<Page>
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: 811-3251
Exact name of registrant as specified in charter: COMMAND Government Fund
Address of principal executive offices: Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
Name and address of agent for service: Jonathan Shain
Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
Registrant's telephone number, including area code: 973-802-6469
Date of fiscal year end: June 30, 2003
Date of reporting period: June 30, 2003
<Page>
Item 1 -- Reports to Stockholders
ANNUAL REPORT
JUNE 30, 2003
COMMAND MONEY FUND
COMMAND GOVERNMENT FUND
COMMAND TAX-FREE FUND
FUND TYPE
Money market
This report is not authorized for distribution
to prospective investors unless preceded or
accompanied by a current prospectus.
The views expressed in this report and
information about the Funds' portfolio holdings
are for the period covered by this report and
are subject to change thereafter.
COMMAND Funds
Annual Report June 30, 2003
FUND OBJECTIVES
COMMAND Money Fund and COMMAND Government Fund
seek high current income, preservation of capital,
and maintenance of liquidity. There can be no
assurance that the Funds will achieve their
respective investment objectives.
COMMAND Tax-Free Fund seeks high current income
that is exempt from federal income taxes,
consistent with the maintenance of liquidity
and preservation of capital. There can be no
assurance that the Fund will achieve its
investment objective.
Fund Facts As of 6/30/03
7-Day Net Asset Weighted Avg. Net Assets
Current Yield Value (NAV) Maturity (WAM) (Millions)
COMMAND Money Fund 0.70% $1.00 70 Days $11,804
- -----------------------------------------------------------------------------------------
iMoneyNet, Inc.
Taxable Prime Retail Avg.1 0.48% N/A 58 Days N/A
- -----------------------------------------------------------------------------------------
COMMAND Government Fund 0.54% $1.00 69 Days $1,017
- -----------------------------------------------------------------------------------------
iMoneyNet, Inc.
Government & Agency Retail Avg.2 0.49% N/A 54 Days N/A
- -----------------------------------------------------------------------------------------
COMMAND Tax-Free Fund 0.54% $1.00 57 Days $1,784
- -----------------------------------------------------------------------------------------
iMoneyNet, Inc.
Tax-Free National Retail Avg.3 0.43% N/A 39 Days N/A
- -----------------------------------------------------------------------------------------
Note: Yields will fluctuate from time to time
and past performance is not indicative of
future results. An investment in the Funds is
neither insured nor guaranteed by the Federal
Deposit Insurance Corporation or any other
government agency. Although the Funds seek to
preserve the value of your investment at $1.00
per share, it is possible to lose money by
investing in the Funds.
1iMoneyNet, Inc. reports a 7-day current yield
and WAM on Tuesdays for taxable retail money
funds. This is the data of all funds in the
iMoneyNet, Inc. Money Fund Taxable Prime Retail
Average category as of June 24, 2003, the
closest date to the end of our reporting
period. The 7-day current yield is after
deduction of expenses.
2iMoneyNet, Inc. reports a 7-day current yield
and WAM on Tuesdays for taxable government
money funds. This is the data of all funds in
the iMoneyNet, Inc. Govt & Agency Retail
Average category as of June 24, 2003, the
closest date to the end of our reporting
period. The 7-day current yield is after
deduction of expenses.
3iMoneyNet, Inc. reports a 7-day current yield
and WAM on Mondays for tax-free money funds.
This is the data of all funds in the iMoneyNet,
Inc Tax-Free National Retail Average category as
of June 30, 2003. The 7-day current yield is
after deduction of expenses.
(800) 225-1852
Annual Report June 30, 2003
INVESTMENT ADVISER'S REPORT
COMMAND MONEY FUND
For investors in money market securities, the
12-month period that began July 1, 2002 was
noteworthy because short-term interest rates in
the United States declined to their lowest
level in many years. Consequently, the average
seven-day compound yield for taxable money
market funds reached very low levels late in
the fiscal year.
In this challenging investment environment, we
identified high-quality securities that in our
opinion offered better relative value by
analyzing trends within sectors of the money
markets and changes in the slope of the money
market yield curve. We believe our strategy
helped the COMMAND Money Fund maintain its net
asset value (NAV) at $1.00 per share and
provide a competitive yield versus the average
comparable fund as measured by iMoneyNet, Inc.
The Federal Reserve (the Fed) reduced short-
term rates in November 2002 and June 2003,
which lowered its target for the rate banks
charge each other for overnight loans to 1.00%.
The rate cuts were intended to promote growth
in the United States at a time when corporate
governance scandals, a volatile stock market,
and geopolitical concerns encouraged a
lingering sense of economic uncertainty.
IMPACT OF SECTOR SELECTIONS ON THE FUND
One sector that we believed had value was
federal agency securities, particularly those
scheduled to mature in 13 months that could be
retired early (or called) by their respective
issuers in three months. These callable
securities featured attractive yields to
compensate investors for this early maturity
option. Although many federal agency securities
were called as interest rates slid progressively
lower, they benefited the COMMAND Money Fund by
providing incremental yield during the time they
were held in the portfolio.
1
COMMAND Funds
Annual Report June 30, 2003
INVESTING AMID HISTORICALLY LOW INTEREST RATES
As for managing interest-rate risk, we employed
what we believed to be a conservative strategy
by investing in a combination of shorter- and
longer-term money market securities. Shorter-
term securities provided the COMMAND Money Fund
with a measure of flexibility as their proceeds
could be readily invested during brief
intervals when yields temporarily edged higher.
Furthermore, we could lock in yields on one-
year securities. Later in the reporting period,
the trend toward sharply lower yields resumed
as sluggish economic conditions in the United
States apparently continued.
2
(800) 225-1852
INVESTMENT ADVISER'S REPORT
COMMAND GOVERNMENT FUND
The 12-month period that began July 1, 2002 was
one in which the cost of borrowing money in the
United States fell to very low levels. This
occurred as the Federal Reserve (the Fed) eased
monetary policy in November 2002 and June 2003,
reducing its target for the overnight bank lending
rate to 1.00%. The rate cuts were intended to
promote growth in the United States at a time
when corporate governance scandals, a volatile
stock market, the United States' involvement in
a war in Iraq, high oil prices, and other
geopolitical concerns encouraged a lingering sense
of economic uncertainty.
As the general level of interest rates fell,
the average seven-day compound yield for
taxable money market funds reached very low
levels late in the reporting period. We tried
to maximize the COMMAND Government Fund's
interest income by investing in certain federal
agency securities that provided relatively
attractive yields because they could be
"called" or retired ahead of schedule. We
believe our strategy helped the COMMAND
Government Fund maintain its net asset value
(NAV) at $1.00 per share and provide a
competitive yield versus the average comparable
fund as measured by iMoneyNet, Inc.
Overall, our investment strategy positioned the
COMMAND Government Fund's weighted average
maturity (WAM) longer than the average
comparable fund as tracked by iMoneyNet, Inc.
(WAM, expressed in days, takes into account the
maturity and quantity of each security held in
a portfolio. It indicates a portfolio's sensitivity
to changes in the level of interest rates.) Maintaining
a WAM that is longer than average typically helps
a portfolio's yield remain higher for a longer period
of time as money market yields decline.
3
COMMAND Funds
Annual Report June 30, 2003
INVESTMENT ADVISER'S REPORT
COMMAND TAX-FREE FUND
The investment environment was challenging
during the COMMAND Tax-Free Fund's fiscal year
that began July 1, 2002. Short-term interest
rates fell to very low levels in the United
States, complicating the search for high-
quality debt securities that provided
attractive yields. Nevertheless, the COMMAND
Tax-Free Fund maintained its net asset value
(NAV) at $1.00 per share and provided a
competitive yield versus the average comparable
fund as measured by iMoneyNet, Inc. We believe
the COMMAND Tax-Free Fund benefited from our
strategy that at times favored longer-term
municipal money market securities during brief
intervals when yields temporarily edged higher,
and shorter-term securities as yields declined.
The trend toward lower yields reflected
anticipation that the Federal Reserve (the Fed)
would ease monetary policy in November 2002 and
June 2003 in an effort to stimulate growth at a
time when corporate governance scandals, a volatile
stock market, and geopolitical concerns encouraged
a lingering sense of economic uncertainty. Tax
revenues have fallen in the lackluster economy, leaving
certain states and cities to face large
budget deficits.
BENEFITING FROM A BRIEF INCREASE IN YIELDS
There were times when economic conditions
appeared to be improving. For example, in late
2002, a spate of stronger-than-expected
economic data led to speculation that the Fed
might not need to cut rates further.
Consequently, municipal money market yields
began to climb. Our strategy was to take
advantage of any brief upturn in yields by
investing in longer-term money market
securities. This strategy helped the COMMAND
Tax-Free Fund ride out this year's "January
effect," a seasonal decline in yields that
typically occurs as increased demand for
municipal money market securities temporarily
outstrips the supply.
4
(800) 225-1852
IMPACT OF SECTOR SELECTIONS ON THE FUND
For the rest of our fiscal year, we generally
avoided one-year securities as the level of
yields moved progressively lower. Instead, we
favored at times tax-exempt commercial paper
and variable-rate demand obligations. These two
sectors, in our opinion, provided relatively
attractive yields compared to the one-year
maturity sector.
Municipalities generally issue tax-exempt
commercial paper to borrow money from 1 day to
270 days. Interest rates are established for
various maturity dates, allowing investors to
select maturities that suit their specific
strategies. Because of this "customized"
feature, tax-exempt investors generally
receive higher yields versus alternative
investments.
As for variable-rate demand obligations, we
generally favored those with rates that reset
either weekly or monthly. In our opinion, these
securities provided attractive yields and
flexibility in the low-interest-rate
environment. If yields rise, we will be able to
demand repayment of these securities before
their stated maturity dates and reinvest the
proceeds in securities that provide higher
returns.
