N-CSR 1 c29258_ncsr.htm c29258 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05813

CASH RESERVES PORTFOLIO
(Exact name of registrant as specified in charter)

125 Broad Street, New York, NY 10004
(Address of principal executive offices) (Zip code)

Christina T. Sydor, Esq.
Smith Barney Fund Management LLC
300 First Stamford Place
Stamford, CT 06902
 (Name and address of agent for service)

Registrant's telephone number, including area code: (800) 451-2010

Date of fiscal year end:  AUGUST 31
Date of reporting period: AUGUST 31, 2003

ITEM 1. REPORT TO STOCKHOLDERS.

The ANNUAL Report to Stockholders is filed herewith.
Cash Reserves Portfolio    
P O R T F O L I O   O F   I N V E S T M E N T S
August 31, 2003
  
  Principal        
  Amount        
Issuer
 (000’s omitted)    
Value
  
 
           
Asset Backed — 9.7%          
 
K2 USA LLC,*            
   1.07% due 04/07/04
$
 140,000  
$
 139,991,691  
   1.08% due 04/26/04   156,500     156,484,776  
   1.07% due 05/18/04   75,000     74,989,636  
Links Finance Corp.,*            
   1.09% due 10/15/03   250,000     249,996,986  
   1.08% due 03/15/04   200,000     199,988,299  
   1.06% due 06/16/04   100,000     99,976,311  
   1.07% due 07/15/04   400,000     399,930,492  
Premier Asset Coll            
   Entity Ltd.,*            
   1.08% due 02/17/04   100,000     99,985,991  
   1.08% due 04/26/04   100,000     99,993,515  
   1.08% due 05/17/04   125,000     124,991,202  
Sigma Finance Corp.,*            
   1.07% due 01/05/04   150,000     149,994,750  
   1.08% due 02/10/04   100,000     99,993,342  
   1.07% due 04/05/04   500,000     499,970,192  
   1.08% due 04/28/04   100,000     99,990,164  
   1.08% due 04/30/04   250,000     249,975,205  
   1.07% due 07/15/04   373,000     372,918,980  
   1.07% due 08/17/04   250,000     249,939,566  
Stanfield Victoria            
   Finance Ltd.,*            
   1.07% due 05/04/04   100,000     99,993,333  
   1.08% due 06/01/04   100,000     99,988,892  
   1.07% due 06/15/04   100,000     99,988,164  
Whistlejacket            
   Capital Ltd.,*            
   1.09% due 02/17/04   90,000     89,995,878  
   1.07% due 06/28/04   50,000     49,991,821  
         
 
          3,809,069,186  
         
 
             
Certificates of Deposit        
(Domestic) — 1.0%            
 
Wells Fargo Bank,            
   1.05% due 09/02/03   320,000     319,999,996  
   1.06% due 10/03/03   89,000     88,999,985  
         
 
          408,999,981  
         
 
             
Certificates of Deposit (Euro) — 11.6%  
 
Barclays Bank,            
   1.26% due 09/03/03   153,000     153,000,167  
Barclays Bank London            
   1.05% due 09/17/03   500,000     500,000,000  
Credit Suisse London,            
   1.09% due 12/22/03   250,000     250,000,000  
HBOS,            
   1.22% due 09/08/03   458,000     458,000,000  
HBOS London,            
   1.05% due 12/30/03   500,000     500,016,580  
San Paulo Euro CD,            
   1.05% due 12/24/03   175,000     175,000,000  
  Principal        
  Amount        
Issuer
 (000’s omitted)     Value  
 
           
Unicredito Italiano            
   1.06% due 10/07/03 $ 750,000   $ 750,000,000  
   1.05% due 10/20/03   500,000     500,000,000  
Westdeutsche            
   Landesbank,            
   1.07% due 10/07/03 1,300,000     1,300,006,482  
       
 
          4,586,023,229  
         
 
             
