UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-5812
CITIFUNDS PREMIUM TRUST- CITI PREMIUM LIQUID RESERVES CITI PREMIUM U.S. TREASURY RESERVES (Exact name of registrant as specified in charter) 125 Broad Street, New York, NY 10004 (Address of principal executive offices) (Zip code) Christina T. Sydor, Esq. Smith Barney Fund Management LLC 300 First Stamford Place Stamford, CT 06902 (Name and address of agent for service) Registrant's telephone number, including area code: (800) 451-2010 Date of fiscal year end: AUGUST 31 Date of reporting period: AUGUST 31, 2003
ITEM 1. REPORT TO STOCKHOLDERS. The ANNUAL Reports to Stockholders are filed herewith.
CitiSM
Premium
Liquid Reserves
ANNUAL REPORT
AUGUST 31, 2003
INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE |
TA B L E O F C O N T E N T S | ||
Letter From the Chairman | 1 | |
Manager Overview | 2 | |
Fund Facts | 5 | |
Fund Performance | 6 | |
Citi Premium Liquid Reserves | ||
Statement of Assets and Liabilities | 7 | |
Statement of Operations | 8 | |
Statements of Changes in Net Assets | 9 | |
Notes to Financial Statements | 10 | |
Financial Highlights | 13 | |
Report of Independent Auditors | 14 | |
Additional Information | 15 | |
Cash Reserves Portfolio | ||
Portfolio of Investments | 21 | |
Statement of Assets and Liabilities | 25 | |
Statement of Operations | 26 | |
Statements of Changes in Net Assets | 27 | |
Notes to Financial Statements | 28 | |
Financial Highlights | 30 | |
Report of Independent Auditors | 31 | |
Additional Information | 32 | |
L E T T E R F R O M T H E C H A I R M A N
Dear Shareholder, The philosopher Bertrand Russell famously remarked that, “Change is one thing, progress is another.” You will notice in the following pages that we have begun to implement some changes to your shareholder report, and we will be reflecting other changes in future reports. Our aim is to make meaningful improvements in reporting on the management of your Fund and its performance, not just to enact change for change’s sake. Please bear with us during this transition period. We know that you have questions about fund managers’ decisions and plans, and we want to be sure that you have easy access to the information you need. Keeping investors informed is, and always will be, one of my top priorities as Chairman of your Fund. | R. JAY GERKEN, CFA Chairman, President and Chief Executive Officer |
We invite you to read this report in full. Please take the opportunity to talk to your financial adviser about this report or any other questions or concerns you have about your Fund and your financial future. As always, thank you for entrusting your assets to us. We look forward to helping you continue to meet your financial goals. Please read on to learn more about your Fund’s performance and the Manager’s strategy.
Sincerely,
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
September 4, 2003
1
M A N A G E R O V E R V I E W
Performance Review As of August 31, 2003, the seven-day current yield for CitiSM Premium Liquid Reserves (“Fund”) was 0.72% and its seven-day effective yield, which reflects compounding, was 0.73%. The seven-day effective yield is calculated similarly to the seven-day current yield but, when annualized, the income earned by an investment in the Fund is assumed to be reinvested. The effective yield typically will be slightly higher than the current yield because of the compounding effect of the assumed reinvestment. Please note that your investment is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. | |
Interest Rates Hit 45-Year Low
Short-term interest rates and yields of money market instruments declined sharply during the Fund’s fiscal year ended August 31 as the Federal Reserve Board and the Bush Administration implemented aggressive measures to stimulate renewed economic growth.
When the Fund’s fiscal year began, the economic outlook appeared mixed. Although consumers continued to spend at a relatively robust pace, U.S. corporations reined in capital spending as the effects of a persistently declining stock market and high-profile accounting scandals took their toll on investor confidence and overall business activity. In addition, rising tensions in the Middle East and elsewhere contributed to generally cautious attitudes among corporate executives. As a result, the U.S. economy expanded sluggishly.
The economy’s struggles prompted the Fed to cut short-term interest rates in early November 2002 by a larger-than-expected 0.5 percentage points, signaling the central bank’s commitment to boosting economic activity. Although the November rate-cut was the first of 2002, it was the twelfth of the aggressive rate-reduction campaign that began in January 2001, and money market yields continued to fall. However, economic growth failed to accelerate meaningfully, despite some encouraging signs toward year-end 2002, including a surge in mortgage refinancings that put cash in consumers’ pockets. Corporations remained cautious as it became clearer early in 2003 that the United States and its allies were likely to go to war in Iraq. In effect, the economy adopted a “wait and see” attitude. Even the Fed indicated at its March 2003 meeting that it could not adequately assess prevailing economic risks because of the geopolitical situation.
After the war in Iraq began in late March, it soon became clear that the military campaign would be successful and Saddam Hussein would be deposed. As major
2
combat operations wound down, consumers and businesses became increasingly optimistic. Improving sentiment was reinforced by legislation enacting federal tax cuts, including a reduction in taxes on capital gains and dividends. For its part, the Fed cut short-term interest rates by another 0.25 percentage points in late June, driving the federal funds ratei to just 1%, its lowest level since the Eisenhower Administration, and money market yields continued to decline.
By the end of August evidence of a sustainable economic improvement emerged. Stronger retail sales, rising domestic consumption and increasing export activity contributed to a relatively robust 3.3% annualized growth rate in GDP (gross domestic product)ii during the second quarter of 2003. However, to forestall potential deflationary forces, the Fed indicated that it was likely to leave rates at prevailing low levels for the foreseeable future.
Adjusting to a New Economic Climate
In this challenging market environment, we maintained a generally cautious investment posture. While interest rates fell during the first ten months of the reporting period, we set the Fund’s weighted average maturity in a range that we considered neutral to slightly longer than average. This strategy enabled us to maintain prevailing rates for as long as we deemed practical, while giving us the flexibility required to respond to changing market conditions. In addition, because the difference in yields, or “yield spread,”iii between shorter- and longer-term money market instruments was narrower than historical norms, it made little sense to us to extend the Fund’s weighted average maturity further. In fact, there were times during the reporting period when longer-term yields were lower than their shorter-term counterparts.
After the Fed reduced short-term interest rates in June, we reduced the Fund’s weighted average maturity to a relatively short position. This strategy reflected our belief that the June rate-cut was probably the last of the current cycle, and it was designed to help us capture higher yields if they became available. Indeed, as of the reporting period’s end, we have begun to see a steeper yield curve,iv which suggests to us that the market may be anticipating higher short-term interest rates. Of course, we intend to continue to adjust our strategies as market conditions change.
3
Thank you for your investment in CitiSM Premium Liquid Reserves. We appreciate that you have entrusted us to manage your money, and we value our relationship with you.
Sincerely,
Kevin Kennedy
Portfolio Manager
September 4, 2003
The information provided in this letter by the Manager is not intended to be a forecast of future events, a guarantee of future results or investment advice.Views expressed may differ from those of the firm as a whole.
Portfolio holdings and breakdowns are as of August 31, 2003 and are subject to change. Please refer to pages 21 through 24 for a list and percentage breakdown of the Fund’s holdings.
i | The federal funds rate is the interest rate that banks with excess reserves at a Federal Reserve dis- |
trict bank charge other banks that need overnight loans. The fed funds rate often points to the | |
direction of U.S. interest rates. | |
ii | Gross Domestic Product is a market value of goods and services produced by labor and property in |
a given country. | |
iii | Yield spread is the difference between yields on securities of the same quality but different maturities |
or the difference between yields on securities of the same maturity but different quality. | |
iv | The yield curve is the graphical depiction of the relationship between the yield on bonds of the same |
credit quality but different maturities. |
4
F U N D FA C T S
Fund Objective
To provide its shareholders with liquidity and as high a level of current income as is consistent with the preservation of capital.
Investment Manager | Dividends |
Citi Fund Management Inc. | Declared daily, paid monthly |
Commencement of Operations | Benchmarks* |
May 3, 1990 | • Lipper Taxable Money Market |
Funds Average | |
Net Assets as of 8/31/03 | • iMoneyNet, Inc. 1st Tier Taxable |
$1,532.0 million | Money Market Funds Average |
* The Lipper Funds Average and iMoneyNet, Inc. Funds Average reflect the performance (excluding |
sales charges) of mutual funds with similar objectives. |
Citi is a service mark of Citicorp. |
5
F U N D P E R F O R M A N C E
Total Returns
One | Five | Ten | |||||
All Periods Ended August 31, 2003 | Year | Years* | Years* | ||||
Citi Premium Liquid Reserves | 1.09% | 3.84% | 4.45% | ||||
Lipper Taxable Money Market | |||||||
Funds Average | 0.60% | 3.31% | 4.03% | ||||
iMoneyNet, Inc. 1st Tier Taxable Money | |||||||
Market Funds Average | 0.69% | 3.43% | 4.08% | ||||
* Average Annual Total Return | |||||||
7-DayYields | |||||||
Annualized Current | 0.72% | ||||||
Effective | 0.73% |
The Annualized Current 7-Day Yield reflects the amount of income generated by the investment during that seven-day period and assumes that the income is generated each week over a 365-day period. The yield is shown as a percentage of the investment.
The Effective 7-Day Yield is calculated similarly, but when annualized the income earned by the investment during that seven-day period is assumed to be reinvested. The effective yield is slightly higher than the current yield because of the compounding effect of this assumed reinvestment.
Note: A money market fund’s yield more closely reflects the current earnings of the fund than does the total return.
Important Tax Information—For the fiscal year ended August 31, 2003 the Fund paid $0.01076 per share to shareholders from net investment income. For such period, 0.12% of income dividends paid were derived from interest earned from U.S. Government and U.S. Government agency obligations.
Comparison of 7-Day Yields for Citi Premium Liquid Reserves vs. iMoneyNet, Inc. 1st Tier Taxable Money Market Funds Average
As illustrated, Citi Premium Liquid Reserves generally provided a higher annualized seven-day yield to that of the iMoneyNet, Inc. 1st Tier Taxable Money Market Funds Average, as published in iMoneyNet, Inc. Money Market Funds ReportTM, for the one year period.
Note: Although money market funds seek to maintain the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. Mutual Fund shares are not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency.Yields and total returns will fluctuate and past performance is no guarantee of future results. Total return figures include reinvestment of dividends. Returns and yields reflect certain voluntary fee waivers. If the waivers were not in place, the Fund’s returns and yields would have been lower.
6
Citi Premium Liquid Reserves | |||||||
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S | |||||||
August 31, 2003 | |||||||
Assets: | |||||||
Investment in Cash Reserves Portfolio, at value (Note 1A) | $ | 1,532,846,813 | |||||
Liabilities: | |||||||
Dividends payable | 378,300 | ||||||
Management fees payable (Note 3) | 257,958 | ||||||
Distribution/Service fees payable (Note 4) | 130,376 | ||||||
Accrued expenses and other liabilities | 113,770 | ||||||
Total liabilities | 880,404 | ||||||
Net Assets for 1,531,966,409 shares of beneficial interest outstanding | $ | 1,531,966,409 | |||||
Net Assets Consist of: | |||||||
Par value of shares of capital stock | 15,320 | ||||||
Capital in excess of par value | 1,531,951,089 | ||||||
Total Net Assets | $ | 1,531,966,409 | |||||
Net Asset Value, Offering Price and Redemption Price Per Share | $ | 1.00 | |||||
See notes to financial statements |
7
Citi Premium Liquid Reserves | |||||||
S T A T E M E N T O F O P E R A T I O N S | |||||||
For the Year Ended August 31, 2003 | |||||||
Investment Income (Note 1B): | |||||||
Income from Cash Reserves Portfolio | $ | 23,408,897 | |||||
Allocated expenses from Cash Reserves Portfolio | (1,591,584 | ) | |||||
$ | 21,817,313 | ||||||
Expenses: | |||||||
Management fees (Note 3) | 3,178,107 | ||||||
Distribution/Service fees (Note 4) | 1,589,054 | ||||||
Transfer agent fees | 130,231 | ||||||
Legal fees | 65,373 | ||||||
Shareholder reports | 39,535 | ||||||
Trustees’ fees | 37,097 | ||||||
Blue Sky fees | 30,000 | ||||||
Registration fees | 20,526 | ||||||
Audit fees | 11,665 | ||||||
Custody and fund accounting fees | 9,480 | ||||||
Miscellaneous | 29,362 | ||||||
Total expenses | 5,140,430 | ||||||
Less: aggregate amount waived by the Manager (Note 3) | (374,482 | ) | |||||
Net expenses | 4,765,948 | ||||||
Net investment income | $ | 17,051,365 | |||||
See notes to financial statements |
8
Citi Premium Liquid Reserves | ||||||||
S T A T E M E N T O F C H A N G E S I N N E T A S S E T S | ||||||||
Year Ended August 31, | ||||||||
2003 | 2002 | |||||||
From Investment Activities: | ||||||||
Net investment income, declared as dividends to | ||||||||
shareholders (Note 2) | $ | 17,051,365 | $ | 28,413,891 | ||||
Transactions in Shares of Beneficial Interest at | ||||||||
Net Asset Value of $1.00 Per Share (Note 5): | ||||||||
Proceeds from sale of shares | 5,367,770,797 | 4,906,399,175 | ||||||
Net asset value of shares issued to shareholders from | ||||||||
reinvestment of dividends | 9,551,660 | 14,292,039 | ||||||
Cost of shares repurchased | (5,157,988,773 | ) | (4,911,264,637 | ) | ||||
Net Increase in Net Assets | 219,333,684 | 9,426,577 | ||||||
Net Assets: | ||||||||
Beginning of year | 1,312,632,725 | 1,303,206,148 | ||||||
End of year | $ | 1,531,966,409 | $ | 1,312,632,725 | ||||
See notes to financial statements |
9
Citi Premium Liquid Reserves
N O T E S T O F I N A N C I A L S T A T E M E N T S
1. Significant Accounting Policies Citi Premium Liquid Reserves (the “Fund”) is a separate diversified series of CitiFunds Premium Trust (the “Trust”), a Massachu-setts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund invests all of its investable assets in Cash Reserves Portfolio (the “Portfolio”), a management investment company for which Citi Fund Management Inc. (the “Manager”) serves as Investment Manager. The value of such investment reflects the Fund’s proportionate interest (3.9% at August 31, 2003) in the net assets of the Portfolio. Cit-igroup Global Markets Inc. (“CGM”) is the Fund’s Distributor (the “Distributor”).