COMMAND Funds Management Team
5
<Page>
COMMAND Funds COMMAND Money Fund
Portfolio of Investments as of June 30, 2003
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Certificates of Deposit--Canadian 3.6%
Toronto Dominion Bank,
$ 250,000 1.20%, 10/6/03 $ 250,000,000
50,000 1.20%, 10/7/03 50,000,000
75,000 1.10%, 11/6/03 75,000,000
50,000 1.25%, 3/17/04 50,000,000
---------------
425,000,000
- -------------------------------------------------------------------------------------
Certificates of Deposit--Yankee 25.8%
Abbey National Treasury Services PLC,
250,000 1.60%, 11/25/03 250,000,000
Bayerische Landesbank-Girozentrale,
250,000 1.28%, 12/1/03 250,000,000
BNP Paribas,
196,303 1.38%, 7/1/03 196,303,000
Credit Agricole Indosuez,
200,000 1.15%, 8/11/03 200,000,000
Credit Suisse First Boston,
400,000 1.27%, 7/7/03 400,000,000
Danske Bank,
200,000 1.05%, 7/30/03 200,000,000
150,000 1.32%, 10/23/03 150,000,000
Depfa Bank PLC,
53,000 1.23%, 9/8/03 53,000,000
Deutsche Bank AG,
40,000 1.18%, 11/10/03 40,011,515
Dresdner Bank AG,
274,000 1.30%, 7/3/03(a) 274,000,000
HBOS Treasury Services PLC,
148,000 1.11%, 9/12/03 148,056,773
KBC Bank NV,
45,000 1.21%, 7/3/03 45,000,000
Landesbank Hessen-Thuringren,
130,000 1.10%, 12/8/03 130,000,000
Royal Bank Scotland PLC,
260,000 1.20%, 7/3/03 260,000,000
48,000 1.35%, 4/19/04 48,000,000
</Table>
6 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Money Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Societe Generale,
$ 150,000 1.33%, 3/31/04 $ 150,000,000
75,000 1.16%, 4/12/04 74,997,059
UBS AG,
75,000 1.25%, 3/17/04 74,997,326
Wells Fargo Bank NA,
93,000 1.23%, 7/7/03 93,007,105
---------------
3,037,372,778
- -------------------------------------------------------------------------------------
Commercial Paper 43.3%
Asset Securitization Corp.,
75,000 1.22%, 7/25/03 74,939,000
100,000 1.18%, 8/4/03 99,888,556
Aventis,
20,000 0.92%, 8/25/03 19,971,889
Barton Capital Corp.,
50,000 1.10%, 7/21/03 49,969,444
BASF AG,
73,000 1.03%, 7/30/03 72,939,430
Caisse Nationale Des Caisses D'Espar,
200,000 1.03%, 9/12/03 199,582,278
CDC Commercial Paper Corp.,
100,000 1.05%, 7/15/03 99,959,167
60,000 0.93%, 7/25/03 59,962,800
Delaware Funding Corp.,
100,000 1.00%, 7/22/03 99,941,667
Den Norske Bank ASA,
50,000 1.21%, 9/5/03 49,889,542
193,000 1.22%, 12/12/03 191,927,349
Dexia Delaware LLC,
174,751 0.93%, 7/21/03 174,660,712
Edison Asset Securitization LLC,
126,570 1.20%, 7/11/03 126,527,810
131,000 1.22%, 9/8/03 130,693,678
</Table>
See Notes to Financial Statements 7
<Page>
COMMAND Funds COMMAND Money Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Falcon Asset Securitization Corp.,
$ 48,948 1.07%, 7/15/03 $ 48,927,632
229,000 1.08%, 7/17/03 228,890,080
10,000 0.96%, 7/29/03 9,992,534
Fcar Owner Trust I,
100,000 1.23%, 7/23/03 99,924,834
79,000 1.22%, 9/19/03 78,785,822
Forrestal Funding Master Trust,
100,208 1.08%, 7/31/03 100,118,230
Goldman Sachs Group, Inc.,
11,000 1.28%, 8/29/03 10,976,924
Hamburgische Landesbank Girozentrale,
21,892 1.32%, 10/17/03 21,805,308
17,484 1.26%, 12/22/03 17,377,522
HBOS Treasury Services PLC,
67,900 1.04%, 7/24/03 67,854,884
61,226 1.08%, 9/9/03 61,097,426
HSBC Bank USA, Inc.,
110,031 1.14%, 8/13/03 109,881,174
Independence Funding LLC,
60,000 1.06%, 8/11/03 59,927,567
ING America Insurance Holdings,
100,000 1.22%, 7/7/03 99,979,667
Intrepid Funding Master Trust,
55,000 0.95%, 7/22/03 54,969,521
J.P. Morgan Chase & Co.,
120,000 1.28%, 7/21/03 119,914,667
220,000 1.28%, 7/22/03 219,835,733
Market Street Funding Corp.,
36,330 1.09%, 7/18/03 36,311,300
Morgan Stanley,
200,000 1.00%, 7/3/03 199,988,889
20,000 1.04%, 7/18/03 19,990,178
Nationwide Building Society,
45,000 1.15%, 9/8/03 44,900,813
New Center Asset Trust,
50,000 1.14%, 10/7/03 49,844,833
</Table>
8 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Money Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Nordea North America, Inc.,
$ 75,000 1.02%, 7/21/03 $ 74,957,500
PB Finance Delaware, Inc.,
41,000 1.24%, 7/21/03 40,971,755
100,000 1.25%, 7/30/03 99,899,306
Prudential PLC,
49,220 1.26%, 7/14/03 49,197,605
San Paolo U.S. Finance Co.,
75,000 1.24%, 7/10/03 74,976,750
98,000 1.05%, 7/14/03 97,962,841
96,130 1.04%, 7/15/03 96,091,121
Santander Finance, Inc.,
100,000 1.24%, 7/11/03 99,965,556
80,000 1.03%, 9/9/03 79,839,778
50,000 1.03%, 9/12/03 49,895,569
Schlumberger Technology Corp.,
65,000 1.20%, 9/2/03 64,863,500
Sheffield Receivables Corp.,
213,522 1.08%, 7/15/03 213,432,321
Sony Global Treasury Services,
48,665 1.16%, 8/19/03 48,588,163
24,249 1.23%, 8/21/03 24,206,746
Spintab/Swedmortgage AB,
25,000 1.06%, 8/13/03 24,968,347
100,000 1.06%, 8/18/03 99,858,667
Stadshypotek Delaware, Inc.,
100,000 1.24%, 7/21/03 99,931,111
53,100 1.22%, 7/25/03 53,056,812
Swedbank,
56,000 1.19%, 8/4/03 55,937,062
68,000 1.20%, 9/2/03 67,857,200
Swiss Re Financial Products Corp.,
51,413 1.26%, 7/22/03 51,375,211
Toyota Motor Credit Corp.
55,000 0.91%, 8/8/03 54,947,169
Tulip Funding Corp.,
90,000 1.18%, 7/18/03 89,949,850
</Table>
See Notes to Financial Statements 9
<Page>
COMMAND Funds COMMAND Money Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Variable Funding Capital Corp.,
$ 46,000 1.02%, 7/15/03 $ 45,981,753
Volkswagen of America, Inc.,
92,437 1.00%, 7/7/03 92,421,594
50,000 0.93%, 7/25/03 49,969,000
---------------
5,113,251,147
- -------------------------------------------------------------------------------------
Other Corporate Obligations 20.9%
American Express Credit Corp., MTN,
90,000 1.35%, 7/7/03(a) 90,000,000
26,000 1.32%, 7/10/03(a) 26,002,179
Bank America Corp.,
27,980 5.75%, 3/1/04 28,809,436
Chase Manhattan Corp., MTN,
86,000 1.27%, 9/15/03(a) 86,022,297
GE Capital Assurance Co.,
100,000 1.14%, 7/22/03(a)(b)
(cost $100,000,000; purchased 7/22/02 ) 100,000,000
General Electric Capital Corp., MTN,
200,000 1.32%, 7/9/03(a) 200,000,000
200,000 1.17%, 7/17/03(a) 200,000,000
Goldman Sachs Group, MTN,
593,000 1.27%, 9/15/03(a) 593,000,000
J.P. Morgan Chase & Co., MTN,
78,000 1.38%, 8/26/03(a) 78,024,403
Merrill Lynch & Co., Inc., MTN,
354,000 1.31%, 7/11/03(a) 354,000,000
Metropolitan Life Insurance Co.,
107,000 1.39%, 7/3/03(a)(b)
(cost $107,000,000; purchased 10/03/02) 107,000,000
58,000 1.37%, 8/7/03(a)(b)
(cost $58,000,000; purchased 2/07/03) 58,000,000
60,000 1.13%, 9/24/03(a)(b)
(cost $60,000,000; purchased 10/24/02) 60,000,000
Morgan Stanley, MTN,
297,000 1.28%, 7/15/03(a) 297,000,000
</Table>
10 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Money Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Nyala Funding LLC,
$ 35,000 1.28%, 8/18/03 $ 34,940,267
Pacific Life Insurance Co.,
38,000 1.32%, 9/11/03(a)(b)
(cost $38,000,000; purchased 9/9/02) 38,000,000
Travelers Insurance Co.,
51,000 1.36%, 7/8/03(a)(b)
(cost $51,000,000; purchased 7/08/02) 51,000,000
25,000 1.38%, 8/25/03(a)(b)
(cost $25,000,000; purchased 2/25/03) 25,000,000
United of Omaha Life Insurance Co.,
40,000 1.45%, 9/5/03(a)(b)
(cost $40,000,000; purchased 12/5/02) 40,000,000
---------------
2,466,798,582
- -------------------------------------------------------------------------------------
U.S. Government Agency & Instrumentality Obligations 6.0%
Federal Home Loan Bank,
229,500 4.88%, 4/16/04 235,980,089
200,000 1.40%, 6/2/04 200,000,000
225,000 1.23%, 7/6/04 225,000,000
Federal National Mortgage Association,
50,000 3.63%, 4/15/04 50,927,844
---------------
711,907,933
---------------
Total Investments 99.6%
(amortized cost $11,754,330,440(c)) 11,754,330,440
Other assets in excess of liabilities 0.4% 49,273,179
---------------
Net Assets 100% $11,803,603,619
---------------
---------------
</Table>
See Notes to Financial Statements 11
<Page>
COMMAND Funds COMMAND Money Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
The following abbreviations are used in the portfolio descriptions:
MTN--Medium Term Note.
(a) Variable rate instrument. The maturity date presented for these instruments
is the next date on which the rate of interest is adjusted or the date on
which the security can be redeemed at par.
(b) Indicates illiquid securities. The aggregate cost of such securities was
$479,000,000. The aggregate value of $479,000,000 is approximately 4.06% of
net assets.
(c) The cost for federal income tax purposes is substantially the same as for
financial reporting purposes.
The industry classification of portfolio holdings and other assets in excess
of liabilities as a percentage of net assets as of June 30, 2003 was as
follows:
Commercial Banks....................................................... 45.1%
Asset Backed Securities................................................ 12.9
Security Brokers & Dealers............................................. 12.5
Federal Credit Agencies................................................ 6.0
Short-Term Business Credit............................................. 4.7
Life Insurance......................................................... 4.5
Bank Holding Companies--Domestic....................................... 3.8
Finance Services....................................................... 3.8
Mortgage Bankers....................................................... 2.0
Motor Vehicle Parts.................................................... 1.7
Fire & Marine Casualty Insurance....................................... 1.3
Chemicals & Allied Products............................................ 0.6
Oil & Gas.............................................................. 0.5
Pharmaceuticals........................................................ 0.2
-----
99.6
Other assets in excess of liabilities.................................. 0.4
-----
100.0%
-----
-----
12 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Money Fund
Statement of Assets and Liabilities
<Table>
<Caption>
June 30, 2003
- ---------------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market
value $11,754,330,440
Receivable for Fund shares sold 276,760,776
Interest receivable 14,281,215
Prepaid expenses 88,924
-----------------
Total assets 12,045,461,355
-----------------
LIABILITIES
Payable for Fund shares repurchased 234,476,628
Management fee payable 3,585,441
Accrued expenses and other liabilities 1,425,705
Distribution fee payable 1,243,822
Dividends payable 1,125,054
Payable to custodian 1,086
-----------------
Total liabilities 241,857,736
-----------------
NET ASSETS $11,803,603,619
-----------------
-----------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 118,036,036
Paid-in capital in excess of par 11,685,567,583
-----------------
Net assets, June 30, 2003 $11,803,603,619
-----------------
-----------------
Class A:
Net asset value, offering price and redemption price per
share ($11,803,603,619 /11,803,603,619 shares of
beneficial interest ($.01 par value) issued and
outstanding) $1.00
-----------------
-----------------
</Table>
See Notes to Financial Statements 13
<Page>
COMMAND Funds COMMAND Money Fund
Statement of Operations
<Table>
<Caption>
Year
Ended
June 30, 2003
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $ 225,491,598
-----------------
Expenses
Management fee 50,837,881
Distribution fee 17,709,957
Transfer agent's fees and expenses 4,537,000
Registration fees 1,100,000
Reports to shareholders 692,000
Custodian's fees and expenses 650,000
Trustees' fees 91,000
Legal fees and expenses 65,000
Audit fee 38,000
Miscellaneous 246,830
-----------------
Total expenses 75,967,668
-----------------
Net investment income 149,523,930
-----------------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 99,798
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 149,623,728
-----------------
-----------------
</Table>
14 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Money Fund
Statement of Changes in Net Assets
<Table>
<Caption>
Year Ended June 30,
------------------------------------
2003 2002
- ---------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 149,523,930 $ 359,445,064
Net realized gain on investment
transactions 99,798 167,400
---------------- ----------------
Net increase in net assets resulting
from operations 149,623,728 359,612,464
---------------- ----------------
Dividends and distributions to
shareholders
(Note 1) (149,623,728) (359,612,464)
---------------- ----------------
Fund share transactions (at $1 per share)
Net proceeds from shares subscribed 51,648,569,116 55,239,051,509
Net asset value of shares issued in
reinvestment of dividends and
distributions 143,017,554 359,606,092
Cost of shares reacquired (54,770,474,062) (57,223,752,894)
---------------- ----------------
Net decrease in net assets from Fund
share transactions (2,978,887,392) (1,625,095,293)
---------------- ----------------
Total decrease (2,978,887,392) (1,625,095,293)
NET ASSETS
Beginning of year 14,782,491,011 16,407,586,304
---------------- ----------------
End of year $ 11,803,603,619 $ 14,782,491,011
---------------- ----------------
---------------- ----------------
</Table>
See Notes to Financial Statements 15
<Page>
COMMAND Funds COMMAND Money Fund
Financial Highlights
<Table>
<Caption>
Year
Ended
June 30, 2003
- ----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.000
Net investment income and net realized gains 0.010
Dividends and distributions to shareholders (0.010)
----------------
Net asset value, end of year $ 1.000
----------------
----------------
TOTAL RETURN(a): 1.06%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $ 11,803,604
Average net assets (000) $ 14,167,966
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .54%
Expenses, excluding distribution and service (12b-1) fees .41%
Net investment income 1.06%
</Table>
- ------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
16 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Money Fund
Financial Highlights Cont'd.