Certificates of Deposit (Yankee) — 8.9%  
 
Banco Bilbao,            
   1.08% due 12/26/03   200,000     200,000,000  
Bayerische Landesbank,            
   1.24% due 09/08/03   172,000     172,000,000  
   1.22% due 11/03/03   100,000     100,006,958  
BNP Paribas,            
   1.18% due 11/17/03   350,000     350,000,000  
Canadian Imperial            
   Bank,            
   1.25% due 10/22/03   100,000     99,999,988  
   1.04% due 10/28/03   250,000     250,000,000  
   1.06% due 03/11/04*   200,000     199,985,490  
Credit Agricole,            
   1.06% due 10/10/03   250,000     250,000,000  
Credit Lyonnais,            
   1.09% due 12/08/03   400,000     400,010,849  
Danske Bank,            
   1.04% due 09/29/03   220,000     220,000,000  
   1.04% due 09/30/03   248,500     248,500,000  
Royal Bank            
   Scotland PLC.,            
   1.06% due 10/10/03   150,000     150,000,000  
Toronto Dominion            
   Bank,            
   1.24% due 09/08/03   100,000     100,000,000  
   1.21% due 11/10/03   200,000     200,003,803  
   1.08% due 12/30/03   91,000     91,005,984  
Westdeutsche            
   Landesbank,            
   1.04% due 12/10/03   388,000     388,000,000  
   1.04% due 12/15/03   100,000     100,000,000  
         
 
          3,519,513,072  
         
 
             
Commercial Paper — 26.3%        
 
Amstel Funding Corp.,            
   1.27% due 10/24/03   219,000     218,590,531  
   1.19% due 10/28/03   100,081     99,892,431  
   1.10% due 11/17/03   100,000     99,764,722  
   1.06% due 12/17/03   182,316     181,741,603  
   1.06% due 12/29/03   321,193     320,067,575  
Aquinas Funding LLC,            
   1.21% due 10/06/03   100,000     99,882,361  
Atlantis One Funding            
   Corp.,            
   1.05% due 10/28/03   185,000     184,692,438  

21

Cash Reserves Portfolio      
P O R T F O L I O   O F   I N V E S T M E N T S  (Continued)
August 31, 2003
  
  Principal        
  Amount        
Issuer
 (000’s omitted)     Value  
 
           
Commercial Paper — (cont’d)        
 
Atomium Funding Corp.,            
   1.07% due 09/09/03 $ 70,738   $ 70,721,180  
   1.06% due 09/10/03   100,193     100,166,449  
   1.05% due 10/09/03   95,652     95,545,986  
   1.10% due 10/28/03   112,613     112,416,866  
   1.09% due 11/06/03   128,873     128,615,462  
   1.10% due 11/18/03   114,362     114,089,437  
   1.06% due 11/21/03   125,000     124,701,875  
Beethoven Funding            
   Corp.,            
   1.10% due 09/19/03   99,453     99,398,301  
Clipper Receivables,            
   1.24% due 09/05/03   100,000     99,986,222  
   1.08% due 09/09/03   100,000     99,976,000  
Compass            
   Securitization,*            
   1.063% due 09/05/03   150,000     149,999,860  
   1.063% due 09/08/03   200,000     199,999,614  
Credit Lyonnais,            
   1.08% due 12/04/03   130,000     129,633,400  
Danske Bank,            
   1.04% due 12/16/03   100,000     99,693,778  
Galleon Capital Corp.,            
   1.24% due 09/05/03   100,000     99,986,222  
GE Capital Corp.,            
   1.21% due 09/05/03   100,000     99,986,556  
   0.94% due 09/16/03   75,000     74,970,625  
   1.20% due 09/24/03   200,000     199,846,667  
Giro Funding U.S.            
   Corp.,            
   1.05% due 09/29/03   100,000     99,918,333  
Goldman Sachs,            
   1.05% due 11/26/03   353,500     352,613,304  
Grampian Funding Ltd.,            
   1.10% due 12/02/03   100,615     100,332,160  
   1.09% due 12/12/03   210,000     209,351,450  
   1.08% due 12/15/03   350,500     349,395,925  
HBOS Treasury            
   Services PLC.,            
   1.09% due 12/29/03   150,000     149,462,021  
KBC Financial Products,            
   1.27 due 09/03/03   100,000     99,992,944  
Mica Funding LLC,            
   0.97% due 09/18/03   249,191     249,076,858  
   1.06% due 09/19/03   50,131     50,104,431  
   1.10% due 10/10/03   185,000     184,779,542  
   1.07% due 10/21/03   250,000     249,628,472  
   1.09% due 11/10/03   140,500     140,202,218  
   1.10% due 11/21/03   150,000     149,628,750  
Moat Funding LLC,            
   1.25% due 09/05/03   100,000     99,986,111  
   1.05% due 10/02/03   65,000     64,941,229  
   1.05% due 10/03/03   100,000     99,906,667  
   1.27% due 10/09/03   100,000     99,865,944  
   1.20% due 11/19/03   200,000     199,473,333  
   1.04% due 12/17/03   100,000     99,690,889  
  Principal        
  Amount        
Issuer
 (000’s omitted)     Value  
 
