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OMB APPROVAL
OMB Number: 3235-0570
Expires: Nov. 30, 2005
Estimated average burden
hours per response: 5.0
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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 811-08669
--------------------------------
Atalanta/Sosnoff Investment Trust
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
101 Park Avenue New York, New York 10178
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Kevin S. Kelly
Atalanta/Sosnoff Capital Corp. 101 Park Avenue New York, New York 10178
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (212) 867-5000
----------------------------
Date of fiscal year end: May 31, 2004
--------------------
Date of reporting period: November 30, 2003
--------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
ATALANTA/SOSNOFF INVESTMENT TRUST
SEMI-ANNUAL REPORT
NOVEMBER 30, 2003
(UNAUDITED)
ATALANTA/SOSNOFF FUND
ATALANTA/SOSNOFF VALUE FUND
LETTER TO SHAREHOLDERS JANUARY 5, 2004
================================================================================
Dear Shareholder:
For the six months ended November 30, 2003, the Atalanta/Sosnoff Fund returned
8.0%, compared with the S&P 500 Index return of 10.8%. For the 12 months ended
December 31, 2003, the Atalanta/Sosnoff Fund returned 26.7%, compared with 28.7%
for the S&P 500 Index. As of November 30, 2003, the average annual total return
since inception (June 17, 1998) for the Atalanta/Sosnoff Fund was 5.7%, compared
with 0.9% for the S&P 500 Index.
For the six months ended November 30, 2003, the Atalanta/Sosnoff Value Fund
returned 7.7%, compared with the S&P 500 Index return of 10.8%. For the 12
months ended December 31, 2003, the Atalanta/Sosnoff Value Fund returned 25.6%,
compared with 28.7% for the S&P 500 Index. As of November 30, 2003, the average
annual total return since inception (July 1, 1999) for the Atalanta/Sosnoff
Value Fund was 4.6%, compared with -4.3% for the S&P 500 Index.
After three years of contraction, March 2000 through March 2003, the economy
worked off its capital goods bubble and responded mightily to fiscal stimulus
and historic low interest rates. The expansion now has its own internal dynamics
of rising employment, capital goods spending and the continuation of strong
consumer buying. We expect above average GDP growth for at least four to eight
quarters. The stimulus of deficit spending and benign Federal Reserve Board
policy emphasis will reinforce economic momentum. Meanwhile, corporate
profitability will benefit from rising productivity, a weak dollar and higher
capacity utilization. These forces, now in place, could run through 2005.
The market caught up with us during the fourth quarter, but the year was
wonderful in terms of absolute performance. We have cut back HMO's and home
builders that served us well for a long time. Our investment posture is based on
a strong economic setting for the foreseeable future. The tilt towards stocks
sensitive to economic growth continues. New adds embrace financial services,
commodities and media where we are over-weighted along with the technology
sector. Although we believe monetary policy will remain accommodative, yields on
Treasuries should begin to move up throughout 2004.
The stock market has parsed many of these benevolent forces and will need the
reinforcement of strong and predictable corporate earnings growth, particularly
for the multinationals, which are the backbone of the Standard and Poor's 500
Index. Technology and financials now comprise approximately 40 percent of this
index so volatility of financial markets is a sure thing going forward. The
index is presently selling at approximately 18 times forward 12-month earning
power. This is a pricey but not extreme valuation. If economic momentum remains
near 4 percent quarterly, the market could begin to discount 2005 within six
months.
Our visceral call is that growth will remain surprisingly strong for longer than
most economists are projecting. The Federal Reserve Board (FRB) will begin to
tighten money market rates by midyear but it should be a gradual and elongated
process that soothes rather than roils financial markets. The biggest
imponderable is not inflation. It will remain benign because of the large labor
pool and low capacity utilization of our productive capacity. It is the course
of the dollar. The fall of more than 20 percent on a trade-weighted comparison
the past two years, could easily embrace another 10 percent. This trend will be
construed bullishly by our FRB and Treasury, making the country more competitive
and helping our balance of
1
trade deficit from deepening further.
The biggest risk for financial markets would be a precipitous fall in the
dollar. It would touch off a protective rise in interest rates to keep foreign
funds, particularly Japan and China's, in place here. Any market sell off would
be a buying opportunity as new equity money would come into our markets from
abroad and touch off many more foreign acquisitions of U.S. properties. There is
always plenty to worry about. Our balance of trade and balance of payments
deficits are problems that can only be solved over a decade. Just so long as our
economy is expanding faster than the rest of the world, foreign money should
rest here in place. The Federal budget deficit probably will peak this year at
close to 5 percent of GDP. Incremental tax receipts from corporate profits and
capital gains will increase materially thereafter. By comparison, the deficit
was higher in relation to GDP in the early Reagan years. It got us out of the
nasty FRB created recession of 1981-1982 when Paul Volcker squeezed the
inflationary expectations out of the country's psyche.
Alan Greenspan doesn't have Volcker's problems. For a while then it looked as if
the country's wage escalations would remain in the 7 to 8 percent range.
Finally, the cost of carrying debt for the country and individuals today is
lower than in previous cycles. We need this trend to continue if housing and
consumer spending are to hold up. Capital spending, normally 10 percent of GDP,
is reaccelerating and will be a motive growth force for a few years as corporate
profits and cash flow increase. In summary, the internal dynamics of the country
should elongate the business cycle for a couple of years barring severe
geopolitical turmoil and serious terrorist acts proliferating in the western
world.
Equities should continue to outperform bonds in the new year based on corporate
profits rising above consensus estimates. We are at $60 a share for the S&P 500
earnings in 2004. The new year faces its share of downside threats. The most
basic for us are the price of oil, which is denominated in dollars, and the
timing, scale and breadth of the dollar's current demise. If it's too rapid it
will touch off FRB tightness earlier than expected. We discount this course just
so long as our economy remains buoyant. In the interim, our major multinationals
will benefit substantively from the weak dollar. It's an area where we are doing
more research, particularly in energy and commodities.