<Table>
<Caption>
Year Ended June 30,
- -----------------------------------------------------------------
2002 2001 2000 1999
- -----------------------------------------------------------------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
0.022 0.055 0.053 0.048
(0.022) (0.055) (0.053) (0.048)
- ----------- ----------- ----------- -----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
- ----------- ----------- ----------- -----------
- ----------- ----------- ----------- -----------
2.23% 5.72% 5.42% 4.85%
$14,782,491 $16,407,586 $13,489,038 $12,246,946
$16,400,541 $15,543,950 $13,178,334 $11,965,069
.53% .53% .53% .54%
.41% .41% .41% .41%
2.19% 5.50% 5.32% 4.73%
</Table>
See Notes to Financial Statements 17
<Page>
COMMAND Funds COMMAND Money Fund
Report of Independent Auditors
To the Shareholders and Trustees of
COMMAND Money Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio 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 COMMAND Money Fund (the 'Fund') at
June 30, 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 securities at June 30, 2003 by
correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
New York, New York
August 18, 2003
18
<Page>
COMMAND Funds COMMAND Government Fund
Portfolio of Investments as of June 30, 2003
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES 84.0%
Federal Farm Credit Bank 10.7%
$ 100,000 1.165%, 7/7/03(a) $ 99,963,312
2,020 3.125%, 10/1/03 2,029,370
2,000 5.00%, 10/2/03 2,018,750
175 6.25%, 11/19/03 178,325
208 5.15%, 12/2/03 211,367
4,000 5.07%, 12/15/03 4,073,238
---------------
108,474,362
- -------------------------------------------------------------------------------------
Federal Home Loan Bank 31.2%
9,650 4.50%, 7/7/03 9,655,203
57,000 1.14%, 7/14/03(a) 56,973,735
50,000 0.931%, 7/25/03(a) 49,983,121
4,000 4.125%, 8/15/03 4,014,898
20,615 0.959%, 9/15/03(a) 20,614,502
1,395 5.125%, 9/15/03 1,406,734
450 2.50%, 11/14/03 452,043
250 3.125%, 11/14/03 251,709
2,915 6.375%, 11/14/03 2,970,722
5,000 6.375%, 11/15/03 5,094,390
1,285 5.375%, 1/5/04 1,311,804
33,000 1.425%, 3/8/04 33,000,000
10,000 4.875%, 4/16/04 10,284,127
1,000 3.63%, 4/26/04 1,018,137
10,000 1.40%, 5/12/04 10,000,000
25,000 1.30%, 6/1/04 25,000,000
22,000 1.40%, 6/2/04 22,000,000
15,000 1.30%, 6/7/04 15,000,000
15,000 1.25%, 6/21/04 15,000,000
10,000 1.30%, 6/28/04 10,000,000
23,000 1.25%, 7/2/04 23,000,000
---------------
317,031,125
</Table>
See Notes to Financial Statements 19
<Page>
COMMAND Funds COMMAND Government Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Federal Home Loan Mortgage Corporation 3.5%
$ 30,000 1.00%, 8/26/03 $ 29,953,333
1,000 5.99%, 12/1/03 1,019,683
4,271 5.00%, 5/15/04 4,410,661
---------------
35,383,677
- -------------------------------------------------------------------------------------
Federal National Mortgage Association 37.0%
90,000 1.10%, 7/1/03(a) 90,000,000
10,000 1.12%, 7/1/03 10,000,000
25,000 1.18%, 7/1/03 25,000,000
15,000 0.99%, 7/22/03(a) 14,999,688
1,500 1.169%, 7/22/03(a) 1,499,564
31,000 1.00%, 7/28/03(a) 30,988,593
53,800 1.13%, 8/1/03(a) 53,796,993
40,000 1.19%, 8/1/03 39,959,011
15,000 1.21%, 8/1/03 14,984,371
1,000 5.91%, 8/25/03 1,006,911
14,000 1.15%, 9/2/03 13,971,825
7,000 1.003%, 9/10/03(a) 6,997,684
30,000 0.92%, 10/1/03 29,929,467
10,000 0.94%, 10/1/03 9,975,978
24,330 1.11%, 10/1/03 24,260,784
5,085 4.75%, 11/14/03 5,151,160
4,135 3.125%, 11/15/03 4,152,755
---------------
376,674,784
- -------------------------------------------------------------------------------------
Student Loan Marketing Association 1.6%
4,500 1.345%, 7/1/03(a) 4,515,006
12,000 2.25%, 7/2/03 11,999,994
---------------
16,515,000
</Table>
20 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Government Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Principal
Amount
(000) Description Value (Note 1)
- ----------------------------------------------------------------------------------------
Repurchase Agreements(b) 25.1%
$ 33,024 Bank of America, 1.07%, dated 6/26/03, due 7/3/03
in the amount of $33,030,871 (cost $33,024,000;
the value of the collateral including accrued
interest was $33,684,481) $ 33,024,000
55,192 Goldman Sachs, 1.14%, dated 6/27/03, due 7/1/03 in
the amount of $55,198,991 (cost $55,192,000; the
value of the collateral including accrued
interest was $56,295,841) 55,192,000
104,000 Morgan Stanley, 0.94%, dated 6/25/03, due 7/2/03
in the amount of $104,019,009 (cost $104,000,000;
the value of the collateral including accrued
interest was $106,080,001) 104,000,000
63,730 Joint Repurchase Agreement Account, 1.25%, 7/1/03
(Note 4) 63,730,000
---------------
255,946,000
---------------
Total Investments 109.1%
(amortized cost $1,110,024,948(c)) 1,110,024,948
Liabilities in excess of other assets (9.1%) (92,715,531)
---------------
Net Assets 100% $ 1,017,309,417
---------------
---------------
</Table>
- ------------------------------
(a) Variable rate instrument. The maturity date presented for these instruments
is the next date on which the rate of interest is adjusted or the date on
which the security can be redeemed at par.
(b) Repurchase agreements are collateralized by United States Treasury or
federal agency obligations.
(c) The cost for federal income tax purposes is substantially the same as for
financial reporting purposes.
See Notes to Financial Statements 21
<Page>
COMMAND Funds COMMAND Government Fund
Statement of Assets and Liabilities
<Table>
<Caption>
June 30, 2003
- ---------------------------------------------------------------------------------------
ASSETS
Investments excluding repurchase agreements, at amortized
cost which approximates market value $ 854,078,948
Repurchase agreements, at amortized cost which approximates
market value 255,946,000
Cash 718
Receivable for Fund shares sold 22,495,871
Interest receivable 1,854,765
Prepaid expenses 7,359
-----------------
Total assets 1,134,383,661
-----------------
LIABILITIES
Payable for investments purchased 94,119,562
Payable for Fund shares repurchased 22,361,896
Management fee payable 341,389
Distribution fee payable 106,684
Dividends payable 73,512
Accrued expenses and other liabilities 71,201
-----------------
Total liabilities 117,074,244
-----------------
NET ASSETS $ 1,017,309,417
-----------------
-----------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 10,173,094
Paid-in capital in excess of par 1,007,136,323
-----------------
Net assets, June 30, 2003 $ 1,017,309,417
-----------------
-----------------
Class A:
Net asset value, offering price and redemption price per
share ($1,017,309,417 / 1,017,309,417 shares of
beneficial interest
($.01 par value) issued and outstanding) $1.00
-----------------
-----------------
</Table>
22 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Government Fund
Statement of Operations
<Table>
<Caption>
Year
Ended
June 30, 2003
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $15,961,306
-----------------
Expenses
Management fee 3,984,684
Distribution fee 1,245,214
Registration fees 337,000
Transfer agent's fees and expenses 112,000
Custodian's fees and expenses 103,000
Audit fee 29,000
Legal fees and expenses 29,000
Reports to shareholders 17,000
Trustees' fees 13,000
Miscellaneous 6,596
-----------------
Total expenses 5,876,494
-----------------
Net investment income 10,084,812
-----------------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 12,133
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $10,096,945
-----------------
-----------------
</Table>
See Notes to Financial Statements 23
<Page>
COMMAND Funds COMMAND Government Fund
Statement of Changes in Net Assets
<Table>
<Caption>
Year Ended June 30,
----------------------------------
2003 2002
- ----------------------------------------------------------------------------------
INCREASE IN NET ASSETS
Operations
Net investment income $ 10,084,812 $ 17,983,208
Net realized gain on investment
transactions 12,133 514,618
--------------- ---------------
Net increase in net assets resulting from
operations 10,096,945 18,497,826
--------------- ---------------
Dividends and distributions to shareholders
(Note 1) (10,096,945) (18,497,826)
--------------- ---------------
Fund share transactions (at $1 per share)
Net proceeds from shares subscribed 4,975,047,494 3,813,414,912
Net asset value of shares issued in
reinvestment of dividends and
distributions 9,929,182 18,503,678
Cost of shares reacquired (4,876,025,207) (3,705,800,462)
--------------- ---------------
Net increase in net assets from Fund share
transactions 108,951,469 126,118,128
--------------- ---------------
Total increase 108,951,469 126,118,128
NET ASSETS
Beginning of year 908,357,948 782,239,820
--------------- ---------------
End of year $ 1,017,309,417 $ 908,357,948
--------------- ---------------
--------------- ---------------
</Table>
24 See Notes to Financial Statements
<Page>
ANNUAL REPORT
JUNE 30, 2003
COMMAND GOVERNMENT FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<Page>
COMMAND Funds COMMAND Government Fund
Financial Highlights
<Table>
<Caption>
Year
Ended
June 30, 2003
- ----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.000
Net investment income and net realized gains 0.010
Dividends and distributions to shareholders (0.010)
----------------
Net asset value, end of year $ 1.000
----------------
----------------
TOTAL RETURN(a) 1.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $1,017,309
Average net assets (000) $ 996,171
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .59%
Expenses, excluding distribution and service (12b-1) fees .46%
Net investment income 1.01%
</Table>
- ------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
26 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Government Fund
Financial Highlights Cont'd.
<Table>
<Caption>
Year Ended June 30,
- -------------------------------------------------------
2002 2001 2000 1999
- -------------------------------------------------------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
0.020 0.054 0.051 0.046
(0.020) (0.054) (0.051) (0.046)
- ---------- ---------- ---------- ----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
- ---------- ---------- ---------- ----------
- ---------- ---------- ---------- ----------
2.11% 5.52% 5.23% 4.74%
$908,358 $782,240 $687,364 $714,390
$916,475 $756,716 $714,655 $739,779
.56% .57% .58% .56%
.43% .45% .45% .44%
1.96% 5.30% 5.12% 4.63%
</Table>
See Notes to Financial Statements 27
<Page>
COMMAND Funds COMMAND Government Fund
Report of Independent Auditors
To the Shareholders and Trustees of
COMMAND Government Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio 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 COMMAND Government Fund (the
'Fund') at June 30, 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 securities at June 30, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
August 18, 2003
28
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
ALASKA 0.9%
Valdez Marine Terminal Phillips,
A.N.N.M.T.,
VMIG2 $ 5,000 2.00%, 7/1/03, Ser. 1994A $ 5,012,347
VMIG2 6,250 2.00%, 7/1/03, Ser. 1994B 6,265,439
VMIG2 4,500 2.00%, 7/1/03, Ser. 1994C 4,511,113
--------------
15,788,899
- -------------------------------------------------------------------------------------
ARIZONA 3.3%
Pima Cnty. Ind. Dev. Auth. Sngl.