           
Nestle Capital Corp.,            
   1.18% due 09/03/03
$
 100,000   $ 99,993,444  
   1.18% due 09/04/03   100,000     99,990,167  
Nordeutsche            
   Landesbank,            
   1.07% due 12/08/03   100,000     99,708,722  
Pennine Funding,            
   1.25% due 09/02/03   141,500     141,495,087  
Perry Global Funding,            
   1.04% due 10/09/03   199,366     199,147,140  
Prudential PLC.,            
   1.20% due 10/10/03   100,000     99,870,000  
Regency Markets LLC,            
   1.09% due 09/19/03   210,882     210,767,069  
Santander,            
   1.10% due 12/24/03   190,000     189,341,175  
Scaldis,            
   1.06% due 09/15/03   678,743     678,463,207  
   1.10% due 11/20/03   115,000     114,718,888  
Silver Tower US            
   Funding LLC,            
   1.09% due 09/08/03   524,000     523,888,940  
   1.12% due 09/17/03   282,000     281,859,626  
   1.07% due 09/26/03   250,000     249,814,236  
Surrey Funding Corp.,            
   1.06% due 09/17/03   120,000     119,943,467  
United Parcel Services,            
   1.19% due 09/03/03   100,000     99,993,389  
Victory Receivable            
   Corp.,            
   1.06% due 09/11/03   142,903     142,860,923  
   1.10% due 09/15/03   132,100     132,043,491  
   1.11% due 09/16/03   133,700     133,638,164  
   1.11% due 10/21/03   111,277     111,105,448  
   1.06% due 10/31/03   149,794     149,529,364  
   1.10% due 11/12/03   141,216     140,905,325  
         
 
    10,371,794,014  
     
 
             
Corporate Notes — 15.1%        
 
Brahms Funding Corp.,            
   1.13% due 09/04/03   300,000     299,971,750  
   1.12% due 09/09/03   615,350     615,196,846  
   1.12% due 09/10/03   199,000     198,944,280  
   1.12% due 09/16/03   175,351     175,269,170  
   1.13% due 09/25/03   113,161     113,075,752  
   1.15% due 09/26/03   101,905     101,823,618  
   1.15% due 10/14/03   80,437     80,326,511  
Fenway Funding,            
   1.15% due 09/12/03   193,493     193,425,009  
   1.15% due 09/18/03   148,697     148,616,249  
   1.15% due 09/19/03   73,325     73,282,838  
   1.15% due 09/29/03   123,034     122,923,953  
   1.15% due 10/03/03   247,500     247,247,000  
   1.15% due 10/10/03   175,986     175,766,751  
   1.15% due 10/24/03   245,000     244,585,201  

22

Cash Reserves Portfolio      
P O R T F O L I O   O F   I N V E S T M E N T S   (Continued)
August 31, 2003
  
  Principal        
  Amount        
Issuer
 (000’s omitted)     Value  
 
           
Corporate Notes — (cont’d)        
 
