UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
811-5875
(Investment Company Act File Number)
THE CROWLEY PORTFOLIO GROUP, INC.
(Exact Name of Registrant as Specified in Charter)
3201-B Millcreek Road, Wilmington, DE 19808
(Address of Principal Executive Offices)
(302) 994-4700
(Registrant's Telephone Number)
Robert A. Crowley, President Copy to:
The Crowley Portfolio Group, Inc. Bruce G. Leto, Esq.
3201-B Millcreek Road Stradley, Ronon, Stevens & Young, LLP
Wilmington, DE 19808 2600 One Commerce Square
(Name and Address of Agent for Service) Philadelphia, PA 19103-7098
Date of Fiscal Year End: November 30, 2003
Date of Reporting Period: Fiscal Period ended May 30, 2003
<page>
ITEM 1: REPORT TO SHAREHOLDERS
THE CROWLEY PORTFOLIO GROUP, INC.
FINANCIAL STATEMENTS
AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MAY 31, 2003
(Unaudited)
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
<table>
<caption>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS
May 31, 2003 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Market
Percent of Value
Par Value Net Assets (Note 1-A)
<s> <c> <c>
CORPORATE BONDS & NOTES
Auto & Truck
Ford Holdings
$ 500,000 7.350%, 11/07/11 4.31% $ 502,250
200,000 7.375%, 10/28/09 1.80 209,800
General Motors Corp.
200,000 7.200%, 01/15/11 1.81 211,000
------- --------------
7.92 923,050
------- --------------
Banking
Banque Paribas New York
95,000 6.875%, 03/01/09 .94 109,013
------- --------------
Chemical (Basic)
Union Carbide Corp. Note
150,000 6.700%, 4/01/09 1.40 162,825
------- --------------
Computer Services
450,000 Electronic Data Systems Corp.
7.125%, 10/15/09 4.33 504,450
------- --------------
Consumer Products
100,000 American Greetings Corp.
6.10%, 05/01/28 .89 103,500
------- --------------
Cruise Lines
Carnival Corp. Note
82,000 7.050%, 05/15/05 .77 89,380
------- --------------
Diversified Company
American Standard, Inc.
250,000 7.375%, 04/15/05 2.25 262,000
100,000 7.375%, 02/01/08 .93 108,450
Tyco International Ltd. Note
150,000 6.375%, 01/15/04 1.31 152,025
------- --------------
4.49 522,475
------- --------------
Electric Utility
Wisconsin Electric Power
245,000 1st Mortgage, 7.750%, 01/15/23 2.16 251,664
------- --------------
Electronics Distribution
Avnet Inc.
100,000 8.200%, 10/17/03 .90 104,800
------- --------------
Energy
Sempra Energy
150,000 6.950%, 12/01/05 1.43 166,350
------- --------------
- -----------------------------------------------------------------------------------------------------
See accompanying notes to financial statements.
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 2003 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
Financial Services
Duke Capital Corp.
$ 275,000 7.500%, 10/01/09 2.65% $ 308,138
200,000 6.250%, 02/15/13 1.82 212,000
General Motors Acceptance Corp.
500,000 6.125%, 02/01/07 4.61 537,000
General Motors Nora Financial
250,000 6.850%, 10/15/08 2.29 267,000
Household Finance Corp.
200,000 6.500%, 11/15/08 1.96 228,000
International Lease Finance Corp.
200,000 5.875%, 05/01/13 1.85 216,000
Leucadia Capital Trust I
100,000 8.650%, 01/15/27 .91 105,800
MBNA Corp. Sr. Medium Term Note
385,000 7.500%, 03/15/12 3.87 451,220
50,000 7.125%, 09/15/04 .45 52,530
Prime Property Note
65,000 7.000%, 08/15/04 .61 70,525
Tiers Principal Protected
200,000 8.850%, 02/15/27 1.83 213,400
Trenwick Capital Trust
200,000 8.820%, 02/01/37 .09 10,000
------- --------------
22.94 2,671,613
------- --------------
Food-Meat Products
Smithfield Foods, Inc.
