N-30D 1 f78572n-30d.txt FORM N-30D FOR THE PERIOD END DATED 12/31/2001 SCHWAB MUNICIPAL MONEY FUNDS December 31, 2001 ANNUAL REPORT SCHWAB MUNICIPAL MONEY FUND SCHWAB CALIFORNIA MUNICIPAL MONEY FUND SCHWAB NEW YORK MUNICIPAL MONEY FUND SCHWAB NEW JERSEY MUNICIPAL MONEY FUND SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND SCHWAB FLORIDA MUNICIPAL MONEY FUND [CHARLES SCHWAB LOGO] [PHOTO OF CHARLES SCHWAB] Dear Shareholder, The events of September 11, 2001 will weigh on our minds for years to come. Amid the nation's uncertainties, a few things remain clear. We must continue to reach out and help the distressed, offer support, and take steps to rebuild and create the best possible future for generations to come. It's also clear that America remains strong, as do its institutions. While the nation's financial system has been deeply affected, the system's foundation is strong. The message for investors remains consistent: the basic rules of investing still apply. Just as in the past, a long-term strategy and a diversified portfolio are still the most important factors in pursuing your financial goals. By investing in SchwabFunds(R), you have already taken an important step in building a portfolio that can help you achieve your financial goals. Thank you for the trust you've placed in SchwabFunds. Sincerely, /s/ Charles Schwab ------------------ Charles Schwab SCHWAB Municipal Money Funds ANNUAL REPORT January 1, 2001 - December 31, 2001 2 Market Overview 6 Schwab Municipal Money Fund 48 Schwab California Municipal Money Fund 69 Schwab New York Municipal Money Fund 81 Schwab New Jersey Municipal Money Fund 90 Schwab Pennsylvania Municipal Money Fund 99 Schwab Florida Municipal Money Fund 113 Financial Notes 117 Fund Trustees ---------------------------------------------------------------------- 120 HOW TO READ THIS REPORT An illustrated guide to the financials, along with a glossary. -------------------------------------------------------------------------------- Subject to SEC approval, all SchwabFunds may soon be able to borrow from, and lend to, each other. This should allow the SchwabFunds to lower borrowing costs and earn more interest than they otherwise would. -------------------------------------------------------------------------------- SchwabFunds(R) offers two basic types of money fund investments, each designed with a particular use in mind. SWEEP INVESTMENTS(TM) For your day-to-day cash needs A Sweep Investment can serve as the primary sweep money fund for your Schwab account. VALUE ADVANTAGE INVESTMENTS(R) For your larger, longer-term cash balances Higher balance requirements and policies designed to discourage frequent transactions make Value Advantage Investments appropriate for money you don't need to access frequently. While their features can help minimize fund expenses -- which in turn can mean higher returns for investors -- Value Advantage Investments cannot be used as sweep funds.
SWEEP VALUE ADVANTAGE INVESTMENTS INVESTMENTS TAXABLE MONEY FUNDS -------------------------------------------------------------------------------- SCHWAB MONEY MARKET FUND o -------------------------------------------------------------------------------- SCHWAB GOVERNMENT MONEY FUND o -------------------------------------------------------------------------------- SCHWAB U.S. TREASURY MONEY FUND o -------------------------------------------------------------------------------- SCHWAB VALUE ADVANTAGE MONEY FUND(R) o -------------------------------------------------------------------------------- MUNICIPAL MONEY FUNDS -------------------------------------------------------------------------------- SCHWAB MUNICIPAL MONEY FUND o o -------------------------------------------------------------------------------- SCHWAB CALIFORNIA MUNICIPAL MONEY FUND o o -------------------------------------------------------------------------------- SCHWAB FLORIDA MUNICIPAL MONEY FUND o -------------------------------------------------------------------------------- SCHWAB NEW JERSEY MUNICIPAL MONEY FUND o -------------------------------------------------------------------------------- SCHWAB NEW YORK MUNICIPAL MONEY FUND o o -------------------------------------------------------------------------------- SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND o --------------------------------------------------------------------------------
For more complete information on SchwabFunds, including fees and expenses, call 800-435-4000 to obtain a prospectus or go to www.schwab.com/schwabfunds. Please read the prospectus carefully before investing. An investment in a money market fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency. Although money funds seek to preserve the value of your investment at $1 per share, it is possible to lose money. MARKET OVERVIEW ECONOMY FLAGS, EVEN BEFORE 9/11; FED CUTS INTEREST RATES 11 TIMES. [PHOTO OF MAN AND WOMAN] After ten years of nearly nonstop growth, the U.S. economy fell into a recession in 2001. Although Gross Domestic Product (GDP) remained positive until the third quarter, the National Bureau of Economic Research, a widely recognized independent panel, later determined that the recession had begun as early as March. Stocks, which were already well below their all-time highs as the year began, continued to flounder, and, for the most part, ended 2001 down significantly. Responding to economic and market weakness, the Federal Reserve Board (the Fed) lowered interest rates aggressively throughout the year, reducing the benchmark Fed Funds Rate from 6.50% to 1.75%. Because the main effects of a rate cut typically are not felt until about six months later, it is not yet clear how much stimulus the most recent cuts will provide. In the meantime, the economy has had to contend not only with a recession but also with the costs and uncertainty resulting from the tragic events of September 11. ASSET CLASS PERFORMANCE COMPARISON % RETURNS DURING THE REPORTING PERIOD This graph compares the performance of various asset classes during the reporting period. [LINE GRAPH] Asset Class Performance
Lehman MSCI Aggregate EAFE Russell S&P 500 3-Mo Bond Index Index 2000 Index Index T-Bills 29-Dec-00 0 0 0 0 0 5-Jan-01 1.37 0.21 -4.21 -1.66 0.25 12-Jan-01 0.36 -1.5 0.49 -0.15 0.3 19-Jan-01 0.96 -0.67 0.99 1.69 0.4 26-Jan-01 0.88 -1.19 3.19 2.63 0.51 2-Feb-01 1.62 -0.95 3.7 2.29 0.61 9-Feb-01 1.73 -3.91 2.91 -0.34 0.7 16-Feb-01 1.46 -5.2 5.4 -1.35 0.8 23-Feb-01 1.62 -8.29 -1.09 -5.57 0.91 2-Mar-01 2.32 -8.06 -1.19 -6.33 1 9-Mar-01 2.6 -7.26 -1.83 -6.39 1.12 16-Mar-01 3.32 -14.35 -8.4 -12.68 1.23 23-Mar-01 3.34 -15.21 -8.07 -13.49 1.33 30-Mar-01 3.03 -13.52 -6.5 -11.85 1.43 6-Apr-01 3.41 -12.23 -9.77 -14.27 1.58 13-Apr-01 2.52 -10.58 -5.52 -10.09 1.63 20-Apr-01 2.51 -8.48 -3.08 -5.57 1.76 27-Apr-01 2.51 -7.89 0.54 -4.81 1.82 4-May-01 3.44 -6.91 2.43 -3.72 1.9 11-May-01 2.29 -8.18 1.32 -5.31 1.96 18-May-01 2.92 -7.92 5.28 -1.78 2.06 25-May-01 2.64 -8.85 5.79 -2.85 2.12 1-Jun-01 3.42 -11.26 4.38 -4.01 2.18 8-Jun-01 3.56 -10.98 6.47 -3.68 2.25 15-Jun-01 4.14 -13.73 3.07 -7.54 2.35 22-Jun-01 4.72 -14.38 1.74 -6.69 2.42 29-Jun-01 3.61 -14.63 6.86 -6.7 2.47 6-Jul-01 3.93 -17.72 0.58 -9.28 2.53 13-Jul-01 4.49 -17.21 2.09 -7.36 2.59 20-Jul-01 5.27 -17.47 1.7 -7.74 2.67 27-Jul-01 5.58 -17.64 1.12 -8.12 2.73 3-Aug-01 5.44 -15.18 1.58 -7.39 2.79 10-Aug-01 6.11 -17.18 -0.81 -9.23 2.87 17-Aug-01 6.6 -16.7 -0.75 -11.38 2.94 24-Aug-01 6.53 -15.66 0.34 -9.63 2.99 31-Aug-01 7.13 -18.37 -2.19 -13.4 3.05 7-Sep-01 7.28 -22.53 -7.05 -17.05 3.14 14-Sep-01 8.04 -27.41 -7.94 -16.54 3.16 21-Sep-01 7.71 -32.5 -20.84 -26.22 3.44 28-Sep-01 8.38 -26.7 -15.36 -20.4 3.48 5-Oct-01 8.97 -24.51 -13.22 -18.07 3.55 12-Oct-01 8.53 -23.52 -10.36 -16.52 3.58 19-Oct-01 9.05 -25.31 -10.95 -17.91 3.63 26-Oct-01 9.53 -22.92 -8.24 -15.53 3.68 2-Nov-01 10.19 -23.95 -9.37 -16.78 3.75 9-Nov-01 10.7 -22.32 -8.29 -14.24 3.82 16-Nov-01 8.43 -21.82 -5.5 -12.83 3.83 23-Nov-01 8.07 -22.13 -4 -11.95 3.85 30-Nov-01 9.13 -21.99 -3.48 -12.66 3.91 7-Dec-01 7.52 -20.78 0.83 -11.21 3.95 14-Dec-01 7.55 -23.67 -1.21 -13.91 3.97 21-Dec-01 8.02 -23.35 1.47 -12.24 4.02 28-Dec-01 8.3 -22.12 2.14 -11.97 4.04
These figures assume dividends and distributions were reinvested. Index figures don't include trading and management costs, which would lower performance. Indices are unmanaged and you can't invest in them directly. Remember that past performance isn't an indication of future results. Data source: Charles Schwab & Co., Inc. (Schwab). THREE-MONTH U.S. TREASURY BILLS(T-BILLS): measures short-term U.S. Treasury obligations LEHMAN BROTHERS U.S. AGGREGATE BOND INDEX: measures the U.S. bond market S&P 500(R) INDEX: measure U.S. large-cap stocks RUSSELL 2000(R) INDEX: measures U.S. small-cap stocks MSCI-EAFE(R) INDEX: measures (in U.S. dollars) large-cap stocks in Europe, Australasia, and the Far East 2 DOWNTURN IS WIDESPREAD; JOBLESS RATE UP FROM RECORD LOWS. [PHOTO OF MAN] After falling so low in 2000 that many feared the return of inflation, the U.S. unemployment rate began rising rapidly. By the end of the reporting period, it was at 5.8%, its highest level in over six years. Job losses have affected almost all industries, with manufacturing among the hardest hit. On a positive note, inflation has remained low. Employers have enjoyed strong worker productivity, which has helped stabilize labor costs and consumer prices. -------------------------------------------------------------------------------- Although unemployment may continue to rise, it is not especially high by historical standards. -------------------------------------------------------------------------------- RATE CUTS DRIVE YIELDS DOWN; STOCKS SLUMP, BOND PRICES RISE. The Fed's series of interest rate cuts during 2001 meant steady downward pressure on money market yields. In spite of this, money market funds remained popular with investors seeking alternatives with lower risk at a time when stock markets and the economy were retreating. In equity markets, the decline that began in the last quarter of 2000 continued throughout 2001. As many Internet start-ups began to downsize or go ECONOMIC FACTORS AND THEIR EFFECTS ON THESE FUNDS. -------------------------------------------------------------------------------- The following charts show recent figures for several common measures of the state of the U.S. economy and the interest rate environment. While the relationship of each of these factors to the performance of the funds is complex, the captions over each chart and the discussion above include analysis of how we believe these factors may have influenced market behavior during the reporting period. REAL GDP GROWTH Annualized growth rate for each quarter shown Strong auto sales and government spending resulted in a surprising preliminary figure for Q4 2001 GDP of 0.2%. Traditionally, a recession is two negative quarters in a row, which could still occur if Q4 GDP is revised downward. [BAR CHART]
Q1 1992 3.8 Q2 1992 3.8 Q3 1992 3.1 Q4 1992 5.4 Q1 1993 -0.1 Q2 1993 2.5 Q3 1993 1.8 Q4 1993 6.2 Q1 1994 3.4 Q2 1994 5.7 Q3 1994 2.2 Q4 1994 5 Q1 1995 1.5 Q2 1995 0.8 Q3 1995 3.1 Q4 1995 3.2 Q1 1996 2.9 Q2 1996 6.8 Q3 1996 2 Q4 1996 4.6 Q1 1997 4.4 Q2 1997 5.9 Q3 1997 4.2 Q4 1997 2.8 Q1 1998 6.1 Q2 1998 2.2 Q3 1998 4.1 Q4 1998 6.7 Q1 1999 3.1 Q2 1999 1.7 Q3 1999 4.7 Q4 1999 8.3 Q1 2000 2.3 Q2 2000 5.7 Q3 2000 1.3 Q4 2000 1.9 Q1 2001 1.3 Q2 2001 0.3 Q3 2001 -1.3 Q4 2001 0.2
Gross domestic product (GDP), a broad measure of the goods and services produced in the United States during a given time period, is a prime indicator of the health of the country's economy. Typically, investors see an increase in GDP as a positive, since it indicates stronger demand, production and corporate earnings. The figures shown here are adjusted for inflation. Data source: Bloomberg L.P. -------------------------------------------------------------------------------- 3 MARKET OVERVIEW Continued under, the technology sector collapsed. By the end of the year, markets had more than regained the ground lost after September 11, but many industries, especially airlines, hotels and entertainment, remain weak. In contrast, bonds continued to perform well. Strong demand from investors fleeing the stock market and the Fed's interest rate cuts were two main factors in pushing bond prices higher (and yields lower). A third factor was the U.S. Treasury's decision to use part of the vanishing budget surplus to buy back its own bonds, which reduced the supply of Treasuries. -------------------------------------------------------------------------------- We expect interest rates and money market yields to rise when signs of an economic recovery materialize. -------------------------------------------------------------------------------- LOOKING AHEAD: RECOVERY LIKELY IN 2002, BUT MAY BE LACKLUSTER. Many uncertainties still linger from September 11 and the ongoing war on terrorism. Further attacks on U.S. targets could hurt the economy or reverse the stock market's Q4 2001 gains. A decline in consumer spending (which so far has remained relatively strong) would be damaging as well. A further risk could be a rise in petroleum prices, which might occur if the antiterrorism coalition were to lose support from some Middle Eastern countries. U.S. UNEMPLOYMENT RATE Adjusted for seasonal variations After a decade of declines, unemployment rose dramatically during the report period. At the end of 2001, it stood at 5.8%--nearly two percentage points above its three-decade low of 3.9% in 2000. [LINE GRAPH] Dec-91 7.3 Jan-92 7.3 Feb-92 7.4 Mar-92 7.4 Apr-92 7.4 May-92 7.6 Jun-92 7.8 Jul-92 7.7 Aug-92 7.6 Sep-92 7.6 Oct-92 7.3 Nov-92 7.4 Dec-92 7.4 Jan-93 7.3 Feb-93 7.1 Mar-93 7 Apr-93 7.1 May-93 7.1 Jun-93 7 Jul-93 6.9 Aug-93 6.8 Sep-93 6.7 Oct-93 6.8 Nov-93 6.6 Dec-93 6.5 Jan-94 6.8 Feb-94 6.6 Mar-94 6.5 Apr-94 6.4 May-94 6.1 Jun-94 6.1 Jul-94 6.3 Aug-94 6 Sep-94 5.8 Oct-94 5.8 Nov-94 5.6 Dec-94 5.5 Jan-95 5.6 Feb-95 5.4 Mar-95 5.3 Apr-95 5.8 May-95 5.8 Jun-95 5.6 Jul-95 5.6 Aug-95 5.7 Sep-95 5.6 Oct-95 5.5 Nov-95 5.7 Dec-95 5.6 Jan-96 5.6 Feb-96 5.5 Mar-96 5.6 Apr-96 5.5 May-96 5.6 Jun-96 5.3 Jul-96 5.5 Aug-96 5.1 Sep-96 5.2 Oct-96 5.2 Nov-96 5.3 Dec-96 5.4 Jan-97 5.3 Feb-97 5.3 Mar-97 5.1 Apr-97 5 May-97 4.7 Jun-97 5 Jul-97 4.7 Aug-97 4.9 Sep-97 4.7 Oct-97 4.7 Nov-97 4.6 Dec-97 4.7 Jan-98 4.5 Feb-98 4.6 Mar-98 4.6 Apr-98 4.3 May-98 4.3 Jun-98 4.5 Jul-98 4.5 Aug-98 4.5 Sep-98 4.5 Oct-98 4.5 Nov-98 4.4 Dec-98 4.3 Jan-99 4.3 Feb-99 4.4 Mar-99 4.2 Apr-99 4.3 May-99 4.2 Jun-99 4.3 Jul-99 4.3 Aug-99 4.2 Sep-99 4.2 Oct-99 4.1 Nov-99 4.1 Dec-99 4.1 Jan-00 4 Feb-00 4.1 Mar-00 4.1 Apr-00 3.9 May-00 4.1 Jun-00 4 Jul-00 4 Aug-00 4.1 Sep-00 3.9 Oct-00 3.9 Nov-00 4 Dec-00 4 Jan-01 4.2 Feb-01 4.2 Mar-01 4.3 Apr-01 4.5 May-01 4.4 Jun-01 4.5 Jul-01 4.5 Aug-01 4.9 Sep-01 4.9 Oct-01 5.4 Nov-01 5.6 Dec-01 5.8
This measures the portion of the U.S. labor force that is unemployed and is either seeking a job or waiting to return to one. Low unemployment often accompanies prosperity and is generally a positive factor for investors, although very low unemployment may boost inflation as employers raise pay to compete for workers. Rising unemployment may mean a softening economy. Data source: Bloomberg L.P. MEASURES OF INFLATION Annualized figures for the Consumer Price Index (monthly) and Employment Cost Index (quarterly) CPI was up 1.6% for 2001 (2.7% if food and energy are excluded). ECI rose 4.1% over the same period. Both measures show that inflation remained low by historical standards. [LINE GRAPH]
CONSUMER PRICE INDEX DATE (MONTHLY) Dec-91 3.1 Jan-92 2.6 Feb-92 2.8 Mar-92 3.2 Apr-92 3.2 May-92 3 Jun-92 3.1 Jul-92 3.2 Aug-92 3.1 Sep-92 3 Oct-92 3.2 Nov-92 3 Dec-92 2.9 Jan-93 3.3 Feb-93 3.2 Mar-93 3.1 Apr-93 3.2 May-93 3.2 Jun-93 3 Jul-93 2.8 Aug-93 2.8 Sep-93 2.7 Oct-93 2.8 Nov-93 2.7 Dec-93 2.7 Jan-94 2.5 Feb-94 2.5 Mar-94 2.5 Apr-94 2.4 May-94 2.3 Jun-94 2.5 Jul-94 2.8 Aug-94 2.9 Sep-94 3 Oct-94 2.6 Nov-94 2.7 Dec-94 2.7 Jan-95 2.8 Feb-95 2.9 Mar-95 2.9 Apr-95 3.1 May-95 3.2 Jun-95 3 Jul-95 2.8 Aug-95 2.6 Sep-95 2.5 Oct-95 2.8 Nov-95 2.6 Dec-95 2.5 Jan-96 2.7 Feb-96 2.7 Mar-96 2.8 Apr-96 2.9 May-96 2.9 Jun-96 2.8 Jul-96 3 Aug-96 2.9 Sep-96 3 Oct-96 3 Nov-96 3.3 Dec-96 3.3 Jan-97 3 Feb-97 3 Mar-97 2.8 Apr-97 2.5 May-97 2.2 Jun-97 2.3 Jul-97 2.2 Aug-97 2.2 Sep-97 2.2 Oct-97 2.1 Nov-97 1.8 Dec-97 1.7 Jan-98 1.6 Feb-98 1.4 Mar-98 1.4 Apr-98 1.4 May-98 1.7 Jun-98 1.7 Jul-98 1.7 Aug-98 1.6 Sep-98 1.5 Oct-98 1.5 Nov-98 1.5 Dec-98 1.6 Jan-99 1.7 Feb-99 1.6 Mar-99 1.7 Apr-99 2.3 May-99 2.1 Jun-99 2 Jul-99 2.1 Aug-99 2.3 Sep-99 2.6 Oct-99 2.6 Nov-99 2.6 Dec-99 2.7 Jan-00 2.7 Feb-00 3.2 Mar-00 3.7 Apr-00 3 May-00 3.1 Jun-00 3.7 Jul-00 3.7 Aug-00 3.4 Sep-00 3.5 Oct-00 3.4 Nov-00 3.4 Dec-00 3.4 Jan-01 3.7 Feb-01 3.5 Mar-01 2.9 Apr-01 3.3 May-01 3.6 Jun-01 3.2 Jul-01 2.7 Aug-01 2.7 Sep-01 2.6 Oct-01 2.1 Nov-01 1.9 Dec-01 1.6
EMPLOYMENT COST INDEX DATE (QUARTERLY) Mar-92 4 Jun-92 3.6 Sep-92 3.5 Dec-92 3.5 Mar-93 3.5 Jun-93 3.6 Sep-93 3.6 Dec-93 3.5 Mar-94 3.2 Jun-94 3.2 Sep-94 3.2 Dec-94 3 Mar-95 2.9 Jun-95 2.9 Sep-95 2.7 Dec-95 2.7 Mar-96 2.8 Jun-96 2.9 Sep-96 2.8 Dec-96 2.9 Mar-97 2.9 Jun-97 2.8 Sep-97 3 Dec-97 3.3 Mar-98 3.3 Jun-98 3.5 Sep-98 3.7 Dec-98 3.4 Mar-99 3 Jun-99 3.2 Sep-99 3.1 Dec-99 3.4 Mar-00 4.3 Jun-00 4.4 Sep-00 4.3 Dec-00 4.1 Mar-01 4.1 Jun-01 3.9 Sep-01 4.1 Dec-01 4.1
The Consumer Price Index (CPI) tracks changes in the cost of goods and services and is the most common measure of inflation. The Employment Cost Index (ECI) measures the cost of employing workers, including benefits costs. Financial markets are very sensitive to increases in inflation because of the potentially negative impact on corporate earnings, investors and consumers. Data source: Bloomberg L.P. 4 [PHOTO OF AMERICAN FLAG] Whether or not an economic recovery occurs in 2002, we expect that unemployment may continue to rise during the first half of the year, because it typically lags other economic factors. Other indicators, such as new orders and investor sentiment, indicate that the economy appears to be shifting back into gear, if somewhat slowly and tentatively. -------------------------------------------------------------------------------- After marking a low on September 21 in the wake of the terrorist attacks, the S&P 500 Index(R) rose about 20% by the end of 2001. -------------------------------------------------------------------------------- Source: Standard & Poor's Although we suspect the worst may be over for now as far as the U.S. economy is concerned, no one can predict with certainty that a recovery will occur in 2002, or how strong it might be if it does occur. We would not be surprised to see economic indicators and investor sentiment looking healthier by mid-2002, but see little reason to expect a quick turnaround. YIELDS OF U.S. TREASURY SECURITIES Effective yields of ten-year and five-year Treasuries For most of 2001, Treasury prices soared and yields plunged as investors sought security in the face of economic and stock market declines. Falling interest rates and a decreasing supply of Treasuries aided this trend. [LINE GRAPH]
Yields Date 5 Yr 10 Yr 31-Dec-91 6.7 5.93 31-Jan-92 7.27 6.43 29-Feb-92 7.25 6.56 31-Mar-92 7.53 6.92 30-Apr-92 7.58 6.88 31-Jul-92 7.32 6.6 30-Jun-92 7.12 6.27 31-Jul-92 6.71 5.82 31-Aug-92 6.6 5.58 30-Sep-92 6.35 5.32 31-Oct-92 6.79 5.89 30-Nov-92 6.94 6.22 31-Dec-92 6.69 5.99 31-Jan-93 6.36 5.55 28-Feb-93 6.02 5.21 31-Mar-93 6.02 5.24 30-Apr-93 6.01 5.11 31-May-93 6.15 5.37 30-Jun-93 5.78 5.05 31-Jul-93 5.81 5.15 31-Aug-93 5.45 4.79 30-Sep-93 5.38 4.77 31-Oct-93 5.43 4.85 30-Nov-93 5.82 5.16 31-Dec-93 5.79 5.21 31-Jan-94 5.64 5.02 28-Feb-94 6.13 5.57 31-Mar-94 6.74 6.23 30-Apr-94 7.04 6.64 31-May-94 7.15 6.76 30-Jun-94 7.32 6.95 31-Jul-94 7.11 6.73 31-Aug-94 7.17 6.8 30-Sep-94 7.6 7.28 31-Oct-94 7.81 7.49 30-Nov-94 7.91 7.79 31-Dec-94 7.82 7.83 31-Jan-95 7.58 7.51 28-Feb-95 7.2 7.04 31-Mar-95 7.2 7.07 30-Apr-95 7.06 6.88 31-May-95 6.28 6.05 30-Jun-95 6.2 5.97 31-Jul-95 6.43 6.16 31-Aug-95 6.28 6.07 30-Sep-95 6.18 6.02 31-Oct-95 6.02 5.81 30-Nov-95 5.74 5.52 31-Dec-95 5.57 5.38 31-Jan-96 5.58 5.24 29-Feb-96 6.1 5.73 31-Mar-96 6.33 6.09 30-Apr-96 6.67 6.41 31-May-96 6.85 6.63 30-Jun-96 6.71 6.46 31-Jul-96 6.79 6.57 31-Aug-96 6.94 6.73 30-Sep-96 6.7 6.46 31-Oct-96 6.34 6.07 30-Nov-96 6.04 5.83 31-Dec-96 6.42 6.21 31-Jan-97 6.49 6.25 28-Feb-97 6.55 6.39 31-Mar-97 6.9 6.75 30-Apr-97 6.72 6.57 31-May-97 6.66 6.5 30-Jun-97 6.5 6.38 31-Jul-97 6.01 5.9 31-Aug-97 6.34 6.22 30-Sep-97 6.1 5.99 31-Oct-97 5.83 5.71 30-Nov-97 5.87 5.84 31-Dec-97 5.74 5.71 31-Jan-98 5.51 5.38 28-Feb-98 5.62 5.59 31-Mar-98 5.65 5.62 30-Apr-98 5.67 5.64 31-May-98 5.55 5.55 30-Jun-98 5.45 5.47 31-Jul-98 5.49 5.5 31-Aug-98 4.98 4.8 30-Sep-98 4.42 4.22 31-Oct-98 4.61 4.23 30-Nov-98 4.71 4.48 31-Dec-98 4.65 4.54 31-Jan-99 4.65 4.55 28-Feb-99 5.29 5.22 31-Mar-99 5.24 5.1 30-Apr-99 5.35 5.21 31-May-99 5.62 5.58 30-Jun-99 5.78 5.65 31-Jul-99 5.9 5.79 31-Aug-99 5.97 5.87 30-Sep-99 5.88 5.75 31-Oct-99 6.02 5.96 30-Nov-99 6.19 6.11 31-Dec-99 6.44 6.34 31-Jan-00 6.67 6.68 29-Feb-00 6.41 6.6 31-Mar-00 6 6.31 30-Apr-00 6.21 6.5 31-May-00 6.27 6.52 30-Jun-00 6.03 6.19 31-Jul-00 6.03 6.15 31-Aug-00 5.73 5.97 30-Sep-00 5.8 5.85 31-Oct-00 5.75 5.81 30-Nov-00 5.47 5.43 31-Dec-00 5.11 4.98 31-Jan-01 5.11 4.77 28-Feb-01 4.9 4.66 31-Mar-01 4.92 4.56 30-Apr-01 5.34 4.89 31-May-01 5.38 4.91 30-Jun-01 5.41 4.95 31-Jul-01 5.05 4.53 31-Aug-01 4.83 4.38 30-Sep-01 4.59 3.8 31-Oct-01 4.23 3.48 30-Nov-01 4.75 4.06 31-Dec-01 5.05 4.3
10-Year Treasuries 5-Year Treasuries Yields, or interest rates, represent the cost of borrowing money. Rapid economic growth or the expectation of higher inflation can drive rates up, while the opposite conditions can push rates down. Data source: Bloomberg L.P. SHORT-TERM RATES Effective yields of 90-day municipal commercial paper during the reporting period Paced by the Fed's year-long series of interest rate cuts, yields on short-term municipal securities declined during the report period, although the decline halted in December, potentially indicating a bottom. [LINE GRAPH]
Short-Term Rates Weekly 90-Day 31-Dec-00 4.15 5-Jan-01 3.5 12-Jan-01 2.15 19-Jan-01 2.25 26-Jan-01 3.75 2-Feb-01 3.5 9-Feb-01 3.25 16-Feb-01 3.4 23-Feb-01 3.3 2-Mar-01 3.3 9-Mar-01 3.3 16-Mar-01 3.1 23-Mar-01 3.25 30-Mar-01 3.25 6-Apr-01 3.25 13-Apr-01 3.5 20-Apr-01 3.5 27-Apr-01 3.5 4-May-01 3.05 11-May-01 2.85 18-May-01 2.8 25-May-01 2.7 1-Jun-01 2.65 8-Jun-01 2.6 15-Jun-01 2.6 22-Jun-01 2.7 29-Jun-01 2.65 6-Jul-01 2.65 13-Jul-01 2.6 20-Jul-01 2.6 27-Jul-01 2.55 3-Aug-01 2.5 10-Aug-01 2.45 17-Aug-01 2.4 24-Aug-01 2.35 31-Aug-01 2.3 7-Sep-01 2.4 14-Sep-01 2.4 21-Sep-01 2.05 28-Sep-01 2.1 5-Oct-01 1.95 12-Oct-01 1.9 19-Oct-01 1.9 26-Oct-01 2.05 2-Nov-01 1.85 9-Nov-01 1.7 16-Nov-01 1.6 23-Nov-01 1.6 30-Nov-01 1.7 7-Dec-01 1.5 14-Dec-01 1.4 21-Dec-01 1.35 28-Dec-01 1.35 31-Dec-01 1.35
90 Day Municipal Commercial Paper Typically, the yields offered by municipal commercial paper broadly reflect market interest rates. Periodic shifts in supply and demand can skew this relationship, however. For example, short-term municipal rates tend to fall sharply in January and rise again in late April, as investors buy or sell muni investments in response to the yearly tax calendar. Data source: Merrill Lynch 5 SCHWAB MUNICIPAL MONEY FUND [PHOTO OF WALTER BEVERIDGE] "An increase in the supply of municipal issues made muni yields relatively attractive during 2001, which in turn brought some nontraditional buyers into the market." Portfolio Manager Walter Beveridge WALTER BEVERIDGE, a portfolio manager, is responsible for day-to-day management of the fund. Prior to joining the firm in 1992, he worked for nearly ten years in asset management. TICKER SYMBOLS SWEEP SHARES SWXXX VALUE ADVANTAGE SHARES SWTXX -------------------------------------------------------------------------------- The fund seeks the highest current income that is consistent with stability of capital and liquidity, and is exempt from federal income tax. -------------------------------------------------------------------------------- THIS FUND MAY BE APPROPRIATE FOR INDIVIDUALS IN HIGHER TAX BRACKETS WHO ARE SEEKING TAX-EXEMPT INCOME. MANAGER'S PERSPECTIVE SHORT-TERM INTEREST RATES DECLINED SHARPLY AND STEADILY THROUGHOUT 2001, PACED BY THE FED'S RATE CUTS. The Fed's 11 interest rate cuts, which began in January and continued into December, left the Federal Funds Rate at 1.75%, its lowest level in more than 40 years. These cuts had the direct effect of reducing yields for money fund investors, taxable and tax-exempt alike. FALLING INTEREST RATES HELPED SPUR THE ISSUANCE OF SHORT-TERM MUNI SECURITIES. The increased supply kept muni prices low (and yields high) relative to their taxable counterparts. This type of situation normally attracts non-traditional buyers of municipal securities, which in turn creates supply and demand imbalances that limit the upward movement of muni yields. Because of the Fed's rate cuts, we kept our average maturity longer than most of our peers, emphasizing fixed-rate securities. This strategy was effective, as fixed-rate securities outperformed variable rates during 2001. EXPECTATIONS OF AN ECONOMIC RECOVERY IN 2002 ARE GAINING MOMENTUM. A stronger economy is likely to lead to a rise in interest rates and yields. However, given the continued mixed economic signals and the uncertain environment, we expect to keep the fund's average weighted maturity in line with that of its peer group. We would accomplish this by emphasizing fixed-rate securities that are priced attractively for their maturities, while maintaining a sufficient position in shorter maturities to provide appropriate liquidity. 6 PERFORMANCE AND FUND FACTS SEVEN-DAY YIELDS 1 as of 12/31/01 The seven-day yields are calculated using standard SEC formulas. The effective yields include the effect of reinvesting daily dividends during the period. Please remember that money market fund yields fluctuate, and that past performance is not an indication of future results.