Fam. Mtge. Rev., Draw Down Bds.,
A.M.T.,
NR 44,985 1.01%, 7/25/03, Ser. 2002 44,985,000
Roaring Fork Mun. Prods. LLC, Tucson
& Pima Co., A.M.T., F.R.W.D.,
A-1+(e) 4,575 1.23%, 7/3/03, Ser. 02-9 4,575,000
Tempe Ind. Dev. Auth. Sr. Rev.,
Friendship Village Proj., F.R.W.D.,
NR 10,000 1.00%, 7/3/03, Ser. 2002C 10,000,000
--------------
59,560,000
- -------------------------------------------------------------------------------------
ARKANSAS 0.9%
Roaring Fork Mun. Prods. LLC, Hsg.
Fin. Corp. Mtge., F.R.W.D.,
VMIG1 15,990 1.16%, 7/3/03, Ser. 02-15 15,990,000
- -------------------------------------------------------------------------------------
CALIFORNIA 1.4%
California Statewide Cmntys. Dev.
Auth. Rev. Kaiser Permanente,
VMIG2 6,500 1.70%, 7/1/03, Ser. 2001B 6,500,000
VMIG2 10,000 1.38%, 1/2/04, Ser. 2001A 10,000,000
El Monte Cert. Partn, Cmnty. Impvt
Proj., F.R.W.D.,
A-1+(e) 4,000 1.00%, 7/3/03, Ser. 2003A 4,000,000
Long Beach Hbr. Rev., A.M.T.,
VMIG1 4,000 4.00%, 5/14/04, Ser. 2002A 4,096,460
--------------
24,596,460
- -------------------------------------------------------------------------------------
COLORADO 1.9%
Adams Cnty. Hosp. Rev.,
Adj-Impt-Platte Valley Med. Ctr. B,
F.R.W.D.,
A-1(e) 9,310 1.08%, 7/2/03, Ser. 2000B 9,310,000
</Table>
See Notes to Financial Statements 29
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Colorado Hsg. & Fin. Auth., Sngl.
Fam., R.A.N.,
MIG1 $ 20,000 1.55%, 11/3/03, Ser. C6 $ 20,000,000
Denver Cnty. Hsg., Circle Vlge.
Proj., F.R.W.D.,
A-1(e) 2,365 1.05%, 7/2/03, Ser. 2000 2,365,000
Dove Valley Metro. Dist. Arapahoe
Cnty., G.O.,
A-1(e) 2,545 1.90%, 11/1/03, Ser. 2002 2,545,000
--------------
34,220,000
- -------------------------------------------------------------------------------------
DELAWARE 0.3%
Delaware St. Econ. Dev. Auth. Rev.,
Delmarva Pwr. & Lt. Co. Proj.,
A.M.T., F.R.D.D.,
VMIG1 4,700 1.09%, 7/1/03, Ser 87A 4,700,000
- -------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA 3.3%
District of Columbia Hsg. Fin. Agcy.
Rev., Sngl. Fam. Mtge., A.M.T.,
A-1+(e) 58,430 1.02%, 7/25/03, Ser. 2002 58,430,000
- -------------------------------------------------------------------------------------
FLORIDA 8.2%
Brevard Cnty. Hlth. Facs. Auth.,
Wuesthoff Mem. Hosp. Proj.,
F.R.W.D.,
A-1(e) 29,000 1.00%, 7/3/03, Ser. 2001 29,000,000
Dade Cnty. Spec. Oblig.,
Aaa 3,000 Zero Coupon, 10/1/03, Ser. 1996B 2,991,037
Florida St. Brd. of Ed., Pub. Ed.
Cap. Outlay, F.R.D.D.,
A-1+(e) 3,300 1.03%, 7/1/03, Ser. SGA 102 3,300,000
Florida St. Mun. Secs. Trust Cert.,
F.R.D.D.,
A-1(e) 8,600 1.03%, 7/1/03, Ser. 131 8,600,000
Orange Cnty. Hlth. Facs. Auth. Rev.,
Adventist Hlth. Sys. Sunbelt,
F.R.W.D., F.S.A.,
A-1(e) 46,350 1.13%, 7/3/03, Ser. 98171 46,350,000
Sarasota Cnty. Hosp. Dist.
VMIG1 5,850 1.00%, 8/15/03, Ser. B 5,850,000
</Table>
30 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Sunshine St. Govt. Fin. Rev. Notes
A.M.B.A.C.,
P-1 $ 28,888 1.10%, 7/17/03, Ser. D $ 28,888,000
P-1 21,155 1.10%, 8/12/03, Ser. G 21,155,000
--------------
146,134,037
- -------------------------------------------------------------------------------------
GEORGIA 4.4%
Crisp Cnty., Solid Waste Mgmt. Auth.
Rev., A.M.T., F.S.A., F.R.W.D.,
VMIG1 4,735 1.47%, 7/3/03, Ser. 98 4,735,000
Dalton, T.A.N.,
NR 7,000 1.25%, 12/31/03 7,008,713
Dalton Util. Rev., F.R.W.D.,
M.E.R.L.O.T.,
VMIG1 5,000 1.08%, 7/2/03, Ser. 2003A2 5,000,000
De Kalb Cnty. Hosp. Auth. Rev.,
Dekalb Med. Ctr. Inc. Proj. B.,
F.R.W.D.,
VMIG1 12,300 1.00%, 7/3/03, Ser. 1999B 12,300,000
Georgia Mun. Gas Auth. Rev., Gas
Portfolio Proj., F.R.W.D.,
A-1(e) 28,330 1.05%, 7/2/03, Ser. A 28,330,000
Richmond Cnty. Hosp. Auth., Univ.
Hlth. Svcs., F.R.W.D.,
VMIG1 13,000 1.00%, 7/2/03, Ser. 2003 13,000,000
Rockdale Cnty., T.A.N.
NR 8,500 1.50%, 12/31/03, Ser. 2003 8,514,751
--------------
78,888,464
- -------------------------------------------------------------------------------------
HAWAII 0.4%
Hawaii St.
G.O., F.S.A., F.R.W.D.,
VMIG1 3,795 1.18%, 7/3/03, Ser. ZTC 43 3,795,000
VMIG1 3,750 1.18%, 7/3/03, Ser. ZTC 44 3,750,000
--------------
7,545,000
- -------------------------------------------------------------------------------------
ILLINOIS 8.4%
Channahon Il Rev., Morris Hosp.,
F.R.W.D.,
A-1(e) 5,670 1.08%, 7/3/03, Ser. 2003B 5,670,000
Chicago Park Dist., F.R.W.D.,
VMIG1 10,195 1.18%, 7/3/03, Ser. ZTC 23 10,195,000
</Table>
See Notes to Financial Statements 31
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Chicago Hsg. Auth. Cap. Prog. Rev.,
F.R.W.D.,
A-1(e) $ 5,235 1.23%, 7/3/03, Ser. 2001-576 $ 5,235,000
Chicago Park Dist., F.R.W.D.,
VMIG1 3,360 1.18%, 7/3/03, Ser. ZTC 46 3,360,000
Chicago Wtr. Rev., F.R.W.D.,
M.E.R.L.O.T.,
VMIG1 14,385 1.08%, 7/2/03, Ser. 00TT 14,385,000
Chicago,, Stockyards Ind Proj.,
F.R.W.D.,
A1+(e) 10,870 1.07%, 7/2/03, Ser. 96A 10,870,000
Elmhurst Rev., Cmnty. Healthcare,
F.R.W.D.,
VMIG1 13,895 0.95%, 7/3/03, Ser. 1988 13,895,000
Illinois Dev. Fin. Auth. Rev., Amer.
Coll. of Surgeons, F.R.W.D.,
A-1+(e) 15,200 1.15%, 7/7/03, Ser. 96 15,200,000
Illinois Hlth. Facs. Auth. Rev.,
Little Co. of Mary Hosp., F.R.W.D.,
A-1(e) 5,000 1.08%, 7/3/03, Ser. 2001 5,000,000
Illinois Hsg. Dev. Auth. Rev.,
Homeowner Mtge.,
MIG1 5,095 1.13%, 4/29/04, Ser. 2003A-1 5,095,000
Illinois St. Sales Tax Rev.
F.R.W.D.,
VMIG1 9,650 1.18%, 7/3/03, Ser. ZTC 32 9,650,000
VMIG1 4,950 1.18%, 7/3/03, Ser. ZTC 45 4,950,000
Morton Ind. Dev. Rev., Morton
Welding Co., Inc. Proj., A.M.T.,
F.R.W.D.,
NR 4,000 1.14%, 7/3/03, Ser. 2002 4,000,000
Peoria Cnty. Swge. Fac. Rev.,
Caterpillar, Inc. Proj., A.M.T.,
F.R.W.D.,
P-1 4,300 1.23%, 7/3/03, Ser. 2000 4,300,000
Wheeling Multi-Fam. Hsg. Rev.,
Woodland Creek Proj., F.R.W.D.,
A-1+(e) 17,655 1.10%, 7/3/03, Ser. 2002 17,655,000
Woodridge Multi-Fam. Hsg. Rev.,
Hinsdale Lake Terr. Apts.,
F.R.W.D., F.S.A.,
Aaa 20,760 1.10%, 7/7/03, Ser. 90 20,760,000
--------------
150,220,000
- -------------------------------------------------------------------------------------
INDIANA 1.6%
Indianapolis Local Pub. Impvt. Brd.,
T.A.N.,
SP-1+(e) 28,580 1.25%, 8/29/03, Ser. 2003E 28,592,383
</Table>
32 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
IOWA 0.7%
Iowa Fin. Auth. Rev., Burlington
Med. Ctr., F.R.D.D.,
Aaa $ 200 1.05%, 7/1/03, Ser. 1997 $ 200,000
Iowa Higher Ed. Ln. Auth. Rev.
Des Moines Univ., F.R.D.D.,
VMIG1 2,500 1.05%, 7/1/03, Ser. 2003C 2,500,000
Morningside Coll., R.A.N.,
SP-1(e) 1,500 2.00%, 5/24/04, Ser. 2003G 1,505,282
Sergeant Bluff Ind. Dev. Rev., Sioux
City Brick & Tile Proj., A.M.T.,
F.R.W.D.,
NR 8,480 1.20%, 7/3/03, Ser. 96 8,480,000
--------------
12,685,282
- -------------------------------------------------------------------------------------
KENTUCKY 2.8%
Breckinridge Cnty. Lease Prog. Rev.,
F.R.D.D.,
VMIG1 2,100 1.00%, 7/1/03, Ser. 2002A 2,100,000
Kenton Cnty. Arpt., Airis Cincinnati
LLC, A.M.T., F.R.W.D.,
VMIG1 19,000 1.20%, 7/2/03, Ser. 2003A 19,000,000
Kentucky St. Prpty. & Bldgs. Comm.
Rev., F.R.W.D.,
VMIG1 9,900 1.18%, 7/3/03, Ser. ZTC 34 9,900,000
Ohio Cnty. Poll. Ctrl. Rev., Big
Rivers Elec. Corp. Proj., F.R.W.D.,
VMIG1 20,000 1.00%, 7/2/03, Ser. 83 20,000,000
--------------
51,000,000
- -------------------------------------------------------------------------------------
LOUISIANA 1.3%
Ascension Parish, A.M.T.,
P-1 10,000 1.20%, 7/15/03, Ser. 99 10,000,000
Louisiana St. Offshore Terminal,
Deepwater Port,
P-1 5,000 1.10%, 8/13/03, Ser. 1991A 5,000,000
</Table>
See Notes to Financial Statements 33
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Roaring Fork Mun. Prods. LLC, LA
Hsg. Auth., A.M.T., F.R.W.D.,
VMIG1 $ 7,990 1.23%, 7/3/03, Ser. 00-2 $ 7,990,000
--------------
22,990,000
- -------------------------------------------------------------------------------------
MAINE 0.3%
Dover & Foxcroft Rev., Pleasant
River Lumber Co. Proj., A.M.T.,
F.R.W.D.,
A-1(e) 2,500 1.30%, 7/2/03, Ser. 02 2,500,000
York Rev., Stonewall Realty LLC
Proj., A.M.T., F.R.W.D.,
VMIG1 2,605 1.55%, 7/3/03, Ser. 99 2,605,000
--------------
5,105,000
- -------------------------------------------------------------------------------------
MASSACHUSETTS 4.5%
Commonwealth of MA,
P-1 23,500 1.05%, 7/21/03, Ser. G 23,500,000
P-1 33,000 0.90%, 8/8/03, Ser. F 33,000,000
Comnwlth. of MA, F.R.W.D.,
VMIG1 9,000 1.18%, 7/3/03, Ser. ZTC 9 9,000,000
Mass. St. Hlth. & Ed. Facs. Auth.
