<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06281
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Liquid Institutional Reserves
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(Exact name of registrant as specified in charter)
51 West 52nd Street, New York, New York 10019-6114
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(Address of principal executive offices) (Zip code)
Amy R. Doberman
UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, NY 10019-6114
(Name and address of agent for service)
Copy to:
Jack W. Murphy, Esq.
Dechert LLP
1775 I Street, N.W.
Washington, DC 20006-2401
Registrant's telephone number, including area code: 212-882 5000
Date of fiscal year end: April 30
Date of reporting period: October 31, 2003
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ITEM 1. REPORTS TO STOCKHOLDERS.
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[UBS GLOBAL ASSET MANAGEMENT LOGO]
UBS LIR MONEY MARKET FUND
UBS LIR TREASURY SECURITIES FUND
SEMIANNUAL REPORT
OCTOBER 31, 2003
<Page>
UBS LIR MONEY MARKET FUND
UBS LIR TEASURY SECURITIES FUND
December 15, 2003
DEAR SHAREHOLDER,
We present you with the semiannual report for UBS LIR Money Market Fund and UBS
LIR Treasury Securities Fund for the six months ended October 31, 2003.
PERFORMANCE
In the falling interest rate environment, the Funds' seven-day current yields
declined over the six months since we last reported to you. As of October 31,
2003, UBS LIR Treasury Securities Fund's seven-day current yield was 0.68%, down
from 0.96% at the end of its fiscal year on April 30, 2003. UBS LIR Money Market
Fund's Institutional share class had a seven-day current yield of 0.82% at
period's end, down from 1.06% on April 30, 2003. (For more on the Fund's
performance, please refer to "Performance At A Glance" on page 5.)
AN INTERVIEW WITH THE PORTFOLIO MANAGERS
Q. CAN YOU DESCRIBE THE ECONOMIC ENVIRONMENT DURING THE REPORTING PERIOD?
A. As the reporting period began in May 2003, there was a great deal of
uncertainty surrounding the economy. First quarter 2003 gross domestic
product (GDP) growth had come in at 1.4%, unchanged from the prior
quarter's figure. Although the war in Iraq had temporarily stimulated the
equity markets, its impact on the economy, if any, was at that point
uncertain. In addition, heightened concerns about terrorism, widening
turmoil in the Middle East and tepid corporate spending appeared to further
undermine the economy.
The following quarter produced more positive news. The combined effects of
significantly higher military spending, an increase in exports and a
stronger manufacturing sector fueled an uptick in economic growth that
resulted in a second quarter
[SIDENOTE]
UBS LIR MONEY MARKET FUND
UBS LIR TREASURY SECURITIES FUND
INVESTMENT GOAL (BOTH FUNDS):
High current income to the extent it is consistent with capital preservation and
liquidity.
PORTFOLIO MANAGERS:
Michael Markowitz Robert Sabatino
UBS Global Asset Management (US) Inc.
COMMENCEMENT:
Institutional Shares--
LIR Money Market Fund: June 3, 1991
LIR Treasury Securities Fund: December 6, 1991
Financial Intermediary Shares--
LIR Money Market Fund:
Original issuance:
March 17, 1994; ceased
April 30, 1995; reissued
January 14, 1998
DIVIDEND PAYMENTS:
Monthly
1
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2003 GDP figure of 3.3%. This was followed by a preliminary third quarter
2003 GDP of 8.2%--far higher than anticipated, and the sharpest recorded
advance since 1984.
Q. WHAT OTHER FACTORS AFFECTED THE ECONOMY?
A. Consumer spending played an integral role in propping up the economy during
the period, as the lower interest rate environment engendered a surge in
mortgage refinancing. The Bush Administration's tax cut package also
appeared to spur on consumers, who now had more disposable income to spend.
Conversely, for much of the period, corporations postponed major purchases
as they waited for clearer signs of a sustainable economic upturn. More
recently, there have been early indications that business spending is
slowly improving, although it's not yet clear if spending will increase to
the point that it will result in new jobs.
Q. HOW DID THE FEDERAL RESERVE BOARD (THE "FED") REACT IN THIS ECONOMIC
ENVIRONMENT?
A. As the reporting period began, the federal funds rate was at
1.25%--unchanged since November 2002. At that time, the Fed's position was
that it would not implement any further rate cuts, although it would
maintain a "heightened surveillance" of the economy in light of the
conflict with Iraq. After the war's start, however, and absent any lift in
the economy, the Fed indicated that a future rate cut was likely, citing
its view that economic weakness was a greater risk than inflation. This cut
eventually occurred during the Fed's June 25, 2003 Federal Open Market
Committee meeting, at which time the federal funds rate was lowered by a
quarter of a percentage point to 1.0%--its lowest level since 1958.
Since that time, the Fed has remained on hold, although it has made clear
its willingness to cut rates further if necessary. At its September 16,
2003 meeting, the Fed rationalized this position, noting "an accommodative
stance on monetary policy, coupled with robust underlying growth in
productivity, is providing important ongoing support to economic activity."
Q. HOW DID YOU POSITION THE FUNDS' PORTFOLIOS DURING THE PERIOD?
A. UBS LIR Treasury Securities Fund invests primarily in securities issued by
the US Treasury; its weighted average maturity ("WAM") can extend out to 90
days. UBS LIR Money Market Fund, which also invests in securities issued by
the US Treasury, can additionally invest in an array of short-term
corporate instruments, including repos and time deposits. Due to its
rating, its WAM cannot exceed 60 days.
2
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That said, we continued to emphasize quality in both portfolios. We
employed a "laddered" approach in managing UBS LIR Treasury Securities
Fund, whereby the portfolio was spread out among maturity levels. We
utilized a "barbell" strategy in managing UBS LIR Money Market Fund, which
entailed purchasing securities at both ends of the maturity spectrum. The
portfolio's longer-term securities--with maturities up to one year in
duration--were used to lock in higher yields as interest rates fell, while
the shorter-term securities--typically less than one month in
duration--provided liquidity.
In both cases, these investment strategies helped us to control the Funds'
WAMs, and to meet our liquidity requirements.
Q. WHAT IS YOUR OUTLOOK FOR THE ECONOMY AND HOW DO YOU ANTICIPATE STRUCTURING
THE PORTFOLIO GOING FORWARD?
A. We are fairly positive regarding the growth prospects for the economy.
Consumer spending is solid, the manufacturing sector appears to be gaining
momentum, the housing market remains strong, the disposable income that
resulted from the recent tax cuts is starting to work its way through the
system, and the Fed should remain accommodative. We will continue to follow
the job market closely; despite the recent positive uptick in new jobs
data, continued high unemployment could diminish the consumer confidence
level, and thus temper the extent of the economic expansion.
Given the current environment, we expect to employ a laddered strategy for
UBS LIR Treasury Securities Fund and for UBS LIR Money Market Fund.
Maintaining high quality portfolios will help us meet the Funds' investment
goals of providing high current income to the extent it is consistent with
capital preservation and liquidity.
3
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Our ultimate objective in managing your investments is to help you successfully
meet your financial goals. We thank you for your continued support and welcome
any comments or questions you may have. For additional information on UBS
funds,* please contact your financial advisor or visit us at
www.ubs.com/globalam-us.
Sincerely,
/s/ Joseph A. Varnas
JOSEPH A. VARNAS
PRESIDENT
UBS LIR Money Market Fund
UBS LIR Treasury Securities Fund
MANAGING DIRECTOR
UBS Global Asset Management (US) Inc.
/s/ Michael Markowitz /s/ Robert Sabatino
MICHAEL MARKOWITZ ROBERT SABATINO
PORTFOLIO MANAGER PORTFOLIO MANAGER
UBS LIR Money Market Fund UBS LIR Money Market Fund
UBS LIR Treasury Securities Fund UBS LIR Treasury Securities Fund
EXECUTIVE DIRECTOR DIRECTOR
UBS Global Asset Management (US) Inc. UBS Global Asset Management (US) Inc.
This letter is intended to assist shareholders in understanding how the Funds
performed during the six months ended October 31, 2003, and reflects our views
at the time of its writing. Of course, these views may change in response to
changing circumstances, and they do not guarantee the future performance of the
markets or the Funds. We encourage you to consult your financial advisor
regarding your personal investment program.
* Mutual funds are sold by prospectus only. The prospectus for a fund
contains more complete information regarding risks, charges and expenses,
and should be read carefully before investing.