Keep in mind that Dow 10,000 is just a number. We were there years ago off and
on. The deep basics are the sustainability of the business cycle and equity
valuation. The market has discounted 2004 fairly adequately but could weigh in
on 2005 before long.
With all good wishes,
Martin T. Sosnoff
2
ATALANTA/SOSNOFF FUND
PORTFOLIO CHARACTERISTICS (UNAUDITED)
================================================================================
SECTOR CONCENTRATION VS. THE S&P 500 INDEX (AS OF NOVEMBER 30, 2003)
[GRAPHIC OMITTED]
ATALANTA/
SOSNOFF
FUND S&P 500 INDEX
- --------------------------------------------------------------------------------
Information Technology 26.3 18.1
Financials 24.2 20.7
Consumer Discretionary 21.7 11.4
Health Care 21.1 13.3
Industrials 4.6 10.7
Telecom Services 2.7 3.3
Consumer Staples 0.7 11.4
Energy 0 5.4
Utilities 0 2.8
Materials 0 2.9
Cash & Equivalents -1.3 0.0
TOP TEN HOLDINGS (AS OF NOVEMBER 30, 2003)
% OF
STOCK SECTOR PORTFOLIO
----------------------------------------------------------------------------
Microsoft Corp. Information Technology 4.47%
Citigroup, Inc. Financials 4.28%
Cisco Systems, Inc. Information Technology 4.27%
Taiwan Semiconductor
Manufacturing Co. LTD - ADR Information Technology 3.50%
Lehman Brothers Holdings, Inc. Financials 3.46%
Aetna, Inc. Healthcare 3.25%
Hewlett-Packard Co. Information Technology 3.23%
Berkshire Hathaway, Inc. - Class B Financials 3.12%
UnitedHealth Group, Inc. Healthcare 3.06%
Merrill Lynch & Co., Inc. Financials 2.98%
-------
TOTAL: 35.62%
=======
COMPARATIVE PERFORMANCE
TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
--------------- -------------------------------
SINCE INCEPTION* YEAR ENDED SINCE INCEPTION*
TO NOVEMBER 30, DECEMBER 31, TO DECEMBER 31,
2003 2003 2003
--------------- ------------ ---------------
Atalanta/Sosnoff Fund 35.6% 26.7% 6.3%
Morningstar Large Cap
Blend Category n/a 24.7% n/a
Lipper Large-Cap Core Index n/a 24.8% n/a
S&P 500 Index 5.2% 28.7% 1.9%
*Inception June 17, 1998
3
ATALANTA/SOSNOFF VALUE FUND
PORTFOLIO CHARACTERISTICS (UNAUDITED)
================================================================================
SECTOR CONCENTRATION VS. THE S&P 500 INDEX (AS OF NOVEMBER 30, 2003)
[GRAPHIC OMITTED]
ATALANTA/
SOSNOFF
VALUE FUND S&P 500 INDEX
- --------------------------------------------------------------------------------
Financials 28.3 20.7
Consumer Discretionary 23.1 11.4
Information Technology 22.8 18.1
Health Care 11.1 13.3
Industrials 8.4 10.7
Telecom Services 3.0 3.3
Consumer Staples 1.4 11.4
Energy 0 5.4
Materials 0 2.9
Utilities 0 2.8
Cash & Equivalents 1.9 0.0
TOP TEN HOLDINGS (AS OF NOVEMBER 30, 2003)
% OF
STOCK SECTOR PORTFOLIO
----------------------------------------------------------------------------
Citigroup, Inc. Financials 4.95%
Taiwan Semiconductor
Manufacturing Co. LTD - ADR Information Technology 4.27%
Microsoft Corp. Information Technology 4.18%
Berkshire Hathaway, Inc. - Class B Financials 4.18%
Lehman Brothers Holdings, Inc. Financials 4.16%
D.R. Horton, Inc. Industrials 3.41%
Computer Associates
International, Inc. Information Technology 3.40%
Aetna, Inc. Healthcare 3.28%
Cisco Systems, Inc. Information Technology 3.23%
UnitedHealth Group, Inc. Healthcare 3.11%
------
TOTAL: 38.17%
======
COMPARATIVE PERFORMANCE
TOTAL RETURNS AVERAGE ANNUAL TOTAL RETURNS
--------------- -------------------------------
SINCE INCEPTION* YEAR ENDED SINCE INCEPTION*
TO NOVEMBER 30, DECEMBER 31, TO DECEMBER 31,
2003 2003 2003
--------------- ------------ ---------------
Atalanta/Sosnoff Value Fund 22.0% 25.6% 5.5%
Lipper Large-Cap Value Index n/a 28.0% n/a
S&P 500 Index ( 17.8%) 28.7% ( 3.2%)
*Inception July 1, 1999
4
STATEMENTS OF ASSETS AND LIABILITIES
NOVEMBER 30, 2003 (UNAUDITED)
================================================================================
ATALANTA/
ATALANTA/ SOSNOFF
SOSNOFF VALUE
FUND FUND
- --------------------------------------------------------------------------------
ASSETS
Investment securities:
At amortized cost ........................ $ 33,355,425 $ 2,559,270
============ ===========
At market value (Note 1) ................. $ 39,403,432 $ 2,947,961
Dividends receivable ....................... 5,435 1,259
Receivable for securities sold ............. 194,978 23,997
Receivable for capital shares sold ......... 500 --
Receivable from Adviser (Note 3) ........... -- 11,248
Other assets ............................... 26,604 9,152
----------- -----------
TOTAL ASSETS ......................... 39,630,949 2,993,617
----------- -----------
LIABILITIES
Bank overdraft ............................. 189,336 --
Payable for securities purchased ........... 1,150,412 79,182
Payable for capital shares redeemed ........ 62,774 --
Payable to Adviser (Note 3) ................ 39,352 --
Payable to other affiliates (Note 3) ....... 8,310 5,000
Other accrued expenses ..................... -- 2,800
----------- -----------
TOTAL LIABILITIES .................... 1,450,184 86,982
----------- -----------
NET ASSETS ................................. $ 38,180,765 $ 2,906,635
=========== ===========
Net assets consist of:
Paid-in capital ............................ $ 37,956,336 $ 2,758,411
Accumulated net investment loss ............ (146,960) (10,983)
Accumulated net realized losses
from security transactions ............... (5,676,618) (229,484)
Net unrealized appreciation on investments . 6,048,007 388,691
----------- -----------
Net assets ................................. $ 38,180,765 $ 2,906,635
=========== ===========
Shares of beneficial interest outstanding
(unlimited number of shares authorized,
no par value) ........................... 3,405,516 267,244
=========== ===========
Net asset value, offering price and
redemption price per share (Note 1) ...... $ 11.21 $ 10.88
=========== ===========
See accompanying notes to financial statements.
