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 811-5900 EXPEDITION FUNDS (Exact name of registrant as specified in charter) -------- 15 South 20th Street Birmingham, Alabama 35233 (Address of principal executive offices) (Zip code) Expedition Funds State Street Bank and Trust Company 225 Franklin Street Boston Massachusetts 02110 (Name and address of agent for service) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 1-800-992-2085 DATE OF FISCAL YEAR END: OCTOBER 31, 2003 DATE OF REPORTING PERIOD: OCTOBER 31, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. Expedition Funds GUIDING YOUR WAY 2003 Annual Report [PHOTO OMITTED] [LOGO] EXPEDITION FUNDS[R] Table of Contents Letter to Our Shareholders ............................ 1 Management's Discussion and Analysis .................. 4 Independent Auditors' Report .......................... 14 Statements of Net Assets .............................. 15 Statements of Operations .............................. 52 Statements of Changes in Net Assets ................... 55 Financial Highlights .................................. 58 Notes to Financial Statements ......................... 64 Trustees and Officers of the Trust .................... 74 Notice to Shareholders ................................ 82 - -------------------------------------------------------------------------------- Shares of the Expedition Funds are not deposits of or obligations of, or guaranteed or endorsed by Compass Bank, Compass Bancshares, Inc. or any of their affiliates, or any bank, and are not obligations of, guaranteed by or insured by the U.S. Government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. An investment in shares of the Funds involves investment risk, including the possible loss of all or a portion of the principal invested, and the investment return and value of shares of the Funds will fluctuate so that an investment, when liquidated, may be worth more or less than the original cost. Money market funds are neither insured nor guaranteed by the U.S. Government and there can be no assurance that the Expedition Money Market Fund or Tax-Free Money Market Fund will be able to maintain a stable net asset value of $1.00 per share. Compass Bank serves as investment advisor and custodian to the Expedition Funds, and Compass Bank and various of its affiliates may provide various services to the Funds, for which investment advisory, custodian and other services Compass Bank and/or such other affiliates are entitled to receive compensation. - -------------------------------------------------------------------------------- LETTER TO OUR SHAREHOLDERS Dear Shareholder: After enduring two solid years of bear markets, it is with great pleasure that we close out a fiscal year in which the bulls returned. Following the tragic events of 2001 and uncertainties surrounding war with Iraq, the stock market was due for a recovery. That recovery finally arrived in the spring of 2003, as investors began moving cautiously back into stocks and out of safe havens such as money market funds. In early summer, a series of encouraging economic reports spurred even greater optimism. And as corporations began reporting surprisingly strong profits for the quarter ending June 30, a genuine rally was underway. By the end of the fiscal year, there were double-digit gains for all the major stock indices. And while rising deficits and ongoing problems in the Middle East remain serious concerns, the markets are clearly anticipating better times ahead. CONSUMERS LEAD, BUSINESSES FOLLOW. During this period of uncertainty, the real heroes of the American economy have been consumers, who have maintained very healthy spending levels throughout even the worst of the past two years. Their resolute confidence, fueled in part by a recent tax cut, kept the economy from dipping into recession. Businesses have less to be proud of, having virtually frozen investments in capital equipment, technology, and personnel. The result was a vicious circle: Businesses weren't spending money on other businesses, so corporate profits suffered all around. On the positive side, many corporations did use this period to reduce overhead costs and streamline processes. As a result, when the recovery finally appeared, its effects went almost directly to the bottom line. Over the past six months, company after company has reported a dramatic increase in earnings, giving investors plenty of reasons to cheer -- and to buy. STOCKS OVERCOME UNCERTAINTY. For the stock market, the early months of fiscal 2003 were dominated by fear of war, and war itself. As the world held its collective breath, investors waited on the sidelines to see whether the conflict would be as smooth as the administration had promised. When it was even smoother, a large sigh of relief was followed by cautious buying. In the last two quarters, with peace proving more costly than war, investors nonetheless were met with overwhelming evidence that the economy had turned a corner, with profits in most sectors showing impressive strength. The result was a return to real bullishness for the first time in two years. Corporate scandals continued to make headlines, although none were of the magnitude of the Enron and WorldCom debacles of the prior year. In addition, the markets seemed to be genuinely reassured by measures such as the Sarbanes-Oxley Act of 2002, which requires chief executives to take personal responsibility for their companies' earnings reports. OCTOBER 31, 2003 | 1 LETTER TO OUR SHAREHOLDERS (CONCLUDED) A MIXED YEAR FOR BONDS. The taxable bond market performed relatively well during the year, although the previous year was a tough act to follow. Bonds enjoyed a bit more stimulus as Federal Reserve Board cut rates just after the start of the fiscal year, and again in June, 2003, bringing the discount rate down to an even one percent. Thereafter, however, the strengthening economy obviated any need for the Fed to do more. The municipal bond market was less robust. Cutbacks in federal funding and weak local economies led to outright fiscal crises in many states. And while there were no actual defaults of any major issues, investors grew increasingly wary, pushing down prices. The money markets remained in limbo -- as in the dance that asks, "how low can you go?" With yields now below the single-digit level, money markets were left with only their relative stability to attract investors. In a year of turmoil, that was often enough. READY FOR THE RECOVERY. It is gratifying to note that when the recovery appeared, the Expedition Funds and its investors were in position to benefit from its substantial gains. Our investor base and asset levels continued to grow during the past year, as individuals and institutions recognized that opportunities were to be found in the face of uncertainty. Our fund managers also used this period wisely, taking advantage of undervalued issues while maintaining their commitment to quality. The results of this patient and prudent approach are evident in the performance figures that appear in the pages ahead. THE ONLY TREND THAT COUNTS. With better times returning to the economy and the markets, it can be easy to think they will always remain so. But history shows that bad years will always be followed by good years, and vice versa. No short-term trend, however positive or negative, is ever permanent. Over time, however, the long-term trend is the same: Good companies grow, high-quality bond issuers meet their commitments, and the American economy continues to expand. That is the trend that you invest in when you choose the Expedition Funds. And that is the trend that we are privileged to pursue on your behalf. We thank you for your continued confidence during this challenging, and ultimately rewarding, period. And we look forward to helping you participate in the markets for many years to come. Sincerely, /S/Denise A. Woodham Denise A. Woodham Managing Director of Investments Compass Asset Management Group 2 | OCTOBER 31, 2003 INDEX DEFINITIONS LEHMAN INTERMEDIATE GOVERNMENT/CREDIT INDEX -- A market value weighted performance benchmark for government and Baa and higher rated corporate fixed-rate debt issues with maturities between one and ten years. LEHMAN MUNICIPAL BOND INDEX -- A broad-based total return index comprised of 8,000 investment grade, fixed rate, tax-exempt bonds with a remaining maturity of at least one year, including state and local general obligation, revenue, insured and pre-refunded bonds. RUSSELL 1000 INDEX -- Measures the performance of the 1,000 largest companies in the Russell 3000 Index which represents approximately 92% of total market capitalization of the Russell 3000 Index. S&P 400 MID-CAP INDEX -- This index is a capitalization-weighted index which measures the performance of the mid-range of the U.S. Stock Market. This index consists of 400 domestic stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index, with each stock affecting the index in proportion to its market value. S&P 500 COMPOSITE INDEX -- An unmanaged capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. S&P 500/BARRA VALUE INDEX -- This index is constructed by dividing the stocks of the S&P 500 Composite Index according to price-to-book ratio. It contains firms with lower price-to-book ratios. The index is capitalization-weighted, meaning that each stock in the index is weighted in proportion to its market value. OCTOBER 31, 2003 | 3 EXPEDITION EQUITY FUND MANAGEMENT'S DISCUSSION AND ANALYSIS For the twelve month period ended October 31, 2003, the Expedition Equity Fund (Institutional Shares) generated a total return of 20.99%. This compares to a 20.80% return for the S&P 500 Composite Index and a 17.75% return for the Lipper Large-Cap Core Funds Classification. The Fund seeks to provide growth of capital, with a secondary objective of income and pursues these objectives by investing in a diversified portfolio of common stocks issued by mid and large capitalization companies. The Expedition Equity Fund performed well in relation to its benchmark, actually outperforming it. This strong performance came amid unexpected strength in both the economy and the markets, particularly in the latter portion of the fiscal year. The effects of the strengthening economy were heightened by the fact that corporations have tightened costs so successfully that even slight improvements in demand translated to bottom-line profitability. For this reason, stocks of cyclical companies and those whose businesses are tied to the overall economy were among the best performers. Looking ahead, we are concerned that the recent earnings momentum may have reached its peak. The improving economy should still produce positive earnings, but most likely at a declining rate of growth. Therefore, we anticipate additional gains for stocks, but not of the magnitude of the past fiscal year. 4 | OCTOBER 31, 2003 EXPEDITION EQUITY FUND MANAGEMENT'S DISCUSSION AND ANALYSIS - -------------------------------------------------------------------------------- EXPEDITION EQUITY FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN - ------------------------------------------------------------------------------------------------- 1 Year 3 Year 5 Year 10 Year Inception to Return Return Return* Return* Date* - ------------------------------------------------------------------------------------------------- Institutional Shares 20.99% -15.45% -0.71% 7.67% 7.64% - ------------------------------------------------------------------------------------------------- Investment Shares - Class A 20.72% -15.63% -0.99%** 7.54%** 7.51%** - ------------------------------------------------------------------------------------------------- Investment Shares - Class A w/load 15.95% -16.77% -1.79%** 7.10%** 7.08%** - ------------------------------------------------------------------------------------------------- Investment Shares - Class B 19.76% -16.30% -1.71%** 7.13%** 7.10%** - ------------------------------------------------------------------------------------------------- Investment Shares - Class B w/load 14.76% -17.03% -1.85%** 7.13%** 7.10%** - ------------------------------------------------------------------------------------------------- COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION EQUITY FUND, INSTITUTIONAL SHARES, INVESTMENT SHARES-CLASS A AND INVESTMENT SHARES-CLASS B, VERSUS THE RUSSELL 1000 INDEX, THE S&P 500 COMPOSITE INDEX, THE S&P 400 MID-CAP INDEX, THE LIPPER GROWTH & INCOME FUNDS OBJECTIVE, AND THE LIPPER LARGE-CAP CORE FUNDS CLASSIFICATION. [GRAPH OMITTED] EDGAR REPRESENTATION OF PLOT POINTS USED IN PRINTED GRAPH EXPEDITION EQUITY FUND, EXPEDITION EQUITY FUND, EXPEDITION EQUITY FUND, RUSSELL 1000 INSTITUTIONAL SHARES INVESTMENT SHARES-CLASS A INVESTMENT SHARES-CLASS B INDEX 10/93 $10,000 $9,600 $10,000 $10,000 10/94 10,033 9,632 10,033 10,310 10/95 11,712 11,243 11,712 13,094 10/96 14,321 13,748 14,321 16,095 10/97 18,209 17,481 18,209 21,219 10/98 21,701 20,868 21,738 25,402 10/99 28,401 27,162 28,159 31,899 10/00 34,652 33,065 34,016 34,790 10/01 22,527 21,456 21,903 25,730 10/02 17,312 16,450 16,655 21,974 10/03 20,946 19,858 19,946 26,878 S&P 500 S&P 400 LIPPER GROWTH & LIPPER LARGE-CAP CORE COMPOSITE INDEX MID-CAP INDEX INCOME FUNDS OBJECTIVE FUNDS CLASSIFICATION 10/93 $10,000 $10,000 $10,000 $10,000 10/94 10,386 10,236 10,269 10,272 10/95 13,132 12,407 12,410 12,590 10/96 16,297 14,560 15,154 15,232 10/97 21,530 19,313 19,508 19,520 10/98 26,264 20,607 21,507 22,448 10/99 33,006 24,949 25,329 28,174 10/00 35,016 32,846 27,935 30,867 10/01 26,297 28,757 23,348 22,567 10/02 22,324 27,382 20,091 18,819 10/03 26,967 35,796 24,228 22,159 * FOR PERIODS PRIOR TO THE INCEPTION OF THE EXPEDITION EQUITY FUND (THE "FUND") ON JUNE 13, 1997, THE PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE OF THE EQUITY MODEL COMMON TRUST FUND INTERNALLY MANAGED BY AN AFFILIATE OF THE FUND'S INVESTMENT ADVISOR, ADJUSTED FOR THE MAXIMUM FEE AND EXPENSES OF THE INSTITUTIONAL SHARES OF THE FUND APPLICABLE AT THE INCEPTION OF THE FUND. THE EQUITY MODEL COMMON TRUST FUND WAS NOT REGISTERED UNDER THE INVESTMENT COMPANY ACT OF 1940 AND THEREFORE, WAS NOT SUBJECT TO CERTAIN RESTRICTIONS WHICH MAY HAVE ADVERSELY AFFECTED PERFORMANCE. ** CLASS A SHARES OF THE FUND WERE OFFERED BEGINNING NOVEMBER 24, 1997 AND CLASS B SHARES OF THE FUND WERE OFFERED BEGINNING NOVEMBER 16, 1998. THE PERFORMANCE INFORMATION SHOWN PRIOR TO THAT REPRESENTS PERFORMANCE OF INSTITUTIONAL SHARES. THE PRIOR INSTITUTIONAL SHARES PERFORMANCE HAS BEEN ADJUSTED TO REFLECT THE MAXIMUM FRONT-END SALES CHARGES AND THE MAXIMUM CONTINGENT DEFERRED SALES CHARGES APPLICABLE TO CLASS A AND CLASS B SHARES, RESPECTIVELY, BUT DOES NOT REFLECT THE HIGHER RULE 12B-1 FEES FOR EITHER CLASS. HAD THAT ADJUSTMENT BEEN MADE, PERFORMANCE WOULD HAVE BEEN LOWER. NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER. OCTOBER 31, 2003 | 5 EXPEDITION EQUITY INCOME FUND MANAGEMENT'S DISCUSSION AND ANALYSIS For the twelve month period ended October 31, 2003, the Expedition Equity Income Fund (Institutional Shares) generated a total return of 16.12%. This compares to a 20.80% return for the S&P 500 Composite Index and a 20.75% return for the Lipper Large-Cap Value Funds Classification for the comparable time period. The Fund seeks to provide growth of capital, with a secondary objective of income. These objectives are pursued through a diversified portfolio of common stocks issued by mid and large-capitalization companies. While it underperformed its benchmark, the Expedition Equity Income Fund produced a very positive overall return. For investors, this return was enhanced by recent legislation that lowered taxes on dividend income. The Fund benefited from a strong stock market in the second half of the fiscal year, as well as continued accommodative action - and frequent inaction - by the Federal Reserve Board. Strong sectors of the portfolio included industrial companies, financial services providers, and transportation providers. Looking ahead, we believe that income-oriented stocks will remain strong, thanks to improving earnings and the increasing demand for dividends. Therefore, we will continue to invest in high-quality issues that combine strong income and the potential for long-term capital appreciation. 6 | OCTOBER 31, 2003 EXPEDITION EQUITY INCOME FUND MANAGEMENT'S DISCUSSION AND ANALYSIS - -------------------------------------------------------------------------------- EXPEDITION EQUITY INCOME FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN - -------------------------------------------------------------------------------- 1 Year 3 Year Inception to Return Return Date - -------------------------------------------------------------------------------- Institutional Shares 16.12% -12.75% -8.60% - -------------------------------------------------------------------------------- Investment Shares - Class A 15.84% -12.98% -8.33% - -------------------------------------------------------------------------------- Investment Shares - Class A w/load 11.21% -14.16% -9.35% - -------------------------------------------------------------------------------- Investment Shares - Class B 14.85% -13.60% -9.09% - -------------------------------------------------------------------------------- Investment Shares - Class B w/load 9.85% -14.42% -9.57% - -------------------------------------------------------------------------------- COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION EQUITY INCOME FUND, INSTITUTIONAL SHARES, INVESTMENT SHARES-CLASSA AND INVESTMENT SHARES-CLASS B, VERSUS THE S&P 500 COMPOSITE INDEX, THE S&P 500/BARRA VALUE INDEX, AND THE LIPPER LARGE-CAP VALUE FUNDS CLASSIFICATION, THE LIPPER EQUITY INCOME CLASSIFICATION, AND THE LIPPER EQUITY INCOME OBJECTIVE [GRAPH OMITTED] EDGAR REPRESENTATION OF PLOT POINTS USED IN PRINTED GRAPH EXPEDITION EQUITY INCOME FUND, EXPEDITION EQUITY INCOME FUND, EXPEDITION EQUITY INCOME FUND, S&P 500 INSTITUTIONAL SHARES INVESTMENT SHARES-CLASS A INVESTMENT SHARES-CLASS B COMPOSITE INDEX 10/93 $10,000 $9,600 $10,000 $10,000 10/00 10,350 9,918 10,302 9,600 10/01 7,556 7,221 7,453 7,210 10/02 5,920 5,642 5,786 6,120 10/03 6,874 6,536 6,520 7,393 S&P 500/BARRA LIPPER LARGE-CAP VALUE LIPPER EQUITY INCOME LIPPER EQUITY VALUE INDEX FUNDS CLASSIFICATION CLASSIFICATION INCOME OBJECTIVE 10/93 $10,000 $10,000 $10,000 $10,000 10/00 10,609 10,697 10,736 10,624 10/01 8,656 9,453 9,743 9,474 10/02 7,290 8,101 8,612 8,320 10/03 9,100 9,782 10,321 9,947 NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER. OCTOBER 31, 2003 | 7 EXPEDITION INVESTMENT GRADE BOND FUND MANAGEMENT'S DISCUSSION AND ANALYSIS For the twelve month period ended October 31, 2003, the Expedition Investment Grade Bond Fund (Institutional Shares) generated a total return of 3.89%. This compares to a 5.66% return for the Lipper Intermediate Investment-Grade Debt Objective. The Fund seeks to provide income with relative stability of principal. While the bond market performed well overall, the lion's share of the gains took place in the early half of the fiscal year, as the war in Iraq, economic concerns, and a half-percent rate cut by the Federal Reserve Board led to a continuation of the previous year's rally. By mid-June, that tide turned sharply, as success in Iraq and an upturn in economic sentiment caused yields to rise a full percentage point in just over six weeks. The Expedition Investment Grade Bond Fund was well positioned throughout the year, holding high quality government and corporate issues with an average maturity level below that of our benchmark. Looking ahead, we believe that rates will continue to drive higher, as the U.S. economy recovers. In light of this forecast, we plan to maintain a relatively short maturity level in order to capture any incremental yield opportunities as they become available. In addition, we will retain our focus on high-quality corporate bonds, which offer strong relative returns backed by favorable earnings trends. 