4
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PERFORMANCE AT A GLANCE
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 10/31/03 4/30/03 10/31/02
- ---------------------------------------------------------------------------------------------------------------------------
Seven-Day Current Yield*
Money Market Fund:
Institutional Shares 0.82% 1.06% 1.61%
Financial Intermediary Shares 0.57% 0.81% 1.36%
Treasury Securities Fund** 0.68% 0.96% 1.38%
Seven-Day Effective Yield*
Money Market Fund:
Institutional Shares 0.82% 1.07% 1.62%
Financial Intermediary Shares 0.57% 0.82% 1.37%
Treasury Securities Fund** 0.68% 0.97% 1.39%
Weighted Average Maturity***
Money Market Fund 50 days 53 days 59 days
Treasury Securities Fund 65 days 58 days 62 days
<Caption>
SECTOR ALLOCATION**** 10/31/03 4/30/03 10/31/02
- ---------------------------------------------------------------------------------------------------------------------------
Money Market Fund:
Commercial Paper 53.4% 57.7% 46.4%
U.S. Government and Agency Obligations 20.7 14.1 18.9
Certificates of Deposit 16.5 8.3 12.6
Short-Term Corporate Obligations 5.3 12.7 11.7
Money Market Funds 4.1 4.5 4.2
Time Deposits -- 2.7 3.3
Bank Notes -- -- 3.7
Liabilities in Excess of Other Assets -- -- (0.8)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- -----------------------------------------------------------------------------------------------------------------------------
Treasury Securities Fund:
U.S. Treasury Obligations 99.8% 95.5% 97.6%
Money Market Funds 0.3 4.5 2.5
Liabilities in Excess of Other Assets (0.1) -- (0.1)
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- ---------------------------------------------------------------------------------------------------------------------------
<Caption>
NET ASSETS 10/31/03 4/30/03 10/31/02
- ---------------------------------------------------------------------------------------------------------------------------
Money Market Fund (bln) $ 1.7 $ 1.9 $ 2.1
Treasury Securities Fund (mm) $ 322.3 $ 328.6 $ 437.9
</Table>
* Yields will fluctuate and reflect fee waivers and/or expense
reimbursements. Performance data quoted represents past performance. Past
performance does not guarantee future results.
** Institutional Shares. UBS LIR Treasury Securities Fund did not have
Financial Intermediary shares outstanding during the periods indicated.
Yields for Financial Intermediary shares would be approximately 0.25% lower
than yields for Institutional shares.
*** The Funds are actively managed and their weighted average maturities will
differ over time.
**** Weightings represent percentages of net assets as of the dates indicated.
The Funds' portfolios are actively managed and their composition will vary
over time.
5
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UBS LIR MONEY MARKET FUND
Statement of Net Assets -- October 31, 2003 (unaudited)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--20.69%
$ 30,000 U.S. Treasury Bills 11/28/03 0.940%@ $ 29,978,850
30,000 Federal Home Loan Bank 11/26/03 1.010@ 29,978,958
25,000 Federal Home Loan Bank 07/02/04 1.250 25,000,000
11/06/03 to 1.030 to
79,000 Federal Home Loan Mortgage Corp. 12/31/03 1.075@ 78,950,219
20,000 Federal Home Loan Mortgage Corp. 09/13/04 1.350 20,000,000
30,000 Federal National Mortgage Association 12/10/03 1.020@ 29,966,850
08/27/04 to 1.250 to
110,000 Federal National Mortgage Association 09/22/04 1.470 110,000,000
20,000 Student Loan Marketing Association 11/04/03 1.020* 20,000,000
- ---------------------------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations (cost--$343,874,877) 343,874,877
- ---------------------------------------------------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--16.55%
BANKING-NON-U.S.--9.63%
1.025 to
50,000 Abbey National Treasury Services PLC 11/03/03 1.048* 49,996,577
40,000 ABN AMRO Bank N.V. 11/03/03 1.070* 40,000,000
20,000 Barclays Bank PLC 11/03/03 1.050* 19,998,257
1.045 to
50,000 Westdeutsche Landesbank AG 11/03/03 1.050* 49,997,010
- ---------------------------------------------------------------------------------------------------------------
159,991,844
BANKING-U.S.--6.92%
40,000 American Express Centurion Bank 11/19/03 1.050 40,000,000
25,000 State Street Bank & Trust Co. 07/09/04 1.140 25,000,000
25,000 SunTrust Bank 11/03/03 1.080* 24,999,839
25,000 Wells Fargo Bank N.A. 11/03/03 1.030* 25,000,000
- ---------------------------------------------------------------------------------------------------------------
114,999,839
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Total Certificates of Deposit (cost--$274,991,683) 274,991,683
- ---------------------------------------------------------------------------------------------------------------
</Table>
6
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<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER@--53.41%
ASSET BACKED-AUTO & TRUCK--3.01%
$50,000 New Center Asset Trust 11/04/03 1.060% $ 49,995,583
- ---------------------------------------------------------------------------------------------------------------
ASSET BACKED-MISCELLANEOUS--20.85%
25,000 Amsterdam Funding Corp. 11/03/03 1.060 24,998,528
11/05/03 to 1.060 to
40,093 Barton Capital Corp. 11/06/03 1.070 40,087,658
39,252 Giro Funding US Corp. 11/06/03 1.060 39,246,221
11/13/03 to 1.050 to
42,000 Grampian Funding LLC 01/14/04 1.100 41,937,522
20,000 Kittyhawk Funding 11/07/03 1.050 19,996,500
20,000 Old Line Funding Corp. 11/17/03 1.060 19,990,578
15,000 Receivables Capital Corp. 11/14/03 1.050 14,994,313
11/05/03 to
86,155 Thunderbay Funding 12/03/03 1.060 86,125,916
25,000 Windmill Funding 11/10/03 1.050 24,993,437
11/03/03 to 1.050 to
34,100 Yorktown Capital LLC 12/12/03 1.070 34,076,872
- ---------------------------------------------------------------------------------------------------------------
346,447,545
BANKING-NON-U.S.--6.79%
37,981 Alliance & Leicester PLC 01/08/04 1.095 37,902,443
11/20/03 to 1.050 to
45,000 HBOS Treasury Services PLC 12/10/03 1.080 44,963,000
30,000 Svenska Handelsbanken, Inc. 12/02/03 1.050 29,972,875
- ---------------------------------------------------------------------------------------------------------------
112,838,318
BANKING-U.S--11.33%
25,000 CBA (Delaware) Finance, Inc. 11/10/03 1.040 24,993,500
15,000 Credit Lyonnais North America, Inc. 12/08/03 1.055 14,983,736
12/05/03 to
33,450 Danske Corp. 12/16/03 1.050 33,410,412
20,000 Dexia Delaware LLC 11/20/03 1.040 19,989,022
40,000 Fortis Funding LLC 11/19/03 1.050 39,979,000
25,000 Nordea North America, Inc. 11/20/03 1.070 24,985,882
30,000 Stadshypotek Del, Inc. 12/02/03 1.050 29,972,875
- ---------------------------------------------------------------------------------------------------------------
188,314,427
</Table>
7
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<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER@--(CONCLUDED)
BROKERAGE--6.02%
11/03/03 to 1.040 to
$50,000 Bear Stearns Cos., Inc. 11/19/03 1.050% $ 49,985,542
11/04/03 to
50,000 Credit Suisse First Boston, Inc. 11/06/03 1.050 49,994,458
- ---------------------------------------------------------------------------------------------------------------
99,980,000
FINANCE-NONCAPTIVE DIVERSIFIED--2.71%
11/07/03 to
45,000 CIT Group, Inc. 11/13/03 1.050 44,987,750
- ---------------------------------------------------------------------------------------------------------------
UTILITIES--2.70%
11/25/03 to
45,000 RWE AG 11/26/03 1.050 44,967,917
- ---------------------------------------------------------------------------------------------------------------
Total Commercial Paper (cost--$887,531,540) 887,531,540
- ---------------------------------------------------------------------------------------------------------------
SHORT-TERM CORPORATE OBLIGATIONS--5.29%
BANKING-U.S--1.50%
25,000 Wells Fargo & Co. 11/14/03 1.190* 25,000,000
- ---------------------------------------------------------------------------------------------------------------
ENERGY-INTEGRATED--1.38%
23,000 BP Capital Markets PLC 11/03/03 1.045* 23,000,000
- ---------------------------------------------------------------------------------------------------------------
FINANCE-NONCAPTIVE DIVERSIFIED--2.41%
40,000 General Electric Capital Corp.# 11/10/03 1.200* 40,000,000
- ---------------------------------------------------------------------------------------------------------------
Total Short-Term Corporate Obligations
(cost--$88,000,000) 88,000,000
- ---------------------------------------------------------------------------------------------------------------
</Table>
8
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<Table>
<Caption>
NUMBER OF
SHARES MATURITY INTEREST
(000) DATES RATES+ VALUE
- ---------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS--4.07%
46,483 AIM Liquid Assets Portfolio 11/03/03 0.980% $ 46,482,518
666 AIM Prime Portfolio 11/03/03 0.940 666,389
624 Blackrock Provident Institutional
TempFund 11/03/03 0.933 623,604
143 Dreyfus Cash Management Fund 11/03/03 0.867 142,843
19,665 Scudder Money Market Series 11/03/03 0.918 19,665,119
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Total Money Market Funds (cost--$67,580,473) 67,580,473
- ---------------------------------------------------------------------------------------------------------------
Total Investments (cost--$1,661,978,573
which approximates cost for federal income
tax purposes)--100.01% 1,661,978,573
Liabilities in excess of other assets--(0.01)% (193,091)
- ---------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 1,628,052,095 and
33,514,409 of Institutional shares and
Financial Intermediary shares outstanding,
respectively, each equivalent to $1.00 per share)--100.00% $ 1,661,785,482
- ---------------------------------------------------------------------------------------------------------------
</Table>
* Variable rate securities--maturity dates reflect earlier of reset date or
stated maturity date. The interest rates shown are the current rates as of
October 31, 2003 and reset periodically.