Rev., Hallmark Hlth. Sys.,
F.R.W.D.,
VMIG1 9,000 1.00%, 7/3/03, Ser. B 9,000,000
Seekonk, B.A.N., G.O.,
NR 6,000 2.00%, 10/17/03 6,007,851
--------------
80,507,851
- -------------------------------------------------------------------------------------
MICHIGAN 1.4%
Michigan Job Dev. Auth. Rev.,
Frankenmuth Bavarian Inn, F.R.M.D.,
A1 6,000 1.20%, 7/1/03, Ser. A 6,000,000
Michigan Pub. Pwr. Agcy. Rev., Belle
River, F.R.W.D.,
VMIG1 5,000 1.18%, 7/3/03, ZTC 42 5,000,000
Michigan Strategic Fd. Ltd., Amer.
Litho Proj., A.M.T., F.R.W.D.,
NR 4,650 1.24%, 7/3/03, Ser. 2002 4,650,000
</Table>
34 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Walled Lake Cons. Sch. Dist., G.O.,
F.R.W.D.,
VMIG1 $ 10,000 1.18%, 7/3/03, Ser. ZTC 18 $ 10,000,000
--------------
25,650,000
- -------------------------------------------------------------------------------------
MINNESOTA 2.6%
Bloomington Coml. Dev. Rev.
94th Str. Assoc. Proj., F.R.W.D.,
Aa1 4,385 1.10%, 7/7/03, Ser. 85 4,385,000
James Avenue Assoc. Proj., F.R.W.D.,
A-1+(e) 4,265 1.10%, 7/7/03, Ser. 1985 4,265,000
Bloomington Port. Auth. Tax Rev.,
Ref., Mall of America, F.R.W.D.,
VMIG1 16,700 1.10%, 7/3/03, Ser. 99B 16,700,000
Chanhassen Multi-Fam. Rev., Hsg.
Vlge. Ponds Proj., A.M.T.,
NR 5,530 1.23%, 7/3/03, Ser. 2003 5,530,000
Chaska Multi-Fam. Hsg. Rev., Clover
Field Commons., A.M.T.,
1.23%, 7/3/03, Ser. 2002(c)
NR 6,800 (cost $6,800,000; purchase 12/3/02) 6,800,000
Duluth Multi-Fam. Hsg. Rev., Irving
Townhomes LLC Proj., A.M.T.,
NR 4,500 1.23%, 7/3/03, Ser. 2002 4,500,000
St. Paul Hsg. & Redev. Auth. Heating
Rev., F.R.W.D.,
A-1+(e) 3,500 1.10%, 7/7/03, Ser. 99D 3,500,000
--------------
45,680,000
- -------------------------------------------------------------------------------------
MISSISSIPPI 1.3%
Roaring Fork Mun. Prods. LLC,
A.M.T.,
1.35%, 2/26/04, Ser. 01-14(c)
VMIG1 9,330 (cost $9,330,000; purchased 3/6/03) 9,330,000
1.25%, 4/1/04, Ser. 02-4(c)
VMIG1 5,000 (cost $5,000,000; purchased 6/6/03) 5,000,000
Roaring Fork Mun. Prods. LLC, MS
Home Corp., A.M.T., F.R.W.D.,
VMIG1 8,530 1.23%, 7/3/03, Ser. 00-18 8,530,000
--------------
22,860,000
</Table>
See Notes to Financial Statements 35
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
MISSOURI 1.3%
Missouri St. Dev. Fin. Util. Prog.,
F.R.D.D.,
VMIG1 $ 7,500 1.05%, 7/1/03, Ser. 2003 $ 7,500,000
Missouri St. Hlth. & Edl. Fac. Rev.,
Valley Coll., F.R.D.D.,
A-1(e) 1,200 1.05%, 7/1/03, Ser. 2001 1,200,000
Roaring Fork Mun. Prods. LLC, MO
Hsg. Dev. Comnty., A.M.T.,
F.R.W.D.,
A-1(e) 14,060 1.23%, 7/3/03, Ser. 00-3 14,060,000
--------------
22,760,000
- -------------------------------------------------------------------------------------
NEBRASKA 0.2%
York Ind. Dev. Rev., Kroy Bldg.
Prods. Inc. Proj., A.M.T.,
F.R.W.D.,
A-1(e) 4,500 1.15%, 7/3/03, Ser. 1998 4,500,000
- -------------------------------------------------------------------------------------
NEVADA 0.8%
Clark Cnty., F.R.W.D.,
VMIG1 15,000 1.18%, 7/3/03, Ser. ZTC 27 15,000,000
- -------------------------------------------------------------------------------------
NEW HAMPSHIRE 0.6%
New Hampshire Hlth. & Ed. Facs.
Auth. Hosp. Rev., Catholic Med.
Ctr., F.R.W.D.,
VMIG1 10,000 1.00%, 7/3/03, Ser. 2002A 10,000,000
- -------------------------------------------------------------------------------------
NEW JERSEY 0.8%
New Jersey St. Mun. Secs. Trust
Cert., F.R.D.D.,
A-1(e) 2,500 0.98%, 7/1/03, Ser. 01-174 2,500,000
Newark, N.J. G.O., B.A.N.,
MIG1 8,000 2.50%, 8/1/03 8,005,360
Sussex Cnty., B.A.N.,
NR 2,996 1.50%, 9/5/03 2,998,945
--------------
13,504,305
- -------------------------------------------------------------------------------------
NEW MEXICO 0.6%
Roaring Fork Mun. Prods. LLC, Mtge.
Fin. Auth. SFK, A.M.T., F.R.W.D.,
A-1+(e) 10,765 1.23%, 7/3/03, Ser. 00-1 10,765,000
</Table>
36 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
NEW YORK 1.7%
Metro. Trans. Auth. N.Y., F.R.W.D.,
M.E.R.L.O.T.,
VMIG1 $ 5,000 1.04%, 7/2/03, Ser. 00F $ 5,000,000
Metro. Trans. Auth. N.Y.,
P-1 10,000 1.10%, 9/10/03 10,000,000
New York, NY, F.R.W.D.,
VMIG1 6,144 1.00%, 7/3/03, Ser. 01-725X 6,143,750
New York, NY City Transitional,
Putters, F.R.W.D.,
A-1+(e) 10,000 1.00%, 7/3/03, Ser. 305 10,000,000
--------------
31,143,750
- -------------------------------------------------------------------------------------
NORTH CAROLINA 1.4%
North Carolina Cap. Facs. Fin. Agcy.
Student Ln., F.R.W.D.,
A-1(e) 17,465 1.00%, 7/3/03, Ser. 2001 17,465,000
Roaring Fork Mun. Prods. LLC, Durham
Co. Allstate Vlge., A.M.T.,
F.R.W.D.,
A-1+(e) 6,975 1.23%, 7/3/03, Ser. 01-8 6,975,000
--------------
24,440,000
- -------------------------------------------------------------------------------------
OHIO 2.8%
Cuyahoga Cnty. Econ. Dev. Rev.,
Botanical Garden Proj., F.R.W.D.,
VMIG1 8,000 1.03%, 7/3/03, Ser. 2001 8,000,000
Cuyahoga Cnty. Hosp. Rev., W.O.
Walker Ctr. Inc., A.M.B.A.C.,
F.R.W.D.,
A-1(e) 11,690 1.08%, 7/2/03, Ser. 98II 11,690,000
East Lake Ind. Dev. Rev., Astro
Model Corp. Proj., A.M.T.,
F.R.W.D.,
NR 2,290 1.20%, 7/3/03, Ser. 96 2,290,000
Hamilton Cnty. Parking Sys.,
F.R.W.D.,
VMIG1 12,250 1.02%, 7/3/03, Ser. 2001 12,250,000
Ohio Hsg. Fin. Agcy., Multi-Fam.
Hsg. Rev., 10 Wilmington Pl. Prog.,
F.R.W.D., F.S.A.,
A-1+(e) 8,945 1.10%, 7/7/03, Ser. B 8,945,000
</Table>
See Notes to Financial Statements 37
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Univ. of Cincinnati, B.A.N.,
MIG1 $ 6,000 1.75%, 3/18/04, Ser. 2003A $ 6,027,501
--------------
49,202,501
- -------------------------------------------------------------------------------------
OKLAHOMA 5.0%
Canadian Cnty. Home Fin. Auth. Sngl.
Fam. Mtge. Rev., Draw Down Joint
Pwrs., A.M.T.,
NR 12,710 1.02%, 7/25/03, Ser. 2003A 12,710,000
Cleveland Cnty. Dev. Auth. Sngl.
Fam., A.M.T.,
NR 7,500 1.28%, 7/25/03, Ser. 2002 7,500,000
Cleveland Cnty. Home Ln. Auth.
Mtge., A.M.T.,
NR 4,860 1.02%, 7/25/03, Ser. 2003A 4,860,000
Oklahoma Cnty. Home Fin. Auth. Sngl.
Fam. Mtge.,
AAA(e) 8,318 1.387%, 7/1/03, Ser. 02A 8,318,192
Oklahoma Hsg. Dev. Auth. Multi-Fam.
Rev.
Affordable Hsg., F.R.W.D.,
VMIG1 33,500 1.20%, 7/3/03, Ser. 2002A 33,500,000
VMIG1 10,000 1.20%, 7/3/03, Ser. 2002B 10,000,000
South Western Dev. Auth. Sngl. Fam.
Mtge. Rev., A.M.T.,
A-1+(e) 7,500 1.28%, 7/31/03, Ser. A 7,500,000
Tulsa Pkg. Auth. Rev., Williams Ctr.
Proj., S.E.M.M.T.,
VMIG1 4,460 1.15%, 11/17/03, Ser. 87A 4,460,000
--------------
88,848,192
- -------------------------------------------------------------------------------------
PENNSYLVANIA 0.4%
Fayette Cnty. Hosp. Auth. Sr. Hlth.
& Hsg. Facs. Rev., Mount Macrina
Manor Proj., F.R.W.D.
A-1(e) 4,500 1.08%, 7/3/03, Ser. 2002 4,500,000
</Table>
38 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Pennsylvania St. Mun. Secs. Trust
Cert., F.R.D.D.,
A-1(e) $ 900 1.03%, 7/1/03, Ser. 01-110 $ 900,000
Union Cnty. Higher Ed. Auth.,
Bucknell Univ., F.R.W.D.,
VMIG1 1,610 0.90%, 7/3/03, Ser. 2002B 1,610,000
--------------
7,010,000
- -------------------------------------------------------------------------------------
RHODE ISLAND 1.2%
Providence Hsg. Auth., Cathedral
Square, A.M.T., F.R.D.D.,
A-1(e) 1,000 1.10%, 7/1/03, Ser. 00A 1,000,000
Rhode Island Hlth. & Ed. Bldg. Corp.
Edl. Inst. Rev.
Hosp. Fin. Care New England-A,
F.R.D.D.,
A-1(e) 12,700 1.00%, 7/1/03, Ser. 2002A 12,700,000
Hosp. Fin. Care Portsmouth Abbey
Sch., F.R.D.D.,
A-1(e) 4,000 1.00%, 7/1/03, Ser. 2001 4,000,000
Hosp. Fin. Care St. Andrews Sch.,
F.R.D.D.,
A-1(e) 4,000 1.00%, 7/1/03, Ser. 99 4,000,000
--------------
21,700,000
- -------------------------------------------------------------------------------------
SOUTH CAROLINA 0.2%
Orangeburg Proj. Corp., Cap. Sales &
Use Tax Rev., M.B.I.A.,
Aaa 4,250 3.50%, 10/1/03, Ser. 2002 4,267,986
- -------------------------------------------------------------------------------------
SOUTH DAKOTA 0.4%
Grant Cnty. Poll. Ctrl. Rev., Otter
Tail Pwr. Co. Proj., F.R.W.D.,
VMIG1 8,000 1.25%, 7/7/03, Ser. 1993 8,000,000
- -------------------------------------------------------------------------------------
TENNESSEE 2.5%
Blount Cnty. Pub. Bldg.