5
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED NOVEMBER 30, 2003 (UNAUDITED)
================================================================================
ATALANTA/
ATALANTA/ SOSNOFF
SOSNOFF VALUE
FUND FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME
Dividends ................................ $ 107,589 $ 10,402
----------- -----------
EXPENSES
Investment advisory fees (Note 3) ........ 136,177 10,949
Administration fees (Note 3) ............. 26,326 12,000
Professional fees ........................ 22,407 13,928
Accounting services fees (Note 3) ........ 12,505 12,000
Service plan expense (Note 3) ............ 17,589 548
Transfer agent fees (Note 3) ............. 9,000 6,000
Trustees' fees and expenses .............. 6,490 6,127
Insurance expense ........................ 8,635 1,063
Registration fees ........................ 4,815 3,273
Custodian fees ........................... 5,963 1,800
Printing of shareholder reports .......... 3,276 906
Other expenses ........................... 1,366 5,018
----------- -----------
TOTAL EXPENSES ......................... 254,549 73,612
Fees waived and/or expenses reimbursed
by the Adviser (Note 3) ................ -- (52,227)
----------- -----------
NET EXPENSES ........................... 254,549 21,385
----------- -----------
NET INVESTMENT LOSS ........................ (146,960) (10,983)
----------- -----------
REALIZED AND UNREALIZED GAINS
ON INVESTMENTS
Net realized gains from
security transactions .................. 920,677 174,470
Net realized gains on option
contracts written (Note 4) ............. 34,581 --
Net change in unrealized appreciation/
depreciation on investments ............ 1,783,050 41,124
----------- -----------
NET REALIZED AND UNREALIZED
GAINS ON INVESTMENTS ..................... 2,738,308 215,594
----------- -----------
NET INCREASE IN NET ASSETS
FROM OPERATIONS .......................... $ 2,591,348 $ 204,611
=========== ===========
See accompanying notes to financial statements.
6
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
ATALANTA/
SOSNOFF
FUND
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
NOVEMBER 30, ENDED
2003 MAY 31,
(UNAUDITED) 2003
- --------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment loss ...................... $ ( 146,960) $ ( 122,874)
Net realized gains (losses) on:
Security transactions .................. 920,677 (2,582,885)
Option contracts written (Note 4) ...... 34,581 (24,282)
Net change in unrealized appreciation/
depreciation on investments ............ 1,783,050 1,903,064
----------- -----------
Net increase (decrease) in net assets
from operations............................ 2,591,348 ( 826,977)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ................ 8,821,705 10,419,763
Payments for shares redeemed ............. (1,772,820) (8,041,532)
----------- -----------
Net increase in net assets from
capital share transactions ............... 7,048,885 2,378,231
----------- -----------
TOTAL INCREASE IN NET ASSETS ............... 9,640,233 1,551,254
NET ASSETS:
Beginning of period ...................... 28,540,532 26,989,278
----------- -----------
End of period ............................ $38,180,765 $28,540,532
=========== ===========
CAPITAL SHARE ACTIVITY:
Shares sold .............................. 820,720 1,101,989
Shares redeemed .......................... (163,695) (850,044)
----------- -----------
Net increase in shares outstanding ....... 657,025 251,945
Shares outstanding, beginning of period .. 2,748,491 2,496,546
----------- -----------
Shares outstanding, end of period ........ 3,405,516 2,748,491
=========== ===========
See accompanying notes to financial statements.
7
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
ATALANTA/
SOSNOFF
VALUE FUND
- --------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR
NOVEMBER 30, ENDED
2003 MAY 31,
(UNAUDITED) 2003
- --------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment loss ...................... $ ( 10,983) $ ( 7,961)
Net realized gains (losses) on:
Security transactions .................. 174,470 (185,509)
Option contracts written (Note 4) ...... -- 4,499
Net change in unrealized appreciation/
depreciation on investments ............ 41,124 93,636
----------- -----------
Net increase (decrease) in net assets
from operations ........................... 204,611 (95,335)
----------- -----------
FROM CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold ................ 184,259 251,501
Payments for shares redeemed ............. (63,915) (44,451)
----------- -----------
Net increase in net assets from capital
share transactions ........................ 120,344 207,050
----------- -----------
TOTAL INCREASE IN NET ASSETS ............... 324,955 111,715
NET ASSETS:
Beginning of period ...................... 2,581,680 2,469,965
----------- -----------
End of period ............................ $ 2,906,635 $ 2,581,680
=========== ===========
CAPITAL SHARE ACTIVITY:
Shares sold .............................. 17,545 26,596
Shares redeemed .......................... (5,960) (4,805)
----------- -----------
Net increase in shares outstanding ....... 11,585 21,791
Shares outstanding, beginning of period .. 255,659 233,868
----------- -----------
Shares outstanding, end of period ........ 267,244 255,659
=========== ===========
See accompanying notes to financial statements.