@ Interest rates shown are the discount rates at date of purchase.
# Illiquid security representing 2.41% of net assets.
+ Interest rates shown reflect yield at October 31, 2003.
Weighted average maturity -- 50 days
See accompanying notes to financial statements
9
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UBS LIR TREASURY SECURITIES FUND
Statement of Net Assets -- October 31, 2003 (unaudited)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- ---------------------------------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS--99.79%
$322,146 U.S. Treasury Bills (1) 11/06/03 to 0.875 to
(cost--$321,598,889) 03/11/04 1.030%@ $ 321,598,889
- ---------------------------------------------------------------------------------------------------------------
<Caption>
NUMBER OF
SHARES
(000)
- ---------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS--0.28%
8 BlackRock Provident Institutional
Treasury Trust Fund 11/03/03 0.754+ 7,923
894 Goldman Sachs Financial Square
Treasury Instruments Fund 11/03/03 0.764+ 893,922
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Total Money Market Funds (cost--$901,845) 901,845
- ---------------------------------------------------------------------------------------------------------------
Total Investments (cost--$322,500,734 which
approximates cost for federal income tax
purposes)--100.07% 322,500,734
Liabilities in excess of other assets--(0.07)% (238,239)
- ---------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 322,191,504 Institutional
shares, equivalent to $1.00 per share)--100.00% $ 322,262,495
- ---------------------------------------------------------------------------------------------------------------
</Table>
@ Interest rates shown are the discount rates at date of purchase.
+ Interest rates shown reflect yield at October 31, 2003.
(1) Security, or portion thereof, was on loan at October 31, 2003.
Weighted average maturity -- 65 days
See accompanying notes to financial statements
10
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UBS LIR MONEY MARKET FUND
UBS LIR TREASURY SECURITIES FUND
Statement of Operations
<Table>
<Caption>
FOR THE SIX MONTHS ENDED
OCTOBER 31, 2003
(UNAUDITED)
-------------------------------------
UBS LIR UBS LIR
MONEY MARKET TREASURY SECURITIES
FUND FUND
- ----------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 10,547,545 $ 1,744,767
EXPENSES:
Investment advisory and administration fees 2,279,998 400,472
Insurance expense 232,944 7,264
State registration fees 159,422 34,275
Transfer agency and related services fees 143,762 65,078
Custody and accounting 91,200 16,019
Professional fees 64,132 33,089
Shareholder servicing fees-Financial Intermediary shares 54,314 --
Reports and notices to shareholders 30,544 7,290
Trustees' fees 14,369 2,816
Other expenses 45,460 11,579
3,116,145 577,882
Less: Expense reimbursements from investment advisor
and administrator (507,977) (113,356)
Net expenses 2,608,168 464,526
Net investment income 7,939,377 1,280,241
Net realized gain from investment activities -- 669
Net increase in net assets resulting from operations $ 7,939,377 $ 1,280,910
- ----------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements
11
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UBS LIR MONEY MARKET FUND
Statement of Changes in Net Assets
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE
OCTOBER 31, 2003 YEAR ENDED
(UNAUDITED) APRIL 30, 2003
- -----------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 7,939,377 $ 31,390,013
Net realized gain from investment activities -- 7,731
Net increase in net assets resulting from operations 7,939,377 31,397,744
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income-Institutional shares (7,801,565) (30,882,978)
Net investment income-Financial Intermediary shares (137,812) (507,035)
Total dividends to shareholders (7,939,377) (31,390,013)
Net decrease in net assets from beneficial interest
transactions (215,199,960) (533,959,341)
Net decrease in net assets (215,199,960) (533,951,610)
NET ASSETS:
Beginning of period 1,876,985,442 2,410,937,052
End of period $ 1,661,785,482 $ 1,876,985,442
</Table>
See accompanying notes to financial statements
12
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UBS LIR TREASURY SECURITIES FUND
Statement of Changes in Net Assets
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE
OCTOBER 31, 2003 YEAR ENDED
(UNAUDITED) APRIL 30, 2003
- -----------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 1,280,241 $ 5,843,578
Net realized gains from investment activities 669 22,187
Net increase in net assets resulting from operations 1,280,910 5,865,765
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income-Institutional shares (1,280,241) (5,843,578)
Net decrease in net assets from beneficial interest
transactions (6,339,499) (104,694,401)
Net decrease in net assets (6,338,830) (104,672,214)
NET ASSETS:
Beginning of period 328,601,325 433,273,539
End of period $ 322,262,495 $ 328,601,325
</Table>
See accompanying notes to financial statements
13
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UBS LIR MONEY MARKET FUND
UBS LIR TREASURY SECURITIES FUND
Notes to Financial Statements (unaudited)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
UBS LIR Money Market Fund ("Money Market Fund") and UBS LIR Treasury Securities
Fund ("Treasury Securities Fund") (collectively, the "Funds") are diversified
series of Liquid Institutional Reserves (the "Trust"), an open-end management
investment company registered with the Securities and Exchange Commission under
the Investment Company Act of 1940, as amended. The Trust currently offers three
no-load series: the Funds and the UBS LIR Government Securities Fund. The
financial statements for the UBS LIR Government Securities Fund are not included
herein. On November 12, 2003 the Trust's Board of Trustees (the "Board")
approved the liquidation of the Funds at a date to be determined in 2004.
The Funds currently offer two classes of shares, Institutional shares and
Financial Intermediary shares. Each class represents interests in the same
assets of the Fund, and both classes have equal voting privileges, except that
beneficial owners of Financial Intermediary shares receive certain services
directly from financial intermediaries, bear certain service fees and to the
extent that matters pertaining to the Shareholder Services Plan or to the
Financial Intermediary shares are submitted to shareholders for approval, only
the holders of Financial Intermediary shares shall be entitled to vote thereon.
At October 31, 2003, the Treasury Securities Fund had no Financial Intermediary
shares outstanding.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires the Funds' management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies:
VALUATION AND ACCOUNTING FOR INVESTMENTS AND INVESTMENT INCOME--Investments are
valued at amortized cost which approximates market value, unless the Trust's
Board determines that this does not represent fair value. Investment
transactions are recorded on the trade date. Realized gains and losses from
investment transactions are calculated using the identified cost method.
Interest income is recorded on an accrual basis. Premiums are amortized and
discounts are accreted as adjustments to interest income and the identified cost
of investments.
REPURCHASE AGREEMENTS--The Money Market Fund may purchase securities or other
obligations from a bank or securities dealer (or its affiliate), subject to the
seller's agreement to repurchase them at an agreed upon date (or upon demand)
and price. The Money Market Fund maintains custody of the underlying obligations
prior to their repurchase, either through its regular custodian or through a
special "tri-party" custodian or sub-custodian that maintains a separate account
for both the Money Market Fund and its counterparty. The underlying collateral
is valued daily on a mark-to-market basis to ensure that the value, including
accrued interest, is at least equal to the repurchase price. In the event of
default of the obligation to repurchase, the Money Market Fund generally has the
right
14
<Page>
to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. Repurchase agreements involving obligations other than U.S.
government securities (such as commercial paper, corporate bonds and mortgage
loans) may be subject to special risks and may not have the benefit of certain
protections in the event of counterparty insolvency. If the seller (or seller's
guarantor, if any) becomes insolvent, the Money Market Fund may suffer delays,
costs and possible losses in connection with the disposition or retention of the
collateral. Under certain circumstances, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. The Money Market Fund may
participate in joint repurchase agreement transactions with other funds managed,
advised or sub-advised by UBS Global Asset Management (US) Inc. ("UBS Global
AM"). UBS Global AM is an indirect wholly owned asset management subsidiary of
UBS AG, an international diversified organization with headquarters in Zurich,
Switzerland and operations in many areas of the financial services industry.