Foxboro Funding Ltd.,            
   1.13% due 09/12/03 $ 149,251   $ 149,199,467  
   1.15% due 10/15/03   136,856     136,663,641  
   1.16% due 11/07/03   80,880     80,705,389  
Harwood Funding            
   Corp.,            
   1.09% due 09/04/03   100,000     99,990,917  
   1.10% due 09/18/03   311,961     311,798,954  
   1.13% due 09/18/03   117,843     117,780,118  
Mittens,            
   1.13% due 09/02/03   100,000     99,996,861  
   1.04% due 09/03/03   100,000     99,994,222  
   1.05% due 09/03/03   100,000     99,994,167  
   1.08% due 09/15/03   100,000     99,958,000  
   1.13% due 09/15/03   150,000     149,934,083  
   1.14% due 09/15/03   218,100     218,003,309  
   1.13% due 09/24/03   100,000     99,927,806  
   1.10% due 10/09/03   200,000     199,767,778  
   1.13% due 10/14/03   99,000     98,866,377  
   1.10% due 10/15/03   150,000     149,798,333  
   1.11% due 10/15/03   48,400     48,334,337  
   1.15% due 11/05/03   200,000     199,584,722  
   1.15% due 11/06/03   175,000     174,631,042  
Motown,            
   1.06% due 10/24/03   107,000     106,833,021  
Park Granada LLC,            
   1.07% due 09/09/03   122,250     122,220,932  
   1.08% due 09/09/03   35,000     34,991,600  
   1.10% due 11/07/03   273,815     273,254,440  
         
 
          5,962,684,444  
         
 
             
Master Notes — 2.8%          
 
Morgan Stanley,            
   1.33% due 09/02/03   850,000     850,000,000  
Merrill Lynch,            
   1.28% due 09/02/03   265,000     265,000,000  
         
 
          1,115,000,000  
         
 
             
Medium Term Notes — 8.1%        
 
Blue Heron Funding,*            
   1.14% due 10/17/03   500,000     500,000,000  
   1.14% due 12/19/03   175,000     175,000,000  
   1.14% due 02/25/04   105,000     105,000,000  
   1.14% due 03/19/04   200,000     200,000,000  
   1.14% due 05/19/04   438,750     438,750,000  
   1.14% due 05/28/04   180,000     180,000,000  
Credit Suisse            
   First Boston,*            
   1.12% due 03/08/04   450,000     450,000,000  
General Electric            
   Capital Corp.,*            
   1.19% due 07/09/07   500,000     500,000,000  
   1.14% due 10/17/07   350,000     350,000,000  
  Principal        
  Amount        
Issuer
 (000’s omitted)     Value  
   
 
           
Merrill Lynch & Co. Inc.,*            
   1.24% due 01/09/04 $ 300,000   $ 299,988,612  
   
   
 
          3,198,738,612  
         
 
             
Promissory Note — 3.5%        
 
Goldman Sachs,            
1.22% due 02/24/04 1,400,000     1,400,000,000  
       
 
             
Time Deposits — 4.2%        
 
Chase Manhattan            
   Bank Nassau,            
   1.00% due 09/02/03   300,000     300,000,000  
Credit Suisse            
   First Boston,            
   1.05% due 10/01/03   800,000     800,000,000  
Keybank National            
   Grand Cayman,            
   1.00% due 09/02/03   288,337     288,337,000  
National City Bank            
   Grand Cayman,            
   1.00% due 09/02/03   250,000     250,000,000  
         
 
          1,638,337,000  
         
 
             
United States            
Government Agency — 8.7%        
 
Federal Home Loan            
   Mortgage            
   Association,            
   1.00% due 10/30/03   100,000     99,836,111  
Federal Home Loan            
   Mortgage            
   Association,            
   1.00% due 10/31/03   200,000     199,666,667  
Federal Home Loan            
   Mortgage            
   Association,            
   1.08% due 11/21/03   500,000     498,785,000  
Federal Home Loan            
   Mortgage            
   Association,            
   1.08% due 12/09/03   89,250     88,984,928  
Federal Home Loan            
   Mortgage            
   Association,            
   1.08% due 12/15/03   388,643     387,418,775  
Federal Home Loan            
   Mortgage            
   Association,            
   1.04% due 12/19/03   285,000     284,102,567  
Federal Home Loan            
   Mortgage            
   Association,            
   1.08% due 12/19/03   200,000     199,346,000  

23

Cash Reserves Portfolio      
P O R T F O L I O   O F   I N V E S T M E N T S  (Continued)
August 31, 2003
  
  Principal        
  Amount        
Issuer
 (000’s omitted)     Value  
 
           
United States            
Government Agency — (cont’d)        
 