VALUE SWEEP ADVANTAGE SHARES SHARES -------------------------------------------------------- Seven-Day Yield 1.17% 1.38% -------------------------------------------------------- Seven-Day Effective Yield 1.18% 1.39% -------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield 3 1.94% 2.28% --------------------------------------------------------
WEIGHTED AVERAGE MATURITY during the year Money Funds must maintain a dollar-weighted average maturity of no longer than 90 days, and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). [LINE GRAPH]
Municipal Money Fund 31-Dec-00 42 31-Jan-01 39 28-Feb-01 40 31-Mar-01 36 30-Apr-01 35 31-May-01 34 30-Jun-01 37 31-Jul-01 38 31-Aug-01 40 30-Sep-01 48 31-Oct-01 45 30-Nov-01 44 31-Dec-01 39
PORTFOLIO COMPOSITION 2 as of 12/31/01 All figures are shown as a percentage of the fund's investments. All of the fund's securities were in the top tier of credit quality at the time of purchase. BY STATE -------------------------------------------------------------------------------- [PIE CHART] 1. 13.3% Texas 2. 8.7% Pennsylvania 3. 7.2% Georgia 4. 6.8% Illinois 5. 6.2% California 6. 4.6% Washington 7. 4.5% New York 8. 4.0% Michigan 9. 3.7% Colorado 10. 3.4% Utah 11. 37.6% Other
BY CREDIT QUALITY -------------------------------------------------------------------------------- [PIE CHART] 1. 100.0% Tier 1
1 A portion of the fund's expenses was reduced during the reporting period. Without this reduction, the fund's yields would have been lower. 2 Composition of the fund's portfolio is as of 12/31/01 and is not indicative of holdings after that date. 3 Taxable-equivalent yield assumes a 2001 maximum federal regular income tax rate of 39.10%. 7 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. The FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
1/1/01- 1/1/00- 1/1/99- 1/1/98- 1/1/97- SWEEP SHARES 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 -------------------------------------------------------------------------------------------------------------------------- PER-SHARE DATA ($) -------------------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 --------------------------------------------------------------------- Income from investment operations: Net investment income 0.02 0.03 0.03 0.03 0.03 --------------------------------------------------------------------- Less distributions: Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) --------------------------------------------------------------------- Net asset value at end of period 1.00 1.00 1.00 1.00 1.00 ===================================================================== Total return (%) 2.23 3.53 2.70 2.92 3.11 RATIOS/SUPPLEMENTAL DATA (%) -------------------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.66 0.66 1 0.66 0.66 0.66 Expense reductions reflected in above ratio 0.17 0.17 0.19 0.22 0.24 Ratio of net investment income to average net assets 2.21 3.47 2.67 2.87 3.06 Net assets, end of period ($ x 1,000,000) 7,265 6,780 6,090 5,247 4,424
1 Would have been 0.67% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which are integral to this information. 8
1/1/01- 1/1/00- 1/1/99- 1/1/98- 1/1/97- VALUE ADVANTAGE SHARES 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 --------------------------------------------------------------------------------------------------------------------------- PER-SHARE DATA ($) --------------------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 ------------------------------------------------------------------------ Income from investment operations: Net investment income 0.02 0.04 0.03 0.03 0.03 ------------------------------------------------------------------------ Less distributions: Dividends from net investment income (0.02) (0.04) (0.03) (0.03) (0.03) ------------------------------------------------------------------------ Net asset value at end of period 1.00 1.00 1.00 1.00 1.00 ======================================================================== Total return (%) 2.45 3.75 2.91 3.14 3.32 RATIOS/SUPPLEMENTAL DATA (%) --------------------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.45 0.45 1 0.45 0.45 0.45 Expense reductions reflected in above ratio 0.16 0.18 0.20 0.24 0.27 Ratio of net investment income to average net assets 2.35 3.70 2.89 3.08 3.29 Net assets, end of period ($ x 1,000,000) 3,778 2,919 2,270 1,620 1,085
1 Would have been 0.46% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which are integral to this information. 9 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS As of December 31, 2001. This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics: + Credit-enhanced security o Illiquid restricted security / Variable-rate security For fixed-rate obligations, the rate shown is the effective yield at the time of purchase. For variable-rate obligations, the rate shown is the rate as of the report date. For variable-rate obligations with scheduled maturities greater than 397 days, the maturity shown is the later of the next interest rate change date or demand date. For variable-rate obligations with scheduled maturities less than 397 days, the maturity shown is the earlier of the next interest rate change date or demand date. For variable-rate obligations without demand features, the maturity shown is the next interest rate change date. The pie chart below shows the fund's major categories and the market value and cost of the securities in each category. For definitions of abbreviations and acronyms used in security descriptions, see "portfolio terms" in the glossary (in "How to Read This Report"). ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 100.0% MUNICIPAL SECURITIES Market Value: $10,866,142 Cost: $10,866,142 --------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $10,866,142 Cost: $10,866,142
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) MUNICIPAL SECURITIES 100.0% of investments ALABAMA 0.7% +/ ALABAMA STATE IDA RB (Scientific Project) 2.00%, 01/07/02 2,700 2,700 +/ BIRMINGHAM, ALABAMA GO Series 1992A 2.00%, 01/07/02 5,600 5,600 Unlimited GO Refunding Bond Series 1995 2.25%, 01/07/02 3,800 3,800 +/ CITRONELLE, ALABAMA IDB Pollution Control Revenue Refunding Bond (AKZO Chemicals, Inc. Project) 1.65%, 01/07/02 2,600 2,600 +/ DAPHNE, ALABAMA UTILITIES BOARD OF WATER, GAS & SEWER Revenue Refunding Bond 1.68%, 01/07/02 9,335 9,335 +/ DECATUR, ALABAMA IDB Solid Waste Disposal RB (Trico Steel Project) Series 1997 2.50%, 01/07/02 5,700 5,700 +/ DOTHAN, ALABAMA IDB RB (Baxley Blowpipe Project) 1.81%, 01/07/02 500 500 +/ FORT PAYNE, ALABAMA IDA IDRB (Charleston Hosiery Project) Series 1997 1.75%, 01/07/02 1,600 1,600 +/ HEADLAND, ALABAMA IDB RB (Golden Peanut Project) 1.85%, 01/07/02 1,855 1,855 +/ HOOVER, ALABAMA BOARD OF EDUCATION Special Tax Warrant TOB Series 2001-16 1.70%, 01/07/02 9,860 9,860 +/ INDIAN SPRINGS VILLAGE, ALABAMA ADDITIONAL BUILDING AUTHORITY RB (J. Bruno Academy Project) 1.95%, 01/07/02 1,485 1,485
See the Financial Notes, which are integral to this information. 10
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ MOBILE COUNTY, ALABAMA IDB Pollution Control Revenue Refunding Bond (Ultraform Co. Project) Series 1995A 1.70%, 01/07/02 7,480 7,480 RB (Ultraform Co. Project) Series 1995B 1.70%, 01/07/02 1,000 1,000 +/ SCOTTSBORO, ALABAMA GO 1.60%, 01/07/02 4,275 4,275 +/ STEVENSON, ALABAMA IDB Environmental Improvement RB (Mead Corp. Project) 2.05%, 01/01/02 4,200 4,200 Environmental Improvement RB (Mead Corp. Project) Series 1998B 2.05%, 01/07/02 7,600 7,600 +/ TUSCALOOSA, ALABAMA IDB IDRB (Field Container Corp.) 1.75%, 01/07/02 1,950 1,950 IDRB (Knight Special Project) 2.00%, 01/07/02 1,090 1,090 ---------- 72,630 ALASKA 0.5% +/ ALASKA STATE HOUSING FINANCE CORP. Housing Development RB Series 2000A 1.75%, 01/07/02 20,745 20,745 TOB Series 1999D 1.71%, 01/07/02 21,805 21,805 +/ NORTH SLOPE BOROUGH, ALASKA EXEMPT FACILITY IDRB (BP Exploration Alaska Project) 2.00%, 01/07/02 9,900 9,900 +/ VALDEZ, ALASKA MARINE TERMINAL Revenue Refunding Bond (Exxon Pipeline Co. Project) Series 1993C 1.85%, 01/01/02 2,950 2,950 ---------- 55,400 ARIZONA 1.3% +/ ARIZONA EDUCATIONAL LOAN MARKETING CORP. Educational Loan RB Series 1990A 1.70%, 01/07/02 12,905 12,905 Educational Loan RB Series 1991A 1.65%, 01/07/02 13,000 13,000 +/ ARIZONA HEALTH FACILITIES AUTHORITY Hospital System RB (Arizona Volunteer Hospital Federation) Series 1985A 1.60%, 01/07/02 11,090 11,090 Hospital System RB (Arizona Volunteer Hospital Federation) Series 1985B 1.60%, 01/07/02 9,330 9,330 Hospital System RB (Northern Arizona Health Care) Series 1996B 1.60%, 01/07/02 24,150 24,150 +/ CHANDLER, ARIZONA IDA IDRB (South Bay Circuits Project) Series 1999A 1.90%, 01/07/02 2,000 2,000 +/ COCONINO COUNTY, ARIZONA POLLUTION CONTROL CORP. RB (Arizona Public Services Co. Project) 1.60%, 01/07/02 15,000 15,000 +/ MARICOPA COUNTY, ARIZONA IDA M/F Housing RB (Gran Victoria Housing, LLC Project) Series 2000A 1.65%, 01/07/02 11,900 11,900 +/ PHOENIX, ARIZONA CIVIC IMPROVEMENT Excise Tax RB (Airport Improvements) 1.70%, 01/07/02 1,000 1,000 +/ PHOENIX, ARIZONA IDA RB (Vaw America, Inc. Project) 1.75%, 01/07/02 3,000 3,000 SALT RIVER PROJECT, ARIZONA AGRICULTURE IMPROVEMENT POWER DISTRICT TECP Series A 2.60%, 01/17/02 10,585 10,585 1.65%, 01/18/02 5,000 5,000 1.35%, 02/13/02 4,400 4,400 +/ YAVAPAI COUNTY, ARIZONA IDRB (Yavapai Regional Medical Center) 1.60%, 01/07/02 14,850 14,850 +/ YUMA COUNTY, ARIZONA IDA M/F Housing RB (El Encanto Apartments) Series 1988A 1.70%, 01/07/02 2,915 2,915 RB (Meadowcraft, Inc. Project) Series 1997 1.75%, 01/07/02 1,000 1,000 ---------- 142,125
See the Financial Notes, which are integral to this information. 11 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) ARKANSAS 0.2% +/ ARKANSAS DEVELOPMENT FINANCE AUTHORITY IDRB (C&C Holding Co. Project) Series 1998 1.75%, 01/07/02 1,255 1,255 +/ FAYETTEVILLE, ARKANSAS PUBLIC FACILITIES BOARD RB 1.95%, 01/01/02 4,400 4,400 +/ INDEPENDENCE COUNTY, ARKANSAS IDRB (Ideal Baking Project) 1.75%, 01/07/02 3,300 3,300 IDRB (Townsends of Arkansas, Inc. Project) 1.75%, 01/07/02 9,000 9,000 ---------- 17,955 CALIFORNIA 6.2% +/ ACCESS LOANS FOR LEARNING STUDENT LOAN CORP. OF CALIFORNIA RB (Student Loan Program) Series II A-1 1.70%, 01/07/02 35,000 35,000 RB (Student Loan Program) Series II A-2 1.67%, 01/07/02 20,000 20,000 RB (Student Loan Program) Series II A-3 1.70%, 01/07/02 22,200 22,200 + CALIFORNIA HIGHER EDUCATION LOAN AUTHORITY Student Loan RB Series 1992A-2-6 3.15%, 04/01/02 9,675 9,675 Student Loan RB Series 1992A-3 3.15%, 04/01/02 44,900 44,900 Student Loan RB Series 1992A-4 3.20%, 04/01/02 8,725 8,725 Student Loan RB Series 1992D-1 3.15%, 04/01/02 13,600 13,600 Student Loan RB Series 1992D-2 3.15%, 04/01/02 11,500 11,500 Student Loan RB Series 1992D-4 3.20%, 04/01/02 5,150 5,150 Student Loan Revenue Refunding Bond Series 1987C-1 2.70%, 07/01/02 50,000 50,000 / Student Loan Revenue Refunding Bond Series 1992E-1 1.65%, 01/07/02 30,600 30,600 CALIFORNIA STATE RAN 2.22%, 06/28/02 179,500 180,387 +/ CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES RB TOB Series 2001K-2 1.75%, 01/07/02 125,000 125,000 Water RB TOB (Regulation D) Series K1 1.75%, 01/07/02 34,950 34,950 LOS ANGELES, CALIFORNIA UNIFIED SCHOOL DISTRICT TRAN 2.57%, 07/23/02 50,000 50,387 +/ METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA Waterworks RB Series 2000B-2 1.35%, 01/07/02 10,000 10,000 Waterworks RB Series 2000B-3 1.80%, 01/01/02 3,900 3,900 Waterworks RB Series 2001C-2 1.65%, 01/01/02 12,500 12,500 ---------- 668,474 COLORADO 3.7% +/ ADAMS COUNTY, COLORADO IDRB (City View Park Project) Series 1985 1.80%, 01/07/02 6,000 6,000 +/ ADAMS COUNTY, COLORADO ECONOMIC DEVELOPMENT AUTHORITY Tax Increment RB (Westminster Plaza Urban Renewal Project) 1.90%, 01/07/02 6,460 6,460 +/ ARAPAHOE COUNTY, COLORADO Industrial Development Revenue Refunding Bond (Denver Jet Center Project) Series 1997 2.05%, 01/07/02 1,000 1,000 ARAPAHOE COUNTY, COLORADO SCHOOL DISTRICT NO. 005 TAN (Cherry Creek Project) Series 2001A 2.48%, 06/28/02 55,000 55,268 +/ ARVADA, COLORADO Water RB 1.95%, 01/07/02 4,300 4,300 +/ COLORADO HEALTH FACILITIES AUTHORITY RB (National Benevolent Association Project) 1.65%, 01/07/02 725 725
See the Financial Notes, which are integral to this information. 12
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ COLORADO HFA Economic Development RB (Inovonics Enterprises Project) 1.85%, 01/07/02 3,235 3,235 Economic Development RB (Pemracs Limited, LLP Project) Series 2000A 1.90%, 01/07/02 3,785 3,785 S/F Mortgage TOB Series 1999M 1.76%, 01/07/02 7,015 7,015 +/ COLORADO STUDENT OBLIGATION BOND AUTHORITY Student Loan RB (Colorado University) Series 1990A 1.75%, 01/07/02 14,400 14,400 Student Loan RB Series 1989A 1.75%, 01/07/02 44,900 44,900 Student Loan RB Series 1999A-2 1.76%, 01/07/02 27,400 27,400 Student Loan RB Series 1999A-3 1.76%, 01/07/02 15,000 15,000 +/ DENVER, COLORADO CITY & COUNTY AIRPORT SYSTEM RB Series 1992D 1.80%, 01/07/02 47,925 47,925 RB Series 1992F 1.80%, 01/07/02 15,500 15,500 RB Series 1992G 1.80%, 01/07/02 19,375 19,375 Revenue Refunding Bond Series 2000B 1.90%, 01/07/02 10,000 10,000 Revenue Refunding Bond Series 2000C 1.80%, 01/07/02 52,400 52,400 + DENVER, COLORADO CITY & COUNTY, SCHOOL DISTRICT NO. 1 GO Series 2001C 1.78%, 12/01/02 4,715 4,873 + DENVER, COLORADO CITY AND COUNTY AIRPORT Revenue Refunding Bond Series 2001A 2.10%, 11/15/02 8,000 8,165 JEFFERSON COUNTY, COLORADO SCHOOL DISTRICT NO. 001 TAN Series 2001B 1.94%, 06/28/02 13,000 13,035 +/ LOWRY, COLORADO ECONOMIC REDEVELOPMENT AUTHORITY RB 1.60%, 01/07/02 10,000 10,000 RB Series 1998A 1.60%, 01/07/02 11,025 11,025 + PALIMINO PARK, COLORADO PUBLIC IMPROVEMENTS CORP. Asset Lien RB 1.45%, 01/02/02 12,680 12,680 +/ SMITH CREEK, COLORADO METROPOLITAN DISTRICT RB Series 1997 1.80%, 01/07/02 2,250 2,250 +/ WHEATRIDGE COUNTY, COLORADO IDRB (Leaf, Inc. Project) 1.70%, 01/07/02 7,000 7,000 ---------- 403,716 DELAWARE 0.6% +/ DELAWARE STATE GO Refunding Bond TOB Series 258 1.69%, 01/07/02 3,995 3,995 +/ DELAWARE STATE ECONOMIC DEVELOPMENT AUTHORITY RB (Hospital Billing Collection Project) Series 1985C 1.60%, 01/07/02 56,735 56,735 +/ SUSSEX COUNTY, DELAWARE IDRB (Perdue Agri-recycle, LLC Project) 1.75%, 01/07/02 5,300 5,300 RB (Baywood, LLC Project) Series 1997A 1.95%, 01/07/02 2,400 2,400 ---------- 68,430 DISTRICT OF COLUMBIA 0.3% +/ DISTRICT OF COLUMBIA RB (Arnold & Porter Project) 1.75%, 01/07/02 3,300 3,300 +/ DISTRICT OF COLUMBIA ENTERPRISE ZONE RB (Crowell & Morning, LLP Project) 1.75%, 01/07/02 4,500 4,500 +/ DISTRICT OF COLUMBIA HFA M/F Housing RB (Edgewood Terrace III Development) 1.75%, 01/07/02 4,000 4,000
See the Financial Notes, which are integral to this information. 13 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) METROPOLITAN WASHINGTON, D.C. AIRPORT AUTHORITY TECP Series B 1.95%, 01/03/02 20,000 20,000 ---------- 31,800 FLORIDA 1.4% +/ DADE COUNTY, FLORIDA IDA RB (June Leasing Corp. Project) Series 1995 1.55%, 01/07/02 125 125 +/ FLORIDA HFA Housing RB (Tiffany Club Project) Series 1996P 1.65%, 01/07/02 50 50 + FLORIDA LOCAL GOVERNMENT FINANCE COMMISSION Pooled TECP Series A 2.10%, 02/14/02 500 500 2.10%, 03/11/02 23,750 23,750 2.15%, 03/11/02 9,368 9,368 + HILLSBOROUGH COUNTY, FLORIDA AVIATION Airport Facilities Sub Lien TECP 1.50%, 03/07/02 35,000 35,000 1.80%, 08/01/02 7,300 7,300 +/ HILLSBOROUGH COUNTY, FLORIDA EDUCATIONAL FACILITIES AUTHORITY RB (University of Tampa Project) 1.65%, 01/07/02 100 100 +/ MANATEE COUNTY, FLORIDA IDRB (Trilectron Industries Project) Series 1997A 1.55%, 01/07/02 2,000 2,000 +/ MANATEE COUNTY, FLORIDA HFA M/F Housing RB (Hampton McGuire Project) Series 1989A 1.35%, 01/07/02 3,275 3,275 +/ MIAMI-DADE COUNTY, FLORIDA IDA IDRB (Airis Miami, LLC Project) Series 1999A 1.60%, 01/07/02 3,500 3,500 IDRB (Arctic Partners Project) 1.80%, 01/07/02 645 645 +/ PALM BEACH COUNTY, FLORIDA IDRB (Palm Beach Day Care School Project) Series 1999 1.65%, 01/07/02 2,000 2,000 RB (Norton Gallery Art School Project) Series 1995 1.70%, 01/07/02 200 200 PINELLAS COUNTY, FLORIDA Capital Improvement RB 3.38%, 01/01/02 3,975 3,975 +/ PINELLAS COUNTY, FLORIDA EDUCATIONAL FACILITIES AUTHORITY RB (Shorecrest Prep School Project) 1.45%, 01/07/02 1,000 1,000 +/ PINELLAS COUNTY, FLORIDA IDA IDRB (Restorative Care of America Project) 1.85%, 01/07/02 1,800 1,800 +/ PINELLAS COUNTY, FLORIDA INDEPENDENT COUNCIL RB (Operation Par, Inc. Project) Series 1999 1.40%, 01/07/02 2,900 2,900 +/ SARASOTA COUNTY, FLORIDA RB (Sarasota County Family YMCA Project) 1.35%, 01/07/02 3,600 3,600 SEMINOLE COUNTY, FLORIDA SCHOOL DISTRICT TAN 2.10%, 08/14/02 3,800 3,826 +/ ST. PETERSBURG, FLORIDA Capital Improvement RB (Airport & Golf Course) Series 1997B 1.65%, 01/07/02 1,850 1,850 +/ SUMTER COUNTY, FLORIDA IDA IDRB (Robbins Manufacturing Co. Project) 1.50%, 01/07/02 1,500 1,500 + SUNSHINE STATE OF FLORIDA GOVERNMENTAL FINANCE COMMISSION RB TECP 1.70%, 01/11/02 25,605 25,605 +/ TALLAHASSEE & LEON COUNTY, FLORIDA CIVIC CENTER AUTHORITY Capital Improvement RB Series 1998A 1.65%, 01/07/02 7,690 7,690 +/ VOLUSIA COUNTY, FLORIDA HEALTH FINANCE AUTHORITY RB (South West Volusia Health Project) Series 1994A 1.35%, 01/07/02 8,770 8,770 ---------- 150,329
See the Financial Notes, which are integral to this information. 14
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) GEORGIA 7.2% +/ ATHENS-CLARKE, JACKSON & MORGAN COUNTIES, GEORGIA IDRB (Mayfield Dairy Farms, Inc. Project) 1.70%, 01/07/02 7,350 7,350 + ATLANTA, GEORGIA AIRPORT / RB TOB Series 376 1.76%, 01/07/02 11,195 11,195 o RB TOBP (PA-926) 2.25%, 07/11/02 12,960 12,960 +/ ATLANTA, GEORGIA URBAN RESIDENTIAL FINANCE AUTHORITY M/F Housing RB (Brentwood Creek Apartments Project) 1.75%, 01/07/02 4,720 4,720 M/F Housing RB (Brentwood Meadows Apartments Project) 1.75%, 01/07/02 3,065 3,065 M/F Housing RB (Brentwood Village Apartments Project) 1.75%, 01/07/02 6,195 6,195 M/F Housing RB (Carver Redevelopment Phase III Project) 1.75%, 01/07/02 3,500 3,500 M/F Housing RB (Delmonte Brownlee Project) Series 2001A 1.75%, 01/07/02 4,600 4,600 M/F Housing RB (Peaks At West Atlanta Apartments Project) 1.75%, 01/07/02 5,000 5,000 M/F Senior Housing RB (Big Bethel Village Project) 1.75%, 01/07/02 4,500 4,500 +/ ATLANTA, GEORGIA WATER & WASTEWATER RB TOB Series 329 1.69%, 01/07/02 1,000 1,000 +/ AUGUSTA, GEORGIA HOUSING AUTHORITY M/F Housing RB (G-Hope Ltd. Partnership Project) 1.75%, 01/07/02 3,800 3,800 +/ BARTOW COUNTY, GEORGIA IDRB (Bartow Paving Co. Project) 1.75%, 01/07/02 2,400 2,400 IDRB (Matthew Contracting Project) 1.70%, 01/07/02 2,400 2,400 +/ CARTERSVILLE, GEORGIA DEVELOPMENT AUTHORITY IDRB (Cartersville Facilities Project) 1.75%, 01/07/02 2,400 2,400 +/ CHEROKEE COUNTY, GEORGIA IDRB (Universal Alloy) 1.70%, 01/07/02 3,100 3,100 +/ CLAYTON COUNTY, GEORGIA IDRB (Wilson Holdings Project) 1.75%, 01/07/02 1,000 1,000 +/ CLAYTON COUNTY, GEORGIA DEVELOPMENT AUTHORITY Special Facilities RB (Delta Air Lines) Series 2000B 1.75%, 01/07/02 111,455 111,455 Special Facilities RB (Delta Air Lines) Series 2000C 1.65%, 01/07/02 86,900 86,900 +/ CLAYTON COUNTY, GEORGIA HOUSING AUTHORITY M/F Housing RB (Hyde Park Club Apartments Project) 1.70%, 01/07/02 12,400 12,400 +/ COBB COUNTY, GEORGIA HFA M/F Housing RB (Walton Green Project) 1.70%, 01/07/02 13,500 13,500 M/F Housing Revenue Refunding Bond (Walton Park Apartments Project) 1.65%, 01/07/02 21,100 21,100 +/ COLUMBUS, GEORGIA DEVELOPMENT AUTHORITY RB (Foundation Property's, Inc. Project) Series 2000 1.75%, 01/07/02 10,000 10,000 +/ COLUMBUS, GEORGIA HOUSING AUTHORITY M/F Housing RB (Eagles Trace Apartments Project) 1.75%, 01/07/02 6,400 6,400 +/ CRISP COUNTY, CORDELE, GEORGIA IDA IDRB (Georgia Ductile Project) 1.81%, 01/07/02 15,000 15,000 +/ DAWSON COUNTY, GEORGIA DEVELOPMENT AUTHORITY IDRB (World Wide Manufacturing Project) 1.75%, 01/07/02 2,950 2,950
See the Financial Notes, which are integral to this information. 15 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ DEKALB COUNTY, GEORGIA DEVELOPMENT AUTHORITY IDRB (Arbor Montessori School Project) 1.65%, 01/07/02 1,100 1,100 IDRB (Siemens Energy, Inc. Project) 1.65%, 01/07/02 7,500 7,500 IDRB (Truman Properties LLC Project) 1.75%, 01/07/02 2,100 2,100 +/ DEKALB COUNTY, GEORGIA HFA M/F Housing RB (Brittany Apartments Project) 1.70%, 01/07/02 4,000 4,000 M/F Housing RB (Eagle Trace Apartments Project) Series 1996 1.65%, 01/07/02 9,150 9,150 M/F Housing RB (Villas of Friendly Heights Apartments Project) 1.75%, 01/07/02 3,575 3,575 M/F Housing RB (Wood Hills Apartment Project) 1.70%, 01/07/02 17,350 17,350 +/ DOUGLAS COUNTY, GEORGIA IDA RB (Blue Circle Project) 1.70%, 01/07/02 3,800 3,800 Revenue Refunding Bond (Mima, Inc. Project) 1.70%, 01/07/02 4,300 4,300 +/ EFFINGHAM COUNTY, GEORGIA IDA RB (Temcor Project) 1.75%, 01/07/02 4,000 4,000 +/ FAYETTE COUNTY, GEORGIA DEVELOPMENT AUTHORITY Educational Facilities RB (Catholic School Properties, Inc. Project) 1.60%, 01/07/02 10,200 10,200 +/ FAYETTE COUNTY, GEORGIA HOSPITAL AUTHORITY Revenue Anticipation Certificate (Fayette Community Hospital Project) 1.65%, 01/07/02 10,000 10,000 +/ FORSYTH COUNTY, GEORGIA ECONOMIC DEVELOPMENT AUTHORITY RB (Federal Road, LLC Project) 1.75%, 01/07/02 7,000 7,000 +/ FULTON COUNTY, GEORGIA DEVELOPMENT AUTHORITY RB (Atlanta International School Project) 1.65%, 01/07/02 2,800 2,800 RB (Trinity School Project) 1.65%, 01/07/02 7,000 7,000 RB (Woodruff Arts Center Project) 1.60%, 01/07/02 10,000 10,000 +/ GAINESVILLE, GEORGIA REDEVELOPMENT AUTHORITY Educational Facilities RB (Riverside Military Project) 1.60%, 01/07/02 30,000 30,000 +/ GEORGIA PRIVATE COLLEGES & UNIVERSITIES AUTHORITY RB (Emory University) Series 2001B 1.50%, 01/07/02 10,000 10,000 +/ GEORGIA STATE GO TOB Series 18 1.71%, 01/07/02 10,390 10,390 GO TOB Series 1998-1003 1.71%, 01/07/02 20,245 20,245 GO TOB Series 2000-1001 1.71%, 01/07/02 13,000 13,000 GO TOB Series 213 1.69%, 01/07/02 5,000 5,000 GO TOBP (PA-897) 1.64%, 01/07/02 10,575 10,575 GEORGIA STATE ROAD & TOLLWAY AUTHORITY BAN 2.29%, 11/20/02 40,000 40,158 +/ GORDON COUNTY, GEORGIA DEVELOPMENT AUTHORITY RB (Constantine Dyeing, LLC Project) 1.75%, 01/07/02 6,300 6,300 +/ GWINNETT COUNTY, GEORGIA HFA M/F Housing RB 1.65%, 01/07/02 5,000 5,000 +/ HAPEVILLE, GEORGIA IDA IDRB (Hapeville Hotel Ltd. Project) 1.90%, 01/07/02 5,200 5,200 +/ HART COUNTY, GEORGIA INDUSTRIAL BUILDING AUTHORITY IDRB (Awh Corp. Project) 1.70%, 01/07/02 5,900 5,900 IDRB (Dundee Mills Project) 1.75%, 01/07/02 3,385 3,385
See the Financial Notes, which are integral to this information. 16
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ HOUSTON COUNTY, GEORGIA DEVELOPMENT AUTHORITY IDRB (Douglas Asphalt County Project) 1.75%, 01/07/02 2,700 2,700 +/ JEFFERSON COUNTY, GEORGIA DEVELOPMENT AUTHORITY IDRB (Grove River Mills Project) Series 1997 1.75%, 01/07/02 2,700 2,700 +/ LAFAYETTE, GEORGIA DEVELOPMENT AUTHORITY RB (Dixie Group Project) 1.75%, 01/07/02 4,000 4,000 +/ LAURENS COUNTY, GEORGIA DEVELOPMENT AUTHORITY Solid Waste Disposal RB (Southeast Paper Manufacturing Co. Project) 1.70%, 01/07/02 51,000 51,000 +/ LOWNDES COUNTY, GEORGIA DEVELOPMENT AUTHORITY M/F Housing RB (FMPH Valdosta, Limited Partnership Project) 1.75%, 01/07/02 5,045 5,045 +/ MACON-BIBB COUNTY, GEORGIA HOSPITAL AUTHORITY RB (The Medical Center of Central Georgia Project) Series 1998 1.65%, 01/07/02 4,000 4,000 +/ MILLER COUNTY, GEORGIA DEVELOPMENT AUTHORITY IDRB (Birdsong Corp. Project) 1.75%, 01/07/02 2,900 2,900 +/ PRIVATE COLLEGES AND UNIVERSITIES FACILITIES AUTHORITY, GEORGIA RB (Emory University) Series 2000C 1.50%, 01/07/02 10,000 10,000 +/ ROSWELL, GEORGIA HFA M/F Housing RB (Gables Realty Wood Crossing Project) 1.60%, 01/07/02 11,650 11,650 +/ SAVANNAH GEORGIA HOUSING AUTHORITY M/F Housing RB (Indigo Pointe Apartments) Series 2001A 1.75%, 01/07/02 3,500 3,500 M/F Housing RB (Live Oak Plantation Apartments) Series 2001A 1.75%, 01/07/02 2,500 2,500 +/ SAVANNAH, GEORGIA ECONOMIC DEVELOPMENT AUTHORITY RB (Georgia Kaolin, Inc.) 1.70%, 01/07/02 11,000 11,000 RB (Home Depot Project) Series 1995B 1.70%, 01/07/02 5,000 5,000 +/ SUMMERVILLE, GEORGIA DEVELOPMENT AUTHORITY RB (Image Industry Project) Series 1997 1.74%, 01/07/02 11,000 11,000 +/ THOMASTON-UPSON COUNTY, GEORGIA IDA IDRB (Southern Mills Project) Series 1999 1.75%, 01/07/02 4,940 4,940 +/ THOMASVILLE, GEORGIA PAYROLL DEVELOPMENT AUTHORITY RB (Brit Corp. Project) 1.90%, 01/07/02 3,300 3,300 +/ WALTON COUNTY, GEORGIA DEVELOPMENT AUTHORITY RB (Tucker Door & Trim Corp. Project) 1.85%, 01/07/02 2,600 2,600 +/ WEBSTER COUNTY, GEORGIA IDA IDRB (Tolleson Lumber Co., Inc. Project) 1.70%, 01/07/02 6,400 6,400 +/ WHITFIELD COUNTY, GEORGIA DEVELOPMENT AUTHORITY RB (Product Concepts Project) 1.65%, 01/07/02 1,200 1,200 +/ WINDER-BARROW, GEORGIA INDUSTRIAL BUILDING AUTHORITY IDRB (Progress Container Corp. Project) Series 2000 1.75%, 01/07/02 3,160 3,160 +/ WORTH COUNTY, GEORGIA IDA Revenue Refunding Bond (Seabrook Project) Series 1996B 1.75%, 01/07/02 1,300 1,300 ---------- 777,813
See the Financial Notes, which are integral to this information. 17 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) HAWAII 0.4% +/ HAWAII STATE Student Loan RB (Secondary Market Services Corp.) Series 1995-II 1.65%, 01/07/02 9,000 9,000 Student Loan RB (Secondary Market Services Corp.) Series 2000-II 1.65%, 01/07/02 8,800 8,800 +/ HAWAII STATE DEPARTMENT OF BUDGET & FINANCE Special Purpose RB TOBP (PA-795R) 1.76%, 01/07/02 8,195 8,195 +o HAWAII STATE HOUSING FINANCE & DEVELOPMENT CORP. TOB 2.75%, 07/01/02 11,070 11,070 + HONOLULU, HAWAII GO TECP 1.40%, 02/06/02 6,100 6,100 ---------- 43,165 IDAHO 0.1% CUSTER COUNTY, IDAHO Pollution Control RB (Amoco Project) Series 1983 2.10%, 04/01/02 5,250 5,250 +/ IDAHO HFA Housing RB (Assisted Living Concepts Project) 1.90%, 01/07/02 3,470 3,470 +/ IDAHO STATE UNIVERSITY FOUNDATION, INC. RB (L E & Thelma Stevens Project) 1.60%, 01/07/02 3,800 3,800 ---------- 12,520 ILLINOIS 6.8% +/ AURORA, ILLINOIS M/F Housing RB (Apartments at Fox Valley) Series 1999A 1.65%, 01/07/02 9,445 9,445 +/ BATAVIA, ILLINOIS IDRB (American Industrial Technologies) 2.00%, 01/07/02 2,545 2,545 +/ BOLINGBROOK, ILLINOIS SPECIAL SERVICE AREA NO. 2 Special Tax Bond Series 2001B 1.85%, 01/07/02 5,000 5,000 +/ CAROL STREAM, ILLINOIS M/F Housing Revenue Refunding Bond (St. Charles Square Project) 1.85%, 01/07/02 4,415 4,415 +/ CENTRALIA, ILLINOIS IDA RB (Consolidated Foods Corp. & Hollywood Brands, Inc. Project) 1.60%, 01/07/02 10,000 10,000 +/ CHICAGO, ILLINOIS IDRB (Morse Automotive Project) Series 1995 1.80%, 01/07/02 1,800 1,800 RB (Homestart Program) Series 2000A 1.75%, 01/07/02 15,000 15,000 S/F Mortgage RB TOB Series 1999N 1.76%, 01/07/02 9,995 9,995 Water Second Lien RB 1.55%, 01/07/02 2,000 2,000 +/ CHICAGO, ILLINOIS BOARD OF EDUCATION Unlimited Tax GO TOB 1.69%, 01/07/02 7,120 7,120 +/ CHICAGO, ILLINOIS GAS SUPPLY RB (Peoples Gas, Light & Coke Co. Project) Series 1993B 1.80%, 01/07/02 15,000 15,000 Revenue Refunding Bond (Peoples Gas, Light & Coke Co. Project) Series 2000C 1.72%, 01/07/02 19,000 19,000 +/ CHICAGO, ILLINOIS MIDWAY AIRPORT RB TOB 1.71%, 01/07/02 24,480 24,480 +/ CHICAGO, ILLINOIS O'HARE INTERNATIONAL AIRPORT RB (ACES General Airport Second Lien) Series B1 1.70%, 01/07/02 23,800 23,800 RB (ACES General Airport Second Lien) Series B2 1.70%, 01/07/02 13,700 13,700 Special Facility RB 1.65%, 01/07/02 55,084 55,084 Special Facility RB Series 2000A 2.10%, 01/07/02 44,410 44,410 Special Facility RB TOB Series 2001B6 1.76%, 01/07/02 11,070 11,070
See the Financial Notes, which are integral to this information. 18
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) Special Facility Revenue Refunding Bond (American Airlines Project) 2.10%, 01/07/02 10,800 10,800 Special Facility Revenue Refunding Bond (Lufthansa German Project) 1.65%, 01/07/02 31,900 31,900 +/ CHICAGO, ILLINOIS WATERWORKS Senior Lien RB TOB 1.71%, 01/07/02 12,975 12,975 +/ EAST DUNDEE, KANE & COOK COUNTIES, ILLINOIS IDRB (Otto Engine Project) 1.70%, 01/07/02 2,125 2,125 +/ ELMHURST, ILLINOIS IDRB (ELM Machining Corp. Project) 1.95%, 01/07/02 2,300 2,300 +/ GILBERTS, ILLINOIS SPECIAL SERVICE AREA NO. 10 RB (Timber Trails Project) 1.75%, 01/07/02 10,785 10,785 +/ GLENDALE HEIGHTS, ILLINOIS IDRB (York Corrugated Container Project) 1.90%, 01/07/02 1,300 1,300 +/ HAMPSHIRE, ILLINOIS IDRB (Poli-Film America Project) Series 1998A 1.75%, 01/07/02 5,400 5,400 +/ HUNTLEY, ILLINOIS SPECIAL CIVIC AREA NO. 9 Special Tax Bond Series 1998B 1.75%, 01/07/02 8,172 8,172 +/ ILLINOIS DEVELOPMENT FINANCE AUTHORITY IDRB (Arc Tronics, Inc. Project) 1.90%, 01/07/02 2,595 2,595 IDRB (Camcraft, Inc. Project) 1.95%, 01/07/02 2,500 2,500 IDRB (Catholic Charities) 1.90%, 01/07/02 910 910 IDRB (Molding Project) 1.90%, 01/07/02 3,500 3,500 IDRB (Perkin Paperboard Co., LP) Series 1994 2.00%, 01/07/02 5,500 5,500 IDRB (Presbyterian Home Lake) Series 1996A 1.75%, 01/07/02 10,000 10,000 IDRB (Radiological Society Project) Series 1997 1.70%, 01/07/02 4,290 4,290 IDRB (River Graphics Corp. Project) Series 1996 1.95%, 01/07/02 2,945 2,945 RB (Catholic Charities Housing Project) Series 1993A 1.75%, 01/07/02 9,160 9,160 RB (Chicago Academy of Science Project) 1.75%, 01/07/02 4,515 4,515 RB (Chicago Academy of Science Project) Series 1998 1.75%, 01/07/02 5,700 5,700 RB (Chicago Horticultural Society Project) 1.75%, 01/07/02 20,000 20,000 RB (Korex Corp. Project) 1.85%, 01/07/02 4,000 4,000 RB (Lake Forest Academy Project) 1.75%, 01/07/02 2,000 2,000 RB (Loyola Academy Project) 1.75%, 01/07/02 14,845 14,845 RB (McCormick Theological Project) Series 2001B 1.75%, 01/07/02 14,500 14,500 RB (Palos Common Hospital Project) Series 1998 1.60%, 01/07/02 10,000 10,000 RB (Presbyterian Homes Project) 1.75%, 01/07/02 9,000 9,000 RB (Roll Service, Inc. Project) 1.90%, 01/07/02 2,230 2,230 RB (Slovak American Charitable Project) 1.75%, 01/07/02 8,110 8,110 RB (St. Ignatius College Prep. Project) 1.75%, 01/07/02 2,200 2,200 RB (Variable Rest Haven Illiana Christian) 1.75%, 01/07/02 11,555 11,555 RB (Wheaton Academy Project) 1.75%, 01/07/02 8,000 8,000 Residential Rental RB (F.C. Harris Pavillion Project) Series 1994 1.65%, 01/07/02 27,510 27,510 Residential Rental RB (River Oak Project) 1.68%, 01/07/02 32,000 32,000
See the Financial Notes, which are integral to this information. 19 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) Revenue Refunding Bond (Francis W. Parker Project) 1.60%, 01/07/02 2,500 2,500 Revenue Refunding Bond (Rich Products Corp. Project) 1.75%, 01/07/02 1,525 1,525 +/ ILLINOIS EDUCATIONAL FACILITIES TOB 1.71%, 01/07/02 2,000 2,000 +/ ILLINOIS EDUCATIONAL FACILITY AUTHORITY RB (Chicago Historical Society) 1.65%, 01/07/02 8,000 8,000 +/ ILLINOIS HDA M/F Mortgage Revenue Refunding Bond (Hyde Park Tower Apartments Project) Series 2000A 1.90%, 01/07/02 4,500 4,500 +/ ILLINOIS HEALTH FACILITY AUTHORITY RB (Bensenville Home Society Project) Series 1989A 1.65%, 01/07/02 2,225 2,225 RB (Ingalls Memorial Hospital) Series 1985C 1.70%, 01/07/02 1,100 1,100 RB (Streetville Corporation) Series A 1.70%, 01/07/02 6,000 6,000 RB (Washington & Jane Smith Home) Series 1991 1.70%, 01/07/02 2,800 2,800 +/ ILLINOIS METROPOLITAN PIER AND EXPO AUTHORITY TOB (McCormick Place Exposition Project) 1.71%, 01/07/02 24,145 24,145 + ILLINOIS REGIONAL TRANSPORTATION AUTHORITY / GO TOB 1.71%, 01/07/02 9,730 9,730 RB Series 1992A 1.87%, 06/01/02 4,000 4,070 +/ ILLINOIS STATE GO TOB 1.71%, 01/07/02 14,000 14,000 GO TOB Series 2001-2 1.70%, 01/07/02 5,000 5,000 GO TOB Series 257 1.69%, 01/07/02 7,000 7,000 +/ ILLINOIS STUDENT ASSISTANCE COMMISSION Student Loan RB Series 1996A 1.75%, 01/07/02 7,800 7,800 +/ ILLINOIS VARIOUS COUNTIES GO TOB 1.71%, 01/07/02 12,055 12,055 +/ LOMBARD, ILLINOIS Industrial Development Revenue Refunding Bond (B & H Partnership Project) 1.95%, 01/07/02 1,850 1,850 +/ MELROSE PARK, ILLINOIS IDRB (Ninos Enterprises, Inc. Project) 1.90%, 01/07/02 2,500 2,500 +/ NEW LENOX, ILLINOIS IDRB (Panduit Corp. Project) 1.80%, 01/07/02 4,400 4,400 +/ OAK FOREST, ILLINOIS RB (Homewood Pool-South Suburban Mayors & Managers Association Project.) 1.70%, 01/07/02 10,000 10,000 +/ ORLAND PARK, ILLINOIS IDRB (Orland Properties Project) 2.15%, 01/07/02 920 920 +/ PALATINE, ILLINOIS SPECIAL FACILITIES Limited Obligation RB (Little City Community Development Project) 1.75%, 01/07/02 4,000 4,000 +/ RICHTON PARK, ILLINOIS IDRB (Avatar Corp. Project) 1.95%, 01/07/02 1,900 1,900 +/ ROCKFORD, ILLINOIS IDRB (Industrial Welding Supply, Inc. Project) 1.95%, 01/07/02 2,000 2,000 IDRB (Ring Can Corp. Project) 1.75%, 01/07/02 2,100 2,100 +/ TINLEY PARK, ILLINOIS IDA RB (Beverly Manufacturing Co. Project) Series 1997A 1.85%, 01/07/02 2,370 2,370 +/ TREMONT, ILLINOIS IDRB (Hanna Steel Project) 1.55%, 01/07/02 9,500 9,500
See the Financial Notes, which are integral to this information. 20