100,000 7.625%, 02/15/08 .90 104,250
------- --------------
Hotel/Gaming Industry
ITT Corp.
200,000 6.750%, 11/15/05 1.80 209,800
Hilton Hotels Corp.
150,000 7.950%, 04/15/07 1.40 162,750
------- --------------
3.20 372,550
------- --------------
Insurance (Diversified)
Nationwide Mutual Insurance Co.
100,000 7.500%, 02/15/24 .95 111,600
Unitrin, Inc. Senior Note
250,000 5.750%, 07/01/07 2.30 267,250
------- --------------
3.25 378,850
------- --------------
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 2003 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Market
Percent of Value
Par Value Net Assets (Note 1-A)
CORPORATE BONDS & NOTES
Retail Building Supply Industry
Loews Corp. Convertible Note
$ 275,000 3.125%, 09/15/07 2.28% $ 265,375
Loews Corp.
300,000 7.625%, 06/01/23 2.99 348,000
------- --------------
5.27 613,375
------- --------------
Retail Store Industry
J.C. Penney, Inc.
100,000 6.125%, 11/15/03 .87 101,000
150,000 7.375%, 06/15/04 1.33 154,800
K Mart Corp., Medium Term Notes (b)
100,000 8.850%, 12/15/11 - -
K Mart Corp.
95,415 Pass Thru Sec K-1 8.990%, 07/05/10 .33 38,166
Sears Roebuck Corp. Note
150,000 6.700%, 11/15/06 1.40 163,275
100,000 6.125%, 01/15/06 .93 107,950
Southland Corp.
100,000 5.000%, 12/15/03 .88 103,000
Supervalue
225,000 7.875%, 08/01/09 2.24 260,550
Tommy Hilfiger U.S.A., Inc.
200,000 6.500%, 06/01/03 1.72 200,000
Tricon Global Restaurants
100,000 7.650%, 05/15/08 .93 109,000
------- --------------
10.63 1,237,741
------- --------------
Savings & Loan Industry
Great Western Financial
200,000 8.206%, 02/01/27 2.01 234,000
------- --------------
Telecommunications Service Industry
Lucent Technologies
300,000 5.500%, 11/15/08 2.31 268,500
Media One Group
250,000 6.750%, 10/01/05 2.29 266,125
Motorola, Inc.
150,000 7.625%, 11/15/10 1.47 171,525
Worldcom, Inc.
100,000 8.000%, 05/15/06 .26 30,000
100,000 6.250%, 08/15/03 .25 29,500
------- --------------
6.58 765,650
------- --------------
Total Corporate Bonds & Notes (Cost $9,243,708) 80.01 9,315,536
------- --------------
</table>
<table>
<caption>
THE CROWLEY INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 2003 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
<s> <c> <c>
PREFERRED STOCKS
4,000 AT&T Capital, 8.25% .88% $ 102,680
4,000 Conseco, 8.70% .00 840
4,000 Corts-Sherwin Williams, 7.25%, Series III .91 105,960
8,000 Hartford Capital, Series A, 7.70% 1.76 204,400
10,000 Hercules Trust I, 9.42% 2.05 238,400
4,000 MBNA Capital Preferred 8.125%, Series D .91 105,760
3,800 Nexen, Inc. Canadian, 9.75% .84 98,230
10,000 Pacificorp Capital, 8.25% 2.19 255,000
6,000 Preferred Plus Trust Preferred 6.05%, Series GECI 1.34 156,000
4,000 Telephone & Data, 6.00%, Series A .91 106,240
6,000 Transcanada Pipe Line Ltd., 8.25% 1.34 155,400
------- --------------
Total Preferred Stocks (Cost $1,597,156) 13.13 1,528,910
------- --------------
COMMON STOCKS
1,108 K Mart Holding Corp. .15 $ 17,617
------- --------------
Total Common Stocks (Cost $106,000) .15 17,617
------- --------------
Total Investments (Cost $10,946,864) (a) 93.29 10,862,063
Other Assets Less Liabilities 6.71 781,614
------- --------------
Net Assets 100.00% $ 11,643,677
======= ==============
(a) Aggregate cost for federal income tax purposes is $10,946,864.