The preparation of financial statements in accordance with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The financial statements of the Portfolio, including the portfolio of investments, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements.The significant accounting policies consistently followed by the Fund are as follows:
A. InvestmentValuation Valuation of securities by the Portfolio is discussed in Note 1A of the Portfolio’s Notes to Financial Statements, which are included elsewhere in this report.
B. Investment Income The Fund earns income, net of Portfolio expenses, daily based on its investment in the Portfolio.
C. Federal Taxes The Fund’s policy is to comply with the provisions of the Internal Revenue Code available to regulated investment companies and to distribute to shareholders all of its taxable income. Accordingly, no provision for federal income or excise tax is necessary.
D. Expenses The Fund bears all costs of its operations other than expenses specifically assumed by the Manager. Expenses incurred by the Trust with respect to any two or more funds in the series are allocated in proportion to the average net assets of each fund, except when allocations of direct expenses to each fund can otherwise be made fairly. Expenses directly attributable to a fund are charged to that fund. The Fund’s share of the Portfolio’s expenses is charged against and reduces the amount of the Fund’s investment in the Portfolio.
2. Dividends The net income of the Fund is determined once daily, as of 3:00 p.m.
Eastern Time, and all of the net income of the Fund so determined is declared as a dividend to shareholders of record at the time of such determination. Dividends are distributed in the form of additional shares of the Fund or, at the election of the shareholder, in cash (subject to the policies of the shareholder’s Shareholder Servicing Agent) on or prior to the last business day of the month.
10
Citi Premium Liquid Reserves
N O T E S T O F I N A N C I A L S T A T E M E N T S (Continued)
3. Management Fees The management fees are computed at an annual rate of 0.20% of the Fund’s average daily net assets. The management fees paid to the Manager amounted to $3,178,107, of which $374,482 was voluntarily waived for the year ended August 31, 2003. The Trust pays no compensation directly to any Trustee or any officer who is affiliated with the Manager, all of whom receive remuneration for their services to the Fund from the Manager or its affiliates. Certain of the officers and a Trustee of the Trust are officers and a director of the Manager or its affiliates.
4. Distribution/Service Fees The Fund adopted a Service Plan pursuant to Rule l2b-1 under the 1940 Act. The Service Plan allows the Fund to pay a monthly fee not to exceed 0.10% of the average daily net assets. The Service fees paid amounted to $1,589,054 for the year ended August 31, 2003. These fees may be used to make payments to the Distributor and to Service Agents or others as compensation for the sale of Fund shares or for advertising, marketing or other promotional activity, and for preparation, printing and distribution of prospectuses, statements of additional information and reports for recipients other than regulators and existing shareholders. The Fund may also make payments to the Distributor and others for providing personal service or the maintenance of shareholder accounts.
5. Shares of Beneficial Interest The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (par value $0.00001 per share).
6. Investment Transactions Increases and decreases in the Fund’s investment in the Portfolio aggregated $3,385,601,407 and $3,187,310,057, respectively, for the year ended August 31, 2003.
7. Income Tax Information and Distributions to Shareholders
At August 31, 2003 the tax basis components of distributable earnings were:
Undistributed ordinary income | $384,383 | |||
The tax character of distributions paid during the year was: | ||||
Ordinary income | $17,051,365 | |||
8.Trustee Retirement Plan The Trustees of the Fund have adopted a Retirement Plan for all Trustees who are not “interested persons” of the Fund, within the meaning of the 1940 Act. Under the Plan, all Trustees are required to retire from the Board as of the last day of the calendar year in which the applicable Trustee attains age 75 (certain Trustees who had already attained age 75 when the Plan was adopted are required to retire effective December 31, 2003). Trustees may retire under the Plan before attaining the mandatory retirement age. Trustees who have served as Trustee of the Trust or any of the investment companies associated with Citigroup for at least ten years when they retire are eligible to receive the maximum retirement benefit under the Plan. The maximum retirement benefit is an amount equal to five times the amount of retainer and regular meeting fees payable to a Trustee during the calendar year ending on or immediately prior to the applicable Trustee’s retirement. Amounts under the Plan
11
Citi Premium Liquid Reserves
N O T E S T O F I N A N C I A L S T A T E M E N T S (Continued)
may be paid in installments or in a lump sum (discounted to present value). The Fund’s allocable share of the expenses of the Plan for the year ended August 31, 2003 and the related liability at August 31, 2003 was not material.
12
Citi Premium Liquid Reserves | ||||||||||||||||||
F I N A N C I A L H I G H L I G H T S | ||||||||||||||||||
Year Ended August 31, | ||||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||||
Net Asset Value, beginning of year | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | ||||||||
Net investment income | 0.01076 | 0.02037 | 0.05258 | 0.05653 | 0.04836 | |||||||||||||
Less dividends from net investment | ||||||||||||||||||
income | (0.01076 | ) | (0.02037 | ) | (0.05258 | ) | (0.05653 | ) | (0.04836 | ) | ||||||||
Net Asset Value, end of year | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | ||||||||
Ratios/Supplemental Data: | ||||||||||||||||||
Net Assets, end of year | ||||||||||||||||||
(000’s omitted) | $ | 1,531,966 | $ | 1,312,633 | $ | 1,303,206 | $ | 997,828 | $ | 795,324 | ||||||||
Ratio of expenses to average | ||||||||||||||||||
net assets† | 0.40% | 0.40% | 0.40% | 0.40% | 0.40% | |||||||||||||
Ratio of net investment | ||||||||||||||||||
income to average net assets† | 1.07% | 2.03% | 5.17% | 5.69% | 4.84% | |||||||||||||
Total return | 1.09% | 2.06% | 5.39% | 5.80% | 4.94% | |||||||||||||
Note: If agents of the Fund and agents of Cash Reserves Portfolio had not waived all or a portion of | ||||||||||||||||||
their fees during the period indicated, the net investment income per share and the ratios would have | ||||||||||||||||||
been as follows: | ||||||||||||||||||
Net investment income per share | $ | 0.00978 | $ | 0.01831 | $ | 0.04898 | $ | 0.05274 | $ | 0.04457 | ||||||||
Ratios: | ||||||||||||||||||
Expenses to average net assets† | 0.50% | 0.59% | 0.80% | 0.79% | 0.79% | |||||||||||||
Net investment income to average | ||||||||||||||||||
net assets† | 0.97% | 1.84% | 4.77% | 5.30% | 4.45% | |||||||||||||
† Includes the Fund’s share of Cash Reserves Portfolio’s allocated expenses. | ||||||||||||||||||
See notes to financial statements |
13
Citi Premium Liquid Reserves
R E P O R T O F I N D E P E N D E N T A U D I TO R S
To the Trustees and the Shareholders of Citi Premium Liquid Reserves:
In our opinion, the accompanying statement of assets and liabilities 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 Citi Premium Liquid Reserves (the “Fund”), a series of CitiFunds Premium Trust, at August 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of investments at August 31, 2003 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
October 16, 2003
14
Citi Premium Liquid Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited)
Information about Trustees and Officers The business and affairs of Citi Premium Liquid Reserves (the “Fund”) are managed under the direction of the Fund’s Board of Trustees. Information pertaining to the Trustees and officers of the Fund is set forth below. Each Trustee and officer holds office for his or her lifetime, unless that individual resigns, retires or is otherwise removed. The Statement of Additional Information includes additional information about Fund Trustees and is available, without charge, upon request by calling 1-800-451-2010.
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
NON-INTERESTED | ||||||||||
TRUSTEES: | ||||||||||
Elliott J. Berv | Trustee | Since 2001 | President and Chief Opera- | 35 | Board | |||||
c/o R. Jay Gerken | tions Officer, Landmark City | Member, | ||||||||
Citigroup Asset | (real estate development) | American | ||||||||
Management | (since 2002); Executive Vice | Identity Corp. | ||||||||
399 Park Avenue | President and Chief Opera- | (doing | ||||||||
New York, NY 10022 | tions Officer, DigiGym | business as | ||||||||
Age 60 | Systems (on-line personal | Morpheus | ||||||||
training systems) (since | Technologies) | |||||||||
2001); Chief Executive | (biometric | |||||||||
Officer, Rocket City | information | |||||||||
Enterprises (internet service | management) | |||||||||
company) (since 2000); | (since 2001; | |||||||||
President, Catalyst (consulting) | consultant | |||||||||
(since 1984). | since 1999); | |||||||||
Director, | ||||||||||
Lapoint | ||||||||||
Industries | ||||||||||
(industrial fil- | ||||||||||
ter company) | ||||||||||
(since 2002); | ||||||||||
Director, | ||||||||||
Alzheimer’s | ||||||||||
Association | ||||||||||
(New England | ||||||||||
Chapter) | ||||||||||
(since 1998). | ||||||||||
Donald M. Carlton | Trustee | Since 2001 | Consultant, URS Corporation | 30 | Director, | |||||
c/o R. Jay Gerken | (engineering) (since 1999); | American | ||||||||
Citigroup Asset | former Chief Executive | Electric Power | ||||||||
Management | Officer, Radian International | (Electric | ||||||||
399 Park Avenue | L.L.C. (engineering) (from | Utility) (since | ||||||||
New York, NY 10022 | 1996 to 1998), Member of | 1999); | ||||||||
Age 66 | Management Committee, | Director, | ||||||||
Signature Science (research | Valero Energy | |||||||||
and development) (since | (petroleum | |||||||||
2000). | refining) | |||||||||
(since 1999); | ||||||||||
Director, | ||||||||||
National | ||||||||||
Instruments | ||||||||||
Corp. (tech- | ||||||||||
nology) (since | ||||||||||
1994). |
15
Citi Premium Liquid Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
A. Benton Cocanougher | Trustee | Since 2001 | Dean Emeritus and Wiley | 30 | Former Direc- | |||||
c/o R. Jay Gerken | Professor, Texas A&M | tor, Randall’s | ||||||||
Citigroup Asset | University (since 2001); | Food Markets, | ||||||||
Management | former Dean and Professor of | Inc. (from | ||||||||
399 Park Avenue | Marketing, College and | 1990 to 1999); | ||||||||
New York, NY 10022 | Graduate School of Business | former Direc- | ||||||||
Age 65 | of Texas A & M University | tor, First | ||||||||
(from 1987 to 2001). | American | |||||||||
Bank | ||||||||||
and First | ||||||||||
American | ||||||||||
Savings Bank | ||||||||||
(from 1994 to | ||||||||||
1999). | ||||||||||
Mark T. Finn | Trustee | Since 2001 | Adjunct Professor, William & | 35 | Former Presi- | |||||
c/o R. Jay Gerken | Mary College (since Septem- | dent and | ||||||||
Citigroup Asset | ber 2002); Principal/Member, | Director, Delta | ||||||||
Management | Belvan Partners/Balfour | Financial, Inc. | ||||||||
399 Park Avenue | Vantage – Manager and | (investment | ||||||||
New York, NY 10022 | General Partner to | advisory firm) | ||||||||
Age 60 | the Vantage Hedge Fund, LP | (from 1983 to | ||||||||
(since March 2002); Chair- | 1999). | |||||||||
man and Owner, Vantage | ||||||||||
Consulting Group, Inc. | ||||||||||
(investment advisory and | ||||||||||
consulting firm) (since 1988); | ||||||||||