Local Govt. Pub. Impvt., F.R.W.D.,
VMIG1 4,095 1.01%, 7/3/03, Ser. A6B 4,095,000
VMIG1 2,500 1.01%, 7/3/03, Ser. A7A 2,500,000
</Table>
See Notes to Financial Statements 39
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Chattanooga Hlth. Edl. Phase I,
F.R.W.D.,
A-1(e) $ 10,440 1.00%, 7/3/03, Ser. 2001A $ 10,440,000
Clarksville Pub. Bldg. Auth.
F.R.D.D.,
VMIG1 1,000 1.00%, 7/1/03, Ser. 2001 1,000,000
VMIG1 3,200 1.00%, 7/1/03, Ser. 2003 3,200,000
Jackson Engy. Auth. Gas Sys.,
F.R.W.D.,
VMIG1 8,300 1.00%, 7/2/03, Ser. 2002 8,300,000
Montgomery Cnty. Pub. Bldg. Auth.,
F.R.D.D.,
VMIG1 14,525 1.00%, 7/1/03, Ser. 2002 14,525,000
--------------
44,060,000
- -------------------------------------------------------------------------------------
TEXAS 21.6%
Austin Combined Util. Sys. Rev.
Corp. Proj., T.E.C.P.
P-1 8,803 1.10%, 7/11/03, Ser. A 8,803,000
Austin Combined Util. Sys. Rev.
Corp. Proj., T.E.C.P.
P-1 26,053 1.00%, 8/15/03, Ser. A 26,053,000
Carroll Indpt. Sch. Dist. G.O., Sch.
Bldg., S.E.M.M.T.,
VMIG1 29,800 1.35%, 4/1/04, Ser. 00 29,800,000
City of Houston Wtr. & Swr.,
T.E.C.P.,
P-1 5,000 1.05%, 7/9/03, Ser. A 5,000,000
Collin Cnty. Hsg. Fin. Corp.
Multi-Fam. Hsg. Rev., Huntington
Apts. Proj., F.R.W.D.,
A-1+(e) 6,155 1.13%, 7/3/03, Ser. 96 6,155,000
Dallas Texas Area Rapid Transit,
P-1 20,000 1.05%, 7/16/03, Ser. 2001 20,000,000
Desoto Ind. Dev. Auth., Solar
Turbines, Inc. Proj., F.R.W.D.,
P-1 7,050 1.08%, 7/3/03, Ser. 2000 7,050,000
El Paso, G.O., T.E.C.P.,
P-1 9,500 1.00%, 8/15/03, Ser. A 9,500,000
Harris Cnty., T.E.C.P.,
P-1 11,817 1.02%, 7/15/03, Ser. D 11,817,000
</Table>
40 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Harris Cnty. Hlth. Facs. Dev., Young
Mens Christian Assoc., F.R.D.D.,
VMIG1 $ 4,300 1.00%, 7/1/03, Ser. 99 $ 4,300,000
Houston Ind. Sch. Dist., F.S.A.,
F.R.W.D.,
VMIG1 12,700 1.18%, 7/3/03, Ser. ZTC 21 12,700,000
Houston Wtr. & Swr. Proj., G.O.,
T.E.C.P.,
P-1 20,300 1.05%, 7/8/03, Ser. A 20,300,000
P-1 13,000 1.00%, 7/17/03, Ser. A 13,000,000
Irving Texas,, Wtr. & Swr.
P-1 22,750 1.05%, 7/17/03, Ser. A 22,750,000
Lower Cnty. River Auth., T.E.C.P.,
P-1 44,100 0.95%, 9/3/03, Ser. A 44,100,000
North Harris Montgomery Cmnty. Coll.
Dist.,
VMIG1 14,830 1.35%, 4/1/04, Ser. 1997 14,830,000
Port Arthur Nav. Dist. Rev., Motiva
Enterprises LLC., A.M.T., F.R.W.D.,
A-1(e) 5,000 1.25%, 7/2/03, Ser. 2002 5,000,000
Roaring Fork Mun. Prods. LLC,
Houston Hsg., F.R.W.D.,
A-1+(e) 7,000 1.13%, 7/3/03, Ser. 03-3 7,000,000
San Antonio Wtr. Rev., F.R.W.D.,
M.E.R.L.O.T.
VMIG1 17,420 1.08%, 7/2/03, Ser. 00VV 17,420,000
San Jacinto Coll. Dist. Limited Tax,
G.O.,
VMIG1 14,500 1.35%, 4/1/04 14,500,000
Spring Branch Indpt. Sch. Dist.,
Limited Tax Schoolhouse Bonds,
F.R.W.D.,
VMIG1 11,880 1.18%, 7/3/03, Ser. ZTC28 11,880,000
Texas Dept. Hsg. & Cmnty., A.M.T.,
T.E.C.P.,
A-1+(e) 35,205 1.12%, 7/9/03, Ser. A 35,205,000
Texas St. Coll. Student Lns.,
F.R.W.D.,
VMIG1 8,000 1.23%, 7/3/03, Ser. ZTC 5 8,000,000
Texas Wtrwrks. & Swr., T.R.A.N.,
MIG1 30,000 2.75%, 8/29/03, Ser. 2002 30,050,805
--------------
385,213,805
</Table>
See Notes to Financial Statements 41
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
UTAH 0.8%
Intermountain Pwr. Agcy.,
VMIG1 $ 6,650 1.00%, 9/15/03, Ser. 85F-2 $ 6,647,908
Salt Lake Cnty., T.R.A.N.
NR 8,000 1.50%, 12/30/03, Ser. 2003 8,026,080
--------------
14,673,988
- -------------------------------------------------------------------------------------
VERMONT 0.9%
Vermont Edl. & Hlth. Bldgs. Fin.
Agcy. Rev.
Middlebury Coll. Proj., A.N.N.M.T.,
Aa3 8,325 1.80%, 11/1/03, Ser. 2002B 8,325,000
A-1+(e) 7,255 1.80%, 11/1/03, Ser. 88A 7,255,000
--------------
15,580,000
- -------------------------------------------------------------------------------------
VIRGINIA 1.6%
Halifax Cnty. Ind. Dev. Auth. Rev.,
VA Elec. & Pwr. Corp. Proj.,
A.M.T.,
VMIG1 15,000 1.35%, 7/11/03, Ser. 92 15,000,000
Roaring Fork Mun. Prods. LLC,
Fairfax Cnty. Red Kingsley,
F.R.W.D.,
A-1+(e) 12,935 1.13%, 7/3/03, Ser. 02-17 12,935,000
--------------
27,935,000
- -------------------------------------------------------------------------------------
WASHINGTON 1.9%
Central Kitsap Sch. Dist. Number
401, F.R.W.D.,
VMIG1 3,460 1.06%, 7/3/03, Ser. 00-252 3,460,000
Port of Pasco Econ. Dev. Corp.,
Douglas Fruit Co., A.M.T.,
F.R.W.D.,
A-1(e) 3,935 1.15%, 7/3/03, Ser. 96 3,935,000
Washington St. F.R.W.D.,
VMIG1 12,935 1.18%, 7/3/03, Ser. ZTC 10 12,935,000
VMIG1 13,570 1.18%, 7/3/03, Ser. ZTC 11 13,570,000
--------------
33,900,000
- -------------------------------------------------------------------------------------
WISCONSIN 3.7%
Appleton Area Sch. Dist., T.R.A.N.,
NR 14,500 1.75%, 9/30/03 14,507,441
</Table>
42 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
<Table>
<Caption>
Moody's Principal
Rating Amount
(Unaudited) (000) Description(a) Value (Note 1)
- -------------------------------------------------------------------------------------------
Elmbrook Sch. Dist., T.R.A.N.,
NR $ 11,500 1.55%, 8/21/03 $ 11,500,788
Franklin Pub. Sch. Dist., T.R.A.N.,
NR 4,900 1.55%, 9/5/03 4,900,515
Greenfield Sch. Dist., G.O.,
T.R.A.N.,
NR 4,650 1.90%, 9/30/03 4,653,536
Northland Pines Sch. Dist.,
T.R.A.N.,
NR 5,000 1.55%, 9/12/03 5,000,488
Wisconsin St., G.O., F.R.W.D.,
VMIG1 19,745 1.18%, 7/3/03, Ser. ZTC20 19,745,000
Wisconsin St. Hlth. & Edl. Facs.
Lakeland Coll., F.R.D.D.,
A-1(e) 1,915 1.00%, 7/1/03, Ser. 2000 1,915,000
Riverview Hosp., F.R.D.D.,
A-1(e) 3,000 1.05%, 7/1/03, Ser. 2001 3,000,000
--------------
65,222,768
Total Investments 100.3%
(cost $1,788,870,671(d)) 1,788,870,671
Liabilities in excess of other
assets (0.3%) (5,181,864)
--------------
Net Assets 100% $1,783,688,807
--------------
--------------
</Table>
See Notes to Financial Statements 43
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Portfolio of Investments as of June 30, 2003 Cont'd.
(a) The following abbreviations are used in the portfolio descriptions:
A.M.B.A.C.--American Municipal Bond Assurance Corporation.
A.M.T.--Alternative Minimum Tax.
A.N.N.M.T.--Annual Mandatory Tender.
B.A.N.--Bond Anticipation Note.
F.R.D.D.--Floating Rate (Daily) Demand Note(b).
F.R.M.D.--Floating Rate (Monthly) Demand Note(b).
F.R.W.D.--Floating Rate (Weekly) Demand Note(b).
F.S.A.--Financial Security Assurance.
G.O.--General Obligation.
LLC--Limited Liability Company.
M.B.I.A.--Municipal Bond Insurance Corporation.
M.E.R.L.O.T.--Municipal Exempt Receipt- Liquid Optional Tender.
R.A.N.--Revenue Anticipation Notes.
S.E.M.M.T.--Semi-Annual Mandatory Tender.
T.A.N.--Tax Anticipation Note.
T.E.C.P.--Tax-Exempt Commercial Paper.
T.R.A.N.--Tax and Revenue Anticipation Note.
(b) For purposes of amortized cost valuation, the maturity date of Floating Rate
Demand Notes considered to be the next date on which the rate of interest is
adjusted or the date on which the security can be redeemed at par.
(c) Indicates illiquid security. The aggregate cost of such securities was
$21,130,000. The aggregate value of $21,130,000 is approximately 1.2% of net
assets.
(d) Federal income tax basis of portfolio securities is the same as for
financial reporting purposes.
(e) Standard & Poor's rating.
NR--Not Rated by Moody's or Standard & Poor's.