8 | OCTOBER 31, 2003 EXPEDITION INVESTMENT GRADE BOND FUND MANAGEMENT'S DISCUSSION AND ANALYSIS - -------------------------------------------------------------------------------- EXPEDITION INVESTMENT GRADE BOND FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN - ---------------------------------------------------------------------------------------------- 1 Year 3 Year 5 Year 10 Year Inception Return Return Return* Return* to Date* - ---------------------------------------------------------------------------------------------- Institutional Shares 3.89% 8.49% 6.33% 5.82% 6.32% - ---------------------------------------------------------------------------------------------- Investment Shares - Class A 3.63% 8.22% 6.04% 5.66% 6.18% - ---------------------------------------------------------------------------------------------- Investment Shares - Class A w/load -0.53% 6.78% 5.19% 5.23% 5.81% - ---------------------------------------------------------------------------------------------- Investment Shares - Class B 2.86% 7.45% 5.84% 5.56% 6.09% - ---------------------------------------------------------------------------------------------- Investment Shares - Class B w/load -2.11% 6.58% 5.68% 5.56% 6.09% - ---------------------------------------------------------------------------------------------- COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION INVESTMENT GRADE BOND FUND, INSTITUTIONAL SHARES, INVESTMENT SHARES-CLASS A AND INVESTMENT SHARES-CLASS B, VERSUS THE LEHMAN INTERMEDIATE GOVERNMENT/CREDIT INDEX, AND THE LIPPER INTERMEDIATE INVESTMENT- GRADE DEBT OBJECTIVE. [GRAPH OMITTED] EDGAR REPRESENTATION OF PLOT POINTS USED IN PRINTED GRAPH Expedition Investment Grade Expedition Investment Grade Expedition Investment Grade Bond Fund, Institutional Shares Bond Fund, Investment Shares-Class A Bond Fund, Investment Shares-Class B 10/93 $10,000 $ 9,600 $10,000 10/94 9,688 9,300 9,688 10/95 10,748 10,318 10,748 10/96 11,225 10,776 11,225 10/97 11,945 11,467 11,945 10/98 12,952 12,413 12,930 10/99 12,944 12,362 13,098 10/00 13,784 13,131 13,824 10/01 15,851 15,064 15,758 10/02 16,942 16,059 16,675 10/03 17,601 16,642 17,152 Lehman Intermediate Lipper Intermediate Investment- Government/Credit Index Grade Debt Objective 10/93 $10,000 $10,000 10/94 9,807 9,564 10/95 11,035 10,954 10/96 11,677 11,541 10/97 12,552 12,516 10/98 13,694 13,526 10/99 13,829 13,533 10/00 14,720 14,356 10/01 16,819 16,301 10/02 17,813 16,905 10/03 18,777 17,862 * INSTITUTIONAL SHARES OF THE FUND WERE OFFERED BEGINNING JUNE 13, 1997 AND CLASS B SHARES OF THE FUND WERE OFFERED BEGINNING NOVEMBER 16, 1998. THE PERFORMANCE INFORMATION SHOWN PRIOR TO THAT REPRESENTS PERFORMANCE OF CLASS A SHARES, WHICH WERE OFFERED BEGINNING APRIL 20, 1992. FOR INSTITUTIONAL SHARES, THE PRIOR CLASS A SHARES PERFORMANCE REFLECTS THE MAXIMUM FRONT-END SALES CHARGE AND RULE 12B-1 FEES ON CLASS A SHARES, NEITHER OF WHICH APPLIES TO INSTITUTIONAL SHARES. FOR CLASS B SHARES, THE PRIOR CLASS A SHARES PERFORMANCE REFLECTS THE MAXIMUM CONTINGENT DEFERRED SALES CHARGE ON CLASS B SHARES, BUT DOES NOT REFLECT CLASS B SHARES' HIGHER RULE 12B-1 FEES. HAD THAT ADJUSTMENT BEEN MADE, PERFORMANCE WOULD HAVE BEEN LOWER. NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER. OCTOBER 31, 2003 | 9 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND MANAGEMENT'S DISCUSSION AND ANALYSIS For the twelve month period ended October 31, 2003, the Expedition Tax-Free Investment Grade Bond Fund (Institutional Shares) generated a total return of 4.57%. This compares to a 5.11% return for the Lehman Municipal Bond Index and a 4.29% return for the Lipper Intermediate Municipal Debt Funds Objective. The Expedition Tax-Free Investment Grade Bond Fund performed well again during the past year, taking advantage of the strong municipal market conditions that prevailed - particularly in the first half of the year. Factors contributing to the Fund's performance included downward pressure on interest rates by the Federal Reserve Board and our continuing focus on quality issues. Looking ahead, we believe that interest rates will remain relatively flat for the next quarter or two, with the possibility of an upward trend thereafter as the economy gains momentum. Therefore, we plan to keep our average maturity level close to that of our benchmark, while retaining our emphasis on issues of superior quality. One area of concern is the recent budget deficit facing many states in the wake of slow economies and reduced federal spending. We have thus far steered clear of any problems related to this trend, through our strategy of emphasizing issues of the highest quality. We plan to continue that strategy in the year ahead. 10 | OCTOBER 31, 2003 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND MANAGEMENT'S DISCUSSION AND ANALYSIS - -------------------------------------------------------------------------------- EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND - -------------------------------------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN - ------------------------------------------------------------------------------- 1 Year 3 Year Inception to Return Return Date - ------------------------------------------------------------------------------- Institutional Shares 4.57% 6.51% 7.23% - ------------------------------------------------------------------------------- Investment Shares - Class A 4.40% 6.28% 6.83% - ------------------------------------------------------------------------------- Investment Shares - Class A w/load 0.21% 4.85% 5.64% - ------------------------------------------------------------------------------- Investment Shares - Class B 3.63% 5.46% 5.85% - ------------------------------------------------------------------------------- Investment Shares - Class B w/load -1.34% 4.55% 5.32% - ------------------------------------------------------------------------------- COMPARISON OF CHANGE IN THE VALUE OF A $10,000 INVESTMENT IN THE EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND, INSTITUTIONAL SHARES AND INVESTMENT SHARES-CLASS A, VERSUS THE LEHMAN MUNICIPAL BOND INDEX, THE LIPPER GENERAL MUNICIPAL DEBT FUNDS OBJECTIVE, AND THE LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS OBJECTIVE. [GRAPH OMITTED] EDGAR PRPRESENTATION OF PLOT POINTS USED IN PRINTED GRAPH EXPEDITION TAX-FREE INVESTMENT GRADE EXPEDITION TAX-FREE INVESTMENT GRADE LEHMAN MUNICIPAL BOND FUND, INSTITUTIONAL SHARES BOND FUND, INVESTMENT SHARES-CLASS A BOND INDEX 3/31/00 $10,000 $ 9,600 $10,000 10/00 10,462 10,019 10,510 10/01 11,459 10,947 11,616 10/02 12,089 11,520 12,297 10/03 12,642 12,027 12,926 LIPPER GENERAL MUNICIPAL LIPPER INTERMEDIATE MUNICIPAL DEBT FUNDS OBJECTIVE DEBT FUNDS OBJECTIVE 3/31/00 $10,000 $10,000 10/00 10,445 10,402 10/01 11,450 11,363 10/02 11,928 11,915 10/03 12,480 12,426 NOTE: PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE AND IS NOT PREDICTIVE OF FUTURE PERFORMANCE. ACTUAL RETURN AND PRINCIPAL VALUE WILL FLUCTUATE, AND SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. RETURNS SHOWN DO NOT REFLECT THE DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS OR THE REDEMPTION OF FUND SHARES. THE RETURNS FOR CERTAIN PERIODS REFLECT FEE WAIVERS AND/OR REIMBURSEMENTS IN EFFECT FOR THAT PERIOD; ABSENT FEE WAIVERS AND REIMBURSEMENTS, PERFORMANCE WOULD HAVE BEEN LOWER. OCTOBER 31, 2003 | 11 EXPEDITION MONEY MARKET FUND MANAGEMENT'S DISCUSSION AND ANALYSIS For the twelve month period ended October 31, 2003, the Expedition Money Market Fund (Institutional Shares) generated a total return of 0.88%. This compares to a 0.71% return for the Lipper Money Market Mutual Funds Index. Yields on money market instruments declined again in fiscal 2003, due to Federal Reserve Board reductions totaling three-quarters of one percent. This led to a historic period in which yields were consistently below one percent. The Expedition Money Market Fund maintained its conservative strategy during the year, keeping assets primarily in 30 to 60 day commercial paper and corporate notes of six months to one year. The remainder of the Fund was invested in overnight repurchase agreements. Looking ahead, we believe that the Fed will respond to the improving economy by holding rates steady, with a possible upward bias. Therefore, we plan to continue with our relatively short-term strategy in hopes of improved yields in the months to come. 12 | OCTOBER 31, 2003 EXPEDITION TAX-FREE MONEY MARKET FUND MANAGEMENT'S DISCUSSION AND ANALYSIS For the twelve month period ended October 31, 2003, the Expedition Tax-Free Money Market Fund (Institutional Shares) generated a total return of 0.79%. This compares to a 0.63% return for the Lipper Tax-Exempt Money Market Funds Index. The Fund seeks to provide income, exempt from Federal income taxes, consistent with stability of principal. The Fund pursues this investment objective by investing in high quality money market instruments maturing in 397 days or less. Yields in the short-term municipal markets declined, as the Federal Reserve Board pushed the discount rate to still more new lows during the fiscal year. With a number of municipalities facing fiscal crunches, investors paid greater attention to quality, pushing rates down even further on the best-quality issues. As a result, yields on the Expedition Tax-Free Money Market Fund remained relatively modest, in line with those of the benchmark index. Looking ahead, we plan to continue keeping maturity levels at the short end of the spectrum in anticipation of potential rate increases. And, we will remain vigilant with regard to quality, focusing on instruments that are well-supported by dependable revenues and, where available, municipal bond insurance. OCTOBER 31, 2003 13 INDEPENDENT AUDITORS' REPORT To the Board of Trustees and Shareholders of Expedition Funds: We have audited the accompanying statements of net assets of Expedition Funds (the "Funds"), including the Equity Fund, Equity Income Fund, Investment Grade Bond Fund, Tax-Free Investment Grade Bond Fund, Money Market Fund, and Tax-Free Money Market Fund as of October 31, 2003, and the related statements of operations for the year then ended, the statements of changes in 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. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of October 31, 2003, by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Funds as of October 31, 2003, the results of their operations for the year then ended, the changes in their 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. Deloitte & Touche LLP New York, New York December 19, 2003 14 | OCTOBER 31, 2003 EXPEDITION EQUITY FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION SHARES (000) - ----------------------------------------------------------------------------------- COMMON STOCK - 99.2% AEROSPACE & DEFENSE - 3.6% Boeing 70,000 $ 2,694 United Technologies 45,000 3,811 - ----------------------------------------------------------------------------------- TOTAL AEROSPACE & DEFENSE 6,505 - ----------------------------------------------------------------------------------- AIRLINES - 2.2% Southwest Airlines 200,000 3,880 - ----------------------------------------------------------------------------------- TOTAL AIRLINES 3,880 - ----------------------------------------------------------------------------------- BANKS - 2.8% Bank of America 25,000 1,893 JP Morgan Chase 90,000 3,231 - ----------------------------------------------------------------------------------- TOTAL BANKS 5,124 - ----------------------------------------------------------------------------------- BROADCASTING, NEWSPAPERS & ADVERTISING - 6.7% Comcast, Cl A* 120,000 4,070 Gannett 35,000 2,944 Omnicom Group 50,000 3,990 Viacom, Cl B 25,000 997 - ----------------------------------------------------------------------------------- TOTAL BROADCASTING, NEWSPAPERS & ADVERTISING 12,001 - ----------------------------------------------------------------------------------- BROKER/DEALERS - 4.6% Goldman Sachs Group 36,000 3,380 Morgan Stanley 90,000 4,938 - ----------------------------------------------------------------------------------- TOTAL BROKER/DEALERS 8,318 - ----------------------------------------------------------------------------------- COMPUTERS & SERVICES - 9.1% Cisco Systems* 250,000 5,245 Dell* 88,000 3,179 Intel 110,000 3,635 International Business Machines 48,000 4,295 - ----------------------------------------------------------------------------------- TOTAL COMPUTERS & SERVICES 16,354 - ----------------------------------------------------------------------------------- COSMETICS/TOILETRIES - 3.6% Gillette 90,000 2,871 Procter & Gamble 36,000 3,538 - ----------------------------------------------------------------------------------- TOTAL COSMETICS/TOILETRIES 6,409 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES - 3.9% American Express 75,000 3,520 Citigroup 75,000 3,555 - ----------------------------------------------------------------------------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 7,075 - ----------------------------------------------------------------------------------- DIVERSIFIED MANUFACTURING - 2.4% General Electric 150,000 4,351 - ----------------------------------------------------------------------------------- TOTAL DIVERSIFIED MANUFACTURING 4,351 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 15 EXPEDITION EQUITY FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION SHARES (000) - ----------------------------------------------------------------------------------- ELECTRICAL SERVICES - 3.2% Exelon 90,000 $ 5,711 - ----------------------------------------------------------------------------------- TOTAL ELECTRICAL SERVICES 5,711 - ----------------------------------------------------------------------------------- ENTERTAINMENT - 1.2% Harrah's Entertainment 50,000 2,175 - ----------------------------------------------------------------------------------- TOTAL ENTERTAINMENT 2,175 - ----------------------------------------------------------------------------------- FOOD, BEVERAGE & TOBACCO - 5.6% Anheuser-Busch 77,000 3,793 Constellation Brands, Cl A* 85,000 2,667 Sysco 105,000 3,534 - ----------------------------------------------------------------------------------- TOTAL FOOD, BEVERAGE & TOBACCO 9,994 - ----------------------------------------------------------------------------------- INSURANCE - 8.8% Allstate 75,000 2,963 American International Group 82,000 4,988 Lincoln National 95,000 3,793 Marsh & McLennan 95,000 4,061 - ----------------------------------------------------------------------------------- TOTAL INSURANCE 15,805 - ----------------------------------------------------------------------------------- MACHINERY - 2.0% Caterpillar 50,000 3,664 - ----------------------------------------------------------------------------------- TOTAL MACHINERY 3,664 - ----------------------------------------------------------------------------------- MEDICAL PRODUCTS & SERVICES - 11.6% Amgen* 60,000 3,706 Cardinal Health 30,000 1,780 CR Bard 40,000 3,202 Lincare Holdings* 50,000 1,947 Mylan Laboratories 100,000 2,415 St. Jude Medical* 70,000 4,071 UnitedHealth Group 75,000 3,816 - ----------------------------------------------------------------------------------- TOTAL MEDICAL PRODUCTS & SERVICES 20,937 - ----------------------------------------------------------------------------------- METALS-ALUMINUM - 2.2% Alcoa 125,000 3,946 - ----------------------------------------------------------------------------------- TOTAL METALS-ALUMINUM 3,946 - ----------------------------------------------------------------------------------- MISCELLANEOUS BUSINESS SERVICES - 1.1% First Data 55,000 1,964 - ----------------------------------------------------------------------------------- TOTAL MISCELLANEOUS BUSINESS SERVICES 1,964 - ----------------------------------------------------------------------------------- PAPER & PAPER PRODUCTS - 2.1% International Paper 95,000 3,738 - ----------------------------------------------------------------------------------- TOTAL PAPER & PAPER PRODUCTS 3,738 - ----------------------------------------------------------------------------------- PETROLEUM REFINING - 6.1% Apache Corporation 50,000 3,486 16 | OCTOBER 31, 2003 EXPEDITION EQUITY FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION SHARES (000) - ----------------------------------------------------------------------------------- Exxon Mobil 110,000 $ 4,024 Schlumberger 75,000 3,523 - ----------------------------------------------------------------------------------- TOTAL PETROLEUM REFINING 11,033 - ----------------------------------------------------------------------------------- PHARMACEUTICALS - 2.7% Merck 35,000 1,549 Pfizer 105,000 3,318 - ----------------------------------------------------------------------------------- TOTAL PHARMACEUTICALS 4,867 - ----------------------------------------------------------------------------------- RETAIL - 3.6% Best Buy* 60,000 3,499 Staples* 110,000 2,950 - ----------------------------------------------------------------------------------- TOTAL RETAIL 6,449 - ----------------------------------------------------------------------------------- SEMI-CONDUCTORS/INSTRUMENTS - 1.9% Applied Materials* 150,000 3,506 - ----------------------------------------------------------------------------------- TOTAL SEMI-CONDUCTORS/INSTRUMENTS 3,506 - ----------------------------------------------------------------------------------- SOFTWARE & PROGRAMMING - 5.1% Microsoft 125,000 3,269 Oracle* 175,000 2,093 Veritas Software* 105,000 3,796 - ----------------------------------------------------------------------------------- TOTAL SOFTWARE & PROGRAMMING 9,158 - ----------------------------------------------------------------------------------- TELEPHONES & TELECOMMUNICATIONS - 3.1% Nokia ADR 75,000 1,274 SBC Communications 180,000 4,317 - ----------------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 5,591 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $163,943) 178,555 - ----------------------------------------------------------------------------------- RELATED PARTY MONEY MARKET FUND - 1.8% Expedition Money Market Fund+ 3,299,429 3,299 - ----------------------------------------------------------------------------------- TOTAL RELATED PARTY MONEY MARKET FUND (COST $3,299) 3,299 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS - 101.0% (COST $167,242) 181,854 - ----------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES - (1.0)% Investment Advisory Fees Payable (112) Administrator Fees Payable (30) Custodian Fees Payable (3) Distribution Fees Payable (15) Other Assets and Liabilities, Net (1,618) - ----------------------------------------------------------------------------------- TOTAL OTHER ASSETS & LIABILITIES (1,778) - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 17 EXPEDITION EQUITY FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION (000) - ----------------------------------------------------------------------------------- NET ASSETS: Portfolio Capital of Institutional Shares (unlimited authorization -- no par value) based on 21,122,001 outstanding shares of beneficial interest $218,602 Portfolio Capital of Investment Shares - Class A (unlimited authorization -- no par value) based on 1,215,983 outstanding shares of beneficial interest 14,731 Portfolio Capital of Investment Shares - Class B (unlimited authorization -- no par value) based on 2,135,973 outstanding shares of beneficial interest 27,137 Undistributed net investment income 145 Accumulated net realized loss on investments (95,151) Net unrealized appreciation on investments 14,612 - ----------------------------------------------------------------------------------- TOTAL NET ASSETS - 100.0% $180,076 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL SHARES ($156,142,145 / 21,122,001 SHARES) $7.39 - ----------------------------------------------------------------------------------- NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- INVESTMENT SHARES - CLASS A ($8,910,118 / 1,215,983 SHARES) $7.33 - ----------------------------------------------------------------------------------- MAXIMUM OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS A (1) $7.64 - ----------------------------------------------------------------------------------- NET ASSET VALUE AND OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS B (2) ($15,024,138 / 2,135,973 SHARES) $7.03 - ----------------------------------------------------------------------------------- <FN> * Non-income producing security. + See Note 4 in Notes to Financial Statements. (1) The offering price is calculated by dividing the net asset value by 1 minus the maximum sales charge of 4.00%. (2) Class B Shares have a contingent deferred sales charge. For a description of a possible redemption charge, see a prospectus for the Funds. ADR -- American Depository Receipt Cl -- Class </FN> The accompanying notes are an integral part of the financial statements. 