Federal Home Loan            
   Mortgage            
   Association,            
   1.04% due 12/22/03
$
 500,000   $ 498,382,222  
Federal Home Loan            
   Mortgage            
   Association,            
   1.10% due 12/22/03   550,000     548,117,778  
Federal National            
   Mortgage            
   Association,            
   1.08% due 12/16/03   150,000     149,525,208  
Federal National            
   Mortgage            
   Association,*            
   1.01% due 01/28/05   228,000     227,903,310  
Federal National            
   Mortgage            
   Association,*            
   1.05% due 02/18/05   235,130     235,060,798  
         
 
          3,417,129,364  
         
 
Total Investments,            
at Amortized Cost 99.9 %   39,427,288,902  
Other Assets,            
      Less Liabilities   0.1     19,804,938  
   
   
 
             
Net Assets 100.0 %
$
 39,447,093,840  
 
   
 
             
*Variable interest rates—subject to periodic  
  change.            
             
See notes to financial statements        

24

Cash Reserves Portfolio          
S T A T E M E N T   O F   A S S E T S   A N D   L I A B I L I T I E S  
           
August 31, 2003            
 
Assets:          
Investments at value (Note 1A)    
$
 39,427,288,902  
Cash       512  
Interest receivable         24,256,632  
 
   Total assets         39,451,546,046  
 
Liabilities:            
Management fees payable (Note 2)     3,113,186  
Accrued expenses and other liabilities     1,339,020  
 
   Total liabilities         4,452,206  
 
Net Assets      
$
 39,447,093,840  
 
Represented by:            
Paid-in capital for beneficial interests  
$
 39,447,093,840  
 
             
             
See notes to financial statements          

25

Cash Reserves Portfolio            
S T A T E M E N T   O F   O P E R AT I O N S  
           
For the Year Ended August 31, 2003          
 
               
Interest Income (Note 1B):         $
663,606,463
  
               
Expenses:            
Management fees (Note 2)   $ 66,705,349      
Custody and fund accounting fees     8,555,695      
Trustees’ fees     692,498      
Legal fees       253,408      
Audit fees       40,415      
Other       31,171      
 
   Total expenses       76,278,536      
Less: aggregate amounts waived by the Manager (Note 2) (31,802,902 )    
Less: fees paid indirectly (Note 1F)     (473 )    
 
   Net expenses             44,475,161  
 
Net investment income           $ 619,131,302  
 
               
See notes to financial statements            

26

Cash Reserves Portfolio                
S T A T E M E N T S   O F   C H A N G E S   I N   N E T   A S S E T S
               
               
        Year Ended August 31,  
       
 
       
2003
2002
  
 
                   
Increase (Decrease) in Net Assets              
   from Operations:                  
Net investment income     $ 619,131,302   $ 1,026,102,717  
 
Capital Transactions:                  
Proceeds from contributions       95,248,125,837     96,678,280,874  
Value of withdrawals     (101,427,035,864 )   (84,770,853,952 )
 
Net increase (decrease) in net assets from              
   capital transactions       (6,178,910,027 )   11,907,426,922  
 
Net Increase (Decrease) in Net Assets   (5,559,778,725 )   12,933,529,639  
 
Net Assets:                  
Beginning of year       45,006,872,565     32,073,342,926  
 
End of year     $ 39,447,093,840   $ 45,006,872,565  
 
                   
See notes to financial statements                

27

Cash Reserves Portfolio

N O T E S   T O   F I N A N C I A L   S T A T E M E N T S

1. Significant Accounting Policies Cash Reserves Portfolio (the “Portfolio”) is registered under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”), as a no-load, diversified, open-end management investment company which was organized as a trust under the laws of the State of New York. The Declaration of Trust permits the Trustees to issue beneficial interests in the Portfolio. Citi Fund Management Inc. (the “Manager”) acts as the Investment Manager.

     The preparation of financial statements in accordance with United States of America generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

     The significant accounting policies consistently followed by the Portfolio are as follows:

     A. Valuation of Investments Money market instruments are valued at amortized cost, in accordance with Rule 2a-7 under the 1940 Act. This method involves valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. The Portfolio’s use of amortized cost is subject to its compliance with certain conditions as specified under Rule 2a-7 of the 1940 Act.