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions is
determined in accordance with federal income tax regulations, which may differ
from accounting principles generally accepted in the United States. These
"book/tax" differences are either considered temporary or permanent in nature.
To the extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification.
NET INVESTMENT INCOME AND INVESTMENT TRANSACTIONS--Income, expenses (excluding
class-specific expenses) and realized/unrealized gains/losses are allocated
proportionately to each class of shares based upon the relative net asset value
of each class at the beginning of the day (after adjusting for current capital
share activity of the respective classes). Class-specific expenses are charged
directly to the applicable class of shares.
CONCENTRATION OF RISK
The ability of the issuers of the debt securities held by the Money Market Fund
to meet their obligations may be affected by economic developments, including
those particular to a specific industry or region.
INVESTMENT ADVISOR AND ADMINISTRATOR
The Trust has an Investment Advisory and Administration Contract ("Advisory
Contract") with UBS Financial Services Inc., an indirect wholly owned subsidiary
of UBS AG, under which UBS Financial Services Inc. serves as investment advisor
and administrator of the Funds. In accordance with the Advisory Contract, the
Funds pay UBS Financial Services Inc. an investment advisory and administration
fee, which is accrued daily and paid monthly, at an annual rate of 0.25% of each
Fund's average daily net assets. At October 31, 2003, the Money Market Fund
15
<Page>
and the Treasury Securities Fund owed UBS Financial Services Inc. $359,500 and
$69,693, respectively, in investment advisory and administration fees.
UBS Global AM serves as sub-advisor and sub-administrator to the Trust pursuant
to a Sub-Advisory and Sub-Administration Contract ("Sub-Advisory Contract")
between UBS Financial Services Inc. and UBS Global AM. In accordance with the
Sub-Advisory Contract, UBS Financial Services Inc. (not the Funds) pays UBS
Global AM a fee, accrued daily and paid monthly, at an annual rate of 50% of the
fee paid by each Fund to UBS Financial Services Inc. under the Advisory
Contract, net of reimbursements.
UBS Financial Services Inc. has agreed to reimburse a portion of expenses to
maintain the Funds' total annual operating expenses through February 29, 2004,
at a level not exceeding 0.28% and 0.29% of the Money Market Fund's and the
Treasury Securities Fund's average daily net assets for Institutional shares,
respectively, and 0.53% and 0.54% of the Money Market Fund's and the Treasury
Securities Fund's average daily net assets for Financial Intermediary shares,
respectively. At October 31, 2003, UBS Financial Services Inc. owed the Money
Market Fund and the Treasury Securities Fund $55,579 and $19,436, respectively,
for reimbursements. The Funds have agreed to repay UBS Financial Services Inc.
for any reimbursed expenses if they can do so over the following three years
without causing the Funds' expenses in any of those years to exceed the
aforementioned rates. For the six months ended October 31, 2003, UBS Financial
Services Inc. reimbursed $507,977 and $113,356 in expenses to the Money Market
Fund and the Treasury Securities Fund, respectively.
SHAREHOLDER SERVICES PLAN AND AGREEMENT
Under a Shareholder Services Plan and Agreement adopted with respect to its
Financial Intermediary shares, each Fund has agreed to pay UBS Global AM monthly
fees at the annual rate of 0.25% of the average daily net assets of the
Financial Intermediary shares held by financial intermediaries on behalf of
their customers. Under related agreements with those financial intermediaries
("Shareholder Service Agreements"), UBS Global AM pays an identical fee to the
financial intermediaries for certain support services that they provide to their
customers as specified in the Shareholder Service Agreements. At October 31,
2003, the Money Market Fund owed UBS Global AM $7,259 in shareholder service
fees.
SECURITIES LENDING
Each Fund may lend securities up to 33 1/3% of its total assets to qualified
broker-dealers or institutional investors. The loans are secured at all times by
cash, cash equivalents or U.S. government securities in an amount at least equal
to the market value of the securities loaned, plus accrued interest and
dividends, determined on a daily basis and adjusted accordingly. Each Fund will
regain ownership of loaned securities to exercise certain beneficial rights;
however, each Fund may bear the risk of delay in recovery of, or even loss of
rights in, the securities
16
<Page>
loaned should the borrower fail financially. Each Fund receives compensation,
which is included in interest income, for lending its securities from interest
or dividends earned on the cash, cash equivalents or U.S. government securities
held as collateral, net of fee rebates paid to the borrower plus reasonable
administrative and custody fees. UBS Financial Services Inc. and UBS Securities
LLC, indirect wholly owned subsidiaries of UBS AG, and other affiliated
broker-dealers have been approved as borrowers under each Fund's securities
lending program. For the six months ended October 31, 2003, the Money Market
Fund and the Treasury Securities Fund earned $1,664 and $36,980, respectively,
for lending securities. Each Fund's lending agent is UBS Securities LLC (or UBS
Financial Services Inc., which provided such service prior to UBS Securities
LLC), which earned $557 and $12,451, in compensation from the Money Market Fund
and the Treasury Securities Fund, respectively, for the six months ended October
31, 2003. At October 31, 2003, the Treasury Securities Fund owed UBS Securities
LLC $2,294 in compensation.
At October 31, 2003, the Money Market Fund had no securities on loan, while the
Treasury Securities Fund had securities on loan having a market value of
$22,937,300. The Treasury Securities Fund's custodian held U.S. government
securities having an aggregate value of $23,525,151 as collateral for portfolio
securities loaned as follows:
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATE VALUE
- -------------------------------------------------------------------------------------
U.S. Treasury Stripped 05/05/17 to
$ 59,000 Principal Payment Bonds 08/15/27 0% $ 23,525,151
</Table>
BANK LINE OF CREDIT
The Funds participated until September 10, 2003 with other funds managed,
advised or sub-advised by UBS Global AM in a $300 million committed credit
facility ("Facility") with UBS AG, Stamford Branch, to be utilized for temporary
financing until the settlement of sales or purchases of portfolio securities,
the repurchase or redemption of shares of the Funds at the request of the
shareholders and other temporary or emergency purposes. Under the Facility
arrangement, each Fund had agreed to pay a commitment fee, pro rata, based on
the relative asset size of the funds in the Facility. Interest would be charged
to the Funds at rates based on prevailing market rates in effect at the time of
borrowings. For the period May 1, 2003 through September 10, 2003, the Funds did
not borrow under the Facility. For the period May 1, 2003 through September 10,
2003, the Money Market Fund and Treasury Securities Fund paid commitment fees of
$11,366 and $2,028, respectively, to UBS AG, Stamford Branch.
17
<Page>
OTHER LIABILITIES
At October 31, 2003, the Money Market Fund had dividends payable, accrued
expenses (excluding investment advisory and administration fees and shareholder
servicing fees) and payable to custodian of $1,153,300, $166,041 and $64,172,
respectively, and the Treasury Securities Fund had dividends payable and accrued
expenses (excluding investment advisory and administration fees and securities
lending compensation) of $196,652 and $42,514, respectively.
FEDERAL TAX STATUS
Each Fund intends to distribute all of its income and to comply with the other
requirements of the Internal Revenue Code applicable to regulated investment
companies. Accordingly, no provision for federal income taxes is required. In
addition, by distributing during each calendar year substantially all of their
net investment income, realized capital gains and certain other amounts, if any,
the Funds intend not to be subject to federal excise tax.
The tax character of distributions paid to shareholders by the Funds during the
six months ended October 31, 2003 and the fiscal year ended April 30, 2003 was
ordinary income.
The components of accumulated earnings on a tax basis for the current period
will be calculated at the Funds' fiscal year ending April 30, 2004.
