargill Global, 5.44%, 1/25/00 4,912,356 EDUCATION (12.9%) 16,500,000 Duke University, 5.05%, 11/29/99 16,363,440 25,000,000 Harvard University, 5.31%, 12/03/99 24,767,687 17,000,000 Stanford University, 5.04%, 11/29/99 16,859,465 15,800,000 Yale University, 5.32%, 11/03/99 15,722,949 Total Education 73,713,541 ELECTRIC UTILITY (0.2%) 1,000,000 Duke Energy, 5.48%, 1/14/00 984,017 FINANCE (16.2%) 20,000,000 American Express Credit Corp., 4.80%, 12/24/99 19,776,000 20,000,000 American General, 5.26%, 11/10/99 19,883,111 25,000,000 Associates First Capital, 5.72%, 1/13/00 24,586,889 29,000,000 General Electric Capital Corp., 5.38%, 3/02/00 28,336,915 Total Finance 92,582,915 FOOD & BEVERAGE (2.6%) 15,000,000 Coca-Cola, 5.25%, 2/10/00 14,730,937 HEALTH CARE (0.3%) 1,900,000 Merck & Co., 5.35%, 2/07/00 1,863,575 INSURANCE (4.3%) 25,000,000 Prudential, 4.80%, 10/08/99 24,976,667 Total Commercial Paper 378,807,404 CORPORATE NOTES (2.6%) 15,000,000 Peoples Benefit Life, Variable Rate Note, 5.61%, 12/29/99 (1) 15,000,000 Total Investments (cost $$574,928,692*) 100.4% 574,928,692 Liabilities in excess of other assets (0.4) (2,314,986) Net Assets 100.0% $ 572,613,706 (*) 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.
FACE AMOUNT U.S. TREASURY BILLS (9.9%) VALUE
See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST STATEMENT OF INVESTMENTS SEPTEMBER 30, 1999 (UNAUDITED) CONNECTICUT (0.79%) Connecticut State, General Obligation Bonds, Series C $ 1,000,000 5.70%, 11/15/99 Aa3/AA $ 1,003,315 GEORGIA (0.79%) Columbus, Georgia Water and Sewer Service 1,000,000 5.75%, 5/01/00 Aaa/AAA 1,012,752 HAWAII (41.08%) Hawaii County 500,000 7.00%, 6/01/00 Aaa/AAA 511,527 Hawaii County 2,000,000 4.25%, 5/15/00 Aaa/AAA 2,005,638 Hawaii State, General Obligation Bonds 1991 Series BV, 1,000,000 5.70%, 11/01/99 A1/A+ 1,002,236 Hawaii State, General Obligation Bonds 1993 Series CC, 1,200,000 4.60%, 2/01/00 A1/A+ 1,206,008 Hawaii State, General Obligation Bonds 1993 Series CD, 1,000,000 6.90%, 6/01/02 Aaa/A+ 1,023,667 Hawaii State, General Obligation Bonds 1993 Series CG, 2,000,000 4.25%, 10/01/99 Aaa/AAA 2,000,000 Hawaii State, General Obligation Bonds 2,000,000 7.0%, 6/01/09 Aaa/A+ 2,046,234 Hawaii State, General Obligation Bonds 1,000,000 4.375%,3/01/00 Aaa/A+ 1,004,961 Hawaii State, General Obligation Bonds 1,005,000 4.5%, 9/01/00 Aaa/AAA 1,012,587 Hawaii State Department of Budget & Finance ADJ- Queens Health System - Series A 1998 Revenue Bonds 17,560,000 3.75%, 07/01/26, Weekly Reset* VMIG1/A-1+ 17,560,000 Stand-by Purchase Agreement: Morgan Guaranty Trust Hawaii State Housing Finance & Development Corp. Revenue Bonds (Rental Housing System) Series 89 A, 1,800,000 3.85%, 07/01/24, Weekly Reset* VMIG1/NR 1,800,000 Letter of Credit: Banque Nationale de Paris Hawaii State Housing Finance & Development Corp. Revenue Bonds (Affordable Rental Housing Program) Series A, 6,050,000 3.80%, 07/01/27, Weekly Reset* VMIG1/NR 6,050,000 Letter of Credit: Banque Nationale de Paris Hawaii State Department of Budget & Finance Citizens Utility - Revenue Bonds Series (Tax- Exempt Commercial Paper Series), 1,700,000 3.25%, 10/15/99 NR/A-1+ 1,700,000 Hawaii State Department of