former Vice Chairman and | ||||||||||
Chief Operating Officer, | ||||||||||
Lindner Asset Management | ||||||||||
Company (mutual fund | ||||||||||
company) (from March 1999 | ||||||||||
to 2001); former General | ||||||||||
Partner and Shareholder, | ||||||||||
Greenwich Ventures, LLC | ||||||||||
(investment partnership) | ||||||||||
(from 1996 to 2001); former | ||||||||||
President, Secretary, and | ||||||||||
Owner, Phoenix Trading Co. | ||||||||||
(commodity trading advisory | ||||||||||
firm) (from 1997 to 2000). |
16
Citi Premium Liquid Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
Stephen Randolph Gross | Trustee | Since 2001 | Partner, Capital Investment | 30 | Director, | |||||
c/o R. Jay Gerken | Advisory Partners (con- | United Telesis, | ||||||||
Citigroup Asset | sulting) (since January 2000); | Inc. (telecom- | ||||||||
Management | former Managing Director, | munications) | ||||||||
399 Park Avenue | Fountainhead Ventures, LLC | (since 1997); | ||||||||
New York, NY 10022 | (consulting) (from 1998 to | Director, | ||||||||
Age 56 | 2002); Secretary, Carint N.A. | eBank.com, | ||||||||
(manufacturing) (since 1988); | Inc. (since | |||||||||
former Treasurer, Hank Aaron | 1997); Direc- | |||||||||
Enterprises (fast food | tor, Andersen | |||||||||
franchise) (from 1985 to | Calhoun, Inc. | |||||||||
2001); Chairman, Gross, | (assisted | |||||||||
Collins & Cress, P.C. | living) (since | |||||||||
(accounting firm) (since | 1987); former | |||||||||
1980); Treasurer, Coventry | Director, | |||||||||
Limited, Inc. (since 1985). | Charter Bank, | |||||||||
Inc. (from | ||||||||||
1987 to 1997); | ||||||||||
former Direc- | ||||||||||
tor, Yu Save, | ||||||||||
Inc. (internet | ||||||||||
company) | ||||||||||
(from 1998 to | ||||||||||
2000); former | ||||||||||
Director, Hot- | ||||||||||
palm, Inc. | ||||||||||
(wireless | ||||||||||
applications) | ||||||||||
(from 1998 to | ||||||||||
2000); former | ||||||||||
Director, Ikon | ||||||||||
Ventures, Inc. | ||||||||||
(from 1997 to | ||||||||||
1998). | ||||||||||
Diana R. Harrington | Trustee | Since 1992 | Professor, Babson College | 35 | Former | |||||
c/o R. Jay Gerken | (since 1993). | Trustee, The | ||||||||
Citigroup Asset | Highland | |||||||||
Management | Family of | |||||||||
399 Park Avenue | Funds (invest- | |||||||||
New York, NY 10022 | ment com- | |||||||||
Age 63 | pany) (from | |||||||||
March 1997 to | ||||||||||
March 1998). | ||||||||||
Susan B. Kerley | Trustee | Since 1992 | Consultant, Strategic | 35 | Director, | |||||
c/o R. Jay Gerken | Management Advisors, LLC— | Eclipse Funds | ||||||||
Citigroup Asset | Global Research Associates, | (currently | ||||||||
Management | Inc. (investment consulting) | supervises 17 | ||||||||
399 Park Avenue | (since 1990). | investment | ||||||||
New York, NY 10022 | companies | |||||||||
Age 52 | in fund com- | |||||||||
plex) (since | ||||||||||
1990). |
17
Citi Premium Liquid Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
Alan G. Merten | Trustee | Since 2001 | President, George Mason | 30 | Director, | |||||
c/o R. Jay Gerken | University (since 1996). | Comshare, | ||||||||
Citigroup Asset | Inc. | |||||||||
Management | (information | |||||||||
399 Park Avenue | technology) | |||||||||
New York, NY 10022 | (since 1985); | |||||||||
Age 61 | former | |||||||||
Director, Indus | ||||||||||
(information | ||||||||||
technology) | ||||||||||
(from 1995 to | ||||||||||
1999). | ||||||||||
C. Oscar Morong, Jr. | Trustee | Since 1991 | Managing Director, Morong | 35 | Former Direc- | |||||
c/o R. Jay Gerken | Capital Management | tor, Indonesia | ||||||||
Citigroup Asset | (since 1993). | Fund | ||||||||
Management | (closed-end | |||||||||
399 Park Avenue | fund) (from | |||||||||
New York, NY 10022 | 1990 to 1999); | |||||||||
Age 68 | Trustee, Mor- | |||||||||
gan Stanley | ||||||||||
Institutional | ||||||||||
Fund | ||||||||||
(currently | ||||||||||
supervises 75 | ||||||||||
investment | ||||||||||
companies) | ||||||||||
(since 1993). | ||||||||||
R. Richardson Pettit | Trustee | Since 2001 | Professor of Finance, | 30 | None | |||||
c/o R. Jay Gerken | University of Houston | |||||||||
Citigroup Asset | (from 1977 to 2002); | |||||||||
Management | Independent Consultant | |||||||||
399 Park Avenue | (since 1984). | |||||||||
New York, NY 10022 | ||||||||||
Age 61 |
18
Citi Premium Liquid Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
Walter E. Robb, III | Trustee | Since 2001 | President, Benchmark | 35 | Director, John | |||||
c/o R. Jay Gerken | Consulting Group, Inc. | Boyle & Co., | ||||||||
Citigroup Asset | (service company) (since | Inc. (textiles) | ||||||||
Management | 1991); Sole Proprietor, Robb | (since 1999); | ||||||||
399 Park Avenue | Associates (financial | Director, | ||||||||
New York, NY 10022 | consulting) (since 1978); | Harbor | ||||||||
Age 77 | Co-owner, Kedron Design | Sweets, Inc. | ||||||||
(gifts) (since 1978); former | (candy) (since | |||||||||
President and Treasurer, | 1990); | |||||||||
Benchmark Advisors, Inc. | Director, W.A. | |||||||||
(corporate financial | Wilde | |||||||||
consulting) (from 1989 to | Co. (direct | |||||||||
2000). | media market- | |||||||||
ing) (since | ||||||||||
1982); Direc- | ||||||||||
tor, Alpha | ||||||||||
Grainger Man- | ||||||||||
ufacturing, | ||||||||||
Inc. (electron- | ||||||||||
ics) (since | ||||||||||
1983); former | ||||||||||
Trustee, MFS | ||||||||||
Family of | ||||||||||
Funds (invest- | ||||||||||
ment | ||||||||||
company) | ||||||||||
(from 1985 to | ||||||||||
2001); Har- | ||||||||||
vard Club of | ||||||||||
Boston (Audit | ||||||||||
Committee) | ||||||||||
(since 2001). | ||||||||||
INTERESTED | ||||||||||
TRUSTEE: | ||||||||||
R. Jay Gerken* | Chairman, | Since 2002 | President since 2002; | Chairman | N/A | |||||
Citigroup Asset | President | Managing Director, CGM | of the | |||||||
Management | and Chief | (since 1996); Chairman, | Board, | |||||||
399 Park Avenue | Executive | President and Chief Executive | Trustee or | |||||||
New York, NY 10022 | Officer | Officer of Smith Barney Fund | Director | |||||||
Age 52 | Management LLC (“SBFM”), | of 219 | ||||||||
Travelers Investment Adviser, | ||||||||||
Inc. (“TIA”) and Citi Fund | ||||||||||
Management Inc. (“CFM”). | ||||||||||
OFFICERS: | ||||||||||
Lewis E. Daidone | Senior | Since 2000 | Managing Director, CGM | N/A | N/A | |||||
125 Broad Street | Vice | (since 1990); former Chief | ||||||||
New York, NY 10004 | President | Financial Officer and | ||||||||
Age 46 | and Chief | Treasurer of certain mutual | ||||||||
Adminis- | funds associated with | |||||||||
trative | Citigroup Inc.; Director and | |||||||||
Officer | Senior Vice President of | |||||||||
SBFM and TIA; Director | ||||||||||
of CFM. |
19
Citi Premium Liquid Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
Frances M. Guggino | Controller | Since 2002 | Vice President, Citigroup | N/A | N/A | |||||
125 Broad Street | Asset Management | |||||||||
New York, NY 10004 | (since 1991). | |||||||||
Age 46 | ||||||||||
Robert I. Frenkel | Secretary | Since 2000 | Managing Director and | N/A | N/A | |||||
CAM | Chief | Since 2003 | General Counsel, Global | |||||||
300 First Stamford Place | Legal | Mutual Funds for Citigroup | ||||||||
Stamford, CT 06902 | Officer | Asset Management (since | ||||||||
Age 48 | 1994) |
* Mr. Gerken is an “interested person” of the Fund as defined in the 1940 Act because he is an |
officer of certain affiliates of the Manager. |
20
Cash Reserves Portfolio | ||
P O R T F O L I O O F I N V E S T M E N T S | August 31, 2003 |
Principal | ||||
Amount | ||||
Issuer | (000’s omitted) | Value | ||
Asset Backed — 9.7% | ||||
K2 USA LLC,* | ||||
1.07% due 04/07/04 | $ | 140,000 | $ | 139,991,691 |
1.08% due 04/26/04 | 156,500 | 156,484,776 | ||
1.07% due 05/18/04 | 75,000 | 74,989,636 | ||
Links Finance Corp.,* | ||||
1.09% due 10/15/03 | 250,000 | 249,996,986 | ||
1.08% due 03/15/04 | 200,000 | 199,988,299 | ||
1.06% due 06/16/04 | 100,000 | 99,976,311 | ||
1.07% due 07/15/04 | 400,000 | 399,930,492 | ||
Premier Asset Coll | ||||
Entity Ltd.,* | ||||
1.08% due 02/17/04 | 100,000 | 99,985,991 | ||
1.08% due 04/26/04 | 100,000 | 99,993,515 | ||
1.08% due 05/17/04 | 125,000 | 124,991,202 | ||
Sigma Finance Corp.,* | ||||
1.07% due 01/05/04 | 150,000 | 149,994,750 | ||
1.08% due 02/10/04 | 100,000 | 99,993,342 | ||
1.07% due 04/05/04 | 500,000 | 499,970,192 | ||
1.08% due 04/28/04 | 100,000 | 99,990,164 | ||
1.08% due 04/30/04 | 250,000 | 249,975,205 | ||
1.07% due 07/15/04 | 373,000 | 372,918,980 | ||
1.07% due 08/17/04 | 250,000 | 249,939,566 | ||
Stanfield Victoria | ||||
Finance Ltd.,* | ||||
1.07% due 05/04/04 | 100,000 | 99,993,333 | ||
1.08% due 06/01/04 | 100,000 | 99,988,892 | ||
1.07% due 06/15/04 | 100,000 | 99,988,164 | ||
Whistlejacket | ||||
Capital Ltd.,* | ||||
1.09% due 02/17/04 | 90,000 | 89,995,878 | ||
1.07% due 06/28/04 | 50,000 | 49,991,821 | ||
3,809,069,186 | ||||
Certificates of Deposit | ||||
(Domestic) — 1.0% | ||||
Wells Fargo Bank, | ||||
1.05% due 09/02/03 | 320,000 | 319,999,996 | ||
1.06% due 10/03/03 | 89,000 | 88,999,985 | ||
408,999,981 | ||||
Certificates of Deposit (Euro) — 11.6% | ||||
Barclays Bank, | ||||
1.26% due 09/03/03 | 153,000 | 153,000,167 | ||
Barclays Bank London | ||||
1.05% due 09/17/03 | 500,000 | 500,000,000 | ||
Credit Suisse London, | ||||
1.09% due 12/22/03 | 250,000 | 250,000,000 | ||
HBOS, | ||||
1.22% due 09/08/03 | 458,000 | 458,000,000 | ||
HBOS London, | ||||
1.05% due 12/30/03 | 500,000 | 500,016,580 | ||
San Paulo Euro CD, | ||||
1.05% due 12/24/03 | 175,000 | 175,000,000 |
Principal | ||||
Amount | ||||
Issuer | (000’s omitted) | Value | ||
Unicredito Italiano | ||||
1.06% due 10/07/03 | $ | 750,000 | $ | 750,000,000 |
1.05% due 10/20/03 | 500,000 | 500,000,000 | ||
Westdeutsche | ||||
Landesbank, | ||||
1.07% due 10/07/03 | 1,300,000 | 1,300,006,482 | ||
4,586,023,229 | ||||
Certificates of Deposit (Yankee) — 8.9% | ||||
Banco Bilbao, | ||||
1.08% due 12/26/03 | 200,000 | 200,000,000 | ||
Bayerische Landesbank, | ||||
1.24% due 09/08/03 | 172,000 | 172,000,000 | ||
1.22% due 11/03/03 | 100,000 | 100,006,958 | ||
BNP Paribas, | ||||
1.18% due 11/17/03 | 350,000 | 350,000,000 | ||
Canadian Imperial | ||||
Bank, | ||||
1.25% due 10/22/03 | 100,000 | 99,999,988 | ||
1.04% due 10/28/03 | 250,000 | 250,000,000 | ||
1.06% due 03/11/04* | 200,000 | 199,985,490 | ||
Credit Agricole, | ||||
1.06% due 10/10/03 | 250,000 | 250,000,000 | ||
Credit Lyonnais, | ||||
1.09% due 12/08/03 | 400,000 | 400,010,849 | ||
Danske Bank, | ||||
1.04% due 09/29/03 | 220,000 | 220,000,000 | ||
1.04% due 09/30/03 | 248,500 | 248,500,000 | ||
Royal Bank | ||||
Scotland PLC., | ||||
1.06% due 10/10/03 | 150,000 | 150,000,000 | ||
Toronto Dominion | ||||
Bank, | ||||
1.24% due 09/08/03 | 100,000 | 100,000,000 | ||
1.21% due 11/10/03 | 200,000 | 200,003,803 | ||
1.08% due 12/30/03 | 91,000 | 91,005,984 | ||
Westdeutsche | ||||
Landesbank, | ||||
1.04% due 12/10/03 | 388,000 | 388,000,000 | ||
1.04% due 12/15/03 | 100,000 | 100,000,000 | ||
3,519,513,072 | ||||
Commercial Paper — 26.3% | ||||
Amstel Funding Corp., | ||||
1.27% due 10/24/03 | 219,000 | 218,590,531 | ||
1.19% due 10/28/03 | 100,081 | 99,892,431 | ||
1.10% due 11/17/03 | 100,000 | 99,764,722 | ||
1.06% due 12/17/03 | 182,316 | 181,741,603 | ||
1.06% due 12/29/03 | 321,193 | 320,067,575 | ||
Aquinas Funding LLC, | ||||
1.21% due 10/06/03 | 100,000 | 99,882,361 | ||
Atlantis One Funding | ||||
Corp., | ||||
1.05% due 10/28/03 | 185,000 | 184,692,438 |
21
Cash Reserves Portfolio | |||
P O R T F O L I O O F I N V E S T M E N T S (Continued) | August 31, 2003 |
Principal | ||||
Amount | ||||
Issuer | (000’s omitted) | Value | ||
Commercial Paper — (cont’d) | ||||
Atomium Funding Corp., | ||||
1.07% due 09/09/03 | $ | 70,738 | $ | 70,721,180 |