SHARES OF BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized. Transactions in shares of beneficial interest, at $1.00 per share,
were as follows:
<Table>
<Caption>
INSTITUTIONAL SHARES FINANCIAL INTERMEDIARY SHARES*
-----------------------------------------------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
OCTOBER 31, 2003 APRIL 30, 2003 OCTOBER 31, 2003 APRIL 30, 2003
- ---------------------------------------------------------------------------------------------------------
MONEY MARKET FUND:
Shares sold 2,410,312,835 6,760,189,622 166,108,019 196,771,640
Shares repurchased (2,608,821,999) (7,300,219,851) (190,633,345) (221,714,653)
Dividends reinvested 7,834,530 31,013,891 -- 10
Net decrease in shares outstanding (190,674,634) (509,016,338) (24,525,326) (24,943,003)
- ---------------------------------------------------------------------------------------------------------
TREASURY SECURITIES FUND:
Shares sold 284,519,070 1,084,850,636
Shares repurchased (292,040,585) (1,195,198,806)
Dividends reinvested 1,182,016 5,653,769
Net decrease in shares outstanding (6,339,499) (104,694,401)
- ---------------------------------------------------------------------
</Table>
- ----------
* For the six months ended October 31, 2003 and for the year ended April 30,
2003, there were no transactions in Financial Intermediary shares of the
Treasury Securities Fund.
18
<Page>
(This page intentionally left blank)
19
<Page>
UBS LIR MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<Table>
<Caption>
INSTITUTIONAL SHARES
-------------------------------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED APRIL 30,
OCTOBER 31, 2003 --------------------------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.004 0.014 0.028 0.061 0.053 0.051
Dividends from net
investment income (0.004) (0.014) (0.028) (0.061) (0.053) (0.051)
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT
RETURN(1) 0.44% 1.42% 2.87% 6.25% 5.40% 5.22%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of period (000's) $ 1,628,268 $ 1,818,943 $ 2,327,952 $ 2,513,344 $ 1,836,114 $ 2,036,379
Expenses to average
net assets, net of
reimbursements from
advisor 0.28%* 0.28% 0.28% 0.28% 0.28% 0.26%
Expenses to average
net assets, before
reimbursements from
advisor 0.34%* 0.32% 0.30% 0.31% 0.30% 0.31%
Net investment income
to average net assets,
net of reimbursements
from advisor 0.88%* 1.41% 2.81% 6.04% 5.26% 5.07%
Net investment income
to average net assets,
before reimbursements
from advisor 0.82%* 1.37% 2.79% 6.01% 5.24% 5.02%
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for a period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions.
20
<Page>
<Table>
<Caption>
FINANCIAL INTERMEDIARY SHARES
-------------------------------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED APRIL 30,
OCTOBER 31, 2003 --------------------------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.003 0.012 0.026 0.058 0.050 0.048
Dividends from net
investment income (0.003) (0.012) (0.026) (0.058) (0.050) (0.048)
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT
RETURN(1) 0.31% 1.17% 2.62% 5.99% 5.14% 4.96%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end
of period (000's) $ 33,517 $ 58,042 $ 82,985 $ 51,534 $ 64,634 $ 12,002
Expenses to average
net assets, net of
reimbursements from
advisor 0.53%* 0.53% 0.53% 0.53% 0.53% 0.51%
Expenses to average
net assets, before
reimbursements from
advisor 0.59%* 0.57% 0.54% 0.56% 0.55% 0.56%
Net investment income
to average net assets,
net of reimbursements
from advisor 0.63%* 1.16% 2.46% 5.74% 5.05% 4.82%
Net investment income
to average net assets,
before reimbursements
from advisor 0.57%* 1.12% 2.45% 5.71% 5.03% 4.77%
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
21
<Page>
UBS LIR TREASURY SECURITIES FUND
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding
throughout each period is presented below:
<Table>
<Caption>
INSTITUTIONAL SHARES
-------------------------------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED APRIL 30,
OCTOBER 31, 2003 --------------------------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
- ----------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.004 0.013 0.025 0.054 0.049 0.046
Dividends from net
investment income (0.004) (0.013) (0.025) (0.054) (0.047) (0.046)
Distributions from net
realized gains from
investment activities -- -- -- -- (0.002) --
Total dividends and
distributions to
shareholders (0.004) (0.013) (0.025) (0.054) (0.049) (0.046)
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 0.40% 1.29% 2.56% 5.55% 4.97% 4.68%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end
of period (000's) $ 322,262 $ 328,601 $ 433,274 $ 167,390 $ 118,525 $ 179,227
Expenses to average
net assets, net of
reimbursements
from advisor 0.29%* 0.29% 0.29% 0.29% 0.29% 0.28%
Expenses to average
net assets, before
reimbursements
from advisor 0.36%* 0.32% 0.35% 0.36% 0.35% 0.33%
Net investment income to
average net assets,
net of reimbursements
from advisor 0.80%* 1.28% 2.29% 5.36% 4.61% 4.57%
Net investment income to
average net assets,
before reimbursements
from advisor 0.73%* 1.25% 2.23% 5.29% 4.55% 4.52%
- ----------------------------------------------------------------------------------------------------------------------------------
</Table>
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total
investment return for a period of less than one year has not been
annualized. Returns do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions.
22
<Page>
TRUSTEES
Brian M. Storms Richard R. Burt
CHAIRMAN Meyer Feldberg
Margo N. Alexander Carl W. Schafer
Richard Q. Armstrong William D. White
David J. Beaubien
PRINCIPAL OFFICERS
Joseph A. Varnas Michael H. Markowitz
PRESIDENT VICE PRESIDENT
Amy R. Doberman Robert Sabatino
VICE PRESIDENT AND SECRETARY VICE PRESIDENT
Paul H. Schubert W. Douglas Beck
VICE PRESIDENT AND TREASURER VICE PRESIDENT
INVESTMENT ADVISOR AND ADMINISTRATOR
UBS Financial Services Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
SUB-ADVISOR, SUB-ADMINISTRATOR AND PRINCIPAL UNDERWRITER
UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, New York 10019-6114
THE FINANCIAL INFORMATION INCLUDED HEREIN IS TAKEN FROM THE RECORDS OF THE FUNDS
WITHOUT EXAMINATION BY INDEPENDENT AUDITORS WHO DO NOT EXPRESS AN OPINION
THEREON.
THIS REPORT IS NOT TO BE USED IN CONNECTION WITH THE OFFERING OF SHARES OF THE
FUNDS UNLESS ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS.
(C) 2003 UBS Global Asset Management (US) Inc. All rights reserved.
<Page>
[UBS LOGO] Presorted
Standard
US Postage
PAID
Smithtown, NY
Permit 700
UBS GLOBAL ASSET MANAGEMENT (US) INC.
51 West 52nd Street
New York, New York 10019
<Page>
[UBS GLOBAL ASSET MANAGEMENT LOGO]
UBS LIR GOVERNMENT
SECURITIES FUND
SEMIANNUAL REPORT
OCTOBER 31, 2003
<Page>
UBS LIR GOVERNMENT SECURITIES FUND
December 15, 2003
DEAR SHAREHOLDER,
We present you with the semiannual report for the UBS LIR Government Securities
Fund for the six months ended October 31, 2003.
PERFORMANCE
In the falling interest rate environment, the Fund's seven-day current yield
declined over the six months since we last reported to you. As of October 31,
2003, the seven-day current yield for the Fund's Institutional share class was
0.72%, down from 0.91% at the end of its fiscal year on April 30, 2003. (For
more on the Fund's performance, please refer to "Performance At A Glance" on
page 5.)
AN INTERVIEW WITH THE PORTFOLIO MANAGERS
Q. CAN YOU DESCRIBE THE ECONOMIC ENVIRONMENT DURING THE REPORTING PERIOD?
A. As the reporting period began in May 2003, there was a great deal of
uncertainty surrounding the economy. First quarter 2003 gross domestic
product (GDP) growth had come in at 1.4%, unchanged from the prior quarter's
figure. Although the war in Iraq had temporarily stimulated the equity
markets, its impact on the economy, if any, was at that point uncertain. In
addition, heightened concerns about terrorism, widening turmoil in the Middle
East and tepid corporate spending appeared to further undermine the economy.
The following quarter produced more positive news. The combined effects of
significantly higher military spending, an increase in exports and a stronger
manufacturing sector fueled an uptick in economic growth that resulted in a
second quarter 2003 GDP figure of 3.3%. This was followed by a preliminary
third quarter 2003 GDP of 8.2%--far higher than anticipated, and the sharpest
recorded advance since 1984.
[SIDENOTE]
UBS LIR GOVERNMENT SECURITIES FUND
INVESTMENT GOAL:
Provide as high a level of current interest income as is consistent with
maintaining liquidity and principal stability.