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ UNIVERSITY OF ILLINOIS RB Merlot TOB Series 2000S 1.71%, 01/07/02 3,500 3,500 +/ WILL-KANKAKEE, ILLINOIS REGIONAL DEVELOPMENT AUTHORITY IDRB (Toltec Steel Services Project) 1.70%, 01/07/02 5,000 5,000 +/ YORKVILLE, ILLINOIS IDRB (F.E. Wheaton & Co., Inc. Project) Series 1996 1.95%, 01/07/02 1,340 1,340 ---------- 743,016 INDIANA 2.5% +/ ELKHART COUNTY, INDIANA Economic Development RB (White Plains Apartments Project) Series 1998A 1.85%, 01/07/02 2,000 2,000 +/ GARY, INDIANA ECONOMIC DEVELOPMENT AUTHORITY Revenue Refunding Bond (Tinplate Partnership Project) Series 1997A 1.90%, 01/07/02 2,100 2,100 +/ GARY, INDIANA EMPOWERMENT ZONE RB (Chemcoaters, LLC Project) Series 2000A 1.90%, 01/07/02 6,500 6,500 +/ GARY, INDIANA REDEVELOPMENT DISTRICT Economic Growth RB Series 2001-A 1.70%, 01/07/02 14,680 14,680 +/ HAMMOND, INDIANA Economic Development RB (Lear Seating Corp. Project) Series 1994 1.75%, 01/07/02 9,145 9,145 INDIANA BOND BANK Advance Funding Program TAN Series 2001A-2 3.10%, 01/22/02 22,000 22,011 3.33%, 01/22/02 50,000 50,019 +/ INDIANA DEVELOPMENT FINANCE AUTHORITY IDRB (Cives Corp. Project) Series 1998 1.70%, 01/07/02 7,150 7,150 INDIANA HEALTH FACILITY FINANCING AUTHORITY RB TECP (Ascension Health Credit Group) Series 2001A-2 1.80%, 02/04/02 24,000 24,000 RB TECP (Ascension Health Credit Group) Series 2001A-3 1.80%, 03/04/02 24,000 24,000 +/ INDIANA SECONDARY MARKET EDUCATIONAL LOANS, INC. Student Loan RB Series 1988B 1.65%, 01/07/02 27,000 27,000 +/ INDIANA STATE DEVELOPMENT FINANCE AUTHORITY IDRB (Big Sky Park Project) 1.70%, 01/07/02 6,000 6,000 +/ INDIANA STATE HOUSING TOB Series 1999A 1.76%, 01/07/02 9,995 9,995 +/ INDIANA STATE HFA S/F Mortgage RB TOB Series 2000P 1.78%, 01/07/02 9,490 9,490 +/ INDIANA THERMAL ENERGY SYSTEM RB TOB 1.71%, 01/07/02 9,900 9,900 +/ INDIANA UNIVERSITY, INDIANA RB 1.55%, 01/07/02 6,039 6,039 +/ INDIANAPOLIS, INDIANA M/F Housing RB (Nora Pines Apartments Project) 1.70%, 01/07/02 5,000 5,000 Resource Recovery RB (Ogden Martin Systems, Inc. Project) Series 1987 2.05%, 01/01/02 5,260 5,260 +/ MIAMI COUNTY, INDIANA Economic Development RB (Dukes Memorial Hospital Project) 1.75%, 01/07/02 4,865 4,865 +/ ST. JOSEPH COUNTY, INDIANA Economic Development RB (Pine Oaks Apartments Project) Series 1997A 1.85%, 01/07/02 1,000 1,000 Economic Development RB Series 1997B 1.85%, 01/07/02 3,430 3,430
See the Financial Notes, which are integral to this information. 21 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) Educational Facilities RB (University of Notre Dame) 1.50%, 01/07/02 9,200 9,200 +/ UNIVERSITY OF SOUTHERN INDIANA AUXILIARY SYSTEM RB Series 2001B 1.60%, 01/07/02 10,800 10,800 +/ VIGO COUNTY, INDIANA Economic Development Revenue Bond (Sister's Providence Project) 1.70%, 01/07/02 3,500 3,500 ---------- 273,084 IOWA 0.3% +/ IOWA STUDENT LOAN LIQUIDITY CORP. Student Loan RB Series 1988B 1.65%, 01/07/02 33,600 33,600 +/ SAINT JOSEPH COUNTY, IOWA ECONOMICAL DEVELOPMENT AUTHORITY RB (Western Manor Project) 1.85%, 01/07/02 2,130 2,130 ---------- 35,730 KANSAS 0.7% +/ KANSAS DEPARTMENT OF TRANSPORTATION HIGHWAY RB TOB Series 1999 1.71%, 01/07/02 37,500 37,500 +/ OLATHE, KANSAS IDRB (Garmin International, Inc. Project) Series 1995 1.75%, 01/07/02 1,700 1,700 +/ WICHITA, KANSAS Airport Facilities Revenue Refunding Bond (Cessna Service Center Project) 1.90%, 01/07/02 11,245 11,245 Airport Facilities Revenue Refunding Bond (Flight Safety International, Inc. Project) 1.65%, 01/07/02 26,170 26,170 ---------- 76,615 KENTUCKY 1.9% +/ ELIZABETHTOWN, KENTUCKY IDRB (Aztec Project) 1.85%, 01/07/02 3,000 3,000 +/ JEFFERSON COUNTY, KENTUCKY SPORTS STADIUM RB (University of Louisville Athletic Department) 1.80%, 01/07/02 5,700 5,700 +/ KENTON COUNTY, KENTUCKY AIRPORT BOARD Special Facilities RB Series 2000A 1.75%, 01/07/02 8,915 8,915 KENTUCKY ASSET LIABILITY COMMISSION General Fund TRAN Series 2001A 2.53%, 06/26/02 44,000 44,304 2.70%, 06/26/02 9,000 9,055 + KENTUCKY CORPORATE HOUSING o RB TOB Series 1998W 2.05%, 06/06/02 19,320 19,320 / Revenue Merlot TOB Series 2000U 1.76%, 01/07/02 9,685 9,685 +/ KENTUCKY HIGHER EDUCATION STUDENT LOAN CORP Insured Student Loan RB Series 1991E 1.60%, 01/07/02 42,600 42,600 Insured Student Loan RB Series 1996A 1.60%, 01/07/02 23,850 23,850 KENTUCKY INTERLOCAL SCHOOL TRANSPORTATION ASSOCIATION TRAN 2.72%, 06/28/02 7,000 7,034 +/ LOUISVILLE & JEFFERSON COUNTIES, KENTUCKY METRO SEWER DISTRICT TOB Series A 1.71%, 01/07/02 6,115 6,115 +/ MAYSVILLE, KENTUCKY Industrial Building RB (Green Tokai Building) 1.95%, 01/07/02 5,740 5,740 +/ MURRAY, KENTUCKY IDA Revenue Refunding Bond (Dean Foods Co. Project) 1.70%, 01/07/02 6,000 6,000 +/ RICHMOND, KENTUCKY IDRB (Mikron Project) 1.70%, 01/07/02 7,175 7,175
See the Financial Notes, which are integral to this information. 22
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ WICKLIFFE, KENTUCKY Pollution Control & Solid Waste Disposal Revenue Refunding Bond (Westvaco Corp. Project) 1.65%, 01/07/02 4,250 4,250 +/ WILSON COUNTY, KENTUCKY IDB RB (Perma Pipe Project) 2.00%, 01/07/02 3,150 3,150 ---------- 205,893 LOUISIANA 1.3% +/ CALCASIEU PARISH, LOUISIANA IDB IDRB (Weingarten Realty Project) 1.80%, 01/07/02 1,990 1,990 +/ LAFAYETTE PARISH, LOUISIANA IDRB (Westwood Village Project) 1.80%, 01/07/02 3,735 3,735 +/ LAKE CHARLES, LOUISIANA Harbor Improvement RB (Port Improvement Global Industries Project) 1.55%, 01/07/02 14,700 14,700 +/ LAKE CHARLES, LOUISIANA HARBOR & TERMINAL DISTRICT Dock & Wharf RB (Conoco, Inc. Project) 1.85%, 01/07/02 10,500 10,500 LOUISIANA STATE Adjustable Tender GO TECP 2.15%, 01/15/02 8,800 8,800 +/ LOUISIANA STATE PUBLIC FACILITIES AUTHORITY Hospital RB (Willis-Knighton Medical Center Project) 1.60%, 01/07/02 14,300 14,300 +/ NEW ORLEANS, LOUISIANA AVIATION BOARD RB Series 1993B 1.75%, 01/07/02 5,760 5,760 +/ OUACHITA PARISH, LOUISIANA IDB IDRB (Sulzer Escher Wyss, Inc. Project) 1.75%, 01/07/02 1,500 1,500 ST. JAMES PARISH, LOUISIANA Pollution Control Revenue Refunding Bond TECP (Texaco Project) Series 1988A 1.45%, 01/15/02 36,500 36,500 Pollution Control Revenue Refunding Bond TECP (Texaco Project) Series 1988B 1.45%, 01/15/02 44,030 44,030 ---------- 141,815 MARYLAND 0.6% +/ MARYLAND STATE COMMUNITY HOUSING DEVELOPMENT ADMINISTRATION DEPARTMENT S/F Mortgage Revenue TOBP (PA-634) 1.76%, 01/07/02 8,290 8,290 TOB Series 1999G 1.76%, 01/07/02 32,335 32,335 +/ MARYLAND STATE ECONOMIC DEVELOPMENT CORP. Economic Development RB (Hunter Douglas Project) 1.75%, 01/07/02 3,400 3,400 IDRB (Dixon Valve Project) 1.75%, 01/07/02 3,000 3,000 +/ MARYLAND STATE ENERGY FINANCING ADMINISTRATION Limited Obligation Local District RB (Comfort Link Project) 1.80%, 01/07/02 10,000 10,000 +/ MARYLAND STATE HEALTH & HIGHER EDUCATION FACILITY AUTHORITY Pooled Loan Program RB (Kennedy Krieger Project) Series 1993D 1.56%, 01/07/02 1,900 1,900 RB (Mercey Ridge Project) 1.70%, 01/07/02 3,300 3,300 ---------- 62,225 MASSACHUSETTS 1.1% COHASSET, MASSACHUSETTS BAN 2.65%, 07/26/02 18,025 18,109 +/ MASSACHUSETTS INDUSTRIAL FINANCE AUTHORITY IDRB (Arkansas Electronic Products Corp. Project) 1.75%, 01/07/02 2,900 2,900 MASSACHUSETTS STATE TECP Series 2001G 1.65%, 01/03/02 45,000 45,000 1.40%, 01/24/02 15,000 15,000
See the Financial Notes, which are integral to this information. 23 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ TOB Series 2001O 1.66%, 01/07/02 2,785 2,785 +/ TOB Series L39 1.67%, 01/07/02 4,330 4,330 + MASSACHUSETTS STATE HFA S/F Housing RB Series 2001H 2.05%, 12/02/02 10,000 10,000 +/ MASSACHUSETTS STATE WATER POLLUTION ABATEMENT TRUST Water Pollution TOB Series 1999N 1.66%, 01/07/02 16,500 16,500 ---------- 114,624 MICHIGAN 4.0% +/ ANN ARBOR, MICHIGAN ECONOMIC DEVELOPMENT CORP. Limited Obligation RB (Glacier Hills, Inc. Project) Series 2000A 1.66%, 01/07/02 23,245 23,245 Limited Obligation RB (Glacier Hills, Inc. Project) Series 2000B 1.66%, 01/07/02 9,620 9,620 +/ DETROIT, MICHIGAN SEWAGE DISPOSAL SYSTEM RB TOB Series 1999A 1.71%, 01/07/02 34,650 34,650 +/ DETROIT, MICHIGAN WATER SUPPLY SYSTEM Second Lien Revenue Refunding Bond Series 2001C 1.60%, 01/07/02 15,200 15,200 +/ GEORGETOWN TOWNSHIP, MICHIGAN ECONOMIC DEVELOPMENT CORP. Limited Obligation RB (Sunset Manor, Inc. Project) 1.66%, 01/07/02 9,180 9,180 +/ GRAND RAPIDS, MICHIGAN ECONOMIC DEVELOPMENT CORP. RB (Amway Hotel Corp. Project) Series 1991A 1.55%, 01/07/02 8,755 8,755 + MICHIGAN MUNICIPAL BOND AUTHORITY RB Series C-2 2.59%, 08/22/02 105,500 106,104 + MICHIGAN STATE BUILDING AUTHORITY COMMISSION TECP Series 2 1.80%, 01/24/02 51,000 51,000 +/ MICHIGAN STATE HDA TOBP (PT-556) 1.76%, 01/07/02 3,630 3,630 +/ MICHIGAN STATE HOSPITAL FINANCE AUTHORITY RB (Martin Luther Memorial Home Inc. Project) 1.75%, 01/07/02 8,085 8,085 +/ MICHIGAN STATE STRATEGIC FUND Limited Obligation RB (Advance Plastics Corp.) 1.80%, 01/07/02 2,430 2,430 Limited Obligation RB (American Cancer Society Great Lakes) 1.70%, 01/07/02 5,790 5,790 Limited Obligation RB (EPI Printers, Inc. Project) 1.80%, 01/07/02 2,000 2,000 Limited Obligation RB (John Widdicomb Co. Project) 1.75%, 01/07/02 1,330 1,330 Limited Obligation RB (Manufacturer's Project) Series 1991 1.75%, 01/07/02 1,050 1,050 Limited Obligation RB (Mechanics Uniform Rental Project) 1.80%, 01/07/02 1,000 1,000 Limited Obligation RB (Orchestra Place Renewal Project) 1.47%, 01/07/02 15,000 15,000 Limited Obligation RB (United Machining Project) Series 1998 1.80%, 01/07/02 6,000 6,000 Limited Obligation RB Series 1998 1.80%, 01/07/02 3,395 3,395 Limited Obligation RB Series 1998B 1.80%, 01/07/02 1,615 1,615 +/ OAKLAND COUNTY, MICHIGAN ECONOMIC DEVELOPMENT CORP. Limited Obligation RB (Husky Envelope Products, Inc. Project) 1.80%, 01/07/02 3,940 3,940 Limited Obligation RB (Pontiac Vision Schools Project) 1.70%, 01/07/02 11,000 11,000
See the Financial Notes, which are integral to this information. 24
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ WAYNE CHARTER COUNTY, MICHIGAN AIRPORT RB (Detroit Metropolitan Wayne County Airport Project) 1.72%, 01/07/02 55,000 55,000 RB (Detroit Metropolitan Wayne County Airport Project) Series 1996A 1.65%, 01/07/02 5,650 5,650 RB (Detroit Metropolitan Wayne County Airport Project) Series 1996B 1.65%, 01/07/02 47,185 47,185 ---------- 431,854 MINNESOTA 3.0% +/ BLOOMINGTON, MINNESOTA PORT AUTHORITY Special Tax Revenue Refunding Bond (Mall of America Project) Series 1999B 1.75%, 01/07/02 9,800 9,800 +/ HENNEPIN COUNTY, MINNESOTA Unlimited GO Series 1996C 1.85%, 01/07/02 3,250 3,250 +/ HENNEPIN COUNTY, MINNESOTA HOUSING & REDEVELOPMENT AUTHORITY M/F Housing RB (City Apartments at Loring Park) 1.90%, 01/07/02 2,600 2,600 +/ MENDOTA HEIGHTS, MINNESOTA IDRB (Dakota Business Plaza Project) 2.05%, 01/07/02 2,300 2,300 + MINNEAPOLIS ST. PAUL, MINNESOTA AIRPORT COMMISSION TECP Series B 2.10%, 01/07/02 10,000 10,000 2.15%, 01/09/02 10,000 10,000 1.70%, 01/11/02 10,500 10,500 1.85%, 02/04/02 10,000 10,000 1.90%, 02/04/02 7,500 7,500 +/ MINNESOTA STATE Agriculture & Economic Development RB (Evangelical Lutheran Project) 1.75%, 01/07/02 8,000 8,000 + MINNESOTA STATE HFA Residential Housing Finance RB Series 2001B 1.90%, 12/04/02 63,785 63,785 Residential Housing Finance RB Series 2001C 1.90%, 12/04/02 30,230 30,230 Residential Housing Finance RB Series 2001D 1.90%, 12/04/02 35,805 35,805 +/ MINNESOTA STATE HIGHER EDUCATION FACILITIES AUTHORITY RB (Carleton College) Series 2000G 1.60%, 01/07/02 12,000 12,000 RB (University of St. Thomas Project) 1.60%, 01/07/02 9,700 9,700 + ROCHESTER, MINNESOTA Health Care Facility RB TECP (Mayo Foundation Clinic) 1.45%, 01/08/02 9,000 9,000 2.20%, 01/10/02 25,000 25,000 2.20%, 01/17/02 15,000 15,000 1.40%, 03/06/02 47,770 47,700 +/ Health Care Facilities RB TOB Series 177 1.69%, 01/07/02 7,130 7,130 ---------- 329,300 MISSISSIPPI 0.9% +/ MISSISSIPPI BUSINESS FINANCE AUTHORITY IDRB (Clopay Building Products Co. Project) Series 1999 1.75%, 01/07/02 3,300 3,300 +/ MISSISSIPPI BUSINESS FINANCIAL CORP. IDRB (Electric Mills Wood Project) 1.85%, 01/07/02 5,000 5,000 IDRB (Omega Motion Project) Series 1996 1.70%, 01/07/02 5,500 5,500 +/ MISSISSIPPI DEVELOPMENT BANK Special Obligation TOBP (PT-520) 1.69%, 01/07/02 38,365 38,365 +/ MISSISSIPPI HOSPITAL EQUIPMENT & FACILITIES AUTHORITY RB (Baptist Memorial Hospital Project) 1.65%, 01/07/02 18,000 18,000 +/ MISSISSIPPI S/F HFA TOB Series 1997G 1.76%, 01/07/02 12,330 12,330
See the Financial Notes, which are integral to this information. 25 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ MISSISSIPPI STATE GO Refunding Bond TOB 1.71%, 01/07/02 14,880 14,880 ---------- 97,375 MISSOURI 0.2% +/ MISSOURI HIGHER EDUCATION LOAN AUTHORITY Student Loan RB Series 1988A 1.65%, 01/07/02 1,000 1,000 +/ MISSOURI STATE DEVELOPMENT FINANCE BOARD IDRB (H.R. Williams Mill Supply Project) Series 1995 2.00%, 01/07/02 3,100 3,100 IDRB (Milbank Manufacturing Co. Project) 1.90%, 01/07/02 3,000 3,000 +/ MISSOURI STATE HEALTH & EDUCATIONAL FACILITIES AUTHORITY Health Facilities RB (National Benevolent Association Project) 1.60%, 01/07/02 2,750 2,750 +o MISSOURI STATE HOUSING DEVELOPMENT COMMISSION Mortgage RB TOBP (PA-847) 1.76%, 01/07/02 6,385 6,385 +/ ST. CLAIR, MISSOURI IDA RB (Private Dynaquip) 1.70%, 01/07/02 1,000 1,000 +/ ST. LOUIS, MISSOURI IDA RB (Kessler Container Project) 1.70%, 01/07/02 2,500 2,500 +/ WASHINGTON, MISSOURI IDA RB (Pauwels Transformer Project) 1.91%, 01/07/02 3,400 3,400 ---------- 23,135 MONTANA 0.1% +/ CLAY COUNTY, MONTANA IDRB (KC Salad Real Estate Project) 1.80%, 01/07/02 2,000 2,000 +/ MONTANA STATE HEALTH FACILITY AUTHORITY RB (Health Care Pooled Loan Program Project) Series 1985A 1.65%, 01/07/02 7,270 7,270 ---------- 9,270 NEBRASKA 0.6% +/ DODGE COUNTY, NEBRASKA IDRB (Oilgear Project) 1.85%, 01/07/02 1,670 1,670 +/ NEBRASKA HIGHER EDUCATION LOAN PROGRAM RB (Nebhelp, Inc. Student Loan Project) Series 1988C 1.80%, 01/07/02 4,150 4,150 +/ NEBRASKA INVESTMENT FINANCE AUTHORITY S/F Housing RB Merlot TOB Series 2000O 1.76%, 01/07/02 3,675 3,675 S/F Housing RB Merlot TOB Series 1998X 2.35%, 01/07/02 10,735 10,735 NEBRASKA PUBLIC POWER DISTRICT + Electric System Revenue Refunding Bond Series 1993A 2.75%, 01/01/02 2,500 2,500 Power Supply System RB 1.85%, 01/01/03 7,690 8,164 +/ STANTON COUNTY, NEBRASKA IDRB (Nucor Corp. Project) Series 1996 1.85%, 01/07/02 10,500 10,500 +/ WASHINGTON COUNTY, NEBRASKA IDRB (Cargill Dow Polymers, LLC) 2.10%, 01/07/02 19,000 19,000 ---------- 60,394 NEVADA 2.3% CLARK COUNTY, NEVADA +/ Economic Development RB (University of Nevada Las Vegas Project) 1.75%, 01/07/02 705 705 Motor Fuel Tax TECP 1.65%, 02/07/02 2,625 2,625 CLARK COUNTY, NEVADA AIRPORT +/ Airport System Improvement RB Sub Lien Series 1995A2 1.70%, 01/07/02 1,200 1,200 Sub Lien RB Series 2001A 1.90%, 01/01/02 11,200 11,200 Sub Lien RB Series 2001C 1.65%, 01/07/02 50,000 50,000
See the Financial Notes, which are integral to this information. 26
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ CLARK COUNTY, NEVADA AIRPORT REVENUE SYSTEMS Sub Lien RB Series 1999B1 1.65%, 01/02/02 46,360 46,360 + CLARK COUNTY, NEVADA PASSENGER FACILITY RB (Las Vegas McCarran International Airport) Series 1992A 1.80%, 07/01/02 11,000 11,446 + CLARK COUNTY, NEVADA SCHOOL DISTRICT / GO TOB Series 378 1.69%, 01/07/02 4,415 4,415 o Limited Obligation GO TOB Series 2001-33 2.15%, 03/13/02 21,715 21,715 / TOB Series 2000-5 1.71%, 01/07/02 19,935 19,935 + LAS VEGAS VALLEY WATER DISTRICT, NEVADA GO TECP Series A 1.50%, 03/06/02 40,000 40,000 +/ NEVADA HOUSING DIVISION M/F Housing RB (Apache Pines Apartments Project) Series 1999A 1.80%, 01/07/02 7,415 7,415 M/F Housing RB Series 1989A 1.55%, 01/07/02 5,300 5,300 Multi-Unit Housing RB (Banbridge Apartment Project) Series 2000A 1.80%, 01/07/02 3,960 3,960 Multi-Unit Housing RB (City Center Project) Series 2000A 1.80%, 01/07/02 9,350 9,350 +/ WASHOE COUNTY, NEVADA Unlimited GO TOB Series 2001-24 1.70%, 01/07/02 21,000 21,000 ---------- 256,626 NEW HAMPSHIRE 0.7% +/ NEW HAMPSHIRE HEALTH & EDUCATION FACILITIES AUTHORITY RB (Dartmouth Hitchcock Obligation) Series 2001A 1.55%, 01/07/02 59,890 59,890 +/ NEW HAMPSHIRE STATE HFA S/F Revenue TOB Series 1998G 1.76%, 01/07/02 7,220 7,220 S/F Revenue TOB Series 1998U 1.76%, 01/07/02 9,995 9,995 ---------- 77,105 NEW JERSEY 0.7% +/ NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY Thermal Energy Facilities RB (Marina Energy, LLC Project) Series 2001A 1.40%, 01/07/02 5,000 5,000 +/ NEW JERSEY HEALTH CARE FACILITIES FINANCING AUTHORITY RB Series 2001A 1.40%, 01/07/02 7,000 7,000 +/ NEW JERSEY SPORTS & EXPOSITION AUTHORITY RB Series 1992C 1.30%, 01/07/02 3,000 3,000 + NEW JERSEY STATE TECP 1.40%, 01/03/02 18,100 18,100 / TOB Series 316 1.51%, 01/07/02 450 450 +/ NEW JERSEY STATE HOUSING & MORTGAGE FINANCE AGENCY RB TOBP (PT-285) 1.52%, 01/07/02 885 885 +/ NEW JERSEY STATE TRANSPORTATION CORP. TOB Series 148 1.51%, 01/07/02 305 305 +/ NEW JERSEY STATE TRANSPORTATION TRUST FUND AUTHORITY TOB Series 204 1.56%, 01/07/02 11,000 11,000 +/ NEW JERSEY STATE TURNPIKE AUTHORITY RB Series 1991D 1.40%, 01/07/02 21,700 21,700 RB TOBP (PA-719) 1.50%, 01/07/02 2,795 2,795 NORTH BRUNSWICK, NEW JERSEY BAN 2.63%, 08/21/02 5,000 5,019
See the Financial Notes, which are integral to this information. 27 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ PORT AUTHORITY OF NEW YORK & NEW JERSEY TOB Series 2000Z 1.66%, 01/07/02 5,075 5,075 ---------- 80,329 NEW MEXICO 0.7% +/ ALBUQUERQUE, NEW MEXICO AIRPORT Sub Lien Governmental Purpose RB Series 2000A 1.70%, 01/07/02 6,600 6,600 Sub Lien RB Series 1996A 1.65%, 01/07/02 12,600 12,600 +/ NEW MEXICO STATE HIGHWAY COMMISSION Sub Lien RB 1.60%, 01/07/02 36,965 36,965 +/ SANTA FE, NEW MEXICO GROSS RECEIPTS TAX Wastewater Systems RB Series 1997B 1.70%, 01/07/02 17,200 17,200 ---------- 73,365 NEW YORK 4.5% +/ BABYLON, NEW YORK IDA Resource Recovery RB (Ogden Martin Project) Series 1998 1.40%, 01/07/02 19,880 19,880 +/ DUTCHESS COUNTY, NEW YORK IDA Civic Facilities RB (Trinity Pawling School Corp. Project) 1.65%, 01/07/02 1,900 1,900 +/ LONG ISLAND, NEW YORK POWER AUTHORITY Electric System RB Subseries 2A 1.45%, 01/07/02 2,000 2,000 Electric System RB Subseries 3A 1.50%, 01/07/02 1,500 1,500 Electric System RB TOB Series 1998A 1.49%, 01/07/02 10,970 10,970 Electric System RB TOB Series 338 1.44%, 01/07/02 22,695 22,695 Electric System RB TOBP (PA-565) 1.51%, 01/07/02 5,000 5,000 NASSAU COUNTY, NEW YORK INTERIM FINANCE AUTHORITY BAN Series 2001B-1 1.50%, 07/18/02 27,200 27,347 +/ NEW YORK CITY, NEW YORK GO Subseries B4 1.90%, 01/01/02 4,000 4,000 GO Subseries H3 1.80%, 01/01/02 8,900 8,900 GO TOB (CoreStates Merlot Program) Series 1997C 1.64%, 01/07/02 17,825 17,825 M/F Rental Housing RB (Tribeca Tower Project) Series 1997A 1.50%, 01/07/02 18,500 18,500 +/ NEW YORK CITY, NEW YORK HOUSING DEVELOPMENT CORP. M/F Mortgage RB (15th Street Development Project) Series 2000A 1.55%, 01/07/02 7,000 7,000 M/F Rental Housing RB (Lyric Development Project) Series 2001A 1.55%, 01/07/02 65,000 65,000 +/ NEW YORK CITY, NEW YORK IDA IDRB (Allway Tools, Inc. Project) 1.65%, 01/07/02 1,710 1,710 + NEW YORK CITY, NEW YORK MUNICIPAL WATER FINANCE AUTHORITY TECP 2.25%, 01/03/02 25,000 25,000 / Water & Sewer System RB Series 1992C 1.90%, 01/07/02 36,500 36,500 / Water & Sewer System RB Series 1994G 1.80%, 01/07/02 6,000 6,000 / Water & Sewer System RB Series 1995A 1.80%, 01/07/02 20,000 20,000 / Water & Sewer Systems RB TOB Series 158 1.46%, 01/07/02 9,995 9,995 +/ NEW YORK CITY, NEW YORK TRANSITIONAL FINANCE AUTHORITY Future Tax Secured TOB Series 1999B 1.64%, 01/07/02 14,830 14,830 NEW YORK STATE RAN Series 2001A 1.75%, 04/12/02 50,000 50,172
See the Financial Notes, which are integral to this information. 28
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ NEW YORK STATE ENERGY RESEARCH & DEVELOPMENT AUTHORITY Facilities RB (Con Edison Co. Project) Subseries A-3 1.65%, 01/07/02 10,000 10,000 Gas Facilities RB TOB Series 379 1.46%, 01/07/02 1,570 1,570 Pollution Control Revenue Refunding Bond (Orange & Rockland Utilities, Inc. Project) Series 1994A 1.40%, 01/07/02 900 900 +/ NEW YORK STATE HFA M/F Housing RB (Union Square South Housing Project) 1.50%, 01/07/02 22,400 22,400 M/F Housing Second Mortgage RB Series 1999A 1.55%, 01/07/02 2,000 2,000 RB (70 Battery Place Project) Series 1999A 1.70%, 01/07/02 3,600 3,600 RB Series 1997A 1.50%, 01/07/02 17,600 17,600 +/ NEW YORK STATE LOCAL GOVERNMENT ASSISTANCE CORP. RB TOB Series 468X 1.51%, 01/07/02 10,000 10,000 RB Series 1995F 1.40%, 01/07/02 700 700 +/ NEW YORK STATE MORTGAGE AGENCY RB Series 2000K 1.54%, 01/07/02 6,805 6,805 RB TOB Series 1999F 1.54%, 01/07/02 10,700 10,700 RB TOB Series 1999H 1.54%, 01/07/02 14,995 14,995 +/ PORT AUTHORITY OF NEW YORK & NEW JERSEY Special Obligation RB TOB 1.56%, 01/07/02 4,345 4,345 TRIBOROUGH BRIDGE & TUNNEL AUTHORITY, NEW YORK General Purpose Revenue BAN Series 2001A-1 3.26%, 01/17/02 10,000 10,007 +/ YONKERS, NEW YORK IDA Civic Facilities RB (Consumers Union Facility Project) 1.50%, 01/07/02 460 460 ---------- 492,806 NORTH CAROLINA 1.9% +/ BUNCOMBE COUNTY, NORTH CAROLINA SCHOOL GO Series 2000C 1.65%, 01/07/02 14,000 14,000 +/ BURKE COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES POLLUTION CONTROL FINANCING AUTHORITY IDRB (Bauer Industries, Inc. Project) 1.75%, 01/07/02 2,955 2,955 +/ CHARLOTTE, NORTH CAROLINA AIRPORT Revenue Refunding Bond Series 1997A 1.65%, 01/07/02 30,965 30,965 +/ DURHAM, NORTH CAROLINA HOUSING AUTHORITY M/F Housing RB (Pendleton Townhomes Project) 1.75%, 01/07/02 5,490 5,490 +/ FORSYTH COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY RB (Plymouth Printing Project) 1.75%, 01/07/02 1,890 1,890 +/ GATES COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY IDRB (Coxe-Lewis Project) 1.80%, 01/07/02 1,595 1,595 +/ GUILFORD COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY RB (Culp, Inc. Project) 1.70%, 01/07/02 3,825 3,825 RB (Neal Manufacturing Project) 1.70%, 01/07/02 2,100 2,100 RB (Vitafoam, Inc. Project) 1.70%, 01/07/02 5,500 5,500
See the Financial Notes, which are integral to this information. 29 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ HERTFORD COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY IDRB (Nucor Corp. Project) Series 2000 1.68%, 01/07/02 17,500 17,500 IDRB (Nucor Corp. Project) Series 2000A 1.85%, 01/07/02 26,500 26,500 +/ JOHNSTON COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY RB (Flanders Corp. Project) 1.75%, 01/07/02 4,500 4,500 +/ NORTH CAROLINA CAPITAL FACILITIES FINANCE AGENCY Capital Facilities RB (Durham Academy Project) 1.60%, 01/07/02 24,000 24,000 +/ NORTH CAROLINA EDUCATIONAL FACILITIES FINANCE AGENCY RB (Davidson College) Series 2000B 1.60%, 01/07/02 19,000 19,000 RB (Cannon School Project) 1.60%, 01/07/02 6,000 6,000 RB (High Point University Project) 1.60%, 01/07/02 5,110 5,110 RB (Queens College) Series 1999B 1.60%, 01/07/02 6,270 6,270 +/ NORTH CAROLINA STATE PUBLIC SCHOOL BUILDING TOB Series 249 1.69%, 01/07/02 2,500 2,500 +/ ROCKINGHAM COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY IDRB (McMichael Mills Project) 1.70%, 01/07/02 3,700 3,700 +/ ROWAN COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES POLLUTION CONTROL FINANCING AUTHORITY (Taylor-Clay Products Project) 1.70%, 01/07/02 4,400 4,400 +/ SAMPSON COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY IDRB (Crumpler Plastic Project) 1.75%, 01/07/02 4,100 4,100 +/ UNION COUNTY, NORTH CAROLINA INDUSTRIAL FACILITIES & POLLUTION CONTROL FINANCING AUTHORITY RB (Rock-Tenn Converting County Project) Series 1997 1.75%, 01/07/02 1,750 1,750 +/ WAKE COUNTY, NORTH CAROLINA HOUSING AUTHORITY M/F Housing RB (Walnut Ridge Apartments Project) 1.75%, 01/07/02 10,075 10,075 +/ WILMINGTON, NORTH CAROLINA HOUSING AUTHORITY M/F Housing RB (Garden Lake Estates Project) Series 1999 1.75%, 01/07/02 7,280 7,280 ---------- 211,005 NORTH DAKOTA 0.2% + NORTH DAKOTA STATE HFA Housing Finance Program RB Series 2001B 3.35%, 03/01/02 17,000 17,000 +/ RICHLAND COUNTY, NORTH DAKOTA IDRB (Minn-Dak Farmers Co-op Project) Series 1986B 2.00%, 01/07/02 875 875 Solid Waste Disposal RB (Minn-Dak Farmers Co-op Project) Series 1996A 2.00%, 01/07/02 9,620 9,620 ---------- 27,495 OHIO 1.2% + BUTLER COUNTY, OHIO TRANSPORTATION IMPROVEMENT DISTRICT RB Series 1997A 2.08%, 04/01/02 5,000 5,036
See the Financial Notes, which are integral to this information. 30
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ CLEVELAND, OHIO AIRPORT SYSTEM RB Series 1997D 1.65%, 01/07/02 21,670 21,670 +/ CUYAHOGA COUNTY, OHIO Economic Development RB (Hathaway Brown School Project) Series 1999 1.75%, 01/07/02 14,650 14,650 +/ OHIO AIR QUALITY DEVELOPMENT AUTHORITY RB (JMG Funding, LP) Series 1994A 1.77%, 01/07/02 2,900 2,900 RB (Limited Partnership Project) Series 1994B 1.70%, 01/07/02 14,400 14,400 + OHIO STATE HFA / Mortgage RB TOB 1.73%, 01/07/02 8,020 8,020 / Mortgage RB TOB Series 2000AA 1.76%, 01/07/02 5,930 5,930 +/ Mortgage RB TOBP (PA-806) 1.76%, 01/07/02 4,285 4,285 Residential Mortgage Backed Securities RB Series 2001E 2.75%, 08/15/02 50,000 50,000 ---------- 126,891 OKLAHOMA 1.5% +/ GARFIELD COUNTY, OKLAHOMA IDRB (Bank of Commerce Group, Inc. Project) 1.60%, 01/07/02 7,265 7,265 +/ MULDROW, OKLAHOMA PUBLIC WORKS AUTHORITY IDRB (Oklahoma Foods Project) 2.00%, 01/07/02 6,500 6,500 OKLAHOMA CITY, OKLAHOMA INDUSTRIAL & CULTURAL FACILITIES TRUST Health Care RB TECP Series 1998B 1.40%, 02/06/02 18,335 18,335 +/ OKLAHOMA COUNTY, OKLAHOMA INDUSTRIAL AUTHORITY RB (National Cowboy Hall of Fame Project) Series 1999 1.60%, 01/07/02 1,360 1,360 +/ OKLAHOMA DEVELOPMENT FINANCE AUTHORITY RB (Shawnee Funding, Ltd.) 1.75%, 01/07/02 4,000 4,000 +/ OKLAHOMA HFA S/F Housing RB TOBP (PT-360) 1.76%, 01/07/02 7,225 7,225 +/ OKLAHOMA STATE STUDENT LOAN AUTHORITY RB Series 1996A 1.60%, 01/07/02 31,980 31,980 RB Series 1997A 1.65%, 01/07/02 33,000 33,000 RB Series 1998A 1.65%, 01/07/02 25,100 25,100 RB Series 2000A-4 1.65%, 01/07/02 20,945 20,945 +/ TULSA, OKLAHOMA INDUSTRIAL AUTHORITY Hospital RB (YMCA of Greater Tulsa Project) Series 1999 1.60%, 01/07/02 2,800 2,800 ---------- 158,510 OREGON 0.8% +/ GILLIAM COUNTY, OREGON Solid Waste Disposal RB (Waste Management Project) Series 2000A 1.95%, 01/07/02 10,000 10,000 +/ OREGON STATE ECONOMIC DEVELOPMENT AUTHORITY RB (Kettle Foods Project) Series 186 1.90%, 01/07/02 5,895 5,895 RB (Pendleton Flour Mills Project) Series 1982 1.70%, 01/07/02 5,330 5,330 +/ OREGON STATE ECONOMIC DEVELOPMENT COMMISSION Economic & IDRB 1.60%, 01/07/02 4,100 4,100 OREGON STATE HOUSING & COMMUNITY SERVICES DEPARTMENT S/F Mortgage RB Series 2001D 3.20%, 03/28/02 4,000 4,000
See the Financial Notes, which are integral to this information. 31 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) S/F Mortgage RB Series 2001T 2.12%, 11/14/02 2,165 2,165 S/F Mortgage RB Series 2001U 2.12%, 11/14/02 10,000 10,000 +/ PORT OF PORTLAND, OREGON Special Obligation RB (Portland Bulk Terminals Limited Liability Corp. Project) 1.65%, 01/07/02 28,000 28,000 Special Obligation RB (Portland Bulk Terminals Limited Liability Corp. Project) Series 1999 1.65%, 01/07/02 6,000 6,000 +/ PORTLAND, OREGON M/F Housing RB (Village of Lovejoy Fountain) 1.90%, 01/07/02 7,000 7,000 ---------- 82,490 PENNSYLVANIA 8.7% +/ ALLEGHENY COUNTY, PENNSYLVANIA IDA RB (USX Corp. Project) 1.60%, 01/07/02 11,900 11,900 +/ CAMBRIA COUNTY, PENNSYLVANIA IDA Resource Recovery RB (Cambria Cogen Co. Project) 1.62%, 01/07/02 16,390 16,390 Resource Recovery RB (Cambria Cogen Co. Project) Series 1998A1 1.60%, 01/07/02 76,550 76,550 +/ CLARION COUNTY, PENNSYLVANIA IDA Energy Development RB (Piney Creek Project) 1.65%, 01/07/02 8,565 8,565 +/ DAUPHIN COUNTY, PENNSYLVANIA GENERAL AUTHORITY RB (Education & Health Loan Program) Series 1997 1.69%, 01/07/02 6,080 6,080 +/ DELAWARE COUNTY, PENNSYLVANIA IDA RB (YMCA of Philadelphia Project) Series 1999 1.70%, 01/07/02 1,630 1,630 +/ DELAWARE VALLEY, PENNSYLVANIA REGIONAL FINANCE AUTHORITY Local Government RB Series 1986 1.60%, 01/07/02 300 300 Local Government RB TOB Series 2001J 1.69%, 01/07/02 11,380 11,380 +/ EASTON, PENNSYLVANIA CITY SCHOOL DISTRICT GO 1.69%, 01/07/02 4,300 4,300 +/ ERIE COUNTY, PENNSYLVANIA SCHOOL DISTRICT GO TOB Series 2001-5 1.68%, 01/07/02 8,645 8,645 +/ HARRISBURG, PENNSYLVANIA AUTHORITY RB 1.66%, 01/07/02 18,000 18,000 +/ MERCER COUNTY, PENNSYLVANIA Unlimited GO TOB Series 2001-18 1.68%, 01/07/02 3,000 3,000 +/ MONTGOMERY COUNTY, PENNSYLVANIA HIGHER EDUCATION & HEALTH AUTHORITY RB (Madlyn & Leonard Abramson Project) 1.70%, 01/07/02 4,000 4,000 + MONTGOMERY COUNTY, PENNSYLVANIA IDA Pollution Control RB TECP 2.05%, 01/24/02 28,400 28,400 1.50%, 02/07/02 30,000 30,000 / RB (Seton Medical Co.) 1.55%, 01/07/02 3,500 3,500 +/ MONTGOMERY COUNTY, PENNSYLVANIA REDEVELOPMENT AUTHORITY M/F Housing RB (Brookside Manor Apartments) Series 2001A 1.50%, 01/07/02 19,510 19,510 M/F Housing RB (Kingswood Apartments Project) Series 2001A 1.50%, 01/07/02 19,205 19,205 M/F Housing Revenue Refunding Bond (Glenmore Assoc. Project) Series A 1.90%, 01/07/02 3,350 3,350
See the Financial Notes, which are integral to this information. 32
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ PENNSYLVANIA CONVENTION CENTER AUTHORITY RB TOBP (PT-1224) 1.64%, 01/07/02 2,400 2,400 +/ PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY Exempt Facilities RB (Reliant Energy Seward Project) Series 2001A 1.65%, 01/07/02 63,200 63,200 +/ PENNSYLVANIA ENERGY DEVELOPMENT AUTHORITY RB (B&W Ebensburg Project) Series 1986 1.65%, 01/07/02 13,495 13,495 RB (Piney Creek Project) Series 1986A 1.65%, 01/07/02 17,360 17,360 RB (Piney Creek Project) Series 1986C 1.65%, 01/07/02 3,000 3,000 PENNSYLVANIA HFA +/ S/F Mortgage RB TOBP (PT-278) Series 1999-66A 1.69%, 01/07/02 4,265 4,265 +/ S/F Mortgage RB TOBP (PT-119A) Series 1997 1.64%, 01/07/02 864 864 +o TOB Series 1998Y 2.35%, 01/07/02 9,495 9,495 +/ TOB Series 1999U 1.74%, 01/07/02 19,505 19,505 +/ TOBP (PA-909) 1.69%, 01/07/02 4,995 4,995 +/ PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY Student Loan RB Series 1988A 1.65%, 01/07/02 20,800 20,800 Student Loan RB Series 1988B 1.65%, 01/07/02 20,000 20,000 Student Loan RB Series 1994A 1.65%, 01/07/02 33,600 33,600 Student Loan RB Series 1997A 1.85%, 01/07/02 20,000 20,000 Student Loan RB Series 1999A 1.65%, 01/07/02 21,000 21,000 + PENNSYLVANIA STATE Refunding GO 1.65%, 09/15/02 1,000 1,024 / TOBP (PA-935) 1.64%, 01/07/02 35,325 35,325 +/ PENNSYLVANIA STATE HIGHER EDUCATION ASSISTANCE AGENCY Student Loan RB Series 2000A 1.85%, 01/07/02 32,900 32,900 Student Loan RB Series 2001A 1.85%, 01/07/02 15,100 15,100 +/ PENNSYLVANIA STATE HIGHER EDUCATIONAL FACILITIES AUTHORITY RB (Ursinus College) 1.60%, 01/07/02 2,760 2,760 +/ PENNSYLVANIA STATE OF COMMONWEALTH TOB Series 1997C 1.71%, 01/07/02 1,000 1,000 +/ PENNSYLVANIA STATE PUBLIC SCHOOL BUILDING AUTHORITY RB (Parkland School District) Series 1999D 1.69%, 01/07/02 5,500 5,500 +/ PENNSYLVANIA STATE TURNPIKE COMMISSION Turnpike RB Series 2001U 1.65%, 01/07/02 54,600 54,600 +/ PENNSYLVANIA STATE UNIVERSITY, PENNSYLVANIA RB Series 2001A 1.70%, 01/07/02 5,000 5,000 PHILADELPHIA, PENNSYLVANIA TRAN 2.65%, 06/28/02 79,500 80,004 +/ Water & Waste RB Series 1997B 1.55%, 01/07/02 5,910 5,910 PHILADELPHIA, PENNSYLVANIA GAS WORKS +/ RB TOBP (PA-877) 1.64%, 01/07/02 1,995 1,995 TECP Series C 1.45%, 02/07/02 26,000 26,000 PHILADELPHIA, PENNSYLVANIA HOSPITAL & HIGHER EDUCATIONAL FACILITIES AUTHORITY Hospital RB (Children's Hospital of Philadelphia Project) Series 1992A 1.35%, 02/15/02 6,110 6,270 +/ PHILADELPHIA, PENNSYLVANIA HOSPITALS & HIGHER EDUCATION FACILITIES AUTHORITY RB (Wills Eye Hospital Project) 1.70%, 01/07/02 11,000 11,000
See the Financial Notes, which are integral to this information. 33 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ PHILADELPHIA, PENNSYLVANIA IDA Airport RB TOB Series 1998A 1.76%, 01/07/02 11,710 11,710 RB (City Line Holiday Inn Project) Series 1996 1.65%, 01/07/02 6,700 6,700 +/ PHILADELPHIA, PENNSYLVANIA INDUSTRIAL AUTHORITY IDRB (Girard Estate Facility Leasing Project) 1.70%, 01/07/02 13,500 13,500 +/ QUAKERTOWN, PENNSYLVANIA GENERAL AUTHORITY RB (Pooled Financing Program) Series A 1.55%, 01/07/02 16,567 16,567 RB Series 1998A 1.55%, 01/07/02 13,095 13,095 +/ QUAKERTOWN, PENNSYLVANIA HOSPITAL AUTHORITY Hospital RB (Hospital Pooled Financing Group) 1.55%, 01/07/02 29,300 29,300 +/ SCHUYLKILL COUNTY, PENNSYLVANIA IDA Resource Recovery RB (Gilberton Power Project) Series 1985 1.60%, 01/07/02 795 795 +/ WASHINGTON COUNTY, PENNSYLVANIA AUTHORITY Lease RB (Girard Estate Refunding Project) Series 1999 1.70%, 01/07/02 32,695 32,695 Municipal Facilities Lease RB Series 1995B-1 1.70%, 01/07/02 6,852 6,852 +/ WEST CORNWALL TOWNSHIP, PENNSYLVANIA MUNICIPAL AUTHORITY RB (Lebanon Valley Crethren) 1.65%, 01/07/02 1,720 1,720 ---------- 946,006 PUERTO RICO 0.4% GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO TECP 1.35%, 02/06/02 28,019 28,019 1.30%, 04/08/02 2,968 2,968 +/ PUERTO RICO COMMONWEALTH TOBP (PA-652) 1.41%, 01/07/02 6,000 6,000 +/ PUERTO RICO COMMONWEALTH HIGHWAY & TRANSPORTATION AUTHORITY HIGHWAY Series 1998A 1.40%, 01/07/02 200 200 +/ PUERTO RICO COMMONWEALTH HIGHWAY & TRANSPORTATION AUTHORITY Revenue TOBP (PA-605) 1.41%, 01/07/02 2,410 2,410 ---------- 39,597 RHODE ISLAND 0.9% +/ RHODE ISLAND CONVENTION CENTER AUTHORITY Revenue Refunding Bond Series 2001A 1.55%, 01/07/02 10,715 10,715 +/ RHODE ISLAND HOUSING & MORTGAGE FINANCE CORP TOB Series 1999E 1.76%, 01/07/02 19,020 19,020 +/ RHODE ISLAND STATE INDUSTRIAL FACILITIES CORP IDRB (Greystone of Lincoln Project) 2.00%, 01/07/02 2,600 2,600 + RHODE ISLAND STATE STUDENT LOAN AUTHORITY / Higher Education Loan RB Series 1995-1 1.70%, 01/07/02 12,300 12,300 / Higher Education Loan RB Series 1996-2 1.70%, 01/07/02 10,000 10,000 / Higher Education Loan RB Series 1996-3 1.70%, 01/07/02 20,400 20,400 RB 2.90%, 06/01/02 19,000 19,000 ---------- 94,035 SOUTH CAROLINA 1.0% +/ GREENVILLE, SOUTH CAROLINA COUNTY & CITY IDRB (Stevens Aviation Technology Services Project) 1.75%, 01/07/02 3,500 3,500
See the Financial Notes, which are integral to this information. 34