(b) Security in bankruptcy.
At May 31, 2003, unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Unrealized appreciation $ 508,145
Unrealized depreciation (592,946)
-----------
Net unrealized depreciation $ (84,801)
===========
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS
May 31, 2003 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
GENERAL EQUITY FUNDS
Aggressive Growth
7,962 American Century Ultra 4.07% $ 185,914
6,968 Strong Opportunity 5.03 230,068
------- ------------
9.10 415,982
------- ------------
Balanced
11,185 Columbia Balanced 4.58 209,273
3,568 Dodge & Cox Balanced 5.11 233,247
13,739 Janus Balanced 5.68 259,524
------- ------------
15.37 702,044
------- ------------
Growth
10,404 Credit Suisse Capital Appreciation 3.05 139,102
8,172 Dreyfus Disciplined 4.72 215,494
9,566 Dynamics Fund 2.55 116,612
6,425 Harbor Capital Appreciation 3.18 145,392
8,063 Janus Mercury 2.93 134,003
2,628 Nicholas 2.68 122,156
6,202 Strong Growth 2.02 92,221
10,709 T. Rowe Price Blue Chip 5.79 264,412
7,510 T. Rowe Price Mid Cap 5.87 268,093
7,970 Vanguard U.S. Growth 2.31 105,366
2,679 White Oak Growth 1.64 74,737
------- ------------
36.74 1,677,588
------- ------------
Growth/Income
7,975 American Century Growth & Income 4.17 190,368
3,669 Dodge & Cox Stock 7.71 352,005
6,567 Vanguard Growth & Income 3.42 156,092
------- ------------
15.30 698,465
------- ------------
Healthcare
2,102 Vanguard Healthcare 4.82 219,903
------- ------------
Foreign Equity
18,765 American Century International Equity 2.72 124,222
5,464 Managers International Equity 3.91 178,393
6,365 Scudder Greater Europe 2.73 124,431
------- ------------
9.36 427,046
------- ------------
THE CROWLEY DIVERSIFIED MANAGEMENT PORTFOLIO
PORTFOLIO OF INVESTMENTS - (Continued)
May 31, 2003 (Unaudited)
- -----------------------------------------------------------------------------------------------------
Market
Number Percent of Value
of Shares Net Assets (Note 1-A)
INTERNATIONAL EQUITY FUNDS
Global Equity
11,307 Founders Worldwide Growth 2.29% $ 104,479
9,512 Gabelli Global Telecommunications 2.42 110,721
4,627 Janus Worldwide 3.41 155,662
------- ------------
8.12 370,862
------- ------------
Total Investments (Cost $6,395,575) (a) 98.81 4,511,890
Other Assets Less Liabilities 1.19 54,300
------- ------------
Net Assets 100.00% $ 4,566,190
======= ============
(a) Aggregate cost for federal income tax purposes is $6,395,575.
At May 31, 2003 unrealized appreciation (depreciation) of
securities for federal income tax purposes is as follows:
Unrealized appreciation $ -
Unrealized depreciation (1,883,685)
-------------
Net unrealized depreciation $ (1,883,685)
=============
</table>
<table>
<caption>
THE CROWLEY PORTFOLIO GROUP, INC.
