Comprehensive annual financial report / Elected Officials' Retirement Plan fy 2003

              ELECTED OFFICIALS’ RETIREMENT PLAN
A PENSION TRUST FUND OF THE STATE OF ARIZONA
TWENTY-SECOND COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2003
This report was prepared by the staff of the EORP
1020 East Missouri Avenue
Phoenix, Arizona 85014
(602) 255-5575
Fax (602) 255-5572
www.psprs.com
STATE OF ARIZONA
ELECTED OFFICIALS’ RETIREMENT PLAN
TWENTY-SECOND COMPREHENSIVE ANNUAL FINANCIAL REPORT
CONTENTS
INTRODUCTORY SECTION
Fund Managers' Report ……………………………………………………………………………………. 3
Letter of Transmittal ………………………………………………………………………………………... 4
Certificate of Achievement for Excellence in Financial Reporting ……………………………………. 7
The Retirement Board and Administrative Organization ………………………………………………. 8
Organizational Chart ……………………………………………………………………………………….. 9
Summary of Plan Provisions (See Note 1 in Notes to Financial Statements)………………………... 20
FINANCIAL SECTION
Independent Auditor's Report …………………………………………………………………………….. 13
Management’s Discussion and Analysis ………………………………………………………………… 14
Basic Financial Statements
Statements of Plan Net Assets…………………………………………………………………… 18
Statements of Changes in Plan Net Assets....................………………………………………… 19
Notes to Financial Statements……………………………………………………………………… 20
(These Notes are an Integral Part of the Financial Statements)
Required Supplementary Information
Schedule of Funding Progress …………………………………………………………………… 26
Schedule of Employer Contributions………………………………………………………………. 27
Supporting Schedule of Changes in Fund Balance Reserves ………………………………………... 28
Supporting Schedule of Administrative and Investment Expenses ………………………………...… 29
Supporting Schedule of Payments to Consultants ……………………………………………………... 29
Supplemental Schedule of Cash Receipts and Cash Disbursements ………………………..……… 30
INVESTMENT SECTION
Fund Objectives ……………………………………………………………………………………………. 33
Investment Performance Data ……………………………………………………………………………. 34
Supporting Schedule of Commissions Paid to Brokers ……………………………………...………… 38
Summary of Changes in Investment Portfolio …………………………………………………………... 39
Detailed List of Investments Acquired …………………………………………………………………… 40
Detailed List of Sales and Redemption of Investments ………………………………………………... 46
Detailed List of Investments Owned ……………………………………………………………………… 50
ACTUARIAL SECTION
Actuarial Certification Statement …………………………………………………………………………. 61
Aggregate Actuarial Balance Sheet, June 30, 2003 …………………………………………………… 62
Summary of Valuation Methods and Assumptions …………………………………………………… 63
Solvency Test ……………………………………………���………………………………………………. 66
Summary of Active Member Data ………………………………………………………………………… 67
Summary of Inactive Member Data ……….……………………………………………………………… 68
Schedule of Retirants and Beneficiaries………………………………………………………………… 68
Schedule of Experience Gain / (Loss)…………………………………………………………………… 69
STATISTICAL SECTION
Schedule of Revenues by Source and Expenses by Type…………………………………………… 73
Schedule of Benefit Expenses by Type ……………………………………………………………....…. 74
Summary of Retired Member and Survivor Data ………………………………………………….....… 75
Summary of Benefit Increases ………………………………………………………………………..... 76
Participating Employers …………….....................…………………………………………………....…. 78
Summary of Growth of the Plan ………………………………………………………………….....……. 79
INTRODUCTORY SECTION
ELECTED OFFICIALS’ RETIREMENT PLAN
TWENTY-SECOND COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2003
Fund Managers' Report
Letter of Transmittal
Certificate of Achievement for
Excellence in Financial Reporting
The Retirement Board and
Administrative Organization
Organizational Chart
Summary of Plan Provisions
(See Note 1 in Notes to Financial Statements)
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM
CORRECTIONS OFFICER RETIREMENT PLAN
ELECTED OFFICIALS’ RETIREMENT PLAN
1020 East Missouri Avenue
Phoenix, Arizona 85014-2613
Jack M. Cross, C.P.A., C.F.A.
Administrator TELEPHONE: (602) 255-5575
James A. Nielsen, C.P.A., J.D.
Assistant Administrator
FAX: (602) 255-5572
September 29, 2003
The Honorable Janet Napolitano
Governor of the State of Arizona
State Capitol
Phoenix, Arizona 85007
Dear Governor Napolitano:
The Fund Manager of the Public Safety Personnel Retirement System respectfully submits the Twenty-Second Comprehensive
Annual Financial Report of the Elected Officials' Retirement Plan for the fiscal year ended June 30, 2003, in accordance with
the provisions of A.R.S. Section 38-803.
We are pleased to report that the Plan is still in good financial and actuarial condition in spite of the difficult investment
environment of the past few years. The Plan’s current funding level is 110.4%. Stakeholders continue to benefit greatly from
our outstanding current and past performance. In fact, funding levels have increased from a low of 71.7% in 1982 to a high of
141.7% two years ago. The average employer contribution rate, as a percentage of gross payrolls, is 13.49% for the 2003/04
fiscal year. While the average contribution rate has increased this past year, and may continue to do so for some time, the
average contribution rate for our employer groups is still below the normal cost of the Plan at 22.65%, due to our investment
earnings.
We realize that we are now in a different investment environment, even from just a few years ago. In order to maintain prudent
funding levels, we are reducing our assumed earnings rate from 9.0% to 8.75%, effective July 1, 2004, with subsequent annual
reductions of one-quarter of one percent each year thereafter until the rate is reduced to 8.0%. We believe this to be a more
realistic rate for our Plan to achieve. Additionally, we will continue to follow a sensible long-term investment approach as well
as continuing to control costs. Set forth below are some of the highlights for the fiscal year ended June 30, 2003.