8
ATALANTA/SOSNOFF FUND
FINANCIAL HIGHLIGHTS
===========================================================================================================
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR PERIOD
NOVEMBER, 30 ENDED ENDED ENDED ENDED ENDED
2003 MAY 31, MAY 31, MAY 31, MAY 31, MAY 31,
(UNAUDITED) 2003 2002 2001 2000 1999(a)
- -----------------------------------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE
OUTSTANDING THROUGHOUT
EACH PERIOD:
Net asset value at beginning of period .. $ 10.38 $ 10.81 $ 12.39 $ 14.93 $ 12.34 $ 10.00
------- ------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment loss ................... (0.04) (0.04) (0.05) (0.04) (0.12) (0.05)
Net realized and unrealized gains
(losses) on investments ............. 0.87 (0.39) (1.53) 0.17 2.71 2.39
------- ------- ------- ------- ------- -------
Total from investment operations ........ 0.83 (0.43) (1.58) 0.13 2.59 2.34
------- ------- ------- ------- ------- -------
Less distributions:
From net realized gains ............... -- -- -- (2.67) -- --
------- ------- ------- ------- ------- -------
Net asset value at end of period ........ $ 11.21 $ 10.38 $ 10.81 $ 12.39 $ 14.93 $ 12.34
======= ======= ======= ======= ======= =======
Total return ............................ 8.00%(b) (3.98%) (12.75%) 0.37% 20.99% 23.40%(b)
======= ======= ======= ======= ======= =======
RATIOS AND
SUPPLEMENTAL DATA:
Net assets at end of period (000's)...... $ 38,181 $ 28,541 $ 26,989 $20,066 $ 18,485 $13,480
======= ======= ======= ======= ======= =======
Ratio of net expenses to
average net assets(c).................. 1.45%(d) 1.50% 1.50% 1.50% 1.50% 1.50%(d)
Ratio of net investment loss to average
net assets (0.84%)(d) (0.53%) (0.54%) (0.36%) (0.88%) (0.60%)(d)
Portfolio turnover rate 97%(d) 120% 98% 141% 143% 124%(d)
(a) Represents the period from the initial public offering of shares, June 17,
1998, through May 31, 1999.
(b) Not annualized.
(c) Absent fee waivers and expense reimbursements by the Adviser, the ratio of
expenses to average net assets would have been 1.72%, 1.83%, 1.73%, 1.95%
and 2.54%(d) for the periods ended May 31, 2003, 2002, 2001, 2000 and 1999,
respectively (Note 3). There were no fee waivers during the period ended
November 30, 2003.
(d) Annualized.
See accompanying notes to financial statements.
9
Atalanta/Sosnoff Value Fund
Financial Highlights
======================================================================================================
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR
NOVEMBER, 30 ENDED ENDED ENDED ENDED
2003 MAY 31, MAY 31, MAY 31, MAY 31,
(UNAUDITED) 2003 2002 2001 2000(a)
- ------------------------------------------------------------------------------------------------------
PER SHARE DATA FOR A SHARE
OUTSTANDING THROUGHOUT
EACH PERIOD:
Net asset value at beginning of period ... $ 10.10 $ 10.56 $ 11.29 $ 10.68 $ 10.00
------- ------- ------- ------- -------
Income (loss) from investment operations:
Net investment income (loss) ............. (0.04) (0.03) (0.04) 0.04 (0.03)
Net realized and unrealized gains (losses)
on investments ......................... 0.82 (0.43) (0.38) 1.62 0.71
------- ------- ------- ------- -------
Total from investment operations ........... 0.78 (0.46) (0.42) 1.66 0.68
------- ------- ------- ------- -------
Less distributions:
From net investment income ............... -- -- -- (0.04) --
From net realized gains .................. -- -- (0.31) (1.01) --
------- ------- ------- ------- -------
Total distributions ........................ -- -- (0.31) (1.05) --
------- ------- ------- ------- -------
Net asset value at end of period ........... $ 10.88 $ 10.10 $ 10.56 $ 11.29 $ 10.68
======= ======= ======= ======= =======
Total return ............................... 7.72%(b) (4.36%) (3.74%) 15.14% 6.80%(b)
======= ======= ======= ======= =======
RATIOS AND SUPPLEMENTAL DATA:
Net assets at end of period (000's) ........ $ 2,907 $ 2,582 $ 2,470 $ 3,036 $ 2,137
======= ======= ======= ======= =======
Ratio of net expenses to average
net assets(c) ............................. 1.54%(d) 1.50% 1.50% 1.50% 1.50%(d)
Ratio of net investment income (loss) to
average net assets ....................... (0.79%)(d) (0.37%) (0.38%) 0.34% (0.38%)(d)
Portfolio turnover rate .................... 146%(d) 143% 200% 983% 416%(d)
(a) Represents the period from the initial public offering of shares, July 1,
1999, through May 31, 2000.
(b) Not annualized.
(c) Absent fee waivers and expense reimbursements by the Adviser, the ratio of
expenses to average net assets would have been 5.29%(d), 5.11%, 4.14%,
4.26% and 4.87%(d) for the periods ended November 30, 2003, May 31, 2003,
2002, 2001 and 2000, respectively (Note 3).
(d) Annualized.
See accompanying notes to financial statements.