PORTFOLIO MANAGERS:
Michael Markowitz
Robert Sabatino
UBS Global Asset
Management (US) Inc.
COMMENCEMENT:
Institutional shares--
June 3, 1991
Select shares--
May 23, 2001
DIVIDEND PAYMENTS:
Monthly
1
<Page>
Q. WHAT OTHER FACTORS AFFECTED THE ECONOMY?
A. Consumer spending played an integral role in propping up the economy during
the period, as the lower interest rate environment engendered a surge in
mortgage refinancing. The Bush Administration's tax cut package also appeared
to spur on consumers, who now had more disposable income to spend.
Conversely, for much of the period, corporations postponed major purchases as
they waited for clearer signs of a sustainable economic upturn. More
recently, there have been early indications that business spending is slowly
improving, although it's not yet clear if spending will increase to the point
that it will result in new jobs.
Q. HOW DID THE FEDERAL RESERVE BOARD (THE "FED") REACT IN THIS ECONOMIC
ENVIRONMENT?
A. As the reporting period began, the federal funds rate was at 1.25%--unchanged
since November 2002. At that time, the Fed's position was that it would not
implement any further rate cuts, although it would maintain a "heightened
surveillance" of the economy in light of the conflict with Iraq. After the
war's start, however, and absent any lift in the economy, the Fed indicated
that a future rate cut was likely, citing its view that economic weakness was
a greater risk than inflation. This cut eventually occurred during the Fed's
June 25, 2003 Federal Open Market Committee meeting, at which time the
federal funds rate was lowered by a quarter of a percentage point to
1.0%--its lowest level since 1958.
Since that time, the Fed has remained on hold, although it has made clear its
willingness to cut rates further if necessary. At its September 16, 2003
meeting, the Fed rationalized this position, noting "an accommodative stance
on monetary policy, coupled with robust underlying growth in productivity, is
providing important ongoing support to economic activity."
2
<Page>
Q. HOW DID YOU POSITION THE FUND'S PORTFOLIO DURING THE PERIOD?
A. Throughout the reporting period we employed a "barbell" strategy, whereby we
purchased securities at both ends of the maturity spectrum. Our longer-term
securities--with final maturities up to one year--were used to lock in higher
yields as interest rates fell, while our shorter-term securities--typically
less than one month to maturity--provided liquidity. This strategy enabled us
to generate incremental yield compared to a more "laddered" approach, wherein
a portfolio is spread out among all maturity levels.
As in the past, we emphasized quality and liquidity in the portfolio. In
particular, we focused on Treasury and Agency securities that offered the
highest credit quality and liquidity. In addition, we slightly reduced the
Fund's exposure to Agency securities to increase the portfolio's overall
diversification level. These strategies helped to control the Fund's weighted
average maturity and meet our liquidity requirements.
Q. WHAT IS YOUR OUTLOOK FOR THE ECONOMY AND HOW DO YOU ANTICIPATE STRUCTURING
THE PORTFOLIO GOING FORWARD?
A. We are fairly positive regarding the growth prospects for the economy.
Consumer spending is solid, the manufacturing sector appears to be gaining
momentum, the housing market remains strong, the disposable income that
resulted from the recent tax cuts is starting to work its way through the
system, and the Fed should remain accommodative. We will continue to follow
the job market closely; despite the recent positive uptick in new jobs data,
continued high unemployment could diminish the consumer confidence level, and
thus temper the extent of the economic expansion.
Given the current environment, we expect to employ a laddered strategy.
Maintaining a high quality portfolio will also be of paramount importance in
order to meet our investment goal of providing as high a level of current
interest income as is consistent with maintaining liquidity and principal
stability.
3
<Page>
Our ultimate objective in managing your investments is to help you successfully
meet your financial goals. We thank you for your continued support and welcome
any comments or questions you may have. For additional information on UBS
funds,* please contact your financial advisor or visit us at
www.ubs.com/globalam-us.
Sincerely,
/s/ Joseph A. Varnas
JOSEPH A. VARNAS
PRESIDENT
UBS LIR Government Securities Fund
MANAGING DIRECTOR
UBS Global Asset Management (US) Inc.
/s/ Michael Markowitz /s/ Robert Sabatino
MICHAEL MARKOWITZ ROBERT SABATINO
PORTFOLIO MANAGER PORTFOLIO MANAGER
UBS LIR Government Securities Fund UBS LIR Government Securities Fund
EXECUTIVE DIRECTOR DIRECTOR
UBS Global Asset Management (US) Inc. UBS Global Asset Management (US) Inc.
This letter is intended to assist shareholders in understanding how the Fund
performed during the six months ended October 31, 2003, and reflects our views
at the time of its writing. Of course, these views may change in response to
changing circumstances, and they do not guarantee the future performance of the
markets or the Fund. We encourage you to consult your financial advisor
regarding your personal investment program.
* Mutual funds are sold by prospectus only. The prospectus for a fund contains
more complete information regarding risks, charges and expenses, and should
be read carefully before investing.
4
<Page>
PERFORMANCE AT A GLANCE
<Table>
<Caption>
YIELDS AND CHARACTERISTICS 10/31/03 4/30/03 10/31/02
- ---------------------------------------------------------------------------------------
Seven-Day Current Yield*
Institutional Shares 0.72% 0.91% 1.44%
Select Shares 0.82% 1.01% 1.54%
Seven-Day Effective Yield*
Institutional Shares 0.72% 0.92% 1.45%
Select Shares 0.82% 1.02% 1.55%
Weighted Average Maturity** 52 days 44 days 50 days
Net Assets (mm) $ 204.1 $ 234.6 $ 299.6
<Caption>
SECTOR ALLOCATION*** 10/31/03 4/30/03 10/31/02
- ---------------------------------------------------------------------------------------
U.S. Government & Agency
Obligations 96.4% 93.3% 96.3%
Money Market Funds 3.7 6.8 3.8
Liabilities in Excess of Other Assets (0.1) (0.1) (0.1)
- ---------------------------------------------------------------------------------------
TOTAL 100.0% 100.0% 100.0%
- ---------------------------------------------------------------------------------------
</Table>
* Yields will fluctuate and reflect fee waivers. Performance data quoted
represents past performance. Past performance does not guarantee future
results.
** The Fund is actively managed and its weighted average maturity will differ
over time.
*** Weightings represent percentages of net assets as of the dates indicated.
The Fund's portfolio is actively managed and its composition will vary over
time.
5
<Page>
Statement of Net Assets -- October 31, 2003 (unaudited)
<Table>
<Caption>
PRINCIPAL
AMOUNT MATURITY INTEREST
(000) DATES RATES VALUE
- --------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AND AGENCY OBLIGATIONS--96.37%
11/13/03 to 0.900 to
$ 90,000 U.S. Treasury Bills 03/11/04 1.040%@ $ 89,835,660
1.000 to
23,000 Federal Farm Credit Bank 11/03/03 1.0350* 22,999,848
11/25/03 to 0.880 to
9,000 Federal Farm Credit Bank 04/15/04 1.500@ 8,975,711
4,000 Federal Home Loan Bank 11/03/03 1.030* 4,000,436
11/21/03 to 1.000 to
48,000 Federal Home Loan Bank 03/05/04 1.090@ 47,937,668
10,000 Student Loan Marketing Association 11/03/03 0.940@ 9,999,478
13,000 Student Loan Marketing Association 11/04/03 1.020* 12,999,709
- --------------------------------------------------------------------------------------------------------------------
Total U.S. Government and Agency Obligations
(cost--$196,748,510) 196,748,510
- --------------------------------------------------------------------------------------------------------------------
<Caption>
NUMBER OF
SHARES
(000)
- --------------------------------------------------------------------------------------------------------------------
MONEY MARKET FUNDS--3.67%
4,036 BlackRock Provident Institutional
Treasury Trust Fund 11/03/03 0.754+ 4,036,120
3,447 Goldman Sachs Financial Square
Treasury Instruments Fund 11/03/03 0.764+ 3,447,446
- --------------------------------------------------------------------------------------------------------------------
Total Money Market Funds (cost--$7,483,566) 7,483,566
- --------------------------------------------------------------------------------------------------------------------
Total Investments (cost--$204,232,076
which approximates cost for federal income
tax purposes)--100.04% 204,232,076
Liabilities in excess of other assets--(0.04)% (83,613)
- --------------------------------------------------------------------------------------------------------------------
Net Assets (applicable to 135,100,454 and 69,017,765 of
Institutional shares and Select shares outstanding,
respectively, each equivalent to $1.00 per share)--100.00% $ 204,148,463
- --------------------------------------------------------------------------------------------------------------------
</Table>
* Variable rate securities--maturity dates reflect earlier of reset date or
stated maturity date. The interest rates shown are the current rates as of
October 31, 2003 and reset periodically.