Budget & Finance Citizens Utility - Revenue Bonds Series (Tax- Exempt Commercial Paper Series), 1,500,000 3.30%, 11/05/99 NR/A-1+ 1,500,000 Hawaii State Department of Budget & Finance Citizens Utility - Revenue Bonds Series (Tax- Exempt Commercial Paper Series), 2,810,000 3.45%, 11/05/99 NR/A-1+ 2,810,000 Honolulu City & County, General Obligation Bonds, Series A, 2,000,000 6.00%, 4/01/00 Aaa/AA- 2,026,070 Honolulu City & County, General Obligation Bonds, Series A, 550,000 5.0%, 11/101/99 Aaa/AAA 550,755 Honolulu City & County, General Obligation Bonds, Series C, 1,000,000 7.15%, 6/01/09 Aaa/AA- 1,034,624 Maui County, General Obligation Bonds, Series A 620,000 5.35%, 6/01/00 Aaa/A+ 627,255 Insurance: Financial Guaranty Insurance Co. Secondary Market Services Corporation Hawaii Student Loan Revenue, Senior Series II, 5,000,000 3.90%, 09/01/10, Weekly Reset* VMIG1/A-1+ 5,000,000 Letter of Credit: National Westminster, Guaranteed Student Loans Total Hawaii 52,471,562 IDAHO (2.92%) Idaho Health Facilities Authority Revenue Bonds (St. Lukes Regional Medical Center Project), 3,735,000 3.95%, 05/01/22, Daily Reset* VMIG1/NR 3,735,000 Letter of Credit: Bayerische Landesbank ILLINOIS (6.01%) Illinois Health Facilities Authority Revenue Bonds (Central Dupage Health Corp. Project), 5,635,000 4.00%, 11/01/20, Daily Reset* VMIG1/NR 5,635,000 Letter of Credit: Rabobank Nederland Illinois State, General Obligation 1,000,000 6.70%, 6/01/00 Aa2/AAA 1,038,276 Chicago, 1,000,000 2.85%, 1/31/00 VMIG1/A-1+ 1,000,000 Total Illinois 7,673,276 INDIANA (7.08%) Indianapolis, IN Economic Development Revenue Bonds (Jewish Federation Campus), 3,970,000 3.75%, 04/01/05, Weekly Reset* Aa/AA 3,970,000 Purdue University, IN University Revenue Bonds (Student Fee) Series L, 1,015,000 3.65%, 07/01/20, Weekly Reset* VMIG1/A-1+ 1,015,000 Purdue University, IN University Revenue Bonds (Student Fee) Series K, 1,130,000 3.65%, 07/01/20, Weekly Reset* VMIG1/A-1+ 1,130,000 Purdue University, IN University Revenue Bonds (Student Fee) Series E, 1,205,000 3.65%, 07/01/11, Weekly Reset* VMIG1/A-1+ 1,205,000 Purdue University, IN University Revenue Bonds (Student Fee) Series L, 1,720,000 3.65%, 07/01/17, Weekly Reset* VMIG1/A-1+ 1,720,000 Total Indiana 9,040,000 KANSAS (0.79%) Johnson County 1,000,000 4.25%, 3/01/00 Aa1/AA 1,003,432 KENTUCKY (1.38%) Warsaw, KY Industrial Building Revenue Bonds (Operating Partnership), 1,760,000 3.95%, 08/01/09, Weekly Reset* NR/A-1+ 1,760,000 Letter of Credit: Fifth Third Bank LOUISIANA (3.92%) St. Charles Parish, LA Pollution Control Revenue Bonds (Shell Oil Co-Norco Project), 2,900,000 3.85%, 10/01/22, Daily Reset* Aa2/AAA 2,900,000 St. Charles Parish, LA Pollution Control Revenue Bonds (Shell Oil Co-Norco Project), 2,100,000 3.95%, 09/01/23, Daily Reset* Aa2/AAA 2,100,000 Total Louisiana 5,000,000 MASSACHUSETTS (0.79%) Massachusetts Transportation Authority 1,000,000 5.0%, 3/01/00 Aa-/AA3 1,007,298 NEW HAMPSHIRE (0.91%) New Hampshire, General Obligation 1,165,000 4.0%, 1/15/00 Aaa/AAA 1,168,306 NEW MEXICO (1.17%) Albuquerque, NM Airport Revenue Bonds Series A, 1,500,000 3.75%, 07/01/17, Weekly Reset* VMIG1/A-1+ 1,500,000 Letter of Credit: Bayerische Landesbank