18 | OCTOBER 31, 2003 EXPEDITION EQUITY INCOME FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION SHARES (000) - ----------------------------------------------------------------------------------- COMMON STOCK - 99.6% AEROSPACE & DEFENSE - 2.7% General Dynamics 2,500 $ 209 Raytheon 6,000 159 - ----------------------------------------------------------------------------------- TOTAL AEROSPACE & DEFENSE 368 - ----------------------------------------------------------------------------------- AIR TRANSPORTATION - 2.3% FedEx 4,000 303 - ----------------------------------------------------------------------------------- TOTAL AIR TRANSPORTATION 303 - ----------------------------------------------------------------------------------- BANKS - 16.3% Bank of America 3,500 265 Bank of New York 10,000 312 BB&T 8,500 329 JP Morgan Chase 6,000 215 Keycorp 10,000 283 Union Planters 8,000 266 Wachovia 5,000 229 Wells Fargo 5,000 282 - ----------------------------------------------------------------------------------- TOTAL BANKS 2,181 - ----------------------------------------------------------------------------------- BROADCASTING, NEWSPAPERS & ADVERTISING - 4.6% Comcast, Cl A* 11,000 373 Viacom, Cl B 6,000 239 - ----------------------------------------------------------------------------------- TOTAL BROADCASTING, NEWSPAPERS & ADVERTISING 612 - ----------------------------------------------------------------------------------- BROKER/DEALERS - 7.6% Goldman Sachs Group 3,500 329 Merrill Lynch 6,000 355 Morgan Stanley 6,000 329 - ----------------------------------------------------------------------------------- TOTAL BROKER/DEALERS 1,013 - ----------------------------------------------------------------------------------- CHEMICALS - 1.8% EI Du Pont de Nemours 6,000 242 - ----------------------------------------------------------------------------------- TOTAL CHEMICALS 242 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES - 5.3% Citigroup 8,500 403 Concord* 8,000 85 Viad 9,000 225 - ----------------------------------------------------------------------------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 713 - ----------------------------------------------------------------------------------- DIVERSIFIED MANUFACTURING - 5.0% Fortune Brands 5,000 326 General Electric 12,000 348 - ----------------------------------------------------------------------------------- TOTAL DIVERSIFIED MANUFACTURING 674 - ----------------------------------------------------------------------------------- ELECTRICAL SERVICES - 6.7% Centerpoint Energy 35,000 343 OCTOBER 31, 2003 | 19 EXPEDITION EQUITY INCOME FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION SHARES (000) - ----------------------------------------------------------------------------------- Exelon 4,500 $ 286 Southern 9,000 268 - ----------------------------------------------------------------------------------- TOTAL ELECTRICAL SERVICES 897 - ----------------------------------------------------------------------------------- ENTERTAINMENT - 1.9% Harrah's Entertainment 6,000 261 - ----------------------------------------------------------------------------------- TOTAL ENTERTAINMENT 261 - ----------------------------------------------------------------------------------- FOOD, BEVERAGE & TOBACCO - 2.3% Adolph Coors, Cl B 5,500 308 - ----------------------------------------------------------------------------------- TOTAL FOOD, BEVERAGE & TOBACCO 308 - ----------------------------------------------------------------------------------- INSURANCE - 5.3% ACE Ltd. 9,500 342 American International Group 6,000 365 - ----------------------------------------------------------------------------------- TOTAL INSURANCE 707 - ----------------------------------------------------------------------------------- MEDICAL PRODUCTS & SERVICES - 5.8% Invitrogen* 7,000 445 Quest Diagnostics* 5,000 338 - ----------------------------------------------------------------------------------- TOTAL MEDICAL PRODUCTS & SERVICES 783 - ----------------------------------------------------------------------------------- PAPER & PAPER PRODUCTS - 2.0% International Paper 7,000 275 - ----------------------------------------------------------------------------------- TOTAL PAPER & PAPER PRODUCTS 275 - ----------------------------------------------------------------------------------- PETROLEUM REFINING - 8.8% Anadarko Petroleum 7,000 306 Exxon Mobil 13,000 476 Noble* 4,000 137 Royal Dutch Petroleum 6,000 266 - ----------------------------------------------------------------------------------- TOTAL PETROLEUM REFINING 1,185 - ----------------------------------------------------------------------------------- REAL ESTATE INVESTMENT TRUSTS - 1.6% Crescent Real Estate Equity 14,000 215 - ----------------------------------------------------------------------------------- TOTAL REAL ESTATE INVESTMENT TRUSTS 215 - ----------------------------------------------------------------------------------- RETAIL - 7.4% CVS 10,000 352 Wal-Mart Stores 5,000 295 Yum! Brands* 10,000 341 - ----------------------------------------------------------------------------------- TOTAL RETAIL 988 - ----------------------------------------------------------------------------------- SEMI-CONDUCTORS/INSTRUMENTS - 3.8% Applied Materials* 12,000 281 Novellus Systems* 5,500 227 - ----------------------------------------------------------------------------------- TOTAL SEMI-CONDUCTORS/INSTRUMENTS 508 - ----------------------------------------------------------------------------------- SOFTWARE & PROGRAMMING - 2.9% Intuit* 4,000 200 20 | OCTOBER 31, 2003 EXPEDITION EQUITY INCOME FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION SHARES (000) - ----------------------------------------------------------------------------------- Microsoft 7,000 $ 183 - ----------------------------------------------------------------------------------- TOTAL SOFTWARE & PROGRAMMING 383 - ----------------------------------------------------------------------------------- TELEPHONES & TELECOMMUNICATIONS - 5.5% Alltel 2,000 95 BellSouth 6,000 158 Nokia ADR 11,000 187 SBC Communications 7,000 168 Verizon Communications 4,000 134 - ----------------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 742 - ----------------------------------------------------------------------------------- TOTAL COMMON STOCK (COST $12,072) 13,358 - ----------------------------------------------------------------------------------- RELATED PARTY MONEY MARKET FUND - 0.3% Expedition Money Market Fund+ 38,502 39 - ----------------------------------------------------------------------------------- TOTAL RELATED PARTY MONEY MARKET FUND (COST $39) 39 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS - 99.9% (COST $12,111) 13,397 - ----------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES - 0.1% Investment Advisory Fees Receivable 2 Administrator Fees Payable (6) Distribution Fees Payable (1) Other Assets and Liabilities, Net 22 - ----------------------------------------------------------------------------------- TOTAL OTHER ASSETS & LIABILITIES 17 - ----------------------------------------------------------------------------------- NET ASSETS: Portfolio Capital of Institutional Shares (unlimited authorization -- no par value) based on 1,867,663 outstanding shares of beneficial interest 19,423 Portfolio Capital of Investment Shares - Class A (unlimited authorization -- no par value) based on 41,680 outstanding shares of beneficial interest 508 Portfolio Capital of Investment Shares - Class B (unlimited authorization -- no par value) based on 108,789 outstanding shares of beneficial interest 1,163 Accumulated net realized loss on investments (8,966) Net unrealized appreciation on investments 1,286 - ----------------------------------------------------------------------------------- TOTAL NET ASSETS - 100.0% $13,414 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 21 EXPEDITION EQUITY INCOME FUND STATEMENT OF NET ASSETS DESCRIPTION VALUE - ------------------------------------------------------------------------------------ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL SHARES ($12,421,862 / 1,867,663 SHARES) $6.65 - ------------------------------------------------------------------------------------ NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- INVESTMENT SHARES - CLASS A ($276,858 / 41,680 SHARES) $6.64 - ------------------------------------------------------------------------------------ MAXIMUM OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS A (1) $6.92 - ------------------------------------------------------------------------------------ NET ASSET VALUE AND OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS B (2) ($715,585 / 108,789 SHARES) $6.58 - ------------------------------------------------------------------------------------ <FN> * Non-income producing security. + See Note 4 in Notes to Financial Statements. (1) The offering price is calculated by dividing the net asset value by 1 minus the maximum sales charge of 4.00%. (2) Class B Shares have a contingent deferred sales charge. For a description of a possible redemption charge, see a prospectus for the Funds. ADR -- American Depository Receipt Cl -- Class Ltd. -- Limited </FN> The accompanying notes are an integral part of the financial statements. 22 | OCTOBER 31, 2003 EXPEDITION INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- CORPORATE OBLIGATIONS - 36.0% BANKS - 5.7% Bank of America 5.875%, 02/15/09 $1,000 $ 1,095 Bank One 6.000%, 08/01/08 2,000 2,194 Wachovia 4.950%, 11/01/06 2,000 2,122 Wells Fargo, Ser G, MTN 6.875%, 08/08/06 1,000 1,115 - ----------------------------------------------------------------------------------- TOTAL BANKS 6,526 - ----------------------------------------------------------------------------------- BROKER/DEALERS - 4.9% Goldman Sachs Group 6.600%, 01/15/12 2,000 2,222 Merrill Lynch 6.375%, 10/15/08 1,000 1,121 Morgan Stanley 6.750%, 04/15/11 2,000 2,251 - ----------------------------------------------------------------------------------- TOTAL BROKER/DEALERS 5,594 - ----------------------------------------------------------------------------------- CHEMICALS - 2.0% EI Du Pont de Nemours 6.875%, 10/15/09 2,000 2,312 - ----------------------------------------------------------------------------------- TOTAL CHEMICALS 2,312 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES - 10.7% Citigroup 5.750%, 05/10/06 1,000 1,077 General Electric Capital, Ser A, MTN 7.375%, 01/19/10 3,000 3,506 6.800%, 11/01/05 2,000 2,180 General Motors Acceptance 6.150%, 04/05/07 2,000 2,113 Household Finance 6.375%, 10/15/11 1,000 1,095 Wells Fargo Financial 5.875%, 08/15/08 2,000 2,213 - ----------------------------------------------------------------------------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 12,184 - ----------------------------------------------------------------------------------- ELECTRICAL SERVICES - 1.9% Alabama Power, Ser G 5.375%, 10/01/08 2,000 2,142 - ----------------------------------------------------------------------------------- TOTAL ELECTRICAL SERVICES 2,142 - ----------------------------------------------------------------------------------- FOOD, BEVERAGE & TOBACCO - 0.1% General Mills, MTN 8.080%, 11/18/03 60 60 - ----------------------------------------------------------------------------------- TOTAL FOOD, BEVERAGE & TOBACCO 60 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 23 EXPEDITION INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- RETAIL - 7.9% Lowe's 8.250%, 06/01/10 $2,000 $ 2,442 Target 5.875%, 11/01/08 2,000 2,190 4.000%, 06/15/13 1,000 934 Wal-Mart Stores 6.875%, 08/10/09 3,000 3,446 - ----------------------------------------------------------------------------------- TOTAL RETAIL 9,012 - ----------------------------------------------------------------------------------- TELEPHONES & TELECOMMUNICATIONS - 2.8% SBC Communications 5.875%, 02/01/12 1,000 1,061 Verizon Wireless 5.375%, 12/15/06 2,000 2,138 - ----------------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 3,199 - ----------------------------------------------------------------------------------- TOTAL CORPORATE OBLIGATIONS (COST $36,798) 41,029 - ----------------------------------------------------------------------------------- U.S. GOVERNMENT AGENCY OBLIGATIONS - 24.9% FHLB 3.125%, 08/15/07 3,000 3,000 FHLB, Ser 100 5.800%, 09/02/08 2,000 2,203 FHLB, Ser 363 4.500%, 11/15/12 3,000 2,984 FHLMC 7.000%, 03/15/10 3,000 3,493 6.625%, 09/15/09 3,000 3,428 FNMA 7.250%, 01/15/10 2,500 2,943 5.500%, 03/15/11 3,000 3,226 5.250%, 01/15/09 3,000 3,221 4.375%, 03/15/13 4,000 3,909 - ----------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS (COST $26,515) 28,407 - ----------------------------------------------------------------------------------- 24 | OCTOBER 31, 2003 EXPEDITION INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- U.S. TREASURY OBLIGATIONS - 24.7% U.S. Treasury Notes 7.000%, 07/15/06 $2,500 $ 2,811 6.875%, 05/15/06 1,000 1,117 6.500%, 10/15/06 3,000 3,353 6.500%, 02/15/10 1,000 1,160 6.125%, 08/15/07 3,000 3,363 6.000%, 08/15/09 3,000 3,393 5.625%, 05/15/08 2,000 2,214 5.500%, 05/15/09 3,000 3,325 5.000%, 02/15/11 1,500 1,606 4.250%, 08/15/13 2,000 1,993 4.000%, 11/15/12 1,000 985 3.875%, 02/15/13 3,000 2,917 - ----------------------------------------------------------------------------------- TOTAL U.S. TREASURY OBLIGATIONS (COST $25,810) 28,237 - ----------------------------------------------------------------------------------- U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS - 8.5% FHLMC, Gold Pool #E00532 6.500%, 02/01/13 215 226 FHLMC, Gold Pool #E00543 6.000%, 04/01/13 485 505 FHLMC, Gold Pool #E00584 6.000%, 11/01/13 703 733 FHLMC, Gold Pool #E00832 7.500%, 04/01/15 299 319 FHLMC, Gold Pool #E00856 7.500%, 06/01/15 290 309 FNMA, Pool # 614934 6.000%, 12/01/16 2,085 2,170 FNMA, Pool #535966 7.000%, 05/01/16 733 779 GNMA, Pool #552999 5.000%, 01/15/18 4,586 4,684 - ----------------------------------------------------------------------------------- TOTAL U.S. GOVERNMENT MORTGAGE-BACKED OBLIGATIONS (COST $9,572) 9,725 - ----------------------------------------------------------------------------------- ASSET-BACKED SECURITIES - 4.7% MBNA Master Credit Card Trust, Ser 1999-J, Cl A 7.000%, 02/15/12 3,000 3,460 Standard Credit Card Master Trust, Ser 1994-2, Cl A 7.250%, 04/07/08 1,725 1,924 - ----------------------------------------------------------------------------------- TOTAL ASSET-BACKED SECURITIES (COST $4,864) 5,384 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 25 EXPEDITION INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION SHARES (000) - ----------------------------------------------------------------------------------- RELATED PARTY MONEY MARKET FUND - 0.2% Expedition Money Market Fund+ 196,466 $ 196 - ----------------------------------------------------------------------------------- TOTAL RELATED PARTY MONEY MARKET FUND (COST $196) 196 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS - 99.0% (COST $103,755) 112,978 - ----------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES - 1.0% Investment Advisory Fees Payable (39) Administrator Fees Payable (20) Custodian Fees Payable (2) Distribution Fees Payable (3) Other Assets and Liabilities, Net 1,260 - ----------------------------------------------------------------------------------- TOTAL OTHER ASSETS & LIABILITIES 1,196 - ----------------------------------------------------------------------------------- NET ASSETS: Portfolio Capital of Institutional Shares (unlimited authorization -- no par value) based on 9,967,477 outstanding shares of beneficial interest 95,001 Portfolio Capital of Investment Shares - Class A (unlimited authorization -- no par value) based on 505,803 outstanding shares of beneficial interest 9,287 Portfolio Capital of Investment Shares - Class B (unlimited authorization -- no par value) based on 198,316 outstanding shares of beneficial interest 2,054 Accumulated net realized loss on investments (1,391) Net unrealized appreciation on investments 9,223 - ----------------------------------------------------------------------------------- TOTAL NET ASSETS - 100.0% $114,174 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL SHARES ($106,643,396 / 9,967,477 SHARES) $10.70 - ----------------------------------------------------------------------------------- NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- INVESTMENT SHARES - CLASS A ($5,406,585 / 505,803 SHARES) $10.69 - ----------------------------------------------------------------------------------- MAXIMUM OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS A (1) $11.14 - ----------------------------------------------------------------------------------- NET ASSET VALUE AND OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS B (2) ($2,124,106 / 198,316 SHARES) $10.71 - ----------------------------------------------------------------------------------- 26 | OCTOBER 31, 2003 EXPEDITION INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS DESCRIPTION - -------------------------------------------------------------------------------- + See Note 4 in Notes to Financial Statements. (1) The offering price is calculated by dividing the net asset value by 1 minus the maximum sales charge of 4.00%. (2) Class B Shares have a contingent deferred sales charge. For a description of a possible redemption charge, see a prospectus for the Funds. Cl -- Class FHLB -- Federal Home Loan Bank FHLMC -- Federal Home Loan Mortgage Corporation FNMA -- Federal National Mortgage Association GNMA -- Government National Mortgage Association MTN -- Medium Term Note Ser -- Series The accompanying notes are an integral part of the financial statements. OCTOBER 31, 2003 | 27 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- MUNICIPAL BONDS - 96.6% ALABAMA - 10.8% Alabama State, Municipal Electric Authority, Power Supply RB, Ser A, MBIA 5.000%, 09/01/33 $1,000 $ 1,005 Alabama State, Public School & College Authority, Capital Improvements RB, Ser D 5.750%, 08/01/19 1,150 1,278 Birmingham, Capital Improvement Warrants GO, Ser A 5.550%, 08/01/21 1,000 1,080 Huntsville, Warrants GO, Ser D 5.000%, 11/01/07 1,000 1,107 Montgomery, Warrants GO, Ser A 5.100%, 10/01/09 1,000 1,102 Phoenix City, School Warrants GO, AMBAC 5.650%, 08/01/21 1,000 1,087 Tuscaloosa, Warrants 5.650%, 01/01/17 1,000 1,111 - ----------------------------------------------------------------------------------- TOTAL ALABAMA 7,770 - ----------------------------------------------------------------------------------- ARIZONA - 1.7% Tucson GO, Ser 1994-D 6.250%, 07/01/14 1,000 1,203 - ----------------------------------------------------------------------------------- TOTAL ARIZONA 1,203 - ----------------------------------------------------------------------------------- CALIFORNIA - 9.7% California State GO, FGIC 5.250%, 09/01/30 1,280 1,307 Los Angeles School District GO, Ser 1997-E, MBIA 5.125%, 01/01/27 1,000 1,024 San Diego School District GO, Ser 1998-D, FGIC 5.250%, 07/01/24 1,000 1,043 San Gabriel School District GO, Ser A, FSA 5.375%, 08/01/21 500 531 Southern California, Metropolitan Water District RB, Ser A 5.100%, 07/01/25 1,000 1,013 University of California, Multiple Purpose Projects RB, Ser M, FGIC 5.125%, 09/01/22 1,000 1,040 5.125%, 09/01/23 1,000 1,024 - ----------------------------------------------------------------------------------- TOTAL CALIFORNIA 6,982 - ----------------------------------------------------------------------------------- COLORADO - 4.4% Denver, City and County GO, Ser B 5.625%, 08/01/07 1,000 1,126 Denver, City and County School District GO, FGIC 5.000%, 12/01/23 1,000 1,016 28 | OCTOBER 31, 2003 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- La Plata County School District GO, MBIA 5.250%, 11/01/25 $1,000 $ 1,036 - ----------------------------------------------------------------------------------- TOTAL COLORADO 3,178 - ----------------------------------------------------------------------------------- FLORIDA - 3.8% Florida State, Board of Education Capital Outlay GO, Ser A, Pre-Refunded @ 101 (A) 5.650%, 01/01/05 500 530 Florida State, Department of Transportation GO, Right of Way Project, Ser B 5.500%, 07/01/11 1,000 1,103 Palm Beach County GO, Ser A 5.450%, 08/01/13 1,000 1,096 - ----------------------------------------------------------------------------------- TOTAL FLORIDA 2,729 - ----------------------------------------------------------------------------------- GEORGIA - 1.6% Georgia State GO, Ser B 6.000%, 03/01/12 1,000 1,173 - ----------------------------------------------------------------------------------- TOTAL GEORGIA 1,173 - ----------------------------------------------------------------------------------- HAWAII - 1.6% Hawaii State GO, Ser CO, FGIC 6.000%, 03/01/08 1,000 1,147 - ----------------------------------------------------------------------------------- TOTAL HAWAII 1,147 - ----------------------------------------------------------------------------------- ILLINOIS - 1.8% Chicago, Project & Refunding GO, Ser C, FGIC 5.500%, 01/01/19 1,180 1,286 - ----------------------------------------------------------------------------------- TOTAL ILLINOIS 1,286 - ----------------------------------------------------------------------------------- KANSAS - 1.5% Kansas State, Department of Transportation RB, Ser A 5.000%, 09/01/06 1,000 1,090 - ----------------------------------------------------------------------------------- TOTAL KANSAS 1,090 - ----------------------------------------------------------------------------------- MASSACHUSETTS - 3.3% Massachusetts State, Consolidated Loan GO, Ser A Pre-Refunded @ 101 (A) 6.000%, 02/01/10 2,000 2,366 - ----------------------------------------------------------------------------------- TOTAL MASSACHUSETTS 2,366 - ----------------------------------------------------------------------------------- MICHIGAN - 2.0% Novi Michigan Street GO, FSA 5.250%, 10/01/15 1,280 1,418 - ----------------------------------------------------------------------------------- TOTAL MICHIGAN 1,418 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 29 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- MINNESOTA - 0.7% Minnesota State, Public Facilities Authority RB, Water Pollution Control, Ser A 6.000%, 03/01/09 $ 500 $ 528 - ----------------------------------------------------------------------------------- TOTAL MINNESOTA 528 - ----------------------------------------------------------------------------------- NEVADA - 1.6% Clark County GO 6.000%, 07/01/06 1,000 1,109 - ----------------------------------------------------------------------------------- TOTAL NEVADA 1,109 - ----------------------------------------------------------------------------------- NEW HAMPSHIRE - 1.5% New Hampshire RB, MBIA 5.250%, 08/15/19 1,000 1,079 - ----------------------------------------------------------------------------------- TOTAL NEW HAMPSHIRE 1,079 - ----------------------------------------------------------------------------------- NEW JERSEY - 1.6% New Jersey State, GO, Ser F 5.500%, 08/01/11 1,000 1,142 - ----------------------------------------------------------------------------------- TOTAL NEW JERSEY 1,142 - ----------------------------------------------------------------------------------- NEW MEXICO - 0.8% New Mexico State, Severance Tax RB, Ser B, FSA 5.000%, 07/01/07 500 550 - ----------------------------------------------------------------------------------- TOTAL NEW MEXICO 550 - ----------------------------------------------------------------------------------- NEW YORK - 8.4% Brookhaven GO, FGIC 5.500%, 10/01/13 500 556 New York City GO, Ser C, MBIA 5.375%, 11/15/17 1,000 1,088 New York City Transitional Authority RB, Ser C, FGIC 5.250%, 08/01/14 1,000 1,099 New York State GO, Ser A, Pre-Refunded @ 101 (A) 5.875%, 03/15/05 1,000 1,073 New York State GO, Ser F 5.250%, 09/15/13 500 544 New York State, Environmental Water Facilities RB, Pooled Financing Program, Ser F 5.250%, 11/15/20 500 533 Triborough, Bridge & Tunnel Authority RB, Ser A, Pre-Refunded @ 100.5 (A) 5.250%, 07/01/09 1,000 1,146 - ----------------------------------------------------------------------------------- TOTAL NEW YORK 6,039 - ----------------------------------------------------------------------------------- NORTH CAROLINA - 6.8% Charlotte RB, Ser C 5.000%, 04/01/09 1,000 1,117 Charlotte, Water & Sewer Systems RB 5.125%, 06/01/26 1,000 1,020 30 | OCTOBER 31, 2003 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- North Carolina State, GO, Ser A, Pre-Refunded @ 102 (A) 4.700%, 02/01/04 $1,000 $ 1,029 Winston-Salem, Water & Sewer Systems RB, Pre-Refunded @ 101 (A) 5.250%, 06/01/11 1,500 1,716 - ----------------------------------------------------------------------------------- TOTAL NORTH CAROLINA 4,882 - ----------------------------------------------------------------------------------- OHIO - 2.3% Ohio State, Building Authority RB, State Facilities Adult Correctional Facilities, Ser A, FSA 5.500%, 10/01/13 1,000 1,127 