10
ATALANTA/SOSNOFF FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 2003 (UNAUDITED)
================================================================================
COMMON STOCKS -- 101.3% SHARES VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY-- 21.7%
Cablevision Systems New York Group* ............ 29,500 $ 611,240
Clear Channel Communications, Inc. ............. 14,100 589,521
Comcast Corp.* ................................. 38,000 1,145,700
Fox Entertainment Group, Inc. * ................ 24,300 693,765
KB HOME ........................................ 11,100 764,568
Lowes Co., Inc. ................................ 18,500 1,078,550
Pulte Homes, Inc. .............................. 6,400 611,456
Staples, Inc.* ................................. 30,900 838,935
Time Warner, Inc.* ............................. 47,900 779,812
Viacom, Inc. - Class B ......................... 29,527 1,161,002
----------
8,274,549
----------
CONSUMER STAPLES-- 0.7%
Wal-Mart Stores, Inc. .......................... 5,000 278,200
----------
FINANCIALS -- 24.2%
Ace LTD ........................................ 11,100 404,595
American Express Co. ........................... 15,900 726,789
Berkshire Hathaway, Inc. - Class B * ........... 439 1,229,639
Citigroup, Inc. ................................ 35,880 1,687,795
Franklin Resources, Inc. ....................... 8,300 396,989
Goldman Sachs Group, Inc. (The) ................ 8,600 826,288
J.P. Morgan Chase & Co. ........................ 20,700 731,952
Lehman Brothers Holdings, Inc. ................. 18,900 1,364,769
Merrill Lynch & Co., Inc. ...................... 20,700 1,174,725
RenaissanceRE Holdings LTD ..................... 14,500 695,420
----------
9,238,961
----------
HEALTHCARE -- 21.1%
Aetna, Inc. .................................... 19,900 1,281,162
Amgen, Inc.* ................................... 12,600 724,626
Boston Scientific Corp.* ....................... 24,200 868,538
Caremark Rx, Inc.* ............................. 36,200 966,540
Eli Lilly and Co. .............................. 9,100 623,896
Forest Laboratories, Inc.* ..................... 16,500 901,560
Gilead Sciences, Inc.* ......................... 13,200 774,576
INAMED Corp.* .................................. 8,700 681,732
UnitedHealth Group, Inc. ....................... 22,400 1,207,360
----------
8,029,990
----------
INDUSTRIALS -- 4.6%
D.R. Horton, Inc. .............................. 22,900 1,000,730
Ryland Group, Inc. (The) ....................... 8,400 774,060
----------
1,774,790
----------
INFORMATION TECHNOLOGY-- 26.3%
Cisco Systems, Inc.* ........................... 74,300 1,683,638
Computer Associates International, Inc. ........ 49,100 1,144,030
Dell Computer Corp.* ........................... 29,200 1,007,400
EchoStar Communications Corp.* ................. 30,800 1,061,984
Hewlett-Packard Co. ............................ 58,700 1,273,203
11
ATALANTA/SOSNOFF FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
COMMON STOCKS -- 101.3% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
INFORMATION TECHNOLOGY -- 26.3% (Continued)
International Business Machines Corp. .......... 8,200 $ 742,428
Microsoft Corp. ................................ 68,600 1,763,020
Taiwan Semiconductor Manufacturing Co. LTD - ADR* 127,015 1,380,653
----------
10,056,356
----------
TELECOMMUNICATIONS SERVICES-- 2.7%
Nextel Communications, Inc.* ................... 40,800 1,033,464
----------
TOTAL COMMON STOCKS (Cost $32,638,303) ......... $ 38,686,310
==========
================================================================================
CASH EQUIVALENTS -- 1.9% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation Fund - Class S
(Cost $717,122) ................................ 717,122 $ 717,122
----------
TOTAL INVESTMENT SECURITIES-- 103.2%
(Cost $33,355,425) ............................. $39,403,432
LIABILITIES IN EXCESS OF OTHER ASSETS-- (3.2%) . (1,222,667)
----------
NET ASSETS-- 100.0% ............................ $38,180,765
==========
See accompanying notes to financial statements.
* Non-income producing security
12
ATALANTA/SOSNOFF VALUE FUND
PORTFOLIO OF INVESTMENTS
NOVEMBER 30, 2003 (UNAUDITED)
================================================================================
COMMON STOCKS -- 96.7% SHARES VALUE
- --------------------------------------------------------------------------------
CONSUMER DISCRETIONARY-- 23.1%
Cablevision Systems New York Group* ............ 2,800 $ 58,016
Clear Channel Communications, Inc. ............. 1,300 54,353
Comcast Corp.* ................................. 2,800 84,420
Fox Entertainment Group, Inc. * ................ 1,800 51,390
KB HOME ........................................ 1,200 82,656
Lowes Co., Inc. ................................ 1,100 64,130
Pulte Homes, Inc. .............................. 700 66,878
Staples, Inc.* ................................. 2,400 65,160
Time Warner, Inc.* ............................. 3,600 58,608
Viacom, Inc. - Class B ......................... 2,200 86,504
----------
672,115
----------
CONSUMER STAPLES-- 1.4%
Loews Corp. - Carolina Group ................... 1,800 41,580
----------
FINANCIALS -- 26.9%
Ace LTD ........................................ 1,200 43,740
American Express Co. ........................... 1,200 54,852
Berkshire Hathaway, Inc. - Class B * ........... 44 123,244
Citigroup, Inc. ................................ 3,100 145,824
Franklin Resources, Inc. ....................... 600 28,698
Goldman Sachs Group, Inc. (The) ................ 800 76,864
J.P. Morgan Chase & Co. ........................ 1,600 56,576
Lehman Brothers Holdings, Inc. ................. 1,700 122,757
Merrill Lynch & Co., Inc. ...................... 1,500 85,125
UnumProvident Corp. ............................ 3,000 44,790
----------
782,470
----------
HEALTHCARE -- 11.1%
Aetna, Inc. .................................... 1,500 96,570
Caremark Rx, Inc.* ............................. 2,700 72,090
Eli Lilly and Co. .............................. 900 61,704
UnitedHealth Group, Inc. ....................... 1,700 91,630
----------
321,994
----------
INDUSTRIALS -- 8.4%