1.06% due 09/10/03 | 100,193 | 100,166,449 | ||
1.05% due 10/09/03 | 95,652 | 95,545,986 | ||
1.10% due 10/28/03 | 112,613 | 112,416,866 | ||
1.09% due 11/06/03 | 128,873 | 128,615,462 | ||
1.10% due 11/18/03 | 114,362 | 114,089,437 | ||
1.06% due 11/21/03 | 125,000 | 124,701,875 | ||
Beethoven Funding | ||||
Corp., | ||||
1.10% due 09/19/03 | 99,453 | 99,398,301 | ||
Clipper Receivables, | ||||
1.24% due 09/05/03 | 100,000 | 99,986,222 | ||
1.08% due 09/09/03 | 100,000 | 99,976,000 | ||
Compass | ||||
Securitization,* | ||||
1.063% due 09/05/03 | 150,000 | 149,999,860 | ||
1.063% due 09/08/03 | 200,000 | 199,999,614 | ||
Credit Lyonnais, | ||||
1.08% due 12/04/03 | 130,000 | 129,633,400 | ||
Danske Bank, | ||||
1.04% due 12/16/03 | 100,000 | 99,693,778 | ||
Galleon Capital Corp., | ||||
1.24% due 09/05/03 | 100,000 | 99,986,222 | ||
GE Capital Corp., | ||||
1.21% due 09/05/03 | 100,000 | 99,986,556 | ||
0.94% due 09/16/03 | 75,000 | 74,970,625 | ||
1.20% due 09/24/03 | 200,000 | 199,846,667 | ||
Giro Funding U.S. | ||||
Corp., | ||||
1.05% due 09/29/03 | 100,000 | 99,918,333 | ||
Goldman Sachs, | ||||
1.05% due 11/26/03 | 353,500 | 352,613,304 | ||
Grampian Funding Ltd., | ||||
1.10% due 12/02/03 | 100,615 | 100,332,160 | ||
1.09% due 12/12/03 | 210,000 | 209,351,450 | ||
1.08% due 12/15/03 | 350,500 | 349,395,925 | ||
HBOS Treasury | ||||
Services PLC., | ||||
1.09% due 12/29/03 | 150,000 | 149,462,021 | ||
KBC Financial Products, | ||||
1.27 due 09/03/03 | 100,000 | 99,992,944 | ||
Mica Funding LLC, | ||||
0.97% due 09/18/03 | 249,191 | 249,076,858 | ||
1.06% due 09/19/03 | 50,131 | 50,104,431 | ||
1.10% due 10/10/03 | 185,000 | 184,779,542 | ||
1.07% due 10/21/03 | 250,000 | 249,628,472 | ||
1.09% due 11/10/03 | 140,500 | 140,202,218 | ||
1.10% due 11/21/03 | 150,000 | 149,628,750 | ||
Moat Funding LLC, | ||||
1.25% due 09/05/03 | 100,000 | 99,986,111 | ||
1.05% due 10/02/03 | 65,000 | 64,941,229 | ||
1.05% due 10/03/03 | 100,000 | 99,906,667 | ||
1.27% due 10/09/03 | 100,000 | 99,865,944 | ||
1.20% due 11/19/03 | 200,000 | 199,473,333 | ||
1.04% due 12/17/03 | 100,000 | 99,690,889 |
Principal | ||||
Amount | ||||
Issuer | (000’s omitted) | Value | ||
Nestle Capital Corp., | ||||
1.18% due 09/03/03 | $ | 100,000 | $ | 99,993,444 |
1.18% due 09/04/03 | 100,000 | 99,990,167 | ||
Nordeutsche | ||||
Landesbank, | ||||
1.07% due 12/08/03 | 100,000 | 99,708,722 | ||
Pennine Funding, | ||||
1.25% due 09/02/03 | 141,500 | 141,495,087 | ||
Perry Global Funding, | ||||
1.04% due 10/09/03 | 199,366 | 199,147,140 | ||
Prudential PLC., | ||||
1.20% due 10/10/03 | 100,000 | 99,870,000 | ||
Regency Markets LLC, | ||||
1.09% due 09/19/03 | 210,882 | 210,767,069 | ||
Santander, | ||||
1.10% due 12/24/03 | 190,000 | 189,341,175 | ||
Scaldis, | ||||
1.06% due 09/15/03 | 678,743 | 678,463,207 | ||
1.10% due 11/20/03 | 115,000 | 114,718,888 | ||
Silver Tower US | ||||
Funding LLC, | ||||
1.09% due 09/08/03 | 524,000 | 523,888,940 | ||
1.12% due 09/17/03 | 282,000 | 281,859,626 | ||
1.07% due 09/26/03 | 250,000 | 249,814,236 | ||
Surrey Funding Corp., | ||||
1.06% due 09/17/03 | 120,000 | 119,943,467 | ||
United Parcel Services, | ||||
1.19% due 09/03/03 | 100,000 | 99,993,389 | ||
Victory Receivable | ||||
Corp., | ||||
1.06% due 09/11/03 | 142,903 | 142,860,923 | ||
1.10% due 09/15/03 | 132,100 | 132,043,491 | ||
1.11% due 09/16/03 | 133,700 | 133,638,164 | ||
1.11% due 10/21/03 | 111,277 | 111,105,448 | ||
1.06% due 10/31/03 | 149,794 | 149,529,364 | ||
1.10% due 11/12/03 | 141,216 | 140,905,325 | ||
10,371,794,014 | ||||
Corporate Notes — 15.1% | ||||
Brahms Funding Corp., | ||||
1.13% due 09/04/03 | 300,000 | 299,971,750 | ||
1.12% due 09/09/03 | 615,350 | 615,196,846 | ||
1.12% due 09/10/03 | 199,000 | 198,944,280 | ||
1.12% due 09/16/03 | 175,351 | 175,269,170 | ||
1.13% due 09/25/03 | 113,161 | 113,075,752 | ||
1.15% due 09/26/03 | 101,905 | 101,823,618 | ||
1.15% due 10/14/03 | 80,437 | 80,326,511 | ||
Fenway Funding, | ||||
1.15% due 09/12/03 | 193,493 | 193,425,009 | ||
1.15% due 09/18/03 | 148,697 | 148,616,249 | ||
1.15% due 09/19/03 | 73,325 | 73,282,838 | ||
1.15% due 09/29/03 | 123,034 | 122,923,953 | ||
1.15% due 10/03/03 | 247,500 | 247,247,000 | ||
1.15% due 10/10/03 | 175,986 | 175,766,751 | ||
1.15% due 10/24/03 | 245,000 | 244,585,201 |
22
Cash Reserves Portfolio | |||
P O R T F O L I O O F I N V E S T M E N T S (Continued) | August 31, 2003 |
Principal | ||||
Amount | ||||
Issuer | (000’s omitted) | Value | ||
Corporate Notes — (cont’d) | ||||
Foxboro Funding Ltd., | ||||
1.13% due 09/12/03 | $ | 149,251 | $ | 149,199,467 |
1.15% due 10/15/03 | 136,856 | 136,663,641 | ||
1.16% due 11/07/03 | 80,880 | 80,705,389 | ||
Harwood Funding | ||||
Corp., | ||||
1.09% due 09/04/03 | 100,000 | 99,990,917 | ||
1.10% due 09/18/03 | 311,961 | 311,798,954 | ||
1.13% due 09/18/03 | 117,843 | 117,780,118 | ||
Mittens, | ||||
1.13% due 09/02/03 | 100,000 | 99,996,861 | ||
1.04% due 09/03/03 | 100,000 | 99,994,222 | ||
1.05% due 09/03/03 | 100,000 | 99,994,167 | ||
1.08% due 09/15/03 | 100,000 | 99,958,000 | ||
1.13% due 09/15/03 | 150,000 | 149,934,083 | ||
1.14% due 09/15/03 | 218,100 | 218,003,309 | ||
1.13% due 09/24/03 | 100,000 | 99,927,806 | ||
1.10% due 10/09/03 | 200,000 | 199,767,778 | ||
1.13% due 10/14/03 | 99,000 | 98,866,377 | ||
1.10% due 10/15/03 | 150,000 | 149,798,333 | ||
1.11% due 10/15/03 | 48,400 | 48,334,337 | ||
1.15% due 11/05/03 | 200,000 | 199,584,722 | ||
1.15% due 11/06/03 | 175,000 | 174,631,042 | ||
Motown, | ||||
1.06% due 10/24/03 | 107,000 | 106,833,021 | ||
Park Granada LLC, | ||||
1.07% due 09/09/03 | 122,250 | 122,220,932 | ||
1.08% due 09/09/03 | 35,000 | 34,991,600 | ||
1.10% due 11/07/03 | 273,815 | 273,254,440 | ||
5,962,684,444 | ||||
Master Notes — 2.8% | ||||
Morgan Stanley, | ||||
1.33% due 09/02/03 | 850,000 | 850,000,000 | ||
Merrill Lynch, | ||||
1.28% due 09/02/03 | 265,000 | 265,000,000 | ||
1,115,000,000 | ||||
Medium Term Notes — 8.1% | ||||
Blue Heron Funding,* | ||||
1.14% due 10/17/03 | 500,000 | 500,000,000 | ||
1.14% due 12/19/03 | 175,000 | 175,000,000 | ||
1.14% due 02/25/04 | 105,000 | 105,000,000 | ||
1.14% due 03/19/04 | 200,000 | 200,000,000 | ||
1.14% due 05/19/04 | 438,750 | 438,750,000 | ||
1.14% due 05/28/04 | 180,000 | 180,000,000 | ||
Credit Suisse | ||||
First Boston,* | ||||
1.12% due 03/08/04 | 450,000 | 450,000,000 | ||
General Electric | ||||
Capital Corp.,* | ||||
1.19% due 07/09/07 | 500,000 | 500,000,000 | ||
1.14% due 10/17/07 | 350,000 | 350,000,000 |
Principal | ||||
Amount | ||||
Issuer | (000’s omitted) | Value | ||
Merrill Lynch & Co. | ||||
Inc.,* | ||||
1.24% due 01/09/04 | $ | 300,000 | $ | 299,988,612 |
3,198,738,612 | ||||
Promissory Note — 3.5% | ||||
Goldman Sachs, | ||||
1.22% due 02/24/04 | 1,400,000 | 1,400,000,000 | ||
Time Deposits — 4.2% | ||||
Chase Manhattan | ||||
Bank Nassau, | ||||
1.00% due 09/02/03 | 300,000 | 300,000,000 | ||
Credit Suisse | ||||
First Boston, | ||||
1.05% due 10/01/03 | 800,000 | 800,000,000 | ||
Keybank National | ||||
Grand Cayman, | ||||
1.00% due 09/02/03 | 288,337 | 288,337,000 | ||
National City Bank | ||||
Grand Cayman, | ||||
1.00% due 09/02/03 | 250,000 | 250,000,000 | ||
1,638,337,000 | ||||
United States | ||||
Government Agency — 8.7% | ||||
Federal Home Loan | ||||
Mortgage | ||||
Association, | ||||
1.00% due 10/30/03 | 100,000 | 99,836,111 | ||
Federal Home Loan | ||||
Mortgage | ||||
Association, | ||||
1.00% due 10/31/03 | 200,000 | 199,666,667 | ||
Federal Home Loan | ||||
Mortgage | ||||
Association, | ||||
1.08% due 11/21/03 | 500,000 | 498,785,000 | ||
Federal Home Loan | ||||
Mortgage | ||||
Association, | ||||
1.08% due 12/09/03 | 89,250 | 88,984,928 | ||
Federal Home Loan | ||||
Mortgage | ||||
Association, | ||||
1.08% due 12/15/03 | 388,643 | 387,418,775 | ||
Federal Home Loan | ||||
Mortgage | ||||
Association, | ||||
1.04% due 12/19/03 | 285,000 | 284,102,567 | ||
Federal Home Loan | ||||
Mortgage | ||||
Association, | ||||
1.08% due 12/19/03 | 200,000 | 199,346,000 |
23
Cash Reserves Portfolio | |||
P O R T F O L I O O F I N V E S T M E N T S (Continued) | August 31, 2003 |
Principal | |||||
Amount | |||||
Issuer | (000’s omitted) | Value | |||
United States | |||||
Government Agency — (cont’d) | |||||
Federal Home Loan | |||||
Mortgage | |||||
Association, | |||||
1.04% due 12/22/03 | $ | 500,000 | $ | 498,382,222 | |
Federal Home Loan | |||||
Mortgage | |||||
Association, | |||||
1.10% due 12/22/03 | 550,000 | 548,117,778 | |||
Federal National | |||||
Mortgage | |||||
Association, | |||||
1.08% due 12/16/03 | 150,000 | 149,525,208 | |||
Federal National | |||||
Mortgage | |||||
Association,* | |||||
1.01% due 01/28/05 | 228,000 | 227,903,310 | |||
Federal National | |||||
Mortgage | |||||
Association,* | |||||
1.05% due 02/18/05 | 235,130 | 235,060,798 | |||
3,417,129,364 | |||||
Total Investments, | |||||
at Amortized Cost | 99.9 | % | 39,427,288,902 | ||
Other Assets, | |||||
Less Liabilities | 0.1 | 19,804,938 | |||
Net Assets | 100.0 | % | $ | 39,447,093,840 | |
* Variable interest rates—subject to periodic | |||||
change. | |||||
See notes to financial statements |
24
Cash Reserves Portfolio | ||||||
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S | ||||||
August 31, 2003 | ||||||
Assets: | ||||||
Investments at value (Note 1A) | $ | 39,427,288,902 | ||||
Cash | 512 | |||||
Interest receivable | 24,256,632 | |||||
Total assets | 39,451,546,046 | |||||
Liabilities: | ||||||
Management fees payable (Note 2) | 3,113,186 | |||||
Accrued expenses and other liabilities | 1,339,020 | |||||
Total liabilities | 4,452,206 | |||||
Net Assets | $ | 39,447,093,840 | ||||
Represented by: | ||||||
Paid-in capital for beneficial interests | $ | 39,447,093,840 | ||||
See notes to financial statements |
25
Cash Reserves Portfolio | |||||||
S T A T E M E N T O F O P E R A T I O N S | |||||||
For the Year Ended August 31, 2003 | |||||||
Interest Income (Note 1B): | $ | 663,606,463 | |||||
Expenses: | |||||||
Management fees (Note 2) | $ | 66,705,349 | |||||
Custody and fund accounting fees | 8,555,695 | ||||||
Trustees’ fees | 692,498 | ||||||
Legal fees | 253,408 | ||||||
Audit fees | 40,415 | ||||||
Other | 31,171 | ||||||
Total expenses | 76,278,536 | ||||||
Less: aggregate amounts waived by the Manager (Note 2) | (31,802,902 | ) | |||||
Less: fees paid indirectly (Note 1F) | (473 | ) | |||||
Net expenses | 44,475,161 | ||||||
Net investment income | $ | 619,131,302 | |||||
See notes to financial statements |
26
Cash Reserves Portfolio | |||||||||
S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S | |||||||||
Year Ended August 31, | |||||||||
2003 | 2002 | ||||||||
Increase (Decrease) in Net Assets | |||||||||
from Operations: | |||||||||
Net investment income | $ | 619,131,302 | $ | 1,026,102,717 | |||||
Capital Transactions: | |||||||||
Proceeds from contributions | 95,248,125,837 | 96,678,280,874 | |||||||
Value of withdrawals | (101,427,035,864 | ) | (84,770,853,952 | ) | |||||
Net increase (decrease) in net assets from | |||||||||
capital transactions | (6,178,910,027 | ) | 11,907,426,922 | ||||||
Net Increase (Decrease) in Net Assets | (5,559,778,725 | ) | 12,933,529,639 | ||||||
Net Assets: | |||||||||
Beginning of year | 45,006,872,565 | 32,073,342,926 | |||||||
End of year | $ | 39,447,093,840 | $ | 45,006,872,565 | |||||
See notes to financial statements |
27
Cash Reserves Portfolio
N O T E S T O F I N A N C I A L S T A T E M E N T S
1. Significant Accounting Policies Cash Reserves Portfolio (the “Portfolio”) is registered under the U.S. Investment Company Act of 1940, as amended (the “1940 Act”), as a no-load, diversified, open-end management investment company which was organized as a trust under the laws of the State of New York. The Declaration of Trust permits the Trustees to issue beneficial interests in the Portfolio. Citi Fund Management Inc. (the “Manager”) acts as the Investment Manager.