Pickerinston, Local School District GO, FGIC 5.250%, 12/01/20 500 528 - ----------------------------------------------------------------------------------- TOTAL OHIO 1,655 - ----------------------------------------------------------------------------------- OREGON - 1.4% Oregon State, Alternative Energy Project GO, Ser E 5.800%, 07/01/07 1,000 1,027 - ----------------------------------------------------------------------------------- TOTAL OREGON 1,027 - ----------------------------------------------------------------------------------- PENNSYLVANIA - 1.5% Pennsylvania State, Intergovernmental Authority ST, Philadelphia Funding Project, FGIC 5.250%, 06/15/15 1,000 1,083 - ----------------------------------------------------------------------------------- TOTAL PENNSYLVANIA 1,083 - ----------------------------------------------------------------------------------- SOUTH CAROLINA - 4.9% Greenville County, School District RB 6.000%, 12/01/21 1,000 1,113 Lancaster County, School District GO, FSA 5.100%, 03/01/15 1,000 1,078 Lexington County, School District GO 5.125%, 03/01/21 1,210 1,280 - ----------------------------------------------------------------------------------- TOTAL SOUTH CAROLINA 3,471 - ----------------------------------------------------------------------------------- TEXAS - 11.1% Canyon, Independent School District GO, Ser A, PSF 5.375%, 02/15/24 1,000 1,042 Frisco, Independent School District GO, PSF 5.125%, 08/15/30 1,000 1,013 Grand Prairie, Independent School District GO, FSA 5.375%, 02/15/18 1,820 1,973 Lamar, Consolidated Independent School District GO, PSF 5.500%, 02/15/15 500 549 Leander, Independent School District GO, PSF 5.375%, 08/15/19 1,000 1,067 OCTOBER 31, 2003 | 31 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS FACE AMT. VALUE DESCRIPTION (000)/SHARES (000) - ----------------------------------------------------------------------------------- Mesquite, Independent School District GO, PSF 5.500%, 08/15/21 $1,160 $ 1,245 Williamson County GO, FSA 5.250%, 02/15/27 1,040 1,067 - ----------------------------------------------------------------------------------- TOTAL TEXAS 7,956 - ----------------------------------------------------------------------------------- UTAH - 1.6% Utah State, Intermountain Power Agency RB, Ser B, MBIA, ETM 6.000%, 07/01/06 1,000 1,115 - ----------------------------------------------------------------------------------- TOTAL UTAH 1,115 - ----------------------------------------------------------------------------------- VIRGINIA - 5.4% Bristol Utility System RB, MBIA 5.250%, 07/15/26 1,850 1,919 Newport News GO, Ser A, MBIA, Pre-Refunded @ 102 (A) 5.625%, 07/01/05 795 868 Virginia, Commonwealth Transportation Board RB, Northern Virginia Transportation Program, Ser A 5.500%, 05/15/15 1,000 1,113 - ----------------------------------------------------------------------------------- TOTAL VIRGINIA 3,900 - ----------------------------------------------------------------------------------- WASHINGTON - 1.6% Washington State, GO, Ser B 6.000%, 01/01/13 1,000 1,156 - ----------------------------------------------------------------------------------- TOTAL WASHINGTON 1,156 - ----------------------------------------------------------------------------------- WEST VIRGINIA - 1.6% West Virginia State, GO, State Road Project, FGIC 5.625%, 06/01/18 1,000 1,106 - ----------------------------------------------------------------------------------- TOTAL WEST VIRGINIA 1,106 - ----------------------------------------------------------------------------------- WISCONSIN - 1.6% Milwaukee GO, Ser T, Pre-Refunded @ 100 (A) 5.250%, 09/01/11 1,000 1,133 - ----------------------------------------------------------------------------------- TOTAL WISCONSIN 1,133 - ----------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (COST $65,494) 69,273 - ----------------------------------------------------------------------------------- RELATED PARTY MONEY MARKET FUND - 2.4% Expedition Tax-Free Money Market Fund+ 1,759,391 1,759 - ----------------------------------------------------------------------------------- TOTAL RELATED PARTY MONEY MARKET FUND (COST $1,759) 1,759 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS - 99.0% (COST $67,253) 71,032 - ----------------------------------------------------------------------------------- 32 | OCTOBER 31, 2003 EXPEDITION TAX-FREE INVESTMENT GRADE BOND FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION (000) - ------------------------------------------------------------------------------------ OTHER ASSETS AND LIABILITIES - 1.0% Investment Advisory Fees Payable $ (22) Administrator Fees Payable (12) Custodian Fees Payable (1) Other Assets and Liabilities, Net 739 - ------------------------------------------------------------------------------------ TOTAL OTHER ASSETS & LIABILITIES 704 - ------------------------------------------------------------------------------------ NET ASSETS: Portfolio Capital of Institutional Shares (unlimited authorization -- no par value) based on 6,525,285 outstanding shares of beneficial interest 66,044 Portfolio Capital of Investment Shares - Class A (unlimited authorization -- no par value) based on 27,963 outstanding shares of beneficial interest 258 Portfolio Capital of Investment Shares - Class B (unlimited authorization -- no par value) based on 20,159 outstanding shares of beneficial interest 214 Undistributed net investment income 17 Accumulated net realized gain on investments 1,424 Net unrealized appreciation on investments 3,779 - ------------------------------------------------------------------------------------ TOTAL NET ASSETS - 100.0% $71,736 - ------------------------------------------------------------------------------------ NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL SHARES ($71,211,142 / 6,525,285 SHARES) $10.91 - ------------------------------------------------------------------------------------ NET ASSET VALUE AND REDEMPTION PRICE PER SHARE -- INVESTMENT SHARES - CLASS A ($305,100 / 27,963 SHARES) $10.91 - ------------------------------------------------------------------------------------ MAXIMUM OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS A (1) $11.36 - ------------------------------------------------------------------------------------ NET ASSET VALUE AND OFFERING PRICE PER SHARE -- INVESTMENT SHARES - CLASS B (2) ($219,898 / 20,159 SHARES) $10.91 - ------------------------------------------------------------------------------------ <FN> + See Note 4 in Notes to Financial Statements. (1) The offering price is calculated by dividing the net asset value by 1 minus the maximum sales charge of 4.00%. (2) Class B Shares have a contingent deferred sales charge. For a description of a possible redemption charge, see a prospectus for the Funds. (A) Pre-Refunded Security -- The maturity date shown is the pre-refunded date. AMBAC -- American Municipal Bond Assurance Company ETM -- Escrowed to Maturity FGIC -- Financial Guaranty Insurance Company FSA -- Financial Security Assurance GO -- General Obligation MBIA -- Municipal Bond Insurance Association PSF -- Permanent School Fund Guarantee Program RB -- Revenue Bond Ser -- Series ST -- Special Tax </FN> The accompanying notes are an integral part of the financial statements. OCTOBER 31, 2003 | 33 EXPEDITION MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- COMMERCIAL PAPER - 74.2% AIRCRAFT - 3.4% General Dynamics 1.010%, 11/14/03 $ 7,000 $ 6,997 1.020%, 11/24/03 8,000 7,995 1.020%, 12/03/03 6,000 5,995 - ----------------------------------------------------------------------------------- TOTAL AIRCRAFT 20,987 - ----------------------------------------------------------------------------------- BANKS - 5.7% Bank One 1.040%, 12/22/03 10,000 9,985 Deutsche Bank 1.020%, 11/12/03 5,000 4,998 Wells Fargo 1.030%, 11/14/03 10,000 9,996 1.000%, 12/09/03 10,000 9,990 - ----------------------------------------------------------------------------------- TOTAL BANKS 34,969 - ----------------------------------------------------------------------------------- BROKER/DEALERS - 1.5% Bear Stearns 1.060%, 12/01/03 4,000 3,997 Merrill Lynch 1.010%, 11/06/03 5,000 4,999 - ----------------------------------------------------------------------------------- TOTAL BROKER/DEALERS 8,996 - ----------------------------------------------------------------------------------- BUILDING & CONSTRUCTION - 3.6% Guardian 1.060%, 11/03/03 7,100 7,100 1.050%, 12/18/03 15,000 14,979 - ----------------------------------------------------------------------------------- TOTAL BUILDING & CONSTRUCTION 22,079 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES - 25.4% American General Finance 1.050%, 11/20/03 12,000 11,993 1.035%, 12/08/03 15,000 14,984 Caterpillar Financial Services 1.020%, 11/10/03 10,000 9,997 1.030%, 11/17/03 5,000 4,998 1.020%, 12/18/03 6,841 6,832 General Electric Capital 1.060%, 11/04/03 10,000 9,999 1.050%, 11/06/03 9,685 9,684 1.040%, 11/13/03 5,000 4,998 1.040%, 11/17/03 9,000 8,996 1.050%, 11/21/03 8,000 7,995 1.020%, 12/02/03 5,000 4,996 1.060%, 12/16/03 7,800 7,790 34 | OCTOBER 31, 2003 EXPEDITION MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- Toyota Motor Credit 1.030%, 11/05/03 $10,000 $ 9,999 1.030%, 11/18/03 5,000 4,998 1.030%, 11/20/03 5,000 4,997 1.020%, 12/05/03 3,000 2,997 1.020%, 12/16/03 5,000 4,994 Transamerica Finance 1.050%, 11/05/03 5,000 4,999 1.040%, 11/07/03 4,000 3,999 1.050%, 11/10/03 4,000 3,999 1.050%, 11/18/03 6,000 5,997 1.050%, 11/24/03 2,000 1,999 1.040%, 12/05/03 5,000 4,995 - ----------------------------------------------------------------------------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 157,235 - ----------------------------------------------------------------------------------- FUNDING CORPORATIONS - 13.6% Falcon Asset Securitization 1.040%, 11/03/03 5,000 5,000 1.050%, 11/07/03 10,000 9,998 1.050%, 11/21/03 4,000 3,998 1.050%, 11/26/03 5,000 4,996 1.050%, 12/03/03 4,000 3,996 Preferred Receivable Funding 1.050%, 11/14/03 5,000 4,998 1.060%, 11/20/03 5,000 4,997 1.060%, 11/21/03 6,000 5,997 1.050%, 11/24/03 12,000 11,992 Receivables Capital 1.050%, 11/04/03 10,000 9,999 1.060%, 11/10/03 5,000 4,999 1.050%, 11/18/03 3,000 2,999 1.040%, 11/20/03 3,000 2,998 1.050%, 11/21/03 5,000 4,997 1.050%, 12/01/03 1,980 1,978 - ----------------------------------------------------------------------------------- TOTAL FUNDING CORPORATIONS 83,942 - ----------------------------------------------------------------------------------- LEASING & RENTING - 4.4% International Lease Finance 1.030%, 11/12/03 10,000 9,997 1.050%, 11/18/03 7,000 6,997 1.020%, 12/03/03 5,000 4,995 1.030%, 12/04/03 5,000 4,995 - ----------------------------------------------------------------------------------- TOTAL LEASING & RENTING 26,984 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 35 EXPEDITION MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- MULTIMEDIA - 4.0% Gannett 1.010%, 11/06/03 $10,000 $ 9,998 1.010%, 11/10/03 5,000 4,999 1.000%, 11/13/03 10,000 9,997 - ----------------------------------------------------------------------------------- TOTAL MULTIMEDIA 24,994 - ----------------------------------------------------------------------------------- PHARMACEUTICALS - 4.2% Pfizer 1.020%, 11/07/03 6,000 5,999 1.020%, 11/26/03 15,000 14,989 1.040%, 01/06/04 5,000 4,991 - ----------------------------------------------------------------------------------- TOTAL PHARMACEUTICALS 25,979 - ----------------------------------------------------------------------------------- SPECIAL PURPOSE ENTITY - 4.4% Three Pillars 1.060%, 11/05/03 6,000 5,999 1.050%, 11/17/03 6,500 6,497 1.060%, 11/26/03 5,000 4,997 1.050%, 12/01/03 10,000 9,991 - ----------------------------------------------------------------------------------- TOTAL SPECIAL PURPOSE ENTITY 27,484 - ----------------------------------------------------------------------------------- TELEPHONES & TELECOMMUNICATIONS - 1.6% BellSouth 1.010%, 11/13/03 5,000 4,998 Verizon 1.000%, 11/04/03 5,000 5,000 - ----------------------------------------------------------------------------------- TOTAL TELEPHONES & TELECOMMUNICATIONS 9,998 - ----------------------------------------------------------------------------------- UTILITIES - 2.4% National Rural Utilities 1.050%, 11/19/03 15,000 14,992 - ----------------------------------------------------------------------------------- TOTAL UTILITIES 14,992 - ----------------------------------------------------------------------------------- TOTAL COMMERCIAL PAPER (COST $458,639) 458,639 - ----------------------------------------------------------------------------------- CORPORATE OBLIGATIONS - 17.2% BANKS - 3.7% Bank of America 5.750%, 03/01/04 4,100 4,161 6.625%, 06/15/04 8,600 8,881 6.125%, 07/15/04 1,228 1,271 Bank One, Ser A, MTN 5.625%, 02/17/04 1,137 1,150 Wachovia 6.625%, 06/15/04 2,898 2,994 36 | OCTOBER 31, 2003 EXPEDITION MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- Wells Fargo 6.625%, 07/15/04 $ 4,500 $ 4,666 - ----------------------------------------------------------------------------------- TOTAL BANKS 23,123 - ----------------------------------------------------------------------------------- BROKER/DEALERS - 7.6% Bear Stearns 6.625%, 01/15/04 6,850 6,922 6.150%, 03/02/04 11,827 12,013 8.750%, 03/15/04 2,405 2,471 6.625%, 10/01/04 2,199 2,305 Lehman Brothers 6.625%, 04/01/04 3,155 3,226 Merrill Lynch, Ser B, MTN 6.800%, 11/03/03 1,715 1,715 6.070%, 04/06/04 2,280 2,327 5.350%, 06/15/04 4,450 4,564 Morgan Stanley 6.375%, 12/15/03 2,000 2,012 5.625%, 01/20/04 9,512 9,598 - ----------------------------------------------------------------------------------- TOTAL BROKER/DEALERS 47,153 - ----------------------------------------------------------------------------------- DIVERSIFIED FINANCIAL SERVICES - 3.1% Associates Corporation of North America 5.750%, 11/01/03 7,000 7,000 5.500%, 02/15/04 1,000 1,012 5.800%, 04/20/04 4,500 4,589 Associates Corporation of North America, Ser F, MTN 6.440%, 01/15/04 1,625 1,642 Caterpillar Financial, Ser F, MTN 7.700%, 11/05/03 1,045 1,046 7.960%, 01/26/04 1,000 1,016 Citigroup 5.700%, 02/06/04 1,500 1,517 Wells Fargo Financial 5.450%, 05/03/04 1,000 1,021 - ----------------------------------------------------------------------------------- TOTAL DIVERSIFIED FINANCIAL SERVICES 18,843 - ----------------------------------------------------------------------------------- ELECTRICAL SERVICES - 1.8% Alabama Power, Ser I 5.350%, 11/15/03 6,350 6,359 Alabama Power, Ser N 4.875%, 09/01/04 4,785 4,921 - ----------------------------------------------------------------------------------- TOTAL ELECTRICAL SERVICES 11,280 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 37 EXPEDITION MONEY MARKET FUND STATEMENT OF NET ASSETS SHARES/FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- UTILITIES - 1.0% National Rural Utilities 6.000%, 01/15/04 $ 6,215 $ 6,273 - ----------------------------------------------------------------------------------- TOTAL UTILITIES 6,273 - ----------------------------------------------------------------------------------- TOTAL CORPORATE OBLIGATIONS (COST $106,672) 106,672 - ----------------------------------------------------------------------------------- U.S. AGENCY OBLIGATIONS - 3.7% FNMA (A) 1.020%, 11/03/03 6,000 6,000 1.040%, 11/12/03 10,000 9,997 1.040%, 11/19/03 7,000 6,996 - ----------------------------------------------------------------------------------- TOTAL U.S. AGENCY OBLIGATIONS (COST $22,993) 22,993 - ----------------------------------------------------------------------------------- REPURCHASE AGREEMENT - 3.9% JP Morgan Chase 0.93% dated 10/31/03, matures 11/03/03, repurchase price $24,093,867 (collateralized by U.S. Treasury obligations, total market value $24,574,195) 24,092 24,092 - ----------------------------------------------------------------------------------- TOTAL REPURCHASE AGREEMENT (COST $24,092) 24,092 - ----------------------------------------------------------------------------------- MONEY MARKET FUND - 0.8% Financial Square Government Money Market Fund 5,014,267 5,014 - ----------------------------------------------------------------------------------- TOTAL MONEY MARKET FUND (COST $5,014) 5,014 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS - 99.8% (COST $617,410) 617,410 - ----------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES - 0.2% Investment Advisory Fees Payable (101) Administrator Fees Payable (79) Custodian Fees Payable (11) Distribution Fees Payable (84) Other Assets and Liabilities, Net 1,422 - ----------------------------------------------------------------------------------- TOTAL OTHER ASSETS & LIABILITIES 1,147 - ----------------------------------------------------------------------------------- 38 | OCTOBER 31, 2003 EXPEDITION MONEY MARKET FUND STATEMENT OF NET ASSETS VALUE DESCRIPTION (000) - ----------------------------------------------------------------------------------- NET ASSETS: Portfolio Capital of Institutional Shares (unlimited authorization -- no par value) based on 251,207,315 outstanding shares of beneficial interest $251,206 Portfolio Capital of Investment Service Shares (unlimited authorization -- no par value) based on 313,851,432 outstanding shares of beneficial interest 313,850 Portfolio Capital of Investment Sweep Class Shares (unlimited authorization -- no par value) based on 53,499,557 outstanding shares of beneficial interest 53,498 Undistributed net investment income 2 Accumulated net realized gain on investments 1 - ----------------------------------------------------------------------------------- TOTAL NET ASSETS - 100.0% $618,557 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL SHARES ($251,212,439 / 251,207,315 SHARES) $1.00 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INVESTMENT SERVICE SHARES ($313,845,198 / 313,851,432 SHARES) $1.00 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- SWEEP CLASS SHARES ($53,499,741 / 53,499,557 SHARES) $1.00 - ----------------------------------------------------------------------------------- <FN> (A) The rate reflected on the Statement of Net Assets represents the security's effective yield at time of purchase. FNMA -- Federal National Mortgage Association MTN -- Medium Term Note Ser -- Series </FN> The accompanying notes are an integral part of the financial statements. OCTOBER 31, 2003 | 39 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- MUNICIPAL BONDS - 99.8% ALABAMA - 1.7% Huntsville, Health Care Authority RB, Ser B, MBIA (A) (B) 6.625%, 06/01/23 $2,000 $ 2,103 Montgomery County, Special Care Financing Authority RB, VHA Alabama Incorporated Project, Ser H, AMBAC (A) (B) 1.050%, 12/01/30 1,200 1,200 - ----------------------------------------------------------------------------------- TOTAL ALABAMA 3,303 - ----------------------------------------------------------------------------------- ARIZONA - 0.3% Apache County, Industrial Development Authority RB, Tucson Electrical Power - Springerville Project (A) (B) (C) 1.100%, 12/01/20 600 600 - ----------------------------------------------------------------------------------- TOTAL ARIZONA 600 - ----------------------------------------------------------------------------------- ARKANSAS - 2.8% Crossett, Pollution Control Revenue Authority RB, Pacific Corporation Project (A) (B) (C) 1.050%, 08/01/04 5,500 5,500 - ----------------------------------------------------------------------------------- TOTAL ARKANSAS 5,500 - ----------------------------------------------------------------------------------- CALIFORNIA - 2.6% California Warrants, Ser A 2.000%, 06/16/04 4,500 4,525 Newport Beach, Revenue Authority RB, Hoag Memorial Hospital, Ser C (A) (B) 1.200%, 10/01/26 500 500 - ----------------------------------------------------------------------------------- TOTAL CALIFORNIA 5,025 - ----------------------------------------------------------------------------------- COLORADO - 2.5% Castle Pines, North Metropolitan District Authority GO (A) (B) (C) 1.130%, 12/01/28 1,000 1,000 Denver City & County, Multi-Family Housing Authority RB, Cottonwood Creek Project, Ser A (A) (B) 1.050%, 04/15/14 1,000 1,000 SBC Metropolitan District GO (A) (B) (C) 1.070%, 12/01/17 2,000 2,000 Thornton, Colorado, Multifamily Revenue RB, Quail Ridge Project, Ser A (A) (B) (C) 1.050%, 04/01/10 900 900 - ----------------------------------------------------------------------------------- TOTAL COLORADO 4,900 - ----------------------------------------------------------------------------------- 40 | OCTOBER 31, 2003 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- CONNECTICUT - 0.5% New Britain, BAN 2.250%, 04/08/04 $1,005 $ 1,010 - ----------------------------------------------------------------------------------- TOTAL CONNECTICUT 1,010 - ----------------------------------------------------------------------------------- DELAWARE - 3.6% Delaware State, Economic Development Authority RB, School House Project (A) (B) (C) 1.050%, 12/01/15 750 750 University of Delaware RB, Ser A (A) (B) 1.050%, 11/01/18 6,300 6,300 - ----------------------------------------------------------------------------------- TOTAL DELAWARE 7,050 - ----------------------------------------------------------------------------------- FLORIDA - 1.7% Miami-Dade County, Industrial Development Authority RB, Holy Cross Academy Project (A) (B) (C) 1.050%, 07/01/20 800 800 Orange County, Industrial Development Authority RB, Orlando Hawaiian Motel (A) (B) (C) 1.300%, 10/01/15 690 690 Palm Beach County, Economic Development Authority RB, YMCA Boynton Beach Project (A) (B) (C) 1.050%, 01/01/24 1,700 1,700 - ----------------------------------------------------------------------------------- TOTAL FLORIDA 3,190 - ----------------------------------------------------------------------------------- GEORGIA - 6.9% Dalton Georgia, Utilities Authority RB, Ser A02, FSA (A) (B) 1.140%, 01/01/12 2,090 2,090 Dekalb County, Development Authority RB, American Cancer Society (A) (B) (C) 1.050%, 09/01/17 1,200 1,200 Dekalb County, Multi-Family