D.R. Horton, Inc. .............................. 2,300 100,510
Deere & Co. .................................... 1,000 61,230
Ryland Group, Inc. (The) ....................... 900 82,935
----------
244,675
----------
INFORMATION TECHNOLOGY-- 22.8%
Cisco Systems, Inc. * .......................... 4,200 95,172
Computer Associates International, Inc. ........ 4,300 100,190
EchoStar Communications Corp.* ................. 1,500 51,720
Hewlett-Packard Co. ............................ 4,200 91,098
International Business Machines Corp. .......... 300 27,162
Microsoft Corp. ................................ 4,800 123,360
Taiwan Semiconductor Manufacturing Co. LTD - ADR* 11,567 125,733
Xerox Corp. .................................... 3,900 47,502
----------
661,937
----------
13
ATALANTA/SOSNOFF VALUE FUND
PORTFOLIO OF INVESTMENTS (CONTINUED)
================================================================================
COMMON STOCKS -- 96.7% (Continued) SHARES VALUE
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS SERVICES-- 3.0%
Nextel Communications, Inc.* ................... 3,400 $ 86,122
----------
TOTAL COMMON STOCKS (Cost $2,423,474) .......... $ 2,810,893
----------
================================================================================
REAL ESTATE INVESTMENT TRUSTS-- 1.4% SHARES VALUE
- --------------------------------------------------------------------------------
Equity Office Properties Trust (Cost $40,323) .. 1,500 $ 41,595
----------
================================================================================
CASH EQUIVALENTS -- 3.3% SHARES VALUE
- --------------------------------------------------------------------------------
First American Treasury Obligation Fund - Class S
(Cost $95,473) ............................... 95,473 $ 95,473
----------
TOTAL INVESTMENT SECURITIES-- 101.4%
(Cost $2,559,270)............................. $ 2,947,961
LIABILITIES IN EXCESS OF OTHER ASSETS-- (1.4%).. ( 41,326)
----------
NET ASSETS-- 100.0%............................. $ 2,906,635
==========
See accompanying notes to financial statements.
* Non-income producing security
14
NOTES TO FINANCIAL STATEMENTS
NOVEMBER 30, 2003 (UNAUDITED)
================================================================================
1. SIGNIFICANT ACCOUNTING POLICIES
The Atalanta/Sosnoff Fund and the Atalanta/Sosnoff Value Fund (individually, a
Fund, and, collectively, the Funds) are each a no-load series of the
Atalanta/Sosnoff Investment Trust (the Trust), an open-end management investment
company registered under the Investment Company Act of 1940. The Trust was
organized as an Ohio business trust on January 29, 1998. The Atalanta/Sosnoff
Fund was capitalized on May 6, 1998, when Atalanta Sosnoff Capital, LLC (the
Adviser) purchased the initial 10,000 shares of the Fund at $10 per share. The
public offering of shares of the Atalanta/Sosnoff Fund commenced on June 17,
1998. The public offering of shares of the Atalanta/Sosnoff Value Fund commenced
on July 1, 1999, when the Adviser purchased the initial 200,000 shares of the
Fund at $10 per share. The Funds had no operations prior to the public offering
of their respective shares except for the initial issuance of shares.
The Atalanta/Sosnoff Fund seeks long-term capital appreciation through equity
investments in companies which the Adviser believes are entering into a period
of accelerating earnings momentum.
The Atalanta/Sosnoff Value Fund seeks long-term capital appreciation by
investing primarily in equity securities which the Adviser believes are
fundamentally undervalued.
The following is a summary of the Funds' significant accounting policies:
Securities valuation -- The Funds' portfolio securities are valued as of the
close of the regular session of trading on the New York Stock Exchange (normally
4:00 p.m., Eastern time). Securities which are traded on stock exchanges are
valued at the last reported sale price or, if not traded on a particular day, at
the closing bid price. Securities which are quoted by NASDAQ are valued at the
NASDAQ Official Closing Price. Securities traded in the over-the-counter market,
and which are not quoted by NASDAQ, are valued at the last sale price, if
available, otherwise, at the last quoted bid price. Securities for which market
quotations are not readily available are valued at fair value as determined in
good faith in accordance with consistently applied procedures established by and
under the general supervision of the Board of Trustees. Short-term instruments
(those remaining maturities of 60 days or less) are valued at amortized cost,
which approximates market value.
Share valuation -- The net asset value per share of each Fund is calculated
daily by dividing the total value of each Fund's assets, less liabilities, by
the number of shares outstanding, rounded to the nearest cent. The offering and
redemption price per share of each Fund is equal to the net asset value per
share.
Investment income -- Dividend income is recorded on the ex-dividend date.
Interest income is accrued as earned. Discounts and premiums on fixed-income
securities are amortized using the interest method.
Distributions to shareholders -- Dividends arising from net investment income,
if any, are declared and paid annually to shareholders of each Fund. Net
realized short-term capital gains, if any, may be distributed throughout the
year and net realized long-term capital gains, if any, are distributed at least
once each year. The amount of distributions from net investment income and net
realized gains are determined in accordance with federal income tax
15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
regulations which may differ from accounting principles generally accepted in
the United States. These "book/tax" differences are either temporary or
permanent in nature and are primarily due to losses deferred due to wash sales.
There were no distributions for the Atalanta/Sosnoff Fund or the
Atalanta/Sosnoff Value Fund during the periods ended November 30, 2003 and May
31, 2003.
Security transactions -- Security transactions are accounted for on trade date.
Securities sold are determined on a specific identification basis.