The preparation of financial statements in accordance with United States of America generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Portfolio are as follows:
A.Valuation of Investments Money market instruments are valued at amortized cost, in accordance with Rule 2a-7 under the 1940 Act. This method involves valuing a portfolio security at its cost and thereafter assuming a constant amortization to maturity of any discount or premium. The Portfolio’s use of amortized cost is subject to its compliance with certain conditions as specified under Rule 2a-7 of the 1940 Act.
B. Interest Income and Expenses Interest income consists of interest accrued and discount earned (including both original issue and market discount adjusted for amortization of premium) on the investments of the Portfolio, accrued ratably to the date of maturity, plus or minus net realized gain or loss, if any, on investments. Expenses of the Portfolio are accrued daily. The Portfolio bears all costs of its operations other than expenses specifically assumed by the Administrator.
C. U.S. Federal Income Taxes The Portfolio is considered a partnership under the U.S. Internal Revenue Code. Accordingly, no provision for federal income taxes is necessary.
D. Repurchase Agreements It is the policy of the Portfolio to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System or to have segregated within the custodian bank’s vault, all securities held as collateral in support of repurchase agreement investments. Additionally, procedures have been established to monitor, on a daily basis, the market value of the repurchase agreements’ underlying investments to ensure the existence of a proper level of collateral.
E. Other Purchases, maturities and sales of money market instruments are accounted for on the date of the transaction.
F. Fees Paid Indirectly The Portfolio’s custodian calculates its fees based on the Portfolio’s average daily net assets. The fee is reduced according to a fee arrangement, which provides for custody fees to be reduced based on a formula developed to measure the value of cash deposited with the custodian by the Portfolio. This amount is shown as a reduction of expenses on the Statement of Operations.
28
Cash Reserves Portfolio
N O T E S T O F I N A N C I A L S T A T E M E N T S (Continued)
2. Management Fees The Manager is responsible for overall management of the Portfolio’s business affairs, and has a Management Agreement with the Portfolio. The Manager or an affiliate also provides certain administrative services to the Portfolio. These administrative services include providing general office facilities and supervising the overall administration of the Portfolio.
The management fees paid to the Manager are accrued daily and payable monthly. The management fee is computed at an annual rate of 0.15% of the Funds’ average daily net assets. The management fee amounted to $66,705,349 of which $31,802,902 was voluntarily waived for the year ended August 31, 2003. The Portfolio pays no compensation directly to any Trustee or any officer who is affiliated with the Manager, all of whom receive remuneration for their services to the Portfolio from the Manager or its affiliates. Certain of the officers and a Trustee of the Portfolio are officers and a director of the Manager or its affiliates.
3. Investment Transactions Purchases, maturities and sales of money market instruments aggregated $708,198,861,551 and $714,004,635,617, respectively, for the year ended August 31, 2003.
4.Trustee Retirement Plan The Trustees of the Fund have adopted a Retirement Plan for all Trustees who are not “interested persons” of the Fund, within the meaning of the 1940 Act. Under the Plan, all Trustees are required to retire from the Board as of the last day of the calendar year in which the applicable Trustee attains age 75 (certain Trustees who had already attained age 75 when the Plan was adopted are required to retire effective December 31, 2003). Trustees may retire under the Plan before attaining the mandatory retirement age. Trustees who have served as Trustee of the Trust or any of the investment companies associated with Citigroup for at least ten years when they retire are eligible to receive the maximum retirement benefit under the Plan. The maximum retirement benefit is an amount equal to five times the amount of retainer and regular meeting fees payable to a Trustee during the calendar year ending on or immediately prior to the applicable Trustee’s retirement. Amounts under the Plan may be paid in installments or in a lump sum (discounted to present value). The Fund’s allocable share of the expenses of the Plan for the year ended August 31, 2003 and the related liability at August 31, 2003 was not material.
29
Cash Reserves Portfolio | ||||||||||||||||
F I N A N C I A L H I G H L I G H T S | ||||||||||||||||
Year Ended August 31, | ||||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | ||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||
Net assets (000’s omitted) | $ | 39,447,094 | $ | 45,006,873 | $ | 32,073,343 | $ | 14,392,341 | $ | 14,929,345 | ||||||
Ratio of expenses to | ||||||||||||||||
average net assets | 0.10% | 0.10% | 0.10% | 0.10% | 0.10% | |||||||||||
Ratio of net investment | ||||||||||||||||
income to average net assets | 1.39% | 2.29% | 5.27% | 5.93% | 5.13% | |||||||||||
Total return | 1.49% | 2.36% | N/A | N/A | N/A | |||||||||||
Note: If agents of the Portfolio had not voluntarily waived a portion of their fees for the years indicated, | ||||||||||||||||
the ratios would have been as follows: | ||||||||||||||||
Ratios: | ||||||||||||||||
Expenses to average net assets | 0.17% | 0.19% | 0.22% | 0.22% | 0.22% | |||||||||||
Net investment income | ||||||||||||||||
to average net assets | 1.32% | 2.20% | 5.15% | 5.81% | 5.01% | |||||||||||
See notes to financial statements |
30
Cash Reserves Portfolio
R E P O R T O F I N D E P E N D E N T A U D I TO R S
To the Trustees and Investors of
Cash Reserves Portfolio:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Cash Reserves Portfolio (the “Portfolio”) at August 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Portfolio’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2003 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
October 16, 2003
31
Cash Reserves Portfolio
A D D I T I O N A L I N F O R M A T I O N (Unaudited)
Information about the Trustees and Officers of the Portfolio can be found on pages 15 through 20 of this report.
32
Trustees |
Elliott J. Berv |
Donald M. Carlton |
A. Benton Cocanougher |
Mark T. Finn |
R. Jay Gerken, CFA, Chairman* |
Stephen Randolph Gross |
Diana R. Harrington |
Susan B. Kerley |
Alan G. Merten |
C. Oscar Morong, Jr. |
R. Richardson Pettit |
Walter E. Robb, III |
Officers |
R. Jay Gerken, CFA* |
President and |
Chief Executive Officer |
Lewis E. Daidone* |
Senior Vice President |
and Chief Administrative Officer |
Frances M. Guggino* |
Controller |
Robert I. Frenkel* |
Secretary and Chief Legal Officer |
*Affiliated Person of Investment Manager |
Investment Manager |
(of Cash Reserves Portfolio) |
Citi Fund Management Inc. |
100 First Stamford Place |
Stamford, CT 06902 |
Distributor |
Citigroup Global Markets Inc. |
Transfer Agent |
Citicorp Trust Bank, fsb. |
125 Broad Street, 11th Floor |
New York, New York 10004 |
Sub-Transfer Agent and Custodian |
State Street Bank and Trust Company |
225 Franklin Street |
Boston, MA 02110 |
Independent Auditors |
PricewaterhouseCoopers LLP |
1177 Avenue of the Americas |
New York, NY 10036 |
Legal Counsel |
Bingham McCutchen LLP |
150 Federal Street |
Boston, MA 02110 |
This report is prepared for the information of shareholders of Citi Premium Liquid Reserves. It is
authorized for distribution to prospective investors only when preceded or accompanied by an
effective prospectus of Citi Premium Liquid Reserves.
©2003 Citicorp | Citigroup Global Markets Inc. | |
CFA/PLR/803 | ||
03-5435 |
CitiSM
Premium
U.S. Treasury
Reserves
ANNUAL REPORT
AUGUST 31, 2003
INVESTMENT PRODUCTS: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE |
T A B L E O F C O N T E N T S | ||
Letter From the Chairman | 1 | |
Manager Overview | 2 | |
Fund Facts | 4 | |
Fund Performance | 5 | |
Citi Premium U.S. Treasury Reserves | ||
Statement of Assets and Liabilities | 6 | |
Statement of Operations | 7 | |
Statements of Changes in Net Assets | 8 | |
Notes to Financial Statements | 9 | |
Financial Highlights | 11 | |
Independent Auditors’ Report | 12 | |
Additional Information | 13 | |
U.S. Treasury Reserves Portfolio | ||
Portfolio of Investments | 19 | |
Statement of Assets and Liabilities | 20 | |
Statement of Operations | 21 | |
Statements of Changes in Net Assets | 22 | |
Notes to Financial Statements | 23 | |
Financial Highlights | 25 | |
Independent Auditors’ Report | 26 | |
Additional Information | 27 | |
L E T T E R F R O M T H E C H A I R M A N
Dear Shareholder, The philosopher Bertrand Russell famously remarked that, “Change is one thing, progress is another.” You will notice in the following pages that we have begun to implement some changes to your shareholder report, and we will be reflecting other changes in future reports. Our aim is to make meaningful improvements in reporting on the management of your Fund and its performance, not just to enact change for change’s sake. Please bear with us during this transition period. We know that you have questions about fund managers’ decisions and plans, and we want to be sure that you have easy access to the information you need. Keeping investors informed is, and always will be, one of my top priorities as Chairman of your Fund. | |
We invite you to read this report in full. Please take the opportunity to talk to your financial adviser about this report or any other questions or concerns you have about your Fund and your financial future. As always, thank you for entrusting your assets to us. We look forward to helping you continue to meet your financial goals. Please read on to learn more about your Fund’s performance and the Manager’s strategy.
Sincerely,
R. Jay Gerken, CFA
Chairman, President and Chief Executive Officer
September 4, 2003
1
M A N A G E R O V E R V I E W
Performance Review
As of August 31, 2003, the seven-day current yield for CitiSM Premium U.S. Treasury Reserves (“Fund”) was 0.51% and its seven-day effective yield, which reflects compounding, was also 0.51%. These numbers are the same due to the effects of rounding. The seven-day effective yield is calculated similarly to the seven-day current yield but, when annualized, the income earned by an investment in the Fund is assumed to be reinvested. The effective yield typically will be slightly higher than the current yield because of the compounding effect of the assumed reinvestment. Please note that your investment is neither insured nor guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) or any other government agency. Although the Fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund.
Interest Rates Hit 45-Year Low
Short-term interest rates and yields of U.S. Treasury billsi declined sharply during the Fund’s fiscal year ended August 31 as the Federal Reserve Board and the Bush Administration implemented aggressive measures to stimulate renewed economic growth.
When the year began, the economic outlook appeared mixed. Although consumers continued to spend at a relatively robust pace, U.S. corporations reined in capital spending as the effects of a persistently declining stock market and high-profile accounting scandals took their toll on investor confidence and overall business activity. In addition, rising tensions in the Middle East and elsewhere contributed to generally cautious attitudes among corporate executives. As a result, the U.S. economy expanded, but sluggishly.
The economy’s struggles prompted the Fed to cut short-term interest rates in early November 2002 by a larger-than-expected 0.5 percentage points, signaling the central bank’s commitment to boosting economic activity. Although the November rate cut was the first of 2002, it was the twelfth of the aggressive rate-reduction campaign that began in January 2001, and U.S. Treasury bill yields continued to fall. However, economic growth failed to accelerate meaningfully, despite some encouraging signs toward year-end 2002, including a surge in mortgage refinancings that put cash in consumers’ pockets. Corporations remained cautious as it became clearer early in 2003 that the United States and its allies were likely to go to war in Iraq. In effect, the economy adopted a “wait and see” attitude. Even the Fed indicated at its March 2003 meeting that it could not adequately assess prevailing economic risks because of the geopolitical situation.
After the war began in late March, it soon became clear that the military campaign would be successful and Saddam Hussein would be deposed. As major combat operations wound down, consumers and businesses became increasingly optimistic. Improving sentiment was reinforced by legislation enacting federal tax cuts, including a reduction in taxes on capital gains and dividends. For its part, the Fed cut short-term interest rates by another 0.25 percentage points in late June, driving the federal funds rateii to just 1%, its lowest level since the Eisenhower Administration, and yields of U.S. Treasury bills continued to fall. However, because the federal budget deficit is widening, the U.S. Treasury is issuing a greater volume of securities, including Treasury bills, to fund its operations.
2
By the end of August evidence of a sustainable economic improvement emerged. Stronger retail sales, rising domestic consumption and increasing export activity contributed to a relatively robust 3.3% annualized growth rate in GDP (gross domestic product)iii during the second quarter of 2003. However, to forestall potential deflationary forces, the Fed indicated that it was likely to leave short-term interest rates at prevailing low levels for the foreseeable future.
Anticipating a New Economic Climate
In this challenging market environment, we maintained a generally cautious investment posture. While interest rates fell during the first ten months of the reporting period, we set the Fund’s weighted average maturity in a range that we considered neutral to slightly longer than average. This strategy enabled us to maintain prevailing rates for as long as we deemed practical, while giving us the flexibility required to respond to changing market conditions. In addition, the Fund’s holdings generally were concentrated in shorter maturities because there was little incentive to extend out on the yield curve. In fact, there were times during the reporting period when longer-term yields on U.S. Treasury bills were lower than their shorter-term counterparts.
As of the end of August, we have begun to see evidence that the market may be anticipating higher short-term interest rates. While we do not expect the Fed to raise their target for the fed funds rate anytime soon, we are prepared to adjust our strategies as market conditions change.
Thank you for your investment in CitiSM Premium U.S. Treasury Reserves. We appreciate that you have entrusted us to manage your money, and we value our relationship with you.
Sincerely,
Denise Guetta
Portfolio Manager
September 5, 2003
The information provided in this letter by the Manager is not intended to be a forecast of future events, a guarantee of future results or investment advice.Views expressed may differ from those of the firm as a whole.
Portfolio holdings and breakdowns are as of August 31, 2003 and are subject to change. Please refer to page 19 for a list and percentage breakdown of the Fund’s holdings.
i | U.S.Treasury bills are backed by the full faith and credit of the United States government and offer |
return of principal value if held to maturity.Treasury bills have maturities of one year or less and prior | |
to maturity will fluctuate with market conditions and interest rate changes. | |
ii | The federal funds rate is the interest rate that banks with excess reserves at a Federal Reserve dis- |
trict bank charge other banks that need overnight loans.The fed funds rate often points to the direc- | |
tion of U.S. interest rates. | |
iii | Gross Domestic Product is a market value of goods and services produced by labor and property in |
a given country. |
3
F U N D F A C T S
Fund Objective
To provide its shareholders with liquidity and as high a level of current income from U.S. government obligations as is consistent with the preservation of capital.