Housing Authority RB, Winters Creek Apartments Project, FNMA (A) (B) 1.050%, 06/15/25 400 400 Dekalb County, Multi-Family Housing Authority RB, Woodhills Apartment Project (A) (B) (C) 1.100%, 12/01/07 1,600 1,600 Fulton County, Multi-Family Housing Authority RB, Champions Green Apartment Project, Ser B (A) (B) 1.050%, 10/01/25 4,300 4,300 Fulton County, Multi-Family Housing Authority RB, Hampton Hills Apartment Project, FHLMC (A) (B) 1.050%, 06/01/23 600 600 Macon-Bibb County, Hospital Authority RB, Medical Control Center Project (A) (B) (C) 1.050%, 12/01/18 1,700 1,700 Private Colleges & Universities Authority RB, Mercer University Project (A) (B) (C) 1.130%, 10/01/32 1,400 1,400 OCTOBER 31, 2003 | 41 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- Thomasville, Hospital Authority RB, Anticipation Certificates - J.D. Archbold Project (A) (B) (C) 1.050%, 11/01/17 $ 100 $ 100 - ----------------------------------------------------------------------------------- TOTAL GEORGIA 13,390 - ----------------------------------------------------------------------------------- ILLINOIS - 6.8% Central Lake RB, Merlots - Ser B18, AMBAC (A) (B) 1.140%, 05/01/20 900 900 Cook County GO, Merlots - Ser B11, AMBAC (A) (B) 1.140%, 11/15/25 500 500 East Peoria, Multi-Family Housing RB (A) (B) (C) 1.200%, 06/01/08 405 405 Illinois State, Development Finance Authority RB, Goodman Theater Project (A) (B) (C) 1.100%, 12/01/33 1,750 1,750 Illinois State, Development Finance Authority RB, WBEZ Alliance Incorporated Project (A) (B) (C) 1.050%, 03/01/29 1,800 1,800 Illinois State, Development Finance Authority RB, YMCA Chicago Project (A) (B) (C) 1.120%, 06/01/29 2,400 2,400 Illinois State, Educational Facilities RB, Field Museum of Natural History (A) (B) (C) 1.050%, 11/01/32 1,500 1,500 Kane Cook & Du Page Counties TAW 2.250%, 11/28/03 1,000 1,000 Oakbrook Terrace, Industrial Development Authority RB, Oakbrook Terrace Atrium Project (A) (B) (C) 1.050%, 12/01/25 2,000 2,000 Orland Park, Industrial Development Authority RB, Ser A (A) (B) (C) 1.350%, 12/28/04 825 825 - ----------------------------------------------------------------------------------- TOTAL ILLINOIS 13,080 - ----------------------------------------------------------------------------------- INDIANA - 5.8% Avon, Community School Warrants 1.950%, 12/31/03 1,000 1,001 Hamilton Southeastern Schools, BAN 1.250%, 04/01/04 1,000 1,000 Indiana State, Development Finance Authority RB, Cathedral High School Project (A) (B) (C) 1.200%, 09/01/26 1,000 1,000 Indiana State, Educational Facilities Authority RB, Evansville University Project, Ser B (A) (B) (C) 1.200%, 12/01/29 2,000 2,000 Indiana State, Health Facilities Financing Authority RB, Capital Access Project (A) (B) (C) 1.050%, 04/01/13 1,500 1,500 42 | OCTOBER 31, 2003 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- Knox Community, School Corporate Industry, TAW 1.750%, 12/31/03 $1,000 $ 1,000 Merrillville School District Authority, TAW 1.250%, 12/31/03 1,000 1,000 Spencer Owen Independent Community Schools GO (A) (B) 1.500%, 12/31/03 1,650 1,651 Tippecanoe, TAN 2.000%, 12/30/03 1,100 1,101 - ----------------------------------------------------------------------------------- TOTAL INDIANA 11,253 - ----------------------------------------------------------------------------------- IOWA - 3.6% Iowa State, Finance Authority RB, Drake University Project (A) (B) (C) 1.200%, 07/01/31 600 600 Iowa State, Higher Education Loan Authority RB, Private College Facilities, Loras Project (A) (B) (C) 1.150%, 11/01/30 2,400 2,400 Iowa State, Higher Education Loan Authority RB, Private College, Des Moines Project (A) (B) (C) 1.200%, 10/01/33 1,200 1,200 Iowa State, Higher Education Loan Authority RB, Private College, St. Ambrose Project (A) (B) (C) 1.150%, 04/01/33 2,700 2,700 - ----------------------------------------------------------------------------------- TOTAL IOWA 6,900 - ----------------------------------------------------------------------------------- KANSAS - 2.1% Kansas Finance Authority RB, Kansas Department Administration, Ser J1 (A) (B) 1.150%, 12/01/18 1,800 1,800 Prairie Village RB, Corinth Place Apartments (A) (B) 1.050%, 11/01/30 2,350 2,350 - ----------------------------------------------------------------------------------- TOTAL KANSAS 4,150 - ----------------------------------------------------------------------------------- KENTUCKY - 2.9% Kentucky State, Rural Water Financial Corporation RB (A) (B) 2.250%, 11/01/03 1,000 1,000 Kentucky State, TRAN 2.000%, 06/30/04 2,500 2,518 Lexington-Fayette Urban County, Government Industrial Building Authority RB, American Horse Shows Association Project (A) (B) (C) 1.200%, 12/01/18 2,025 2,025 - ----------------------------------------------------------------------------------- TOTAL KENTUCKY 5,543 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 43 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- LOUISIANA - 1.6% East Baton Rouge RB, Parish Pollution Control Authority, Rhone-Poulenc Project (A) (B) (C) 1.200%, 06/01/11 $ 800 $ 800 1.200%, 12/01/11 1,230 1,230 Louisiana State, Public Facilities Authority Hospital RB, St. Francis Medical Center Project, FSA (A) (B) 5.300%, 07/01/09 1,000 1,048 - ----------------------------------------------------------------------------------- TOTAL LOUISIANA 3,078 - ----------------------------------------------------------------------------------- MASSACHUSETTS - 2.3% Massachusetts State, Development Finance Agency RB, Marino Foundation Project (A) (B) (C) 1.050%, 07/01/21 2,100 2,100 Massachusetts State, Health and Educational Facilities Authority RB, Falmouth Assisted Living, Ser A (A) (B) (C) 1.030%, 11/01/26 2,300 2,300 - ----------------------------------------------------------------------------------- TOTAL MASSACHUSETTS 4,400 - ----------------------------------------------------------------------------------- MICHIGAN - 5.4% Farmington Hills Michigan Hospital Finance Authority RB, Botsford General Hospital, Ser B, MBIA (A) (B) 1.200%, 02/15/16 1,650 1,650 Jackson County, Economic Development Authority RB, Thrifty Leoni Project (A) (B) (C) 1.060%, 12/01/14 1,000 1,000 Michigan State, Job Development Authority RB, East Lansing Residential Project (A) (B) (C) 0.950%, 12/01/14 900 900 Michigan State, Strategic Fund RB, Van Andel Research Institution Project (A) (B) (C) 1.050%, 11/01/27 3,400 3,400 Northern University RB, FGIC (A) (B) 1.150%, 06/01/31 1,600 1,600 Pinckney Community Schools, State Aid Anticipation Notes 1.500%, 08/20/04 2,000 2,005 - ----------------------------------------------------------------------------------- TOTAL MICHIGAN 10,555 - ----------------------------------------------------------------------------------- 44 | OCTOBER 31, 2003 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- MINNESOTA - 2.8% Mankato, Revenue Authority RB, Bethany Lutheran College Project, Ser B, (A) (B) (C) 1.200%, 11/01/15 $1,740 $ 1,740 Minneapolis & St. Paul, Housing & Redevelopment Authority RB, Childrens Healthcare System Project, Ser B, FSA (A) (B) 1.150%, 08/15/25 2,800 2,800 Minnesota State, Higher Education Facilities Authority RB, St. Olaf College Project (A) (B) (C) 1.150%, 10/01/20 800 800 - ----------------------------------------------------------------------------------- TOTAL MINNESOTA 5,340 - ----------------------------------------------------------------------------------- MISSOURI - 5.0% Clayton, Industrial Development Authority RB, Bailey Court Project (A) (B) (C) 1.200%, 01/01/09 500 500 Kansas City, Industrial Development Authority RB, Bethesda Living Center Project, Ser A (A) (B) (C) 1.100%, 08/01/31 2,200 2,200 Kansas City, Industrial Development Authority RB, Ewing Marion Kaufman (A) (B) 1.150%, 04/01/27 3,100 3,100 Missouri State, Health & Educational Facilities Authority RB, Saint Louis University Project, Ser B (A) (B) 1.200%, 10/01/24 600 600 Missouri State, Health & Educational Facilities RN 1.150%, 10/29/04 945 945 Missouri State, State Office Buildings RB, Ser B (A) (B) 4.000%, 12/01/03 1,500 1,503 Saint Louis, Industrial Development Authority RB, Schnuck Markets Kirkwood Project (A) (B) (C) 1.100%, 12/01/15 900 900 - ----------------------------------------------------------------------------------- TOTAL MISSOURI 9,748 - ----------------------------------------------------------------------------------- MONTANA - 0.8% Montana State, Board Investment RB, Municipal Finance Consolidated-Intercapitalization Project (A) (B) 1.350%, 03/01/25 1,500 1,500 - ----------------------------------------------------------------------------------- TOTAL MONTANA 1,500 - ----------------------------------------------------------------------------------- NEW HAMPSHIRE - 0.5% Coos County, TAN 1.625%, 12/31/03 1,000 1,000 - ----------------------------------------------------------------------------------- TOTAL NEW HAMPSHIRE 1,000 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 45 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- NEW YORK - 3.0% New York City, Municipal Water Finance RB, Ser C-1 (A) (B) 1.160%, 06/15/18 $4,600 $ 4,600 New York City, Municipal Water Finance RB, Ser F-1 (A) (B) 1.160%, 06/15/33 1,300 1,300 - ----------------------------------------------------------------------------------- TOTAL NEW YORK 5,900 - ----------------------------------------------------------------------------------- NORTH CAROLINA - 0.6% North Carolina Medical Care Community RB, Carolina Meadows Income Project (A) (B) (C) 1.150%, 06/01/28 1,200 1,200 - ----------------------------------------------------------------------------------- TOTAL NORTH CAROLINA 1,200 - ----------------------------------------------------------------------------------- OHIO - 4.4% American Municipal Power BAN 1.900%, 11/06/03 400 400 1.600%, 12/04/03 670 670 1.300%, 08/05/04 750 750 American Municipal Power BAN, Hubbard Project 1.450%, 12/19/03 420 420 American Municipal Power BAN, Oberlin Project 1.600%, 12/11/03 650 651 American Municipal Power BAN, St. Mary's Project 1.200%, 10/07/04 830 830 Brook Park BAN 1.600%, 01/07/04 700 700 Clermont County, Economic Development Authority RB, John Q. Hammons Project (A) (B) (C) 1.400%, 05/01/12 680 680 Ohio State, Higher Education Facilities RB, Kenyon College Project (A) (B) 1.100%, 08/01/33 150 150 Ohio State, Higher Education Facilities RB, Ser A (A) (B) (C) 1.100%, 09/01/24 2,000 2,000 Toledo Lucas County, Port Facilities Authority RB, Toledo Museum of Art Project (A) (B) (C) 1.040%, 09/01/19 1,200 1,200 - ----------------------------------------------------------------------------------- TOTAL OHIO 8,451 - ----------------------------------------------------------------------------------- OKLAHOMA - 1.0% Tulsa, Industrial Development Authority RB, Tulsa County Housing Fund Project (A) (B) 1.250%, 10/01/32 2,000 2,000 - ----------------------------------------------------------------------------------- TOTAL OKLAHOMA 2,000 - ----------------------------------------------------------------------------------- 46 | OCTOBER 31, 2003 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- OREGON - 1.9% Portland Economic Development RB, Broadway Project, Ser A, AMBAC (A) (B) (C) 1.090%, 04/01/35 $3,750 $ 3,750 - ----------------------------------------------------------------------------------- TOTAL OREGON 3,750 - ----------------------------------------------------------------------------------- PENNSYLVANIA - 10.6% Allegheny County RB, Industrial Development Authority, Jewish Home & Hospital Project, Ser B (A) (B) (C) 1.100%, 10/01/26 1,240 1,240 Delaware County Industrial Development Authority RB, British Petroleum Project (A) (B) 1.120%, 10/01/19 1,500 1,500 Erie County Hospital Authority RB, Ser 820, MBIA (A) (B) 1.110%, 07/01/22 3,000 3,000 Lawrence County Industrial Development Authority RB, Villa Maria Project (A) (B) (C) 1.090%, 07/01/33 2,600 2,600 Montgomery County RB, Kingswood Apartments Project, Ser A, FNMA (A) (B) 1.000%, 08/15/31 1,000 1,000 Pennsylvania State, Economic Development Financing Authority RB, Philadelphia Area Project, Ser J3 (A) (B) (C) 1.100%, 11/01/30 4,200 4,200 Pennsylvania State, Higher Education Association Independent Colleges RB, Ser I1 (A) (B) (C) 1.100%, 11/01/31 3,000 3,000 Pennsylvania State, Higher Educational Facility RB, CICU Funding Program, Ser B7 (A) (B) (C) 1.100%, 11/01/23 1,300 1,300 Philadelphia Authority for Industrial Development RB (A) (B) 1.450%, 05/01/17 500 500 Philadelphia RB, School for the Deaf Project (A) (B) (C) 1.100%, 11/01/32 1,000 1,000 Philadelphia, Hospital & Higher Education Facilities Authority RB, Temple East Project, Ser B (A) (B) (C) 1.100%, 06/01/14 300 300 Temple University, Commonwealth of Higher Education RN 1.200%, 05/04/04 1,000 1,000 - ----------------------------------------------------------------------------------- TOTAL PENNSYLVANIA 20,640 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 47 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- TENNESSEE - 1.3% Chattanooga, Health Education and Facilities Board RB, McCallie School Project (A) (B) (C) 1.050%, 12/01/23 $1,400 $ 1,400 Wilson County, Industrial Development Board RB, Hartmann Luggage Co. Project (A) (B) 1.220%, 07/01/26 1,100 1,100 - ----------------------------------------------------------------------------------- TOTAL TENNESSEE 2,500 - ----------------------------------------------------------------------------------- TEXAS - 2.1% Texas State, TRAN 2.000%, 08/31/04 4,000 4,028 - ----------------------------------------------------------------------------------- TOTAL TEXAS 4,028 - ----------------------------------------------------------------------------------- VERMONT - 0.8% Vermont State, Educational & Health Buildings Financing Authority RB, Capital Asset Financing Program, Ser 1 (A) (B) (C) 1.150%, 06/01/22 1,500 1,500 - ----------------------------------------------------------------------------------- TOTAL VERMONT 1,500 - ----------------------------------------------------------------------------------- WASHINGTON - 4.3% Seattle, Low Income Housing Authority RB, Foss Home Project (A) (B) (C) 1.050%, 12/01/24 345 345 Washington State, GO, Ser A11, MBIA (A) (B) 1.140%, 06/01/17 1,400 1,400 Washington State, Housing Finance Commission Non-Profit RB, Pioneer Human Services Project, Ser A (A) (B) (C) 1.150%, 08/01/19 1,250 1,250 Washington State, Housing Finance Commission Non-Profit RB, Rockwood Retirement Community (A) (B) (C) 1.150%, 01/01/34 1,000 1,000 Washington State, Housing Finance Commission Non-Profit RB, Rockwood Retirement Community, Ser A (A) (B) (C) 1.150%, 01/01/30 3,600 3,600 Washington State, Housing Finance Commission Non-Profit RB, Tacoma Art Museum Project (A) (B) (C) 1.200%, 06/01/32 100 100 Washington State, Housing Finance Commission Non-Profit RB, Vincent DePaul Project, Ser A, (A) (B) (C) 1.050%, 02/01/30 500 500 Washington State, Housing Finance Commission Non-Profit RB, YMCA Columbia/Willamette Project (A) (B) (C) 1.150%, 08/01/24 100 100 - ----------------------------------------------------------------------------------- TOTAL WASHINGTON 8,295 - ----------------------------------------------------------------------------------- 48 | OCTOBER 31, 2003 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- WEST VIRGINIA - 0.6% Putnam County, Industrial Development RB, FMC Corporation Project (A) (B) (C) 1.000%, 10/01/11 $1,200 $ 1,200 - ----------------------------------------------------------------------------------- TOTAL WEST VIRGINIA 1,200 - ----------------------------------------------------------------------------------- WISCONSIN - 6.0% Chippewa Falls BAN 2.000%, 11/01/03 1,075 1,075 Milwaukee RB, Montessori Society School Project (A) (B) (C) 1.250%, 07/01/21 100 100 West Salem School District, TRAN 1.750%, 09/01/04 1,400 1,407 Wisconsin State, Health & Educational Facilities Authority RB, Alverno College Project (A) (B) (C) 1.200%, 11/01/17 100 100 Wisconsin State, Health & Educational Facilities Authority RB, Gundersen Lutheran Project, Ser A, FSA (A) (B) 1.150%, 12/01/15 5,300 5,300 Wisconsin State, Health & Educational Facilities Authority RB, Mercy Health Systems Project, Ser C (A) (B) (C) 1.100%, 08/15/23 2,600 2,600 Wisconsin State, Health & Educational Facilities Authority RB, Oakwood Village East Lutheran Homes Project, Ser B (A) (B) (C) 1.100%, 08/15/30 1,000 1,000 - ----------------------------------------------------------------------------------- TOTAL WISCONSIN 11,582 - ----------------------------------------------------------------------------------- WYOMING - 0.5% Campbell County, TAN 1.500%, 12/22/03 1,000 1,000 - ----------------------------------------------------------------------------------- TOTAL WYOMING 1,000 - ----------------------------------------------------------------------------------- MULTI-STATE - 0.5% Greystone, Municipal Lease Certificate Trust Authority COP, Ser A (A) (B) (C) 1.220%, 07/01/05 460 460 Greystone, Tax Exempt Certificate Trust Authority RB, Senior Certificate of Beneficial Ownership Project (A) (B) (C) 1.220%, 05/01/28 505 505 - ----------------------------------------------------------------------------------- TOTAL MULTI-STATE 965 - ----------------------------------------------------------------------------------- TOTAL MUNICIPAL BONDS (COST $193,526) 193,526 - ----------------------------------------------------------------------------------- TOTAL INVESTMENTS - 99.8% (COST $193,526) 193,526 - ----------------------------------------------------------------------------------- OCTOBER 31, 2003 | 49 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS FACE VALUE DESCRIPTION AMT. (000) (000) - ----------------------------------------------------------------------------------- OTHER ASSETS AND LIABILITIES - 0.2% Investment Advisory Fees Payable $ (20) Administrator Fees Payable (24) Custodian Fees Payable (3) Distribution Fees Payable (26) Other Assets and Liabilities, Net 462 - ----------------------------------------------------------------------------------- TOTAL OTHER ASSETS & LIABILITIES 389 - ----------------------------------------------------------------------------------- NET ASSETS: Portfolio Capital of Institutional Shares (unlimited authorization -- no par value) based on 84,122,634 outstanding shares of beneficial interest 84,122 Portfolio Capital of Investment Service Shares (unlimited authorization -- no par value) based on 87,069,195 outstanding shares of beneficial interest 87,070 Portfolio Capital of Sweep Class Shares (unlimited authorization -- no par value) based on 22,736,594 outstanding shares of beneficial interest 22,736 Accumulated net realized loss on investments (13) - ----------------------------------------------------------------------------------- TOTAL NET ASSETS - 100.0% $193,915 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INSTITUTIONAL SHARES ($84,116,108 / 84,122,634 SHARES) $1.00 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- INVESTMENT SERVICE SHARES ($87,062,230 / 87,069,195 SHARES) $1.00 - ----------------------------------------------------------------------------------- NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE -- SWEEP CLASS SHARES ($22,736,234 / 22,736,594 SHARES) $1.00 - ----------------------------------------------------------------------------------- 50 | OCTOBER 31, 2003 EXPEDITION TAX-FREE MONEY MARKET FUND STATEMENT OF NET ASSETS - -------------------------------------------------------------------------------- (A) Floating rate security. (B) Put & Demand Feature -- the date reported is the final maturity date, not the next reset or put date. (C) Securities are held in conjunction with a letter of credit from a major bank or financial institution. AMBAC -- American Municipal Bond Assurance Company BAN -- Bond Anticipation Notes COP -- Certificate of Participation FGIC -- Financial Guaranty Insurance Corporation FHLMC -- Federal Home Loan Mortgage Corporation FNMA -- Federal National Mortgage Association FSA -- Financial Security Assurance MBIA -- Municipal Bond Insurance Association RN -- Revenue Notes GO -- General Obligation RB -- Revenue Bond Ser -- Series TAN -- Tax Anticipation Notes TAW -- Tax Anticipation Warrants TRAN -- Tax & Revenue Anticipation Notes VHA -- Veteran's Hospital Association The accompanying notes are an integral part of the financial statements. OCTOBER 31, 2003 | 51 STATEMENTS OF OPERATIONS (000) For the year ended October 31, 2003 EXPEDITION EXPEDITION EQUITY EQUITY INCOME FUND FUND ---------- ------------- INVESTMENT INCOME: Dividends $ 2,859 $ 255 Interest 26 5 ------- ------ Total investment income 2,885 260 ------- ------ EXPENSES: Investment advisory fees 1,283 100 Administrator fees 342 75 Custodian fees 34 3 Distribution fees -- Investment Shares - Class A 19 1 Investment Shares - Class B 136 7 Transfer agent fees 283 97 Professional fees 29 17 Printing fees 15 1 Registration fees 15 1 Trustees' fees 5 -- Other fees 14 2 ------- ------ Total expenses 2,175 304 ------- ------ Less: Waiver of investment advisory fees -- (100) Reimbursement of investment advisory fees -- (30) ------- ------ Net expenses 2,175 174 ------- ------ NET INVESTMENT INCOME 710 86 ------- ------ Net realized loss on investments (22,249) (2,349) Net change in unrealized appreciation of investments 53,720 4,184 ------- ------ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 31,471 1,835 ------- ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $32,181 $1,921 ======= ====== Amounts designated as "--" are either $0 or have been rounded to $0. The accompanying notes are an integral part of the financial statements. 