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2003 (Unaudited)
- ------------------------------------------------------------------------------------------------------
Diversified
Income Management
Portfolio Portfolio
<s> <c> <c>
ASSETS
Investments at market value
(Identified cost $10,946,864 and $6,395,575, respectively)
(Note 1) $ 10,862,063 $ 4,511,890
Cash 644,775 54,952
Dividends and interest receivable 136,857 -
------------- --------------
Total assets 11,643,695 4,566,842
------------- --------------
LIABILITIES
Accrued expenses 18 652
------------- --------------
NET ASSETS
(500 million shares of $.01 par value common stock
authorized; 1,138,561 and 529,985 shares issued
and outstanding, respectively) $ 11,643,677 $ 4,566,190
============= ==============
NET ASSET VALUE, OFFERING AND REPURCHASE
PRICE PER SHARE
($11,643,677 / 1,138,561 shares) $10.23
======
($4,566,190 / 529,985 shares) $8.62
=====
NET ASSETS
At May 31, 2003, net assets consisted of:
Paid-in capital $ 11,879,845 $ 6,662,135
Undistributed net investment income/(loss) 236,674 (19,220)
Accumulated net realized loss on investments (388,041) (193,040)
Net unrealized depreciation (84,801) (1,883,685)
------------- --------------
$ 11,643,677 $ 4,566,190
============= ==============
THE CROWLEY PORTFOLIO GROUP, INC.
STATEMENT OF OPERATIONS
For the six months ended May 31, 2003 (Unaudited)
- -------------------------------------------------------------------------------------------------------
Diversified
Income Management
Portfolio Portfolio
INVESTMENT INCOME
Interest income $ 310,368 $ 670
Dividends 61,996 21,825
--------------- --------------
Total income 372,364 22,495
---------- -----------
EXPENSES
Investment advisory fees (Note 3) 33,953 21,554
Transfer agent fees (Note 3) 22,635 8,621
Professional fees 18,511 7,490
Directors' fees 3,000 3,000
Insurance 600 -
Registration 1,000 1,050
---------- -----------
Total expenses 79,699 41,715
---------- -----------
Net investment income (loss) 292,665 (19,220)
---------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized loss from security transactions (5,329) -
Capital gain distributions from regulated investment companies - 15,691
Change in unrealized appreciation (depreciation) of investments 411,644 162,200
---------- -----------
Net gain on investments 406,315 177,891
---------- -----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $ 698,980 $ 158,671
========== ===========
</table>
<table>
<caption>
THE CROWLEY PORTFOLIO GROUP, INC.
INCOME PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------
Six
Months Ended Year Ended
May 31, 2003 November 30, 2002
(Unaudited)
<s> <c> <c>
INCREASE (DECREASE) IN NET ASSETS FROM
Operations
Net investment income $ 292,665 $ 624,155
Net realized loss on investments (5,329) (16,967)
Increase (decrease) in unrealized appreciation of investments 411,644 (445,222)
------------- --------------
Net increase in net assets resulting from operations 698,980 161,966
Distributions to shareholders
Net investment income
($.56 and $.66 per share, respectively) (610,198) (685,035)
Capital share transactions (a)
Increase in net assets resulting from capital share transactions 453,531 382,865
------------- --------------
Total increase (decrease) in net assets 542,313 (140,204)
NET ASSETS
Beginning of period 11,101,364 11,241,568
------------- --------------
End of period
(Including undistributed net investment income of
$236,674 and $554,207, respectively) $ 11,643,677 $ 11,101,364
============= ==============
(a) Summary of capital share activity follows:
Six Months Ended
May 31, 2003 Year Ended
(Unaudited) November 30, 2002
Shares Value Shares Value
Shares sold 22,012 $ 213,897 29,327 $ 291,874
Shares issued in reinvestment of distributions 62,449 607,624 67,996 682,000
--------- ----------- -------- -----------
84,461 821,521 97,323 973,874
Shares redeemed (37,294) (367,990) (58,634) (591,009)
--------- ----------- -------- -----------
Net increase 47,167 $ 453,531 38,689 $ 382,865
========= =========== ======== ===========
THE CROWLEY PORTFOLIO GROUP, INC.