44 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Statement of Assets and Liabilities
<Table>
<Caption>
June 30, 2003
- --------------------------------------------------------------------------------------
ASSETS
Investments, at amortized cost which approximates market value $1,788,870,671
Cash 174,027
Receivable for Fund shares sold 22,325,805
Interest receivable 4,464,023
Prepaid expenses 16,565
--------------
Total assets 1,815,851,091
--------------
LIABILITIES
Payable for Fund shares repurchased 23,096,717
Payable for investments purchased 8,026,080
Management fee payable 619,417
Distribution fee payable 182,500
Dividends payable 127,647
Accrued expenses and other liabilities 109,923
--------------
Total liabilities 32,162,284
--------------
NET ASSETS $1,783,688,807
--------------
--------------
Net assets were comprised of:
Shares of beneficial interest, at par $ 17,836,888
Paid-in capital in excess of par 1,765,851,919
--------------
Net assets, June 30, 2003 $1,783,688,807
--------------
--------------
Class A:
Net asset value, offering price and redemption price per
share ($1,783,688,807 / 1,783,688,807 shares of
beneficial interest
($.01 par value) issued and outstanding) $1.00
--------------
--------------
</Table>
See Notes to Financial Statements 45
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Statement of Operations
<Table>
<Caption>
Year
Ended
June 30, 2003
- ---------------------------------------------------------------------------------------
NET INVESTMENT INCOME
Income
Interest and discount earned $26,582,528
-----------------
Expenses
Management fee 7,815,067
Distribution fee 2,313,356
Transfer agent's fees and expenses 170,000
Registration fees 101,000
Custodian fees and expenses 90,000
Legal fees and expenses 31,000
Audit fee 29,000
Trustees' fees 18,000
Reports to shareholders 6,000
Miscellaneous 4,785
-----------------
Total expenses 10,578,208
Less: custodian fee credit (Note 1) (3,418)
-----------------
Net expenses 10,574,790
-----------------
Net investment income 16,007,738
-----------------
REALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions 62,913
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $16,070,651
-----------------
-----------------
</Table>
46 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Statement of Changes in Net Assets
<Table>
<Caption>
Year Ended June 30,
----------------------------------
2003 2002
- ----------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
Operations
Net investment income $ 16,007,738 $ 27,201,031
Net realized gain on investment
transactions 62,913 42,517
--------------- ---------------
Net increase in net assets resulting from
operations 16,070,651 27,243,548
--------------- ---------------
Dividends and distributions to shareholders
(Note 1) (16,070,651) (27,243,548)
--------------- ---------------
Fund share transactions (at $1 per share)
Net proceeds from shares subscribed 5,930,677,397 5,727,746,338
Net asset value of shares issued in
reinvestment of dividends and
distributions 15,494,915 27,244,695
Cost of shares reacquired (5,902,513,575) (5,759,776,771)
--------------- ---------------
Net increase (decrease) in net assets from
Fund share transactions 43,658,737 (4,785,738)
--------------- ---------------
Total increase (decrease) 43,658,737 (4,785,738)
NET ASSETS
Beginning of year 1,740,030,070 1,744,815,808
--------------- ---------------
End of year $ 1,783,688,807 $ 1,740,030,070
--------------- ---------------
--------------- ---------------
</Table>
See Notes to Financial Statements 47
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Financial Highlights
<Table>
<Caption>
Year
Ended
June 30, 2003
- ----------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.000
Net investment income and net realized gains 0.009
Dividends and distributions to shareholders (0.009)
----------------
Net asset value, end of year $ 1.000
----------------
----------------
TOTAL RETURN(a) .88%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000) $1,783,689
Average net assets (000) $1,850,684
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .57%
Expenses, excluding distribution and service (12b-1) fees .45%
Net investment income .87%
</Table>
- ------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each year reported and includes reinvestment
of dividends and distributions.
48 See Notes to Financial Statements
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Financial Highlights Cont'd.
<Table>
<Caption>
Year Ended June 30,
- -------------------------------------------------------------
2002 2001 2000 1999
- -------------------------------------------------------------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
0.015 0.034 0.032 0.027
(0.015) (0.034) (0.032) (0.027)
- ---------- ---------- ---------- ----------
$ 1.000 $ 1.000 $ 1.000 $ 1.000
- ---------- ---------- ---------- ----------
- ---------- ---------- ---------- ----------
1.51% 3.42% 3.19% 2.77%
$1,740,030 $1,744,816 $1,429,087 $1,476,732
$1,839,473 $1,600,345 $1,515,352 $1,549,367
.58% .57% .58% .59%
.46% .45% .46% .46%
1.48% 3.32% 3.15% 2.72%
</Table>
See Notes to Financial Statements 49
<Page>
COMMAND Funds COMMAND Tax-Free Fund
Report of Independent Auditors
To the Shareholders and Trustees of
COMMAND Tax-Free Fund
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio 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 COMMAND Tax-Free Fund (the 'Fund')
at June 30, 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 securities at June 30, 2003 by
correspondence with the custodian and brokers, provide a reasonable basis for
our opinion.
PricewaterhouseCoopers LLP
New York, New York
August 18, 2003
50
<Page>
COMMAND Funds
Notes to Financial Statements
COMMAND Money Fund, COMMAND Government Fund and COMMAND Tax-Free Fund
(each a 'Fund' and collectively, the 'Funds') are each registered under the
Investment Company Act of 1940 as an open-end, diversified management investment
company whose shares are offered exclusively to participants in the Prudential
Securities COMMAND Funds Program of Prudential Securities Incorporated
('Prudential Securities'). The COMMAND Money Fund seeks high current income,
preservation of capital and maintenance of liquidity by investing in a
diversified portfolio of money market instruments maturing in 13 months or less.
The COMMAND Government Fund seeks high current income, preservation of capital
and maintenance of liquidity by investing in a portfolio of U.S. government
securities maturing in 13 months or less. The COMMAND Tax-Free Fund seeks high
current income that is exempt from federal income taxes, consistent with the
preservation of capital and maintenance of liquidity. The Fund invests in a
diversified portfolio of short-term, tax-exempt securities with maturities of 13
months or less that are issued by states, municipalities and their agencies (or
authorities). Some securities may be subject to the federal alternative minimum
tax (AMT). The Funds invest in a portfolio of money market instruments whose
ratings are within the two highest ratings categories by a nationally recognized
statistical rating agency or, if not rated, are of comparable quality. The
ability of the issuers of the securities held by the Funds to meet their
obligations may be affected by economic and/or political developments in a
specific industry, state or region.
Note 1. Accounting Policies
The following is a summary of significant generally accepted accounting policies
followed by the Funds in the preparation of their financial statements.
Securities Valuation: Portfolio securities of the Funds are valued at
amortized cost, which approximates market value. The amortized cost method
involves valuing a security at its cost on the date of purchase and thereafter
assuming a constant amortization to maturity of any discount or premium. If the
amortized cost method is determined not to represent fair value, the value shall
be determined by or under the direction of the Board of Trustees. The Funds may
hold up to 10% of their net assets in illiquid securities, including those which
are restricted as to disposition under securities law ('restricted securities').
None of the issues of restricted securities held by the Funds at June 30, 2003
include registration rights under which the Fund may demand registration by the
issuer.
Repurchase Agreements: In connection with transactions in repurchase
agreements, it is the Funds' policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the
51
<Page>
COMMAND Funds
Notes to Financial Statements Cont'd.
repurchase transaction, including accrued interest. To the extent that any
repurchase agreement exceeds one business day, the value of collateral is
marked-to-market on a daily basis to ensure adequacy of the collateral. If the
seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Funds may be delayed or limited.
Securities Transactions and Investment Income: Securities transactions
are recorded on the trade date. Realized gains (losses) on sales of securities
are calculated on the identified cost basis. Interest income is recorded on the
accrual basis. The Funds amortize premiums and accrete discounts on purchases of
portfolio securities as adjustments to interest income. Expenses are recorded on
the accrual basis, which may require the use of certain estimates by management.
Dividends: Each Fund declares daily dividends from net investment
income and net realized short-term capital gains or losses. Payment of dividends
is made monthly. Income distributions and capital gain distributions are
determined in accordance with income tax regulations, which may differ from
generally accepted accounting principles.
Federal Income Taxes: It is each Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income to shareholders.
Therefore, no federal income tax provision is required.
Custody Fee Credits: The COMMAND Tax-Free Fund has an arrangement with
its custodian bank, whereby uninvested monies earn credits which reduce the fees
charged by the custodian. Such custody fee credits are presented as a reduction
of gross expenses in the accompanying statement of operations.
Note 2. Agreements
Each Fund has a management agreement with Prudential Investments LLC ('PI').
Pursuant to this agreement, PI has responsibility for all investment advisory
services and supervises the subadvisor's performance of such services. PI has
entered into a subadvisory agreement with Prudential Investment Management, Inc.
('PIM'). The subadvisory agreement provides that PIM will furnish investment
advisory services in connection with the management of each Fund. In connection
therewith, PIM is obligated to keep certain books and records of the Fund. PI
pays for the services of PIM, the compensation of officers of the Funds,
occupancy and certain clerical and bookkeeping costs of the Funds. The Funds
bear all other costs and expenses.
The management fee paid to PI is computed daily and payable monthly on the
following basis:
52
<Page>
COMMAND Funds
Notes to Financial Statements Cont'd.
Average Daily COMMAND COMMAND COMMAND
Net Assets Money Government Tax-Free
- --------------------- -------- ----------- --------
First $500 million .500% .400% .500%
Second $500 million .425% .400% .425%
Third $500 million .375% .375% .375%
Excess of $1.5
billion .350% .375% .375%
Each Fund has a distribution agreement with Prudential Investment
Management Services LLC ('PIMS') which acts as the distributor of the shares of
each Fund. Each Fund compensates PIMS for distributing and servicing each Fund's
Class A shares, pursuant to the plan of distribution at an annual rate of .125
of 1% of the average daily net assets of each Fund's Class A shares. The
distribution fees are accrued daily and payable monthly.
PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential
Financial, Inc. ('Prudential'). Effective July 1, 2003, Prudential Securities
became a division of Wachovia Securities LLC of which Prudential holds a
minority interest. Prior to July 1, 2003, Prudential Securities was an indirect,
wholly-owned subsidiary of Prudential.
Note 3. Other Transactions with Affiliates
Prudential Mutual Fund Services LLC ('PMFS'), an affiliate of PI and an
indirect, wholly-owned subsidiary of Prudential, serves as the Funds' transfer
agent. During the year ended June 30, 2003 the Funds incurred fees for the
services of PMFS of approximately:
COMMAND Money $4,537,000
COMMAND Government $ 111,900
COMMAND Tax-Free $ 169,500
As of June 30, 2003, the following amounts were due to PMFS from the Funds:
COMMAND Money $ 449,100
COMMAND Government $ 15,300
COMMAND Tax-Free $ 16,700
Note 4. Joint Repurchase Agreement Account
The COMMAND Government Fund, along with other affiliated registered investment
companies, transfers uninvested cash balances into a single joint account, the
daily aggregate balance of which is invested in one or more repurchase
agreements collateralized by U.S.Treasury or Federal agency obligations. At June
30, 2003, the Fund had an undivided interest of 29.25% in the repurchase
agreements in the joint account. The undivided interest for the Fund represented
$63,730,000 in principal amount and the value of the collateral therefore was as
follows:
53
<Page>
COMMAND Funds
Notes to Financial Statements Cont'd.
Bank of America Securities, 1.26% in the principal amount of $72,637,000,
repurchase price $72,639,542, due 7/1/03. The value of the collateral including
accrued interest was $74,089,740.
Bear Stearns Securities Corp., 1.24% in the principal amount of
$72,636,000, repurchase price $72,638,502, due 7/1/03. The value of the
collateral including accrued interest was $74,089,944.
State Street Bank & Trust Co, 1.25% in the principal amount of
$72,637,000, repurchase price $72,639,522, due 7/1/03. The value of the
collateral including accrued interest was $74,093,502.
Note 5. Distributions and Tax Information
For the years ended June 30, 2003 and June 30, 2002, the tax character of
dividends paid, as reflected in the Statement of Changes in Net Assets and in
the table below, was ordinary income:
Year Ended June 30,
-------------------------------
2003 2002
------------ ------------
COMMAND Money $149,623,728 $359,612,464
COMMAND Government $ 10,096,945 $ 18,497,826
For the years ended June 30, 2003 and June 30, 2002, the tax character of
dividends paid for COMMAND Tax-Free Fund, as reflected in the Statement of
Changes in Net Assets, of $16,070,651 and $27,243,548, respectively, was
tax-exempt income.
Note 6. Capital
The Funds offer Class A shares. The Funds may also offer Class Z and Class S
shares (COMMAND Tax-Free Fund may only offer Class S). There are no Class Z or
Class S shares currently issued and outstanding.
54
<Page>
COMMAND Funds
Federal Income Tax Information (Unaudited)
COMMAND TAX-FREE FUND:
We are required by the Internal Revenue Code to advise you within 60 days
of the COMMAND Tax-Free Fund's fiscal year-end (June 30, 2003) as to the federal
tax status of dividends and distributions paid by the Fund during such fiscal
year. Accordingly, we are advising you that for the year ended June 30, 2003,
dividends paid from net investment income totaling $.009 per share were all
federally tax-exempt interest dividends.