52 | OCTOBER 31, 2003 STATEMENTS OF OPERATIONS (000) For the year ended October 31, 2003 EXPEDITION EXPEDITION INVESTMENT TAX-FREE INVESTMENT GRADE BOND GRADE BOND FUND FUND ---------- ------------------ INVESTMENT INCOME: Interest $6,259 $3,276 ------ ------ Total investment income 6,259 3,276 ------ ------ EXPENSES: Investment advisory fees 599 378 Administrator fees 240 151 Custodian fees 24 15 Distribution fees -- Investment Shares - Class A 14 1 Investment Shares - Class B 21 3 Transfer agent fees 144 89 Professional fees 26 22 Printing fees 12 8 Registration fees 12 7 Trustees' fees 3 2 Other fees 11 14 ------ ------ Total expenses 1,106 690 ------ ------ Less: Waiver of investment advisory fees (112) (82) ------ ------ Net expenses 994 608 ------ ------ NET INVESTMENT INCOME 5,265 2,668 ------ ------ Net realized gain on investments 776 1,425 Net change in unrealized depreciation of investments (1,476) (711) ------ ------ NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (700) 714 ------ ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $4,565 $3,382 ====== ====== The accompanying notes are an integral part of the financial statements. OCTOBER 31, 2003 | 53 STATEMENTS OF OPERATIONS (000) For the year ended October 31, 2003 EXPEDITION EXPEDITION TAX-FREE MONEY MARKET MONEY MARKET FUND FUND ------------ ------------ INVESTMENT INCOME: Interest $ 8,152 $2,528 ------- ------ Total investment income 8,152 2,528 ------- ------ EXPENSES: Investment advisory fees 2,483 830 Administrator fees 931 311 Shareholder Servicing Fees -- Investment Service Shares 828 240 Sweep Class Shares 184 76 Custodian fees 124 41 Transfer agent fees 383 104 Registration fees 70 21 Professional fees 68 33 Printing fees 65 23 Trustees' fees 17 6 Amortization of organization costs -- 1 Other fees 14 7 ------- ------ Total expenses 5,167 1,693 ------- ------ Less: Waiver of investment advisory fees (1,362) (486) ------- ------ Net expenses 3,805 1,207 ------- ------ NET INVESTMENT INCOME 4,347 1,321 ------- ------ Net realized gain (loss) on investments 24 (3) ------- ------ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 4,371 $1,318 ======= ====== Amounts designated as "--" are either $0 or have been rounded to $0. The accompanying notes are an integral part of the financial statements. 54 | OCTOBER 31, 2003 STATEMENTS OF CHANGES IN NET ASSETS (000) For the years ended October 31, EXPEDITION EXPEDITION EQUITY EQUITY INCOME FUND FUND ------------------- ----------------- 2003 2002 2003 2002 -------- --------- ------- ------- OPERATIONS: Investment income $ 710 $ 220 $ 86 $ 99 Net realized loss on investments (22,249) (35,629) (2,349) (6,195) Net change in unrealized appreciation (depreciation) of investments 53,720 (22,715) 4,184 1,648 -------- --------- ------- ------- Net increase (decrease) in net assets resulting from operations 32,181 (58,124) 1,921 (4,448) -------- --------- ------- ------- DIVIDENDS TO SHAREHOLDERS FROM: Investment income: Institutional Shares (775) -- (106) (100) Investment Shares - Class A (10) -- (2) (1) Investment Shares - Class B -- -- -- -- Tax return of capital: Institutional Shares -- -- (4) -- Investment Shares - Class A -- -- -- -- Investment Shares - Class B -- -- -- -- -------- --------- ------- ------- Total dividends (785) -- (112) (101) -------- --------- ------- ------- CAPITAL SHARE TRANSACTIONS (1): Institutional Shares: Proceeds from sales 11,892 27,244 39 837 Shares issued in lieu of cash distributions 397 -- -- -- Payments for redemptions (56,560) (91,883) (3,157) (3,183) -------- --------- ------- ------- Decrease in net assets from Institutional Shares transactions (44,271) (64,639) (3,118) (2,346) -------- --------- ------- ------- Investment Shares - Class A: Proceeds from sales 1,872 2,186 26 185 Shares issued in lieu of cash distributions 9 -- 1 1 Payments for redemptions (1,610) (3,917) (100) (170) -------- --------- ------- ------- Increase (decrease) in net assets from Investment Shares - Class A transactions 271 (1,731) (73) 16 -------- --------- ------- ------- Investment Shares - Class B: Proceeds from sales 1,577 3,115 80 399 Shares issued in lieu of cash distributions -- -- -- -- Payments for redemptions (2,176) (3,773) (164) (285) -------- --------- ------- ------- Increase (decrease) in net assets from Investment Shares - Class B transactions (599) (658) (84) 114 -------- --------- ------- ------- Total decrease in net assets from capital share transactions (44,599) (67,028) (3,275) (2,216) -------- --------- ------- ------- Total decrease in net assets (13,203) (125,152) (1,466) (6,765) -------- --------- ------- ------- NET ASSETS AT BEGINNING OF YEAR 193,279 318,431 14,880 21,645 -------- --------- ------- ------- NET ASSETS AT END OF YEAR $180,076 $ 193,279 $13,414 $14,880 ======== ========= ======= ======= <FN> (1) See note 5 in the notes to financial statements for additional information. </FN> Amounts designated as "--" are either $0 or have been rounded to $0. The accompanying notes are an integral part of the financial statements. OCTOBER 31, 2003 | 55 STATEMENTS OF CHANGES IN NET ASSETS (000) For the years ended October 31, EXPEDITION EXPEDITION TAX-FREE INVESTMENT GRADE INVESTMENT GRADE BOND FUND BOND FUND ------------------- ----------------- 2003 2002 2003 2002 -------- -------- ------- -------- OPERATIONS: Investment income $ 5,265 $ 6,122 $ 2,668 $ 3,068 Net realized gain on investments 776 1,462 1,425 1,276 Net change in unrealized appreciation (depreciation) of investments (1,476) 151 (711) (590) -------- -------- ------- -------- Net increase in net assets resulting from operations 4,565 7,735 3,382 3,754 -------- -------- ------- -------- DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM: Investment income: Institutional Shares (5,021) (5,843) (2,652) (3,033) Investment Shares - Class A (231) (250) (15) (31) Investment Shares - Class B (73) (54) (6) (6) Realized capital gains: Institutional Shares -- -- (1,267) (335) Investment Shares - Class A -- -- (14) (3) Investment Shares - Class B -- -- (4) (1) -------- -------- ------- -------- Total dividends and distributions (5,325) (6,147) (3,958) (3,409) -------- -------- ------- -------- CAPITAL SHARE TRANSACTIONS (1): Institutional Shares: Proceeds from sales 27,319 24,890 10,476 6,231 Shares issued in lieu of cash distributions 2,852 3,393 989 327 Payments for redemptions (33,137) (38,707) (14,752) (18,293) -------- -------- ------- -------- Decrease in net assets from Institutional Shares transactions (2,966) (10,424) (3,287) (11,735) -------- -------- ------- -------- Investment Shares - Class A: Proceeds from sales 489 459 182 2 Shares issued in lieu of cash distributions 179 189 28 33 Payments for redemptions (525) (698) (723) (86) -------- -------- ------- -------- Increase (decrease) in net assets from Investment Shares - Class A transactions 143 (50) (513) (51) -------- -------- ------- -------- Investment Shares - Class B: Proceeds from sales 669 1,224 41 63 Shares issued in lieu of cash distributions 67 47 7 5 Payments for redemptions (510) (454) (51) (27) -------- -------- ------- -------- Increase (decrease) in net assets from Investment Shares - Class B transactions 226 817 (3) 41 -------- -------- ------- -------- Total decrease in net assets from capital share transactions (2,597) (9,657) (3,803) (11,745) -------- -------- ------- -------- Total decrease in net assets (3,357) (8,069) (4,379) (11,400) -------- -------- ------- -------- NET ASSETS AT BEGINNING OF YEAR 117,531 125,600 76,115 87,515 -------- -------- ------- -------- NET ASSETS AT END OF YEAR $114,174 $117,531 $71,736 $ 76,115 ======== ======== ======= ======== <FN> (1) See note 5 in the notes to financial statements for additional information. Amounts designated as "--" are either $0 or have been rounded to $0. </FN> The accompanying notes are an integral part of the financial statements. 56 | OCTOBER 31, 2003 STATEMENTS OF CHANGES IN NET ASSETS (000) For the years ended October 31, EXPEDITION EXPEDITION TAX-FREE MONEY MARKET MONEY MARKET FUND FUND ------------------- ------------------- 2003 2002 2003 2002 -------- -------- -------- -------- OPERATIONS: Investment income $ 4,347 $ 7,835 $ 1,321 $ 1,748 Net realized gain (loss) on investments 24 (21) (3) (3) -------- -------- -------- -------- Net increase in net assets resulting from operations 4,371 7,814 1,318 1,745 -------- -------- -------- -------- DIVIDENDS TO SHAREHOLDERS FROM: Investment income: Institutional Shares (2,064) (2,741) (727) (829) Investment Service Shares (2,081) (4,494) (512) (881) Sweep Class Shares (249) (601) (81) (38) -------- -------- -------- -------- Total dividends (4,394) (7,836) (1,320) (1,748) -------- -------- -------- -------- CAPITAL SHARE TRANSACTIONS (1): Institutional Shares: Proceeds from sales 831,364 781,592 395,054 203,523 Shares issued in lieu of cash distributions 90 149 -- -- Payments for redemptions (818,571) (691,209) (408,728) (141,669) -------- -------- -------- -------- Increase (decrease) in net assets from Institutional Shares transactions 12,883 90,532 (13,674) 61,854 -------- -------- -------- -------- Investment Service Shares: Proceeds from sales 646,623 721,789 231,192 166,273 Shares issued in lieu of cash distributions 214 398 4 12 Payments for redemptions (689,955) (743,113) (220,987) (202,949) -------- -------- -------- -------- Increase (decrease) in net assets from Investment Service Shares transactions (43,118) (20,926) 10,209 (36,664) -------- -------- -------- -------- Sweep Class Shares: Proceeds from sales 153,774 154,371 62,132 17,731 Shares issued in lieu of cash distributions 233 575 19 33 Payments for redemptions (150,961) (157,019) (47,843) (13,404) -------- -------- -------- -------- Increase (decrease) in net assets from Sweep Class Shares transactions 3,046 (2,073) 14,308 4,360 -------- -------- -------- -------- Total increase (decrease) in net assets from capital share transactions (27,189) 67,533 10,843 29,550 -------- -------- -------- -------- Total increase (decrease) in net assets (27,212) 67,511 10,841 29,547 -------- -------- -------- -------- NET ASSETS AT BEGINNING OF YEAR 645,769 578,258 183,074 153,527 -------- -------- -------- -------- NET ASSETS AT END OF YEAR $618,557 $645,769 $193,915 $183,074 ======== ======== ======== ======== -------- -------- -------- -------- <FN> (1) See note 5 in the notes to financial statements for additional information. Amounts designated as "--" are either $0 or have been rounded to $0. </FN> The accompanying notes are an integral part of the financial statements. OCTOBER 31, 2003 | 57 FINANCIAL HIGHLIGHTS For a Share Outstanding Throughout Each Period - ------------------------------------------------------------------------------------------------------------------------------------ NET NET REALIZED AND DIVIDENDS TOTAL NET ASSET ASSET VALUE, INVESTMENT UNREALIZED TOTAL FROM NET DISTRIBUTIONS DIVIDENDS VALUE, BEGINNING INCOME GAINS OR (LOSSES) FROM INVESTMENT FROM AND END OF OF PERIOD (LOSS) ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS PERIOD - ------------------------------------------------------------------------------------------------------------------------------------ EQUITY FUND - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 $ 6.14 $ 0.04 $ 1.24 $ 1.28 $(0.03) $ -- $(0.03) $ 7.39 2002 7.99 0.01 (1.86) (1.85) -- -- -- 6.14 2001 14.25 (0.01) (4.44) (4.45) -- (1.81) (1.81) 7.99 2000 13.09 (0.02) 2.67 2.65 -- (1.49) (1.49) 14.25 1999 10.55 -- 3.13 3.13 -- (0.59) (0.59) 13.09 Investment Shares - Class A 2003 $ 6.08 $ 0.02 $ 1.24 $ 1.26 $(0.01) $ -- $(0.01) $ 7.33 2002 7.93 (0.02) (1.83) (1.85) -- -- -- 6.08 2001 14.18 (0.03) (4.41) (4.44) -- (1.81) (1.81) 7.93 2000 13.06 (0.03) 2.64 2.61 -- (1.49) (1.49) 14.18 1999 10.58 (0.03) 3.10 3.07 -- (0.59) (0.59) 13.06 Investment Shares - Class B 2003 $ 5.87 $(0.04) $ 1.20 $ 1.16 $ -- $ -- $ -- $ 7.03 2002 7.72 (0.07) (1.78) (1.85) -- -- -- 5.87 2001 13.95 (0.09) (4.33) (4.42) -- (1.81) (1.81) 7.72 2000 12.96 (0.08) 2.56 2.48 -- (1.49) (1.49) 13.95 1999(1) 10.82 (0.04) 2.77 2.73 -- (0.59) (0.59) 12.96 - ------------------------------------------------------------------------------------------------------------------------------------ EQUITY INCOME FUND - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 $ 5.78 $ 0.05 $ 0.87 $ 0.92 $(0.05)++ $ -- $(0.05)++ $ 6.65 2002 7.42 0.04 (1.64) (1.60) (0.04) -- (0.04) 5.78 2001 10.77 0.05 (2.82) (2.77) (0.05) (0.53) (0.58) 7.42 2000(2) 10.00 0.07 0.76 0.83 (0.06) -- (0.06) 10.77 Investment Shares - Class A 2003 $ 5.77 $ 0.04 $ 0.87 $ 0.91 $(0.04)++ $ -- $(0.04)++ $ 6.64 2002 7.41 0.02 (1.64) (1.62) (0.02) -- (0.02) 5.77 2001 10.76 0.04 (2.83) (2.79) (0.03) (0.53) (0.56) 7.41 2000(3) 9.78 0.04 1.00 1.04 (0.06) -- (0.06) 10.76 Investment Shares - Class B 2003 $ 5.73 $(0.02) $ 0.87 $ 0.85$ --*++ $ -- $ --*++ $ 6.58 2002 7.38 (0.03) (1.62) (1.65) -- -- -- 5.73 2001 10.75 (0.02) (2.82) (2.84) -- (0.53) (0.53) 7.38 2000(4) 9.82 0.01 0.94 0.95 (0.02) -- (0.02) 10.75 - -------------------------------------------------------------------------------------------------------------------- RATIO OF RATIO OF NET RATIO OF EXPENSES NET ASSETS EXPENSES INVESTMENT TO AVERAGE NET ASSETS TOTAL END OF TO AVERAGE INCOME (LOSS) TO (EXCLUDING WAIVERS PORTFOLIO RETURN+ PERIOD (000) NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) TURNOVER RATE - -------------------------------------------------------------------------------------------------------------------- EQUITY FUND - -------------------------------------------------------------------------------------------------------------------- Institutional Shares 2003 20.99% $156,142 1.18% 0.51% 1.18% 66.18% 2002 (23.15)% 173,038 1.16% 0.16% 1.16% 47.88% 2001 (34.99)% 288,992 1.10% (0.09)% 1.10% 79.08% 2000 22.01% 422,148 1.05% (0.22)% 1.05% 64.54% 1999 30.87% 363,694 1.05% 0.04% 1.05% 90.76% Investment Shares - Class A 2003 20.72% $ 8,910 1.43% 0.24% 1.43% 66.18% 2002 (23.33)% 7,100 1.41% (0.09)% 1.41% 47.88% 2001 (35.11)% 11,253 1.35% (0.32)% 1.35% 79.08% 2000 21.73% 10,090 1.30% (0.49)% 1.30% 64.54% 1999 30.16% 4,688 1.30% (0.21)% 1.30% 90.76% Investment Shares - Class B 2003 19.76% $ 15,024 2.18% (0.50)% 2.18% 66.18% 2002 (23.96)% 13,141 2.16% (0.84)% 2.16% 47.88% 2001 (35.61)% 18,186 2.10% (1.08)% 2.10% 79.08% 2000 20.80% 20,358 2.05% (1.24)% 2.05% 64.54% 1999(1) 26.31% 7,706 2.05% (0.95)% 2.05% 90.76% - -------------------------------------------------------------------------------------------------------------------- EQUITY INCOME FUND - -------------------------------------------------------------------------------------------------------------------- Institutional Shares 2003 16.12% $ 12,422 1.25% 0.70% 2.23% 99.66% 2002 (21.66)% 13,865 1.25% 0.56% 1.72% 93.43% 2001 (26.99)% 20,401 1.25% 0.60% 1.42% 88.73% 2000(2) 8.36% 34,420 1.25% 1.00% 1.25% 73.31% Investment Shares - Class A 2003 15.84% $ 277 1.50% 0.46% 2.48% 99.66% 2002 (21.87)% 309 1.50% 0.32% 1.97% 93.43% 2001 (27.19)% 408 1.50% 0.32% 1.67% 88.73% 2000(3) 10.60% 286 1.50% 0.84% 1.50% 73.31% Investment Shares - Class B 2003 14.85% $ 715 2.25% (0.29)% 3.23% 99.66% 2002 (22.36)% 706 2.25% (0.43)% 2.72% 93.43% 2001 (27.66)% 836 2.25% (0.45)% 2.42% 88.73% 2000(4) 9.71% 427 2.25% (0.15)% 2.25% 73.31% <FN> * Amount represents less than $0.01. + Returns are for the period indicated and have not been annualized. ++ Includes Return of Capital of $0.0003. (1) Commenced operations on November 16, 1998. All ratios for the period have been annualized. (2) Commenced operations on March 3, 2000. All ratios for the period have been annualized. (3) Commenced operations on March 10, 2000. All ratios for the period have been annualized. (4) Commenced operations on March 15, 2000. All ratios for the period have been annualized. Amounts designated as "--" are either $0 or have been rounded to $0. </FN> The accompanying notes are an integral part of the financial statements. 58 & 59 | OCTOBER 31, 2003 FINANCIAL HIGHLIGHTS For a Share Outstanding Throughout Each Period - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED AND DIVIDENDS TOTAL NET ASSET ASSET VALUE, NET UNREALIZED TOTAL FROM NET DISTRIBUTIONS DIVIDENDS VALUE, BEGINNING INVESTMENT GAINS OR (LOSSES) FROM INVESTMENT FROM AND END OF OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS PERIOD - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT GRADE BOND FUND - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 $10.77 $0.49 $(0.07) $ 0.42 $(0.49) $ -- $(0.49) $10.70 2002 10.60 0.53 0.17 0.70 (0.53) -- (0.53) 10.77 2001 9.72 0.53 0.88 1.41 (0.53) -- (0.53) 10.60 2000 9.65 0.53 0.07 0.60 (0.53) -- (0.53) 9.72 1999 10.15 0.49 (0.50) (0.01) (0.49) -- (0.49) 9.65 Investment Shares - Class A 2003 $10.76 $0.46 $(0.07) $ 0.39 $(0.46) $ -- $(0.46) $10.69 2002 10.59 0.50 0.17 0.67 (0.50) -- (0.50) 10.76 2001 9.71 0.50 0.88 1.38 (0.50) -- (0.50) 10.59 2000 9.64 0.51 0.07 0.58 (0.51) -- (0.51) 9.71 1999 10.15 0.47 (0.51) (0.04) (0.47) -- (0.47) 9.64 Investment Shares - Class B 2003 $10.78 $0.38 $(0.07) $ 0.31 $(0.38) $ -- $(0.38) $10.71 2002 10.61 0.42 0.17 0.59 (0.42) -- (0.42) 10.78 2001 9.72 0.43 0.89 1.32 (0.43) -- (0.43) 10.61 2000 9.64 0.44 0.08 0.52 (0.44) -- (0.44) 9.72 1999(1) 10.06 0.38 (0.17) 0.21 (0.63) -- (0.63) 9.64 - ------------------------------------------------------------------------------------------------------------------------------------ TAX-FREE INVESTMENT GRADE BOND FUND - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 $11.00 $0.39 $0.10 $ 0.49 $(0.39) $(0.19) $(0.58) $10.91 2002(2) 10.89 0.43 0.15 0.58 (0.43) (0.04) (0.47) 11.00 2001 10.37 0.44 0.52 0.96 (0.44) -- (0.44) 10.89 2000(3) 10.00 0.31 0.37 0.68 (0.31) -- (0.31) 10.37 Investment Shares - Class A 2003 $10.99 $0.36 $0.11 $ 0.47 $(0.36) $(0.19) $(0.55) $10.91 2002(2) 10.88 0.40 0.15 0.55 (0.40) (0.04) (0.44) 10.99 2001 10.36 0.42 0.52 0.94 (0.42) -- (0.42) 10.88 2000(4) 10.05 0.28 0.31 0.59 (0.28) -- (0.28) 10.36 Investment Shares - Class B 2003 $10.99 $0.28 $0.11 $ 0.39 $(0.28) $(0.19) $(0.47) $10.91 2002(2) 10.89 0.32 0.14 0.46 (0.32) (0.04) (0.36) 10.99 2001 10.37 0.34 0.52 0.86 (0.34) -- (0.34) 10.89 2000(5) 10.18 0.13 0.19 0.32 (0.13) -- (0.13) 10.37 - ------------------------------------------------------------------------------------------------------------------ RATIO OF RATIO OF NET RATIO OF EXPENSES NET ASSETS EXPENSES INVESTMENT TO AVERAGE NET ASSETS TOTAL END OF TO AVERAGE INCOME TO (EXCLUDING WAIVERS PORTFOLIO RETURN+ PERIOD (000) NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) TURNOVER RATE - ------------------------------------------------------------------------------------------------------------------ INVESTMENT GRADE BOND FUND - ------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 3.89% $106,643 0.80% 4.42% 0.89% 27.97% 2002 6.88% 110,312 0.80% 5.06% 0.90% 13.80% 2001 15.00% 119,279 0.77% 5.35% 0.86% 29.53% 2000 6.49% 136,354 0.75% 5.61% 0.89% 77.09% 1999 (0.06)% 98,889 0.90% 5.00% 1.15% 39.57% Investment Shares - Class A 2003 3.63% $ 5,407 1.05% 4.17% 1.14% 27.97% 2002 6.61% 5,305 1.05% 4.81% 1.15% 13.80% 2001 14.72% 5,262 1.02% 5.09% 1.11% 29.53% 2000 6.22% 5,222 1.00% 5.32% 1.14% 77.09% 1999 (0.41)% 7,279 1.15% 4.75% 1.40% 39.57% Investment Shares - Class B 2003 2.86% $ 2,124 1.80% 3.42% 1.89% 27.97% 2002 5.82% 1,914 1.80% 4.03% 1.90% 13.80% 2001 13.99% 1,059 1.77% 4.30% 1.86% 29.53% 2000 5.54% 204 1.75% 4.58% 1.89% 77.09% 1999(1) 2.10% 214 1.90% 4.07% 2.15% 39.57% - ------------------------------------------------------------------------------------------------------------------ TAX-FREE INVESTMENT GRADE BOND FUND - ------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 4.57% $ 71,211 0.80% 3.54% 0.91% 38.86% 2002(2) 5.50% 75,064 0.80% 3.96% 0.88% 23.39% 2001 9.53% 86,461 0.77% 4.22% 0.83% 29.84% 2000(3) 6.84% 84,729 0.65% 4.58% 0.75% 42.74% Investment Shares - Class A 2003 4.40% $ 305 1.05% 3.31% 1.16% 38.86% 2002(2) 5.24% 827 1.05% 3.71% 1.13% 23.39% 2001 9.26% 872 1.02% 3.96% 1.08% 29.84% 2000(4) 5.95% 523 0.90% 4.36% 1.00% 42.74% Investment Shares - Class B 2003 3.63% $ 220 1.80% 2.54% 1.91% 38.86% 2002(2) 4.36% 224 1.80% 2.96% 1.88% 23.39% 2001 8.45% 182 1.77% 3.18% 1.83% 29.84% 2000(5) 3.16% 3 1.65% 3.56% 1.75% 42.74% <FN> + Returns are for the period indicated and have not been annualized. (1) Commenced operations on November 16, 1998. All ratios for the period have been annualized. (2) As required, effective November 1, 2001, the Funds adopted the provisions of the AICPA AUDIT AND ACCOUNTING GUIDE FOR INVESTMENT COMPANIES that requires it to record the accretion of market discounts. The effect of this change for the year ended October 31, 2002 was a decrease in the ratio of net investment income to average net assets of 0.01%. Per share data and ratios for period prior to November 1, 2001 have not been restated to reflect this change in accounting. (3) Commenced operations on March 3, 2000. All ratios for the period have been annualized. (4) Commenced operations on March 10, 2000. All ratios for the period have been annualized. (5) Commenced operations on June 23, 2000. All ratios for the period have been annualized. Amounts designated as "--" are either $0 or have been rounded to $0. </FN> The accompanying notes are an integral part of the financial statements. 