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ SOUTH CAROLINA ECONOMIC DEVELOPMENT AUTHORITY Hospital Facility RB (Sanders Brothers Construction Project) 1.75%, 01/07/02 1,750 1,750 +/ SOUTH CAROLINA JOBS ECONOMIC DEVELOPMENT AUTHORITY IDRB (Electric City Printing Project) 1.75%, 01/07/02 2,200 2,200 RB (Specialty Minerals Project) 1.75%, 01/07/02 4,600 4,600 RB (Thomas & Betts Corp. Project) 1.75%, 01/07/02 3,250 3,250 SOUTH CAROLINA PUBLIC SERVICE AUTHORITY RB TECP 1.50%, 01/10/02 5,000 5,000 1.45%, 02/13/02 34,937 34,937 +/ SOUTH CAROLINA STATE HOUSING FINANCE & DEVELOPMENT AUTHORITY M/F Housing RB (Ashley Apartments Project) Series 1999 1.75%, 01/07/02 4,300 4,300 M/F Rental Housing RB (Peidmont) Series 2000B-1 1.75%, 01/07/02 5,755 5,755 M/F Rental Housing RB (Spartanburg) Series 2000C-1 1.75%, 01/07/02 1,960 1,960 M/F Rental Housing Revenue Refunding Bond (Fairway Project) Series 2001A 1.65%, 01/07/02 7,735 7,735 + SOUTH CAROLINA STATE PUBLIC SERVICE AUTHORITY Revenue Refunding Bond Series 1995A 3.22%, 01/01/02 3,450 3,450 +/ SOUTH CAROLINA TRANSPORTATION INFRASTRUCTURE RB TOB Series 1999A 1.71%, 01/07/02 22,610 22,610 +/ SPARTANBURG COUNTY, SOUTH CAROLINA IDA RB (Bemis, Inc.) 1.65%, 01/07/02 4,750 4,750 ---------- 105,797 SOUTH DAKOTA 0.6% SOUTH DAKOTA HDA Homeownership Mortgage RB Series 2001C 3.25%, 04/03/02 8,200 8,200 +/ Homeownership Mortgage RB Series 2001F 1.80%, 01/07/02 20,000 20,000 +/ M/F Housing RB (Harmon Apartments Project) 1.75%, 01/07/02 6,500 6,500 +/ SOUTH DAKOTA STATE HEALTH & EDUCATIONAL FACILITIES AUTHORITY RB (Mckenna Hospital) Series 1994 1.75%, 01/07/02 27,535 27,535 ---------- 62,235 TENNESSEE 2.9% +/ BLOUNT COUNTY, TENNESSEE IDB IDRB (Advance Crystal Technology, Inc. Project) 1.75%, 01/07/02 3,000 3,000 +/ BRISTOL, TENNESSEE HEALTH & EDUCATIONAL FACILITIES BOARD RB (Kings College Project) 1.60%, 01/07/02 7,650 7,650 +/ CHATTANOOGA, TENNESSEE HEALTH EDUCATION & HOUSING FACILITY BOARD RB (Baylor School Project) 1.65%, 01/07/02 2,035 2,035 +/ CLARKSVILLE, TENNESSEE PUBLIC BUILDING AUTHORITY Pooled Financing RB 1.90%, 01/07/02 18,000 18,000 +/ FRANKLIN COUNTY, TENNESSEE IDRB (Hi-Tech Project) Series 1997 1.85%, 01/07/02 5,200 5,200 +/ GRUNDY COUNTY, TENNESSEE IDB Limited Obligation RB (Toyo Seat USA Corp. Project) 1.90%, 01/07/02 4,500 4,500 +/ HENDERSONVILLE, TENNESSEE IDB Industrial Development & Improvement Revenue Refunding Bond (Betty Machinery Co. Project) 1.75%, 01/07/02 5,500 5,500
See the Financial Notes, which are integral to this information. 35 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ HUNTINGDON, TENNESSEE IDB IDRB (Associated Rubber Co. Project) Series 1999 1.75%, 01/07/02 2,500 2,500 +/ JACKSON COUNTY, TENNESSEE Solid Waste Facilities IDRB (Ameristeel Corp. Project) 1.70%, 01/07/02 3,800 3,800 +/ MCMINN COUNTY, TENNESSEE IDB Solid Waste Disposal RB (Bowater, Inc. Project) 1.70%, 01/07/02 13,500 13,500 + MEMPHIS-SHELBY COUNTY, TENNESSEE AIRPORT AUTHORITY Airport Revenue Refunding Bond Series 1997A 2.89%, 02/15/02 1,000 1,003 +/ METROPOLITAN NASHVILLE & DAVIDSON COUNTY, TENNESSEE IDB IDRB (Bind Technologies, Inc.) 1.70%, 01/07/02 3,550 3,550 M/F Housing IDRB (Arbor Crest) Series 1985B 1.60%, 01/07/02 12,550 12,550 M/F Housing IDRB (Arbor Knoll) Series 1985A 1.60%, 01/07/02 1,000 1,000 +/ SEVIER COUNTY, TENNESSEE PUBLIC BUILDING AUTHORITY Local Government Public Improvement Bond Series 1995C1 1.65%, 01/07/02 5,065 5,065 Local Government Public Improvement Bond Series 1995E3 1.65%, 01/07/02 2,235 2,235 Local Government Public Improvement Bond Series 1996A 1.65%, 01/07/02 7,000 7,000 Local Government Public Improvement Bond Series 1996D1 1.65%, 01/07/02 2,505 2,505 Local Government Public Improvement Bond Series 1996E4 1.65%, 01/07/02 2,845 2,845 Local Government Public Improvement Bond Series 1996F1 1.65%, 01/07/02 9,000 9,000 Local Government Public Improvement Bond Series 1996F2 1.65%, 01/07/02 7,555 7,555 Local Government Public Improvement Bond Series 1996G 1.65%, 01/07/02 6,030 6,030 Local Government Public Improvement Bond Series 1997I-A1 1.65%, 01/07/02 10,000 10,000 Local Government Public Improvement Bond Series II-C 1.65%, 01/07/02 945 945 Local Government Public Improvement Bond Series III-A 2.05%, 01/07/02 4,000 4,000 Local Government Public Improvement Bond Series III-C1 1.65%, 01/07/02 10,090 10,090 SHELBY COUNTY, TENNESSEE Health, Education & Housing RB TECP 1.80%, 04/10/02 15,000 15,000 +/ TAN Series 2001A 1.65%, 01/07/02 37,800 37,800 +/ SHELBY COUNTY, TENNESSEE HEALTH, EDUCATION, & HOUSING FACILITIES BOARD Educational Facilities RB (Rhodes College) 1.60%, 01/07/02 9,900 9,900 M/F Housing RB Series 1997A 1.75%, 01/07/02 5,000 5,000 +/ SUMNER COUNTY, TENNESSEE HEALTH, EDUCATION, & HOUSING FACILITIES BOARD RB (Hospital Alliance Pooled Program) Series 1999A 1.73%, 01/07/02 15,000 15,000 +/ TENNESSEE HDA Mortgage Finance TOB Series 1997K 1.81%, 01/07/02 2,840 2,840 RB TOB Series 2001H 1.74%, 01/07/02 7,660 7,660 TENNESSEE STATE GO TECP 1.70%, 02/13/02 13,000 13,000 +/ TENNESSEE VOLUNTEER STATE STUDENT LOAN FUNDING CORP. RB Series 1987A 1.65%, 01/07/02 15,000 15,000
See the Financial Notes, which are integral to this information. 36
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) RB Series 1987A-2 1.65%, 01/07/02 3,100 3,100 RB Series 1997A-3 1.65%, 01/07/02 36,800 36,800 ---------- 312,158 TEXAS 13.3% +/ AMARILLO, TEXAS HEALTH FACILITIES CORP. Hospital RB (High Plains Baptist Hospital) Series 1985 1.95%, 01/07/02 3,000 3,000 Revenue Refunding Bond 1.75%, 01/07/02 3,155 3,155 +/ AUSTIN, TEXAS INDEPENDENT SCHOOL DISTRICT TOB 1.71%, 01/07/02 5,700 5,700 +/ AUSTIN, TEXAS PUBLIC IMPROVEMENT TOB 1.71%, 01/07/02 6,000 6,000 +/ AUSTIN, TEXAS WATER & WASTEWATER SYSTEMS RB TOB Series A63 1.71%, 01/07/02 6,425 6,425 +/ BEXAR COUNTY, TEXAS HEALTH FACILITIES DEVELOPMENT CORP. RB (Chandler Memorial Home Project) Series 1995 1.68%, 01/07/02 4,395 4,395 +/ BRAZOS RIVER, TEXAS HIGHER EDUCATION AUTHORITY RB Series 1993B1 1.65%, 01/07/02 38,000 38,000 +/ BROWNSVILLE COUNTY, TEXAS INDUSTRIAL DEVELOPMENT CORP. Revenue Refunding Bond (Rich Seapak Corp. Project) 1.75%, 01/07/02 3,750 3,750 +/ CALHOUN COUNTY, TEXAS NAVIGATION DISTRICT Solid Waste Disposal RB (Formosa Plastics Corp. Project) 1.70%, 01/07/02 14,500 14,500 +/ CAPITAL INDUSTRIAL DEVELOPMENT CORP., TEXAS Solid Waste Disposal RB (Texas Disposal System, Inc. Project) 1.70%, 01/07/02 5,000 5,000 +/ COLLIN COUNTY, TEXAS HFA M/F Housing RB (Huntington Apartments Project) 1.76%, 01/07/02 6,150 6,150 +/ DALLAS FORT WORTH, TEXAS INTERNATIONAL AIRPORT RB TOBP (PA-678) 1.81%, 01/07/02 7,045 7,045 +/ DENTON, TEXAS UTILITY SYSTEMS RB TOB Series 369 1.69%, 01/07/02 5,230 5,230 +/ EAGLE, TEXAS TEXAS A&M BOARD OF REGENTS PERMANENT UNIVERSITY FUND TOB 1.71%, 01/07/02 28,445 28,445 +/ EL PASO, TEXAS Water & Sewer RB TOB Series 1999 1.76%, 01/07/02 13,260 13,260 +/ EULESS, TEXAS IDA RB (Ferguson Enterprises, Inc. Project) 1.65%, 01/07/02 4,950 4,950 +/ GRAND PRAIRIE, TEXAS IDA IDRB (NTA Leasing Co. Project) Series 1994 1.75%, 01/07/02 1,735 1,735 + GRAPEVINE, TEXAS INDUSTRIAL DEVELOPMENT CORP. Airport RB (Singer County Project) 3.30%, 04/01/02 18,975 18,975 + GREATER EAST TEXAS HIGHER EDUCATION AUTHORITY Student Loan RB Series 1992A 3.40%, 02/01/02 32,500 32,500 Student Loan RB Series 1992B 3.45%, 02/01/02 30,200 30,200 2.75%, 07/01/02 14,000 14,000 Student Loan RB Series 1993A 3.25%, 05/01/02 48,150 48,150 Student Loan RB Series 1993B1 3.45%, 02/01/02 18,000 18,000
See the Financial Notes, which are integral to this information. 37 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) Student Loan RB Series 1995 3.25%, 05/01/02 40,000 40,000 Student Loan RB Series 1995A 3.25%, 05/01/02 11,700 11,700 Student Loan RB Series 1995B 2.75%, 07/01/02 10,000 10,000 + GREATER EAST TEXAS STUDENT LOAN CORP. Student Loan RB Series 1996A 3.43%, 03/01/02 56,000 56,000 +/ GUADALUPE BLANCO RIVER AUTHORITY, TEXAS Pollution Control Revenue Refunding Bond (Central Power & Light Co. Project) 1.90%, 01/07/02 2,000 2,000 +/ GULF COAST, TEXAS IDA RB (Gruma Corp. Project) 1.70%, 01/07/02 6,440 6,440 +/ GULF COAST, TEXAS WASTE DISPOSAL AUTHORITY Environmental Facilities RB (ExxonMobil Project) Series 2001A 1.95%, 01/07/02 2,500 2,500 Pollution Control Revenue Refunding Bond (Amoco Oil Co. Project) 1.85%, 01/07/02 3,100 3,100 +/ HARRIS COUNTY, TEXAS HEALTH FACILITY DEVELOPMENT CORP. TOB 1.71%, 01/07/02 14,850 14,850 +/ HARRIS COUNTY, TEXAS HOUSING FINANCE CORP. M/F Housing RB (Dominion Square Apartments Project) 1.76%, 01/07/02 3,275 3,275 +/ HARRIS COUNTY, TEXAS HOUSTON SPORTS AUTHORITY Special Jr. Lien RB (Rodeo Project) Series 2001C 1.60%, 01/07/02 12,000 12,000 + HARRIS COUNTY, TEXAS TOLL ROAD Prerefunded RB Series 1992A 1.68%, 08/15/02 3,005 3,153 + HOUSTON, TEXAS Water & Sewer TECP Series A 2.10%, 01/11/02 40,000 40,000 1.70%, 02/20/02 9,000 9,000 1.35%, 03/06/02 5,000 5,000 +/ HOUSTON, TEXAS PUBLIC IMPROVEMENT Revenue Refunding Bond TOB Series 1998A 1.71%, 01/07/02 21,655 21,655 +/ KATY, TEXAS INDEPENDENT SCHOOL DISTRICT Unlimited Tax School Building TOB Series 2000A 1.71%, 01/07/02 10,145 10,145 +/ LAVACA-NAVIDAD RIVER AUTHORITY, TEXAS WATER SUPPLY SYSTEM CONTRACT RB (Formosa Plastics Corp. Project) 1.70%, 01/07/02 13,600 13,600 LOWER COLORADO RIVER AUTHORITY, TEXAS +/ Revenue Refunding Bond TOB Series 1999A 1.71%, 01/07/02 10,770 10,770 TECP Series A 2.75%, 01/01/02 3,000 3,060 2.05%, 02/07/02 17,100 17,100 2.15%, 02/07/02 16,500 16,500 +/ LOWER NECHES VALLEY AUTHORITY, TEXAS INDUSTRIAL DEVELOPMENT CORP. Revenue Refunding Bond (ExxonMobil Project) Series 2001B 1.95%, 01/07/02 9,000 9,000 +/ LUBBOCK, TEXAS EDUCATIONAL FACILITIES AUTHORITY RB (Lubbock Christian University Project) 1.75%, 01/07/02 6,500 6,500 +/ MANSFIELD, TEXAS INDUSTRIAL DEVELOPMENT CORP. RB (Southern Champion Tray Project) Series 1999 1.75%, 01/07/02 2,800 2,800 +/ MATAGORDA COUNTY, TEXAS NAVIGATION DISTRICT NO. 1 RB Merlots TOB Series 2001A44 1.76%, 01/07/02 19,385 19,385
See the Financial Notes, which are integral to this information. 38
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ MONTGOMERY COUNTY, TEXAS INDUSTRIAL DEVELOPMENT CORP. IDRB (Houston Area Research Center Project) 1.80%, 01/07/02 6,600 6,600 +/ NORTH TEXAS HIGHER EDUCATION AUTHORITY Income Tax Student Loan RB Series 1996C 1.65%, 01/07/02 5,600 5,600 Income Tax Student Loan RB Series 2000A 1.65%, 01/07/02 43,000 43,000 Income Tax Student Loan RB Series 2001A 1.65%, 01/07/02 13,405 13,405 Income Tax Student Loan Revenue Refunding Bond (Texas Student Loan Project) 1.65%, 01/07/02 9,000 9,000 Income Tax Student Loan Revenue Refunding Bond 1.65%, 01/07/02 40,700 40,700 Income Tax Student Loan Revenue Refunding Bond Series 1987A 1.70%, 01/07/02 87,750 87,750 Income Tax Student Loan Revenue Refunding Bond Series 1996A 1.65%, 01/07/02 8,600 8,600 Income Tax Student Loan Revenue Refunding Bond Series 1996B 1.65%, 01/07/02 4,000 4,000 Income Tax Student Loan Revenue Refunding Bond Series 1996D 1.65%, 01/07/02 4,000 4,000 +/ PANHANDLE PLAINS, TEXAS HIGHER EDUCATION AUTHORITY Student Loan RB Series 1991A 1.65%, 01/07/02 23,700 23,700 Student Loan RB Series 1992A 1.65%, 01/07/02 15,500 15,500 Student Loan RB Series 1992A1 1.65%, 01/07/02 2,400 2,400 Student Loan RB Series 1993A 1.65%, 01/07/02 43,700 43,700 Student Loan RB Series 1995A 1.65%, 01/07/02 20,600 20,600 Student Loan RB Series 1997X 1.65%, 01/07/02 19,300 19,300 +/ ROBERTSON COUNTY, TEXAS INDUSTRIAL DEVELOPMENT CORP. IDRB (Sanderson Farms Project) Series 1995 1.80%, 01/07/02 3,700 3,700 +/ SAN ANTONIO, TEXAS IDA IDRB (Gruma Corp. Project) 1.70%, 01/07/02 4,095 4,095 +/ SOUTH TEXAS HIGHER EDUCATION AUTHORITY Student Loan RB 1.65%, 01/07/02 108,700 108,700 Student Loan RB Series 1997Z 1.65%, 01/07/02 12,000 12,000 +/ SOUTHEAST TEXAS HOUSING FINANCE CORP. TOBP (PT-165) 1.76%, 01/07/02 11,400 11,400 TOBP (PT-193) 1.76%, 01/07/02 11,595 11,595 +/ TEXAS CAPITAL HEALTH FACILITIES DEVELOPMENT CORP. RB (Island On Lake Travis Ltd. Project) 1.65%, 01/07/02 8,500 8,500 +/ TEXAS DEPARTMENT OF HOUSING & COMMUNITY AFFAIRS Residential Meeting RB TOB Series 1999C 1.76%, 01/07/02 14,995 14,995 +/ TEXAS MUNICIPAL GAS CORP. Gas Reserve Senior Lien RB 1.60%, 01/07/02 36,160 36,160 TEXAS STATE +/ Revenue Refunding Bond (Veterans Housing Assistance Fund) Series 1995 1.55%, 01/07/02 3,385 3,385 TRAN Series 2001A-L32 1.92%, 08/29/02 1,000 1,012 2.50%, 08/29/02 180,000 181,443 + TEXAS STATE COLLEGE STUDENT LOAN GO 2.58%, 08/01/02 5,720 5,812 +/ TEXAS STATE DEPARTMENT OF HOUSING & COMMUNITY AFFAIRS M/F Housing RB (Creek Point Apartments Project) 1.70%, 01/07/02 7,200 7,200
See the Financial Notes, which are integral to this information. 39 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ TEXAS STATE PUBLIC FINANCE AUTHORITY GO Refunding TOBP Series 290 1.69%, 01/07/02 8,660 8,660 +/ TRINITY RIVER AUTHORITY, TEXAS Pollution Control RB (Lafarge Corp. Project) 1.70%, 01/07/02 5,100 5,100 Solid Waste Disposal RB (Community Waste Project) 1.95%, 01/07/02 7,235 7,235 ---------- 1,446,945 UTAH 3.4% +/ INTERMOUNTAIN POWER AGENCY, UTAH Power Supply TOB Series 1997B 1.69%, 01/07/02 10,995 10,995 Power Supply TOB Series 409 1.69%, 01/07/02 15,330 15,330 +/ SALT LAKE CITY, UTAH RB (Rowland Hall St. Marks Project) 1.60%, 01/07/02 9,515 9,515 +/ SALT LAKE CITY, UTAH AIRPORT RB 1.70%, 01/07/02 10,000 10,000 +/ SALT LAKE CITY, UTAH HOSPITAL RB TOB (IHC Health Services) 1.71%, 01/07/02 26,730 26,730 +/ SALT LAKE CITY, UTAH SPECIAL FACILITIES Revenue Refunding Bond (Delta Airlines, Inc. Project) 1.75%, 01/07/02 23,510 23,510 +/ UTAH COUNTY, UTAH Environmental Improvement Revenue Refunding Bond (USX Corp. Project) 1.55%, 01/07/02 15,375 15,375 +/ UTAH STATE TOBP (PT-429) 1.69%, 01/07/02 31,085 31,085 +/ UTAH STATE BOARD OF REGENTS Student Loan RB Series 1993A 1.60%, 01/07/02 35,000 35,000 Student Loan RB Series 1995L 1.65%, 01/07/02 67,500 67,500 Student Loan RB Series 1996Q 1.65%, 01/07/02 35,000 35,000 Student Loan RB Series 1997R 1.65%, 01/07/02 46,355 46,355 +/ UTAH STATE BUILDING OWNERSHIP AUTHORITY Lease Revenue Refunding Bond TOB Series 1998C 1.71%, 01/07/02 9,695 9,695 +/ UTAH STATE FACILITIES SYSTEM Revenue Refunding Bond TOB Series 1998A 1.71%, 01/07/02 30,060 30,060 +/ WOODS CROSS CITY, UTAH M/F Housing RB (Springwood Apartments Project) Series 2001-A 1.60%, 01/07/02 3,605 3,605 ---------- 369,755 VERMONT 0.2% +/ VERMONT ECONOMIC DEVELOPMENT AUTHORITY IDRB (AGRI Mark, Inc. Project) Series 1999A 1.90%, 01/07/02 17,000 17,000 IDRB (AGRI Mark, Inc. Project) Series 1999B 1.90%, 01/07/02 1,000 1,000 +/ VERMONT STATE EDUCATION & HEALTH BUILDINGS FINANCE AGENCY RB (Hospital Fletcher Allen Medical Center) Series 2000B 1.60%, 01/07/02 5,000 5,000 ---------- 23,000 VIRGINIA 0.7% +/ ALEXANDRIA, VIRGINIA IDA Resource Recovery RB (Alexandria Arlington Waste- to-Energy Facility Project) Series 1986A 2.05%, 01/07/02 3,000 3,000 +/ CHESTERFIELD COUNTY, VIRGINIA IDA Solid Waste Disposal Facility RB (Tidewater Fibre Corp. Project) 1.70%, 01/07/02 7,500 7,500 +/ FAIRFAX COUNTY, VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY Resource Recovery RB TOB Series 2000-A35 1.76%, 01/07/02 4,975 4,975
See the Financial Notes, which are integral to this information. 40
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ HENRICO COUNTY, VIRGINIA ECONOMIC DEVELOPMENT AUTHORITY IDRB (Infineon Technologies Project) 1.70%, 01/07/02 7,000 7,000 +/ KING GEORGE COUNTY, VIRGINIA IDA Solid Waste Disposal Facility RB (Garnet of Virginia Project) Series 1996 1.70%, 01/07/02 3,700 3,700 +/ LOUDOUN COUNTY, VIRGINIA IDRB (Electronic Instrumentation Project) 1.75%, 01/07/02 2,260 2,260 + MECKLENBURG COUNTY, VIRGINIA IDA Exempt Facility Revenue Refunding Bond (UAE, LP Project) 2.10%, 06/28/02 6,500 6,500 +/ MONTGOMERY COUNTY, VIRGINIA IDA RB (Virginia Tech Foundation) Series 2001A 1.60%, 01/07/02 10,000 10,000 RB (Virginia Tech Foundation) Series 2001B 1.70%, 01/07/02 1,840 1,840 +/ NORFOLK, VIRGINIA PACKAGE SYSTEM Revenue Refunding Bond TOB 1.71%, 01/07/02 9,450 9,450 +/ PORTSMOUTH, VIRGINIA REDEVELOPMENT & HOUSING AUTHORITY M/F Housing RB (Churchland North Apartments Project) 1.75%, 01/07/02 7,000 7,000 +/ STAUNTON, VIRGINIA IDRB (Diebold, Inc. - Staunton Project) Series 1997 1.70%, 01/07/02 2,835 2,835 +/ VIRGINIA BEACH, VIRGINIA DEVELOPMENT AUTHORITY M/F Housing RB (Silver Hill at Thalia, LLC Project) Series 1999 1.75%, 01/07/02 4,400 4,400 VIRGINIA STATE HDA Commonwealth Mortgage RB Series 2001I-1 1.90%, 07/01/02 6,825 6,825 +/ Commonwealth Mortgage RB TOB Series 2000CC 1.76%, 01/07/02 285 285 +/ Commonwealth Mortgage RB TOBP (PA-818) Series 2001R 1.69%, 01/07/02 4,650 4,650 ---------- 82,220 WASHINGTON 4.6% +/ ALGONA, WASHINGTON ECONOMIC DEVELOPMENT CORP. IDRB (Aitchison Family Partnership Project) 1.70%, 01/07/02 2,530 2,530 CLARK COUNTY, WASHINGTON PUBLIC UTILITY DISTRICT NO. 001 Electric Revenue BAN 3.23%, 03/26/02 15,000 15,026 +/ DOUGLAS COUNTY, WASHINGTON ECONOMIC DEVELOPMENT CORP. RB (Executive Flight Program) 1.70%, 01/07/02 6,500 6,500 +/ EVERETT, WASHINGTON IDA RB (Partners Trust/Synsor Project) Series 1996 1.70%, 01/07/02 4,100 4,100 KING COUNTY, WASHINGTON BAN 2.16%, 10/01/02 40,000 40,318 +/ Sewer Jr. Lien RB Series 2001A 1.50%, 01/07/02 35,000 35,000 +/ TOB Series 215 1.69%, 01/07/02 14,995 14,995 +/ OLYMPIA, WASHINGTON ECONOMIC DEVELOPMENT AUTHORITY Solid Waste Disposal RB (Lemay Enterprises Project) 1.95%, 01/07/02 8,160 8,160 +/ PIERCE COUNTY, WASHINGTON ECONOMIC DEVELOPMENT CORP. RB (Flex-A-Lite Consolidated Project) 1.70%, 01/07/02 2,700 2,700 RB (K & M Holdings II Project) Series 1997 1.60%, 01/07/02 1,500 1,500 RB (McFarland Cascade Project) 1.90%, 01/07/02 2,000 2,000
See the Financial Notes, which are integral to this information. 41 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) RB (Solid Waste Lemay Enterprises Project) 1.95%, 01/07/02 3,500 3,500 +/ PIERCE COUNTY, WASHINGTON SCHOOL DISTRICT NO. 10 GO TOB 1.71%, 01/07/02 43,655 43,655 +/ PORT BELLINGHAM, WASHINGTON INDUSTRIAL DEVELOPMENT CORP. Environmental Facilities RB (Atlanta Richfield Project) 2.00%, 01/01/02 5,000 5,000 +/ PORT BENTON, WASHINGTON ECONOMIC DEVELOPMENT CORP. Solid Waste RB (ATG, Inc. Project) 1.95%, 01/07/02 26,500 26,500 +/ PORT CENTRALIA, WASHINGTON IDB Solid Waste Disposal RB (Lemay Enterprises Project) 1.95%, 01/07/02 2,200 2,200 +/ PORT MOSES LAKE, WASHINGTON PUBLIC CORP. RB (Moses Lake Industrial Project) Series 1995 1.70%, 01/07/02 3,000 3,000 RB (National Frozen Foods Corp.) 1.60%, 01/07/02 5,400 5,400 +/ PORT OF SEATTLE, WASHINGTON Special Facilities RB TOB Series 1999J 1.76%, 01/07/02 49,795 49,795 TOBP (PA-759R) 1.76%, 01/07/02 5,100 5,100 +/ SEATTLE, WASHINGTON HDA RB (Capitol Hill Housing Improvement & HRG Project) 1.70%, 01/07/02 3,635 3,635 RB (Casa Pacifica Apartments Project) Series 1997 1.70%, 01/07/02 3,100 3,100 +/ SPOKANE COUNTY, WASHINGTON INDUSTRIAL DEVELOPMENT CORP. RB (Metal Sales Manufacturing Corp. Project) 1.93%, 01/07/02 1,575 1,575 + TACOMA, WASHINGTON ELECTRIC SYSTEM Sub Lien TECP 1.90%, 01/18/02 3,400 3,400 +/ TACOMA, WASHINGTON HOUSING AUTHORITY RB (Crown Assisted Living Project) 1.85%, 01/07/02 3,400 3,400 +/ WASHINGTON HEALTH CARE FACILITIES AUTHORITY RB (Yakima Valley Farm Workers Clinic) Series 1997 1.60%, 01/07/02 3,500 3,500 WASHINGTON STATE +/ GO TOB 1.71%, 01/07/02 13,380 13,380 Refunding GO Series 2001A 2.61%, 09/01/02 28,045 28,390 +/ Various Purpose GO TOB Series 1998C 1.71%, 01/07/02 12,150 12,150 +/ WASHINGTON STATE ECONOMIC DEVELOPMENT FINANCE AUTHORITY ACES RB (Tank Project) Series 1998B 1.90%, 01/07/02 1,330 1,330 IDRB (Tonkin Building) Series 1997A 1.90%, 01/07/02 1,000 1,000 RB (Hunter Douglas Project) Series 1997A 1.75%, 01/07/02 3,500 3,500 RB (Skills, Inc. Project) 1.85%, 01/07/02 3,180 3,180 Solid Waste Disposal RB (Waste Management Project) Series 2000H 1.95%, 01/07/02 6,825 6,825 Solid Waste Disposal RB (Waste Management Project) Series 2000I 1.70%, 01/07/02 3,415 3,415 Solid Waste Disposal RB (Waste Management Project) Series 2000L 1.95%, 01/07/02 7,235 7,235 Solid Waste Disposal RB (Waste Management Project) Series 2001C 1.95%, 01/07/02 5,500 5,500 RB (Hamilton Materials Project) 1.70%, 01/07/02 4,200 4,200 +/ WASHINGTON STATE ENERGY Northwest Eagle TOB 1.71%, 01/07/02 29,700 29,700 +/ WASHINGTON STATE HFA M/F Housing Mortgage RB (Brittany Park Phase 3 Project) 1.90%, 01/07/02 3,480 3,480
See the Financial Notes, which are integral to this information. 42
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) M/F Housing Mortgage RB (Canyon Lake II) Series 1993A 1.70%, 01/07/02 4,505 4,505 M/F Housing Mortgage RB (Lake Washington Apartments Project) Series 1996 1.70%, 01/07/02 8,550 8,550 M/F Housing Mortgage RB (Meridian Court Apartments) Series 1996 1.70%, 01/07/02 6,700 6,700 M/F Housing Mortgage RB (Merrill Gardens Project) Series 1997A 1.70%, 01/07/02 3,725 3,725 M/F Housing Mortgage RB (Rosecreek Apartments Project) 1.75%, 01/07/02 3,570 3,570 M/F Housing Mortgage RB (Woodrose Apartment Project) Series 1999A 1.70%, 01/07/02 6,750 6,750 WASHINGTON STATE HOUSING FINANCE COMMISSION +/ M/F Housing RB (Carlyle Care Center Project Series) 2000A 2.10%, 01/07/02 3,055 3,055 +/ M/F Housing RB (Lakewood Meadows Apartments Project) Series 2000A 1.85%, 01/07/02 3,140 3,140 +/ M/F Housing RB (Mill Pointe Apartments Project) Series 1999A 2.00%, 01/07/02 700 700 +/ Non-Profit Housing RB (Emerald Heights Project) Series 1990 1.90%, 01/07/02 7,500 7,500 S/F Housing RB Series 2001-1A-S 3.37%, 02/01/02 6,250 6,250 WASHINGTON STATE PUBLIC POWER SUPPLY SYSTEM Revenue Refunding Bond (Nuclear Project No. 1) Series 1992A 2.68%, 07/01/02 5,300 5,503 +/ YAKAMA INDIAN NATION, WASHINGTON CONFEDERATED TRIBES & BANDS RB (Yakama Forests Products Project) 1.70%, 01/07/02 4,900 4,900 +/ YAKIMA COUNTY, WASHINGTON PUBLIC CORP. IDRB (Cowiche Growers Project) 1.70%, 01/07/02 3,400 3,400 RB (Hi-Country Foods Project) 1.70%, 01/07/02 6,700 6,700 RB (Michaelson Packaging Project) 1.85%, 01/07/02 2,600 2,600 RB (Printing Press Project) 1.70%, 01/07/02 1,600 1,600 ---------- 498,022 WEST VIRGINIA 0.7% +/ FAYETTE COUNTY, WEST VIRGINIA SOLID WASTE DISPOSAL FACILITIES RB (Georgia-Pacific Corp. Project) Series 1995 1.75%, 01/07/02 11,100 11,100 +/ MARION COUNTY, WEST VIRGINIA SOLID WASTE DISPOSAL FACILITIES RB (Grant Town Project) Series 1990B 1.65%, 01/07/02 23,025 23,025 RB (Grant Town Project) Series 1990C 1.65%, 01/07/02 19,900 19,900 RB (Grant Town Project) Series 1990D 1.65%, 01/07/02 3,800 3,800 +/ WEST VIRGINIA SCHOOL BUILDING AUTHORITY RB TOBP (PA-914) 1.69%, 01/07/02 17,555 17,555 +/ WEST VIRGINIA STATE HOSPITAL FINANCE AUTHORITY RB (St. Joseph's Hospital Project) Series 1987 1.68%, 01/07/02 1,600 1,600 ---------- 76,980 WISCONSIN 1.0% +/ CARLTON, WISCONSIN Pollution Control RB (Wisconsin Power & Light Co. Project) 1.85%, 01/07/02 5,800 5,800 +/ CHILTON, WISCONSIN IDRB (Kaytee Products, Inc. Project) Series 1995 1.95%, 01/07/02 715 715
See the Financial Notes, which are integral to this information. 43 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ COLBURN, WISCONSIN IDRB (Heartland Farms Project) Series 1994 1.85%, 01/07/02 6,400 6,400 +/ GRAFTON, WISCONSIN IDRB (Milwaukee Sign Co. Project) 1.85%, 01/07/02 690 690 +/ KENOSHA, WISCONSIN IDRB (Asyst Tech, LLC Project) 1.70%, 01/07/02 5,000 5,000 +/ LAC DU FLAMBEAU, BAND OF LAKE SUPERIOR, WISCONSIN CHIPPEWA INDIANS Special Obligation Bond (Simpson Electric Co. Project) Series 1985 1.80%, 01/07/02 3,400 3,400 +/ RAPIDS CITY, WISCONSIN IDRB (Theile Kaolin of Wisconsin, Inc. Project) Series 1998 1.75%, 01/07/02 2,250 2,250 +/ RHINELANDER, WISCONSIN IDRB (Lake Shore, Inc. Project) 1.85%, 01/07/02 3,820 3,820 +/ SOUTHEAST WISCONSIN PROFESSIONAL BASEBALL PARK DISTRICT Sales Tax RB TOB Series 2000Y 1.71%, 01/07/02 5,000 5,000 +/ WISCONSIN HOUSING & ECONOMIC DEVELOPMENT AUTHORITY Home Ownership RB TOB Series 1999R 1.73%, 01/07/02 18,690 18,690 Home Ownership RB TOB Series 1999S 1.78%, 01/07/02 13,240 13,240 Home Ownership TOBP (PT-194) 1.76%, 01/07/02 12,860 12,860 RB (Ultratec, Inc. Project) Series 7 1.85%, 01/07/02 2,820 2,820 +/ WISCONSIN STATE HEALTH & EDUCATIONAL FACILITIES AUTHORITY RB (Gundersen Lutheran) Series 2000A 2.00%, 01/01/02 2,865 2,865 RB (Lutheran College) 1.85%, 01/07/02 7,000 7,000 RB (Prohealth, Inc. Project) Series 2001B 2.00%, 01/01/02 1,600 1,600 RB (Sinai Samaritan) Series 1994A 1.75%, 01/07/02 15,138 15,138 ---------- 107,288 WYOMING 0.6% +/ LINCOLN COUNTY, WYOMING Pollution Control RB (ExxonMobil Corp. Project) Series 1987A 2.00%, 01/07/02 8,100 8,100 Pollution Control RB (ExxonMobil Corp. Project) Series 1987B 2.00%, 01/01/02 3,700 3,700 Pollution Control RB (ExxonMobil Corp. Project) Series 1987C 2.00%, 01/07/02 14,700 14,700 Pollution Control RB (ExxonMobil Corp. Project) Series B 1.80%, 01/01/02 1,300 1,300 +/ UNITA COUNTY, WYOMING Pollution Control RB (Chevron USA, Inc. Project) 1.85%, 01/01/02 19,030 19,030 +/ WYOMING COMMUNITY DEVELOPMENT AUTHORITY Housing RB TOB 1.60%, 01/07/02 13,290 13,290 Housing RB TOBP (PT-533) 1.76%, 01/07/02 6,675 6,675 ---------- 66,795
-------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which are integral to this information. 44 Statement of ASSETS AND LIABILITIES As of December 31, 2001. All numbers x 1,000 except NAV.
ASSETS -------------------------------------------------------------------------------- Investments, at market value $10,866,142 a Cash 1,296 Receivables: Fund shares sold 35,965 Interest 45,628 Investments sold 164,785 Prepaid expenses + 511 --------------- TOTAL ASSETS 11,114,327 LIABILITIES -------------------------------------------------------------------------------- Payables: Fund shares redeemed 21,196 Dividends to shareholders 921 Investments bought 48,623 Investment adviser and administrator fees 188 Transfer agent and shareholder service fees 326 Accrued expenses + 300 --------------- TOTAL LIABILITIES 71,554 NET ASSETS -------------------------------------------------------------------------------- TOTAL ASSETS 11,114,327 TOTAL LIABILITIES - 71,554 --------------- NET ASSETS $11,042,773
NET ASSETS BY SOURCE Capital received from investors 11,045,714 Net realized capital losses (2,941)
NET ASSETS BY SHARE CLASS SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Sweep Shares $7,265,169 7,268,251 $1.00 Value Advantage Shares $3,777,604 3,777,730 $1.00
FEDERAL TAX DATA -------------------------------------------------------------------------------- COST BASIS OF PORTFOLIO $10,866,143 UNUSED CAPITAL LOSSES: Expires 12/31 of: Loss amount: 2002 $ 268 2003 36 2004 465 2005 523 2007 775 2008 + 873 ----------- $2,940
a Includes illiquid restricted securities worth $80,945, or 0.74% of the fund's investments. The amortized cost for the fund's securities was $10,866,142. During the reporting period, the fund had $3,495,580 in transactions with other SchwabFunds.(R) See the Financial Notes, which are integral to this information. 45 SCHWAB MUNICIPAL MONEY FUND -- FINANCIALS Statement of OPERATIONS For January 1, 2001 through December 31, 2001. All numbers x 1,000.
INVESTMENT INCOME -------------------------------------------------------------------------------- Interest $292,596 NET REALIZED GAINS -------------------------------------------------------------------------------- Net realized gains on investments sold 1,167 EXPENSES -------------------------------------------------------------------------------- Investment adviser and administrator fees 36,209 a Transfer agent and shareholder service fees: Sweep Shares 30,772 b Value Advantage Shares 7,968 b Trustees' fees 49 c Custodian and portfolio accounting fees 747 Professional fees 61 Registration fees 1,135 Shareholder reports 457 Other expenses + 63 ------------ Total expenses 77,461 Expense reduction - 16,808 d ------------ NET EXPENSES 60,653 INCREASE IN NET ASSETS FROM OPERATIONS -------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 292,596 NET EXPENSES - 60,653 ------------ NET INVESTMENT INCOME 231,943 NET REALIZED GAINS + 1,167 ------------ INCREASE IN NET ASSETS FROM OPERATIONS $233,110
a Calculated on a graduated basis as a percentage of average daily net assets: 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion, 0.30% over $20 billion and 0.27% over $40 billion. Prior to June 1, 2001, these percentages were 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion and 0.30% over $20 billion. b Calculated as a percentage of average daily net assets as follows: TRANSFER AGENT SERVICES:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS --------------------------------------------- Sweep Shares 0.25 Value Advantage Shares 0.05
SHAREHOLDER SERVICES:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS --------------------------------------------- Sweep Shares 0.20 Value Advantage Shares 0.17
Prior to June 1, 2001, the shareholder services fee for Value Advantage Shares was 0.20%. c For the fund's independent trustees only. d Includes $15,884 from the investment adviser (CSIM) and $924 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least April 30, 2002, as follows:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS --------------------------------------------- Sweep Shares 0.66 Value Advantage Shares 0.45
This limit doesn't include interest, taxes and certain non-routine expenses. See the Financial Notes, which are integral to this information. 46 Statements of CHANGES IN NET ASSETS For the current and prior reporting periods. All numbers x 1,000.
OPERATIONS ---------------------------------------------------------------------------------------------- 1/1/01-12/31/01 1/1/00-12/31/00 Net investment income $ 231,943 $ 312,760 Net realized gains or losses + 1,167 (845) --------------------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 233,110 311,915 DISTRIBUTIONS PAID ---------------------------------------------------------------------------------------------- DIVIDENDS FROM NET INVESTMENT INCOME Sweep Shares 150,939 217,620 Value Advantage Shares + 81,004 95,140 --------------------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME 231,943 312,760 TRANSACTIONS IN FUND SHARES a ---------------------------------------------------------------------------------------------- SHARES SOLD Sweep Shares 24,826,248 29,861,664 Value Advantage Shares + 5,849,858 4,684,428 --------------------------------------------- TOTAL SHARES SOLD 30,676,106 34,546,092 SHARES REINVESTED Sweep Shares 147,934 212,617 Value Advantage Shares + 74,863 88,189 --------------------------------------------- TOTAL SHARES REINVESTED 222,797 300,806 SHARES REDEEMED Sweep Shares 24,489,922 29,383,923 Value Advantage Shares + 5,065,908 4,124,460 --------------------------------------------- TOTAL SHARES REDEEMED 29,555,830 33,508,383 NET INCREASE 1,343,073 1,338,515 b NET ASSETS ---------------------------------------------------------------------------------------------- Beginning of period 9,698,533 8,360,863 Total increase + 1,344,240 1,337,670 c --------------------------------------------- END OF PERIOD $ 11,042,773 $ 9,698,533
a Because all transactions in this section took place at $1.00 a share, figures for share quantities are the same as for dollars. b Represents shares sold plus shares reinvested, minus shares redeemed. c Represents the changes in net assets from operations plus the changes in value of transactions in fund shares, minus distributions paid. See the Financial Notes, which are integral to this information. 47 SCHWAB California Municipal Money Fund [PHOTO OF KEVIN SHAUGHNESSY] "California's economic slowdown, especially in the technology sector, reduced sales and income tax revenue as capital gains and stock option income declined dramatically." Portfolio Manager Kevin Shaughnessy KEVIN SHAUGHNESSY, a portfolio manager, is responsible for the day-to-day management of the fund. Prior to joining the firm in 2000, he worked for more than ten years in fixed income portfolio management. TICKER SYMBOLS SWEEP SHARES SWCXX VALUE ADVANTAGE SHARES SWKXX -------------------------------------------------------------------------------- The fund seeks the highest current income that is consistent with stability of capital and liquidity, and is exempt from federal and California personal income tax. -------------------------------------------------------------------------------- THIS FUND MAY BE APPROPRIATE FOR CALIFORNIA TAXPAYERS, ESPECIALLY THOSE IN HIGHER TAX BRACKETS WHO ARE SEEKING DOUBLE TAX-EXEMPT INCOME. MANAGER'S PERSPECTIVE SHORT-TERM INTEREST RATES DECLINED SHARPLY AND STEADILY THROUGHOUT 2001, PACED BY THE FED'S RATE CUTS. The Fed's 11 interest rate cuts, which began in January and continued into December, left the Federal Funds Rate at 1.75%, its lowest level in more than 40 years. These cuts had the direct effect of reducing yields for money fund investors, taxable and tax-exempt alike. FALLING INTEREST RATES HELPED SPUR THE ISSUANCE OF SHORT-TERM MUNI SECURITIES. The increased supply kept muni prices low (and yields high) relative to their taxable counterparts. This type of situation normally attracts non-traditional buyers of municipal securities, which in turn creates supply and demand imbalances that limit the upward movement of muni yields. Because of the Fed's rate cuts, we kept our average maturity longer than most of our peers, emphasizing fixed-rate securities. This strategy was effective, as fixed-rate securities outperformed variable rates during 2001. CALIFORNIA OUTPACED THE NATION IN JOB GROWTH, BUT LAGGED IN PERSONAL INCOME GROWTH. The economic slowdown reduced tax revenues just as the state's energy crisis hit. These events wiped out the state's $2.8 billion surplus, threatening its liquidity for the rest of fiscal 2002 and contributing to an expected $12 billion deficit for fiscal 2003. Still, the state retains a solid investment grade credit rating, with ratings of A1 (negative outlook), A+ (negative outlook) and AA (rating watch negative) from Moody's, Standard & Poor's and Fitch, respectively. 48 PERFORMANCE AND FUND FACTS SEVEN-DAY YIELDS 1 as of 12/31/01 The seven-day yields are calculated using standard SEC formulas. The effective yields include the effect of reinvesting daily dividends during the period. Please remember that money market fund yields fluctuate, and that past performance is not an indication of future results.