DIVERSIFIED MANAGEMENT PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------
Six
Months Ended Year Ended
May 31, 2003 November 30, 2002
(Unaudited)
DECREASE IN NET ASSETS FROM
Operations
Net investment loss $ (19,220) $ (52,269)
Net realized loss on investments - (157,140)
Capital gain distributions from regulated investment companies 15,691 22,933
Change in unrealized depreciation of investments 162,200 (832,993)
------------ --------------
Net increase (decrease) in net assets resulting from operations 158,671 (1,019,469)
Capital share transactions (a)
Increase (decrease) in net assets resulting from capital
share transactions (243,007) 175,463
------------ --------------
Total decrease in net assets (84,336) (844,006)
NET ASSETS
Beginning of period 4,650,526 5,494,532
------------ --------------
End of period, including accumulated net investment
loss of $19,220 and $0 $ 4,566,190 $ 4,650,526
============ ===============
(a) Summary of capital share activity follows:
Six Months Ended
May 31, 2003 Year Ended
(Unaudited) November 30, 2002
Shares Value Shares Value
Shares sold 3,115 $ 24,207 58,638 $ 493,384
Shares redeemed (33,719) (267,214) (36,582) (317,921)
-------- ----------- -------- -----------
Net increase (decrease) (30,604) $ (243,007) 22,056 $ 175,463
========= =========== ======== ===========
</table>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
<table>
<caption>
THE CROWLEY PORTFOLIO GROUP, INC.
INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended
May 31, 2003 Year Ended May 31,
(Unaudited) 2002** 2001 2000 1999 1998
---------- ---- ---- ---- ---- ----
<s> <c> <c> <c> <c> <c> <c>
NET ASSET VALUE
Beginning of period $10.17 $10.68 $10.38 $ 10.56 $ 11.05 $ 11.00
------ ----- ----- ------ ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .26 .58 .65 .71 .69 .59
Net gains (losses) on securities (both realized and unrealized) .36 (.43) .34 (.19) (.59) .14
------ ----- ----- ------ ------- -------
Total from investment operations .62 .15 .99 .52 .10 .73
------ ----- ----- ------ ------- -------
Dividends (from net investment income) (.56) (.66) (.69) (.70) (.59) (.68)
Distributions (from realized capital gains) - - - - - -
------- ------ ------ ------- ------- -------
Total distributions (.56) (.66) (.69) (.70) (.59) (.68)
------- ------ ------ ------- ------- -------
NET ASSET VALUE
End of period $10.23 $10.17 $10.68 $ 10.38 $10.56 $11.05
====== ====== ====== ======== ======= =======
TOTAL RETURN 6.38% 1.45% 10.08% 5.32% .92% 7.03%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $11,644 $11,101 $11,242 $10,724 $11,313 $11,980
Ratio of expenses to average net assets 1.40%(1) 1.41% 1.39% 1.37% 1.36% 1.35%
Ratio of net investment income to average net assets 5.14%(1) 5.65% 6.20% 6.79% 6.17% 5.70%
Portfolio turnover rate 28.27% 32.28% 30.12% 1.38% 27.13% 44.77%
** As required, effective December 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies
and began amortizing discount and premium on debt securities. Had the Fund
not amortized discount and premium on debt securities as adjustments to
interest income, the net investment income per share would have been $.57
and the ratio of net investment income to average net assets would have
been 5.59%. Per share and ratios prior to December 1, 2001 have not been
restated to reflect this change in presentation.
(1) Annualized
THE CROWLEY PORTFOLIO GROUP, INC.