@ Interest rates shown are the discount rates at date of purchase.
+ Interest rates shown reflect yield at October 31, 2003.
Weighted average maturity -- 52 days
See accompanying notes to financial statements
6
<Page>
Statement of Operations
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED
OCTOBER 31, 2003
(UNAUDITED)
- ------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 1,195,321
EXPENSES:
Investment advisory and administration fees 283,528
Shareholder servicing fees-Institutional shares 71,782
Transfer agency and related services fees 60,392
State registration fees 50,559
Professional fees 30,914
Reports and notices to shareholders 14,706
Custody and accounting 11,341
Insurance expense 6,161
Trustees' fees 1,901
Other expenses 19,069
550,353
Less: Fee waivers/reimbursements from investment advisor
and administrator (263,089)
Net expenses 287,264
Net investment income 908,057
Net realized gain from investment activities 4,974
Net increase in net assets resulting from operations $ 913,031
- ------------------------------------------------------------------------------
</Table>
See accompanying notes to financial statements
7
<Page>
Statement of Changes in Net Assets
<Table>
<Caption>
FOR THE SIX
MONTHS ENDED FOR THE
OCTOBER 31, 2003 YEAR ENDED
(UNAUDITED) APRIL 30, 2003
- -------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 908,057 $ 3,498,406
Net realized gains from investment activities 4,974 1,360
Net increase in net assets resulting from operations 913,031 3,499,766
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income--Institutional shares (549,464) (2,030,578)
Net investment income--Select shares (358,593) (1,467,828)
Total dividends to shareholders (908,057) (3,498,406)
Net increase (decrease) in net assets from
beneficial interest transactions (30,433,837) 6,662,066
Net increase (decrease) in net assets (30,428,863) 6,663,426
NET ASSETS:
Beginning of period 234,577,326 227,913,900
End of period $ 204,148,463 $ 234,577,326
</Table>
See accompanying notes to financial statements
8
<Page>
Notes to Financial Statements (unaudited)
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
UBS LIR Government Securities Fund (the "Fund") is a diversified series of
Liquid Institutional Reserves (the "Trust"), an open-end management investment
company registered with the Securities and Exchange Commission under the
Investment Company Act of 1940, as amended. The Trust currently offers three
no-load series: the Fund, the UBS LIR Money Market Fund and the UBS LIR Treasury
Securities Fund. The financial statements for the UBS LIR Money Market Fund and
UBS LIR Treasury Securities Fund are not included herein. On November 12, 2003
the Trust's Board of Trustees (the "Board") approved the liquidation of the Fund
at a date to be determined in 2004.
The Fund currently offers two classes of shares, Institutional shares and Select
shares. Each class represents interests in the same assets of the Fund, and both
classes have equal voting privileges, except that owners of Institutional shares
receive certain services directly from financial intermediaries, bear certain
service fees and to the extent that matters pertaining to the Shareholder
Services Plan or to the Institutional shares are submitted to shareholders for
approval, only the holders of Institutional shares shall be entitled to vote
thereon.
The preparation of financial statements in accordance with accounting principles
generally accepted in the United States requires the Fund's management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies:
VALUATION AND ACCOUNTING FOR INVESTMENTS AND INVESTMENT INCOME-- Investments are
valued at amortized cost, which approximates market value, unless the Trust's
Board determines that this does not represent fair value. Investment
transactions are recorded on the trade date. Realized gains and losses from
investment transactions are calculated using the identified cost method.
Interest income is recorded on an accrual basis. Premiums are amortized and
discounts are accreted as adjustments to interest income and the identified cost
of investments.
DIVIDENDS AND DISTRIBUTIONS--Dividends and distributions to shareholders are
recorded on the ex-dividend date. The amount of dividends and distributions is
determined in accordance with federal income tax regulations, which may differ
from accounting principles generally accepted in the United States. These
"book/tax" differences are either considered temporary or permanent in nature.
To the extent these differences are permanent in nature, such amounts are
reclassified within the capital accounts based on their federal tax-basis
treatment; temporary differences do not require reclassification.
NET INVESTMENT INCOME AND INVESTMENT TRANSACTIONS--Income, expenses (excluding
class-specific expenses) and realized/unrealized gains/losses are allocated
proportionately to each class of shares based upon the relative net asset value
of each class at the beginning of the day (after adjusting for current capital
9
<Page>
share activity of the respective classes). Class-specific expenses are charged
directly to the applicable class of shares.
INVESTMENT ADVISOR AND ADMINISTRATOR
The Trust has an Investment Advisory and Administration Contract ("Advisory
Contract") with UBS Financial Services Inc., an indirect wholly owned subsidiary
of UBS AG, under which UBS Financial Services Inc. serves as investment advisor
and administrator of the Fund. UBS AG is an international diversified
organization with headquarters in Zurich, Switzerland and operations in many
areas of the financial services industry. In accordance with the Advisory
Contract, the Fund pays UBS Financial Services Inc. an investment advisory and
administration fee, which is accrued daily and paid monthly, at an annual rate
of 0.25% of the Fund's average daily net assets. At October 31, 2003 the Fund
owed UBS Financial Services Inc. $46,355 in investment advisory and
administration fees.
UBS Global Asset Management (US) Inc. ("UBS Global AM") serves as sub-advisor
and sub-administrator to the Trust pursuant to a Sub-Advisory and
Sub-Administration Contract ("Sub-Advisory Contract") between UBS Financial
Services Inc. and UBS Global AM. UBS Global AM is an indirect wholly owned asset
management subsidiary of UBS AG. In accordance with the Sub-Advisory Contract,
UBS Financial Services Inc. (not the Fund) pays UBS Global AM a fee, accrued
daily and paid monthly, at an annual rate of 50% of the fee paid by the Fund to
UBS Financial Services Inc. under the Advisory Contract, net of waivers and/or
reimbursements.
The Fund and UBS Financial Services Inc. have entered into a written investment
advisory and administration fee waiver/expense reimbursement agreement under
which UBS Financial Services Inc. is contractually obligated to waive 0.10% of
its investment advisory and administration fees and to reimburse Fund expenses
through February 29, 2004, to the extent that the Fund's expenses otherwise
would exceed 0.29% for Institutional shares and 0.19% for Select shares. At
October 31, 2003, UBS Financial Services Inc. owed the Fund $47,141 for fee
waivers and reimbursements under the above agreement. The Fund has agreed to
repay UBS Financial Services Inc. for any reimbursed expenses if it can do so
over the following three years without causing the Fund's expenses in any of
those years to exceed the aforementioned rates. For the six months ended October
31, 2003, UBS Financial Services Inc. reimbursed $149,677 in expenses, which is
subject to repayment through April 30, 2006, and waived $113,412 in investment
advisory and administration fees.
SHAREHOLDER SERVICES PLAN AND AGREEMENT
Under a Shareholder Services Plan and Agreement adopted with respect to its
Institutional shares, the Fund has agreed to pay UBS Global AM monthly fees at
the annual rate of 0.10% of the average daily net assets of the Institutional
shares owned by the customers of financial intermediaries that have entered into
10
<Page>
service agreements with UBS Global AM. Under related agreements with those
financial intermediaries ("Shareholder Service Agreements"), UBS Global AM pays
an identical fee to the financial intermediaries for certain support services
that they provide to their customers as specified in the Shareholder Service
Agreements. At October 31, 2003, the Fund owed UBS Global AM $12,376 in
shareholder service fees.
BANK LINE OF CREDIT
The Fund participated until September 10, 2003 with other funds managed, advised
or sub-advised by UBS Global AM in a $300 million committed credit facility
("Facility") with UBS AG, Stamford Branch, to be utilized for temporary
financing until the settlement of sales or purchases of portfolio securities,
the repurchase or redemption of shares of the Fund at the request of the
shareholders and other temporary or emergency purposes. Under the Facility
arrangement, the Fund had agreed to pay a commitment fee, pro rata, based on the
relative asset size of the funds in the Facility. Interest would have been
charged to the Fund at rates based on prevailing market rates in effect at the
time of borrowings. For the period May 1, 2003 through September 10, 2003, the
Fund did not borrow under the Facility. For the period May 1, 2003 through
September 10, 2003, the Fund paid a commitment fee of $1,435 to UBS AG, Stamford
Branch.