VALUE SWEEP ADVANTAGE SHARES SHARES ------------------------------------------------------------ Seven-Day Yield 1.02% 1.22% ------------------------------------------------------------ Seven-Day Effective Yield 1.03% 1.23% ------------------------------------------------------------ Seven-Day Taxable-Equivalent Effective Yield 3 1.86% 2.23% ------------------------------------------------------------
WEIGHTED AVERAGE MATURITY during the year Money Funds must maintain a dollar-weighted average maturity of no longer than 90 days, and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). [LINE GRAPH] 31-Dec-00 55 31-Jan-01 44 28-Feb-01 35 31-Mar-01 33 30-Apr-01 27 31-May-01 20 30-Jun-01 38 31-Jul-01 50 31-Aug-01 48 30-Sep-01 62 31-Oct-01 54 30-Nov-01 51 31-Dec-01 44
PORTFOLIO COMPOSITION 2 as of 12/31/01 All figures are shown as a percentage of the fund's investments. All of the fund's securities were in the top tier of credit quality at the time of purchase. BY STATE -------------------------------------------------------------------------------- [PIE CHART] 1. 93.4% California 2. 6.6% Puerto Rico
BY CREDIT QUALITY -------------------------------------------------------------------------------- [PIE CHART] 1. 100.0% Tier 1
1 A portion of the fund's expenses was reduced during the reporting period. Without this reduction, the fund's yields would have been lower. 2 Composition of the fund's portfolio is as of 12/31/01 and is not indicative of holdings after that date. 3 Taxable-equivalent yield assumes a 2001 maximum combined federal regular income and California state personal income tax rate of 44.76%. 49 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. The FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
1/1/01-- 1/1/00-- 1/1/99-- 1/1/98-- 1/1/97-- SWEEP SHARES 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 ---------------------------------------------------------------------------------------------------------- PER-SHARE DATA ($) ---------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 ------------------------------------------------------------ Income from investment operations: Net investment income 0.02 0.03 0.02 0.03 0.03 ------------------------------------------------------------ Less distributions: Dividends from net investment income (0.02) (0.03) (0.02) (0.03) (0.03) ------------------------------------------------------------ Net asset value at end of period 1.00 1.00 1.00 1.00 1.00 ============================================================ Total return (%) 1.99 3.02 2.42 2.64 2.95 RATIOS/SUPPLEMENTAL DATA (%) ---------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.65 0.65 1 0.65 0.65 0.65 1 Expense reductions reflected in above ratio 0.17 0.18 0.20 0.24 0.26 Ratio of net investment income to average net assets 1.98 2.98 2.41 2.60 2.91 Net assets, end of period ($ x 1,000,000) 3,897 3,923 3,457 2,611 2,155
1 Would have been 0.66% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which are integral to this information. 50
1/1/01-- 1/1/00-- 1/1/99-- 1/1/98-- 1/1/97-- VALUE ADVANTAGE SHARES 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 ------------------------------------------------------------------------------------------------------------- PER-SHARE DATA ($) ------------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 ------------------------------------------------------------ Income from investment operations: Net investment income 0.02 0.03 0.03 0.03 0.03 ------------------------------------------------------------ Less distributions: Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) ------------------------------------------------------------ Net asset value at end of period 1.00 1.00 1.00 1.00 1.00 ============================================================ Total return (%) 2.19 3.22 2.62 2.84 3.15 RATIOS/SUPPLEMENTAL DATA (%) ------------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.45 0.45 1 0.45 0.45 0.45 1 Expense reductions reflected in above ratio 0.16 0.17 0.20 0.25 0.27 Ratio of net investment income to average net assets 2.11 3.20 2.60 2.79 3.12 Net assets, end of period ($ x 1,000,000) 2,563 2,170 1,604 1,359 937
1 Would have been 0.46% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which are integral to this information. 51 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS As of December 31, 2001. This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics: + Credit-enhanced security o Illiquid restricted security / Variable-rate security For fixed-rate obligations, the rate shown is the effective yield at the time of purchase. For variable-rate obligations, the rate shown is the rate as of the report date. For variable-rate obligations with scheduled maturities greater than 397 days, the maturity shown is the later of the next interest rate change date or demand date. For variable-rate obligations with scheduled maturities less than 397 days, the maturity shown is the earlier of the next interest rate change date or demand date. For variable-rate obligations without demand features, the maturity shown is the next interest rate change date. The pie chart below shows the fund's major categories and the market value and cost of the securities in each category. For definitions of abbreviations and acronyms used in security descriptions, see "portfolio terms" in the glossary (in "How to Read This Report"). ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 100.0% MUNICIPAL SECURITIES Market Value: $6,518,416 Cost: $6,518,416 100.0% TOTAL INVESTMENTS Market Value: $6,518,416 Cost: $6,518,416
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) MUNICIPAL SECURITIES 100.0% of investments CALIFORNIA 93.4% +/ ABAG FINANCING AUTHORITY FOR NON-PROFIT CORPORATIONS, CALIFORNIA COP (Bentley School) 1.35%, 01/07/02 5,230 5,230 COP (Harker School Project) 1.55%, 01/07/02 5,100 5,100 COP (Lucile Salter Packard Project) 1.45%, 01/07/02 4,700 4,700 M/F Housing RB (Architect Building Project) 1.60%, 01/07/02 3,200 3,200 M/F Housing RB (Miramar Apartments) 1.55%, 01/07/02 30,000 30,000 M/F Housing RB (Mountain View Apartments) Series 1997A 1.60%, 01/07/02 3,215 3,215 RB (Public Policy Institute Project) Series 2001A 1.50%, 01/07/02 8,000 8,000 +/ ALAMEDA COUNTY, CALIFORNIA IDRB (Aitchison Family Project) Series 1993A 1.50%, 01/07/02 2,680 2,680 IDRB (JMS Family Partners) Series A 1.50%, 01/07/02 1,000 1,000 IDRB (Scientific Technology Project) Series 1994A 1.55%, 01/07/02 2,500 2,500 +/ ALAMEDA COUNTY, CALIFORNIA IDA RB (Malmberg Engineering, Inc. Project) 1.50%, 01/07/02 2,625 2,625 +/ ANAHEIM, CALIFORNIA COP (Anaheim Memorial Hospital Association Project) 1.35%, 01/07/02 20,815 20,815 COP (Police Facility Financing Project) 1.35%, 01/07/02 2,500 2,500 +/ ANAHEIM, CALIFORNIA HOUSING AUTHORITY M/F Housing RB (Casa Grande Apartments) Series 1997A 1.45%, 01/07/02 3,695 3,695 M/F Housing RB (Park Vista Apartments) 1.45%, 01/07/02 21,000 21,000
See the Financial Notes, which are integral to this information. 52
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) M/F Housing RB (Port Trinidad Apartments) Series 1997C 1.45%, 01/07/02 2,140 2,140 M/F Housing RB (Sage Park Project) Series A 1.40%, 01/07/02 3,500 3,500 +/ ANAHEIM, CALIFORNIA UNION HIGH SCHOOL DISTRICT COP 1.50%, 01/07/02 5,500 5,500 +/ BAY AREA, CALIFORNIA TOLL AUTHORITY Toll Bridge RB (San Francisco Bay Area Project) Series 2001A 1.60%, 01/07/02 27,300 27,300 Toll Bridge RB (San Francisco Bay Area Project) Series 2001B 1.35%, 01/07/02 18,000 18,000 Toll Bridge RB (San Francisco Bay Area Project) Series 2001C 1.35%, 01/07/02 29,000 29,000 Toll Bridge RB TOB Series 2001Q 1.46%, 01/07/02 10,125 10,125 +/ BIG BEAR LAKE, CALIFORNIA Water RB TOBP (PA- 597) 1.41%, 01/07/02 8,445 8,445 +/ BURBANK, CALIFORNIA REDEVELOPMENT AGENCY M/F Housing RB 1.30%, 01/07/02 8,900 8,900 +/ CALIFORNIA ALTERNATIVE ENERGY SOURCE FINANCING AUTHORITY RB (GE Capital Corp. Arroyo Project) Series 1993B 1.45%, 01/07/02 12,260 12,260 RB (GE Capital Corp. Arroyo Project) Series A 1.45%, 01/07/02 25,330 25,330 +/ CALIFORNIA EASTERN WATER MUNICIPAL DISTRICT Water & Sewer RB COP Series 1993B 1.40%, 01/07/02 13,000 13,000 +/ CALIFORNIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY RB (Lion Raisin Project) 1.50%, 01/07/02 1,650 1,650 + CALIFORNIA EDUCATIONAL FACILITIES AUTHORITY / RB (Chapman University) 1.40%, 01/07/02 4,900 4,900 / RB (San Francisco Conservatory) 1.45%, 01/07/02 2,940 2,940 RB (St Mary's College Project) Series B 1.40%, 01/02/02 8,150 8,150 / RB TOB Series 413 1.42%, 01/07/02 8,995 8,995 / RB (University of Judaism Project) Series A 1.55%, 01/07/02 5,500 5,500 / RB (University of San Francisco) 1.35%, 01/07/02 20,000 20,000 +/ CALIFORNIA HEALTH FACILITIES FINANCE AUTHORITY TOB Putters Series 181 1.55%, 01/07/02 9,995 9,995 +/ CALIFORNIA HEALTH FACILITIES FINANCING AUTHORITY RB (California Presbyterian Homes) Series 1998 1.40%, 01/07/02 30,500 30,500 RB (Catholic Health Care West) Series 1988B 1.45%, 01/07/02 10,000 10,000 RB (Catholic Health Care) Series A 1.45%, 01/07/02 11,300 11,300 RB (Children's Hospital Project) Series 1991 1.40%, 01/07/02 20,700 20,700 RB (Scripps Memorial Hospital) Series 1985B 1.42%, 01/07/02 14,870 14,870 RB (Scripps Memorial Hospital) Series 1991B 1.42%, 01/07/02 400 400 RB (Scripps Memorial Hospital) Series A 1.60%, 01/07/02 12,000 12,000 + CALIFORNIA HFA / Home Mortgage RB Series 1999J-1 1.48%, 01/07/02 20,565 20,565 / Home Mortgage RB Series 1999J-2 1.48%, 01/07/02 17,770 17,770 / Home Mortgage RB Series 1999L 1.90%, 01/07/02 3,570 3,570 / Home Mortgage RB Series 2000G 1.40%, 01/07/02 6,335 6,335 / Home Mortgage RB Series 2000M 1.48%, 01/07/02 25,505 25,505
See the Financial Notes, which are integral to this information. 53 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) / Home Mortgage RB Series 2000N 1.48%, 01/07/02 36,000 36,000 / Home Mortgage RB Series 2001J 1.48%, 01/07/02 83,600 83,600 / Home Mortgage RB Series 2001R 1.90%, 01/07/02 4,710 4,710 / Home Mortgage RB Series G 1.40%, 01/07/02 50,000 50,000 Home Mortgage RB Series N 1.70%, 01/02/02 13,635 13,635 Home Mortgage RB Series P 2.67%, 08/01/02 70,930 70,930 / M/F Housing RB Series 2001G 1.65%, 01/07/02 60,835 60,835 / RB TOB Series 1997E 1.41%, 01/07/02 8,805 8,805 o RB TOB Series R 2.60%, 01/07/02 9,995 9,995 +/ CALIFORNIA INFRASTRUCTURE & ECONOMIC DEVELOPMENT BANK IDRB (American Derosa- Lamparts) 1.55%, 01/07/02 4,950 4,950 IDRB (Fairmont Sign Co. Project) Series 2000A 1.80%, 01/07/02 4,250 4,250 IDRB (Independent System Operation Corporation Project) Series A 1.75%, 01/07/02 15,600 15,600 IDRB (Lafayette Textile Industries Project) 1.50%, 01/07/02 2,895 2,895 IDRB (Nelson Name Plate Co. Project) 1.55%, 01/07/02 3,750 3,750 IDRB (Roller Bearing Co. of America Santa Ana Project) 1.50%, 01/07/02 2,400 2,400 RB (Buck Institute) 1.45%, 01/07/02 55,600 55,600 +/ CALIFORNIA POLLUTION CONTROL FINANCING AUTHORITY RB (Green Team of San Jose Project) 1.60%, 01/07/02 2,000 2,000 RB (Wadham Energy Project) Series 1987B 1.40%, 01/07/02 700 700 Resource Recovery RB (Sanger Project) Series 1990A 1.45%, 01/07/02 20,600 20,600 Resource Recovery Solid Waste Disposal RB (Atlas Disposal Industrial Project) Series 1999A 1.65%, 01/07/02 3,000 3,000 Resource Recovery Solid Waste Disposal RB (Bay Leasing, Inc. Project) Series 1999A 1.60%, 01/07/02 9,075 9,075 Solid Waste Disposal RB (Blue Line Transfer, Inc. Project) 1.60%, 01/07/02 4,900 4,900 Solid Waste Disposal RB (Alameda County Industries Project) Series 2000A 1.60%, 01/07/02 4,845 4,845 Solid Waste Disposal RB (Allan Co. Project) 1.60%, 01/07/02 850 850 Solid Waste Disposal RB (Athens Disposal Co. Project) Series 1995A 1.60%, 01/07/02 15,910 15,910 Solid Waste Disposal RB (Athens Disposal Co. Project) Series 1999A 1.60%, 01/07/02 7,600 7,600 Solid Waste Disposal RB (Athens Services Project) Series 2001A 1.60%, 01/07/02 5,000 5,000 Solid Waste Disposal RB (BLT Enterprises) Series 1999A 1.60%, 01/07/02 8,510 8,510 Solid Waste Disposal RB (Blue Line Transfer Project) Series 2001A 1.60%, 01/07/02 5,000 5,000 Solid Waste Disposal RB (Burrtec Waste Industries Project) Series 1995A 2.10%, 01/07/02 3,770 3,770 Solid Waste Disposal RB (Calsan, Inc. Project) Series 1999B 1.60%, 01/07/02 3,915 3,915 Solid Waste Disposal RB (Cheese & Protein International Project) Series 2001A 1.00%, 01/07/02 10,000 10,000
See the Financial Notes, which are integral to this information. 54
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) Solid Waste Disposal RB (Cold Cyn Landfill Project) 1.60%, 01/07/02 5,845 5,845 Solid Waste Disposal RB (Colmac Energy Project) Series 1990A 1.45%, 01/07/02 8,445 8,445 Solid Waste Disposal RB (Contra Costa Services) Series 1995A 1.60%, 01/07/02 3,000 3,000 Solid Waste Disposal RB (Edco Disposal Corp. Project) Series 1996A 1.60%, 01/07/02 17,140 17,140 Solid Waste Disposal RB (Equity Stanislaus Project) 1.90%, 01/01/02 5,700 5,700 Solid Waste Disposal RB (Federal Disposal Service Project) Series 2001A 1.65%, 01/07/02 3,450 3,450 Solid Waste Disposal RB (Greenteam of San Jose Project) Series 2001A 1.60%, 01/07/02 5,000 5,000 Solid Waste Disposal RB (Greenwaste of Tehama Project) Series A 1.65%, 01/07/02 2,995 2,995 Solid Waste Disposal RB (Madera Disposable Project) Series A 1.65%, 01/07/02 1,800 1,800 Solid Waste Disposal RB (Marborg Industries Project) Series A 1.60%, 01/07/02 5,425 5,425 Solid Waste Disposal RB (Met Recycling Corporation Project) Series B 1.65%, 01/07/02 5,070 5,070 Solid Waste Disposal RB (Norcal Waste System, Inc. Project) Series 2001A 1.65%, 01/07/02 9,250 9,250 Solid Waste Disposal RB (Ratto Group Co., Inc. Project) Series 2001A 1.60%, 01/07/02 4,925 4,925 Solid Waste Disposal RB (Republic Services, Inc. Project) Series 2001A 1.60%, 01/07/02 6,250 6,250 Solid Waste Disposal RB (Santa Clara Project) 1.65%, 01/07/02 3,700 3,700 Solid Waste Disposal RB (Santa Clara Valley Project) Series 2001A 1.60%, 01/07/02 3,780 3,780 Solid Waste Disposal RB (Shell Martinez Refining Project) Series 1996A 1.70%, 01/07/02 12,900 12,900 Solid Waste Disposal RB (Shell Oil Co. Project) Series 1994B 1.70%, 01/01/02 7,000 7,000 Solid Waste Disposal RB (Solag Disposal Project) Series 1997A 1.65%, 01/07/02 2,935 2,935 Solid Waste Disposal RB (Specialty Solid Waste Project) Series 2001A 1.65%, 01/07/02 5,460 5,460 Solid Waste Disposal RB (Sun Valley Paper Project) 1.60%, 01/07/02 1,050 1,050 Solid Waste Disposal RB (Talco Plastics Project) Series 1997A 1.50%, 01/07/02 4,075 4,075 Solid Waste Disposal RB (Taormina Industries, Inc. Project) Series 1994B 1.50%, 01/07/02 2,225 2,225 Solid Waste Disposal RB (Tri Community Recycle Project) 1.55%, 01/07/02 2,455 2,455 Solid Waste Disposal RB (Waste Management, Inc. Project) Series A 1.60%, 01/07/02 5,000 5,000 Solid Waste Disposal RB (West Valley Project) Series 1997A 2.10%, 01/07/02 5,705 5,705 Solid Waste Disposal RB (Zanker Road Landfill Project) Series C 1.65%, 01/07/02 6,370 6,370 Solid Waste Disposal RB 2.10%, 01/07/02 11,615 11,615 Solid Waste Disposal RB Series A 1.50%, 01/07/02 10,000 10,000 +/ CALIFORNIA PUBLIC POWER AGENCY Sub Lien RB (San Juan Project) Series 1997D 1.50%, 01/07/02 2,500 2,500
See the Financial Notes, which are integral to this information. 55 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) + CALIFORNIA SCHOOL CASH RESERVE PROGRAM AUTHORITY Pooled RB Series A 2.50%, 07/03/02 5,100 5,137 2.62%, 07/03/02 1,000 1,007 2.63%, 07/03/02 9,500 9,563 2.65%, 07/03/02 161,390 162,454 +/ CALIFORNIA SCHOOL FACILITIES FINANCING CORP. COP (Capital Improvement Financing Project) Series 1999D 1.40%, 01/07/02 21,085 21,085 CALIFORNIA STATE GO 3.33%, 03/01/02 32,660 32,746 2.89%, 06/01/02 19,375 19,579 +/ GO Series 2001I-2 1.41%, 01/07/02 17,840 17,840 + GO TECP 2.10%, 01/07/02 19,650 19,650 2.05%, 02/04/02 23,500 23,500 1.40%, 02/07/02 6,600 6,600 1.50%, 02/08/02 20,000 20,000 1.55%, 02/08/02 7,200 7,200 1.45%, 02/14/02 22,500 22,500 1.50%, 02/26/02 12,000 12,000 1.50%, 03/05/02 7,200 7,200 1.30%, 03/12/02 25,000 25,000 +/ GO TOB Putters Series 174 1.55%, 01/07/02 6,325 6,325 +/ GO TOB Series 194 1.61%, 01/07/02 8,120 8,120 +/ GO TOB Series 195 1.57%, 01/07/02 10,835 10,835 +/ GO TOB Series 470X 1.57%, 01/07/02 12,175 12,175 +o GO TOBP (PA-676) 2.75%, 01/07/02 19,495 19,495 +/ GO TOBP (PA-815R) 1.50%, 01/07/02 12,445 12,445 +/ GO TOBP (PT-1236) 1.50%, 01/07/02 31,605 31,605 +/ GO TOBP (PT-1252) 1.50%, 01/07/02 34,045 34,045 +/ GO TOBP (PT-1257) 1.50%, 01/07/02 29,495 29,495 +/ GO TOBP (PT-153) 1.47%, 01/07/02 4,995 4,995 +/ Merlot GO TOB Series 2000A 1.56%, 01/07/02 18,065 18,065 RAN 2.00%, 06/28/02 40,790 41,033 2.22%, 06/28/02 352,425 354,166 +/ TOB Putters Series 132 1.55%, 01/07/02 95,175 95,175 +/ CALIFORNIA STATE DEPARTMENT OF WATER RESOURCES Water RB Series K1 Regulation D 1.75%, 01/07/02 250,000 250,000 +/ CALIFORNIA STATE ECONOMIC DEVELOPMENT FINANCING AUTHORITY IDRB (Calco Project) 1.45%, 01/07/02 775 775 IDRB (Gaiser Tool Project) 1.50%, 01/07/02 2,465 2,465 IDRB (Mannesmann Dematic Corp.) 1.50%, 01/07/02 3,200 3,200 IDRB (Mercury Air Group) 1.50%, 01/07/02 15,300 15,300 RB (Costa Macoroni Project) 1.50%, 01/07/02 3,095 3,095 +/ CALIFORNIA STATE GOVERNMENT Eagle TOB Series 1994 1.41%, 01/07/02 19,850 19,850 Eagle TOB Series 1997C 1.41%, 01/07/02 10,900 10,900 Eagle TOB Series 2000 1.41%, 01/07/02 29,255 29,255 1.46%, 01/07/02 40,440 40,440 +o CALIFORNIA STATE HFA RB TOBP (PA-540R) 2.30%, 01/07/02 4,375 4,375 +/ CALIFORNIA STATE PUBLIC WORKS BOARD Lease Revenue TOB Putters Series 209 1.55%, 01/07/02 9,995 9,995 Lease Revenue TOB Series 1999F 1.51%, 01/07/02 9,985 9,985 Lease Revenue TOB Series 2000D 1.41%, 01/07/02 3,000 3,000 Lease Revenue TOBP (PA-814) 1.41%, 01/07/02 15,395 15,395
See the Financial Notes, which are integral to this information. 56
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ CALIFORNIA STATEWIDE COMMUNITY Industrial Development Revenue Refunding Bond (Golden Valley Project) Series A 1.50%, 01/07/02 1,470 1,470 +/ CALIFORNIA STATEWIDE COMMUNITY DEVELOPMENT AUTHORITY COP (North California Retired Officers) 1.75%, 01/01/02 4,100 4,100 COP 1.40%, 01/07/02 7,485 7,485 COP TOB Series 1999E 1.51%, 01/07/02 5,000 5,000 IDRB (Biocol Investments, LP) Series 1997B 2.50%, 01/07/02 1,500 1,500 IDRB (Integrated Rolling Co. Project) Series 1999A 1.55%, 01/07/02 2,600 2,600 Insured RB (Fremont Rideout Project) Series 2001A 1.80%, 01/07/02 19,500 19,500 M/F Housing RB (Cypress Villa Apartments) Series F 1.55%, 01/07/02 4,725 4,725 M/F Housing RB (Emerald Gardens Apartments) Series E 1.55%, 01/07/02 7,320 7,320 M/F Housing RB (Kimberly Woods Project) Series 1995B 1.70%, 01/07/02 11,400 11,400 M/F Housing RB (Park David Senior Apartments Project) Series 1999D 1.55%, 01/07/02 8,220 8,220 M/F Housing RB (Plaza Club Apartments) Series 1997A 1.42%, 01/07/02 9,790 9,790 RB (Davis Retirement Care) 1.70%, 01/01/02 8,500 8,500 RB (Dr. Nichols Pistachio) Series C 1.55%, 01/07/02 700 700 RB (Elder Care Alliance) 1.40%, 01/07/02 12,760 12,760 RB (Gemological Institute Project) 1.55%, 01/07/02 35,900 35,900 RB (Japanese American Museum Project) Series 2000A 1.45%, 01/07/02 4,900 4,900 RB (Jewish Federation of Los Angeles) Series 2000A 1.55%, 01/07/02 8,800 8,800 Solid Waste Facilities (Disposal Waste Services) 1.50%, 01/07/02 25,000 25,000 +/ CALIFORNIA STATEWIDE COMMUNITY DEVELOPMENT CORP. IDRB (13th I Associates Project) 0.40%, 01/07/02 4,705 4,705 IDRB (Agricultural Products, Inc. Project) 2.50%, 01/07/02 1,310 1,310 IDRB (Cowden Metal Stamping Project) 2.50%, 01/07/02 1,695 1,695 IDRB (Drip In Irrigation Co. Project) 1.50%, 01/07/02 3,600 3,600 IDRB (Flambeau Airmold Project) 1.50%, 01/07/02 2,250 2,250 IDRB (Pacific Handy Cutter Products Project) 2.50%, 01/07/02 280 280 IDRB (The Diamond Foods Project) Series 1991 2.50%, 01/07/02 915 915 IDRB Series 1998C 1.50%, 01/07/02 1,945 1,945 +/ CALIFORNIA STATEWIDE M/F HOUSING AUTHORITY RB (Woodsong Apartments) Series 1997B 1.45%, 01/07/02 3,327 3,327 +/ CARLSBAD, CALIFORNIA M/F Housing Revenue Refunding Bond COP (La Costa Apartment Project) Series 1993A 1.45%, 01/07/02 11,720 11,720 CENTRAL COAST, CALIFORNIA WATER AUTHORITY RB (State Water Project Regional Facilities) 2.41%, 10/01/02 5,600 5,882 +/ CONCORD, CALIFORNIA M/F Housing Mortgage RB (Bel Air Apartments Project) Series 1986A 1.50%, 01/07/02 3,000 3,000
See the Financial Notes, which are integral to this information. 57 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ CONCORD, CALIFORNIA M/F HOUSING AUTHORITY RB (California Hill Apartments) Series 1989A 1.50%, 01/07/02 7,900 7,900 CONTRA COSTA COUNTY, CALIFORNIA +/ M/F Housing Mortgage RB (El Cerrito Project) Series A 1.50%, 01/07/02 980 980 TRAN Series A 2.43%, 10/04/02 28,000 28,117 +/ DAVIS, CALIFORNIA COMMUNITY FACILITIES DISTRICT Special Tax Bond (East Davis Mace Ranch Project) District No. 1999-2 1.55%, 01/07/02 4,160 4,160 +/ DUBLIN, CALIFORNIA HOUSING AUTHORITY M/F Housing RB (Park Siera Project) Series A 1.50%, 01/07/02 12,700 12,700 +/ DUBLIN, CALIFORNIA SAN RAMON SERVICES DISTRICT COP 1.40%, 01/07/02 10,000 10,000 EAST BAY, CALIFORNIA MUNICIPAL UTILITY DISTRICT TECP 2.00%, 01/08/02 3,000 3,000 2.00%, 01/09/02 12,000 12,000 1.25%, 03/06/02 21,800 21,800 1.30%, 03/06/02 22,300 22,300 +/ EL CAJON, CALIFORNIA M/F Housing RB (Pinewood Apartments Project) 1.42%, 01/07/02 1,450 1,450 Redevelopment Bond M/F Housing RB (Mollison & Madison Project) 1.42%, 01/07/02 5,300 5,300 +/ ENCINITAS, CALIFORNIA M/F Housing Revenue Refunding Bond (Torrey Pines Project) Series A 1.50%, 01/07/02 3,100 3,100 +/ FOOTHILL-DE ANZA, CALIFORNIA COMMUNITY COLLEGE DISTRICT Merlot TOB Series 2000YY 1.51%, 01/07/02 9,995 9,995 +/ FREMONT, CALIFORNIA M/F Housing Revenue Refunding COP (Amber Court Apartments Project) Series 1990A 1.55%, 01/07/02 10,000 10,000 +/ FRESNO, CALIFORNIA IDA RB (Keiser Corp.) 1.55%, 01/07/02 1,965 1,965 + GOLDEN EMPIRE SCHOOLS, CALIFORNIA FINANCING AUTHORITY Lease RB (Kern High School District Projects) 2.40%, 01/09/02 10,600 10,600 GOLDEN GATE BRIDGE HIGHWAY & TRANSPORTATION DISTRICT TECP 2.35%, 01/16/02 30,500 30,500 +/ HAYWARD, CALIFORNIA M/F Housing RB (Shorewood Apartment Project) Series A 1.40%, 01/07/02 9,100 9,100 +/ HAYWARD, CALIFORNIA HOUSING AUTHORITY M/F Housing RB (Huntwood Terrace Apartments) 1.55%, 01/07/02 5,565 5,565 +/ HERCULES, CALIFORNIA REDEVELOPMENT AGENCY IDRB (Pro Media Project) Series 2000A 1.50%, 01/07/02 2,500 2,500 +/ HUNTINGTON BEACH, CALIFORNIA M/F Housing RB (Five Points Project) 1.42%, 01/07/02 6,400 6,400 +/ HUNTINGTON PARK, CALIFORNIA REDEVELOPMENT AGENCY M/F Housing RB (Casa Rita Apartments) Series 1994A 1.42%, 01/07/02 4,100 4,100 +/ INDIO, CALIFORNIA M/F Housing Mortgage Revenue Refunding Bond (Carreon Apartments Project ) Series 1996A 1.35%, 01/07/02 3,950 3,950
See the Financial Notes, which are integral to this information. 58
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ IRVINE RANCH, CALIFORNIA IMPROVEMENT BOND ACT 1915 RB (Assessment District No. 00-18) Series 2001A 1.70%, 01/01/02 5,300 5,300 RB (Assessment District No. 85-7) Series 1986I 1.50%, 01/07/02 16,182 16,182 RB (Assessment District No. 87-8) 1.70%, 01/01/02 4,900 4,900 RB (Assessment District No. 93-14) 1.80%, 01/07/02 5,700 5,700 +/ IRVINE RANCH, CALIFORNIA WATER DISTRICT COP (Capital Improvement Project) 1.80%, 01/01/02 9,900 9,900 GO (Districts 105, 140, 240 & 250) Series 1995 1.80%, 01/01/02 7,600 7,600 GO (Various Improvement District Number 182) Series 1988A 1.80%, 01/01/02 1,800 1,800 Improvement GO (District 284) Series 1988A 1.80%, 01/01/02 1,000 1,000 RB 1.70%, 01/01/02 1,800 1,800 +/ KERN COUNTY, CALIFORNIA COP (Kern Public Facilities Project) Series A 1.40%, 01/07/02 3,400 3,400 +/ LIVERMORE, CALIFORNIA M/F Housing Revenue Refunding Bond (Arbors Apartment Project) Series 1991A 1.60%, 01/07/02 9,005 9,005 +/ LONG BEACH, CALIFORNIA HARBOR RB TOBP (PA-890R) 1.47%, 01/07/02 9,190 9,190 LOS ANGELES COUNTY, CALIFORNIA +/ COP ACES (Los Angeles County Museum of Art Project) Series 1985A 1.35%, 01/07/02 1,900 1,900 +/ COP ACES (Los Angeles County Museum of Art Project) Series 1985B 1.35%, 01/07/02 2,100 2,100 +/ M/F Housing RB (Channel Gateway Apartments) 1.45%, 01/07/02 54,300 54,300 TRAN 2.12%, 06/28/02 10,000 10,078 2.54%, 06/28/02 10,000 10,057 2.61%, 06/28/02 40,000 40,216 2.62%, 06/28/02 9,000 9,048 2.65%, 06/28/02 115,000 115,463 2.67%, 06/28/02 5,000 5,025 LOS ANGELES COUNTY, CALIFORNIA CAPITAL ASSET LEASING CORP. Lease Revenue TECP 2.45%, 02/08/02 6,050 6,050 2.20%, 02/11/02 5,990 5,990 2.45%, 02/12/02 19,950 19,950 1.25%, 03/08/02 6,060 6,060 +/ LOS ANGELES COUNTY, CALIFORNIA HOUSING AUTHORITY M/F Housing RB (Malibu Canyon Apartments Project) Series B 1.60%, 01/07/02 23,520 23,520 +/ LOS ANGELES COUNTY, CALIFORNIA METROPOLITAN TRANSIT AUTHORITY TOB 1.51%, 01/07/02 23,830 23,830 +/ LOS ANGELES COUNTY, CALIFORNIA METROPOLITAN TRANSPORTATION AUTHORITY Eagle Sales Tax Revenue Refunding TOB Series A 1.41%, 01/07/02 24,750 24,750 Revenue Refunding Bond Series 1993A 1.40%, 01/07/02 64,200 64,200 +/ LOS ANGELES COUNTY, CALIFORNIA PENSION Revenue Refunding Bond Series 1996A 1.35%, 01/07/02 12,375 12,375 +/ LOS ANGELES COUNTY, CALIFORNIA TRANSPORTATION COMMISSION Sales Tax RB Series 1992A 1.30%, 01/07/02 8,050 8,050 LOS ANGELES, CALIFORNIA +/ M/F Housing RB (Beverly Park Apartments) 1.55%, 01/07/02 34,000 34,000 +/ M/F Housing RB (Fountain Park Project Phase II) Series B 1.45%, 01/07/02 25,615 25,615 +/ M/F Housing RB (Fountain Park Project) Series P 1.45%, 01/07/02 11,100 11,100
See the Financial Notes, which are integral to this information. 59 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ M/F Housing RB (San Regis Project) Series 2001E 1.60%, 01/07/02 23,600 23,600 +/ M/F Housing RB (Studio Colony) Series 1985C 1.40%, 01/07/02 16,305 16,305 +/ M/F Housing RB Series 1985K 1.05%, 01/07/02 114,855 114,855 +/ M/F Housing Revenue Refunding Bond (Tri City Project) Series 2001I 1.45%, 01/07/02 3,700 3,700 S/F Home Mortgage RB Series 2001B 2.72%, 06/01/02 7,100 7,101 +/ TOBP (PA-554) 1.41%, 01/07/02 3,150 3,150 +/ Water & Power RB Subseries 2001B-1 1.35%, 01/07/02 24,500 24,500 +/ Water & Power RB Subseries 2001B-6 1.60%, 01/07/02 24,300 24,300 +/ LOS ANGELES, CALIFORNIA COMMUNITY REDEVELOPMENT AGENCY M/F Housing RB (Grand Promenade Project) 1.40%, 01/07/02 12,100 12,100 M/F Housing Revenue Refunding Bond (Promenade Towers Project) Series 2000 1.30%, 01/07/02 33,900 33,900 LOS ANGELES, CALIFORNIA DEPARTMENT OF WATER & POWER +/ Eagle TOB Series 2001 1.41%, 01/07/02 24,750 24,750 +/ Electric Plant TOB Series 1 1.51%, 01/07/02 19,995 19,995 +/ Electric Plant TOB Series 370 1.47%, 01/07/02 45,055 45,055 +/ RB TOB Series L 1.51%, 01/07/02 20,390 20,390 TECP 1.25%, 01/15/02 10,100 10,100 1.60%, 02/04/02 19,300 19,300 1.95%, 03/07/02 15,000 15,000 1.65%, 03/20/02 4,000 4,000 +/ TOB Putters Series 184 1.55%, 01/07/02 15,000 15,000 +/ TOB Putters Series 185 1.55%, 01/07/02 14,495 14,495 LOS ANGELES, CALIFORNIA UNIFIED SCHOOL DISTRICT +/ Munitops TOB Series C 1.43%, 01/07/02 15,400 15,400 TRAN 2.58%, 07/23/02 61,560 62,037 + LOS ANGELES, CALIFORNIA WASTEWATER SYSTEM Revenue Refunding Bond Series 2001A 1.88%, 10/31/02 14,000 14,000 Revenue Refunding Bond Series 2001B 1.88%, 10/31/02 18,000 18,000 Revenue Refunding Bond Series 2001C 1.88%, 10/31/02 20,000 20,000 +/ LOS ANGELES, CALIFORNIA WATER & POWER RB Subseries B-2 1.40%, 01/07/02 28,500 28,500 +/ MADERA, CALIFORNIA PUBLIC FINANCING MUNICIPAL GOLF COURSE REVENUE REFINANCING AUTHORITY RB 2.45%, 01/07/02 1,900 1,900 + METROPOLITAN WATER DISTRICT OF SOUTHERN CALIFORNIA / Revenue Refunding Bond Series 1996A 1.35%, 01/07/02 8,395 8,395 / Revenue Refunding Bond Series 1997C 1.40%, 01/07/02 4,200 4,200 / Revenue Refunding Bond Series 1998B 1.30%, 01/07/02 8,500 8,500 / Revenue Refunding Bond Series B2 1.30%, 01/07/02 53,000 53,000 o Water Works Revenue TOB Series 154 1.80%, 01/07/02 10,000 10,000 / Water Works Revenue TOB Series 1999O 1.51%, 01/07/02 16,000 16,000 / Water Works Revenue TOBP (PA-546) 1.50%, 01/07/02 14,000 14,000 / Waterworks RB Series 2000 B2 1.35%, 01/07/02 5,000 5,000 / Waterworks RB Series 2000B-3 1.80%, 01/07/02 8,400 8,400 / Waterworks RB Series 2001C-2 1.65%, 01/01/02 14,300 14,300 / Waterworks Revenue Refunding Bond Series 2001B-1 1.30%, 01/07/02 21,000 21,000
See the Financial Notes, which are integral to this information. 60
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ MOUNT SAN JACINTO, CALIFORNIA WINTER PARK AUTHORITY COP (Palm Springs Aerial Project) 1.45%, 01/07/02 8,200 8,200 COP (Palm Springs Aerial Project) Series 2000B 1.45%, 01/07/02 2,900 2,900 +/ OAKLAND PORT, CALIFORNIA Merlot TOB (First Union) Series 2000JJ 1.56%, 01/07/02 15,000 15,000 OAKLAND, CALIFORNIA +/ Revenue TOB (180 Harrison Foundation Project) Series 2000M 1.51%, 01/07/02 3,000 3,000 TRAN 2.65%, 07/25/02 64,785 65,265 +/ ORANGE COUNTY, CALIFORNIA COP (Florence Crittenton Services Project) Series 1990 1.42%, 01/07/02 5,900 5,900 M/F Housing RB (Lantern Pines Project) 1.30%, 01/07/02 14,700 14,700 +/ ORANGE COUNTY, CALIFORNIA APARTMENT DEVELOPMENT RB (Villas Aliento) Series 1998E 1.30%, 01/07/02 4,500 4,500 RB (Hidden Hills) Series 1985C 1.35%, 01/07/02 9,700 9,700 RB Series F 1.30%, 01/07/02 15,900 15,900 Revenue Refunding Bond (Jess L. Frost Project) Series 1985B 1.45%, 01/07/02 10,200 10,200 Revenue Refunding Bond (Pointe Niguel Project) Series 1992C 1.35%, 01/07/02 11,000 11,000 Revenue Refunding Bond (The Lakes Project #185) Series 1991A 1.50%, 01/07/02 16,000 16,000 Revenue Refunding Bond (Vintage Woods) Series 1988H 1.50%, 01/07/02 19,500 19,500 ORANGE COUNTY, CALIFORNIA LOCAL TRANSPORTATION AUTHORITY Sales Tax Revenue TECP 1.30%, 03/06/02 5,000 5,000 1.25%, 03/08/02 40,000 40,000 +/ ORANGE COUNTY, CALIFORNIA SANITATION DISTRICT COP (Sanitation Districts 1-3, 5-7 & 11) Series 1992C 1.40%, 01/07/02 5,000 5,000 COP Series 2000B 1.70%, 01/07/02 100 100 +/ PALO ALTO, CALIFORNIA UNIFIED SCHOOL DISTRICT Merlot TOB Series R 1.51%, 01/07/02 6,000 6,000 +/ PETALUMA, CALIFORNIA COMMUNITY M/F HOUSING AUTHORITY M/F Housing RB (Oakmont At Petaluma Project) 1.60%, 01/07/02 3,550 3,550 +/ PINOLE, CALIFORNIA REDEVELOPMENT AGENCY M/F Housing RB (East Bluff Apartments Project) 1.60%, 01/07/02 2,559 2,559 +/ PLEASANT HILL, CALIFORNIA M/F Housing RB (Brookside Apartments Project) 1.40%, 01/07/02 4,800 4,800 + PORT OF OAKLAND, CALIFORNIA TECP Series A 2.00%, 01/08/02 25,450 25,450 2.00%, 01/17/02 12,490 12,490 1.60%, 02/04/02 43,000 43,000 1.30%, 02/13/02 13,400 13,400 TECP Series D 1.25%, 02/12/02 25,000 25,000 / TOBP (PA-663) 1.47%, 01/07/02 7,575 7,575 +/ RANCHO, CALIFORNIA WATER DISTRICT FINANCING AUTHORITY RB Series 2001B 1.35%, 01/07/02 10,000 10,000 +/ REDWOOD CITY, CALIFORNIA COP (City Hall Project) 1.55%, 01/07/02 2,400 2,400 RIVERSIDE COUNTY, CALIFORNIA +/ M/F Housing RB (Ambergate Apartments) Series 1992A 1.65%, 01/07/02 2,600 2,600 Teeter Obligation TECP 2.10%, 01/09/02 8,458 8,458
See the Financial Notes, which are integral to this information. 61 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ RIVERSIDE COUNTY, CALIFORNIA ASSET LEASING CORP. Leasehold RB (South West Justice Center) Series 2000B 1.35%, 01/07/02 17,500 17,500 +/ RIVERSIDE COUNTY, CALIFORNIA COMMUNITY FACILITIES DISTRICT NO. 88-4 Special Tax Revenue Refunding Bond 1.45%, 01/07/02 13,100 13,100 +/ RIVERSIDE COUNTY, CALIFORNIA HOUSING AUTHORITY M/F Housing RB (Briarwood Apartment Project) Series 1985C 1.45%, 01/07/02 4,500 4,500 M/F Housing RB (Tyler Springs Apartments) Series 1999C 1.50%, 01/07/02 7,000 7,000 M/F Housing Revenue Refunding Bond (Victoria Springs Apartments) 1.42%, 01/07/02 9,000 9,000 +/ RIVERSIDE COUNTY, CALIFORNIA IDA RB (Calmold, Inc. Project) 1.65%, 01/07/02 3,370 3,370 +/ RIVERSIDE COUNTY, CALIFORNIA PUBLIC FACILITIES ACES COP (Riverside County Public Facility Project) Series 1985C 1.35%, 01/07/02 6,500 6,500 ACES COP Series 1985B 1.45%, 01/07/02 19,000 19,000 +/ SACRAMENTO COUNTY, CALIFORNIA COP (Administration Center & Court House Project) 1.50%, 01/07/02 8,070 8,070 +/ SACRAMENTO COUNTY, CALIFORNIA HOUSING AUTHORITY M/F Housing RB (Chesapeake Commons Project) Series C 1.42%, 01/07/02 28,000 28,000 M/F Housing RB (Hidden Oaks Apartments) Series 1999C 1.55%, 01/07/02 6,300 6,300 +/ SACRAMENTO COUNTY, CALIFORNIA SANITATION DISTRICT FINANCING AUTHORITY TOB Series 366 1.42%, 01/07/02 28,945 28,945 TOBP (PA-694) 1.41%, 01/07/02 6,090 6,090 +/ SACRAMENTO COUNTY, CALIFORNIA SPECIAL FACILITIES RB (Recessna Aircraft Corp. Project) 1.50%, 01/07/02 3,700 3,700 SACRAMENTO, CALIFORNIA MUNICIPAL UTILITY DISTRICT TECP Series 1 1.55%, 02/14/02 25,250 25,250 +/ SALINAS, CALIFORNIA APARTMENT DEVELOPMENT M/F Housing RB (Mariner Villa Project) Series 1985B 1.40%, 01/07/02 2,825 2,825 +/ SAN BERNARDINO COUNTY, CALIFORNIA COP (Glen Helen Blockbuster Pavilion Project) Series 1994C 1.45%, 01/07/02 6,380 6,380 COP (Medical Center Financing Project) 1.48%, 01/07/02 21,060 21,060 SAN DIEGO, CALIFORNIA CITY & COUNTY UNIFIED SCHOOL DISTRICT TRAN 2.65%, 08/01/02 19,700 19,794 +/ SAN DIEGO, CALIFORNIA HOUSING AUTHORITY M/F Mortgage RB (Canyon Rim Apartments) Series B 1.55%, 01/07/02 32,440 32,440 M/F Mortgage RB (Creekside Villa) Series 1999B 1.42%, 01/07/02 6,000 6,000 M/F Mortgage RB (La Cima) Series 1999K 1.35%, 01/07/02 25,500 25,500 M/F Mortgage RB (Nobel Courts) Series 1999L 1.35%, 01/07/02 4,000 4,000 +/ SAN FRANCISCO, CALIFORNIA CITY & COUNTY AIRPORTS COMMISSION International Airport Certificates Series 476 1.66%, 01/07/02 16,255 16,255
See the Financial Notes, which are integral to this information. 62
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) International Airports RB TOB Series 2000-429 1.66%, 01/07/02 8,485 8,485 International Airports RB TOBP (PA-662) 1.53%, 01/07/02 12,670 12,670 +/ SAN FRANCISCO, CALIFORNIA CITY & COUNTY FINANCING CORP. Lease RB (Moscone Center Expansion Project) Series 2000 1.30%, 01/07/02 14,100 14,100 Lease RB (Moscone Center Expansion Project) Series 2000-1 1.50%, 01/07/02 13,500 13,500 +/ SAN FRANCISCO, CALIFORNIA CITY & COUNTY REDEVELOPMENT AGENCY M/F Housing RB (3rd & Mission) Series 1999C 1.45%, 01/07/02 58,900 58,900 M/F Housing RB (Fillmore Center Project) Series A2 1.54%, 01/07/02 3,750 3,750 M/F Housing RB (Ocean Beach Apartments) Series-B 1.60%, 01/07/02 4,850 4,850 M/F Housing RB (Post Street Towers) Series A 1.50%, 01/07/02 10,000 10,000 M/F Housing RB (Winterland Project) Series 1985C 1.55%, 01/07/02 16,800 16,800 +/ SAN FRANCISCO, CALIFORNIA HOUSING AUTHORITY M/F Housing RB (Magnolia Plaza Project) Series A 1.55%, 01/07/02 5,500 5,500 SAN FRANCISCO, CALIFORNIA INTERNATIONAL AIRPORT COMMISSION TECP Series A 2.05%, 01/07/02 8,000 8,000 2.10%, 01/07/02 15,000 15,000 2.10%, 01/08/02 9,287 9,287 2 .15%, 01/08/02 5,000 5,000 SAN JOAQUIN COUNTY, CALIFORNIA TRANSPORTATION AUTHORITY Sales Tax Revenue TECP 2.55%, 01/17/02 15,000 15,000 2.25%, 02/13/02 4,900 4,900 +/ SAN JOSE, CALIFORNIA M/F Housing RB (Almeden Lake Apartments Project) Series 1997A 1.42%, 01/07/02 15,900 15,900 M/F Housing RB (Carlton Plaza Project) Series A 1.90%, 01/07/02 5,000 5,000 M/F Housing RB (Seinna at Renaissance Project) Series 1996A 1.55%, 01/07/02 20,000 20,000 +/ SAN JOSE, CALIFORNIA REDEVELOPMENT AGENCY M/F Housing (101 San Fernando Apartments Project) Series A 1.50%, 01/07/02 38,000 38,000 RB (Merged Area Redevelopment Project) 1.20%, 01/07/02 19,500 19,500 Tax Allocation TOB Putters Series 158 1.55%, 01/07/02 30,095 30,095 +/ SAN LEANDRO, CALIFORNIA M/F Housing RB (Carlton Plaza Project) Series A 1.95%, 01/07/02 1,900 1,900 +/ SANTA CLARA COUNTY, CALIFORNIA M/F Housing Revenue Refunding Bond (Brairwood Apartments Project) Series 1996B 1.60%, 01/07/02 7,000 7,000 M/F Housing Revenue Refunding Bond (Grove Garden Apartments) Series 1997A 1.50%, 01/07/02 14,000 14,000 +/ SANTA CLARA COUNTY, CALIFORNIA ELECTRIC AUTHORITY RB, Series C 1.40%, 01/07/02 18,900 18,900 +/ SANTA CLARA COUNTY, CALIFORNIA HOSPITAL FACILITY AUTHORITY RB (El Camino Hospital District - Valley Medical Center Project) Series 1985A 1.45%, 01/07/02 16,700 16,700 +/ SANTA CLARA VALLEY, CALIFORNIA WATER DISTRICT COP TOB Series 411 1.42%, 01/07/02 15,120 15,120
See the Financial Notes, which are integral to this information. 63 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND - FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ SANTA FE SPRINGS, CALIFORNIA IDA RB 2.30%, 01/07/02 4,000 4,000 +/ SANTA PAULA, CALIFORNIA PUBLIC FINANCING AUTHORITY Lease Water System RB (Aquis Project) 1.35%, 01/07/02 9,400 9,400 +/ SANTA ROSA, CALIFORNIA M/F Housing RB (Quail Run Apartments) Series 1997A 1.60%, 01/07/02 4,980 4,980 SONOMA COUNTY, CALIFORNIA TRAN 2.05%, 11/19/02 21,500 21,676 +/ SOUTH PLACER, CALIFORNIA WASTEWATER AUTHORITY RB Series B 1.35%, 01/07/02 20,000 20,000 +/ SOUTHERN CALIFORNIA PUBLIC POWER AUTHORITY RB (Sub-Southern Transmission Project) Series 2000A 1.40%, 01/07/02 31,000 31,000 Revenue Refunding Bond (Palos Verdes Project) Series 1996B 1.35%, 01/07/02 6,300 6,300 Revenue Refunding Bond (Southern Transmission Project) Series 2001A 1.40%, 01/07/02 6,095 6,095 Revenue Refunding Bond Series C 1.35%, 01/07/02 12,800 12,800 +/ SOUTHERN CALIFORNIA SOUTHEAST RESOURCE RECOVERY FACILITY AUTHORITY RB Series 1993A 1.40%, 01/07/02 12,241 12,241 +/ STOCKTON, CALIFORNIA COMMUNITY FACILITY DISTRICT RB 1.55%, 01/07/02 2,085 2,085 +/ SUNNYVALE, CALIFORNIA COP (Government Center Site Acquisition) Series 2001A 1.40%, 01/07/02 8,000 8,000 +/ TULARE PORTERVILLE, CALIFORNIA SCHOOL FINANCING AUTHORITY RB 2.45%, 01/07/02 6,495 6,495 +/ UNION CITY, CALIFORNIA M/F Housing RB (Greenhaven Apartments Project) Series 1997A 1.50%, 01/07/02 10,975 10,975 UNIVERSITY OF CALIFORNIA BOARD OF REGENTS +/ Eagle TOB 1.41%, 01/07/02 19,430 19,430 TECP 2.00%, 01/09/02 17,300 17,300 1.15%, 01/10/02 16,000 16,000 2.00%, 01/15/02 5,000 5,000 1.25%, 03/06/02 23,545 23,545 1.35%, 06/10/02 13,000 13,000 1.45%, 06/10/02 9,000 9,000 +/ VAL VERDE, CALIFORNIA UNIFIED SCHOOL DISTRICT COP RB Series 2001A 1.51%, 01/07/02 13,000 13,000 +/ VALLECITOS, CALIFORNIA WATER DISTRICT RB (Twin Oaks Reservoir Project) 1.40%, 01/07/02 19,300 19,300 +/ VALLEJO CITY, CALIFORNIA UNIFIED SCHOOL DISTRICT COP (Various Capital Improvement Financing Projects) Series 1999E 1.40%, 01/07/02 5,765 5,765 +/ VICTOR VALLEY, CALIFORNIA COMMUNITY COLLEGE DISTRICT COP 1.50%, 01/07/02 53,450 53,450 +/ VISTA, CALIFORNIA IDA IDRB (Desalination System, Inc. Project) 1.50%, 01/07/02 5,650 5,650 +/ WEST BASIN, CALIFORNIA MUNICIPAL WATER DISTRICT RB COP (Phase ll Recycled Water Project) Series 1997B 1.35%, 01/07/02 14,800 14,800 RB COP (Phase III Recycled Water Project) Series 1999A 1.35%, 01/07/02 2,900 2,900 +/ WEST SACRAMENTO, CALIFORNIA SPECIAL TAX RB (Community Facilities District #6) 2.05%, 01/07/02 3,835 3,835
See the Financial Notes, which are integral to this information. 64
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ WESTERN RIVERSIDE COUNTY, CALIFORNIA REGIONAL WASTEWATER AUTHORITY RB (Regulatory Wastewater Treatment) 1.70%, 01/01/02 3,200 3,200 +/ WESTMINSTER, CALIFORNIA COP (Civic Center Project) Series A 1.50%, 01/07/02 3,945 3,945 +/ WESTMINSTER, CALIFORNIA AGENCY Tax Allocation Bond (Community Redevelopment Project) 1.50%, 01/07/02 9,365 9,365 +/ WESTMINSTER, CALIFORNIA REDEVELOPMENT AGENCY M/F Housing RB (Brookhurst Royale) Series A 2.40%, 01/07/02 7,700 7,700 --------- 6,090,448 PUERTO RICO 6.6% GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO TECP 1.25%, 01/03/02 4,400 4,400 1.25%, 01/23/02 800 800 1.60%, 01/23/02 6,000 6,000 1.70%, 01/23/02 25,779 25,779 1.60%, 01/24/02 30,000 30,000 1.70%, 01/24/02 22,662 22,662 1.60%, 01/25/02 22,776 22,776 1.70%, 01/25/02 20,824 20,824 1.55%, 01/30/02 39,000 39,000 1.35%, 01/31/02 11,000 11,000 1.35%, 02/15/02 9,236 9,236 1.35%, 02/20/02 29,753 29,753 +/ PUERTO RICO COMMONWEALTH Infrastructure Eagle TOB Series 2000 1.41%, 01/07/02 37,085 37,085 Public Improvement TOB Series 2001A 1.36%, 01/07/02 12,835 12,835 TOB Putters Series 232 1.40%, 01/07/02 24,245 24,245 TOB Series 204 1.40%, 01/07/02 6,295 6,295 TOB Series 3 1.41%, 01/07/02 28,695 28,695 TOBP (PA-652) 1.41%, 01/07/02 2,730 2,730 Unlimited GO Series 2001II-R-124 1.56%, 01/07/02 4,995 4,995 PUERTO RICO COMMONWEALTH HIGHWAY & TRANSPORTATION AUTHORITY Highway Revenue Refunded Bond Series T 2.50%, 07/01/02 4,655 4,818 +/ RB Series 1998A 1.40%, 01/07/02 12,100 12,100 +/ Transportation Revenue Merlot TOB Series 2000FFF 1.46%, 01/07/02 4,985 4,985 +/ PUERTO RICO COMMONWEALTH INFRASTRUCTURE FINANCING AUTHORITY TOBP (PA-498) 1.41%, 01/07/02 6,290 6,290 TOBP (PA-782) 1.41%, 01/07/02 10,105 10,105 +/ PUERTO RICO ELECTRIC POWER AUTHORITY RB TOB Putters 1.40%, 01/07/02 5,000 5,000 RB TOB Putters Series 164 1.40%, 01/07/02 15,765 15,765 +/ PUERTO RICO HOUSING FINANCE CORP. RB TOB Series R 1.41%, 01/07/02 8,255 8,255 +/ PUERTO RICO PUBLIC BUILDING AUTHORITY Government Facilities RB TOB Putter Series 211 1.40%, 01/07/02 14,995 14,995 Revenue Guaranteed RB TOB Series II-R-56 1.41%, 01/07/02 6,545 6,545 --------- 427,968
-------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which are integral to this information. 65 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND -- FINANCIALS Statement of ASSETS AND LIABILITIES As of December 31, 2001. All numbers x 1,000 except NAV. ASSETS ------------------------------------------------------------------------------- Investments, at market value $6,518,416 a Cash 405 Receivables: Fund shares sold 16,652 Interest 29,494 Prepaid expenses + 21 ------------- TOTAL ASSETS 6,564,988 LIABILITIES ------------------------------------------------------------------------------- Payables: Fund shares redeemed 16,491 Dividends to shareholders 326 Investments bought 87,546 Investment adviser and administrator fees 113 Transfer agent and shareholder service fees 181 Accrued expenses + 150 ------------- TOTAL LIABILITIES 104,807 NET ASSETS ------------------------------------------------------------------------------- TOTAL ASSETS 6,564,988 TOTAL LIABILITIES - 104,807 ------------- NET ASSETS $6,460,181 NET ASSETS BY SOURCE Capital received from investors 6,461,741 Net realized capital losses (1,560)
NET ASSETS BY SHARE CLASS SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Sweep Shares $3,897,125 3,898,527 $1.00 Value Advantage Shares $2,563,056 2,563,329 $1.00 a Includes illiquid restricted securities worth $43,865, or 0.67% of the fund's investments. The amortized cost for the fund's securities was $6,518,416. During the reporting period, the fund had $1,181,115 in transactions with other SchwabFunds.(R) FEDERAL TAX DATA ------------------------------------------------------------------------------ COST BASIS OF PORTFOLIO $6,518,416 UNUSED CAPITAL LOSSES: Expires 12/31 of: Loss amount: 2002 $173 2004 93 2005 35 2006 42 2007 259 2008 + 958 ------------- $1,560
See the Financial Notes, which are integral to this information. 66 Statement of OPERATIONS For January 1, 2001 through December 31, 2001. All numbers x 1,000. INVESTMENT INCOME ------------------------------------------------------------------------------- Interest $157,439 NET REALIZED GAINS ------------------------------------------------------------------------------- Net realized gains on investments sold 465 EXPENSES ------------------------------------------------------------------------------- Investment adviser and administrator fees 21,467 a Transfer agent and shareholder service fees: Sweep Shares 16,752 b Value Advantage Shares 5,375 b Trustees' fees 68 c Custodian and portfolio accounting fees 500 Professional fees 58 Registration fees 253 Shareholder reports 238 Other expenses + 39 ----------- Total expenses 44,750 Expense reduction - 10,089 d ----------- NET EXPENSES 34,661 INCREASE IN NET ASSETS FROM OPERATIONS ------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 157,439 NET EXPENSES - 34,661 ----------- NET INVESTMENT INCOME 122,778 NET REALIZED GAINS + 465 ----------- INCREASE IN NET ASSETS FROM OPERATIONS $123,243
a Calculated on a graduated basis as a percentage of average daily net assets: 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion, 0.30% over $20 billion and 0.27% over $40 billion. Prior to June 1, 2001, these percentages were 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion and 0.30% over $20 billion. b Calculated as a percentage of average daily net assets as follows: TRANSFER AGENT SERVICES:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS ----------------------------------------- Sweep Shares 0.25 Value Advantage Shares 0.05
SHAREHOLDER SERVICES:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS ----------------------------------------- Sweep Shares 0.20 Value Advantage Shares 0.17
Prior to June 1, 2001, the shareholder services fee for Value Advantage Shares was 0.20%. c For the fund's independent trustees only. d Includes $9,450 from the investment adviser (CSIM) and $639 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least April 30, 2002, as follows:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS ----------------------------------------- Sweep Shares 0.65 Value Advantage Shares 0.45
This limit doesn't include interest, taxes and certain non-routine expenses. See the Financial Notes, which are integral to this information. 67 SCHWAB CALIFORNIA MUNICIPAL MONEY FUND -- FINANCIALS Statements of CHANGES IN NET ASSETS For the current and prior reporting periods. All numbers x 1,000.