NEW YORK (2.35%) New York, NY Municipal Water Finance Authory Water & Sewer System Revenue Bonds, Series A, 3,000,000 4.20%, 06/15/25, Daily Reset* VMIG1/A-1+ 3,000,000 Letter of Credit: Financial Guaranty Insurance Corporation NORTH CAROLINA (1.10%) Durham County, NC General Obligation Bonds, Public Improvement Project 1,400,000 3.65%, 02/01/09, Weekly Reset* VMIG1/A-1+ 1,400,000 Letter of Credit: Wachovia Bank OHIO (5.04%) University of Cincinnati, Bond Anticipation Notes 1,000,000 3.14%, 3/01/00 VMIG1/SP1 999,517 Ohio State Public Facilities Revenue Bonds, Series A 1,000,000 4.50%, 6/01/01, Prerefunded Aaa/AAA 1,001,201 Letter of Credit: Municipal Bond Insurance Agency Ohio State University Revenue Bonds, General Receipts Series B, 835,000 3.65%, 12/01/01, Daily Reset* VMIG1/A-1+ 835,000 Ohio State University Revenue Bonds, General Receipts Series B, 3,595,000 3.65%, 12/01/06, Daily Reset* VMIG1/A-1+ 3,595,000 Letter of Credit: National Westminster Total Ohio 6,430,718 OREGON (0.78%) Oregon State, General Obligation 1,000,000 3.45%, 6/29/00 Aa2/MIG1 1,000,000 PENNSYLVANIA (1.41%) Pennsylvania State Higher Education Assistance Agency Student Loan Revenue Bonds, Series B, 1,800,000 3.90%, 07/01/18, Weekly Reset* VMIG1/A-1+ 1,800,000 Letter of Credit: Student Loan Marketing TENNESSEE (1.58%) Tennessee State, General Obligation 1,000,000 4.0%, 5/01/00 Aaa/AAA 1,004,941 Shelby County 1,000,000 4.65%, 4/01/00 Aa3/AA+ 1,007,315 Total Tennessee 2,012,256 TEXAS (14.15%) Dallas 1,790,000 4.75%, 2/15/00 Aaa/AAA 1,801,078 El Paso 1,800,000 4.75%, 2/15/00 Aaa/AAA 1,810,946 Gulf Coast Waste Disposal 1,600,000 4.00%, 1/01/26, Daily Reset* Aa1/AAA 1,600,000 Gulf Coast Waste Disposal 3,800,000 4.00%, 7/01/27, Daily Reset* Aa1/AAA 3,800,000 Texas State 2,000,000 6.00%, 8/01/00 Aaa/AAA 2,039,626 Texas State 1,000,000 6.80%, 10/01/09 NR/AA 1,000,000 Tyler Waterworks 1,000,000 4.25%, 9/01/00 Aaa/AAA 1,003,670 Lower Neches Valley Authority of Texas Revenue Bonds (Chevron USA Income Project), 1,500,000 3.45%, 02/15/17 NR/A1+ 1,500,000 Texas State Tax Revenue 2,000,000 4.50%, 8/31/00 VMIG1/SP1+ 2,014,152 Westside Calhoun County, Sewer & Solid Waste 1,500,000 4.00%, 4/01/31, Daily Reset* Aa2/AA 1,500,000 Total Texas 18,069,472 UTAH (1.17%) University of Utah Revenue Bonds, (Auxiliary & Campus Facilities - A), 1,500,000 3.70%, 04/01/27, Weekly Reset* VMIG1/A-1+ 1,500,000 Letter of Credit: Bank of Nova Scotia VERMONT (1.18%) Vermont Municipal Bond, Revenue Bonds 1995 1,500,000 5.00%, 12/01/99 Aaa/AAA 1,505,120 WASHINGTON (3.99%) Seattle, WA Water System Revenue Bonds, 1,000,000 3.77%, 09/01/25, Weekly Reset* VMIG1/A-1+ 1,000,000 Letter of Credit: Bayerische Landesbank Spokane, GO Limited Notes 1999 Bond Anticipation Notes 1,000,000 3.0%, 12/01/99 MIG1/NR 1,000,000 Washington State Health Care Facility Authority (Fred Hutchinson Cancer Research Center, Seattle) Series 1991-A, 3,100,000 4.25, 01/01/29, Daily Reset* VMIG1/NR 3,100,000 Total Washington 5,100,000 Total Investments (cost $128,192,507**) 100.38% 128,192,507 Liabilities in excess of other assets (0.38) (479,983) Net Assets 100.00% $127,712,524 (*) 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.