     B. Interest Income and Expenses Interest income consists of interest accrued and discount earned (including both original issue and market discount adjusted for amortization of premium) on the investments of the Portfolio, accrued ratably to the date of maturity, plus or minus net realized gain or loss, if any, on investments. Expenses of the Portfolio are accrued daily. The Portfolio bears all costs of its operations other than expenses specifically assumed by the Administrator.

     C. U.S. Federal Income Taxes The Portfolio is considered a partnership under the U.S. Internal Revenue Code. Accordingly, no provision for federal income taxes is necessary.

     D. Repurchase Agreements It is the policy of the Portfolio to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian bank’s vault, all securities held as collateral in support of repurchase agreement investments. Additionally, procedures have been established to monitor, on a daily basis, the market value of the repurchase agreements’ underlying investments to ensure the existence of a proper level of collateral.

     E. Other Purchases, maturities and sales of money market instruments are accounted for on the date of the transaction.

     F. Fees Paid Indirectly The Portfolio’s custodian calculates its fees based on the Portfolio’s average daily net assets. The fee is reduced according to a fee arrangement, which provides for custody fees to be reduced based on a formula developed to measure the value of cash deposited with the custodian by the Portfolio. This amount is shown as a reduction of expenses on the Statement of Operations.

28

Cash Reserves Portfolio

N O T E S   T O   F I N A N C I A L   S T A T E M E N T S   (Continued)

2. Management Fees The Manager is responsible for overall management of the Portfolio’s business affairs, and has a Management Agreement with the Portfolio. The Manager or an affiliate also provides certain administrative services to the Portfolio. These administrative services include providing general office facilities and supervising the overall administration of the Portfolio.

     The management fees paid to the Manager are accrued daily and payable monthly. The management fee is computed at an annual rate of 0.15% of the Funds’ average daily net assets. The management fee amounted to $66,705,349 of which $31,802,902 was voluntarily waived for the year ended August 31, 2003. The Portfolio pays no compensation directly to any Trustee or any officer who is affiliated with the Manager, all of whom receive remuneration for their services to the Portfolio from the Manager or its affiliates. Certain of the officers and a Trustee of the Portfolio are officers and a director of the Manager or its affiliates.

3. Investment Transactions Purchases, maturities and sales of money market instruments aggregated $708,198,861,551 and $714,004,635,617, respectively, for the year ended August 31, 2003.

4.Trustee Retirement Plan The Trustees of the Fund have adopted a Retirement Plan for all Trustees who are not “interested persons” of the Fund, within the meaning of the 1940 Act. Under the Plan, all Trustees are required to retire from the Board as of the last day of the calendar year in which the applicable Trustee attains age 75 (certain Trustees who had already attained age 75 when the Plan was adopted are required to retire effective December 31, 2003). Trustees may retire under the Plan before attaining the mandatory retirement age. Trustees who have served as Trustee of the Trust or any of the investment companies associated with Citigroup for at least ten years when they retire are eligible to receive the maximum retirement benefit under the Plan. The maximum retirement benefit is an amount equal to five times the amount of retainer and regular meeting fees payable to a Trustee during the calendar year ending on or immediately prior to the applicable Trustee’s retirement. Amounts under the Plan may be paid in installments or in a lump sum (discounted to present value). The Fund’s allocable share of the expenses of the Plan for the year ended August 31, 2003 and the related liability at August 31, 2003 was not material.

29

Cash Reserves Portfolio                        
F I N A N C I A L   H I G H L I G H T S                  
                         
                         
            Year Ended August 31,      
     
 
     
2003
2002
2001
2000
1999
  
 
Ratios/Supplemental Data:                          
 