OPERATIONS ------------------------------------------------------------------------------- 1/1/01-12/31/01 1/1/00-12/31/00 Net investment income $ 122,778 $ 171,599 Net realized gains or losses + 465 (961) -------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 123,243 170,638 DISTRIBUTIONS PAID ------------------------------------------------------------------------------- DIVIDENDS FROM NET INVESTMENT INCOME Sweep Shares 73,669 113,342 Value Advantage Shares + 49,109 58,257 -------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME 122,778 171,599 TRANSACTIONS IN FUND SHARES a ------------------------------------------------------------------------------- SHARES SOLD Sweep Shares 13,033,350 17,669,847 Value Advantage Shares + 3,316,593 2,995,788 -------------------------------- TOTAL SHARES SOLD 16,349,943 20,665,635 SHARES REINVESTED Sweep Shares 72,176 110,869 Value Advantage Shares + 46,166 55,159 -------------------------------- TOTAL SHARES REINVESTED 118,342 166,028 SHARES REDEEMED Sweep Shares 13,131,183 17,314,654 Value Advantage Shares + 2,970,370 2,483,685 -------------------------------- TOTAL SHARES REDEEMED 16,101,553 19,798,339 NET INCREASE 366,732 1,033,324 b NET ASSETS ------------------------------------------------------------------------------- Beginning of period 6,092,984 5,060,621 Total increase + 367,197 1,032,363 c -------------------------------- END OF PERIOD $6,460,181 $6,092,984
a Because all transactions in this section took place at $1.00 a share, figures for share quantities are the same as for dollars. b Represents shares sold plus shares reinvested, minus shares redeemed. c Represents the changes in net assets from operations plus the changes in value of transactions in fund shares, minus distributions paid. See the Financial Notes, which are integral to this information. 68 SCHWAB NEW YORK MUNICIPAL MONEY FUND [PHOTO OF KEVIN SHAUGHNESSY] "The events of September 11, in addition to the pre-existing slowdown in the economy, have meant significant shortfalls in revenue for the current fiscal year." Portfolio Manager Kevin Shaughnessy KEVIN SHAUGHNESSY, a portfolio manager, is responsible for the day-to-day management of the fund. Prior to joining the firm in 2000, he worked for more than ten years in fixed income portfolio management. TICKER SYMBOLS SWEEP SHARES SWNXX VALUE ADVANTAGE SHARES SWYXX -------------------------------------------------------------------------------- The fund seeks the highest current income that is consistent with stability of capital and liquidity, and is exempt from federal and New York state and local personal income tax. -------------------------------------------------------------------------------- THIS FUND MAY BE APPROPRIATE FOR NEW YORK TAXPAYERS, ESPECIALLY THOSE IN HIGHER TAX BRACKETS WHO ARE SEEKING TRIPLE TAX-EXEMPT INCOME. MANAGER'S PERSPECTIVE SHORT-TERM INTEREST RATES DECLINED SHARPLY AND STEADILY THROUGHOUT 2001, PACED BY THE FED'S RATE CUTS. The Fed's 11 interest rate cuts, which began in January and continued into December, left the Federal Funds Rate at 1.75%, its lowest level in more than 40 years. These cuts had the direct effect of reducing yields for money fund investors, taxable and tax-exempt alike. FALLING INTEREST RATES HELPED SPUR THE ISSUANCE OF SHORT-TERM MUNI SECURITIES. The increased supply kept muni prices low (and yields high) relative to their taxable counterparts. This type of situation normally attracts non-traditional buyers of municipal securities, which in turn creates supply and demand imbalances that limit the upward movement of muni yields. Because of the Fed's rate cuts, we kept our average maturity longer than most of our peers, emphasizing fixed-rate securities. This strategy was effective, as fixed-rate securities outperformed variable rates during 2001. ECONOMIC WEAKNESS HAS PUSHED THE STATE BUDGET FROM SURPLUS TO DEFICIT. After finishing fiscal 2001 (3/30) with a $3 billion surplus, New York is seeing significant revenue shortfalls, which are estimated to wipe out the surplus and set the stage for a $3 billion dollar budget gap in fiscal 2002. Combined with election-year politics, the economic difficulties are expected to make New York's budget negotiations even more fractious for fiscal 2003. The state's credit ratings are A2, AA and AA from Moody's, Standard & Poor's and Fitch, respectively. 69 SCHWAB NEW YORK MUNICIPAL MONEY FUND PERFORMANCE AND FUND FACTS SEVEN-DAY YIELDS 1 as of 12/31/01 The seven-day yields are calculated using standard SEC formulas. The effective yields include the effect of reinvesting daily dividends during the period. Please remember that money market fund yields fluctuate, and that past performance is not an indication of future results.
VALUE SWEEP ADVANTAGE SHARES SHARES -------------------------------------------------------------------------------- Seven-Day Yield 1.06% 1.30% -------------------------------------------------------------------------------- Seven-Day Effective Yield 1.06% 1.31% -------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield 3 1.94% 2.40% --------------------------------------------------------------------------------
WEIGHTED AVERAGE MATURITY during the year Money Funds must maintain a dollar-weighted average maturity of no longer than 90 days, and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). [LINE GRAPH]
NY Municipal Money Fund 31-Dec-00 52 31-Jan-01 55 28-Feb-01 41 31-Mar-01 32 30-Apr-01 27 31-May-01 22 30-Jun-01 29 31-Jul-01 47 31-Aug-01 50 30-Sep-01 52 31-Oct-01 53 30-Nov-01 47 31-Dec-01 46
PORTFOLIO COMPOSITION 2 as of 12/31/01 All figures are shown as a percentage of the fund's investments. All of the fund's securities were in the top tier of credit quality at the time of purchase. BY STATE ---------------------------------------------------------- [PIE CHART] 1. 95.5% New York 2. 4.5% Puerto Rico
BY CREDIT QUALITY ---------------------------------------------------------- [PIE CHART] 1. 100.0% Tier 1
1 A portion of the fund's expenses was reduced during the reporting period. Without this reduction, the fund's yields would have been lower. 2 Composition of the fund's portfolio is as of 12/31/01 and is not indicative of holdings after that date. 3 Taxable-equivalent yield assumes a 2001 maximum combined federal regular income and New York state and New York City personal income tax rate of 45.49%. 70 SCHWAB NEW YORK MUNICIPAL MONEY FUND -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. The FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
1/1/01- 1/1/00- 1/1/99- 1/1/98- 1/1/97- SWEEP SHARES 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 --------------------------------------------------------------------------------------------------------- PER-SHARE DATA ($) --------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 ---------------------------------------------------------- Income from investment operations: Net investment income 0.02 0.03 0.03 0.03 0.03 ---------------------------------------------------------- Less distributions: Dividends from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) ---------------------------------------------------------- Net asset value at end of period 1.00 1.00 1.00 1.00 1.00 ========================================================== Total return (%) 2.06 3.39 2.59 2.78 2.96 RATIOS/SUPPLEMENTAL DATA (%) --------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.69 0.69 1 0.69 0.69 0.69 1 Expense reductions reflected in above ratio 0.17 0.18 0.22 0.28 0.33 Ratio of net investment income to average net assets 2.04 3.35 2.57 2.73 2.93 Net assets, end of period ($ x 1,000,000) 889 798 604 468 357
1 Would have been 0.70% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which are integral to this information. 71 SCHWAB NEW YORK MUNICIPAL MONEY FUND -- FINANCIALS
1/1/01- 1/1/00- 1/1/99- 1/1/98- 1/1/97- VALUE ADVANTAGE SHARES 12/31/01 12/31/00 12/31/99 12/31/98 12/31/97 --------------------------------------------------------------------------------------------------------- PER-SHARE DATA ($) -------------------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 1.00 --------------------------------------------------------- Income from investment operations: Net investment income 0.02 0.04 0.03 0.03 0.03 --------------------------------------------------------- Less distributions: Dividends from net investment income (0.02) (0.04) (0.03) (0.03) (0.03) --------------------------------------------------------- Net asset value at end of period 1.00 1.00 1.00 1.00 1.00 ========================================================= Total return (%) 2.30 3.64 2.83 3.03 3.21 RATIOS/SUPPLEMENTAL DATA (%) -------------------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.45 0.45 1 0.45 0.45 0.45 1 Expense reductions reflected in above ratio 0.19 0.22 0.26 0.33 0.40 Ratio of net investment income to average net assets 2.23 3.59 2.81 2.96 3.18 Net assets, end of period ($ x 1,000,000) 604 419 296 238 126
1 Would have been 0.46% if certain non-routine expenses (proxy fees) had been included. See the Financial Notes, which are integral to this information. 72 PORTFOLIO HOLDINGS As of December 31, 2001. This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics: + Credit-enhanced security o Illiquid restricted security / Variable-rate security For fixed-rate obligations, the rate shown is the effective yield at the time of purchase. For variable-rate obligations, the rate shown is the rate as of the report date. For variable-rate obligations with scheduled maturities greater than 397 days, the maturity shown is the later of the next interest rate change date or demand date. For variable-rate obligations with scheduled maturities less than 397 days, the maturity shown is the earlier of the next interest rate change date or demand date. For variable-rate obligations without demand features, the maturity shown is the next interest rate change date. The pie chart below shows the fund's major categories and the market value and cost of the securities in each category. For definitions of abbreviations and acronyms used in security descriptions, see "portfolio terms" in the glossary (in "How to Read This Report"). ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 100.0% MUNICIPAL SECURITIES Market Value: $1,485,399 Cost: $1,485,399 --------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $1,485,399 Cost: $1,485,399
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) MUNICIPAL SECURITIES 100.0% of investments NEW YORK 95.5% +/ ALBANY, NEW YORK IDA IDRB (Newkirk Products Project) Series 1995A 1.70%, 01/07/02 1,000 1,000 IDRB (United Cerebral Palsy Project) Series B 1.60%, 01/07/02 11,455 11,455 CENTRAL ISLIP, NEW YORK UNIFIED FREE SCHOOL DISTRICT TAN 2.68%, 06/28/02 27,000 27,073 +/ CHAUTAQUA COUNTY, NEW YORK IDA Civic Facilities RB (Jamestown Center City Development Project) Series 2000A 1.65%, 01/07/02 3,950 3,950 +/ CHENANGO COUNTY, NEW YORK IDA IDRB (Baille Lumber Project) Series 2000A 1.90%, 01/07/02 5,551 5,551 CONNETQUOT, NEW YORK CENTRAL SCHOOL DISTRICT OF ISLIP TAN 2.65%, 06/28/02 21,000 21,053 +/ DUTCHESS COUNTY, NEW YORK IDA IDRB (Mechtroncis Corp. Project) Series 1998 1.65%, 01/07/02 3,325 3,325 IDRB (Trinity Pawling School Corp. Project) 1.65%, 01/07/02 3,300 3,300 EAST MEADOW, NEW YORK UNION FREE SCHOOL DISTRICT BAN 2.54%, 08/23/02 13,000 13,047 +/ HERKIMER COUNTY, NEW YORK IDA Civic Facilities RB (Templeton Foundation Project) 1.85%, 01/07/02 2,200 2,200 +/ ISLIP, NEW YORK IDA IDRB (Magnum Reality Creative Bath Products Project) 1.65%, 01/07/02 640 640 +/ JAY STREET DEVELOPMENT CORP., NEW YORK Lease RB (Jay Street Project) Series A-1 1.45%, 01/07/02 13,300 13,300
See the Financial Notes, which are integral to this information. 73 SCHWAB NEW YORK MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) LONG ISLAND, NEW YORK POWER AUTHORITY +/ Electric System RB Subseries 2A 1.45%, 01/07/02 14,400 14,400 +/ Electric System RB Subseries 2B 1.80%, 01/01/02 700 700 +/ Electric System RB Subseries 3A 1.50%, 01/07/02 13,000 13,000 +/ Electric System RB Subseries 3B 1.80%, 01/07/02 8,800 8,800 +/ Electric System RB Subseries 7B 1.45%, 01/07/02 5,000 5,000 +/ Electric System RB TOB Series 1998A 1.49%, 01/07/02 1,900 1,900 +/ Electric System RB TOBP (PA 824) 1.51%, 01/07/02 4,365 4,365 +/ Electric System RB TOBP (PA-522) 1.51%, 01/07/02 21,000 21,000 +/ Electric System RB TOBP (PA-565) 1.51%, 01/07/02 10,000 10,000 +/ Electric System Sub Lein RB Subseries 2C 1.80%, 01/01/02 3,500 3,500 TECP 1.70%, 01/07/02 12,000 12,000 METROPOLITAN, NEW YORK TRANSPORTATION AUTHORITY TECP 1.50%, 03/05/02 15,000 15,000 +/ MONROE COUNTY, NEW YORK IDRB (ENBI Corp. Lease Rent Project) Series 1988 1.50%, 01/07/02 2,000 2,000 NASSAU COUNTY, NEW YORK GO Series A 2.60%, 01/01/02 2,250 2,250 2.70%, 07/01/02 4,895 4,950 NASSAU COUNTY, NEW YORK INTERIM FINANCE AUTHORITY BAN Series 2001B-2 1.55%, 09/12/02 25,000 25,163 BAN Series A-1 2.50%, 03/14/02 16,015 16,054 2.50%, 04/11/02 19,000 19,064 +/ NEW YORK CITY, NEW YORK GO Series 1992D 1.55%, 01/07/02 4,300 4,300 GO Subseries 1994H-2 1.80%, 01/01/02 1,800 1,800 GO Subseries A-6 1.80%, 01/01/02 5,000 5,000 GO Subseries A-8 1.40%, 01/07/02 5,000 5,000 GO Subseries B-4 1.90%, 01/01/02 1,000 1,000 GO Subseries H-2 1.80%, 01/01/02 8,000 8,000 GO Subseries H-3 1.80%, 01/01/02 9,000 9,000 GO TOB (CoreStates Merlot Program Project) Series 1997C 1.64%, 01/07/02 26,000 26,000 GO TOB Series 394 1.55%, 01/07/02 6,920 6,920 GO TOB Series F 1.61%, 01/07/02 3,395 3,395 M/F Rental Housing RB (Tribeca Tower Project) Series 1997A 1.50%, 01/07/02 9,600 9,600 +/ NEW YORK CITY, NEW YORK HEALTH & HOSPITAL CORP. RB TOBP (PA-555) 1.46%, 01/07/02 17,620 17,620 +/ NEW YORK CITY, NEW YORK HOUSING DEVELOPMENT CORP. M/F Housing RB (100 Jane Street Development Project) Series A 1.55%, 01/07/02 6,525 6,525 M/F Housing RB (15th Street Development Project) (Bayerische Hypotheken E41) 1.55%, 01/07/02 39,000 39,000 M/F Housing RB (One Columbus Project) Series A 1.55%, 01/07/02 20,700 20,700 M/F Rental Housing RB (Lyric Development Project) Series 2001A 1.55%, 01/07/02 2,000 2,000 +/ NEW YORK CITY, NEW YORK IDA Civic Facility RB (Jewish Board of Family Services Project) 1.55%, 01/07/02 15,820 15,820 RB TOBP (PT-459) 1.51%, 01/07/02 4,265 4,265 Special Facility RB (Korean Airlines Co. Project) Series 1997A 1.60%, 01/07/02 7,400 7,400
See the Financial Notes, which are integral to this information. 74
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ NEW YORK CITY, NEW YORK MUNICIPAL FINANCING AUTHORITY Water & Sewer System RB TOB 1.46%, 01/07/02 4,995 4,995 +/ NEW YORK CITY, NEW YORK MUNICIPAL ACCEPTANCE CORP. TOB / (Merrill Lynch Capital Services Liquidity & Merrill Lynch & Co. Guarantee) 1.51%, 01/07/02 23,445 23,445 NEW YORK CITY, NEW YORK MUNICIPAL WATER FINANCE AUTHORITY RB 1.50%, 06/15/02 2,000 2,064 + TECP 2.25%, 01/03/02 7,400 7,400 1.40%, 01/08/02 14,600 14,600 2.00%, 01/10/02 5,000 5,000 +/ Water & Sewer System RB Series 1995A 1.80%, 01/01/02 1,600 1,600 +/ Water & Sewer System Revenue TOBP (PA-492) 1.46%, 01/07/02 3,250 3,250 +/ Water & Sewer System Revenue TOBP (PA-523) Series 1999B 1.46%, 01/07/02 18,235 18,235 +/ Water & Sewer System Revenue TOBP (PA-838) 1.54%, 01/07/02 4,995 4,995 + NEW YORK CITY, NEW YORK TRANSIT CULTURAL RESOURCE / RB (American Museum of Natural History Project) Series 1993A 1.40%, 01/07/02 5,475 5,475 RB (American Museum of Natural History Project) Series 1999B 2.60%, 07/01/02 8,000 8,000 NEW YORK CITY, NEW YORK TRANSITIONAL FINANCE AUTHORITY BAN (New York City Recovery Notes) Series 2001A 2.06%, 10/02/02 20,000 20,174 BAN (New York City Recovery Notes) Series 2001A 2.13%, 10/02/02 20,000 20,165 +/ RB (Future Tax Secured Project) Series 2001B 1.80%, 01/01/02 1,300 1,300 o RB TOBP (PA-917) 2.15%, 05/01/02 14,545 14,545 +/ TOB 1.49%, 01/07/02 22,720 22,720 +/ TOB Series 283 1.46%, 01/07/02 3,700 3,700 + NEW YORK LOCAL GOVERNMENT ASSISTANCE CORP. o TOB Series 2000-23 2.00%, 03/27/02 20,965 20,965 / TOB Series 468X 1.51%, 01/07/02 9,995 9,995 +/ NEW YORK STATE Environmental Pollution Control RB TOB Series 1994D 1.49%, 01/07/02 17,050 17,050 + NEW YORK STATE DORMITORY AUTHORITY / Lease RB TOB Series 493 1.46%, 01/07/02 2,180 2,180 / RB (New York Foundling Charitable Corp. Project) 1.40%, 01/07/02 4,760 4,760 / RB Series 1989D 1.55%, 01/07/02 5,000 5,000 o RB TOB Series 2000-15 2.65%, 02/14/02 47,030 47,030 / RB TOB Series 2001D 1.54%, 01/07/02 2,900 2,900 / TOB 1.49%, 01/07/02 12,375 12,375 +/ NEW YORK STATE ENERGY RESEARCH & DEVELOPMENT AUTHORITY Facility RB (Con Edison Co. Project) Subseries A-1 1.50%, 01/07/02 5,000 5,000 Facility RB (Con Edison Co. Project) Subseries A-2 1.45%, 01/07/02 5,000 5,000 Facility RB (Con Edison Co. Project) Subseries A-3 1.65%, 01/07/02 4,000 4,000 Gas Facilities RB TOB Series 379 1.46%, 01/07/02 14,125 14,125 Pollution Control RB (New York State Electric & Gas Corporation Project) Series 1994D 1.80%, 01/07/02 2,300 2,300
See the Financial Notes, which are integral to this information. 75 SCHWAB NEW YORK MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) Pollution Control RB (Niagara Mohawk Power Project) Series A 1.90%, 01/01/02 1,300 1,300 TOB (Eagle Trust) Series 1994A 1.49%, 01/07/02 14,850 14,850 NEW YORK STATE ENVIRONMENTAL TECP 1.30%, 02/06/02 44,000 44,000 +/ NEW YORK STATE HFA Housing RB (345 East 94th Street Housing Project) 1.45%, 01/07/02 3,800 3,800 Housing RB (345 East 94th Street Housing Project) 1.45%, 01/07/02 18,400 18,400 Housing RB (East 84th Street Project) Series 1995A 1.50%, 01/07/02 1,500 1,500 Housing RB (Union Square South Housing Project) 1.50%, 01/07/02 15,400 15,400 Housing RB (Worth Street Housing Project) Series A 1.55%, 01/07/02 10,000 10,000 M/F Housing RB Series 1999A 1.55%, 01/07/02 17,500 17,500 RB (101 West End Ave) Series A 1.55%, 01/07/02 14,400 14,400 RB (150 East 44th Street Project) Series 2000A 1.55%, 01/07/02 51,000 51,000 RB (70 Battery Place Project) Series 1999A 1.70%, 01/07/02 8,500 8,500 RB (Chelsea Arms Housing Project) Series 1998A 1.55%, 01/07/02 18,000 18,000 RB (Tribeca Landing) Series 1997A 1.50%, 01/07/02 4,500 4,500 RB (Tribeca Landing) Series 1997A 1.55%, 01/07/02 13,000 13,000 RB (West 20th Street Project) Series 2001A 1.47%, 01/07/02 30,600 30,600 RB (West 38th Street Project) Series 2001A 1.45%, 01/07/02 5,200 5,200 RB Series 1997A 1.50%, 01/07/02 27,900 27,900 Service Contract Obligation RB Series 2001A 1.45%, 01/07/02 5,000 5,000 +/ NEW YORK STATE LOCAL GOVERNMENT ASSISTANCE CORP. RB Series 1994B 1.40%, 01/07/02 2,500 2,500 RB Series 1995D 1.50%, 01/07/02 7,900 7,900 RB Series 1995F 1.40%, 01/07/02 1,500 1,500 RB Series 1995G 1.40%, 01/07/02 11,350 11,350 TOB 1.49%, 01/07/02 9,900 9,900 +/ NEW YORK STATE MEDICAL CARE FACILITIES FINANCING AGENCY RB (Pooled Equipment Loan Program 1) 1.45%, 01/07/02 5,100 5,100 +/ NEW YORK STATE MEDICAL CARE FACILITY TOBP (PT-154) 1.46%, 01/07/02 3,175 3,175 + NEW YORK STATE MORTGAGE AGENCY / RB TOB (Homeowners Mortgage) Series 77-A 1.54%, 01/07/02 11,860 11,860 / RB TOB Series B3 1.29%, 01/07/02 4,800 4,800 o RB TOBP (PA-153C) 2.75%, 02/21/02 4,640 4,640 o RB TOBP (PA-627R) 2.75%, 02/21/02 13,995 13,995 o RB TOBP (PA-628R) 2.75%, 02/14/02 5,335 5,335 / RB TOBP (PA-907) 1.51%, 01/07/02 5,495 5,495 / RB TOBP (PT-260) 1.51%, 01/07/02 8,115 8,115 / TOB Series 1999F 1.54%, 01/07/02 24,795 24,795 NEW YORK STATE POWER AUTHORITY Revenue & General Purpose Refunding Bond Series 1991Z 4.14%, 01/01/02 5,000 5,100 TECP 1.30%, 02/06/02 12,500 12,500 +/ NEW YORK STATE THRUWAY AUTHORITY General Revenue TOB Series 456 1.44%, 01/07/02 6,995 6,995
See the Financial Notes, which are integral to this information. 76
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ NEW YORK STATE TRIBOROUGH BRIDGE & TUNNEL AUTHORITY RB Series 1999C 1.45%, 01/07/02 14,750 14,750 Special Obligation RB Series C 1.40%, 01/07/02 13,900 13,900 NEW YORK STATE URBAN DEVELOPMENT CORP. Correctional Capital Facilities RB Series 3 1.90%, 01/01/02 5,000 5,100 +/ NIAGARA COUNTY, NEW YORK IDRB (Allegheny Ludlum Steel Co. Project) Series 1984 1.60%, 01/07/02 10,000 10,000 +/ PORT AUTHORITY OF NEW YORK & NEW JERSEY TOB Series 153 1.55%, 01/07/02 200 200 +/ POUGHKEEPSIE, NEW YORK IDA IDRB (Eastman & Bixby Project) Series 2000B 1.55%, 01/07/02 3,000 3,000 SACHEM, NEW YORK CENTRAL SCHOOL DISTRICT OF HOLBROOK TAN 2.65%, 06/27/02 23,500 23,558 +/ SCHENECTADY, NEW YORK IDRB (Fortitech Holding Corp. Project) Series 1995A 1.70%, 01/07/02 1,000 1,000 SUFFOLK COUNTY, NEW YORK TAN 2.12%, 09/10/02 25,000 25,149 TRIBOROUGH, NEW YORK BRIDGE & TUNNEL AUTHORITY +/ General Purpose RB Series 2001B 1.40%, 01/07/02 25,000 25,000 General Purpose Revenue BAN 2001A 2.90%, 01/17/02 5,000 5,004 3.20%, 01/17/02 5,000 5,004 +/ Special Obligation Refunding Bond Series 2000A 1.50%, 01/07/02 2,000 2,000 WEST BABYLON, NEW YORK UNION FREE SCHOOL DISTRICT TAN 2.65%, 06/27/02 6,000 6,013 +/ WESTCHESTER COUNTY, NEW YORK IDA IDRB (Levister Redevelopment Co., LLC) Series A 1.55%, 01/07/02 7,000 7,000 IDRB (Levister Redevelopment Co., LLC) Series B 1.55%, 01/07/02 6,000 6,000 +/ YONKERS, NEW YORK CIVIC FACILITIES IDRB (Consumers Union Facility Project) Series 1989 1.50%, 01/07/02 1,300 1,300 IDRB (Consumers Union Facility Project) Series 1991 1.50%, 01/07/02 700 700 IDRB (Consumers Union Facility Project) Series 1994 1.50%, 01/07/02 1,740 1,740 ---------- 1,419,051 PUERTO RICO 4.5% GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO TECP 1.70%, 01/24/02 23,800 23,800 1.35%, 02/20/02 10,000 10,000 1.30%, 04/08/02 11,000 11,000 + PUERTO RICO COMMONWEALTH GO 1.50%, 07/01/02 10,660 11,048 / Public Improvement TOB Series 3 1.41%, 01/07/02 600 600 +o PUERTO RICO HOUSING FINANCE CORP RB TOB Series J 1.90%, 04/18/02 9,900 9,900 ---------- 66,348
-------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which are integral to this information. 77 SCHWAB NEW YORK MUNICIPAL MONEY FUND -- FINANCIALS Statement of ASSETS AND LIABILITIES As of December 31, 2001. All numbers x 1,000 except NAV. ASSETS ------------------------------------------------------------------------------- Investments, at market value $1,485,399 a Cash 464 Receivables: Fund shares sold 1,333 Interest 6,968 Prepaid expenses + 19 ------------- TOTAL ASSETS 1,494,183 LIABILITIES ------------------------------------------------------------------------------- Payables: Fund shares redeemed 1,317 Dividends to shareholders 91 Investment adviser and administrator fees 25 Transfer agent and shareholder service fees 43 Accrued expenses + 98 ------------- TOTAL LIABILITIES 1,574 NET ASSETS ------------------------------------------------------------------------------ TOTAL ASSETS 1,494,183 TOTAL LIABILITIES - 1,574 ------------- NET ASSETS $1,492,609 NET ASSETS BY SOURCE Capital received from investors 1,492,924 Net realized capital losses (315)
NET ASSETS BY SHARE CLASS
SHARES SHARE CLASS NET ASSETS / OUTSTANDING = NAV Sweep Shares $888,861 889,124 $1.00 Value Advantage Shares $603,748 603,863 $1.00
a Includes illiquid restricted securities worth $116,410, or 7.84% of the fund's investments. The amortized cost for the fund's securities was $1,485,399. During the reporting period, the fund had $713,052 in transactions with other SchwabFunds.(R) FEDERAL TAX DATA ------------------------------------------------------------------------------- COST BASIS OF PORTFOLIO $1,485,411 UNUSED CAPITAL LOSSES: Expires 12/31 of: Loss amount: 2003 $6 2004 9 2006 6 2007 53 2008 186 2009 + 43 ------------- $303
See the Financial Notes, which are integral to this information. 78 Statement of OPERATIONS For January 1, 2001 through December 31, 2001. All numbers x 1,000. INVESTMENT INCOME ------------------------------------------------------------------------------- Interest $37,974 NET REALIZED LOSSES ------------------------------------------------------------------------------- Net realized losses on investments sold (54) EXPENSES ------------------------------------------------------------------------------- Investment adviser and administrator fees 5,207 a Transfer agent and shareholder service fees: Sweep Shares 3,821 b Value Advantage Shares 1,279 b Trustees' fees 28 c Custodian and portfolio accounting fees 267 Professional fees 31 Registration fees 116 Shareholder reports 66 Other expenses + 12 ----------- Total expenses 10,827 Expense reduction - 2,480 d ----------- NET EXPENSES 8,347 INCREASE IN NET ASSETS FROM OPERATIONS ------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 37,974 NET EXPENSES - 8,347 ----------- NET INVESTMENT INCOME 29,627 NET REALIZED LOSSES + (54) ----------- INCREASE IN NET ASSETS FROM OPERATIONS $29,573
a Calculated on a graduated basis as a percentage of average daily net assets: 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion, 0.30% over $20 billion and 0.27% over $40 billion. Prior to June 1, 2001, these percentages were 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion and 0.30% over $20 billion. b Calculated as a percentage of average daily net assets as follows: TRANSFER AGENT SERVICES:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS ----------------------------------------- Sweep Shares 0.25 Value Advantage Shares 0.05
SHAREHOLDER SERVICES:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS ----------------------------------------- Sweep Shares 0.20 Value Advantage Shares 0.17
Prior to June 1, 2001, the shareholder services fee for Value Advantage Shares was 0.20%. c For the fund's independent trustees only. d Includes $2,363 from the investment adviser (CSIM) and $117 from the transfer agent and shareholder service agent (Schwab). These reductions reflect a guarantee by CSIM and Schwab to limit the operating expenses of this fund through at least April 30, 2002, as follows:
% OF AVERAGE SHARE CLASS DAILY NET ASSETS ----------------------------------------- Sweep Shares 0.69 Value Advantage Shares 0.45
This limit doesn't include interest, taxes and certain non-routine expenses. See the Financial Notes, which are integral to this information. 79 SCHWAB NEW YORK MUNICIPAL MONEY FUND -- FINANCIALS Statements of CHANGES IN NET ASSETS For the current and prior reporting periods. All numbers x 1,000.
OPERATIONS ------------------------------------------------------------------------------- 1/1/01-12/31/01 1/1/00-12/31/00 Net investment income $ 29,627 $ 35,802 Net realized losses + (54) (187) -------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 29,573 35,615 DISTRIBUTIONS PAID ------------------------------------------------------------------------------- DIVIDENDS FROM NET INVESTMENT INCOME Sweep Shares 17,301 23,446 Value Advantage Shares + 12,326 12,356 -------------------------------- TOTAL DIVIDENDS FROM NET INVESTMENT INCOME 29,627 35,802 TRANSACTIONS IN FUND SHARES a ------------------------------------------------------------------------------- SHARES SOLD Sweep Shares 2,857,059 3,321,113 Value Advantage Shares + 720,805 555,726 -------------------------------- TOTAL SHARES SOLD 3,577,864 3,876,839 SHARES REINVESTED Sweep Shares 16,899 22,830 Value Advantage Shares + 11,690 11,614 -------------------------------- TOTAL SHARES REINVESTED 28,589 34,444 SHARES REDEEMED Sweep Shares 2,782,798 3,150,196 Value Advantage Shares + 547,669 444,187 -------------------------------- TOTAL SHARES REDEEMED 3,330,467 3,594,383 NET INCREASE 275,986 316,900 b NET ASSETS ------------------------------------------------------------------------------- Beginning of period 1,216,677 899,964 Total increase + 275,932 316,713 c -------------------------------- END OF PERIOD $1,492,609 $1,216,677
a Because all transactions in this section took place at $1.00 a share, figures for share quantities are the same as for dollars. b Represents shares sold plus shares reinvested, minus shares redeemed. c Represents the changes in net assets from operations plus the changes in value of transactions in fund shares, minus distributions paid. See the Financial Notes, which are integral to this information. 80 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND [PHOTO OF KEVIN SHAUGHNESSY] "The national economic downturn and the aftereffects of September 11 have been damaging. Further shortfalls will need to be addressed either through spending cuts or new revenue sources." Portfolio Manager Kevin Shaughnessy KEVIN SHAUGHNESSY, a portfolio manager, is responsible for the day-to-day management of the fund. Prior to joining the firm in 2000, he worked for more than ten years in fixed income portfolio management. TICKER SYMBOL SWJXX -------------------------------------------------------------------------------- The fund seeks the highest current income that is consistent with stability of capital and liquidity, and is exempt from federal and New Jersey personal income tax. -------------------------------------------------------------------------------- THIS FUND MAY BE APPROPRIATE FOR NEW JERSEY TAXPAYERS, ESPECIALLY THOSE IN HIGHER TAX BRACKETS WHO ARE SEEKING DOUBLE TAX-EXEMPT INCOME. MANAGER'S PERSPECTIVE SHORT-TERM INTEREST RATES DECLINED SHARPLY AND STEADILY THROUGHOUT 2001, PACED BY THE FED'S RATE CUTS. The Fed's 11 interest rate cuts, which began in January and continued into December, left the Federal Funds Rate at 1.75%, its lowest level in more than 40 years. These cuts had the direct effect of reducing yields for money fund investors, taxable and tax-exempt alike. FALLING INTEREST RATES HELPED SPUR THE ISSUANCE OF SHORT-TERM MUNI SECURITIES. The increased supply kept muni prices low (and yields high) relative to their taxable counterparts. This type of situation normally attracts non-traditional buyers of municipal securities, which in turn creates supply and demand imbalances that limit the upward movement of muni yields. Because of the Fed's rate cuts, we kept our average maturity longer than most of our peers, emphasizing fixed-rate securities. This strategy was effective, as fixed-rate securities outperformed variable rates during 2001. NEW JERSEY ENDED FISCAL 2001 (6/30) WITH A $1.2 BILLION SURPLUS, BUT FACES A $1.3 BILLION SHORTFALL IN FISCAL 2002. Last year's surplus will nearly cover the current shortfall, but fiscal discipline will be needed going forward. Still, we anticipate the state will successfully close any shortfalls in fiscal 2002 and will deliver a balanced budget for fiscal 2003. The state's ratings are Aa1 (negative outlook), AA+ (rating watch negative) and AA+ from Moody's, Standard & Poor's and Fitch, respectively. 81 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND PERFORMANCE AND FUND FACTS SEVEN-DAY YIELDS 1 as of 12/31/01 The seven-day yields are calculated using standard SEC formulas. The effective yields include the effect of reinvesting daily dividends during the period. Please remember that money market fund yields fluctuate, and that past performance is not an indication of future results. -------------------------------------------------------------------------------- Seven-Day Yield 1.04% -------------------------------------------------------------------------------- Seven-Day Effective Yield 1.05% -------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield 3 1.84% --------------------------------------------------------------------------------
WEIGHTED AVERAGE MATURITY during the year Money Funds must maintain a dollar-weighted average maturity of no longer than 90 days, and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). [LINE GRAPH] 31-Dec-00 71 31-Jan-01 60 28-Feb-01 48 31-Mar-01 44 30-Apr-01 36 31-May-01 24 30-Jun-01 41 31-Jul-01 56 31-Aug-01 66 30-Sep-01 57 31-Oct-01 57 30-Nov-01 46 31-Dec-01 45
PORTFOLIO COMPOSITION 2 as of 12/31/01 All figures are shown as a percentage of the fund's investments. All of the fund's securities were in the top tier of credit quality at the time of purchase. BY STATE --------------------------------------------------------- [PIE CHART] 1. 91.3% New Jersey 2. 4.4% Pennsylvania 3. 3.2% Puerto Rico 4. 1.1% Delaware
BY CREDIT QUALITY --------------------------------------------------------- [PIE CHART] 1. 100.0% Tier 1
1 A portion of the fund's expenses was reduced during the reporting period. Without this reduction, the fund's yields would have been lower. 2 Composition of the fund's portfolio is as of 12/31/01 and is not indicative of holdings after that date. 3 Taxable-equivalent yield assumes a 2001 maximum combined federal regular income and New Jersey state personal income tax rate of 42.98%. 82 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. The FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
1/1/01- 1/1/00- 1/1/99- 2/2/98 4- 12/31/01 12/31/00 12/31/99 12/31/98 --------------------------------------------------------------------------------------------- PER-SHARE DATA ($) --------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 ---------------------------------------------- Income from investment operations: Net investment income 0.02 0.03 0.03 0.03 ---------------------------------------------- Less distributions: Dividends from net investment income (0.02) (0.03) (0.03) (0.03) ---------------------------------------------- Net asset value at end of period 1.00 1.00 1.00 1.00 ============================================== Total return (%) 2.13 3.38 2.58 2.60 2 RATIOS/SUPPLEMENTAL DATA (%) --------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.65 0.65 3 0.65 0.65 1 Expense reductions reflected in above ratio 0.25 0.27 0.29 0.48 1 Ratio of net investment income to average net assets 2.08 3.35 2.60 2.75 1 Net assets, end of period ($ x 1,000,000) 382 321 206 98
1 Annualized. 2 Not annualized. 3 Would have been 0.66% if certain non-routine expenses (proxy fees) had been included. 4 Commencement of operations. See the Financial Notes, which are integral to this information. 83 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS As of December 31, 2001. This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics: + Credit-enhanced security o Illiquid restricted security / Variable-rate security For fixed-rate obligations, the rate shown is the effective yield at the time of purchase. For variable-rate obligations, the rate shown is the rate as of the report date. For variable-rate obligations with scheduled maturities greater than 397 days, the maturity shown is the later of the next interest rate change date or demand date. For variable-rate obligations with scheduled maturities less than 397 days, the maturity shown is the earlier of the next interest rate change date or demand date. For variable-rate obligations without demand features, the maturity shown is the next interest rate change date. The pie chart below shows the fund's major categories and the market value and cost of the securities in each category. For definitions of abbreviations and acronyms used in security descriptions, see "portfolio terms" in the glossary (in "How to Read This Report"). ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 100.0% MUNICIPAL SECURITIES Market Value: $380,176 Cost: $380,176 ------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $380,176 Cost: $380,176
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) MUNICIPAL SECURITIES 100.0% of investments DELAWARE 1.1% +/ DELAWARE RIVER & BAY AUTHORITY RB Series B 1.40%, 01/07/02 4,200 4,200 NEW JERSEY 91.3% BERGEN COUNTY, NEW JERSEY General Improvement GO 2.57%, 07/15/02 1,800 1,813 Special Services GO (Vocational School Project) 2.57%, 07/15/02 400 403 EAST BRUNSWICK TOWNSHIP, NEW JERSEY BAN 4.20%, 01/04/02 4,368 4,368 2.65%, 07/26/02 7,000 7,023 + ESSEX COUNTY, NEW JERSEY General Improvement GO 2.56%, 06/01/02 3,150 3,171 +/ ESSEX COUNTY, NEW JERSEY IMPROVEMENT AUTHORITY Lease Revenue TOBP (PA-648) 1.48%, 01/07/02 5,995 5,995 +/ ESSEX COUNTY, NEW JERSEY PUBLIC IMPROVEMENT AUTHORITY RB (County Asset Sale Project) Series 1995 1.50%, 01/07/02 1,000 1,000 MONMOUTH COUNTY, NEW JERSEY General Improvement GO 2.60%, 07/15/02 1,055 1,063 MONMOUTH COUNTY, NEW JERSEY COUNTY COLLEGE GO 2.60%, 07/15/02 600 604 +/ MONMOUTH COUNTY, NEW JERSEY IMPROVEMENT AUTHORITY RB (Pooled Government Loan Program) 1.40%, 01/07/02 6,000 6,000 NEW BRUNSWICK, NEW JERSEY BAN 2.63%, 08/21/02 10,000 10,038 NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY + Market Transition Facility RB Series 1994A 2.70%, 07/01/02 1,120 1,135
See the Financial Notes, which are integral to this information. 84
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) + Municipal Loan Pool RB 2.25%, 09/15/02 900 908 +/ Natural Gas Facilities RB (New Jersey Natural Gas Co.) Series 1998C 1.40%, 01/07/02 2,600 2,600 +/ Natural Gas Facilities RB TOB (Nui Corp. Project) Series 161 1.56%, 01/07/02 1,525 1,525 +/ Natural Gas Facilities RB TOB Series 371 1.53%, 01/07/02 3,000 3,000 +/ Natural Gas Facilities Revenue Refunding Bond (New Jersey Natural Gas Co.) Series 1998B 1.40%, 01/07/02 1,400 1,400 +/ RB (500 International Partners Project) 1.50%, 01/07/02 5,800 5,800 +/ RB (Catholic Community Services Project) 1.40%, 01/07/02 4,725 4,725 +/ RB (Geriatric Services Housing Corp. Project) 1.40%, 01/07/02 7,735 7,735 +/ RB (Graphic Management, Inc. Project) 1.40%, 01/07/02 5,675 5,675 +/ RB (Hamilton Industrial Development Project) Series 1998 1.55%, 01/07/02 6,480 6,480 +/ RB (Jewish Home Rockleigh Project) Series 1998A 1.55%, 01/07/02 5,000 5,000 +/ RB (Job Haines Home Project) 1.50%, 01/07/02 3,900 3,900 +/ RB (St. James Prep & Social Service Project) Series 1998 1.45%, 01/07/02 3,240 3,240 +/ RB (Stone Brothers Secaucus Project) 1.71%, 01/07/02 1,860 1,860 +/ RB (Toys R Us, Inc. Project) Series 1984 2.10%, 01/30/02 3,000 3,000 +/ RB (Wechsler Coffee Corp. Project) Series 1998 1.60%, 01/07/02 1,175 1,175 +/ Revenue Refunding Bond (Airis Newark, LLC Project) 1.45%, 01/07/02 1,500 1,500 +/ Revenue Refunding Bond (Stolthaven Project) Series 1998A 1.90%, 01/01/02 200 200 School Facilities RB Series 2001A 2.09%, 06/15/02 2,475 2,496 TECP 1.90%, 01/08/02 5,300 5,300 1.90%, 01/11/02 3,000 3,000 1.65%, 01/18/02 10,000 10,000 +/ Thermal Energy Facilities RB (Thermal Energy, Ltd. Partnership I Project) Series 1997 1.65%, 01/07/02 4,600 4,600 +/ NEW JERSEY HEALTH CARE FACILITIES FINANCING AUTHORITY RB (Hackettstown Community Hospital Project) 1.50%, 01/07/02 6,900 6,900 RB (Hospital Capital Asset Financing Project) Series 1985D 1.30%, 01/07/02 1,500 1,500 RB (Princeton Medical Center Project) Series 1999A-3 1.70%, 01/07/02 3,100 3,100 RB Series 2001A 1.40%, 01/07/02 7,700 7,700 RB Series 2001A1 1.40%, 01/07/02 4,000 4,000 RB Series 2001A3 1.40%, 01/07/02 4,000 4,000 RB TOBP (PA-504) 1.48%, 01/07/02 3,400 3,400 Revenue Refunding Bond (Christian Health Project) Series 1998B 1.46%, 01/07/02 6,300 6,300 +/ NEW JERSEY SPORTS & EXPOSITION AUTHORITY RB Series 1992C 1.30%, 01/07/02 5,000 5,000 NEW JERSEY STATE GO Series 1992D 5.30%, 02/15/02 1,000 1,003 TECP 1.40%, 03/06/02 18,500 18,500 1.30%, 03/11/02 15,000 15,000 +/ TOB Series 316 1.51%, 01/07/02 6,000 6,000 TRAN Series 2001C 2.00%, 06/14/02 10,000 10,045
See the Financial Notes, which are integral to this information. 85 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) + NEW JERSEY STATE EDUCATIONAL FACILITIES AUTHORITY / RB (Caldwell College) Series 2000B 1.40%, 01/07/02 2,300 2,300 RB (Seton Hall University Project) Series 2001A 2.56%, 07/01/02 2,245 2,261 + NEW JERSEY STATE HIGHER EDUCATION ASSISTANCE AUTHORITY Student Loan RB Series 1999B 2.80%, 06/03/02 4,000 4,000 +/ NEW JERSEY STATE HOUSING & MORTGAGE FINANCE AGENCY RB TOBP (PT-285) 1.52%, 01/07/02 16,880 16,880 RB TOBP (PT-287) 1.95%, 01/07/02 4,125 4,125 +/ NEW JERSEY STATE TRANSPORTATION CORP TOB Series 148 1.51%, 01/07/02 4,100 4,100 + NEW JERSEY STATE TRANSPORTATION TRUST FUND AUTHORITY / TOB Series 2000C 1.61%, 01/07/02 11,495 11,495 / TOB Series 203 1.51%, 01/07/02 1,995 1,995 / TOB Series 204 1.56%, 01/07/02 2,685 2,685 Transportation System RB Series 1995B 2.70%, 06/15/02 1,000 1,010 +/ NEW JERSEY STATE TURNPIKE AUTHORITY Putters TOB Series 193 1.53%, 01/07/02 5,700 5,700 RB Series 1991D 1.40%, 01/07/02 18,400 18,400 RB TOB (Eagle Trust Project) 1.51%, 01/07/02 8,000 8,000 RB TOBP (PA-719) 1.50%, 01/07/02 5,000 5,000 +/ NORTH HUDSON, NEW JERSEY SEWAGE AUTHORITY RB Series 2001B 1.75%, 01/07/02 4,000 4,000 PORT AUTHORITY OF NEW YORK & NEW JERSEY RB 2.70%, 07/15/02 7,850 7,945 +/ Special Obligation RB TOB Series 805 1.66%, 01/07/02 2,295 2,295 TECP 2.50%, 01/17/02 1,875 1,875 2.45%, 02/08/02 5,200 5,200 +/ TOB Series 153 1.55%, 01/07/02 170 170 +o TOBP (PA-518) 3.32%, 01/07/02 6,795 6,795 +/ TRENTON, NEW JERSEY PARKING AUTHORITY Putters RB TOB Series 221 1.51%, 01/07/02 4,320 4,320 +/ UNION COUNTY, NEW JERSEY IMPROVEMENT AUTHORITY RB (Cedar Glen Housing Corp.) Series 2001A 1.50%, 01/07/02 6,500 6,500 ---------- 347,231 PENNSYLVANIA 4.4% +/ DELAWARE RIVER PORT AUTHORITY OF PENNSYLVANIA & NEW JERSEY RB TOBP (PA-606) 1.48%, 01/07/02 14,950 14,950 RB TOBP (PA-611) 1.48%, 01/07/02 1,695 1,695 ---------- 16,645 PUERTO RICO 3.2% GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO TECP 1.65%, 01/23/02 3,300 3,300 1.35%, 02/20/02 1,500 1,500 1.30%, 04/08/02 6,600 6,600 +/ PUERTO RICO COMMONWEALTH Public Improvement TOB Series 3 1.41%, 01/07/02 700 700 ---------- 12,100
-------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which are integral to this information. 86 Statement of ASSETS AND LIABILITIES As of December 31, 2001. All numbers x 1,000 except NAV. ASSETS ------------------------------------------------------------------------------- Investments, at market value $380,176 a Cash 236 Interest receivable 1,993 Prepaid expenses + 13 ------------- TOTAL ASSETS 382,418 LIABILITIES ------------------------------------------------------------------------------- Payables: Dividends to shareholders 19 Investment adviser and administrator fees 4 Transfer agent and shareholder service fees 14 Accrued expenses + 43 ------------- TOTAL LIABILITIES 80 NET ASSETS ------------------------------------------------------------------------------- TOTAL ASSETS 382,418 TOTAL LIABILITIES - 80 ------------- NET ASSETS $382,338 NET ASSETS BY SOURCE Capital received from investors 382,367 Net realized capital losses (29)
NET ASSET VALUE (NAV) SHARES NET ASSETS / OUTSTANDING = NAV $382,338 382,403 $1.00 a Includes illiquid restricted securities worth $6,795, or 1.79% of the fund's investments. The amortized cost for the fund's securities was $380,176. During the reporting period, the fund had $716,450 in transactions with other SchwabFunds.(R) FEDERAL TAX DATA --------------------------------------- COST BASIS OF PORTFOLIO $380,176 UNUSED CAPITAL LOSSES: Expires 12/31 of: Loss amount: 2007 $ 5 2008 + 24 ------------- $29
See the Financial Notes, which are integral to this information. 87 SCHWAB NEW JERSEY MUNICIPAL MONEY FUND -- FINANCIALS Statement of OPERATIONS For January 1, 2001 through December 31, 2001. All numbers x 1,000. INVESTMENT INCOME ------------------------------------------------------------------------------- Interest $9,782 NET REALIZED GAINS ------------------------------------------------------------------------------- Net realized gains on investments sold 9 EXPENSES ------------------------------------------------------------------------------- Investment adviser and administrator fees 1,360 a Transfer agent and shareholder service fees 1,610 b Trustees' fees 19 c Custodian and portfolio accounting fees 128 Professional fees 23 Registration fees 41 Shareholder reports 18 Other expenses + 6 ----------- Total expenses 3,205 Expense reduction - 879 d ----------- NET EXPENSES 2,326 INCREASE IN NET ASSETS FROM OPERATIONS ------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 9,782 NET EXPENSES - 2,326 ----------- NET INVESTMENT INCOME 7,456 NET REALIZED GAINS + 9 ----------- INCREASE IN NET ASSETS FROM OPERATIONS $7,465
a Calculated on a graduated basis as a percentage of average daily net assets: 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion, 0.30% over $20 billion and 0.27% over $40 billion. Prior to June 1, 2001, these percentages were 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion and 0.30% over $20 billion. b Calculated as a percentage of average daily net assets: for transfer agent services, 0.25% of the fund's assets; for shareholder services, 0.20% of the fund's assets. c For the fund's independent trustees only. d This reduction was made by the investment adviser (CSIM). It reflects a guarantee by CSIM and the transfer agent and shareholder service agent (Schwab) to limit the operating expenses of this fund through at least April 30, 2002 to 0.65% of average daily net assets. This limit doesn't include interest, taxes and certain non-routine expenses. See the Financial Notes, which are integral to this information. 88 Statements of CHANGES IN NET ASSETS For the current and prior reporting periods. All numbers x 1,000.