RATING FACE MOODY'S/ AMOUNT BONDS AND NOTES (100.38%) S&P VALUE
See accompanying notes to financial statements PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST STATEMENT OF INVESTMENTS SEPTEMBER 30, 1999 (UNAUDITED) $ 4,959,000 4.32%, due 01/06/00 $ 4,901,358 U.S. GOVERNMENT AGENCIES (99.0%) FEDERAL HOME LOAN BANK (69.0%) 100,384,000 5.17%, due 10/01/99 100,384,000 20,000,000 4.83%, due 10/08/99 19,981,217 45,000,000 5.17%, due 10/22/99 44,864,200 15,000,000 5.02%, due 10/28/99 14,943,525 40,000,000 5.25%, due 11/29/99 39,655,833 11,133,000 5.49%, due 2/01/00 10,924,173 2,250,000 5.15%, due 3/08/00 2,250,000 5,000,000 4.77%, due 4/10/00 4,872,800 Total Federal Home Loan Bank 237,875,748 FARM CREDIT BUREAU (30.0%) 2,883,000 4.57%, due 10/01/99 2,883,000 20,000,000 5.04%, due 10/05/99 19,988,800 20,000,000 5.22%, due 10/20/99 19,944,900 20,975,000 5.17%, due 11/08/99 20,860,535 14,634,000 5.22%, due 11/17/99 14,534,269 12,675,000 5.23%, due 11/23/99 12,577,406 13,221,000 4.98%, due 5/18/00 12,799,929 Total Farm Credit Bureau 103,588,839 Total U.S. Government Agencies 341,464,587 Total Investments (cost $346,365,945*) 100.4% 346,365,945 Liabilities in excess of other assets (0.4) (1,503,032) Net Assets 100.0% $344,862,913 (*) Cost for Federal tax purposes is identical.
FACE AMOUNT U.S. TREASURY BILLS (1.4%) VALUE
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF ASSETS AND LIABILITIES SEPTEMBER 30, 1999 (UNAUDITED) ASSETS: Investments at value (cost $574,928,692, $128,192,507 and $346,365,945, respectively) $574,928,692 $128,192,507 $346,365,945 Cash 931 2,533 97 Interest receivable 69,243 915,951 7,537 Other assets 6,576 341 11,221 Total Assets 575,005,442 129,111,332 346,384,800 LIABILITIES: Payable for investment securities purchased - 1,003,670 - Dividends payable 2,112,298 297,896 1,340,878 Adviser and Administrator fees payable 228,911 43,128 118,018 Distribution fees payable 37,825 8,809 45,360 Accrued expenses 12,702 45,305 17,631 Total Liabilities 2,391,736 1,398,808 1,521,887 NET ASSETS $572,613,706 $127,712,524 $344,862,913 NET ASSETS CONSIST OF: Capital Stock - Authorized an unlimited number of shares, par value $.01 per share $ 5,730,053 $ 1,277,104 $ 3,448,456 Additional paid-in capital 567,280,537 126,435,461 341,424,182 Accumulated net realized loss on investments (396,884) (41) (9,725) $572,613,706 $127,712,524 $344,862,913 SHARES OF BENEFICIAL INTEREST: Original Shares Class: Net Assets $388,231,399 $ 86,746,420 $115,373,334 Shares outstanding 388,705,912 86,745,016 115,363,411 Net asset value per share $1.00 $1.00 $1.00 Service Shares Class: Net Assets $184,382,307 $ 40,966,104 $229,489,579 Shares outstanding 184,299,412 40,965,420 229,482,181 Net asset value per share $1.00 $1.00 $1.00
CASH TAX-FREE GOVERNMENT FUND FUND FUND
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1999 (UNAUDITED) INVESTMENT INCOME: Interest income $ 14,417,353 $ 2,058,787 $ 8,843,615 EXPENSES: Investment Adviser fees (note 3) 1,073,072 180,426 575,482 Administrator fees (note 3) 363,637 72,816 143,894 Distribution fees (note 3) 220,686 57,902 283,249 Trustees' fees and expenses 74,500 28,000 56,000 Legal fees 24,000 8,000 19,000 Shareholders' reports 18,500 4,000 13,000 Registration fees and dues 15,000 5,500 22,000 Fund accounting fees 14,750 14,000 14,800 Transfer and shareholder servicing agent fees 13,500 14,000 13,000 Insurance 12,350 2,800 8,500 Audit and accounting fees 9,000 7,625 9,000 Custodian fees 2,869 3,135 2,387 Miscellaneous 7,875 2,190 16,163 Total expenses 1,849,739 400,394 1,176,475 Expenses paid indirectly (note 6) (399) (2,325) - Net expenses 1,849,340 398,069 1,176,475 Net investment income 12,568,013 1,660,718 7,667,140 Net realized gain (loss) from securities transactions 14,639 - (1,234) Net increase in net assets resulting from operations $ 12,582,652 $ 1,660,718 $ 7,665,906