DIVERSIFIED MANAGEMENT PORTFOLIO
FINANCIAL HIGHLIGHTS
(For a share outstanding throughout each period)
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months Ended
May 31, 2003 For The Year Ended May 31,
(Unaudited) 2002** 2001 2000 1999 1998
------------- ---- ---- ---- ---- ----
NET ASSET VALUE
Beginning of period $ 8.30 $10.20 $13.21 $14.40 $13.11 $12.87
-------- ------ ------ ------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) (.04) (.09) .12 .06 .08 .16
Net gains (losses) on securities (both realized and unrealized) .36 (1.81) (2.39) (.91) 1.79 .48
------ ------ ------ ------- ------ ------
Total from investment operations .32 (1.90) (2.27) (.85) 1.87 .64
------ ------ ------ ------- ------ ------
LESS DISTRIBUTIONS
Dividends (from net investment income) - - (.15) (.16) (.13) (.08)
Distributions (from realized capital gains) - - (.59) (.18) (.45) (.32)
------- ------ ------- ------ ------- ------
Total distributions - - (.74) (.34) (.58) (.40)
------- ------ ------- ------ ------- ------
NET ASSET VALUE
End of period $ 8.62 $ 8.30 $10.20 $ 13.21 $14.40 $13.11
====== ====== ====== =======
TOTAL RETURN 3.86% (18.63)% (18.31)% (6.20)% 14.74% 5.10%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $4,566 $4,651 $5,495 $6,573 $7,109 $6,245
Ratio of expenses to average net assets 1.97%(1) 1.89% 1.81% 1.86% 1.82% 1.88%
Ratio of net investment income (loss) to average net assets (.93)%(1) (1.06)% .98% .39% .57% 1.11%
Portfolio turnover rate 0% 1.75% 6.81% 15.36% 23.81% 4.51%
(1) Annualized
</table>
- --------------------------------------------------------------------------------
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
May 31, 2003 (Unaudited)
- --------------------------------------------------------------------------------
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Crowley Portfolio Group, Inc. (the "Fund") is an open-end diversified
investment company currently offering two series of shares: The Crowley
Income Portfolio, and The Crowley Diversified Management Portfolio (each a
"Portfolio").
The objective of The Crowley Income Portfolio is to maximize current
income, consistent with prudent risk, i.e., reasonable risk to principal.
The objective of The Crowley Diversified Management Portfolio is high total
return consistent with reasonable risk. The Portfolios will use a variety
of investment strategies in an effort to balance portfolio risks and to
hedge market risks. There can be no assurance that the objectives of the
Portfolios will be achieved.
SECURITY VALUATION
Portfolio securities which are fixed income securities, are valued by
using market quotations, prices provided by market-makers or estimates
of market values obtained from yield data relating to instruments or
securities with similar characteristics, in accordance with procedures
established in good faith by the Board of Directors. Securities listed
on an exchange or quoted on a national market system are valued at the
last sales price. Investments in regulated investment companies are
valued at the net asset value per share as quoted by the National
Association of Securities Dealers, Inc. Money market securities with
remaining maturities of less than 60 days are valued on the amortized
cost basis as reflecting fair value. All other securities are valued
at their fair value as determined in good faith by the Board of
Directors.
FEDERAL INCOME TAXES
The Portfolios intend to comply with the requirements of the Internal
Revenue Code necessary to qualify as regulated investment companies
and as such will not be subject to federal income taxes on otherwise
taxable income (including net realized capital gains) which is
distributed to shareholders. At November 30, 2002, the Crowley Income
Portfolio had a capital loss carryforward for Federal income tax
purposes of approximately $382,700, of which $50,400 expires in 2003,
$143,200 in 2004, $47,000 in 2005, $52,800 in 2006, $24,700 in 2008,
$13,000 in 2009 and $51,600 in 2010. At November 30, 2002, the Crowley
Diversified Management had a capital loss carryforward for Federal
income tax purposes of approximately $208,700 of which of $74,500
expires in 2009, and $134,200 expires in 2010.
SECURITY TRANSACTIONS, INVESTMENT INCOME AND DISTRIBUTIONS TO
SHAREHOLDERS
As is common in the industry, security transactions are accounted for
on the trade date (the date the securities are purchased or sold).
Interest income is recorded on the accrual basis. Bond premiums and
discounts are amortized daily. Dividend income and distributions to
shareholders are recorded on the ex-dividend date.
USE OF ESTIMATES IN FINANCIAL STATEMENTS
In preparing financial statements in conformity with accounting
principles generally accepted in the United States of America,
management makes estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial
statements, as well as the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
THE CROWLEY PORTFOLIO GROUP, INC.