OPERATIONS ------------------------------------------------------------------------------- 1/1/01-12/31/01 1/1/00-12/31/00 Net investment income $ 7,456 $ 8,781 Net realized gains or losses + 9 (22) ----------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 7,465 8,759 DISTRIBUTIONS PAID ------------------------------------------------------------------------------- Dividends from net investment income $7,456 $8,781 TRANSACTIONS IN FUND SHARES a ------------------------------------------------------------------------------- Shares sold 1,155,713 1,223,668 Shares reinvested 7,343 8,618 Shares redeemed + (1,101,332) (1,117,762) ----------------------------------- NET INCREASE 61,724 114,524 NET ASSETS ------------------------------------------------------------------------------- Beginning of period 320,605 206,103 Total increase + 61,733 114,502 b ----------------------------------- END OF PERIOD $ 382,338 $ 320,605
a Because all transactions in this section took place at $1.00 a share, figures for share quantities are the same as for dollars. b Represents the changes in net assets from operations plus the changes in value of transactions in fund shares, minus distributions paid. See the Financial Notes, which are integral to this information. 89 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND [PHOTO OF WALTER BEVERIDGE] "The substantial "rainy day fund" built up over the years should help the state deal with the economic downturn." Portfolio Manager Walter Beveridge WALTER BEVERIDGE, a portfolio manager, has been responsible for day-to-day management of the fund since its inception in 1998. Prior to joining the firm in 1992, he worked for nearly ten years in asset management. TICKER SYMBOL SWEXX -------------------------------------------------------------------------------- The fund seeks the highest current income that is consistent with stability of capital and liquidity, and is exempt from federal and Pennsylvania personal income tax. -------------------------------------------------------------------------------- THIS FUND MAY BE APPROPRIATE FOR PENNSYLVANIA TAXPAYERS, ESPECIALLY THOSE IN HIGHER TAX BRACKETS WHO ARE SEEKING DOUBLE TAX-EXEMPT INCOME. MANAGER'S PERSPECTIVE SHORT-TERM INTEREST RATES DECLINED SHARPLY AND STEADILY THROUGHOUT 2001, PACED BY THE FED'S RATE CUTS. The Fed's 11 interest rate cuts, which began in January and continued into December, left the Federal Funds Rate at 1.75%, its lowest level in more than 40 years. These cuts had the direct effect of reducing yields for money fund investors, taxable and tax-exempt alike. FALLING INTEREST RATES HELPED SPUR THE ISSUANCE OF SHORT-TERM MUNI SECURITIES. The increased supply kept muni prices low (and yields high) relative to their taxable counterparts. This type of situation normally attracts non-traditional buyers of municipal securities, which in turn creates supply and demand imbalances that limit the upward movement of muni yields. Because of the Fed's rate cuts, we kept our average maturity longer than most of our peers, emphasizing fixed-rate securities. This strategy was effective, as fixed-rate securities outperformed variable rates during 2001. PENNSYLVANIA'S ECONOMIC PERFORMANCE HAS BEEN IN LINE WITH ITS MID-ATLANTIC NEIGHBORS OVER THE PAST DECADE. The state's above-average credit quality is based on its conservative financial management, strong financial reserves, increasing economic diversification and moderate debt levels. The current recession is projected to produce a budget shortfall of about 3% for fiscal 2002 that will likely be offset by adjustments to expenditures. Pennsylvania's ratings are Aa2, AA and AA from Moody's, Standard & Poor's and Fitch, respectively. 90 PERFORMANCE AND FUND FACTS SEVEN-DAY YIELDS 1 as of 12/31/01 The seven-day yields are calculated using standard SEC formulas. The effective yields include the effect of reinvesting daily dividends during the period. Please remember that money market fund yields fluctuate, and that past performance is not an indication of future results. ------------------------------------------------------------------------------- Seven-Day Yield 1.09% ------------------------------------------------------------------------------- Seven-Day Effective Yield 1.09% ------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield 3 1.84% -------------------------------------------------------------------------------
WEIGHTED AVERAGE MATURITY during the year Money Funds must maintain a dollar-weighted average maturity of no longer than 90 days, and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). [LINE GRAPH]
Pennsylvania Municipal Money Fund 31-Dec-00 37 31-Jan-01 30 28-Feb-01 27 31-Mar-01 24 30-Apr-01 25 31-May-01 24 30-Jun-01 27 31-Jul-01 36 31-Aug-01 29 30-Sep-01 26 31-Oct-01 18 30-Nov-01 25 31-Dec-01 27
PORTFOLIO COMPOSITION 2 as of 12/31/01 All figures are shown as a percentage of the fund's investments. All of the fund's securities were in the top tier of credit quality at the time of purchase. BY STATE [PIE CHART] 1. 100.0% Pennsylvania
BY CREDIT QUALITY [PIE CHART] 1. 100.0% Tier 1
1 A portion of the fund's expenses was reduced during the reporting period. Without this reduction, the fund's yields would have been lower. 2 Composition of the fund's portfolio is as of 12/31/01 and is not indicative of holdings after that date. 3 Taxable-equivalent yield assumes a 2001 maximum combined federal regular income and Pennsylvania state personal income tax rate of 40.81%. 91 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. The FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
1/1/01- 1/1/00- 1/1/99- 2/2/98 4- 12/31/01 12/31/00 12/31/99 12/31/98 -------------------------------------------------------------------------------------------- PER-SHARE DATA ($) -------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 --------------------------------------------- Income from investment operations: Net investment income 0.02 0.04 0.03 0.03 --------------------------------------------- Less distributions: Dividends from net investment income (0.02) (0.04) (0.03) (0.03) --------------------------------------------- Net asset value at end of period 1.00 1.00 1.00 1.00 ============================================= Total return (%) 2.20 3.57 2.71 2.72 2 RATIOS/SUPPLEMENTAL DATA (%) -------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.65 0.65 3 0.65 0.65 1 Expense reductions reflected in above ratio 0.27 0.27 0.29 0.51 1 Ratio of net investment income to average net assets 2.14 3.52 2.68 2.85 1 Net assets, end of period ($ x 1,000,000) 292 225 164 122
1 Annualized. 2 Not annualized. 3 Would have been 0.66% if certain non-routine expenses (proxy fees) had been included. 4 Commencement of operations. See the Financial Notes, which are integral to this information. 92 PORTFOLIO HOLDINGS As of December 31, 2001. This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics: + Credit-enhanced security o Illiquid restricted security / Variable-rate security For fixed-rate obligations, the rate shown is the effective yield at the time of purchase. For variable-rate obligations, the rate shown is the rate as of the report date. For variable-rate obligations with scheduled maturities greater than 397 days, the maturity shown is the later of the next interest rate change date or demand date. For variable-rate obligations with scheduled maturities less than 397 days, the maturity shown is the earlier of the next interest rate change date or demand date. For variable-rate obligations without demand features, the maturity shown is the next interest rate change date. The pie chart below shows the fund's major categories and the market value and cost of the securities in each category. For definitions of abbreviations and acronyms used in security descriptions, see "portfolio terms" in the glossary (in "How to Read This Report"). ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 100.0% MUNICIPAL SECURITIES Market Value: $290,312 Cost: $290,312 ------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $290,312 Cost: $290,312
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) MUNICIPAL SECURITIES 100.0% of investments PENNSYLVANIA 100% + ALLEGHENY COUNTY, PENNSYLVANIA AIRPORT Revenue Refunding Bond (Pittsburgh International Airport) Series 1997A-1 4.27%, 01/01/02 2,000 2,000 2.20%, 01/01/03 2,000 2,065 +/ ALLEGHENY COUNTY, PENNSYLVANIA IDA RB (Saureisen Project) 2.00%, 01/07/02 1,300 1,300 +/ BERKS COUNTY, PENNSYLVANIA IDA RB (Beacon Container Project) 1.80%, 01/07/02 1,730 1,730 +/ BUCKS COUNTY, PENNSYLVANIA IDA RB (Klearfold Project) 2.00%, 01/07/02 4,000 4,000 RB (Schuman & Sons Project) 1.75%, 01/07/02 2,870 2,870 +/ CAMBRIA COUNTY, PENNSYLVANIA IDA Resource Recovery RB (Cambria Cogen Co. Project) 1.60%, 01/07/02 6,700 6,700 +/ CENTRAL BUCKS, PENNSYLVANIA SCHOOL DISTRICT GO Series 2000A 1.69%, 01/07/02 1,900 1,900 +/ CHESTER COUNTY, PENNSYLVANIA HEALTH & EDUCATION FACILITIES AUTHORITY RB (Simpson Meadows Project) Series 2000 1.70%, 01/07/02 4,000 4,000 +/ CLARION COUNTY, PENNSYLVANIA IDA Energy Development RB (Piney Creek Project) 1.65%, 01/07/02 5,900 5,900 +/ DELAWARE COUNTY, PENNSYLVANIA IDA RB (YMCA of Philadelphia Project) Series 1999 1.70%, 01/07/02 1,395 1,395
See the Financial Notes, which are integral to this information. 93 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND -- FINANCIALS
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ DELAWARE RIVER PORT AUTHORITY OF PENNSYLVANIA & NEW JERSEY RB Series 1999-606 1.48%, 01/07/02 7,550 7,550 +/ ERIE COUNTY, PENNSYLVANIA SCHOOL DISTRICT GO Series 2001-5 1.68%, 01/07/02 12,000 12,000 + ERIE, PENNSYLVANIA WATER AUTHORITY RB 1.72%, 12/01/02 1,085 1,109 +/ HARRISBURG, PENNSYLVANIA AUTHORITY RB Series 2001 1.66%, 01/07/02 7,000 7,000 +/ LANCASTER COUNTY, PENNSYLVANIA HOSPITAL AUTHORITY RB (Brethren Village) 1.69%, 01/07/02 5,800 5,800 +/ LEBANON COUNTY, PENNSYLVANIA HEALTH FACILITIES RB (ECC Retirement Village Project) 1.69%, 01/07/02 3,000 3,000 +/ MONTGOMERY COUNTY, PENNSYLVANIA M/F Housing RB (Glenmore Association) Series A 1.90%, 01/07/02 500 500 +/ MONTGOMERY COUNTY, PENNSYLVANIA HIGHER EDUCATION & HEALTH AUTHORITY RB (Madlyn & Leonard Abramson Project) 1.70%, 01/07/02 1,500 1,500 + MONTGOMERY COUNTY, PENNSYLVANIA IDA / Environmental Facilities RB (Lonza, Inc. Project) 1.74%, 01/07/02 7,000 7,000 Pollution Control RB 2.00%, 01/10/02 3,000 3,000 1.50%, 02/07/02 560 560 / RB (Seton Medical Co.) 1.55%, 01/07/02 2,000 2,000 +/ NORTH HAMPTON COUNTY, PENNSYLVANIA IDA RB (Binney & Smith) Series A 1.70%, 01/07/02 3,250 3,250 RB (Binney & Smith) Series B 1.70%, 01/07/02 900 900 +/ NORWIN SCHOOL DISTRICT, PENNSYLVANIA GO TOB Series 2001-12 1.68%, 01/07/02 8,710 8,710 +/ PENNSYLVANIA CONVENTION CENTER AUTHORITY RB TOBP (PT-1224) 1.64%, 01/07/02 4,845 4,845 +/ PENNSYLVANIA ECONOMIC DEVELOPMENT FINANCING AUTHORITY Exempt Facilities RB (AMTRAK Project) Series 2001B 1.55%, 01/07/02 12,500 12,500 Exempt Facilities RB (Merck & Company West Project) Series 2000 1.65%, 01/07/02 5,000 5,000 Exempt Facilities RB (Merck & Company West Project) Series 2001 1.65%, 01/07/02 10,000 10,000 Exempt Facilities RB (Reliant Energy Seward Project) Series 2001A 1.65%, 01/07/02 2,300 2,300 +/ PENNSYLVANIA ENERGY DEVELOPMENT AUTHORITY RB (B&W Ebensburg Project) Series 1986 1.65%, 01/07/02 11,650 11,650 RB (Piney Creek Project) Series 1986A 1.65%, 01/07/02 9,305 9,305 RB (Piney Creek Project) Series 1986C 1.65%, 01/07/02 1,155 1,155 PENNSYLVANIA HFA +o RB TOB Series 1998Y 2.35%, 01/07/02 6,000 6,000 +/ S/F Mortgage RB TOBP (PT-278) Series 1999-66A 1.69%, 01/07/02 10,300 10,300
See the Financial Notes, which are integral to this information. 94
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ S/F Mortgage RB TOBP (PT-119A) Series 1997 1.64%, 01/07/02 8,826 8,826 +/ TOB Series 1999U 1.74%, 01/07/02 10,100 10,100 +/ PENNSYLVANIA HIGHER EDUCATION ASSISTANCE AGENCY Student Loan RB Series 1994A 1.65%, 01/07/02 10,400 10,400 Student Loan RB Series 2000A 1.85%, 01/07/02 9,800 9,800 PENNSYLVANIA STATE +/ GO Macon Trust Receipts Series 2001F 1.69%, 01/07/02 3,575 3,575 +/ GO Series 2000-3 TOB 1.71%, 01/07/02 3,700 3,700 GO 2nd Series 2000 1.78%, 10/15/02 9,850 10,113 +/ PENNSYLVANIA STATE HIGHER EDUCATION ASSISTANCE AGENCY Student Loan RB Series 2001A 1.85%, 01/07/02 7,400 7,400 +/ PENNSYLVANIA STATE HIGHER EDUCATIONAL FACILITIES AUTHORITY RB (Ursinus College) 1.60%, 01/07/02 440 440 +/ PENNSYLVANIA STATE OF COMMONWEALTH TOB Series 1997C 1.71%, 01/07/02 11,870 11,870 +/ PENNSYLVANIA STATE PUBLIC SCHOOL BUILDING AUTHORITY RB Series 1999D 1.69%, 01/07/02 2,000 2,000 PHILADELPHIA, PENNSYLVANIA +/ IDRB TOBP (PA-982) (Philadelphia Airport) Series 1998A 1.76%, 01/07/02 6,000 6,000 TRAN Series 2001 2.65%, 06/28/02 10,000 10,064 + PHILADELPHIA, PENNSYLVANIA GAS WORKS / RB TOB Series 2001 1.64%, 01/07/02 4,000 4,000 TECP Series C 1.45%, 02/07/02 4,000 4,000 +/ PHILADELPHIA, PENNSYLVANIA HOSPITALS & HIGHER EDUCATION FACILITIES AUTHORITY RB (Wills Eye Hospital Project) 1.70%, 01/07/02 2,800 2,800 +/ QUAKERTOWN, PENNSYLVANIA GENERAL AUTHORITY Pooled Financing Program RB Series 1998A 1.55%, 01/07/02 275 275 Pooled Financing Program RB Series A 1.55%, 01/07/02 1,850 1,850 +/ SPRING FORD, PENNSYLVANIA AREA SCHOOL DISTRICT TOB Series 247 1.64%, 01/07/02 3,500 3,500 +/ WASHINGTON COUNTY, PENNSYLVANIA AUTHORITY RB (Girard Estate Refunding Project) Series 1999J 1.70%, 01/07/02 8,805 8,805 ---------- 290,312
-------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which are integral to this information. 95 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND -- FINANCIALS Statement of ASSETS AND LIABILITIES As of December 31, 2001. All numbers x 1,000 except NAV. ASSETS ------------------------------------------------------------------------------- Investments, at market value $290,312 a Cash 132 Interest receivable 1,218 Prepaid expenses + 9 ------------ TOTAL ASSETS 291,671 LIABILITIES ------------------------------------------------------------------------------- Payables: Dividends to shareholders 14 Investment adviser and administrator fees 3 Transfer agent and shareholder service fees 11 Accrued expenses + 38 ------------ TOTAL LIABILITIES 66 NET ASSETS ------------------------------------------------------------------------------- TOTAL ASSETS 291,671 TOTAL LIABILITIES - 66 ------------ NET ASSETS $291,605 NET ASSETS BY SOURCE Capital received from investors 291,605
NET ASSET VALUE (NAV) SHARES NET ASSETS / OUTSTANDING = NAV $291,605 291,642 $1.00 a Includes illiquid restricted security worth $6,000, or 2.07% of the fund's investments. The amortized cost for the fund's securities was $290,312. During the reporting period, the fund had $542,150 in transactions with other SchwabFunds.(R) FEDERAL TAX DATA ------------------------------------ COST BASIS OF PORTFOLIO $290,312 See the Financial Notes, which are integral to this information. 96 Statement of OPERATIONS For January 1, 2001 through December 31, 2001. All numbers x 1,000. INVESTMENT INCOME ------------------------------------------------------------------------------- Interest $7,051 NET REALIZED GAINS ------------------------------------------------------------------------------- Net realized gains on investments sold 32 EXPENSES ------------------------------------------------------------------------------- Investment adviser and administrator fees 962 a Transfer agent and shareholder service fees 1,139 b Trustees' fees 22 c Custodian and portfolio accounting fees 112 Professional fees 23 Registration fees 40 Shareholder reports 19 Other expenses + 6 ---------- Total expenses 2,323 Expense reduction - 677 d ---------- NET EXPENSES 1,646 INCREASE IN NET ASSETS FROM OPERATIONS ------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 7,051 NET EXPENSES - 1,646 ---------- NET INVESTMENT INCOME 5,405 NET REALIZED GAINS + 32 ---------- INCREASE IN NET ASSETS FROM OPERATIONS $5,437
a Calculated on a graduated basis as a percentage of average daily net assets: 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion, 0.30% over $20 billion and 0.27% over $40 billion. Prior to June 1, 2001, these percentages were 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion and 0.30% over $20 billion. b Calculated as a percentage of average daily net assets: for transfer agent services, 0.25% of the fund's assets; for shareholder services, 0.20% of the fund's assets. c For the fund's independent trustees only. d This reduction was made by the investment adviser (CSIM). It reflects a guarantee by CSIM and the transfer agent and shareholder service agent (Schwab) to limit the operating expenses of this fund through at least April 30, 2002 to 0.65% of average daily net assets. This limit doesn't include interest, taxes and certain non-routine expenses. See the Financial Notes, which are integral to this information. 97 SCHWAB PENNSYLVANIA MUNICIPAL MONEY FUND -- FINANCIALS Statements of CHANGES IN NET ASSETS For the current and prior reporting periods. All numbers x 1,000.
OPERATIONS ------------------------------------------------------------------------------- 1/1/01-12/31/01 1/1/00-12/31/00 Net investment income $5,405 $6,707 Net realized gains or losses + 32 (23) --------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 5,437 6,684 DISTRIBUTIONS PAID ------------------------------------------------------------------------------- Dividends from net investment income $5,405 $6,707 TRANSACTIONS IN FUND SHARES a ------------------------------------------------------------------------------- Shares sold 860,902 827,007 Shares reinvested 5,247 6,605 Shares redeemed + (799,275) (772,817) --------------------------------- NET INCREASE 66,874 60,795 NET ASSETS ------------------------------------------------------------------------------- Beginning of period 224,699 163,927 Total increase + 66,906 60,772 b --------------------------------- END OF PERIOD $291,605 $224,699
a Because all transactions in this section took place at $1.00 a share, figures for share quantities are the same as for dollars. b Represents the changes in net assets from operations plus the changes in value of transactions in fund shares, minus distributions paid. See the Financial Notes, which are integral to this information. 98 SCHWAB FLORIDA MUNICIPAL MONEY FUND [PHOTO OF WALTER BEVERIDGE] "While the national economic downturn and a decline in tourism have hurt Florida, the state's substantial reserves and strong financial controls should bolster the recovery process." Portfolio Manager Walter Beveridge WALTER BEVERIDGE, a portfolio manager, has been responsible for day-to-day management of the fund since its inception in 1998. Prior to joining the firm in 1992, he worked for nearly ten years in asset management. TICKER SYMBOL SWFXX -------------------------------------------------------------------------------- The fund seeks the highest current income that is consistent with stability of capital and liquidity, and also seeks to have its shares exempt from the Florida intangible tax. -------------------------------------------------------------------------------- THIS FUND MAY BE APPROPRIATE FOR FLORIDA TAXPAYERS, ESPECIALLY THOSE IN HIGHER TAX BRACKETS WHO ARE SEEKING TAX-EXEMPT INCOME. MANAGER'S PERSPECTIVE SHORT-TERM INTEREST RATES DECLINED SHARPLY AND STEADILY THROUGHOUT 2001, PACED BY THE FED'S RATE CUTS. The Fed's 11 interest rate cuts, which began in January and continued into December, left the Federal Funds Rate at 1.75%, its lowest level in more than 40 years. These cuts had the direct effect of reducing yields for money fund investors, taxable and tax-exempt alike. FALLING INTEREST RATES HELPED SPUR THE ISSUANCE OF SHORT-TERM MUNI SECURITIES. The increased supply kept muni prices low (and yields high) relative to their taxable counterparts. This type of situation normally attracts non-traditional buyers of municipal securities, which in turn creates supply and demand imbalances that limit the upward movement of muni yields. Because of the Fed's rate cuts, we kept our average maturity longer than most of our peers, emphasizing fixed-rate securities. This strategy was effective, as fixed-rate securities outperformed variable rates during 2001. FLORIDA ENDED FISCAL 2001 (6/30) WITH A $2.1 BILLION UNRESERVED SURPLUS. The state has lowered its fiscal 2002 revenue projections by $1.3 billion due to the national economic downturn and the decline in tourism after September 11. In a special session, the state legislature addressed the budget shortfalls without drawing on its "rainy day" fund. We expect the state to end fiscal 2002 with a surplus and to institute appropriate spending measures for fiscal 2003. The state's ratings are Aa2, AA+ and AA from Moody's, Standard & Poor's and Fitch, respectively. 99 SCHWAB FLORIDA MUNICIPAL MONEY FUND PERFORMANCE AND FUND FACTS SEVEN-DAY YIELDS 1 as of 12/31/01 The seven-day yields are calculated using standard SEC formulas. The effective yields include the effect of reinvesting daily dividends during the period. Please remember that money market fund yields fluctuate, and that past performance is not an indication of future results. -------------------------------------------------------------------------------- Seven-Day Yield 1.12% -------------------------------------------------------------------------------- Seven-Day Effective Yield 1.13% -------------------------------------------------------------------------------- Seven-Day Taxable-Equivalent Effective Yield 3 1.86% --------------------------------------------------------------------------------
WEIGHTED AVERAGE MATURITY during the year Money Funds must maintain a dollar-weighted average maturity of no longer than 90 days, and cannot invest in any security whose effective maturity is longer than 397 days (approximately 13 months). [LINE GRAPH] Florida Municipal Money Fund 31-Dec-00 35 31-Jan-01 43 28-Feb-01 37 31-Mar-01 33 30-Apr-01 27 31-May-01 23 30-Jun-01 34 31-Jul-01 28 31-Aug-01 38 30-Sep-01 41 31-Oct-01 50 30-Nov-01 40 31-Dec-01 29
PORTFOLIO COMPOSITION 2 as of 12/31/01 All figures are shown as a percentage of the fund's investments. All of the fund's securities were in the top tier of credit quality at the time of purchase. BY STATE [PIE CHART] 1. 92.6% Florida 2. 4.3% California 3. 1.8% Puerto Rico 4. 1.1% Texas 5. 0.2% Other
BY CREDIT QUALITY [PIE CHART] 1. 100.0% Tier 1
1 A portion of the fund's expenses was reduced during the reporting period. Without this reduction, the fund's yields would have been lower. 2 Composition of the fund's portfolio is as of 12/31/01 and is not indicative of holdings after that date. 3 Taxable-equivalent yield assumes a 2001 maximum federal regular income tax rate of 39.10%. 100 SCHWAB FLORIDA MUNICIPAL MONEY FUND -- FINANCIALS FINANCIAL TABLES These pages provide additional data on the fund's performance, portfolio holdings, expenses and business operations. These figures have been audited by PricewaterhouseCoopers LLP. Two other sections of this report provide context for the data in these financials. The FINANCIAL NOTES section contains information about the fund's business structure, accounting practices and other matters, completing the data given in these tables. The final section, HOW TO READ THIS REPORT, includes guides designed to make the financials easy to read and understand. FINANCIAL HIGHLIGHTS
1/1/01- 1/1/00- 1/1/99- 3/18/98 4- 12/31/01 12/31/00 12/31/99 12/31/98 -------------------------------------------------------------------------------------------- PER-SHARE DATA ($) -------------------------------------------------------------------------------------------- Net asset value at beginning of period 1.00 1.00 1.00 1.00 --------------------------------------------- Income from investment operations: Net investment income 0.02 0.04 0.03 0.02 --------------------------------------------- Less distributions: Dividends from net investment income (0.02) (0.04) (0.03) (0.02) --------------------------------------------- Net asset value at end of period 1.00 1.00 1.00 1.00 ============================================= Total return (%) 2.32 3.62 2.78 2.37 2 RATIOS/SUPPLEMENTAL DATA (%) -------------------------------------------------------------------------------------------- Ratio of net operating expenses to average net assets 0.59 0.59 3 0.59 0.59 1 Expense reductions reflected in above ratio 0.28 0.29 0.33 0.41 1 Ratio of net investment income to average net assets 2.30 3.56 2.75 2.95 1 Net assets, end of period ($ x 1,000,000) 1,518 1,435 1,215 1,016
1 Annualized. 2 Not annualized. 3 Would have been 0.60% if certain non-routine expenses (proxy fees) had been included. 4 Commencement of operations. See the Financial Notes, which are integral to this information. 101 SCHWAB FLORIDA MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS As of December 31, 2001. This section shows all the securities in the fund's portfolio and their market value, as of the report date. We use the symbols below to designate certain characteristics: + Credit-enhanced security / Variable-rate security For fixed-rate obligations, the rate shown is the effective yield at the time of purchase. For variable-rate obligations, the rate shown is the rate as of the report date. For variable-rate obligations with scheduled maturities greater than 397 days, the maturity shown is the later of the next interest rate change date or demand date. For variable-rate obligations with scheduled maturities less than 397 days, the maturity shown is the earlier of the next interest rate change date or demand date. For variable-rate obligations without demand features, the maturity shown is the next interest rate change date. The pie chart below shows the fund's major categories and the market value and cost of the securities in each category. For definitions of abbreviations and acronyms used in security descriptions, see "portfolio terms" in the glossary (in "How to Read This Report"). ALL DOLLAR VALUES ARE IN THOUSANDS. [PIE CHART] 100.0% MUNICIPAL SECURITIES Market Value: $1,471,276 Cost: $1,471,276 ---------------------------------- 100.0% TOTAL INVESTMENTS Market Value: $1,471,276 Cost: $1,471,276
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) MUNICIPAL SECURITIES 100.0% of investments CALIFORNIA 4.3% CALIFORNIA STATE RAN 2.13%, 06/28/02 15,000 15,081 RAN 2.15%, 06/28/02 3,930 3,951 KERN, CALIFORNIA HIGH SCHOOL DISTRICT TRAN 2.55%, 07/09/02 13,000 13,095 + SOUTHERN CALIFORNIA HFA S/F Housing RB Series A2 2.45%, 02/01/02 9,000 9,000 S/F Housing RB Series A3 2.55%, 07/15/02 14,600 14,600 SUNNYVALE, CALIFORNIA COMMUNITY FACILITIES DISTRICT BAN 2.55%, 02/01/02 7,800 7,905 ---------- 63,632 FLORIDA 92.6% +/ BREVARD COUNTY, FLORIDA HFA M/F Housing Revenue Refunding Bond (Shore View Apartment Project) 1.75%, 01/07/02 1,900 1,900 +/ BROWARD COUNTY, FLORIDA Port Facilities Revenue Refunding Bond (Port Everglades Project) Series 1998 1.65%, 01/07/02 9,400 9,400 +/ BROWARD COUNTY, FLORIDA EDUCATIONAL FACILITIES AUTHORITY RB (Nova SouthEastern) Series 2000A 1.65%, 01/07/02 5,500 5,500 + BROWARD COUNTY, FLORIDA HFA / M/F Housing RB (Landings Inverrary Apartments Project) Series 1985 1.60%, 01/07/02 6,600 6,600 / M/F Housing RB (Reflections Airport Project) Series 1999 1.45%, 01/07/02 12,000 12,000 / M/F Housing RB (Sanctuary Apartments Project) Series 1985 1.60%, 01/07/02 9,000 9,000 / M/F Housing RB (South Pointe
See the Financial Notes, which are integral to this information. 102
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) Project) 1.45%, 01/07/02 7,750 7,750 / M/F Housing Revenue Refunding Bond (Island Club Apartments Project) Series 2001A 1.65%, 01/07/02 3,000 3,000 / M/F Housing Revenue Refunding Bond (Water's Edge Project) 1.45%, 01/07/02 400 400 S/F Mortgage RB Series 2001D 3.50%, 03/29/02 6,000 6,000 / S/F Mortgage RB TOBP (PT-589) 1.34%, 01/07/02 3,130 3,130 +/ CHARLOTTE COUNTY, FLORIDA HFA M/F Housing RB (Murdock Circle Apartments Project) 1.65%, 01/07/02 10,500 10,500 CHARLOTTE COUNTY, FLORIDA SCHOOL DISTRICT TAN 2.45%, 06/28/02 11,500 11,537 +/ CITRUS PARK, FLORIDA COMMUNITY DEVELOPMENT DISTRICT Capital Improvement Bond Series 1996 1.47%, 01/07/02 2,020 2,020 +/ COLLIER COUNTY, FLORIDA HFA M/F Housing RB (Brittany Bay Apartments Project) Series 2001A 1.50%, 01/07/02 3,350 3,350 M/F Housing RB (River Beach Project) Series 1985 1.65%, 01/07/02 4,300 4,300 + DADE COUNTY, FLORIDA / Aviation RB Series 1984A 1.47%, 01/07/02 2,600 2,600 Public Improvement Refunding Unlimited GO 1.70%, 06/01/02 3,100 3,171 / Special Obligation TOB Series 415 1.69%, 01/07/02 7,995 7,995 / Water & Sewer System RB Series 1994 1.35%, 01/07/02 25,185 25,185 +/ DADE COUNTY, FLORIDA IDA Exempt Facilities Revenue Refunding Bond (Florida Power & Light Co.) 1.70%, 01/01/02 12,300 12,300 IDRB (June Leasing Corp. Project) Series 1995 1.55%, 01/07/02 375 375 RB (Dolphins Stadium Project) Series 1985C 1.40%, 01/07/02 1,050 1,050 RB (Michael-Ann Russell Jewish Community Center Project) Series 1997 1.65%, 01/07/02 4,485 4,485 + DUVAL COUNTY, FLORIDA SCHOOL DISTRICT Refunding Unlimited GO 1.70%, 08/01/02 3,000 3,073 +/ ESCAMBIA COUNTY, FLORIDA HFA S/F Mortgage RB Series 2001C 1.73%, 01/07/02 2,415 2,415 S/F Mortgage RB TOB Series 1997D 1.76%, 01/07/02 6,810 6,810 S/F Mortgage RB TOBP (PT-519) 1.76%, 01/07/02 3,230 3,230 +/ EUSTIS, FLORIDA Multi-Purpose RB 1.65%, 01/07/02 3,930 3,930 + FIRST FLORIDA GOVERNMENTAL FINANCING COMMISSION RB Series 1992A 2.75%, 07/01/02 1,000 1,017 +/ FLORIDA DEVELOPMENT FINANCE CORP IDRB (Central Farms, Ltd. Project) Series 1999A4 1.80%, 01/07/02 1,410 1,410 IDRB (Pioneer Ram Project) Series 1998A3 1.80%, 01/07/02 1,250 1,250 IDRB (Schmitt Family Project) Series 1999A2 1.80%, 01/07/02 2,250 2,250 IDRB (Sunshine State Project) Series 1999A3 1.70%, 01/07/02 1,420 1,420 IDRB (Vutec Corp. Project) Series 1999A1 1.80%, 01/07/02 1,840 1,840
See the Financial Notes, which are integral to this information. 103 SCHWAB FLORIDA MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ FLORIDA HFA Housing RB (Ashley Lake II Project) Series 1989J 1.63%, 01/07/02 10,800 10,800 Housing RB (Caribbean Key Apartments) Series 1996F 1.65%, 01/07/02 3,400 3,400 Housing RB (Heron Park Project) Series 1996U 1.63%, 01/07/02 3,605 3,605 Housing RB (Tiffany Club Project) Series 1996P 1.65%, 01/07/02 7,400 7,400 M/F Housing RB (Buena Vista Project) Series 1985MM 1.35%, 01/07/02 10,000 10,000 M/F Housing RB (South Pointe Project) Series 1998J 1.40%, 01/07/02 5,100 5,100 M/F Housing RB (Waterford Pointe) Series 2000E-1 1.50%, 01/07/02 4,155 4,155 M/F Housing RB Series 1983J 1.70%, 01/07/02 9,370 9,370 M/F Housing Revenue Refunding Bond (Reflections Project) Series 2001A 1.45%, 01/07/02 12,500 12,500 +/ FLORIDA HOUSING FINANCE CORP. Housing RB (Heritage Pointe Project) Series 1999I-1 1.47%, 01/07/02 9,500 9,500 Housing RB (Timberline Apartments) Series 1999P 1.60%, 01/07/02 2,500 2,500 Housing RB (Valencia Village Apartments Project) Series 1999G-1 1.50%, 01/07/02 5,875 5,875 Housing RB (Vinings Hampton Village) Series 2001D 1.50%, 01/07/02 10,800 10,800 RB (Riverside Apartments) 1.50%, 01/07/02 7,100 7,100 RB TOB Series 2000J 1.73%, 01/07/02 5,000 5,000 RB TOBP (PT-471) 1.69%, 01/07/02 14,760 14,760 + FLORIDA LOCAL GOVERNMENT FINANCE COMMISSION Pooled TECP Series A 2.50%, 02/13/02 4,640 4,640 2.10%, 02/14/02 7,263 7,263 Pooled TECP Series B 2.15%, 02/14/02 2,435 2,435 1.70%, 07/11/02 4,000 4,000 +/ FLORIDA MUNICIPAL POWER AGENCY Revenue Refunding Bond (Stanton II Project) Series 1997 1.42%, 01/07/02 2,000 2,000 +/ FLORIDA OCEAN HIGHWAY & PORT AUTHORITY RB Series 1990 1.80%, 01/07/02 11,400 11,400 +/ FLORIDA STATE BOARD OF EDUCATION CAPITAL OUTLAY Public Education GO Series 2000A 4.05%, 01/01/02 1,000 1,000 +/ FLORIDA STATE BOARD OF EDUCATION Capital Outlay Revenue Refunding TOB 1.71%, 01/07/02 14,100 14,100 Capital Outlay TOB Series 137 1.68%, 01/07/02 17,945 17,945 Capital Outlay TOB Series 190 1.69%, 01/07/02 2,275 2,275 Capital Outlay TOB Series 1998E 1.71%, 01/07/02 12,280 12,280 Capital Outlay TOB Series 223 1.69%, 01/07/02 6,145 6,145 Capital Outlay TOB Series 286 1.69%, 01/07/02 2,675 2,675 +/ FLORIDA STATE BOARD OF FINANCE DEPARTMENT OF GENERAL SERVICES RB TOB Series 317 1.69%, 01/07/02 23,165 23,165 +/ FLORIDA STATE MUNICIPAL POWER AGENCY Revenue Refunding Bond (Stanton Project) Series 1984 1.55%, 01/07/02 11,930 11,930
See the Financial Notes, which are integral to this information. 104
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ FLORIDA STATE TURNPIKE AUTHORITY Turnpike RB TOB Series 273 1.69%, 01/07/02 5,745 5,745 +/ FORT MEYERS, FLORIDA Utility Revenue Refunding TOB Series 1999A 1.69%, 01/07/02 2,495 2,495 +/ GAINESVILLE, FLORIDA IDRB (Exactech, Inc. Project) 1.75%, 01/07/02 3,300 3,300 IDRB (Lifes Community Blood Centers, Inc.) Series 1999 1.65%, 01/07/02 6,060 6,060 GREATER ORLANDO, FLORIDA AVIATION AUTHORITY Airport Facility TECP Series A 1.80%, 01/22/02 6,750 6,750 Airport Facility TECP Series B 1.90%, 02/22/02 3,465 3,465 +/ GULF BREEZE, FLORIDA RB (Local Government Loan Program) Series 1985B 1.40%, 01/07/02 19,440 19,440 RB (Local Government Loan Program) Series 1985C 1.40%, 01/07/02 6,280 6,280 RB (Local Government Loan Program) Series 1985E 1.45%, 01/07/02 3,130 3,130 +/ HALIFAX, FLORIDA HOSPITAL MEDICAL CENTER Health Care Facilities RB (Health Care Plan, Inc. Project) 1.45%, 01/07/02 5,200 5,200 +/ HIGHLANDS COUNTY, FLORIDA HEALTH FACILITY AUTHORITY RB (Adventist Health Systems Project) Series 1997A 1.65%, 01/07/02 13,710 13,710 + HILLSBOROUGH COUNTY, FLORIDA Capital Improvement TECP Series A 1.65%, 02/14/02 6,900 6,900 2.15%, 07/02/02 9,000 9,000 +/ HILLSBOROUGH COUNTY, FLORIDA AVIATION AUTHORITY Special Purpose Revenue Refunding Bond (Delta Airlines Project) 1.65%, 01/07/02 6,695 6,695 +/ HILLSBOROUGH COUNTY, FLORIDA CAPITAL IMPROVEMENT PROGRAM RB TOB Series 222 1.69%, 01/07/02 9,230 9,230 +/ HILLSBOROUGH COUNTY, FLORIDA EDUCATIONAL FACILITIES AUTHORITY RB (University of Tampa Project) 1.65%, 01/07/02 5,800 5,800 +/ HILLSBOROUGH COUNTY, FLORIDA IDA Education Facilities RB (Berkeley Preparatory School) Series 1999 1.65%, 01/07/02 4,895 4,895 RB (Independent Day School Project) 1.63%, 01/07/02 2,000 2,000 RB (Tampa Metropolitan YMCA Project) Series 2000K 1.65%, 01/07/02 9,400 9,400 +/ JACKSONVILLE, FLORIDA Industrial Development Revenue Refunding Bond (Pavilion Associates Project) 1.45%, 01/07/02 5,400 5,400 +/ JACKSONVILLE, FLORIDA ECONOMIC DEVELOPMENT COMMISSION RB (Bolles School Project) Series 1999A 1.35%, 01/07/02 3,400 3,400 JACKSONVILLE, FLORIDA ELECTRIC AUTHORITY +/ RB TOB Series 2000FF 1.71%, 01/07/02 9,975 9,975 +/ RB TOB Series 211 1.69%, 01/07/02 7,185 7,185 +/ RB TOB Series 226 1.69%, 01/07/02 5,000 5,000 Water & Sewer RB TECP 1.40%, 01/03/02 50,000 50,000 +/ Water & Sewer Systems RB Series 2000B 1.40%, 01/07/02 4,450 4,450
See the Financial Notes, which are integral to this information. 105 SCHWAB FLORIDA MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) +/ JACKSONVILLE, FLORIDA HEALTH FACILITIES AUTHORITY Hospital Revenue Refunding Bond (Genesis Rehabilitation Hospital) 2.00%, 01/01/02 4,000 4,000 +/ JACKSONVILLE, FLORIDA HEALTH FACILITY AUTHORITY RB (River Garden Project) Series 1994 1.40%, 01/07/02 3,590 3,590 +/ JACKSONVILLE, FLORIDA PORT AUTHORITY TOB 1.73%, 01/07/02 10,100 10,100 +/ LAKE SHORE, FLORIDA HOSPITAL AUTHORITY Health Facilities RB (Lakeshore Hospital Project) Series 1991 1.65%, 01/07/02 3,400 3,400 +/ LAKELAND, FLORIDA EDUCATIONAL FACILITIES RB (Florida Southern College Project) Series 1999 1.65%, 01/07/02 30,000 30,000 +/ LEE COUNTY, FLORIDA HFA M/F Housing RB (Cape Coral Apartments Project) Series 1999A 1.65%, 01/07/02 6,160 6,160 +/ LEE COUNTY, FLORIDA IDA Educational Facilities RB (Canterbury School, Inc. Project) 1.65%, 01/07/02 5,000 5,000 +/ MANATEE COUNTY, FLORIDA HFA M/F Housing RB (Centre Court Apartments Project) Series 2000A 1.45%, 01/07/02 3,850 3,850 M/F Housing RB (Sabal Palm Harbor Project) Series 2000A 1.65%, 01/07/02 7,300 7,300 M/F Housing RB (Sabal Palm Harbor Project) Series 2000B 1.65%, 01/07/02 3,930 3,930 +/ MIAMI, FLORIDA HEALTH FACILITIES AUTHORITY RB (Jewish Home for the Aged, Inc. Project) Series 1996 1.65%, 01/07/02 8,900 8,900 +/ MIAMI-DADE COUNTY, FLORIDA IDRB (Gulliver Schools Project) Series 2000 1.65%, 01/07/02 3,900 3,900 MIAMI-DADE COUNTY, FLORIDA AVIATION AUTHORITY TECP (Miami International Airport) Series A 1.65%, 01/07/02 2,000 2,000 +/ MIAMI-DADE COUNTY, FLORIDA IDA Airport Facilities RB (Flight Safety Project) Series 1999A 1.75%, 01/07/02 9,000 9,000 Airport Facilities RB (Flight Safety Project) Series 1999A 1.75%, 01/07/02 12,500 12,500 IDRB (Airbus Service Co. Project) Series 1998A 1.50%, 01/07/02 9,520 9,520 IDRB (Airis Miami LLC Project) Series 1999A 1.60%, 01/07/02 8,500 8,500 IDRB (Arctic Partners, Ltd. Project) 1.80%, 01/07/02 2,115 2,115 IDRB (Badia Spices, Inc. Project) 1.75%, 01/07/02 4,175 4,175 IDRB (Belen Jesuit Preparatory School Project) Series 1999 1.65%, 01/07/02 7,505 7,505 IDRB (Fine Arts Lamps Project) Series 1998 1.75%, 01/07/02 1,900 1,900 +/ NASSUA COUNTY, FLORIDA Pollution Control RB (Rayonier Project) Series 1999 1.55%, 01/07/02 6,450 6,450 +/ OKEECHOBEE COUNTY, FLORIDA Exempt Facility RB (Okeechobee Landfill, Inc. Project) Series 1999 1.45%, 01/07/02 15,000 15,000 + ORANGE COUNTY, FLORIDA / M/F Housing RB (Smokewood Project) Series A 1.40%, 01/07/02 19,950 19,950 TECP Series A 2.10%, 01/24/02 18,536 18,536 +/ ORANGE COUNTY, FLORIDA HEALTH FACILITIES AUTHORITY RB (Adventist Health Systems) Series 1992B 1.75%, 01/07/02 3,600 3,600
See the Financial Notes, which are integral to this information. 106
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) RB (Florida Hospital Association Health Facility Loan Program) Series 2000A 1.85%, 01/07/02 53,600 53,600 ORANGE COUNTY, FLORIDA HEALTH FACILITY AUTHORITY Health Facility TECP 1.35%, 03/14/02 35,000 35,000 ORANGE COUNTY, FLORIDA HFA Homeowner RB Series 2001A2 2.50%, 03/01/02 4,250 4,250 +/ M/F Housing RB (Andover Place Apartments) 1.60%, 01/07/02 7,770 7,770 +/ M/F Housing RB (Glenn Millenia Project) Series 2001C 1.50%, 01/07/02 3,355 3,355 +/ M/F Housing RB (Highland Pointe Apartments Project) Series 1988J 1.45%, 01/07/02 7,655 7,655 +/ M/F Housing RB (West Pointe Villas Project) Series 2000F 1.50%, 01/07/02 5,750 5,750 +/ M/F Housing RB Series 2000G 1.65%, 01/07/02 3,200 3,200 +/ M/F Housing Revenue Refunding Bond (Heather Glenn Apartments Project) Series 2001E 1.50%, 01/07/02 11,800 11,800 +/ ORANGE COUNTY, FLORIDA IDA IDRB (Central Florida Kidney Centers Project) 1.65%, 01/07/02 5,000 5,000 IDRB (Goodwill Industries, Inc. Project) 1.65%, 01/07/02 6,000 6,000 RB (Center For Drug Free Living Project) 1.35%, 01/07/02 9,855 9,855 +/ ORANGE COUNTY, FLORIDA SCHOOL BOARD COP Series 2000B 1.85%, 01/07/02 2,000 2,000 +/ ORLANDO, FLORIDA Special Assessment RB (Republic Drive Interchange Project) 1.50%, 01/07/02 6,300 6,300 +/ PALM BEACH COUNTY, FLORIDA IDRB (Benjamin Private School Project) 1.65%, 01/07/02 9,000 9,000 IDRB (Palm Beach Day Care School Project) Series 1999 1.65%, 01/07/02 5,000 5,000 RB (Complete Alcohol Rehabilitation Project) 1.35%, 01/07/02 5,700 5,700 RB (Norton Gallery Art School Project) Series 1995 1.70%, 01/07/02 2,300 2,300 RB (Zoological Society, Inc. Project) 1.65%, 01/07/02 5,500 5,500 +/ PALM BEACH COUNTY, FLORIDA AIRPORT RB (Galaxy Aviation Project) Series 2000A 1.75%, 01/07/02 6,000 6,000 +/ PALM BEACH COUNTY, FLORIDA CRIMINAL JUSTICE FACILITIES TOB Series 191 1.69%, 01/07/02 7,495 7,495 +/ PALM BEACH COUNTY, FLORIDA EDUCATIONAL FACILITIES AUTHORITY RB (Lynn University Project) 1.60%, 01/07/02 7,100 7,100 +/ PALM BEACH COUNTY, FLORIDA HDA CORP M/F Revenue Refunding Bonds (Spinnaker Landing Project) 1.75%, 01/07/02 2,945 2,945 +/ PALM BEACH COUNTY, FLORIDA HEALTH FACILITIES AUTHORITY Revenue Refunding Bond (Joseph L. Morse Geriatric Center) 1.65%, 01/07/02 8,355 8,355 PALM BEACH COUNTY, FLORIDA HEALTH FACILITY AUTHORITY TECP (Pooled Hospital Loan Program) 1.35%, 03/14/02 2,400 2,400 +/ PALM BEACH COUNTY, FLORIDA HEALTH FACILITIES AUTHORITY Health Facilities RB (Bethesda Healthcare System Project) 1.90%, 01/01/02 19,000 19,000 PALM BEACH COUNTY, FLORIDA HFA +/ M/F Housing RB (Azalea Place Apartments Project) Series 1999A 1.65%, 01/07/02 2,600 2,600
See the Financial Notes, which are integral to this information. 107 SCHWAB FLORIDA MUNICIPAL MONEY FUND -- FINANCIALS PORTFOLIO HOLDINGS Continued As of December 31, 2001.