CASH TAX-FREE GOVERNMENT FUND FUND FUND
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST STATEMENTS OF CHANGES IN NET ASSETS (UNAUDITED) INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income 12,568,013 $ 26,323,450 1,660,718 $ 3,665,409 7,667,140 $ 14,942,868 Net realized gain (loss) from securities transactions 14,639 219,878 - 164 (1,234) (8,032) Net increase in net assets resulting from operations 12,582,652 26,543,328 1,660,718 3,665,573 7,665,906 14,934,836 DIVIDENDS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Original Shares (8,856,672) (20,213,192) (1,089,830) (2,429,740) (2,935,497) (6,660,794) Service Shares (3,711,341) (6,110,258) (570,888) (1,235,669) (4,731,643) (8,282,074) Total dividends to shareholders from net investment income (12,568,013) (26,323,450) (1,660,718) (3,665,409) (7,667,140) (14,942,868) CAPITAL SHARE TRANSACTIONS (at $1.00 per share): Proceeds from shares sold: Original Shares 541,508,311 1,391,409,673 82,726,649 179,018,803 147,070,265 507,780,125 Service Shares 176,604,772 393,617,033 28,559,475 115,791,206 489,467,704 1,014,867,768 718,113,083 1,785,026,706 111,286,124 294,810,009 636,537,969 1,522,647,893 Reinvested dividends and distributions: Original Shares 86,814 124,236 46,866 105,339 20,031 59,163 Service Shares 3,589,575 6,031,200 567,362 1,211,951 4,610,860 8,074,146 3,676,389 6,155,436 614,228 1,317,290 4,630,891 8,133,309 Cost of shares redeemed: Original Shares (571,123,529) (1,392,720,503) (79,452,646) (172,261,157) (171,594,363) (468,776,126) Service Shares (158,459,169) (350,487,018) (35,719,321) (106,556,540) (478,871,229) (958,541,263) (729,582,698) (1,743,207,521) (115,171,967) (278,817,697) (650,465,592) (1,427,317,389) Change in net assets from capital share transactions (7,793,226) 47,974,621 (3,271,615) 17,309,602 (9,296,732) 103,463,813 Total increase (decrease) in net assets (7,778,587) 48,194,499 (3,271,615) 17,309,766 (9,297,966) 103,455,781 NET ASSETS: Beginning of period 580,392,293 532,197,794 130,984,139 113,674,373 354,160,879 250,705,098 End of period $ 572,613,706 $ 580,392,293 $ 127,712,524 $ 130,984,139 $ 344,862,913 $ 354,160,879
CASH FUND TAX-FREE FUND GOVERNMENT FUND SIX MONTHS YEAR SIX MONTHS YEAR SIX MONTHS YEAR ENDED ENDED ENDED ENDED ENDED ENDED SEPT. 30, 1999 MARCH 31, 1999 SEPT. 30, 1999 MARCH 31, 1999 SEPT. 30, 1999 MARCH 31, 1999
See accompanying notes to financial statements. THE PACIFIC CAPITAL FUNDS OF CASH ASSETS TRUST NOTES TO FINANCIAL STATEMENTS (UNAUDITED) 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 generally accepted accounting principles 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 is 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 generally accepted accounting principles 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: Pacific Century Trust (the "Adviser"), a division of Bank of Hawaii, 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. For the six months ended September 30, 1999, the Fund incurred fees under the Advisory Agreement and the Administration Agreement of $1,073,072 and $363,637, 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. For the six months ended September 30, 1999, the Fund incurred fees under the Advisory Agreement and the Administration Agreement of $180,426 and $72,816, 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. For the six months ended September 30, 1999, the Fund incurred fees under the Advisory Agreement and the Administration Agreement of $575,482 and $143,894, 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 six months ended September 30, 1999. 