NOTES TO FINANCIAL STATEMENTS - (Continued)
May 31, 2003 (Unaudited)
- --------------------------------------------------------------------------------
(2) CHANGE IN ACCOUNTING PRINCIPLE
The Crowley Income Portfolio, as required, adopted the provision of the
AICPA Audit and Accounting Guide for Investment Companies (the "Guide") and
began accreting market discounts and amortizing market premiums on debt
securities. Prior to December 1, 2001, the Fund did not accrete market
discount or amortize market premiums on debt securities. The cumulative
effect of this change had no impact on total net assets of the Fund, but
resulted in a $35,292 decrease in the cost of securities and a
corresponding increase of $35,292 in net unrealized gains and losses based
on securities held by the Fund on December 1, 2001.
The effect of this change during the year ended November 30, 2002 was to
increase net investment income by $5,692, decrease net unrealized gains and
losses by $40,276, and increase net realized gains and losses by $34,584.
As a result, the ratio of net investment income to average net assets
increased by .06%, the net investment income per share increased by $.01,
and the net realized and unrealized gain and losses per share decreased by
less than $.01.
(3) INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Crowley & Crowley Corp. (the "Advisor") provides the Fund with management
and administrative services pursuant to a Management Agreement.
As compensation for its services, the Advisor receives a fee, computed
daily and payable monthly, at the annualized rate of .60% of the average
daily net assets of The Crowley Income Portfolio and 1% of the average
daily net assets of The Crowley Diversified Management Portfolio. The
Advisor pays all expenses incurred by it in rendering management services
to the Fund including the costs of accounting, bookkeeping and data
processing services provided in its role as administrator. The Portfolios
bear their costs of operations, which include, but are not limited to:
advisory fees, taxes, brokerage fees, accounting fees, legal fees,
custodian and auditing fees, and printing and other expenses which are not
expressly assumed by the Advisor under the Management Agreement.
The Crowley Financial Group, Inc. ("TCFG") serves as the Portfolio
shareholders' servicing agent. As shareholder servicing agent, TCFG will
act as the Transfer, Dividend Disbursing and Redemption Agent to the
Portfolios. As compensation for its services, TCFG receives a fee computed
daily and payable monthly, at the annualized rate of .40% of the average
daily net assets of each Portfolio. During the period ended May 31, 2003,
TCFG earned fees of $22,635 and $8,621 from the Income Portfolio and
Diversified Management Portfolio, respectively.
Crowley Securities serves as distributor of the Fund's shares.
Certain officers and directors of the Fund are also officers of Crowley &
Crowley Corp., Crowley Securities and The Crowley Financial Group, Inc.
(4) PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, other than short-term investments,
aggregated $3,083,958 and $2,997,628, respectively, in the Income Portfolio
and $184,453 and $0, respectively, in the Diversified Management Portfolio
for the six months ended May 31, 2003.
THE CROWLEY PORTFOLIO GROUP, INC.
The Crowley Income Portfolio
The Crowley Diversified Management Portfolio
Semi-Annual Report Dated
May 31, 2003
Dear Shareholder:
We are pleased to present you with the Semi-Annual Report for The Crowley
Portfolio Group, Inc.
The report contains information regarding both The Crowley Income Portfolio and
The Crowley Diversified Management Portfolio. The Portfolios have combined
assets of approximately 16.2 million dollars as of May 31, 2003. There are
currently 319 active accounts.
The Crowley Diversified Management Portfolio had a net asset value of $8.62 per
share as of May 31, 2003 and had a total return of 3.86% for the six-month
period ending May 31, 2003. The Crowley Diversified Management Portfolio had
approximately $4.6 million dollars in net assets as of May 31, 2003. The Crowley
Diversified Management Portfolio was broadly invested in 26 mutual funds spread
over 7 different investment classifications. The largest portion of the
Portfolio's assets was invested in funds included in the Growth category
(36.74%), followed by Balanced (15.37%), Growth/Income (15.30%), Foreign Equity
(9.36%), Aggressive Growth (9.10%), Global Equity (8.12%), and Healthcare
(4.82%). Cash and cash equivalents were (1.19%). The international portion of
the Portfolio was at 17.48% as of May 31, 2003. Management believes that the
current equity investment environment has turned for the better and believes
that the portfolio is positioned for the next economic expansion. While
continuing to use mutual funds as the Portfolio's primary investment vehicle,
management currently intends to invest the Portfolio's assets with a greater
allocation to stock funds.