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) S/F Homeowner RB Series 2001A2 2.90%, 05/01/02 3,250 3,250 PALM BEACH COUNTY, FLORIDA SCHOOL DISTRICT TAN 1.66%, 09/26/02 25,000 25,196 +/ PASCO COUNTY, FLORIDA COP 1.60%, 01/07/02 60,370 60,370 +/ PASCO COUNTY, FLORIDA EDUCATION FACILITY AUTHORITY RB (St. Leo University Project) 1.66%, 01/07/02 2,550 2,550 PINELLAS COUNTY, FLORIDA Educational Facility TECP (Pooled Higher Educational Loan Program) 2.00%, 01/03/02 5,000 5,000 +/ PINELLAS COUNTY, FLORIDA EDUCATIONAL FACILITIES AUTHORITY RB (Canterbury School of Florida Project) 1.45%, 01/07/02 4,010 4,010 RB (Shorecrest Prep School Project) 1.45%, 01/07/02 4,000 4,000 + PINELLAS COUNTY, FLORIDA HFA / M/F Housing RB (Mariners Pointe Apartments) 1.65%, 01/07/02 8,900 8,900 S/F Housing RB Series 2001B2 2.75%, 02/01/02 8,250 8,250 / S/F Housing RB TOBP (PT-352) 1.76%, 01/07/02 4,205 4,205 +/ PINELLAS COUNTY, FLORIDA IDA IDRB (H&S Swanson's Tool Co. Project) 1.75%, 01/07/02 4,000 4,000 +/ POLK COUNTY, FLORIDA IDA IDRB (Juice Bowl Products, Inc. Project) 1.75%, 01/07/02 2,790 2,790 RB (Farmland Hydro Project) 1.80%, 01/07/02 6,000 6,000 RB (Pavermodule, Inc. Project) 1.75%, 01/07/02 3,910 3,910 +/ RIVIERA BEACH, FLORIDA IDRB (Sunshine Farms Poultry Project) 1.75%, 01/07/02 2,200 2,200 +/ SEMINOLE COUNTY, FLORIDA IDA IDRB (Amrhein Family Project) 1.75%, 01/07/02 4,560 4,560 SEMINOLE COUNTY, FLORIDA SCHOOL DISTRICT TAN 2.50%, 08/14/02 7,000 7,032 +/ SOUTHEAST VOLUSIA, FLORIDA HOSPITAL DISTRICT RB (Bert Fish Medical Center Project) Series 1995 1.65%, 01/07/02 12,230 12,230 +/ ST. PETERSBURG, FLORIDA Capital Improvement RB (Airport & Golf Course Project) Series 1997C 1.75%, 01/07/02 680 680 Capital Improvement RB (Airport & Golf Course Project) Series B 1.65%, 01/07/02 2,250 2,250 +/ SUMTER COUNTY, FLORIDA IDA RB (Robbins Manufacturing Project) Series 1997 1.50%, 01/07/02 340 340 SUNSHINE STATE OF FLORIDA GOVERNMENTAL FINANCE COMMISSION TECP Series 2000A 1.50%, 01/03/02 8,455 8,455 TECP Series 2000D 1.50%, 01/03/02 3,830 3,830 1.40%, 01/07/02 25,771 25,771 +/ TALLAHASSEE & LEON COUNTY, FLORIDA CIVIC CENTER AUTHORITY Capital Improvement RB Series A 1.65%, 01/07/02 7,000 7,000 +/ TAMPA BAY, FLORIDA WATER UTILITY SYSTEM RB TOB Series 2001N 1.69%, 01/07/02 5,200 5,200 + TAMPA, FLORIDA Guaranteed Entitlement Revenue Refunding Bond 1.78%, 10/01/02 2,130 2,196 / Health Care Facilities RB (Lifelink Foundation Inc., Project) 1.65%, 01/01/02 5,200 5,200
See the Financial Notes, which are integral to this information. 108
ISSUER SECURITY TYPE, PROJECT, SERIES, FACE VALUE MKT. VALUE RATE, MATURITY ($ x 1,000) ($ x 1,000) / Occupational License Tax RB Series 1996A 1.42%, 01/07/02 8,725 8,725 / RB (Tampa Prep School Project) 1.40%, 01/07/02 10,000 10,000 +/ VOLUSIA COUNTY, FLORIDA EDUCATIONAL FACILITY AUTHORITY RB (Bethune Cookman College Project) 1.65%, 01/07/02 5,675 5,675 +/ WEST ORANGE, FLORIDA HEALTHCARE DISTRICT RB Series 1999B 1.55%, 01/07/02 10,900 10,900 ---------- 1,362,702 ILLINOIS 0.0% +/ CHICAGO, ILLINOIS O'HARE INTERNATIONAL AIRPORT RB ACES (General Airport Second Lien) Series B1 1.70%, 01/07/02 100 100 NEBRASKA 0.1% OMAHA, NEBRASKA PUBLIC POWER DISTRICT Electric RB Series 1992A 2.70%, 02/01/02 1,000 1,018 PUERTO RICO 1.8% GOVERNMENT DEVELOPMENT BANK FOR PUERTO RICO TECP 1.30%, 01/03/02 10,000 10,000 1.35%, 01/08/02 11,328 11,328 1.30%, 04/08/02 5,100 5,100 ---------- 26,428 TEXAS 1.1% +/ CAPITAL INDUSTRIAL DEVELOPMENT CORP., TEXAS Solid Waste Disposal RB (Texas Disposal System, Inc. Project) 1.70%, 01/07/02 200 200 TEXAS STATE TRAN Series 2001A-L32 2.50%, 08/29/02 15,000 15,120 ---------- 15,320 WASHINGTON 0.1% + WASHINGTON STATE PUBLIC POWER SUPPLY SYSTEM Revenue Refunding Bond (Nuclear Project No. 1) Series 1992A 2.70%, 07/01/02 2,000 2,076
-------------------------------------------------------------------------------- END OF PORTFOLIO HOLDINGS. For totals, please see the first page of holdings for this fund. See the Financial Notes, which are integral to this information. 109 SCHWAB FLORIDA MUNICIPAL MONEY FUND -- FINANCIALS Statement of ASSETS AND LIABILITIES As of December 31, 2001. All numbers x 1,000 except NAV. ASSETS ------------------------------------------------------------------------------- Investments, at market value $1,471,276 a Cash 471 Receivables: Interest 4,214 Investments sold 41,812 Prepaid expenses + 28 -------------- TOTAL ASSETS 1,517,801 LIABILITIES ------------------------------------------------------------------------------- Payables: Dividends to shareholders 35 Investment adviser and administrator fees 16 Transfer agent and shareholder service fees 61 Accrued expenses + 33 -------------- TOTAL LIABILITIES 145 NET ASSETS ------------------------------------------------------------------------------- TOTAL ASSETS 1,517,801 TOTAL LIABILITIES - 145 -------------- NET ASSETS $1,517,656 NET ASSETS BY SOURCE Capital received from investors 1,517,755 Net realized capital losses (99)
NET ASSET VALUE (NAV) SHARES NET ASSETS / OUTSTANDING = NAV $1,517,656 1,517,778 $1.00 a The amortized cost for the fund's securities was $1,471,276. During the reporting period, the fund had $2,098,198 in transactions with other SchwabFunds.(R) FEDERAL TAX DATA -------------------------------------- COST BASIS OF PORTFOLIO $1,471,276 UNUSED CAPITAL LOSSES: Expires 12/31 of: Loss amount: 2008 $99
See the Financial Notes, which are integral to this information. 110 Statement of OPERATIONS For January 1, 2001 through December 31, 2001. All numbers x 1,000. INVESTMENT INCOME ------------------------------------------------------------------------------- Interest $23,942 NET REALIZED GAINS ------------------------------------------------------------------------------- Net realized gains on investments sold 67 EXPENSES ------------------------------------------------------------------------------- Investment adviser and administrator fees 3,141 a Transfer agent and shareholder service fees 3,724 b Trustees' fees 21 c Custodian and portfolio accounting fees 183 Professional fees 26 Registration fees 83 Shareholder reports 50 Other expenses + 9 ------------- Total expenses 7,237 Expense reduction - 2,354 d ------------- NET EXPENSES 4,883 INCREASE IN NET ASSETS FROM OPERATIONS ------------------------------------------------------------------------------- TOTAL INVESTMENT INCOME 23,942 NET EXPENSES - 4,883 ------------- NET INVESTMENT INCOME 19,059 NET REALIZED GAINS + 67 ------------- INCREASE IN NET ASSETS FROM OPERATIONS $19,126
a Calculated on a graduated basis as a percentage of average daily net assets: 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion, 0.30% over $20 billion and 0.27% over $40 billion. Prior to June 1, 2001, these percentages were 0.38% of the first $1 billion, 0.35% over $1 billion, 0.32% over $10 billion and 0.30% over $20 billion. b Calculated as a percentage of average daily net assets: for transfer agent services, 0.25% of the fund's assets; for shareholder services, 0.20% of the fund's assets. c For the fund's independent trustees only. d This reduction was made by the investment adviser (CSIM). It reflects a guarantee by CSIM and the transfer agent and shareholder service agent (Schwab) to limit the operating expenses of this fund through at least April 30, 2002 to 0.59% of average daily net assets. This limit doesn't include interest, taxes and certain non-routine expenses. See the Financial Notes, which are integral to this information. 111 SCHWAB FLORIDA MUNICIPAL MONEY FUND -- FINANCIALS Statements of CHANGES IN NET ASSETS For the current and prior reporting periods. All numbers x 1,000. OPERATIONS ------------------------------------------------------------------------------- 1/1/01-12/31/01 1/1/00-12/31/00 Net investment income $19,059 $27,457 Net realized gains or losses + 67 (152) ----------------------------------- INCREASE IN NET ASSETS FROM OPERATIONS 19,126 27,305 DISTRIBUTIONS PAID ------------------------------------------------------------------------------- Dividends from net investment income $19,059 $27,457 TRANSACTIONS IN FUND SHARES a ------------------------------------------------------------------------------- Shares sold 3,151,142 3,540,268 Shares reinvested 18,492 26,476 Shares redeemed + (3,087,097) (3,346,712) ----------------------------------- NET INCREASE 82,537 220,032 NET ASSETS ------------------------------------------------------------------------------- Beginning of period 1,435,052 1,215,172 Total increase + 82,604 219,880 b ----------------------------------- END OF PERIOD $1,517,656 $1,435,052
a Because all transactions in this section took place at $1.00 a share, figures for share quantities are the same as for dollars. b Represents the changes in net assets from operations plus the changes in value of transactions in fund shares, minus distributions paid. See the Financial Notes, which are integral to this information. 112 FINANCIAL NOTES FINANCIAL NOTES BUSINESS STRUCTURE OF THE FUNDS EACH OF THE FUNDS DISCUSSED IN THIS REPORT IS A SERIES OF THE CHARLES SCHWAB FAMILY OF FUNDS(TM), A NO LOAD, OPEN-END MANAGEMENT INVESTMENT COMPANY. The company is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended. The sidebar shows the funds in this report and their trust. THE SCHWAB MUNICIPAL MONEY FUND, SCHWAB CALIFORNIA AND SCHWAB NEW YORK MUNICIPAL MONEY FUNDS OFFER TWO SHARE CLASSES EACH: Sweep Shares and Value Advantage Shares. Shares of each class represent interests in the same portfolio, but each class has different expenses and investment minimums. The Schwab New Jersey, Pennsylvania and Florida Municipal Money Funds each offers one share class. Shares are bought and sold at $1.00 per share. Each share has a par value of 1/1,000 of a cent, and the trust may issue as many shares as necessary. FUND OPERATIONS Most of the funds' investments are described in the fund-by-fund sections earlier in this report. However, there are certain other investments and policies that may affect a fund's financials. The most significant of these are described below. Other policies concerning the funds' business operations also are described here. THE FUNDS DECLARE DIVIDENDS EVERY DAY THEY ARE OPEN FOR BUSINESS. These dividends, which are equal to a fund's net investment income for that day, are paid out to shareholders once a month. The funds may make distributions from any net realized capital gains once a year. THE FUNDS MAY BUY SECURITIES ON A DELAYED-DELIVERY BASIS. In these transactions, a fund agrees to buy a security for a stated price, with settlement generally occurring within two weeks. If the security's value falls before settlement occurs, a fund could end up paying more for the security than its market value at the time of settlement. The funds have set aside sufficient securities as collateral for those securities bought on a delayed-delivery basis. THE FUNDS PAY FEES FOR VARIOUS SERVICES. Through their trust, the funds have agreements with Charles Schwab Investment Management, Inc. (CSIM) to provide investment advisory and administrative services and with Charles Schwab & Co., Inc. (Schwab) to provide transfer agent and shareholder services. Although these agreements specify certain fees for these services, CSIM and Schwab have made additional agreements with the funds that may limit the total expenses charged. The rates and limitations for these fees vary from fund to fund, and are described in each fund's Statement of Operations. THE TRUST AND ITS FUNDS -------------------------------------------------------------------------------- This list shows all of the funds included in The Charles Schwab Family of Funds. The funds discussed in this report are highlighted. THE CHARLES SCHWAB FAMILY OF FUNDS Organized October 20, 1989 Schwab Money Market Fund Schwab Government Money Fund Schwab U.S. Treasury Money Fund Schwab Value Advantage Money Fund(R) Schwab Municipal Money Fund Schwab California Municipal Money Fund Schwab New York Municipal Money Fund Schwab New Jersey Municipal Money Fund Schwab Pennsylvania Municipal Money Fund Schwab Florida Municipal Money Fund Schwab Institutional Advantage Money Fund(R) Schwab Retirement Money Fund(R) Schwab Government Cash Reserves -------------------------------------------------------------------------------- 113 FINANCIAL NOTES TRUSTEES MAY INCLUDE PEOPLE WHO ARE OFFICERS AND/OR DIRECTORS OF THE INVESTMENT ADVISER OR SCHWAB. Federal securities law limits the percentage of such "interested persons" who may serve on a trust's board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these persons for their service as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund's Statement of Operations. THE FUNDS MAY ENGAGE IN CERTAIN TRANSACTIONS INVOLVING AFFILIATES. The funds may make direct transactions with certain other SchwabFunds(R) when practical. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and officers. THE FUNDS INTEND TO MEET FEDERAL INCOME AND EXCISE TAX REQUIREMENTS FOR REGULATED INVESTMENT COMPANIES. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains (if any) to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax. ACCOUNTING POLICIES The following are the main policies the funds use in preparing their financial statements. THE FUNDS VALUE THEIR SECURITIES AT AMORTIZED COST, which approximates market value. SECURITY TRANSACTIONS are recorded as of the date the order to buy or sell the security is executed. INTEREST INCOME is recorded as it accrues. If a fund bought a debt instrument at a discount (that is, for less than its face value) or a premium (more than face value), it amortizes the discount or premium from the current date up to maturity. The fund then increases (in the case of discounts) or reduces (in the case of premiums) the income it records from the security. If the security is callable (meaning that the issuer has the option to pay it off before its maturity date), then the fund amortizes the premium to the security's call date and price, rather than the maturity date and price. REALIZED GAINS AND LOSSES from security transactions are based on the identified costs of the securities involved. EXPENSES that are specific to a fund are charged directly to that fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their net assets. EACH FUND MAINTAINS ITS OWN ACCOUNT FOR PURPOSES OF HOLDING ASSETS AND ACCOUNTING, and is considered a separate entity for tax purposes. Within its account, each fund also keeps certain assets in segregated accounts, as may be required by securities law. THE ACCOUNTING POLICIES DESCRIBED ABOVE CONFORM WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It's possible that once the results are known, they may turn out to be different from these estimates. 114 REPORT OF INDEPENDENT ACCOUNTANTS TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF: Schwab Municipal Money Fund Schwab California Municipal Money Fund Schwab New York Municipal Money Fund Schwab New Jersey Municipal Money Fund Schwab Pennsylvania Municipal Money Fund Schwab Florida Municipal Money Fund In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, 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 Schwab Municipal Money Fund, Schwab California Municipal Money Fund, Schwab New York Municipal Money Fund, Schwab New Jersey Municipal Money Fund, Schwab Pennsylvania Municipal Money Fund and Schwab Florida Municipal Money Fund (six of the portfolios constituting The Charles Schwab Family of Funds, hereafter referred to as the "Funds") at December 31, 2001, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, 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 Funds' 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 audits 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 December 31, 2001 by correspondence with the custodian, provide a reasonable basis for our opinion. PRICEWATERHOUSECOOPERS LLP San Francisco, CA February 8, 2002 115 TAX DESIGNATIONS (UNAUDITED) Pursuant to Section 852(b)(5)(A) of the Internal Revenue Code, the funds hereby designate 100% of the dividends paid from net investment income for the year ended December 31, 2001 as exempt-interest dividends. 116 FUND TRUSTEES (unaudited) A fund's Board of Trustees is responsible for protecting the interests of that fund's shareholders. The tables below give information about the people who serve as trustees and officers for the SchwabFunds(R), including the funds covered in this report. Under the Investment Company Act of 1940, any officer, director, or employee of Schwab or CSIM is considered an "interested person," meaning that he or she is considered to have a business interest in Schwab or CSIM. These individuals are the "interested trustees" listed in the first table. The "independent trustees" in the third table are individuals who, under the 1940 Act, are not considered to have a business interest in Schwab or CSIM. Each of the SchwabFunds (of which there were 44 as of 12/31/01) belongs to one of these trusts: The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust or Schwab Annuity Portfolios. Currently all these trusts have the same trustees and officers. The address for all trustees and officers is 101 Montgomery Street, San Francisco, CA 94104. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 800-435-4000. INDIVIDUALS WHO ARE INTERESTED TRUSTEES AND OFFICERS OF THE TRUST
TRUST POSITION(S); NAME AND BIRTHDATE TRUSTEE SINCE MAIN OCCUPATIONS AND OTHER DIRECTORSHIPS AND AFFILIATIONS ----------------------------------------------------------------------------------------------------------------------------- CHARLES R. SCHWAB Chair. Trustee: Chair, Co-CEO, Director, The Charles Schwab Corp.; CEO, Director, 7/29/37 Family of Funds, 1989; Schwab Holdings, Inc.; Chair, Director, Charles Schwab & Co., Inc., Investments, 1991; Charles Schwab Investment Management, Inc.; Chair, Schwab Retirement Capital Trust, 1993; Plan Services, Inc.; until 7/01 Director, The Charles Schwab Trust Annuity Portfolios, 1994. Co.; Director, U.S. Trust Corp.; until 1/99, Chair, Director, Mayer & Schweitzer, Inc. (securities brokerage subsidiary of The Charles Schwab Corp.); Director, The Gap, Inc. (clothing retailer), Audiobase, Inc. (Internet audio solutions), Vodafone AirTouch PLC (telecom), Siebel Systems (software), Xign, Inc. (electronic payment systems). ----------------------------------------------------------------------------------------------------------------------------- JOHN P. COGHLAN President, CEO. Vice Chair, EVP, The Charles Schwab Corp.; Vice Chair, Enterprise 5/6/51 Trustee: 2000 President, Retirement Plan Services, Services for Investment Managers, (all trusts). Charles Schwab & Co., Inc.; CEO, Director, Charles Schwab Investment Management, Inc.; President, CEO, Director, The Charles Schwab Trust Co.; President, Director, Schwab Retirement Technologies, Inc.; Director, Charles Schwab Asset Management (Ireland) Ltd., Charles Schwab Worldwide Funds PLC, Performance Technologies, Inc., Schwab Retirement Plan Services, Inc. ----------------------------------------------------------------------------------------------------------------------------- JEREMIAH H. CHAFKIN EVP, COO. Trustee: EVP, Asset Management Products and Services, Charles Schwab & Co., 5/9/59 2000 (all trusts). Inc.; President, COO, Charles Schwab Investment Management, Inc.; Director, Charles Schwab Asset Management (Ireland) Ltd., Charles Schwab Worldwide Funds PLC; until 9/99, Senior Managing Director, Bankers Trust Co.
117 INDIVIDUALS WHO ARE OFFICERS OF THE TRUST BUT NOT TRUSTEES
NAME AND BIRTHDATE TRUST OFFICE(S) HELD MAIN OCCUPATIONS AND OTHER DIRECTORSHIPS AND AFFILIATIONS ----------------------------------------------------------------------------------------------------------------------------- TAI-CHIN TUNG Treasurer, Principal SVP, CFO, Charles Schwab Investment Management, Inc.; VP, The Charles 3/7/51 Financial Officer. Schwab Trust Co.; 1994-96, Controller, Robertson Stephens Investment Management, Inc. ----------------------------------------------------------------------------------------------------------------------------- STEPHEN B. WARD SVP, Chief Investment SVP, Chief Investment Officer, Charles Schwab Investment Management, 4/5/55 Officer. Inc.; Chief Investment Officer, The Charles Schwab Trust Co. ----------------------------------------------------------------------------------------------------------------------------- KOJI E. FELTON Secretary. SVP, Chief Counsel, Assistant Corporate Secretary, Charles Schwab 3/13/61 Investment Management, Inc.; until 6/98, San Francisco Branch Chief in Enforcement, U.S. Securities and Exchange Commission.
INDIVIDUALS WHO ARE INDEPENDENT TRUSTEES
NAME AND BIRTHDATE TRUSTEE SINCE MAIN OCCUPATIONS AND OTHER DIRECTORSHIPS AND AFFILIATIONS ----------------------------------------------------------------------------------------------------------------------------- DONALD F. DORWARD Family of Funds, 1989; CEO, Dorward & Associates (management, marketing, marketing 9/23/31 Investments, 1991; consulting); 1996-99, EVP, Managing Director, Grey Advertising. Capital Trust, 1993; Annuity Portfolios, 1994. ----------------------------------------------------------------------------------------------------------------------------- ROBERT G. HOLMES Family of Funds, 1989; Chair, CEO, Director, Semloh Financial, Inc. (international financial 5/15/31 Investments, 1991; services and investment advisory firm.). Capital Trust, 1993; Annuity Portfolios, 1994. ----------------------------------------------------------------------------------------------------------------------------- DONALD R. STEPHENS Family of Funds, 1989; Managing Partner, D.R. Stephens & Co. (investments); until 1996, 6/28/38 Investments, 1991; Chair, CEO, North American Trust (real estate investment). Capital Trust, 1993; Annuity Portfolios, 1994. ----------------------------------------------------------------------------------------------------------------------------- MICHAEL W. WILSEY Family of Funds, 1989; Chair, CEO, Wilsey Bennett, Inc. (transportation, real estate and 8/18/43 Investments, 1991; investments). Capital Trust, 1993; Annuity Portfolios, 1994. ----------------------------------------------------------------------------------------------------------------------------- MARIANN BYERWALTER 2000 (all trusts). Special Advisor to the President, Stanford University; 1996-2000 VP, 8/13/60 Business Affairs, CFO, Stanford University; until 2/96, CFO, Eureka Bank; CFO, COO, America First Eureka Holdings, Inc. (holding company); Director, America First Cos., (venture capital/fund management), Redwood Trust, Inc. (mortgage finance), Stanford Hospitals and Clinics, SRI International (research), LookSmart, Ltd. (internet infra- structure), PMI Group, Inc. (mortgage insurance), Lucile Packard Children's Hospital.
118 INDIVIDUALS WHO ARE INDEPENDENT TRUSTEES Continued
NAME AND BIRTHDATE TRUSTEE SINCE MAIN OCCUPATIONS AND OTHER DIRECTORSHIPS AND AFFILIATIONS ----------------------------------------------------------------------------------------------------------------------------- WILLIAM A. HASLER 2000 (all trusts). Co-CEO, Aphton Corp (bio-pharmaceuticals); until 8/98, Dean, Haas 11/22/41 School of Business, University of California, Berkeley; Director, Solectron Corp. (manufacturing), Tenera, Inc. (services and software), Airlease Ltd. (aircraft leasing), Mission West Properties (commercial real estate), Digital Microwave Corp. (network equipment). ----------------------------------------------------------------------------------------------------------------------------- GERALD B. SMITH 2000 (all trusts). Chair, CEO, Founder, Smith Graham & Co. (investment advisors); 9/28/50 Director, Pennzoil-Quaker State Co. (oil and gas), Rorento N.V. (investments -- Netherlands), Cooper Industries (electrical products); Member, audit committee, Northern Border Partners, L.P., (energy).
119 HOW TO READ THIS REPORT This report, including the financial tables, has been designed to be EASY TO READ. The next few pages provide additional information that can help you more fully understand the financial tables and why they are important to ALL FUND INVESTORS. In this section, we take a closer look at the types of information presented in the financial tables. Brief CALLOUTS add context to some of the most important elements in the tables, and help explain certain fund operations and accounting principles. At the end, a GLOSSARY defines many of the financial terms that are used in this report. [GRAPHIC OF SAMPLE OF FINANCIAL HIGHLIGHTS TABLE] Table is for illustration only. The financial highlights summarize the fund's activities over the past five years (or since inception, if the fund doesn't yet have five years of operat- ing history). The figures in the first part of the table are for a single share of the fund that was "outstanding," or in existence, during the periods indicated. These lines show how much the fund earned per share, and where these earnings came from: how much was from interest and dividends, and how much from capital appreciation (that is, price increases of investments the fund owned). A fund may show losses in this section if its expenses exceeded its income or its capital losses exceeded its capital gains. Some funds, such as money funds, typically receive all their earnings as interest, while some equity funds may have only appreciation, or may receive interest and dividends only occasionally. Total return shows what an investor in the fund would have earned or lost during each period indicated, assuming that all dividends and distributions were reinvested. Because the numbers in the financial highlights are for a fund's fiscal year, they will be different from calendar year numbers, except for funds whose fiscal year is the same as the calendar year. 120 [GRAPHIC OF SAMPLE OF FINANCIAL HIGHLIGHTS TABLE continued] Table is for illustration only. In some cases, such as with funds that started partway through their planned fiscal year or have changed their fiscal year, the financial highlights may contain a "stub period" that is less than 12 months. In financial tables, parentheses around numbers are used to indicate a negative number, such as a loss, or a number that is being subtracted, such as a distribution paid by a fund to its shareholders. The figures in this part of the table disclose a fund's annual operating expenses. The expenses are shown as a percentage of a fund's average net assets, because they are paid from these assets. For some funds, the annual expenses are capped at a certain level. With these funds, there are two sets of expense figures: net expenses and the amounts of any expense reductions. The net figures reflect what the expenses actually were, after the reductions. This shows you how much a fund netted in dividend and interest income (i.e., total dividends and interest minus expenses), expressed as a percentage of the fund's average net assets. 121 HOW TO READ THIS REPORT Continued [GRAPHIC OF SAMPLE OF PORTFOLIO HOLDINGS TABLE] Table is for illustration only. The Portfolio Holdings (sometimes also called the Schedule of Investments) is a snapshot of all securities a fund held on the last day of the reporting period. Symbols that may appear in the Portfolio Holdings: + Credit-enhanced security--indicates a security that is backed by the credit of a third party (usually a large financial institution). An issuer uses credit enhancement to give its securities a higher credit rating, which means that the issuer can pay a lower interest rate. From a fund's standpoint, credit enhancements can help lower the risk of default on those securities that carry them. o Illiquid restricted security--indicates a security whose resale is subject to legal or contractual restrictions, and has been determined to be illiquid. = Delayed-delivery security--indicates a security a fund has arranged to buy but has not yet received. A fund may incur a gain or loss if the value of the security rises or falls between the time the purchase was arranged and the time the security is delivered. For fixed-rate obligations, the interest rate is set at the time of issue and doesn't change. However, some types of obligations (variable- and floating-rate) are structured so that the rate may be reset at certain times, typically to reflect changes in market interest rates. A fund may own some of both types of securities. This shows a breakdown of holdings by asset type. To the right of the pie chart are figures showing the total market value of securities of each asset type, and also the amortized cost for those securities. 122 [GRAPHIC OF SAMPLE OF PORTFOLIO HOLDINGS TABLE Continued] Table is for illustration only. Unlike longer term bonds, money market securities have characteristics (i.e. shorter maturities) that allow their market value to be less sensitive to changes in interest rates or other market factors. Thus, with most money market securities, face value and market value are substantially equal. In some cases, securities are organized into sub-groups. For each sub-group, there are figures showing the percentage of investments represented and the total market value of the securities in the sub-group. Note that for all dollar values, you need to add three zeroes after each number to get the approximate value. 123 HOW TO READ THIS REPORT Continued [GRAPHIC OF SAMPLE OF STATEMENT OF ASSETS AND LIABILITIES TABLE] Table is for illustration only. The Statement of Assets and Liabilities is a snapshot of a fund's balance sheet on the last day of the reporting period. At any given time, a fund is likely to be owed money from various sources that it has not yet received, and to owe money it hasn't yet paid. This section gathers the totals from the first two sections in order to compute net assets. This section shows where the assets described above came from. "Capital received from investors" is money a fund received from investors buying its shares during the reporting period, and is a net figure (meaning that money the fund remitted to investors who redeemed their shares has already been subtracted from it). As with the Portfolio Holdings, the figures in these statements need to be multiplied by 1,000. This includes the figures in the notes. [GRAPHIC OF SAMPLE OF FEDERAL TAX DATA TABLE] Table is for illustration only. Although a mutual fund doesn't expect to pay federal income tax, it does have to file a return with the IRS. In some cases, the requirements of tax accounting differ from the requirements of the accounting practices used in keeping a fund's books, so the figures in this box may differ from those shown elsewhere in the financials. These differences may require that some values be reclassified in the financials, but this does not affect a fund's NAV. 124 [GRAPHIC OF SAMPLE OF STATEMENT OF OPERATIONS TABLE] Table is for illustration only. The Statement of Operations tells you how much money a fund earned and spent over the course of the reporting period, and how much it gained and lost on its investments. These are the capital gains or losses resulting from securities a fund sold during the reporting period. To safeguard the interests of shareholders, mutual funds must keep their portfolio securities in accounts at a financial institution, whose tasks include maintaining records of a fund's holdings. Covers most activities related to managing a fund's portfolio. Covers most activities associated with shareholders, including processing transactions in fund shares and providing services such as account statements and information. This section gathers the totals from the first four sections in order to com- pute the net earnings or losses that resulted from a fund's operations during the reporting period. These figures also appear, in summary form, on the Statements of Changes in Net Assets. 125 HOW TO READ THIS REPORT Continued [GRAPHIC OF SAMPLE OF STATEMENTS OF CHANGES IN NET ASSETS TABLE] Table is for illustration only. The Statements of Changes in Net Assets compare a fund's performance during the current reporting period with its performance from the previous report period. Keep in mind that if the current report is a semiannual report, its figures are only for six months, whereas the figures for the previous period are generally for a full year. From this section, you can see how the size of a fund was affected by investors buying and selling shares (as opposed to changes due to fund performance, shown above in "Operations"). The information shows how many shares the fund sold to investors, how many shares the fund issued in connection with investors who reinvested their divi- dends or distributions, and how many shares the fund redeemed (bought back from investors). In funds with more than one share class, these figures are reported by class. These are the figures for the current reporting period. These are the figures for the previous reporting period. 126 GLOSSARY ALTERNATIVE MINIMUM TAX (AMT) A federal income tax designed to limit the extent to which high-income taxpayers (including individuals, estates, trusts and corporations) can benefit from certain deductions and exemptions. For example, some types of income that are exempt from regular federal income tax are not exempt from the AMT. ASSET ALLOCATION The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage. ASSET-BACKED SECURITIES Securities that are backed by the loans or accounts receivable of an entity, such as a bank or credit card company. These securities are obligations that the issuer intends to repay using the assets backing them (once collected). Therefore, repayment depends largely on the cash flows generated by the assets backing the securities. ASSET CLASS A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes. BOND A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the "coupon rate") until a specified date (the "maturity date"), at which time the issuer returns the money bor- rowed ("principal" or "face value") to the bondholder. Because of their structure, bonds are sometimes called "fixed income securities" or "debt securities." BOND ANTICIPATION NOTES Obligations sold by a municipality on an interim basis in anticipation of the municipality's issuance of a longer-term bond in the future. CAPITAL GAIN, CAPITAL LOSS The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still "on paper" and is considered unrealized. COMMERCIAL PAPER Promissory notes issued by banks, corporations and other institutions to finance short-term credit needs. These securities generally are structured as discount notes but sometimes may be interest-bearing notes. Commercial paper, which may be unsecured, is subject to credit risk. CREDIT QUALITY The capacity of an issuer to make its interest and principal payments. Federal regulations strictly limit the credit quality of the securities a money market fund can buy. CREDIT RATINGS Debt issuers, including corporations, states and municipalities, may arrange with a recognized independent rating organization, such as Moody's Investor Service, Standard & Poor's and Fitch, Inc., to rate their creditworthiness and/or the creditworthiness of their debt issues. For example, an issuer may obtain a long-term rating within the investment grade rating category, which is from high to low, AAA, AA, A and BBB for Standard & Poor's and Fitch, and Aaa, Aa, A and Baa for Moody's. CREDIT RISK The risk that a debt issuer may be unable to pay interest or principal to its debtholders. PORTFOLIO TERMS To help reduce the space occupied by the portfolio holdings, we use the following terms. Most of them appear within descriptions of individual securities in municipal funds, and describe features of the issuer or the security. Some of these are more fully defined elsewhere in the Glossary. ACES Adjustable convertible extendable security BAN Bond anticipation note COP Certificate of participation GAN Grant anticipation note GO General obligation HDA Housing Development Authority HFA Housing Finance Agency IDA Industrial Development Authority IDB Industrial Development Board IDRB Industrial Development Revenue Bond M/F Multi-family RAN Revenue anticipation note RB Revenue bond S/F Single-family TAN Tax anticipation note TECP Tax-exempt commercial paper TOB Tender option bond TOBP Tender option bond partnership TRAN Tax and revenue anticipation note VRD Variable-rate demand 127 GLOSSARY Continued DOLLAR-WEIGHTED AVERAGE MATURITY (DWAM) See weighted average maturity. EFFECTIVE YIELD A measurement of a fund's yield that assumes that all dividends were reinvested in additional shares of the fund. EXPENSE RATIO The amount that is taken from a mutual fund's assets each year to cover the fund's operating expenses. An expense ratio of 0.50% means that a fund's expenses amount to half of one percent of its average net assets a year. FACE VALUE The value of a bond, note, mortgage or other security as given on the certificate or instrument. Face value is also referred to as par value or nominal value. INTEREST Payments to holders of debt securities as compensation for loaning a security's principal to the issuer. MATURITY Generally, the date a debt security is scheduled to be "retired" and its principal amount returned to the bondholder. MONEY MARKET SECURITIES High-quality, short-term debt securities that may be issued by entities such as the U.S. government, corporations and financial institutions (such as banks). Money market securities include commercial paper, promissory notes, certificates of deposit, banker's acceptances, notes and time deposits. MUNICIPAL SECURITIES Debt securities issued by a state, its counties, municipalities, authorities and other subdivisions, or the territories and possessions of the United States and the District of Columbia, including their subdivisions, agencies and instrumentalities and corporations. These securities may be issued to obtain money for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, public utilities, schools, streets, and water and sewer works. NET ASSET VALUE PER SHARE (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund's total assets, subtracting liabilities, and dividing by the number of shares outstanding. Money funds seek to maintain a steady NAV of $1.00 OUTSTANDING SHARES, SHARES OUTSTANDING When speaking of a company or mutual fund, indicates all shares currently held by investors. REVENUE ANTICIPATION NOTES Obligations that are issued in expectation of the receipt of other types of revenue, such as that available under the Federal Revenue Sharing Program. TAXABLE-EQUIVALENT YIELD The yield an investor would need to get from a taxable investment in order to match the yield paid by a given tax-exempt investment, once the effect of all applicable taxes is taken into account. For example, if your tax rate were 25%, a tax-exempt investment paying 4.5% would have a taxable-equivalent yield for you of 6.0% (4.5% / [1 - 0.25%] = 6.0%). TOTAL RETURN The overall performance of an investment over a given period, including any expenses, any income or distributions paid out and any capital gain or loss (increases or decreases in portfolio value). TAX ANTICIPATION NOTES Notes that typically are sold to finance the working capital needs of municipalities in anticipation of the receipt of property taxes on a future date. WEIGHTED AVERAGE For mutual funds, an average that gives the same weight to each security as the security represents in the fund's portfolio. WEIGHTED AVERAGE MATURITY For mutual funds, the maturity of all the debt securities in its portfolio, calculated as a weighted average. As a rule, the longer a fund's weighted average maturity, the greater its interest rate risk. Money funds are required to maintain a weighted average maturity of no more than 90 days. YIELD The income paid out by an investment, expressed as an annual rate and calculated as a percentage of the investment's market value. 128 CONTACT SCHWAB The SchwabFunds(R) Family includes a variety of funds to help meet your investment needs. You can diversify your portfolio in a single step with our asset allocation funds. Or you can customize your portfolio with a combination of our stock funds as well as our taxable and tax-advantaged bond and money market funds. Please call 800-435-4000 for a free prospectus and brochure for any of these SchwabFunds. This report must be preceded or accompanied by a current prospectus. METHODS FOR PLACING ORDERS The following information outlines how Schwab brokerage account investors can place orders. If you are investing through a third-party investment provider, methods for placing orders may be different. INTERNET 1 www.schwab.com SCHWAB BY PHONE(TM) Use our automated voice service or speak to a representative. Call 800-435-4000, day or night (for TDD service, call 800-345-2550). TELEBROKER(R) Automated touch-tone phone service at 800-272-4922 MAIL Write to SchwabFunds at: PO Box 7575 San Francisco, CA 94120-7575 When selling or exchanging shares, be sure to include the signatures of at least one of the persons whose name is on the account. 1 Shares of Sweep Investments(TM) may not be purchased over the Internet. THE SCHWABFUNDS FAMILY STOCK FUNDS Schwab S&P 500 Fund Schwab 1000 Fund(R) Schwab Small-Cap Index Fund(R) Schwab Total Stock Market Index Fund(R) Schwab International Index Fund(R) Schwab Analytics Fund(R) Schwab Focus Funds Communications Focus Fund Financial Services Focus Fund Health Care Focus Fund Technology Focus Fund Schwab MarketManager Portfolios(R) Small Cap Portfolio International Portfolio ASSET ALLOCATION FUNDS Schwab MarketTrack Portfolios(R) All Equity Portfolio Growth Portfolio Balanced Portfolio Conservative Portfolio Schwab MarketManager Portfolios Growth Portfolio Balanced Portfolio BOND FUNDS Schwab Short-Term Bond Market Index Fund Schwab Total Bond Market Index Fund Schwab YieldPlus Fund(R) Schwab Short/Intermediate Tax-Free Bond Fund Schwab Long-Term Tax-Free Bond Fund Schwab California Short/Intermediate Tax-Free Bond Fund Schwab California Long-Term Tax-Free Bond Fund SCHWAB MONEY FUNDS Schwab offers an array of money market funds that seek high current income consistent with safety and liquidity.2 Choose from taxable or tax-advantaged alternatives. Many can be linked to your Schwab account to "sweep" cash balances automatically when you're between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments.(R) 2 Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. [CHARLES SCHWAB LOGO] INVESTMENT ADVISER Charles Schwab Investment Management, Inc. 101 Montgomery Street, San Francisco, CA 94104 DISTRIBUTOR Charles Schwab & Co., Inc. PO Box 7575, San Francisco, CA 94120-7575 This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus. (C) 2002 Charles Schwab & Co., Inc. All rights reserved. Member SIPC/NYSE. Printed on recycled paper. REG13859-04