$
39,447,094
$
45,006,873
$32,073,343
$14,392,341
$14,929,345
Net assets (000’s omitted)            
Ratio of expenses to                          
   average net assets     0.10 %   0.10 % 0.10 % 0.10 % 0.10 %
Ratio of net investment                          
income to average net assets   1.39 %   2.29 % 5.27 % 5.93 % 5.13 %
Total return     1.49 %   2.36 % N/A   N/A   N/A  
Note: If agents of the Portfolio had not voluntarily waived a portion of their fees for the years indicated,  
the ratios would have been as follows:                        
Ratios:                        
Expenses to average net assets   0.17 %   0.19 % 0.22 % 0.22 % 0.22 %
Net investment income                        
   to average net assets     1.32 %   2.20 % 5.15 % 5.81 % 5.01 %
 
                           
                           
See notes to financial statements                        

30

Cash Reserves Portfolio

R E P O R T  O F  I N D E P E N D E N T  A U D I TO R S

To the Trustees and Investors of Cash Reserves Portfolio:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Cash Reserves Portfolio (the “Portfolio”) at August 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. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Portfolio’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2003 by correspondence with the custodian, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
October 16, 2003

31

Cash Reserves Portfolio

A D D I T I O N A L  I N F O R M AT I O N (Unaudited)

     Information about the Trustees and Officers of the Portfolio can be found on pages 15 through 20 of this report.

32 


ITEM 2.  CODE OF ETHICS.

         The registrant has adopted a code of ethics that applies to the
         registrant's principal executive officer, principal financial officer,
         principal accounting officer or controller.

ITEM 3.  AUDIT COMMITTEE FINANCIAL EXPERT.

         The Board of Trustees of the registrant has determined that Mr. Stephen
         Randolph Gross, the Chairman of the Board's Audit Committee, possesses
         the technical attributes identified in Instruction 2(b) of Item 3 to
         Form N-CSR to qualify as an "audit committee financial expert," and has
         designated Mr. Gross as the Audit Committee's financial expert. Mr.
         Gross is an "independent" Trustee pursuant to paragraph (a)(2) of Item
         3 to Form N-CSR.

ITEM 4.  PRINCIPAL ACCOUNTANT FEES AND SERVICES.

         Not applicable.

ITEM 5.  AUDIT COMMITTEE OF LISTED REGISTRANTS.

         Not applicable.

ITEM 6.  [RESERVED]

ITEM 7.  DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
         MANAGEMENT INVESTMENT COMPANIES.

         Not applicable.

ITEM 8.  [RESERVED]

ITEM 9.  CONTROLS AND PROCEDURES.

         (a)    The registrant's principal executive officer and principal
                financial officer have concluded that the registrant's
                disclosure controls and procedures (as defined in Rule 30a- 3(c)
                under the Investment Company Act of 1940, as amended (the "1940
                Act")) are effective as of a date within 90 days of the filing
                date of this report that includes the disclosure required by
                this paragraph, based on their evaluation of the disclosure
                controls and procedures required by Rule 30a-3(b) under the 1940
                Act and 15d-15(b) under the Securities Exchange Act of 1934

         (b)    There were no changes in the registrant's internal control over
                financial reporting (as defined in Rule 30a-3(d) under the 1940
                Act) that occurred during the registrant's last fiscal half-year
                (the registrant's second fiscal half-year in the case of an
                annual report) that have materially affected, or are likely to
                materially affect the registrant's internal control over
                financial reporting.

ITEM 10. EXHIBITS.

         (a)(1) Code of Ethics attached hereto.

         (a)(2) Attached hereto.

         Exhibit 99.CERT  Certifications pursuant to section 302 of the
                          Sarbanes-Oxley Act of 2002
         (b) Furnished.

Exhibit 99.906CERT        Certifications pursuant to Section 906 of the
                          Sarbanes-Oxley Act of 2002



SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this Report to be
signed on its behalf by the undersigned, there unto duly authorized.

CASH RESERVES PORTFOLIO

By:   /s/ R. Jay Gerken
      R. Jay Gerken
      Chief Executive Officer of
      CASH RESERVES PORTFOLIO

Date: OCTOBER 16, 2003

     Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By:   /s/ R. Jay Gerken
      (R. Jay Gerken)
      Chief Executive Officer of
      CASH RESERVES PORTFOLIO

Date: OCTOBER 16, 2003

By:   /s/ LEWIS E. DAIDONE
      Chief Administrative Officer of
      CASH RESERVES PORTFOLIO

Date: OCTOBER 16, 2003