60 & 61 | OCTOBER 31, 2003 FINANCIAL HIGHLIGHTS For a Share Outstanding Throughout Each Period - ------------------------------------------------------------------------------------------------------------------------------------ NET REALIZED AND DIVIDENDS TOTAL NET ASSET ASSET VALUE, NET UNREALIZED TOTAL FROM NET DISTRIBUTIONS DIVIDENDS VALUE, BEGINNING INVESTMENT GAINS FROM INVESTMENT FROM AND END OF OF PERIOD INCOME ON INVESTMENTS OPERATIONS INCOME CAPITAL GAINS DISTRIBUTIONS PERIOD - ------------------------------------------------------------------------------------------------------------------------------------ MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01) $1.00 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 1.00 2001 1.00 0.04 -- 0.04 (0.04) -- (0.04) 1.00 2000 1.00 0.06 -- 0.06 (0.06) -- (0.06) 1.00 1999 1.00 0.05 -- 0.05 (0.05) -- (0.05) 1.00 Investment Service Shares 2003 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01) $1.00 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 1.00 2001 1.00 0.04 -- 0.04 (0.04) -- (0.04) 1.00 2000 1.00 0.06 -- 0.06 (0.06) -- (0.06) 1.00 1999 1.00 0.05 -- 0.05 (0.05) -- (0.05) 1.00 Sweep Class Shares 2003 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01) $1.00 2002 1.00 0.02 -- 0.02 (0.02) -- (0.02) 1.00 2001 1.00 0.04 -- 0.04 (0.04) -- (0.04) 1.00 2000(1) 1.00 0.01 -- 0.01 (0.01) -- (0.01) 1.00 - ------------------------------------------------------------------------------------------------------------------------------------ TAX-FREE MONEY MARKET FUND - ------------------------------------------------------------------------------------------------------------------------------------ Institutional Shares 2003 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01) $1.00 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 1.00 2001 1.00 0.03 -- 0.03 (0.03) -- (0.03) 1.00 2000 1.00 0.04 -- 0.04 (0.04) -- (0.04) 1.00 1999(2) 1.00 0.02 -- 0.02 (0.02) -- (0.02) 1.00 Investment Service Shares 2003 $1.00 $0.01 $-- $0.01 $(0.01) $-- $(0.01) $1.00 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 1.00 2001 1.00 0.03 -- 0.03 (0.03) -- (0.03) 1.00 2000 1.00 0.03 -- 0.03 (0.03) -- (0.03) 1.00 1999 1.00 0.03 -- 0.03 (0.03) -- (0.03) 1.00 Sweep Class Shares 2003 $1.00 $ -- $-- $ -- $ --* $-- $ --* $1.00 2002 1.00 0.01 -- 0.01 (0.01) -- (0.01) 1.00 2001 1.00 0.03 -- 0.03 (0.03) -- (0.03) 1.00 2000(1) 1.00 0.01 -- 0.01 (0.01) -- (0.01) 1.00 - ---------------------------------------------------------------------------------------------------- RATIO OF RATIO OF NET RATIO OF EXPENSES NET ASSETS EXPENSES INVESTMENT TO AVERAGE NET ASSETS TOTAL END OF TO AVERAGE INCOME TO (EXCLUDING WAIVERS RETURN+ PERIOD (000) NET ASSETS AVERAGE NET ASSETS AND REIMBURSEMENTS) - ---------------------------------------------------------------------------------------------------- MONEY MARKET FUND - ---------------------------------------------------------------------------------------------------- Institutional Shares 2003 0.88% $251,212 0.45% 0.85% 0.67% 2002 1.56% 238,337 0.45% 1.54% 0.68% 2001 4.61% 147,806 0.45% 4.59% 0.72% 2000 5.96% 130,891 0.43% 5.79% 0.69% 1999 4.83% 130,798 0.43% 4.73% 0.77% Investment Service Shares 2003 0.63% $313,845 0.70% 0.62% 0.92% 2002 1.31% 356,976 0.70% 1.30% 0.93% 2001 4.35% 377,922 0.70% 4.17% 0.97% 2000 5.69% 324,583 0.68% 5.62% 0.94% 1999 4.56% 186,431 0.68% 4.47% 1.02% Sweep Class Shares 2003 0.51% $ 53,500 0.82% 0.49% 1.04% 2002 1.18% 50,456 0.82% 1.18% 1.05% 2001 4.22% 52,530 0.82% 3.96% 1.09% 2000(1) 1.53% 31,979 0.80% 5.95% 1.06% - ---------------------------------------------------------------------------------------------------- TAX-FREE MONEY MARKET FUND - ---------------------------------------------------------------------------------------------------- Institutional Shares 2003 0.79% $ 84,116 0.43% 0.80% 0.67% 2002 1.28% 97,792 0.43% 1.25% 0.68% 2001 2.97% 35,939 0.43% 2.55% 0.76% 2000 3.80% 5,622 0.43% 3.61% 0.69% 1999(2) 1.69% 28,874 0.43% 3.06% 0.89% Investment Service Shares 2003 0.54% $ 87,062 0.68% 0.53% 0.92% 2002 1.02% 76,854 0.68% 1.03% 0.93% 2001 2.71% 113,519 0.68% 2.62% 1.01% 2000 3.54% 72,535 0.68% 3.48% 0.94% 1999 2.77% 59,889 0.68% 2.73% 0.95% Sweep Class Shares 2003 0.42% $ 22,737 0.80% 0.39% 1.04% 2002 0.90% 8,428 0.80% 0.91% 1.05% 2001 2.59% 4,069 0.80% 2.31% 1.13% 2000(1) 1.00% 2,058 0.80% 3.81% 1.06% <FN> * Amount represents less than $0.01. + Returns are for the period indicated and have not been annualized. (1) Commenced operations on August 1, 2000. All ratios for the period have been annualized. (2) Commenced operations on April 14, 1999. All ratios for the period have been annualized. Amounts designated as "--" are either $0 or have been rounded to $0. </FN> The accompanying notes are an integral part of the financial statements. 62 & 63 | OCTOBER 31, 2003 NOTES TO FINANCIAL STATEMENTS (1) ORGANIZATION The Expedition Funds (the "Trust") are registered under the Investment Company Act of 1940, as amended (the "1940 Act") as an open-end, management investment company offering the following Funds as of October 31, 2003: the Expedition Equity Fund (the "Equity Fund"), the Expedition Equity Income Fund (the "Equity Income Fund"), the Expedition Investment Grade Bond Fund (the "Investment Grade Bond Fund"), the Expedition Tax-Free Investment Grade Bond Fund (the "Tax-Free Investment Grade Bond Fund"), the Expedition Money Market Fund (the "Money Market Fund"), and the Expedition Tax-Free Money Market Fund (the "Tax-Free Money Market Fund") (each a "Fund", collectively, the "Funds"). The Funds are registered to offer three classes of shares. The Equity, Equity Income, Investment Grade Bond, and Tax-Free Investment Grade Bond Funds offer Institutional Shares, Investment Shares - Class A and Investment Shares - Class B, and the Money Market and Tax-Free Money Market Funds offer Institutional Shares, Investment Service Shares and Sweep Class Shares. The assets of each Fund are segregated and a shareholder's interest is limited to the Funds in which shares are held. The investment objectives, policies, and strategies of the Funds are described in their prospectuses. (2) SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Funds which are in conformity with accounting principles generally accepted in the United States of America. USE OF ESTIMATES -- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and income reported in the financial statements. Actual results could differ from those estimated. SECURITY VALUATION -- Investment securities held by the Money Market Fund and the Tax-Free Money Market Fund are stated at amortized cost, which approximates market value. Under this valuation method, purchase discounts and premiums are accreted and amortized ratably to maturity and are included in interest income. Investments in securities held in the Equity, Equity Income, Investment Grade Bond, and Tax-Free Investment Grade Bond Funds are valued as follows: equity securities that are traded on a national securities exchange are stated at the last quoted sales price if readily available for such equity securities on each business day; other equity securities traded in the over-the-counter market and listed equity securities for which no sale was reported on that date are stated at the last quoted bid price. Equity securities that are traded on the NASDAQ National Market System for which quotations are readily available are valued at the official closing price. Debt obligations exceeding sixty days to maturity for which market quotations are readily available are valued at the mean of the most recently quoted bid and asked price. Debt obligations with sixty days or less remaining until maturity may be valued at their amortized cost. Restricted securities for which quotations are not readily available are valued at fair value using methods determined in good faith under general supervision of the Board of Trustees (the "Trustees"). 64 | OCTOBER 31, 2003 REPURCHASE AGREEMENTS -- It is the policy of the Funds to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Funds to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement transaction. The Funds will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by Compass Asset Management, a division of Compass Bank, the Funds' investment advisor (the "Advisor"), to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Trustees. Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Funds could receive less than the repurchase price on the sale of collateral securities. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Security transactions are accounted for on the date the security is purchased or sold (trade date). Costs used in determining realized gains and losses on the sale of investment securities are those of the specific securities sold, adjusted for the accretion and amortization of purchase discounts, and premiums during the respective holding periods. Interest income is recorded on the accrual basis; dividend income is recorded on the ex-dividend date. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Distributions from net investment income for the Investment Grade Bond Fund, the Tax-Free Investment Grade Bond Fund, the Money Market Fund and the Tax-Free Money Market Fund are declared daily and paid monthly. The Equity Fund and the Equity Income Fund declare and pay dividends from net investment income quarterly. Any net realized capital gains will be distributed at least annually for all Funds. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds may engage in when-issued or delayed delivery transactions. The Funds record when-issued securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased upon settlement. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. INVESTING IN GOVERNMENT SPONSORED ENTERPRISES -- The Investment Grade Bond and Money Market Funds invest in securities issued by the Federal Home Loan Mortgage Corporation ("Freddie Mac") and similar United States Government sponsored entities such as Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Banks ("FHLB's"). Freddie Mac, Fannie Mae and FHLB's, although chartered and sponsored by Congress, are not funded by Congressional appropriations and the debt and mortgage-backed securities issued by Freddie Mac, Fannie Mae, FHLB's are neither guaranteed nor insured by the United States Government. OCTOBER 31, 2003 | 65 NOTES TO FINANCIAL STATEMENTS EXPENSES -- Expenses that are directly related to one of the Funds are charged directly to that Fund. Other operating expenses of the Funds are prorated to the Funds on the basis of relative daily net assets. CLASSES -- Class specific expenses are borne by that class. Income, non-class specific expenses, and realized/unrealized gains and losses are allocated to the respective classes on the basis of the relative daily net assets. (3) INVESTMENT ADVISORY, ADMINISTRATION, DISTRIBUTION AND SERVICE AGREEMENTS INVESTMENT ADVISORY FEE -- Compass Asset Management, a division of Compass Bank, the Advisor, receives for its services annual advisory fees equal to 0.75% of each of the Equity and Equity Income Funds', 0.50% of each of the Investment Grade Bond and Tax-Free Investment Grade Bond Funds' and 0.40% of each of the Money Market and the Tax-Free Money Market Funds' average daily net assets. The Advisor may voluntarily choose to waive any portion of its fee. The Advisor can modify or terminate these voluntary waivers at any time at its sole discretion. INVESTMENT SUB-ADVISOR -- Weiss, Peck & Greer, L.L.C. ("WPG") serves as the Tax-Free Money Market Fund's investment sub-advisor under a sub-advisory agreement (the "Sub-Advisory Agreement") with the Advisor. Under the Sub-Advisory Agreement, WPG invests the assets of the Fund on a daily basis, and continuously administers the investment program of the Fund. WPG is entitled to a fee which is paid by the Advisor and which is calculated daily and paid monthly, at an annual rate of: 0.075% of the Fund's average daily net assets up to $150 million; 0.05% of the next $350 million of the Fund's average daily net assets, 0.04% of the next $500 million of the Funds' average daily net assets; and 0.03% of the Fund's average daily net assets over $1 billion. ADMINISTRATIVE FEE -- The Trust and SEI Investments Global Funds Services (the "Administrator"), a Delaware business trust, are parties to an administration agreement (the "Agreement") dated June 9, 1997, under which the Administrator provides the Trust with certain legal, accounting, and shareholder services for an annual fee of 0.20% of the Funds' average daily net assets. The Administrator may voluntarily waive its fee, subject to termination at any time by the Administrator, to the extent necessary to limit the total operating expenses of a Fund. DISTRIBUTION FEES -- The Trust and SEI Investments Distribution Co. (the "Distributor") are parties to a Distribution Agreement dated June 9, 1997. The Equity, Equity Income, Investment Grade Bond, and Tax-Free Investment Grade Bond Funds have adopted Distribution Plans for Investment Shares - Class A and Investment Shares - Class B. Under the terms of each Plan the Funds pay the Distributor a monthly distribution fee at an annual rate of 0.25% of the average daily net assets of the Class A Shares and 1.00% of the average daily net assets of Class B Shares, which may be used by the Distributor to provide compensation for sales support and distribution activities. 66 | OCTOBER 31, 2003 The Money Market and Tax-Free Money Market Funds have adopted and entered into a Shareholder Service Plan and Agreement with the Distributor. Each Fund pays the Distributor a monthly shareholder servicing fee at an annual rate of 0.25% of the average daily net assets of each Fund's Investment Service Shares and Sweep Class Shares, which may be used by the Distributor to provide compensation to service providers that have agreed to provide certain shareholders support services for their customers who own such Shares of the Funds. ADMINISTRATIVE SERVICING FEES -- To the extent that investors buy Sweep Class Shares through Compass Bank or any of its affiliates providing sub-accounting, sub-transfer agency services or other administrative services, including Compass Brokerage, Inc., those entities may receive administrative servicing fees, payable from the Funds' assets, of up to 0.12% of each Fund's average daily net assets attributable to Sweep Class Shares. CUSTODIAN FEES -- Compass Bank serves as the Funds' custodian. Their fee is based on a rate of 0.02% of each Fund's average daily net assets for the period, plus out-of-pocket expenses. (4) ORGANIZATION COSTS AND TRANSACTIONS WITH AFFILIATES Organization costs have been capitalized by the Tax-Free Money Market Fund and are being amortized over sixty months commencing with the operations. In the event that any of the initial shares of the Fund are redeemed by any holder thereof during the period that the Fund is amortizing its organizational costs, the redemption proceeds payable to the holder thereof by the Fund will be reduced by the unamortized organizational costs in the same ratio as the number of initial shares being redeemed bears to the number of initial shares outstanding at the time of redemption. Certain officers of the Trust are also officers of the Administrator and the Distributor. Such officers are paid no fees by the Trust for serving as officers of the Trust. The Funds also used the Distributor as an agent in placing repurchase agreements. For this service the Distributor retains a portion of the interest earned as a commission. Such commissions for the year ended October 31, 2003 were as follows: Equity Fund ................................................. $1,145 Equity Income Fund .......................................... 223 Investment Grade Bond Fund .................................. 1,902 Money Market Fund ........................................... 17,636 ------- $20,906 ======= Effective October 24, 2003, this agreement was discontinued. Pursuant to an exemptive order issued by the Securities and Exchange Commission, the Funds may invest in the Money Market Fund or the Tax-Free Money Market Fund (the "Money Market Funds"), provided that investments in the Money Market Funds do not exceed 25% of the investing Fund's total assets. OCTOBER 31, 2003 | 67 NOTES TO FINANCIAL STATEMENTS (5) CAPITAL SHARE TRANSACTIONS (000) For the years ended October 31, EXPEDITION EXPEDITION EXPEDITION EXPEDITION TAX-FREE EQUITY EQUITY INCOME INVESTMENT GRADE INVESTMENT GRADE FUND FUND BOND FUND BOND FUND ----------------- --------------- ---------------- ------------------ 2003 2002 2003 2002 2003 2002 2003 2002 ------ ------ ------ ------ ------ ------ ------- ------- Institutional Shares: Shares issued 1,756 3,607 7 117 2,515 2,412 957 576 Shares issued in lieu of cash distributions 64 -- -- -- 263 326 92 31 Shares redeemed (8,868) (11,598) (536) (471) (3,052) (3,752) (1,350) (1,722) ------ ------ ------ ------ ------ ------ ------- ------- Increase (decrease) from Institutional Shares transactions (7,048) (7,991) (529) (354) (274) (1,014) (301) (1,115) ------ ------ ------ ------ ------ ------ ------- ------- Investment Shares - Class A and Investment Service Shares, respectively: Shares issued 292 277 5 27 45 44 16 -- Shares issued in lieu of cash distributions 2 -- -- -- 17 18 3 3 Shares redeemed (246) (529) (17) (29) (49) (66) (66) (8) ------ ------ ------ ------ ------ ------ ------- ------- Increase (decrease) from Investment Shares - Class A and Investment Service Shares transactions, respectively 48 (252) (12) (2) 13 (4) (47) (5) ------ ------ ------ ------ ------ ------ ------- ------- Investment Shares - Class B and Sweep Class Shares, respectively: Shares issued 252 411 14 56 61 117 4 6 Shares issued in lieu of cash distributions -- -- -- -- 6 5 1 -- Shares redeemed (354) (529) (28) (46) (47) (44) (5) (3) ------ ------ ------ ------ ------ ------ ------- ------- Increase (decrease) from Investment Shares - Class B and Sweep Class Shares transactions, respectively (102) (118) (14) 10 20 78 -- 3 ------ ------ ------ ------ ------ ------ ------- ------- TOTAL Increase (decrease) from Share transactions (7,102) (8,361) (555) (346) (241) (940) (348) (1,117) ------ ------ ------ ------ ------ ------ ------- ------- EXPEDITION EXPEDITION MONEY MARKET TAX-FREE MONEY FUND MARKET FUND ----------------- ----------------- 2003 2002 2003 2002 ------- ------- -------- ------- Institutional Shares: Shares issued 831,364 781,592 395,054 203,523 Shares issued in lieu of cash distributions 90 149 -- -- Shares redeemed (818,571) (691,209) (408,728)(141,669) ------- ------- -------- ------- Increase (decrease) from Institutional Shares transactions 12,883 90,532 (13,674) 61,854 ------- ------- -------- ------- Investment Shares - Class A and Investment Service Shares, respectively: Shares issued 646,623 721,789 231,192 166,273 Shares issued in lieu of cash distributions 214 398 4 12 Shares redeemed (689,955) (743,113) (220,987)(202,949) ------- ------- -------- ------- Increase (decrease) from Investment Shares - Class A and Investment Service Shares transactions, respectively (43,118) (20,926) 10,209 (36,664) ------- ------- -------- ------- Investment Shares - Class B and Sweep Class Shares, respectively: Shares issued 153,774 154,371 62,132 17,731 Shares issued in lieu of cash distributions 233 575 19 33 Shares redeemed (150,961) (157,019) (47,843) (13,404) ------- ------- -------- ------- Increase (decrease) from Investment Shares - Class B and Sweep Class Shares transactions, respectively 3,046 (2,073) 14,308 4,360 ------- ------- -------- ------- TOTAL Increase (decrease) from Share transactions (27,189) 67,533 10,843 29,550 ------- ------- -------- ------- Amounts designated as "--" are either $0 or have been rounded to $0. 68 & 69 | OCTOBER 31, 2003 NOTES TO FINANCIAL STATEMENTS (6) INVESTMENT TRANSACTIONS Purchases and sales of investments, excluding short-term securities, for the year ended October 31, 2003, were as follows (000): TAX-FREE EQUITY INVESTMENT INVESTMENT EQUITY INCOME GRADE BOND GRADE BOND FUND FUND FUND FUND -------- --------- ----------- ---------- Purchases U.S. Government ...... $ -- $ -- $31,404 $ -- Other ................ 111,897 12,870 935 27,364 Sales U.S. Government ...... -- -- 21,194 -- Other ................ 154,043 14,781 10,801 30,634 (7) FEDERAL TAX INFORMATION It is each Fund's policy to continue to comply with the provisions of the Internal Revenue Code of 1986 (Subchapter M), as amended (the "Code"), applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provisions for Federal tax are necessary. Dividends from net investment income and distributions from net realized capital gains are determined in accordance with U.S. Federal income tax regulations. Certain book/tax differences are either temporary or permanent in nature. To the extent these differences are permanent, they are charged or credited to paid-in-capital or accumulated net realized gain, as appropriate, in the period that the differences arise. Accordingly, at October 31, 2003, the following reclassifications were made to the Funds (000): UNDISTRIBUTED ACCUMULATED NET INVESTMENT REALIZED PAID-IN-CAPITAL INCOME/(LOSS) GAIN/(LOSS) --------------- -------------- ----------- Equity Income Fund .......... $(5) $ 5 $-- Investment Grade Bond Fund ................ -- 59 (59) Tax-Free Investment Grade Bond Fund ................ -- (1) 1 Money Market Fund ........... -- 3 (3) These reclassifications had no effect on net assets or net asset value per share. 70 | OCTOBER 31, 2003 The tax character of dividends and distributions paid during the last two years were as follows (000): TAX-FREE ORDINARY LONG-TERM RETURN OF INCOME INCOME CAPITAL GAIN CAPITAL TOTAL -------- -------- ------------ --------- -------- Equity Fund 2003 ............... $ -- $ 785 $-- $-- $ 785 2002 ............... -- -- -- -- -- Equity Income Fund 2003 ............... -- 108 -- 4 112 2002 ............... -- 101 -- -- 101 Investment Grade Bond Fund 2003 ............... -- 5,325 -- -- 5,325 2002 ............... -- 6,147 -- -- 6,147 Tax-Free Investment Grade Bond Fund 2003 ............... 2,534 -- 1,424 -- 3,958 2002 ............... 2,182 -- 1,227 -- 3,409 Money Market Fund 2003 ............... -- 4,394 -- -- 4,394 2002 ............... -- 7,836 -- -- 7,836 Tax-Free Money Market Fund 2003 ............... 1,320 -- -- -- 1,320 2002 ............... 1,748 -- -- -- 1,748 As of October 31, 2003, the components of Distributable Earnings (Accumulated Losses) were as follows (000): TOTAL UNDISTRIBUTED DISTRIBUTABLE UNDISTRIBUTED LONG-TERM CAPITAL OTHER EARNINGS ORDINARY CAPITAL LOSS UNREALIZED TEMPORARY (ACCUMULATED INCOME GAIN CARRYFORWARDS APPRECIATION DIFFERENCES LOSSES) ------------- ----------- ------------- ------------ ----------- ------------- Equity Fund ......... $145 $ -- $(92,794) $12,255 $ -- $(80,394) Equity Income Fund ............. -- -- (8,884) 1,204 -- (7,680) Investment Grade Bond Fund ............. 432 -- (1,391) 9,223 (432) 7,832 Tax-Free Investment Grade Bond Fund ............. -- 1 ,424 -- 3,779 17 5,220 Money Market Fund ............. 