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 1% 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. 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. At September 30, 1999, the Cash Fund had a capital loss carryover of approximately $396,800 which expires on March 31, 2003. This amount is available to offset future net realized gains on securities transactions to the extent provided for in the Internal Revenue Code and it is probable the gains so offset will not be distributed. 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 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 (UNAUDITED) FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 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 $1.00 $1.00 Income from Investment Operations: Net investment income 0.02 0.05 0.05 0.05 0.05 0.01 0.02 0.05 0.05 0.05 0.05 0.04 Less Distributions: Dividends from net investment income (0.02) (0.05) (0.05) (0.05) (0.05) (0.01) (0.02) (0.05) (0.05) (0.05) (0.05) (0.04) 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 $1.00 $1.00 Total Return (%) 2.12+ 4.64 4.88 4.62 5.06 0.85+ 2.25+ 4.90 5.15 4.88 5.32 4.40 Ratios/Supplemental Data Net Assets, End of Period ($ millions) 184.4 162.6 113.4 65.8 32.9 3.5 388.2 417.7 418.8 421.4 308.7 486.7 Ratio of Expenses to Average Net Assets (%) 0.82* 0.81 0.83 0.85 0.86 0.83* 0.57* 0.57 0.58 0.60 0.61 0.59 Ratio of Net Investment Income to Average Net Assets (%) 4.20* 4.51 4.77 4.53 4.84 5.26* 4.45* 4.79 5.03 4.78 5.23 4.40 For periods after April 1, 1995, the expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of Expenses to Average Net Assets (%) 0.82* 0.81 0.82 0.85 0.86 0.57* 0.56 0.57 0.60 0.60
SERVICE SHARES(1) ORIGINAL SHARES(2) SIX MONTHS PERIOD SIX MONTHS ENDED YEAR ENDED MARCH 31, ENDED ENDED YEAR ENDED MARCH 31, 9/30/99 1999 1998 1997 1996 3/31/95** 9/30/99 1999 1998 1997 1996 1995
(1)New class of shares established on January 20, 1995. (2)Designated as the "Original Shares" class of shares on January 20, 1995. ** For the period from February 1, 1995 (commencement of operations) to March 31, 1995. + Not annualized. * Annualized. See accompanying notes to financial statements. PACIFIC CAPITAL TAX-FREE CASH ASSETS TRUST FINANCIAL HIGHLIGHTS (UNAUDITED) FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 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 $1.00 $1.00 Income from Investment Operations: Net investment income 0.01 0.03 0.03 0.03 0.03 0.01 0.01 0.03 0.03 0.03 0.03 0.03 Less Distributions: Dividends from net investment income (0.01) (0.03) (0.03) (0.03) (0.03) (0.01) (0.01) (0.03) (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 $1.00 $1.00 Total Return (%) 1.24+ 2.65 2.83 2.75 3.11 0.52+ 1.37+ 2.91 3.08 3.00 3.37 2.74 Ratios/Supplemental Data Net Assets, End of Period ($ millions) 41.0 47.6 37.1 25.5 17.6 1.4 86.7 83.4 76.6 91.0 125.2 138.3 Ratio of Expenses to Average Net Assets (%) 0.79* 0.79 0.88 0.80 0.80 0.77* 0.54* 0.54 0.63 0.55 0.54 0.55 Ratio of Net Investment Income to Average Net Assets (%) 2.46* 2.64 2.79 2.70 2.97 3.22* 2.71* 2.85 3.04 2.97 3.32 2.74 For periods after April 1, 1995, the expense ratios after giving effect to the expense offset for uninvested cash balances were: Ratio of Expenses to Average Net Assets (%) 0.79* 0.78 0.88 0.80 0.80 0.54* 0.53 0.63 0.55 0.54
SERVICE SHARES(1) ORIGINAL SHARES(2) SIX MONTHS PERIOD SIX MONTHS ENDED YEAR ENDED MARCH 31, ENDED ENDED YEAR ENDED MARCH 31, 9/30/99 1999 1998 1997 1996 3/31/95** 9/30/99 1999 1998 1997 1996 1995