COMMAND GOVERNMENT FUND AND COMMAND MONEY FUND:
IMPORTANT NOTICE FOR CERTAIN SHAREHOLDERS
We are required by Massachusetts, Missouri and Oregon to inform you that
dividends which have been derived from interest on federal obligations are not
taxable to shareholders, provided the mutual fund meets certain requirements
mandated by the respective state's taxing authorities. We are pleased to report
that 32% and 2% of the dividends paid by the COMMAND Government Fund and COMMAND
Money Fund, respectively, qualify for such deduction.
For more detailed information regarding your state and local taxes, you
should contact your tax advisor or the state/local taxing authorities.
55
<Page>
COMMAND Funds
Management of the Funds (Unaudited)
Information pertaining to the Trustees of the Funds is set forth below. Trustees
who are not deemed to be 'interested persons' of the Funds as defined in the
Investment Company Act of 1940, as amended (the 1940 Act) are referred to as
'Independent Trustees.' Trustees who are deemed to be 'interested persons' of
the Funds are referred to as 'Interested Trustees.' 'Fund Complex'5 consists of
the Funds and any other investment companies managed by Prudential Investments
LLC (PI).
Independent Trustees(2)
Delayne Dedrick Gold (65), Trustee since 1982(3)
Oversees 129 portfolios in Fund complex
Principal occupations (last 5 years): Marketing Consultant (1982-present);
formerly Senior Vice President and Member of the Board of Directors, Prudential
Bache Securities, Inc.
Other Directorships held:(4) None
Robert E. La Blanc (69), Trustee since 1996(3)
Oversees 107 portfolios in Fund complex
Principal occupations (last 5 years): President (since 1981) of Robert E. La
Blanc Associates, Inc. (telecommunications); formerly General Partner at Salomon
Brothers and Vice-Chairman of Continental Telecom; Trustee of Manhattan
College.
Other Directorships held:(4) Director of Storage Technology Corporation (since
1979) (technology). Chartered Semiconductor Manufacturing Ltd. (since 1998)
(Singapore). Titan Corporation (electronics) (since 1995). Computer Associates
International, Inc. (software company) (since 2002); Director (since 1999) of
First Financial Fund, Inc. and Director (since April 1999) of The High Yield
Plus Fund, Inc.
Stephen P. Munn (61), Trustee since 2003(3)
Oversees 105 portfolios in Fund complex
Principal occupations (last 5 years): Chairman of the Board (since 1994) and
formerly Chief Executive Officer (1988-2001) and President of Carlisle Companies
Incorporated.
Other Directorships held:(4) Chairman of the Board (since January 1991) and
Director (since 1988) of Carlisle Companies Incorporated (manufacturer of
industrial products); Director of Gannett Co., Inc. (publishing and media).
Robin B. Smith (63), Trustee since 1996(3)
Oversees 107 portfolios in Fund complex
Principal occupations (last 5 years): Chairman of the Board (since January 2003)
of Publishers Clearing House (direct marketing), formerly Chairman and Chief
Executive Officer (August 1996-December 2003) of Publishers Clearing House.
Other Directorships held:(4) Director of BellSouth Corporation (since 1992).
56
<Page>
COMMAND Funds
Management of the Funds (Unaudited) Cont'd.
Stephen Stoneburn (60), Trustee since 1982(30
Oversees 105 portfolios in Fund complex
Principal occupations (last 5 years): President and Chief Executive Officer
(since June 1996) of Quadrant Media Corp. (a publishing company); formerly
President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice
President and Managing Director (January 1993-1995) of Cowles Business Media and
Senior Vice President of Fairchild Publications, Inc. (1975-1989).
Other Directorships held:(4) None
Clay T. Whitehead (64), Trustee since 1999(3)
Overseas 104 portfolios in Fund complex
Principal occupations (last 5 years): President (since 1983) of National
Exchange Inc. (new business development firm).
Other Directorships held:(4) Director (since 2000) of First Financial Fund, Inc.
and Director (since 2000) of The High Yield Plus Fund, Inc.
Interested Trustees(1,2)
Robert F. Gunia (56), Trustee and Vice President since 1996(3)
Overseas 187 portfolios in Fund complex
Principal occupations (last 5 years): Executive Vice President and Chief
Administrative Officer (since June 1999) of PI; Executive Vice President and
Treasurer (since January 1996) of PI; President (since April 1999) of Prudential
Investment Management Services LLC (PIMS); Corporate Vice President (since
September 1997) of The Prudential Insurance Company of America (Prudential);
Director, Executive Vice President and Chief Administration Officer (since May
2003) of American Skandia Investment Services, Inc., American Skandia Advisory
Services, Inc., and American Skandia Fund Services, Inc.; formerly Senior Vice
President (March 1987-May 1999) of Prudential Securities.
Other Directorships held:(4) Vice President and Director (since May 1989) and
Treasurer (since 1999) of The Asia Pacific Fund, Inc.
Judy A. Rice (55), Trustee since 2000 and President since 2003(3)
Overseas 102 portfolios in Fund complex
Principal occupations (last 5 years): President, Chief Executive Officer, Chief
Operating Officer and Officer-in-Charge (since 2003) of PI; Director,
Officer-in-Charge, President, Chief Executive Officer and Chief Operating
Officer (since May 2003) of American Skandia Advisory Services, Inc.; Director,
Officer-in-Charge, President, Chief Executive Officer and Chief Operating
Officer (since May 2003) of American Skandia Investment Services, Inc.;
Director, Officer-in-Charge, President, Chief Executive Officer (since May 2003)
of American Skandia Fund Services, Inc.; formerly various positions to Senior
Vice President (1992-1999) of Prudential Securities; and various positions to
Managing Director (1975-1992) of Salomon Smith Barney; Member of Board of
Governors of the Money Management Institute.
Other Directorships held:(4) None
57
<Page>
COMMAND Funds
Management of the Funds (Unaudited) Cont'd.
Information pertaining to the Officers of the Funds who are not the Trustees is
set forth below.
Officers(2)
Marguerite E.H. Morrison (47), Chief Legal Officer since 2003 and Assistant
Secretary since 2002(3)
Principal occupations (last 5 years): Vice President and Chief Legal
Officer--Mutual Funds and Unit Investment Trusts (since August 2000) of
Prudential; Senior Vice President and Secretary (since April 2003) of PI; Senior
Vice President and Secretary (since May 2003) of American Skandia Investment
Services, Inc., American Skandia Advisory Services, Inc. and American Skandia
Fund Services, Inc.; Vice President and Assistant Secretary of PIMS (since
October 2001), previously Senior Vice President and Assistant Secretary
(February 2001-April 2003) of PI, Vice President and Associate General Counsel
(December 1996-February 2001) of PI.
Grace C. Torres (44), Treasurer and Principal Financial and Accounting Officer
since 1995(3)
Principal occupations (last 5 years): Senior Vice President (since January 2000)
of PI; Senior Vice President and Assistant Treasurer (since May 2003) of
American Skandia Investment Services, Inc. and American Skandia Advisory
Services, Inc.; formerly First Vice President (December 1996-January 2000) of PI
and First Vice President (March 1993-1999) of Prudential Securities.
Jonathan D. Shain (45), Secretary since 2001(3)
Principal occupations (last 5 years): Vice President and Corporate Counsel
(since August 1998) of Prudential; Vice President and Assistant Secretary (since
May 2003) of American Skandia Investment Services, Inc.; Vice President and
Assistant Secretary (since May 2003) of American Skandia Fund Services, Inc.;
formerly Attorney with Fleet Bank, N.A. (January 1997-July 1988) and Associate
Counsel (August 1994-January 1997) of New York Life Insurance Company.
Maryanne Ryan (38), Anti-Money Laundering Compliance Officer since 2002(3)
Principal occupations (last 5 years): Vice President, Prudential (since November
1998) and First Vice President, Prudential Securities (March 1997-May 1998);
Anti-Money Laundering Officer (since May 2003) of American Skandia Investment
Services, Inc., American Skandia Advisory Services, Inc. and American Skandia
Marketing, Inc..
58
<Page>
COMMAND Funds
Management of the Funds (Unaudited) Cont'd.
<Table>
1 'Interested' Trustee, as defined in the 1940 Act, by reason of employment with the Manager, the
Subadviser or the Distributor.
2 Unless otherwise noted, the address of the Trustees and Officers is c/o: Prudential Investments
LLC, Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102.
3 There is no set term of office for Trustees and Officers. The Independent Trustees have adopted
a retirement policy, which calls for the retirement of Trustees on December 31 of the year in
which they reach the age of 75. This shows the number of years for which they have served as
Trustees and/or Officer.
4 This includes only directorships of companies required to register, or file reports with the
Commission under the Securities and Exchange Act of 1934 (i.e., 'public companies') or other
investment companies registered under the 1940 Act.
5 The Fund Complex consists of all investment companies managed by PI. Effective May 1, 2003, the
Funds for which PI serves as manager include JennisonDryden Mutual Funds, Strategic Partners
Funds, American Skandia Advisor Funds, Inc. The Prudential Variable Contract Accounts 2, 10,
11, The Target Portfolio Trust, The Prudential Series Fund, Inc., American Skandia Trust, and
Prudential's Gibraltar Fund.
</Table>
Additional information about the Funds' Trustees is included in the Funds'
Statement of Additional Information which is available without charge, upon
request, by calling (800) 225-1852 or (732) 482-7555 (Calling from outside the
U.S.)
59
FOR MORE INFORMATION
COMMAND Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
(800) 225-1852
TRUSTEES
Delayne Dedrick Gold
Robert F. Gunia
Robert E. La Blanc
Stephen P. Munn
Robin B. Smith
Stephen D. Stoneburn
Clay T. Whitehead
OFFICERS
Judy A. Rice, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Marguerite E.H. Morrison, Chief Legal
Officer and Assistant Secretary
Jonathan D. Shain, Secretary
Maryanne Ryan, Anti-Money Laundering
Compliance Officer
MANAGER
Prudential Investments LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
INVESTMENT ADVISER
Prudential Investment Management, Inc.
Gateway Center Two
100 Mulberry Street
Newark, NJ 07102
DISTRIBUTOR
Prudential Investment
Management Services LLC
Gateway Center Three, 14th Floor
100 Mulberry Street
Newark, NJ 07102-4077
CUSTODIAN
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171
TRANSFER AGENT
Prudential Mutual Fund Services LLC
PO Box 8098
Philadelphia, PA 19101
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004-2498
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL
GOVERNMENT AGENCY
MAY LOSE VALUE
ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR
ANY BANK AFFILIATE
Fund Symbols Nasdaq CUSIP
COMMAND Money Fund CDMXX 20050F103
COMMAND Tax-Free Fund CDFXX 20050R107
COMMAND Govt Fund CGMXX 20050D108
CFA IFS-A083175
<Page>
Item 2 -- Code of Ethics -- Not required in this filing
Item 3 -- Audit Committee Financial Expert -- Not required in this filing
Item 4 -- Principal Accountant Fees and Services -- Not required in this filing
Item 5 -- Reserved
Item 6 -- Reserved
Item 7 -- Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -- Not required in this filing
Item 8 -- Reserved
Item 9 -- Controls and Procedures
(a) It is the conclusion of the registrant's principal executive
officer and principal financial officer that the effectiveness of
the registrant's current disclosure controls and procedures (such
disclosure controls and procedures having been evaluated within
90 days of the date of this filing) provide reasonable assurance
that the information required to be disclosed by the registrant
has been recorded, processed, summarized and reported within the
time period specified in the Commission's rules and forms and
that the information required to be disclosed by the registrant
has been accumulated and communicated to the registrant's
principal executive officer and principal financial officer in
order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10 -- Exhibits
(a) Code of Ethics -- Not required in this filing
(b) Certifications pursuant to Sections 302 and 906 of the
Sarbanes-Oxley Act -- Attached hereto
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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, thereunto duly authorized.
COMMAND Government Fund
By: /s/ Jonathan D. Shain
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Jonathan D. Shain
Secretary
Date: August 26, 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/ Judy A. Rice
----------------------------------------------------------
Judy A. Rice
President and Principal Executive Officer
Date: August 26, 2003
By: /s/ Grace C. Torres
----------------------------------------------------------
Grace C. Torres
Treasurer and Principal Financial Officer
Date: August 26, 2003