264 -- -- -- (261) 3 Tax-Free Money Market Fund ...... -- -- (13) -- -- (13) OCTOBER 31, 2003 | 71 NOTES TO FINANCIAL STATEMENTS For Federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. At October 31, 2003, the Funds had the following capital loss carryforwards (000): TOTAL CAPITAL LOSS CARRY- EXPIRES EXPIRES EXPIRES EXPIRES EXPIRES FORWARD 2011 2010 2009 2008 2007 10/31/03 ------- ------- ------- ------- ------- -------- Equity Fund ............ $22,416 $33,297 $37,081 $ -- $-- $92,794 Equity Income Fund ..... 2,567 5,967 350 -- -- 8,884 Investment Grade Bond Fund ........... -- -- -- 1,391 -- 1,391 Tax-Free Money Market Fund ......... 3 2 -- 1 7 13 During the year ended October 31, 2003, the Investment Grade Bond Fund and the Money Market Fund utilized capital loss carryforwards of $716,008 and $21,368 to offset capital gains, respectively. For Federal income tax purposes, the cost of securities owned at October 31, 2003, and the net realized gains or losses on securities sold for the period were different from amounts reported for financial reporting purposes, primarily due to wash sales which cannot be used for Federal income tax purposes in the current year and have been deferred for use in future years. The Federal tax cost and aggregate gross unrealized appreciation and depreciation on investments, held by the Funds at October 31, 2003 were as follows (000): NET FEDERAL APPRECIATED DEPRECIATED UNREALIZED TAX COST SECURITIES SECURITIES APPRECIATION -------- ----------- ----------- ------------ Equity Fund .............. $169,599 $24,605 $(12,350) $12,255 Equity Income Fund .................. 12,193 1,688 (484) 1,204 Investment Grade Bond Fund ............. 103,755 9,564 (341) 9,223 Tax-Free Investment Grade Bond Fund ....... 67,253 3,815 (36) 3,779 72 | OCTOBER 31, 2003 This page intentionally left blank TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED) Set forth below are the names, age, position with the Trust, length of term of office, and the principal occupations for the last five years of each of the persons currently serving as Trustees of the Trust. Trustees who are deemed not to be "interested persons" of the Trust are referred to as "Independent Board Members." Messrs. Nesher and Doran are Trustees who may be deemed to be "interested" persons of the Fund as that term is defined in the 1940 Act by virtue of their affiliation with the Trust's Distributor. The following chart lists Trustees and Officers as of November 11, 2003. TERM OF POSITION(S) OFFICE AND NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) AGE 1 THE TRUST TIME SERVED 2 DURING PAST 5 YEARS - ------------------------------------------------------------------------------------------------------------------- INDEPENDENT BOARD MEMBERS - ------------- JOHN T. COONEY Trustee (Since 1993) Vice Chairman of Ameritrust Texas N.A., 76 yrs. old 1989-1992, and MTrust Corp., 1985-1989. - ------------------------------------------------------------------------------------------------------------------- ROBERTA. PATTERSON Trustee (Since 1993) Pennsylvania State University, Senior Vice 76 yrs. old President, Treasurer (Emeritus); Financial and Investment Consultant, Professor of Transportation since 1984; Vice President- Investments, Treasurer, Senior Vice President (Emeritus), 1982-1984. Director, Pennsylvania Research Corp. - ------------------------------------------------------------------------------------------------------------------- EUGENE B. PETERS Trustee (Since 1993) Private investor from 1987 to present. Vice 74 yrs. old President and Chief Financial officer, Western Company of North America (petroleum ser- vice company), 1980-1986. President of Gene Peters and Associates (import company), 1978-1980. President and Chief Executive Officer of Jos. Schlitz Brewing Company before 1978. - ------------------------------------------------------------------------------------------------------------------- JAMES M. STOREY Trustee (Since 1994) Partner, Dechert (law firm), September 72 yrs. old 1987-December 1993. - ------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN THE EXPEDITION TRUST OVERSEEN BY NAME, ADDRESS, BOARD OTHER DIRECTORSHIPS AGE 1 MEMBER HELD BY BOARD MEMBER 3 - -------------------------------------------------------------------------------------------- INDEPENDENT BOARD MEMBERS - ------------- JOHN T. COONEY 6 Trustee of the Advisors' Inner Circle 76 yrs. old Fund, The MDL Funds, and The Arbor Funds. - -------------------------------------------------------------------------------------------- ROBERTA. PATTERSON 6 Member and Treasurer, Board of 76 yrs. old Trustees of Grove City College. Trustee of The Advisors' Inner Circle Fund, The MDL Funds, and The Arbor Funds. - -------------------------------------------------------------------------------------------- EUGENE B. PETERS 6 Trustee of the Advisors' Inner Circle 74 yrs. old Fund, The MDL Funds, and The Arbor Funds. - -------------------------------------------------------------------------------------------- JAMES M. STOREY 6 Trustee of the Advisors' Inner Circle 72 yrs. old Fund, The MDL Funds, The Arbor Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, State Street Research Funds, Massachusetts Health and Education Tax-Exempt Trust. - -------------------------------------------------------------------------------------------- <FN> 1 Unless otherwise noted, the business address of each Trustee is SEI Investments Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456. 2 Each trustee shall hold office during the lifetime of this Trust until the election and qualification of his or her successor, or until he or she sooner dies, resigns or is removed in accordance with the Trust's Declaration of Trust. 3 Directorships of companies required to report to the Securities and Exchange Commission under the Securities Exchange Act of 1934 (i.e., "public companies") or other investment companies registered under the 1940 Act. </FN> 74 & 75 | OCTOBER 31, 2003 TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED) TERM OF POSITION(S) OFFICE AND NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) AGE 1 THE TRUST TIME SERVED 2 DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------------------------- INDEPENDENT BOARD MEMBERS (CONTINUED) - ------------------------- GEORGE J. SULLIVAN, JR. Trustee (Since 1999) Chief Executive Officer, Newfound 61 yrs. old Consultants Inc. since April 1997. General Partner, Teton Partners, L.P., June 1991- December 1996; Chief Financial Officer, Nobel Partners, L.P., March 1991-December 1996; Treasurer and Clerk, Peak Asset Management, Inc., since 1991. - -------------------------------------------------------------------------------------------------------------------- INTERESTED BOARD MEMBERS - ------------- ROBERT A. NESHER Chairman (Since 1991) Currently performs various services on behalf 57 yrs. old of the Board of SEI Investments for which Mr. Nesher is of Trustees compensated. Executive Vice President of SEI Investments, 1986-1994. Director and Executive Vice president of the Administrator and the Distributor, 1981-1994. - -------------------------------------------------------------------------------------------------------------------- WILLIAM M. DORAN Trustee (Since 1992) Partner, Morgan, Lewis & Bockius LLP 1701 Market Street, (law firm), counsel to the Trust, SEI Investments, Philadelphia, PA 19103 the Administrator and the Distributor. Director 63 yrs. old of SEI Investments since 1974; Secretary of SEI Investments since 1978. - -------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN THE EXPEDITION TRUST OVERSEEN BY NAME, ADDRESS, BOARD OTHER DIRECTORSHIPS AGE 1 MEMBER HELD BY BOARD MEMBER 3 - ------------------------------------------------------------------------------------- INDEPENDENT BOARD MEMBERS (CONTINUED) - ------------------------- GEORGE J. SULLIVAN, JR. 6 Trustee, Navigator Securities Lending 61 yrs. old Trust, since 1995. Trustee of The Advisors' Inner Circle Fund, The MDL Funds, The Arbor Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust. - ------------------------------------------------------------------------------------ INTERESTED BOARD MEMBERS - ------------- ROBERT A. NESHER 6 Trustee of The Advisors' Inner Circle 57 yrs. old Fund, Bishop Street Funds, The Arbor Funds, The MDL Funds, SEI Asset Allocation Trust, SEI Daily Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust, SEI Tax Exempt Trust, SEI Opportunity Master Fund, L.P., SEI Opportunity Fund, L.P., SEI Absolute Return Master Fund, L.P., SEI Absolute Return Fund, L.P. - ------------------------------------------------------------------------------------ WILLIAM M. DORAN 6 Trustee of The Advisors' Inner Circle 1701 Market Street, Fund, The MDL Funds, The Arbor Philadelphia, PA 19103 Funds, SEI Asset Allocation Trust, SEI 63 yrs. old Daily Income Trust, SEI Index Funds, SEI Institutional International Trust, SEI Institutional Investments Trust, SEI Institutional Managed Trust, SEI Liquid Asset Trust and SEI Tax Exempt Trust. - ------------------------------------------------------------------------------------ <FN> 1 Unless otherwise noted, the business address of each Trustee is SEI Investments Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456. 2 Each trustee shall hold office during the lifetime of this Trust until the election and qualification of his or her successor, or until he or she sooner dies, resigns or is removed in accordance with the Trust's Declaration of Trust. 3 Directorships of companies required to report to the Securities and Exchange Commission under the Securities Exchange Act of 1934 (i.e., "public companies") or other investment companies registered under the 1940 Act. </FN> 76 & 77 | OCTOBER 31, 2003 TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED) TERM OF POSITION(S) OFFICE AND NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) AGE 1 THE TRUST TIME SERVED 2 DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------------------------------------- OFFICERS - -------- JAMES F. VOLK, CPA President (Since 2003) Senior Operations Officer, SEI 41 yrs. old Investments, Fund Accounting and Administration (1996-present); Assistant Chief Accountant of the Securities & Exchange Commission's Division of Investment Management (1993-1996). - -------------------------------------------------------------------------------------------------------------------------------- PETER GOLDEN Controller and Chief (Since 2003) Director, SEI Investments, Fund 39 yrs. old Financial Officer Accounting and Administration since June 2001. From March 2000 to 2001, Vice President of Funds Administration for J.P. Morgan Chase & Co. From 1997 to 2000, Vice President of Pension and Mutual Fund Accounting for Chase Manhattan Bank. - -------------------------------------------------------------------------------------------------------------------------------- JENNIFER SPRATLEY, CPA Co-Controller and Co-Chief (Since 2001) Director, SEI Investments, Fund 34 yrs. old Financial Officer Accounting and Administration since November 1999; Audit Manager, Ernst & Young LLP from 1991-1999. - -------------------------------------------------------------------------------------------------------------------------------- SHERRY K. VETTERLEIN Vice President and Secretary (Since 2001) Vice President and Assistant Secretary of 41 yrs. old SEI Investments Global Funds Services and SEI Investments Distribution Co. since January 2001; Shareholder/Partner, Buchanan Ingersoll Professional Corporation from 1992-2000. - -------------------------------------------------------------------------------------------------------------------------------- LYDIA A. GAVALIS Vice President and (Since 1998) Vice President and Assistant Secretary 39 yrs. old Assistant Secretary of SEI Investments, SEI Investments Global Funds Services and SEI Investments Distribution Co. since 1998; Assistant General Counsel and Director of Arbitration, Philadelphia Stock Exchange from 1989-1998. - -------------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN THE ADVISORS' INNER CIRCLE FUND NAME, ADDRESS, OVERSEEN BY OTHER DIRECTORSHIPS AGE 1 OFFICER HELD BY OFFICER - --------------------------------------------------------------------------------- OFFICERS - -------- JAMES F. VOLK, CPA N/A N/A 41 yrs. old - --------------------------------------------------------------------------------- PETER GOLDEN N/A N/A 39 yrs. old - --------------------------------------------------------------------------------- JENNIFER SPRATLEY, CPA N/A N/A 34 yrs. old - --------------------------------------------------------------------------------- SHERRY K. VETTERLEIN N/A N/A 41 yrs. old - --------------------------------------------------------------------------------- LYDIA A. GAVALIS N/A N/A 39 yrs. old - --------------------------------------------------------------------------------- <FN> 1 The business address of each officer is SEI Investments Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456. </FN> 78 & 79 | OCTOBER 31, 2003 TRUSTEES AND OFFICERS OF THE EXPEDITION FUNDS (UNAUDITED) TERM OF POSITION(S) OFFICE AND NAME, ADDRESS, HELD WITH LENGTH OF PRINCIPAL OCCUPATION(S) AGE 1 THE TRUST TIME SERVED 2 DURING PAST 5 YEARS - -------------------------------------------------------------------------------------------------------------------------------- OFFICERS (CONTINUED) - ------------------- TIMOTHY D. BARTO Assistant Vice President (Since 2000) Vice President and Assistant Secretary of SEI 35 yrs. old and Assistant Secretary Investments Global Funds Services and SEI Investments Distribution Co. since 1999; Associate, Dechert (law firm) from 1997-1999; Associate, Richter, Miller & Finn (law firm) from 1994-1997. - -------------------------------------------------------------------------------------------------------------------------------- WILLIAM E. ZITELLI Assistant Vice President (Since 2000) Vice President and Assistant Secretary of 35 yrs. old and Secretary SEI Investments Global Funds Services and SEI Investments Distribution Co. since 2000; Vice President, Merrill Lynch & Co. Asset Management Group from 1998-2000; Associate at Pepper Hamilton LLP from 1997-1998. - -------------------------------------------------------------------------------------------------------------------------------- CHRISTINE M. MCCULLOUGH Vice President and (Since 2000) Vice President and Assistant Secretary of SEI 43 yrs. old Assistant Secretary Investments Global Funds Services and SEI Investments Distribution Co. since 1999; Associate at White and Williams LLP from 1991-1999. - -------------------------------------------------------------------------------------------------------------------------------- JOHN C. MUNCH Vice President and (Since 2001) Vice President and Assistant Secretary of SEI 32 yrs. old Assistant Secretary Investments Global Funds Services and SEI Investments Distribution Co. since 2001; Associate at Howard Rice Nemorvoski Canady Falk & Rabkin from 1998-2001; Associate at Seward & Kissel from 1996-1998. - -------------------------------------------------------------------------------------------------------------------------------- JOHN MUNERA Vice President and (Since 2002) Middle Office Compliance Officer at SEI 40 yrs. old Assistant Secretary Investments since 2000; Supervising Examiner at Federal Reserve Bank of Philadelphia from 1998-2000. - -------------------------------------------------------------------------------------------------------------------------------- CORI DAGGETT Vice President and (Since 2003) Employed by SEI Investments Company 42 yrs. old Assistant Secretary since 2003. Associate at Drinker Biddle & Reath from 1998-2003. - -------------------------------------------------------------------------------------------------------------------------------- NUMBER OF PORTFOLIOS IN THE ADVISORS' INNER CIRCLE FUND NAME, ADDRESS, OVERSEEN BY OTHER DIRECTORSHIPS AGE 1 OFFICER HELD BY OFFICER - -------------------------------------------------------------------------------- OFFICERS (CONTINUED) - ------------------- TIMOTHY D. BARTO N/A N/A 35 yrs. old - -------------------------------------------------------------------------------- WILLIAM E. ZITELLI N/A N/A 35 yrs. old - -------------------------------------------------------------------------------- CHRISTINE M. MCCULLOUGH N/A N/A 43 yrs. old - -------------------------------------------------------------------------------- JOHN C. MUNCH N/A N/A 32 yrs. old - -------------------------------------------------------------------------------- JOHN MUNERA N/A N/A 40 yrs. old - -------------------------------------------------------------------------------- CORI DAGGETT N/A N/A 42 yrs. old - -------------------------------------------------------------------------------- 1 The business address of each officer is SEI Investments Company, 1 Freedom Valley Drive, Oaks, Pennsylvania 19456. 80 & 81 | OCTOBER 31, 2003 NOTICE TO SHAREHOLDERS (UNAUDITED) For shareholders that do not have a October 31, 2003 tax year end, this notice is for informational purposes only. For shareholders with a October 31, 2003, please consult your tax advisor as to the pertinence of this notice. For this fiscal year ended October 31, 2003, each Fund is designating the following items with regard to distributions paid during the year. Qualifying Long Term Qualified Dividend (20% Rate) 5-Year Ordinary Income Capital Gain Gain Income Tax Exempt Total Qualifying (15% Tax Rate Distribution Distributions Distributions Interest Distributions Dividends(1) For QDI)(2) ------------ ------------- ------------- ---------- ------------- ------------ ------------- Equity Fund 0.00% 0.00% 100.00% 0.00% 100.00% 100.00% 72.01% Equity Income Fund 0.00% 0.00% 100.00% 0.00% 100.00% 100.00% 79.75% Investment Grade Bond Fund 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% Tax-Free Investment Grade Bond 30.85% 0.00% 1.66% 67.49% 100.00% 0.00% 0.00% Money Market Fund 0.00% 0.00% 100.00% 0.00% 100.00% 0.00% 0.00% Tax-Free Money Market Fund 0.00% 0.00% 0.00% 100.00% 100.00% 0.00% 0.00% <FN> (1) Qualifying dividends represent dividends which qualify for the corporate dividends received deduction and is reflected as a percentage of "Ordinary Income Distributions." (2) The percentage in this column represents the amount of "Qualifying Dividend Income" as created by the Jobs and Growth Tax Relief Reconciliation Act of 2003 and is reflected as a percentage of "Ordinary Income Distributions." It is the intention of each of the aforementioned Funds to designate the maximum amount permitted by the law. </FN> The information reported herein may differ from the information and distributions taxable to the shareholders for the calendar year ending December 31, 2003. Complete information will be computed and reported in conjunction with your 2003 Form 1099-DIV. 82 | OCTOBER 31, 2003 NOTES NOTES [LOGO] EXPEDITION FUNDS. INVESTMENT ADVISOR Compass Asset Management, a division of Compass Bank 15 South 20th Street Birmingham, Alabama 35233 DISTRIBUTOR: SEI Investments Distribution Co. One Freedom Valley Drive Oaks, Pennsylvania 19456 TRANSFER AGENT: State Street Bank and Trust Company 225 Franklin Street Boston, Massachusetts 02110 SERVICING AGENT: Boston Financial Data Services, Inc. Two Heritage Drive Quincy, Massachusetts 02171 INDEPENDENT AUDITORS: Deloitte & Touche LLP Two World Financial Center New York, NY 10281 COUNSEL: Morgan, Lewis & Bockius LLP 1800 M Street, N.W. Washington, D.C. 20036 EXP-AR-011-0800 ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, comptroller or principal accounting officer, and any person who performs a similar function. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. (a)(1) The registrant's board of trustees has determined that the registrant has at least one audit committee financial expert serving on the audit committee. (a)(2) The audit committee financial experts are George Sullivan and Robert Patterson and are independent as defined in Form N-CSR Item 3(a)(2). ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable - only effective for annual reports for periods ending on or after December 15, 2003. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable. ITEM 6. (RESERVED) ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable. ITEMS 8. (RESERVED) ITEM 9. CONTROLS AND PROCEDURES. (a) The certifying officers, whose certifications are included herewith, have evaluated the registrant's disclosure controls and procedures within 90 days of the filing date of this report. In their opinion, based on their evaluation, the registrant's disclosure controls and procedures are adequately designed, and are operating effectively to ensure, that information required to be disclosed by the registrant in the reports it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. (b) There were no significant changes in the registrant's internal control over financial reporting that occurred during the registrant's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting. ITEMS 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Code of Ethics attached hereto. (a)(2) A separate certification for the principal executive officer and the principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(a)), are filed herewith. (b) Officer certifications as required by Rule 30a-2(b) under the Investment Company Act of 1940, as amended (17 CFR 270.30a-2(b)) also accompany this filing as an Exhibit - -------------------------------------------------------------------------------- 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 Advisors' Inner Circle Fund By (Signature and Title)* \s\ James F. Volk ----------------- James F. Volk, President Date 12/22/03 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 (Signature and Title)* \s\ James F. Volk ----------------- James F. Volk, President Date 12/22/03 By (Signature and Title)* \s\ Peter J. Golden ------------------- Peter J. Golden, Controller and CFO Date 12/22/03 * Print the name and title of each signing officer under his or her signature.