Option transactions - The Funds may write covered call options for which
premiums are received and are recorded as liabilities, and are subsequently
valued daily at the closing prices on their primary exchanges. Premiums received
from writing options which expire are treated as realized gains. Premiums
received from writing options which are exercised increase the proceeds used to
calculate the realized gain or loss on the sale of the security. If a closing
purchase transaction is used to terminate the Funds' obligation on a call, a
gain or loss will be realized, depending upon whether the price of the closing
purchase transaction is more or less than the premium previously received on the
call written.
Estimates -- The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of income and expenses during the reporting period. Actual results could
differ from those estimates.
Federal income tax -- It is each Fund's policy to comply with the special
provisions of the Internal Revenue Code (the Code) applicable to regulated
investment companies. As provided therein, in any fiscal year in which a Fund so
qualifies and distributes at least 90% of its taxable income, the Fund (but not
the shareholders) will be relieved of federal income tax on the income
distributed. Accordingly, no provision for income taxes has been made.
In order to avoid imposition of the excise tax applicable to regulated
investment companies, it is also each Fund's intention to declare as dividends
in each calendar year at least 98% of its net investment income (earned during
the calendar year) and 98% of its net realized capital gains (earned during the
twelve months ended October 31) plus undistributed amounts from prior years.
The tax character of distributable earnings at November 30, 2003 was as follows:
- --------------------------------------------------------------------------------
ATALANTA/
ATALANTA/ SOSNOFF
SOSNOFF VALUE
FUND FUND
- --------------------------------------------------------------------------------
Accumulated net investment loss........ $ ( 146,960) $ ( 10,983)
Capital loss carryforwards............. ( 6,434,917) ( 399,083)
Unrealized appreciation................ 5,839,098 377,056
Other gains............................ 967,208 181,234
------------ ----------
Total distributable earnings........... $ 224,429 $ 148,224
============ ==========
- --------------------------------------------------------------------------------
16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
As of May 31, 2003, the Funds had the following capital loss carryforwards for
federal income tax purposes. These capital loss carryforwards may be utilized in
the current and future years to offset net realized capital gains, if any, prior
to distribution to shareholders.
- --------------------------------------------------------------------------------
ATALANTA/
ATALANTA/ SOSNOFF
SOSNOFF VALUE
EXPIRES MAY 31, FUND FUND
- --------------------------------------------------------------------------------
2009................................. $ 968,544 $ --
2010................................. 987,464 151,888
2011................................. 4,478,909 247,195
----------- ---------
$ 6,434,917 $ 399,083
=========== =========
- --------------------------------------------------------------------------------
The following information is based upon the federal income tax cost of the
investment securities as of November 30, 2003:
- --------------------------------------------------------------------------------
ATALANTA/
ATALANTA/ SOSNOFF
SOSNOFF VALUE
FUND FUND
- --------------------------------------------------------------------------------
Gross unrealized appreciation.......... $ 6,436,076 $ 404,799
Gross unrealized depreciation.......... ( 596,978) ( 27,743)
----------- ---------
Net unrealized appreciation............ $ 5,839,098 $ 377,056
=========== =========
Federal income tax cost................ $ 33,564,334 $ 2,570,905
=========== =========
The difference between the federal income tax cost and the financial statement
cost of portfolio investments is due to certain timing differences in the
recognition of capital losses under income tax regulations and accounting
principles generally accepted in the United States.
2. INVESTMENT TRANSACTIONS
Investment transactions, other than short-term investments and U.S. government
securities, were as follows for the six months ended November 30, 2003:
- --------------------------------------------------------------------------------
ATALANTA/
ATALANTA/ SOSNOFF
SOSNOFF VALUE
FUND FUND
- --------------------------------------------------------------------------------
Purchases of investment securities..... $ 24,224,545 $ 2,045,196
============ ===========
Proceeds from sales of investment
securities............................ $ 16,249,431 $ 1,921,069
============ ===========
- --------------------------------------------------------------------------------
17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
3. TRANSACTIONS WITH AFFILIATES
Certain officers of the Trust are also officers of the Adviser. Certain other
officers of the Trust are also officers of Ultimus Fund Solutions, LLC
(Ultimus), the administrative services agent, shareholder servicing and transfer
agent and accounting services agent for the Trust.
INVESTMENT ADVISORY AGREEMENT
The Funds' investments are managed by the Adviser pursuant to the terms of an
Investment Advisory Agreement. Each Fund pays the Adviser an investment advisory
fee, computed and accrued daily and paid monthly, at an annual rate of 0.75% of
average daily net assets of each Fund. This base management fee of 0.75% may be
increased or decreased by 0.25% if a Fund outperforms or underperforms its
relevant benchmark by at least 2.00% (referred to as the "performance fee
adjustment"). For the six months ended November 30, 2003, the Atalanta/Sosnoff
Fund and the Atalanta/Sosnoff Value Fund paid an additional $4,949 and $513,
respectively, in investment advisory fees pursuant to the performance fee
adjustment.
The Adviser has committed to waive its investment advisory fees and reimburse
the Funds for expenses incurred to the extent necessary to limit total operating
expenses of each Fund (before any performance fee adjustment) to a maximum level
of 1.50% of each Fund's average daily net assets. Accordingly, during the six
months ended November 30, 2003, the Adviser waived its investment advisory fees
of $10,949, which includes $513 of the performance fee adjustment, and
reimbursed $41,278 of other operating expenses for the Atalanta/Sosnoff Value
Fund. There were no waivers for the Atalanta/Sosnoff Fund.