Investment Manager | Dividends | |
Citi Fund Management Inc. | Declared daily, paid monthly | |
Commencement of Operations | Benchmark* | |
March 1, 1991 | • | Lipper S&P AAA rated U.S. |
Treasury Money Market | ||
Funds Average | ||
Net Assets as of 8/31/03 | • | iMoneyNet, Inc. |
$372.8 million | 100% U.S. Treasury Rated Money | |
Market Funds Average |
* | The Lipper Funds Average and iMoneyNet, Inc. Funds Average reflect the performance (exclud- |
ing sales charges) of mutual funds with similar objectives. | |
Citi is a service mark of Citicorp. |
4
F U N D P E R F O R M A N C E
Total Returns
One | Five | Ten | |||||
All Periods Ended August 31, 2003 | Year | Years* | Years* | ||||
Citi Premium U.S.Treasury Reserves | 0.85 | % | 3.36 | % | 3.98 | % | |
Lipper S&P AAA rated U.S.Treasury Money Market | |||||||
Funds Average | 0.58 | % | 3.18 | % | 3.89 | % | |
iMoneyNet, Inc. 100% U.S.Treasury Rated Money | |||||||
Market Funds Average | 0.65 | % | 3.21 | % | 3.85 | % | |
*Average Annual Total Return | |||||||
7-DayYields | |||||||
Annualized Current | 0.51% | ||||||
Effective | 0.51% |
The Annualized Current 7-Day Yield reflects the amount of income generated by the investment during the seven-day period and assumes that the income is generated each week over a 365-day period. The yield is shown as a percentage of the investment.
The Effective 7-Day Yield is calculated similarly, but when annualized, the income earned by the investment during that seven-day period is assumed to be reinvested. The effective yield may be slightly higher than the current yield because of the compounding effect of this assumed reinvestment.
Note: A money market fund’s yield more closely reflects the current earnings of the fund than does the total return.
Important Tax Information—For the fiscal year ended August 31, 2003 the Fund paid $0.00848 per share to shareholders from net investment income. For such period, 100% of income dividends paid were derived from interest earned from U.S. Treasury Bills, Notes and Bonds.
Comparison of 7-Day Yields for Citi Premium U.S. Treasury Reserves vs. iMoneyNet, Inc. 100% U.S. Treasury Rated Money Market Funds Average
As illustrated, Citi Premium U.S. Treasury Reserves generally provided an annualized seven-day yield comparable to the iMoneyNet, Inc. 100% U.S. Treasury Rated Money Market Funds Average, as published in iMoneyNet, Inc. Money Fund Report™, for the one-year period.
Note: Although money market funds seek to maintain the value of your investment at $1.00 per share, it is possible to lose money by investing in the Fund. Mutual fund shares are not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency.Yields and total returns will fluctuate and past performance is no guarantee of future results. Total return figures include reinvestment of dividends. Returns and yields reflect certain voluntary fee waivers. If the waivers were not in place, the Fund’s returns and yields would have been lower.
5
Citi Premium U.S. Treasury Reserves | ||||||||
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S | ||||||||
August 31, 2003 | ||||||||
Assets: | ||||||||
Investment in U.S.Treasury Reserves Portfolio, at value (Note 1) | $ | 373,176,593 | ||||||
Liabilities: | ||||||||
Dividends payable | 88,884 | |||||||
Management fees payable (Note 3) | 77,823 | |||||||
Distribution/Service fees payable (Note 4) | 38,912 | |||||||
Accrued expenses and other liabilities | 148,204 | |||||||
Total liabilities | 353,823 | |||||||
Net Assets for 372,822,706 shares of beneficial interest outstanding | $ | 372,822,770 | ||||||
Net Assets Consist of: | ||||||||
Paid-in capital | $ | 372,822,706 | ||||||
Accumulated net gain on investments | 64 | |||||||
Total | $ | 372,822,770 | ||||||
Net Asset Value, Offering Price and Redemption Price Per Share | $ | 1.00 | ||||||
See notes to financial statements |
6
Citi Premium U.S. Treasury Reserves | ||||||||
S T A T E M E N T O F O P E R A T I O N S | ||||||||
For The Year Ended August 31, 2003 | ||||||||
Investment Income (Note 1A): | ||||||||
Income from U.S.Treasury Reserves Portfolio | $ | 7,135,170 | ||||||
Allocated expenses from U.S.Treasury Reserves Portfolio | (531,397 | ) | ||||||
$ | 6,603,773 | |||||||
Expenses: | ||||||||
Management fees (Note 3) | 1,064,444 | |||||||
Distribution/Service fees (Note 4) | 532,222 | |||||||
Legal fees | 88,637 | |||||||
Transfer agent fees | 53,120 | |||||||
Shareholder reports | 41,268 | |||||||
Blue sky fees | 34,759 | |||||||
Audit fees | 21,384 | |||||||
Custody and fund accounting fees | 10,383 | |||||||
Trustees’ fees | 6,835 | |||||||
Miscellaneous | 10,254 | |||||||
Total expenses | 1,863,306 | |||||||
Net investment income | 4,740,467 | |||||||
Net Realized Gain on Investments from U.S.Treasury Reserves Portfolio | 106,350 | |||||||
Net Increase in Net Assets Resulting from Operations | $ | 4,846,817 | ||||||
See notes to financial statements |
7
Citi Premium U.S. Treasury Reserves | ||||||
S TA T E M E N T S O F C H A N G E S I N N E T A S S E T S | ||||||
Year Ended August 31, | ||||||
2003 | 2002 | |||||
Increase in Net Assets from Operations: | ||||||
Net investment income | $ | 4,740,467 | $ | 8,059,603 | ||
Net realized gain on investments | 106,350 | — | ||||
Net increase in net assets from operations | 4,846,817 | 8,059,603 | ||||
From Investment Activities: | ||||||
Declared as dividends to shareholders (Note 2): | (4,846,753 | ) | (8,059,603 | ) | ||
Transactions in Shares of Beneficial Interest at | ||||||
Net Asset Value of $1.00 Per Share (Note 5): | ||||||
Proceeds from sale of shares | 2,714,513,499 | 2,298,464,517 | ||||
Net asset value of shares issued to shareholders | ||||||
from reinvestment of dividends | 3,053,119 | 4,334,876 | ||||
Cost of shares repurchased | (3,068,852,406 | ) | (1,999,448,005 | ) | ||
Net increase (decrease) in net assets resulting from | ||||||
transactions in shares of beneficial interest | (351,285,788 | ) | 303,351,388 | |||
Net Increase (Decrease) in Net Assets | (351,285,724 | ) | 303,351,388 | |||
Net Assets: | ||||||
Beginning of year | 724,108,494 | 420,757,106 | ||||
End of year | $ | 372,822,770 | $ | 724,108,494 | ||
See notes to financial statements |
8
Citi Premium U.S. Treasury Reserves
N O T E S T O F I N A N C I A L S T A T E M E N T S
1. Significant Accounting Policies Citi Premium U.S. Treasury Reserves (the “Fund”) is a diversified separate series of CitiFunds Premium Trust (the “Trust”), a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Fund invests all of its investable assets in U.S. Treasury Reserves Portfolio (the “Portfolio”), an open-end, diversified management investment company for which Citi Fund Management Inc. (the “Manager”) serves as Investment Manager. The value of such investment reflects the Fund’s proportionate interest (25.6% at August 31, 2003) in the net assets of the Portfolio. Citigroup Global Markets Inc. is the Fund’s Distributor.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The financial statements of the Portfolio, including the portfolio of investments, are contained elsewhere in this report and should be read in conjunction with the Fund’s financial statements.
The significant accounting policies consistently followed by the Fund are as follows:
A. Investment Income The Fund earns income, net of Portfolio expenses, daily on its investment in the Portfolio.
B. FederalTaxes The Fund’s policy is to comply with the provisions of the Internal Revenue Code available to regulated investment companies and to distribute to shareholders all of its taxable income. Accordingly, no provision for federal income or excise tax is necessary.
C. Expenses The Fund bears all costs of its operations other than expenses specifically assumed by the Manager. Expenses incurred by the Trust with respect to any two or more funds in a series are allocated in proportion to the average net assets of each fund, except where allocations of direct expenses to each fund can otherwise be made fairly. Expenses directly attributable to a fund are charged to that fund.
D. Other All the net investment income of the Portfolio is allocated pro rata, based on respective ownership interests, among the Fund and other investors in the Portfolio at the time of such determination.
2. Dividends The net income of the Fund is determined once daily, as of 2:00 p.m. Eastern Time, and all of the net income of the Fund so determined is declared as a dividend to shareholders of record at the time of such determination. Dividends are distributed in the form of additional shares of the Fund or, at the election of the shareholder, in cash (subject to the policies of the shareholder’s Shareholder Servicing Agent) on or prior to the last business day of the month.
3. Management Fees The management fees are computed at an annual rate of 0.20% of the Fund’s average daily net assets. The management fees paid to the Manager amounted to $1,064,444 for the year ended August 31, 2003. The Trust pays no compensation directly to any Trustee or any officer who is affiliated with the Manager, all of
9
Citi Premium U.S. Treasury Reserves
N O T E S TO F I N A N C I A L S T A T E M E N T S (Continued)
whom receive remuneration for their services to the Fund from the Manager or its affiliates. Certain of the officers and a Trustee of the Trust are officers and a director of the Manager or its affiliates.
4. Distribution/Service Fees The Fund adopted a Service Plan pursuant to Rule 12b-1 under the 1940 Act. The Service Plan allows the Fund to pay monthly fees at an annual rate not to exceed 0.10% of the average daily net assets. The Service fees paid amounted to $532,222 for the year ended August 31, 2003. These fees may be used to make payments to the Distributor and to Service Agents or others as compensation for the sale of Fund shares or for advertising, marketing or other promotional activity, and for preparation, printing and distribution of prospectuses, statements of additional information and reports for recipients other than regulators and existing shareholders. The Fund may also make payments to the Distributor and others for providing personal service or the maintenance of shareholder accounts.
5. Shares of Beneficial Interest The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (par value $0.00001 per share).
6. Investment Transactions Increases and decreases in the Fund’s investment in the Portfolio aggregated $2,106,287,853 and $2,464,732,537, respectively, for the year ended August 31, 2003.
7. Income Tax Information and Distributions to Shareholders
At August 31, 2003 the tax basis components of distributable earnings were:
Undistributed ordinary income | $ | 90,066 | |
The tax character of distributions paid during the year was: | |||
Ordinary income | $ | 4,846,753 | |
8.Trustee Retirement Plan The Trustees of the Fund have adopted a Retirement Plan for all Trustees who are not “interested persons” of the Fund, within the meaning of the 1940 Act. Under the Plan, all Trustees are required to retire from the Board as of the last day of the calendar year in which the applicable Trustee attains age 75 (certain Trustees who had already attained age 75 when the Plan was adopted are required to retire effective December 31, 2003). Trustees may retire under the Plan before attaining the mandatory retirement age. Trustees who have served as Trustee of the Trust or any of the investment companies associated with Citigroup for at least ten years when they retire are eligible to receive the maximum retirement benefit under the Plan. The maximum retirement benefit is an amount equal to five times the amount of retainer and regular meeting fees payable to a Trustee during the calendar year ending on or immediately prior to the applicable Trustee’s retirement. Amounts under the Plan may be paid in installments or in a lump sum (discounted to present value). The Fund’s allocable share of the expenses of the Plan for the year ended August 31, 2003 and the related liability at August 31, 2003 was not material.
10
Citi Premium U.S. Treasury Reserves | |||||||||||||||
F I N A N C I A L H I G H L I G H T S | |||||||||||||||
Year Ended August 31, | |||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||
Net Asset Value, beginning of year | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | |||||
Net investment income | 0.00848 | 0.01689 | 0.04778 | 0.05049 | 0.04195 | ||||||||||
Less dividends from net investment | |||||||||||||||
income | (0.00848 | ) | (0.01689 | ) | (0.04778 | ) | (0.05049 | ) | (0.04195 | ) | |||||
Net Asset Value, end of year | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | $ | 1.00000 | |||||
Ratios/Supplemental Data: | |||||||||||||||
Net assets, end of year | |||||||||||||||
(000's omitted) | $ | 372,823 | $ | 724,108 | $ | 420,757 | $ | 340,433 | $ | 237,520 | |||||
Ratio of expenses to average | |||||||||||||||
net assets† | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | 0.45 | % | |||||
Ratio of net investment income to | |||||||||||||||
average net assets† | 0.91 | % | 1.67 | % | 4.76 | % | 5.12 | % | 4.21 | % | |||||
Total return | 0.85 | % | 1.70 | % | 4.88 | % | 5.17 | % | 4.28 | % | |||||
Note: If Agents of the Fund and agents of U.S.Treasury Reserves Portfolio had not waived all or a por- | |||||||||||||||
tion of their fees during the years indicated, the net investment income per share and the ratios would | |||||||||||||||
have been as follows: | |||||||||||||||
Net investment income per share | $ | 0.00732 | $ | 0.01564 | $ | 0.04438 | $ | 0.04678 | $ | 0.03836 | |||||
Ratios: | |||||||||||||||
Expenses to average net assets† | 0.53 | % | 0.64 | % | 0.84 | % | 0.83 | % | 0.81 | % | |||||
Net investment income to average | |||||||||||||||
net assets† | 0.83 | % | 1.49 | % | 4.37 | % | 4.74 | % | 3.85 | % | |||||
† Includes the Fund’s share of U.S.Treasury Reserves Portfolio’s allocated expenses. | |||||||||||||||
See notes to financial statements |
11
Citi Premium U.S. Treasury Reserves
I N D E P E N D E N T A U D I TO R S ’ R E P O R T
To the Trustees and Shareholders of
Citi Premium U.S. Treasury Reserves:
We have audited the accompanying statement of assets and liabilities of Citi Premium U.S. Treasury Reserves of CitiFunds Premium Trust (the “Trust”) (a Massachusetts business trust) as of August 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the three year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the years in the two year period ended August 31, 2000 were audited by other auditors whose report thereon, dated October 4, 2000, expressed an unqualified opinion on the financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Citi Premium U.S. Treasury Reserves of CitiFunds Premium Trust as of August 31, 2003, and the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the three year period then ended, in conformity with accounting principles generally accepted in the United States of America.