OTHER LIABILITIES
At October 31, 2003, dividends payable and accrued expenses (excluding
investment advisory and administration fees and shareholder servicing fees) were
$132,967 and $59,511, respectively.
FEDERAL TAX STATUS
The Fund intends to distribute all of its income and to comply with the other
requirements of the Internal Revenue Code applicable to regulated investment
companies. Accordingly, no provision for federal income taxes is required. In
addition, by distributing during each calendar year substantially all of its net
investment income, realized capital gains and certain other amounts, if any, the
Fund intends not to be subject to federal excise tax.
The tax character of distributions paid to shareholders by the Fund during the
six months ended October 31, 2003 and the fiscal year ended April 30, 2003 was
ordinary income.
The components of accumulated earnings on a tax basis for the current period
will be calculated at the Fund's fiscal year ending April 30, 2004.
11
<Page>
SHARES OF BENEFICIAL INTEREST
There is an unlimited amount of $0.001 par value shares of beneficial interest
authorized. Transactions in shares of beneficial interest, at $1.00 per share,
were as follows:
<Table>
<Caption>
INSTITUTIONAL SHARES SELECT SHARES
------------------------------------------------------------------------------
FOR THE SIX FOR THE FOR THE SIX FOR THE
MONTHS ENDED YEAR ENDED MONTHS ENDED YEAR ENDED
OCTOBER 31, 2003 APRIL 30, 2003 OCTOBER 31, 2003 APRIL 30, 2003
------------------------------------------------------------------------------
Shares sold 122,385,027 233,672,603 329,533,825 1,062,329,760
Shares repurchased (139,267,088) (257,839,769) (343,885,970) (1,034,681,852)
Dividends reinvested 518,687 2,027,625 281,682 1,153,699
Net increase (decrease)
in shares outstanding (16,363,374) (22,139,541) (14,070,463) 28,801,607
</Table>
12
<Page>
(This page intentionally left blank)
13
<Page>
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each
period is presented below:
<Table>
<Caption>
INSTITUTIONAL SHARES
----------------------------------------------------------------------------------------------
FOR THE SIX
MONTHS ENDED FOR THE YEARS ENDED APRIL 30,
OCTOBER 31, 2003 --------------------------------------------------------------------------
(UNAUDITED) 2003 2002 2001 2000 1999
- -------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Net investment income 0.004 0.013 0.026 0.059 0.051 0.049
Dividends from net
investment income (0.004) (0.013) (0.026) (0.059) (0.051) (0.049)
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 0.38% 1.27% 2.65% 6.02% 5.22% 5.04%
RATIOS/SUPPLEMENTAL DATA:
Net assets,
end of period (000's) $ 135,130 $ 151,490 $ 173,626 $ 260,164 $ 121,897 $ 138,783
Expenses to average net
assets, net of fee
waivers/reimbursements
from advisor 0.29%* 0.29% 0.29% 0.29% 0.29% 0.28%
Expenses to average net
assets, before fee
waivers/reimbursements
from advisor 0.52%* 0.47% 0.46% 0.38% 0.33% 0.33%
Net investment income to
average net assets,
net of fee
waivers/reimbursements
from advisor 0.76%* 1.26% 2.70% 5.68% 5.10% 4.90%
Net investment income to
average net assets,
before fee
waivers/reimbursements
from advisor 0.53%* 1.08% 2.53% 5.59% 5.06% 4.85%
- -------------------------------------------------------------------------------------------------------------------------
</Table>
+ Commencement of issuance.
* Annualized.
(1) Total investment return is calculated assuming a $10,000 investment on the
first day of each period reported, reinvestment of all dividends and other
distributions, if any, at net asset value on the payable dates, and a sale
at net asset value on the last day of each period reported. Total investment
return for a period of less than one year has not been annualized. Returns
do not reflect the deduction of taxes that a shareholder would pay on Fund
distributions.
14
<Page>
<Table>
<Caption>
SELECT SHARES
----------------------------------------------
FOR THE
PERIOD
FOR THE SIX FOR THE MAY 23,
MONTHS ENDED YEAR ENDED 2001+ TO
OCTOBER 31, 2003 APRIL 30, APRIL 30,
(UNAUDITED) 2003 2002
- -------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00
Net investment income 0.004 0.014 0.024
Dividends from net
investment income (0.004) (0.014) (0.024)
NET ASSET VALUE,
END OF PERIOD $ 1.00 $ 1.00 $ 1.00
TOTAL INVESTMENT RETURN(1) 0.44% 1.37% 2.38%
RATIOS/SUPPLEMENTAL DATA:
Net assets,
end of period (000's) $ 69,018 $ 83,087 $ 54,288
Expenses to average net
assets, net of fee
waivers/reimbursements
from advisor 0.19%* 0.19% 0.19%*
Expenses to average net
assets, before fee
waivers/reimbursements
from advisor 0.42%* 0.37% 0.36%*
Net investment income to
average net assets,
net of fee
waivers/reimbursements
from advisor 0.86%* 1.36% 2.17%*
Net investment income to
average net assets,
before fee
waivers/reimbursements
from advisor 0.63%* 1.18% 2.00%*
- -------------------------------------------------------------------------
</Table>
15
<Page>
TRUSTEES
Brian M. Storms Richard R. Burt
CHAIRMAN
Meyer Feldberg
Margo N. Alexander Carl W. Schafer
Richard Q. Armstrong William D. White
David J. Beaubien
PRINCIPAL OFFICERS
Joseph A. Varnas Michael H. Markowitz
PRESIDENT VICE PRESIDENT
Amy R. Doberman Robert Sabatino
VICE PRESIDENT AND SECRETARY VICE PRESIDENT
Paul H. Schubert W. Douglas Beck
VICE PRESIDENT AND TREASURER VICE PRESIDENT
INVESTMENT ADVISOR AND
ADMINISTRATOR
UBS Financial Services Inc.
1285 Avenue of the Americas
New York, New York 10019-6028
SUB-ADVISOR, SUB-ADMINISTRATOR
AND PRINCIPAL UNDERWRITER
UBS Global Asset Management (US) Inc.
51 West 52nd Street
New York, New York 10019-6114
THE FINANCIAL INFORMATION INCLUDED HEREIN IS TAKEN FROM THE RECORDS OF THE FUND
WITHOUT EXAMINATION BY INDEPENDENT AUDITORS WHO DO NOT EXPRESS AN OPINION
THEREON.
THIS REPORT IS NOT TO BE USED IN CONNECTION WITH THE OFFERING OF SHARES OF THE
FUND UNLESS ACCOMPANIED OR PRECEDED BY AN EFFECTIVE PROSPECTUS.
(C) 2003 UBS Global Asset Management (US) Inc. All rights reserved.
<Page>
[UBS LOGO] Presorted
Standard
US Postage
PAID
UBS GLOBAL ASSET MANAGEMENT (US) INC. Smithtown, NY
51 West 52nd Street Permit 700
New York, New York 10019
<Page>
ITEM 2. CODE OF ETHICS.
Form N-CSR disclosure requirement not applicable to this filing of a semi-annual
report.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Form N-CSR disclosure requirement not applicable to this filing of a semi-annual
report.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable to the registrant.
ITEM 6. [RESERVED BY SEC FOR FUTURE USE. ]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the registrant.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to the registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Form N-CSR disclosure requirement not yet effective with respect to the
registrant.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial
officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-3(c) under the Investment Company Act
of 1940, as amended) are effective based on their evaluation of these
controls and procedures as of a date within 90 days of the filing date
of this document.
<Page>
(b) The registrant's principal executive officer and principal financial
officer are aware of no changes in the registrant's internal control
over financial reporting that occurred during the registrant's most
recent fiscal half-year that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS.
(a) (1) Code of Ethics - Form N-CSR disclosure requirement not applicable to
this filing of a semi-annual report.
(a) (2) Certifications of principal executive officer and principal
financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 is attached hereto as Exhibit EX-99.CERT.
(b) Certifications of principal executive officer and principal financial
officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 is
attached hereto as Exhibit EX-99.906CERT.
<Page>
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.
LIQUID INSTITUTIONAL RESERVES
By: /s/ Joseph A. Varnas
--------------------
Joseph A. Varnas
President
Date: January 8, 2004
---------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Joseph A. Varnas
---------------------
Joseph A. Varnas
President
Date: January 8, 2004
---------------
By: /s/ Paul H. Schubert
--------------------
Paul H. Schubert
Treasurer
Date: January 8, 2004
---------------