The Crowley Income Portfolio had a net asset value of $10.23 per share as of May
31, 2003 and had a total return of 6.38% for the six-month period ending May 31,
2003. As of May 31, 2003, The Crowley Income Portfolio had investments in 61
individual issues. No individual investment comprised more than 5% of the
Portfolio, while corporate bonds and notes comprised 80.01% of the overall
portfolio. The remaining assets were invested in preferred stocks (13.13%),
common stocks (.15%), and the balance was in cash and cash equivalents (6.71%).
The Crowley Income Portfolio continues to be invested to maximize current
income, consistent with prudent risk. Interest rates have remained at lower
levels making it more difficult to find investments with higher yields and
prudent risk. Management is still in the process of shortening the average
length of maturity of investments within The Crowley Income Portfolio.
Management believes that interest rates have or are nearing a cycle bottom.
The Crowley Income Portfolio had a distribution of $0.56 from net investment
income on December 31, 2002. The Crowley Diversified Management Portfolio did
not have a year-end distribution.
The enclosed report, which is unaudited, contains a list of the investments of
each portfolio as of May 31, 2003.
Sincerely,
Robert A. Crowley, CFA
President
July 25, 2003
ITEM 2: CODE OF ETHICS - Item not required at this time; applicable only to
annual reports with periods ending on or after July 15, 2003
ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT - Item not required at this time;
applicable only to annual reports with periods ending on or after July 15, 2003
ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES - Item not required at this time;
applicable only to annual reports with periods ending on or after December 15,
2003
ITEM 5: AUDIT COMMITTEE OF LISTED REGISTRANTS - Item not applicable to
registrant, which is an open-end management investment company.
ITEM 6: [RESERVED].
ITEM 7: DISCLOSURE of PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES - Item not applicable to registrant, which is an
open-end management investment company.
ITEM 8: [RESERVED].
ITEM 9: CONTROLS AND PROCEDURES
(a) Based on their evaluation of the Registrant's disclosure controls and
procedures ("Procedures") as of a date within 90 days of the filing date of
this Form N-CSR (the "Report"), the Registrant's President/Chief Executive
Officer and Treasurer/Chief Financial Officer believe that the disclosure
controls and procedures (as defined in Rule 30a-2(c) under the Investment
Company Act of 1940, as amended) are effectively designed to ensure that
information required to be disclosed by the Registrant in the Report is
recorded, processed, summarized and reported by the filing date, including
ensuring that the information required to be disclosed in the Report is
accumulated and communicated to the Registrant's principal executive and
financial officers that are making certifications in the Report, as
appropriate, to allow timely decisions regarding required disclosure.
(b) There were 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, and there were no corrective
actions with regard to significant deficiencies and material weaknesses.
ITEM 10: EXHIBITS
(a) Item not required at this time; applicable only to annual reports with
periods ending on or after July 15, 2003.
(b) The certifications required by Rule 30a-2 under the Investment Company
Act of 1940, as amended, and Sections 302 and 906 of the Sarbanes-Oxley Act
of 2002 are attached as exhibits hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report
to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant: The Crowley Portfolio Group, Inc.
By: /s/Robert A. Crowley
Name: Robert A. Crowley
Title: President
Date: July 30, 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.
Registrant: The Crowley Portfolio Group, Inc.
By: /s/Robert A. Crowley
Name: Robert A. Crowley
Title: President (Principal Executive Officer)
Date: July 30, 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.
Registrant: The Crowley Portfolio Group, Inc.
By: /s/Robert A. Crowley
Name: Robert A. Crowley
Title: Treasurer (Principal Financial Officer)
Date: July 30, 2003