New York, New York
October 13, 2003
12
Citi Premium U.S. Treasury Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited)
Information about Trustees and Officers The business and affairs of the Citi Premium U.S. Treasury Reserves (the “Fund”) are managed under the direction of the Fund’s Board of Trustees. Information pertaining to the Trustees and officers of the Fund is set forth below. Each Trustee and officer holds office for his or her lifetime, unless that individual resigns, retires or is otherwise removed. The Statement of Additional Information includes additional information about Fund Trustees and is available, without charge, upon request by calling 1-800-451-2010.
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
NON-INTERESTED | ||||||||||
TRUSTEES: | ||||||||||
Elliott J. Berv | Trustee | Since 2001 | President and Chief Operations | 35 | Board | |||||
c/o R. Jay Gerken | Officer, Landmark City (real | Member, | ||||||||
Citigroup Asset | estate development) (since | American | ||||||||
Management | 2002); Executive Vice | Identity Corp. | ||||||||
399 Park Avenue | President and Chief Operations | (doing | ||||||||
New York, NY 10022 | Officer, DigiGym Systems | business as | ||||||||
Age 60 | (on-line personal training | Morpheus | ||||||||
systems) (since 2001); Chief | Technologies) | |||||||||
Executive Officer, Rocket City | (biometric | |||||||||
Enterprises (internet service | information | |||||||||
company) (since 2000); | management) | |||||||||
President, Catalyst (consulting) | (since 2001; | |||||||||
(since 1984). | consultant | |||||||||
since 1999); | ||||||||||
Director, | ||||||||||
Lapoint | ||||||||||
Industries | ||||||||||
(industrial fil- | ||||||||||
ter company) | ||||||||||
(since 2002); | ||||||||||
Director, | ||||||||||
Alzheimer’s | ||||||||||
Association | ||||||||||
(New England | ||||||||||
Chapter) | ||||||||||
(since 1998). | ||||||||||
Donald M. Carlton | Trustee | Since 2001 | Consultant, URS Corporation | 30 | Director, | |||||
c/o R. Jay Gerken | (engineering) (since 1999); | American | ||||||||
Citigroup Asset | former Chief Executive Officer, | Electric Power | ||||||||
Management | Radian International L.L.C. | (Electric | ||||||||
399 Park Avenue | (engineering) (from 1996 to | Utility) (since | ||||||||
New York, NY 10022 | 1998), Member of Management | 1999); | ||||||||
Age 66 | Committee, Signature Science | Director, | ||||||||
(research and development) | Valero Energy | |||||||||
(since 2000). | (petroleum | |||||||||
refining) | ||||||||||
(since 1999); | ||||||||||
Director, | ||||||||||
National | ||||||||||
Instruments | ||||||||||
Corp. (tech- | ||||||||||
nology) (since | ||||||||||
1994). |
13
Citi Premium U.S. Treasury Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | ||||||||||
Principal | Portfolios In | Memberships | |||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | |||||||
Held with | of Time | During Past | Overseen by | Trustee During | |||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | ||||||
A. Benton Cocanougher | Trustee | Since 2001 | Dean Emeritus and Wiley | 30 | Former Direc- | ||||||
c/o R. Jay Gerken | Professor, Texas A&M | tor, Randall’s | |||||||||
Citigroup Asset | University (since 2001); | Food Markets, | |||||||||
Management | former Dean and Professor of | Inc. (from | |||||||||
399 Park Avenue | Marketing, College and | 1990 to 1999); | |||||||||
New York, NY 10022 | Graduate School of Business | former Direc- | |||||||||
Age 65 | of Texas A & M University | tor, First | |||||||||
(from 1987 to 2001). | American | ||||||||||
Bank | |||||||||||
and First | |||||||||||
American | |||||||||||
Savings Bank | |||||||||||
(from 1994 to | |||||||||||
1999). | |||||||||||
Mark T. Finn | Trustee | Since 2001 | Adjunct Professor, William & | 35 | Former Presi- | ||||||
c/o R. Jay Gerken | Mary College (since Septem- | dent and | |||||||||
Citigroup Asset | ber 2002); Principal/Member, | Director, Delta | |||||||||
Management | Belvan Partners/Balfour | Financial, Inc. | |||||||||
399 Park Avenue | Vantage – Manager and | (investment | |||||||||
New York, NY 10022 | General Partner to | advisory firm) | |||||||||
Age 60 | the Vantage Hedge Fund, LP | (from 1983 to | |||||||||
(since March 2002); Chair- | 1999). | ||||||||||
man and Owner, Vantage | |||||||||||
Consulting Group, Inc. | |||||||||||
(investment advisory and | |||||||||||
consulting firm) (since 1988); | |||||||||||
former Vice Chairman and | |||||||||||
Chief Operating Officer, | |||||||||||
Lindner Asset Management | |||||||||||
Company (mutual fund | |||||||||||
company) (from March 1999 | |||||||||||
to 2001); former General | |||||||||||
Partner and Shareholder, | |||||||||||
Greenwich Ventures, LLC | |||||||||||
(investment partnership) | |||||||||||
(from 1996 to 2001); former | |||||||||||
President, Secretary, and | |||||||||||
Owner, Phoenix Trading Co. | |||||||||||
(commodity trading advisory | |||||||||||
firm) (from 1997 to 2000). |
14
Citi Premium U.S. Treasury Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
Stephen Randolph Gross | Trustee | Since 2001 | Partner, Capital Investment | 30 | Director, | |||||
c/o R. Jay Gerken | Advisory Partners (consulting) | United Telesis, | ||||||||
Citigroup Asset | (since January 2000); | Inc. (telecom- | ||||||||
Management | former Managing Director, | munications) | ||||||||
399 Park Avenue | Fountainhead Ventures, LLC | (since 1997); | ||||||||
New York, NY 10022 | (consulting) (from 1998 to | Director, | ||||||||
Age 56 | 2002); Secretary, Carint N.A. | eBank.com, | ||||||||
(manufacturing) (since 1988); | Inc. (since | |||||||||
former Treasurer, Hank Aaron | 1997); Direc- | |||||||||
Enterprises (fast food franchise) | tor, Andersen | |||||||||
(from 1985 to 2001); | Calhoun, Inc. | |||||||||
Chairman, Gross, Collins & | (assisted | |||||||||
Cress, P.C. (accounting firm) | living) (since | |||||||||
(since 1980); Treasurer, | 1987); former | |||||||||
Coventry Limited, Inc. | Director, | |||||||||
(since 1985). | Charter Bank, | |||||||||
Inc. (from | ||||||||||
1987 to 1997); | ||||||||||
former Direc- | ||||||||||
tor, Yu Save, | ||||||||||
Inc. (internet | ||||||||||
company) | ||||||||||
(from 1998 to | ||||||||||
2000); former | ||||||||||
Director, | ||||||||||
Hotpalm, Inc. | ||||||||||
(wireless | ||||||||||
applications) | ||||||||||
(from 1998 to | ||||||||||
2000); former | ||||||||||
Director, Ikon | ||||||||||
Ventures, Inc. | ||||||||||
(from 1997 to | ||||||||||
1998). | ||||||||||
Diana R. Harrington | Trustee | Since 1992 | Professor, Babson College | 35 | Former | |||||
c/o R. Jay Gerken | (since 1993). | Trustee, The | ||||||||
Citigroup Asset | Highland | |||||||||
Management | Family of | |||||||||
399 Park Avenue | Funds (invest- | |||||||||
New York, NY 10022 | ment com- | |||||||||
Age 63 | pany) (from | |||||||||
March 1997 to | ||||||||||
March 1998). | ||||||||||
Susan B. Kerley | Trustee | Since 1992 | Consultant, Strategic | 35 | Director, | |||||
c/o R. Jay Gerken | Management Advisors, LLC– | Eclipse Funds | ||||||||
Citigroup Asset | Global Research Associates, Inc. | (currently | ||||||||
Management | (investment consulting) | supervises 17 | ||||||||
399 Park Avenue | (since 1990). | investment | ||||||||
New York, NY 10022 | companies | |||||||||
Age 52 | in fund com- | |||||||||
plex) (since | ||||||||||
1990). |
15
Citi Premium U.S. Treasury Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
Alan G. Merten | Trustee | Since 2001 | President, George Mason | 30 | Director, | |||||
c/o R. Jay Gerken | University (since 1996). | Comshare, | ||||||||
Citigroup Asset | Inc. | |||||||||
Management | (information | |||||||||
399 Park Avenue | technology) | |||||||||
New York, NY 10022 | (since 1985); | |||||||||
Age 61 | former | |||||||||
Director, | ||||||||||
Indus (infor- | ||||||||||
mation tech- | ||||||||||
nology) (from | ||||||||||
1995 to 1999). | ||||||||||
C. Oscar Morong, Jr. | Trustee | Since 1991 | Managing Director, Morong | 35 | Former Direc- | |||||
c/o R. Jay Gerken | Capital Management | tor, Indonesia | ||||||||
Citigroup Asset | (since 1993). | Fund | ||||||||
Management | (closed-end | |||||||||
399 Park Avenue | fund) (from | |||||||||
New York, NY 10022 | 1990 to 1999); | |||||||||
Age 68 | Trustee, | |||||||||
Morgan | ||||||||||
Stanley | ||||||||||
Institutional | ||||||||||
Fund | ||||||||||
(currently | ||||||||||
supervises 75 | ||||||||||
investment | ||||||||||
companies) | ||||||||||
(since 1993). | ||||||||||
R. Richardson Pettit | Trustee | Since 2001 | Professor of Finance, | 30 | None | |||||
c/o R. Jay Gerken | University of Houston | |||||||||
Citigroup Asset | (from 1977 to 2002); | |||||||||
Management | Independent Consultant | |||||||||
399 Park Avenue | (since 1984). | |||||||||
New York, NY 10022 | ||||||||||
Age 61 |
16
Citi Premium U.S. Treasury Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | ||||||||||
Principal | Portfolios In | Memberships | |||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | |||||||
Held with | of Time | During Past | Overseen by | Trustee During | |||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | ||||||
Walter E. Robb, III | Trustee | Since 2001 | President, Benchmark | 35 | Director, John | ||||||
c/o R. Jay Gerken | Consulting Group, Inc. (service | Boyle & Co., | |||||||||
Citigroup Asset | company) (since 1991); Sole | Inc. (textiles) | |||||||||
Management | Proprietor, Robb Associates | (since 1999); | |||||||||
399 Park Avenue | (financial consulting) (since | Director, | |||||||||
New York, NY 10022 | 1978); Co-owner, Kedron | Harbor | |||||||||
Age 77 | Design (gifts) (since 1978); | Sweets, Inc. | |||||||||
former President and Treasurer, | (candy) (since | ||||||||||
Benchmark Advisors, Inc. | 1990); | ||||||||||
(corporate financial consulting) | Director, W.A. | ||||||||||
(from 1989 to 2000). | Wilde | ||||||||||
Co. (direct | |||||||||||
media market- | |||||||||||
ing) (since | |||||||||||
1982); | |||||||||||
Director, | |||||||||||
Alpha | |||||||||||
Grainger | |||||||||||
Manufacturing, | |||||||||||
Inc. (electron- | |||||||||||
ics) (since | |||||||||||
1983); former | |||||||||||
Trustee, MFS | |||||||||||
Family of | |||||||||||
Funds (invest- | |||||||||||
ment compa- | |||||||||||
ny) (from | |||||||||||
1985 to 2001); | |||||||||||
Harvard Club | |||||||||||
of Boston | |||||||||||
(Audit | |||||||||||
Committee) | |||||||||||
(since 2001). | |||||||||||
INTERESTED | |||||||||||
TRUSTEE: | |||||||||||
R. Jay Gerken* | Chairman, | Since 2002 | President since 2002; | Chairman | N/A | ||||||
Citigroup Asset | President | Managing Director, CGM | of the | ||||||||
Management | and Chief | (since 1996); Chairman, | Board, | ||||||||
399 Park Avenue | Executive | President and Chief Executive | Trustee or | ||||||||
New York, NY 10022 | Officer | Officer of Smith Barney Fund | Director | ||||||||
Age 52 | Management LLC (“SBFM”), | of 219 | |||||||||
Travelers Investment Advisers, | |||||||||||
Inc. (“TIA”) and Citi Fund | |||||||||||
Management Inc. (“CFM”). | |||||||||||
OFFICERS: | |||||||||||
Lewis E. Daidone | Senior | Since 2000 | Managing Director, CGM | N/A | N/A | ||||||
125 Broad Street | Vice | (since 1990); former Chief | |||||||||
New York, NY 10004 | President | Financial Officer and Treasurer | |||||||||
Age 46 | and Chief | of certain mutual funds | |||||||||
Adminis- | associated with Citigroup Inc.; | ||||||||||
trative | Director and Senior Vice | ||||||||||
Officer | President of SBFM and TIA; | ||||||||||
Director of CFM. |
17
Citi Premium U.S. Treasury Reserves
A D D I T I O N A L I N F O R M A T I O N (Unaudited) (Continued)
Number of | Other Board | |||||||||
Principal | Portfolios In | Memberships | ||||||||
Position(s) | Length | Occupation(s) | Fund Complex | Held by | ||||||
Held with | of Time | During Past | Overseen by | Trustee During | ||||||
Name, Address and Age | Fund | Served | Five Years | Trustee | Past Five Years | |||||
Frances M. Guggino | Controller | Since 2002 | Vice President, Citigroup | N/A | N/A | |||||
125 Broad Street | Asset Management | |||||||||
New York, NY 10004 | (since 1991). | |||||||||
Age 46 | ||||||||||
Robert I. Frenkel | Secretary | Since 2000 | Managing Director and | N/A | N/A | |||||
CAM | Chief | Since 2003 | General Counsel, Global | |||||||
300 First Stamford Place | Legal | Mutual Funds for Citigroup | ||||||||
Stamford, CT 06902 | Officer | Asset Management (since | ||||||||
Age 48 | 1994) |
* Mr. Gerken is an “interested person” of the Fund as defined in the 1940 Act because he is an |
officer of certain affiliates of the Manager. |
18
U.S. Treasury Reserves Portfolio | |
P O R T F O L I O O F I N V E S T M E N T S | August 31, 2003 |
Principal | |||||
Amount | |||||
Issuer | (000’s omitted) | Value | |||
U.S.Treasury Bills — 100.0% | |||||
United States Treasury Bill: | |||||
due 9/04/03 | $ | 184,955 | $ | 184,941,465 | |
due 9/11/03 | 90,027 | 90,004,865 | |||
due 9/18/03 | 140,000 | 139,937,808 | |||
due 9/25/03 | 130,160 | 130,075,031 | |||
due 10/02/03 | 168,321 | 168,163,794 | |||
due 10/09/03 | 275,000 | 274,745,084 | |||
due 10/16/03 | 40,000 | 39,941,266 | |||
due 10/23/03 | 50,000 | 49,935,722 | |||
due 11/20/03 | 45,690 | 45,595,389 | |||
due 11/28/03 | 50,000 | 49,880,833 | |||
due 1/02/04 | 75,000 | 74,765,958 | |||
due 1/22/04 | 100,000 | 99,624,625 | |||
due 1/29/04 | 36,000 | 35,855,250 | |||
due 2/05/04 | 25,000 | 24,889,882 | |||
due 2/26/04 | 50,000 | 49,745,361 | |||