(1) New class of shares established on January 20, 1995. (2) Designated as the "Original Shares" class of shares on January 20, 1995. ** For the period from February 1, 1995 (commencement of operations) to March 31, 1995. + Not annualized. * Annualized. See accompanying notes to financial statements. PACIFIC CAPITAL U.S. GOVERNMENT SECURITIES CASH ASSETS TRUST FINANCIAL HIGHLIGHTS (UNAUDITED) FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD 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 $1.00 $1.00 Income from Investment Operations: Net investment income 0.02 0.04 0.05 0.04 0.05 0.01 0.02 0.04 0.05 0.05 0.05 0.04 Less Distributions: Dividends from net investment income (0.02) (0.04) (0.05) (0.04) (0.05) (0.01) (0.02) (0.04) (0.05) (0.05) (0.05) (0.04) 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 $1.00 $1.00 Total Return (%) 2.10+ 4.54 4.69 4.50 4.94 0.94+ 2.23+ 4.80 4.95 4.76 5.20 4.20 Ratios/Supplemental Data Net Assets, End of Period ($ millions) 229.5 214.2 149.9 83.4 11.8 0.5 115.4 139.9 100.8 65.7 74.0 64.0 Ratio of Expenses to Average Net Assets (%) 0.75* 0.74 0.77 0.80 0.80 0.85* 0.50* 0.49 0.52 0.56 0.55 0.54 Ratio of Net Investment Income to Average Net Assets (%) 4.18* 4.42 4.60 4.42 4.67 5.09* 4.41* 4.70 4.85 4.65 5.06 4.04 The expense and net investment income ratios without the effect of the Adviser's and Administrator's voluntary waiver of fees for periods prior to April 1, 1996 were: Ratio of Expenses to Average Net Assets (%) - - - - 0.88 0.98* - - - - 0.63 0.59 Ratio of Net Investment Income to Average Net Assets (%) - - - - 4.59 4.96* - - - - 4.98 3.99 The expense ratios after giving effect to the waivers and the expense offset for uninvested cash balances (for periods after April 1, 1995) were: Ratio of Expenses to Average Net Assets (%) 0.75* 0.74 0.77 0.79 0.79 0.50* 0.49 0.52 0.55 0.54
SERVICE SHARES(1) ORIGINAL SHARES(2) SIX MONTHS PERIOD SIX MONTHS ENDED YEAR ENDED MARCH 31, ENDED ENDED YEAR ENDED MARCH 31, 9/30/99 1999 1998 1997 1996 3/31/95** 9/30/99 1999 1998 1997 1996 1995
(1) New class of shares established on January 20, 1995. (2) Designated as the "Original Shares" class of shares on January 20, 1995. ** For the period from February 1, 1995 (commencement of operations) to March 31, 1995. + Not annualized. * Annualized. See accompanying notes to financial statements. PREPARING FOR YEAR 2000 (UNAUDITED) The Trustees and officers of the Trust have been monitoring issues involving preparedness for the turn of the century for some time in an effort to minimize or eliminate any potential impact upon the Trust and its shareholders. Our officers have focussed significant time and effort in order that the various computerized functions that could affect the Trust are ready by the beginning of the year 2000. The Trust is highly reliant on certain mission-critical suppliers' services. Each supplier of these services has provided the Trust's officers with assurances that it is actively addressing potential problems relating to the year 2000. The officers, in turn, are monitoring and will continue to monitor the progress of its suppliers. The Trust has NOT incurred, nor is anticipated to incur, any costs related to Y2K. All such costs are being incurred by the respective vendors. As you can well understand, we cannot directly control our supplier operations. We assure you, however, that we recognize a responsibility to inform our shareholders if in the future we become aware of any developments which would lead us to believe that the Trust will be significantly affected by year 2000 problems. We will continue to keep you up-to-date through future communications. -----END PRIVACY-ENHANCED MESSAGE-----