ADMINISTRATION AGREEMENT
Under the terms of an Administration Agreement, Ultimus supplies non-investment
related statistical and research data, internal regulatory compliance services
and executive and administrative services for the Funds. Ultimus prepares the
tax returns, reports to shareholders of each Fund, reports to and filings with
the Securities and Exchange Commission and state securities commissions, and
materials for meetings of the Board of Trustees. For these services, Ultimus
receives a monthly fee at an annual rate of 0.15% of each Fund's average daily
net assets up to $50 million; 0.125% of such net assets between $50 million and
$100 million; 0.10% of such net assets between $100 million and $250 million;
0.075% of such nets assets between $250 million and $500 million; and 0.05% of
such net assets in excess of $500 million, subject to a $2,000 minimum monthly
fee per Fund.
FUND ACCOUNTING AGREEMENT
Under the terms of a Fund Accounting Agreement, Ultimus calculates the daily net
asset value per share and maintains the financial books and records of each
Fund. For these services, Ultimus receives a fee, based on current asset levels,
of $2,000 per month from each Fund plus an asset-based fee computed as a
percentage of each Fund's average net assets. In addition, each Fund reimburses
Ultimus for out-of-pocket expenses related to the pricing of each Fund's
portfolio securities.
18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
TRANSFER AGENT AGREEMENT
Under the terms of a Transfer Agent and Shareholder Services Agreement, Ultimus
maintains the records of each shareholder's account, answers shareholders'
inquiries concerning their accounts, processes purchases and redemptions of each
Fund's shares, acts as dividend and distribution disbursing agent, and performs
other shareholder service functions. For these services, Ultimus receives a
monthly fee at an annual rate of $18 per shareholder account from each Fund,
subject to a $1,500 minimum monthly fee for each Fund (except that if a Fund has
less than 25 shareholders, the monthly fee is reduced to $1,000 and if a Fund
has less than 100 shareholders but not less than 25, the monthly fee is reduced
to $1,250). In addition, each Fund reimburses Ultimus for out-of-pocket expenses
including, but not limited to, postage and supplies.
SERVICE PLAN
The Trust has adopted a Service Plan (the Plan) under which each Fund
compensates Atalanta Sosnoff Management, LLC (the Distributor) for services
related to the distribution and promotion of Fund shares. Each Fund pays the
Distributor a fee, computed and accrued daily and paid monthly, at a maximum
annual rate of 0.25% of the average daily net assets of each Fund. During the
six months ended November 30, 2003, the Atalanta/Sosnoff Fund and the
Atalanta/Sosnoff Value Fund incurred expenses of $17,589 and $548 respectively,
under the Plan.
4. CALL OPTIONS WRITTEN
A summary of written call option contracts during the six months ended November
30, 2003 for the Atalanta/Sosnoff Fund is as follows:
- --------------------------------------------------------------------------------
ATALANTA/SOSNOFF
FUND
- --------------------------------------------------------------------------------
OPTION OPTION
CONTRACTS PREMIUMS
- --------------------------------------------------------------------------------
Options outstanding at beginning of period....... -- $ --
Options written.................................. 87 34,581
Options canceled in a closing purchase
transaction..................................... ( 87) ( 34,581)
---------- ----------
Options outstanding at end of period............. -- $ --
========== ==========
- --------------------------------------------------------------------------------
19
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ATALANTA/SOSNOFF INVESTMENT TRUST
101 Park Avenue o New York, New York 10178
toll free 1-877-SOSNOFF (767-6633)
website o www.atalantasosnoff.com
e-mail o asfund@atalantasosnoff.com
BOARD OF TRUSTEES
Toni E. Sosnoff
Howard A. Drucker
Irving L. Straus
Aida L. Wilder
INVESTMENT ADVISER
Atalanta Sosnoff Capital, LLC
101 Park Avenue o New York, New York 10178
212-867-5000
DISTRIBUTOR
Atalanta Sosnoff Management, LLC
101 Park Avenue o New York, New York 10178
TRANSFER AGENT
Ultimus Fund Solutions, LLC
P.O. Box 46707 o Cincinnati, Ohio 45246-0707
SHAREHOLDER SERVICES
Nationwide: (Toll-Free) 1-877-SOSNOFF
1-877-767-6633
A description of the policies and procedures that the Fund uses to determine how
to vote proxies relating to portfolio securities is available without charge
upon request by calling toll-free 1-877-SOSNOFF (1-877-767-6633), or on the
Securities and Exchange Commission's website at http://www.sec.gov.
ITEM 2. CODE OF ETHICS.
Not required
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not required
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not required
ITEM 5. AUDIT COMMITTEE OF LISTED COMPANIES.
Not required
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not required
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) Based on their evaluation of the registrant's disclosure controls and
procedures (as defined in Rule 301-2(c) under the Investment Company Act of
1940), the registrant's principal executive officer and principal financial
officer have concluded that such disclosure controls and procedures are
reasonably designed and are operating effectively to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to them by others within those entities, particularly during the
period in which this report is being prepared, and that the information required
in filings on Form N-CSR is recorded, processed, summarized, and reported on a
timely basis.
(b) There were no significant changes in the registrant's internal control over
financial reporting that occurred during the registrant's most recent fiscal
half-year (the registrant's second fiscal half-year in the case of an annual
report) that have materially affected, or are reasonably likely to materially
affect, the registrant's internal control over financial reporting.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
(b) A separate certification for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2 under the Act (17
CFR 270.30a-2): Attached hereto
Exhibit 99.CERT Certifications pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002
Exhibit 99.906CERT Certifications pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Atalanta/Sosnoff Investment Trust
------------------------------------------------------------------
By (Signature and Title)* /s/ Kevin S. Kelly
-------------------------------------
Kevin S. Kelly, President
Date February 2, 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 (Signature and Title)* /s/ Kevin S. Kelly
-------------------------------------
Kevin S.Kelly, President
Date February 2, 2004
-------------------------------
By (Signature and Title)* /s/ Mark J. Seger
-------------------------------------
Mark J. Seger, Treasurer
Date February 2, 2004
-------------------------------
* Print the name and title of each signing officer under his or her signature.