1,458,102,333 | |||||
Total Investments, | |||||
at Amortized Cost | 100.0 | % | 1,458,102,333 | ||
Other Assets | |||||
Less Liabilities | 0.0 | 247,042 | |||
Net Assets | 100.0 | % | $ | 1,458,349,375 | |
See notes to financial statements |
19
U.S. Treasury Reserves Portfolio | |||||||
S T A T E M E N T O F A S S E T S A N D L I A B I L I T I E S | |||||||
August 31, 2003 | |||||||
Assets: | |||||||
Investments, at amortized cost and value (Note 1A) | $ | 1,458,102,333 | |||||
Cash | 475,715 | ||||||
Total assets | 1,458,578,048 | ||||||
Liabilities: | |||||||
Management fees payable (Note 2) | 107,300 | ||||||
Accrued expenses and other liabilities | 121,373 | ||||||
Total liabilities | 228,673 | ||||||
Net Assets | $ | 1,458,349,375 | |||||
Represented by: | |||||||
Paid-in capital for beneficial interests | $ | 1,458,349,375 | |||||
See notes to financial statements |
20
U.S. Treasury Reserves Portfolio | ||||||
S T A T E M E N T O F O P E R AT I O N S | ||||||
For the Year Ended August 31, 2003 | ||||||
Interest Income (Note 1B): | $ | 23,414,582 | ||||
Expenses | ||||||
Management fees (Note 2) | $ | 2,696,661 | ||||
Custody and fund accounting fees | 397,888 | |||||
Legal fees | 67,825 | |||||
Trustees’ fees | 42,505 | |||||
Audit fees | 16,015 | |||||
Miscellaneous | 44,165 | |||||
Total expenses | 3,265,059 | |||||
Less: aggregate amounts waived by the Manager (Note 2) | (1,464,732 | ) | ||||
Less: fees paid indirectly (Note 1D) | (411 | ) | ||||
Net expenses | 1,799,916 | |||||
Net investment income | 21,614,666 | |||||
Net Realized Gain on Investments | 345,124 | |||||
Net Increase in Net Assets Resulting from Operations | $ | 21,959,790 | ||||
See notes to financial statements |
21
U.S. Treasury Reserves Portfolio | |||||||||
S T A T E M E N T S O F C H A N G E S I N N E T A S S E T S | |||||||||
Year Ended August 31, | |||||||||
2003 | 2002 | ||||||||
Increase in Net Assets from Operations: | |||||||||
Net investment income | $ | 21,614,666 | $ | 36,456,445 | |||||
Net realized gain on investments | 345,124 | — | |||||||
Net increase in net assets from operations | 21,959,790 | 36,456,445 | |||||||
Capital Transactions: | |||||||||
Proceeds from contributions | 7,288,135,094 | 7,437,576,345 | |||||||
Value of withdrawals | (7,804,910,366 | ) | (6,908,038,868 | ) | |||||
Net increase (decrease) in net assets from capital transactions | (516,775,272 | ) | 529,537,477 | ||||||
Net Increase (Decrease) in Net Assets | (494,815,482 | ) | 565,993,922 | ||||||
Net Assets: | |||||||||
Beginning of year | 1,953,164,857 | 1,387,170,935 | |||||||
End of year | $ | 1,458,349,375 | $ | 1,953,164,857 | |||||
See notes to financial statements |
22
U.S. Treasury Reserves Portfolio
N O T E S T O F I N A N C I A L S T A T E M E N T S
1. Significant Accounting Policies U.S. Treasury Reserves Portfolio (the “Portfolio”) is registered under the Investment Company Act of 1940, as amended (the “1940 Act”) as a no-load, diversified, open-end management investment company which was organized as a trust under the laws of the State of New York. The Declaration of Trust permits the Trustees to issue beneficial interests in the Portfolio. Citi Fund Management Inc. (the “Manager”) acts as the Investment Manager.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
The significant accounting policies consistently followed by the Portfolio are as follows:
A.Valuation of Investments Money market instruments are valued at amortized cost, which the Trustees have determined in good faith constitutes fair value. The Portfolio’s use of amortized cost is subject to the Portfolio’s compliance with certain conditions as specified under the 1940 Act.
B. Investment Income and Expenses Investment income consists of interest accrued and discount earned (including both original issue and market discount), adjusted for amortization of premium, on the investments of the Portfolio, accrued ratably to the date of maturity, plus or minus net realized gain or loss, if any, on investments. Expenses of the Portfolio are accrued daily.
C. Federal Income Taxes The Portfolio’s policy is to comply with the applicable provisions of the Internal Revenue Code. Accordingly, no provision for federal income taxes is necessary.
D. Fees Paid Indirectly The Portfolio’s custodian calculates its fees based on the Portfolio’s average daily net assets. The fee is reduced according to a fee arrangement, which provides for custody fees to be reduced based on a formula developed to measure the value of cash deposited with the custodian by the Portfolio. This amount is shown as a reduction of expenses on the Statement of Operations.
E. Other Purchases, maturities and sales of money market instruments are accounted for on the date of the transaction.
2. Management Fees The Manager is responsible for overall management of the Portfolio’s business affairs, and has a Management Agreement with the Portfolio. The Manager or an affiliate also provides certain administrative services to the Portfolio. These administrative services include providing general office facilities and supervising the overall administration of the Portfolio.
The management fees paid to the Manager are accrued daily and payable monthly. The management fee is computed at the annual rate of 0.15% of the Funds’ average daily net assets. The management fee amounted to $2,696,661 of which $1,464,732 was voluntarily waived for the year ended August 31, 2003. The Portfolio pays no compensation directly to any Trustee or any officer who is affiliated with the Manager, all of whom receive remuneration for their services to the Fund from the Manager or its
23
U.S. Treasury Reserves Portfolio
N O T E S TO F I N A N C I A L S T A T E M E N T S (Continued)
affiliates. Certain of the officers and a Trustee of the Portfolio are officers and a director of the Manager or its affiliates.
3. Investment Transactions Purchases, maturities and sales of U.S. Treasury obligations, aggregated $17,986,161,304 and $18,502,718,161, respectively, for the year ended August 31, 2003.
4. Trustee Retirement Plan The Trustees of the Portfolio have adopted a Retirement Plan for all Trustees who are not “interested persons” of the Portfolio, within the meaning of the 1940 Act. Under the Plan, all Trustees are required to retire from the Board as of the last day of the calendar year in which the applicable Trustee attains age 75 (certain Trustees who had already attained age 75 when the Plan was adopted are required to retire effective December 31, 2003). Trustees may retire under the Plan before attaining the mandatory retirement age. Trustees who have served as Trustee of the Trust or any of the investment companies associated with Citigroup for at least ten years when they retire are eligible to receive the maximum retirement benefit under the Plan. The maximum retirement benefit is an amount equal to five times the amount of retainer and regular meeting fees payable to a Trustee during the calendar year ending on or immediately prior to the applicable Trustee’s retirement. Amounts under the Plan may be paid in installments or in a lump sum (discounted to present value). The Portfolio’s allocable share of the expenses of the Plan for the year ended August 31, 2003 and the related liability at August 31, 2003 was not material.
24
U.S. Treasury Reserves Portfolio | |||||||||||||||
F I N A N C I A L H I G H L I G H T S | |||||||||||||||
Year Ended August 31, | |||||||||||||||
2003 | 2002 | 2001 | 2000 | 1999 | |||||||||||
Ratios/Supplemental Data: | |||||||||||||||
Net Assets, end of year | |||||||||||||||
(000’s omitted) | $ | 1,458,349 | $ | 1,953,165 | $ | 1,387,171 | $ | 1,324,688 | $ | 1,188,627 | |||||
Ratio of expenses to | |||||||||||||||
average net assets | 0.10 | % | 0.10 | % | 0.10 | % | 0.10 | % | 0.10 | % | |||||
Ratio of net investment income | |||||||||||||||
to average net assets | 1.22 | % | 2.00 | % | 5.13 | % | 5.41 | % | 4.55 | % | |||||
Note: If Agents of the Portfolio had not voluntarily waived a portion of their fees during the years indi- | |||||||||||||||
cated and the expenses were not reduced for fees paid indirectly, the ratios would have been as follows: | |||||||||||||||
Ratios: | |||||||||||||||
Expenses to average net assets | 0.18 | % | 0.20 | % | 0.23 | % | 0.23 | % | 0.23 | % | |||||
Net investment income to | |||||||||||||||
average net assets | 1.14 | % | 1.90 | % | 5.00 | % | 5.28 | % | 4.42 | % | |||||
See notes to financial statements |
25
U.S. Treasury Reserves Portfolio
I N D E P E N D E N T A U D I TO R S ’ R E P O R T
To the Trustees and Investors of
U.S. Treasury Reserves Portfolio:
We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of U.S. Treasury Reserves Portfolio (a New York Trust) as of August 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the three year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights for each of the years in the two year period ended August 31, 2000 were audited by other auditors whose report thereon, dated October 4, 2000, expressed an unqualified opinion on the financial highlights.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of August 31, 2003 by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of U.S. Treasury Reserves Portfolio as of August 31, 2003 and the results of its operations for the year then ended, the changes in its net assets for each of the years in the two year period then ended, and the financial highlights for each of the years in the three year period then ended, in conformity with accounting principles generally accepted in the United States of America.
New York, New York
October 13, 2003
26
U.S. Treasury Reserves Portfolio
A D D I T I O N A L I N F O R M A T I O N (Unaudited)
Information about the Trustees and Officers of the Portfolio can be found on pages 13 through 18 of this report.
27
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Trustees |
Elliott J. Berv |
Donald M. Carlton |
A. Benton Cocanougher |
Mark T. Finn |
R. Jay Gerken, CFA, Chairman* |
Stephen Randolph Gross |
Diana R. Harrington |
Susan B. Kerley |
Alan G. Merten |
C. Oscar Morong, Jr. |
R. Richardson Pettit |
Walter E. Robb, III |
Officers |
R. Jay Gerken, CFA* |
President and |
Chief Executive Officer |
Lewis E. Daidone* |
Senior Vice President |
and Chief Administrative Officer |
Frances M. Guggino* |
Controller |
Robert I. Frenkel* |
Secretary and Chief Legal Officer |
*Affiliated Person of Investment Manager |
Investment Manager |
(of U.S.Treasury Reserves Portfolio) |
Citi Fund Management Inc. |
100 First Stamford Place |
Stamford, CT 06902 |
Distributor |
Citigroup Global Markets Inc. |
Transfer Agent |
Citicorp Trust Bank, fsb. |
125 Broad Street, 11th Floor |
New York, NY 10004 |
Sub-Transfer Agent and Custodian |
State Street Bank and Trust Company |
225 Franklin Street |
Boston, MA 02110 |
Auditors |
KPMG LLP |
757 Third Avenue |
New York, NY 10017 |
Legal Counsel |
Bingham McCutchen LLP |
150 Federal Street |
Boston, MA 02110 |
This report is prepared for the information of shareholders of Citi Premium U.S. Treasury Reserves.
It is authorized for distribution to prospective investors only when preceded or accompanied by an
effective prospectus of Citi Premium U.S. Treasury Reserves.
©2003 Citicorp | Citigroup Global Markets Inc. | |
CFA/PUS/803 | ||
03-5464 |
ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The Board of Trustees of the registrant has determined that Mr. Stephen Randolph Gross, the Chairman of the Board's Audit Committee, possesses the technical attributes identified in Instruction 2(b) of Item 3 to Form N-CSR to qualify as an "audit committee financial expert," and has designated Mr. Gross as the Audit Committee's financial expert. Mr. Gross is an "independent" Trustee pursuant to paragraph (a)(2) of Item 3 to Form N-CSR. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEM 8. RESERVED] ITEM 9. ONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a- 3(c) under the Investment Company Act of 1940, as amended (the "1940 Act")) are effective as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the 1940 Act and 15d-15(b) under the Securities Exchange Act of 1934 (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are likely to materially affect the registrant's internal control over financial reporting. ITEM 10. EXHIBITS. (a) (1) Code of Ethics attached hereto. (a) (2) Attached hereto. Exhibit 99.CERT Certifications pursuant to section 302 of the Sarbanes-Oxley Act of 2002 (b) Furnished. Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized. CITI PREMIUM LIQUID RESERVES By: /s/ R. Jay Gerken R. Jay Gerken Chief Executive Officer of CITI PREMIUM LIQUID RESERVES Date: OCTOBER 14, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ R. Jay Gerken (R. Jay Gerken) Chief Executive Officer of CITI PREMIUM LIQUID RESERVES Date: OCTOBER 14, 2003 By: /s/ LEWIS E. DAIDONE Chief Administrative Officer of CITI PREMIUM LIQUID RESERVES Date: OCTOBER 14, 2003 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this Report to be signed on its behalf by the undersigned, there unto duly authorized. CITI PREMIUM U.S. TREASURY RESERVES By: /s/ R. Jay Gerken R. Jay Gerken Chief Executive Officer of CITI PREMIUM U.S. TREASURY RESERVES Date: OCTOBER 14, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ R. Jay Gerken (R. Jay Gerken) Chief Executive Officer of CITI PREMIUM U.S. TREASURY RESERVES Date: OCTOBER 14, 2003 By: /s/ LEWIS E. DAIDONE Chief Administrative Officer of CITI PREMIUM U.S. TREASURY RESERVES Date: OCTOBER 14, 2003