We are pleased to report for the current year the Plan had a total rate of return of 6.7%. This return is very good compared to
similar pension plans nationwide. Additionally, the Plan continues to perform well against the market indexes (S&P
500/NYSE stock and Shearson Lehman Government/Corporate bond) on a long-term basis. The 5, 10 and 15-year total rates
of return, including realized as well as unrealized gains and losses, for the total fund were –0.05%, 7.72% and 9.65%,
respectively. The 1, 5, 10 and 15-year rates of return for the equity portfolio were 3.77%, -3.92%, 7.95% and 11.0%,
respectively. The 1, 5, 10 and 15-year rates of return for the fixed income portfolio were 12.22%, 7.53%, 7.72% and 9.11%,
respectively.
Benefits paid to retired Elected Officials and their beneficiaries increased from $19,529,287 to $21,929,828. Total
administrative and investment expenses increased from $100,134 to $103,260. Costs have increased over 80% during the past
eighteen years. This increase is very low since the assets managed have increased over 390%, the Plan’s membership has
increased over 90% and inflation has increased over 70% during this same time period.
We sincerely appreciate the opportunity of serving the State of Arizona, its political subdivisions, and its elected officials and
judges.
Respectfully submitted,
_________________________________
_________________________________
Pat Cantelme, Chairman
__________________________________
Ron Snodgrass, Member
_________________________________
Wendy Hancock, Member
__________________________________
Carter Olson, Member Kevin Keogh, Member
Page 4
PUBLIC SAFETY PERSONNEL RETIREMENT SYSTEM
CORRECTIONS OFFICER RETIREMENT PLAN
ELECTED OFFICIALS’ RETIREMENT PLAN
1020 East Missouri Avenue
Phoenix, Arizona 85014-2613
Jack M. Cross, CPA, CFA
Administrator TELEPHONE: (602) 255-5575
James A. Nielsen, CPA, JD
Assistant Administrator
FAX: (602) 255-5572
www.psprs.com
September 29, 2003
The Fund Manager
Public Safety Personnel Retirement System
State of Arizona
Phoenix, Arizona
Gentlemen:
There is presented, herewith, the Twenty-Second Comprehensive Annual Financial Report of the operations and financial
conditions of the Elected Officials' Retirement Plan, State of Arizona, for the fiscal year ended June 30, 2003. Incorporated
in this report are the audited financial statements and other financial data from the June 30, 2003, report of Barrows &
Schatza, P.L.C., Certified Public Accountants and auditors for the Plan. Also included are the Actuarial Certification
Statement and the Actuarial Balance Sheet from the June 30, 2003, Actuarial Valuation prepared by the Plan’s actuary,
Rodwan & Nichols, Consulting Actuaries.
This report has been organized into five sections: (1) the Introductory Section containing general information regarding the
operations of the Elected Officials' Retirement Plan; (2) the Financial Section containing the new Management’s Discussion
and Analysis and, the financial reports and schedules of the funds administered by the Elected Officials' Retirement Plan; (3)
the Investment Section containing detailed lists of the investment transactions and portfolios of the Plan, along with
investment performance; (4) the Actuarial Section containing actuarial information regarding the funding of the pension trusts,
and (5) the Statistical Section containing statistical data pertaining to the benefits paid by the Elected Officials' Retirement
Plan and growth of the Plan.
FINANCIAL INFORMATION
The primary responsibility for the integrity and objectivity of the financial statements and related financial data rests with the
management of the Plan. The financial statements were prepared in conformity with generally accepted accounting
principles appropriate for government-sponsored defined benefit pension plans. Management believes that all other financial
information included in this annual report is consistent with those financial statements.
It is the Plan's policy to maintain a control-conscious environment through an effective system of accounting controls. These
controls are adequate to provide reasonable assurance that assets are safeguarded against loss or unauthorized use and to
produce the records necessary for the preparation of financial information. There are limits inherent in all systems of internal
control based on the recognition that the costs of such plans should be related to the benefits to be derived. Management
believes the Plan's controls provide this appropriate balance.
The Plan uses the accrual basis of accounting for both revenues and expenses. Contributions to the Plan are based on
principles of level-cost financing with current service financed as a level percent of payroll on a current basis and prior service
amortized as a level percent of payroll over a rolling twenty (20) year period.
REVENUES
Revenues to the Plan are derived from three sources: member contributions, employer contributions, and investment
income. As shown by the Schedule of Revenues by Source included in the Statistical Section later in this report, the Plan
suffered an investment loss this fiscal year that was partly offset by member contributions and employer contributions.
Please refer to the Statistical Section for a ten-year history of revenues and expenses.
ADMINISTRATIVE AND INVESTMENT EXPENSES
The 2002/2003 Administrative and Investment Expenses of the Administrative Office increased to $103,260 compared to
$100,134 for the prior year. This is only 87% higher than the total for fiscal year 1984/1985. This is a compounded annual
Page 5
rate of increase of 3.55% over the last eighteen years. This rate of increase is consistent with the rate of inflation and the
rate of growth of the Plan. A dedicated staff and constantly improving internal expertise has allowed management to keep
costs extremely low for the past eighteen years even though inflation, membership and assets managed have increased
substantially during this same period (over 70%, over 80% and nearly 400%, respectively).
INVESTMENTS
Since the Plan is well funded, management takes a moderately conservative approach to investing. The Plan invests
primarily in bonds rated A or better and blue chip common stock. A detailed summary of the investment portfolio and all
investment transactions is presented in the Investment Section. At year-end, the investment portfolio was made up of 8.1%
U. S. Government Securities, 18.0% Corporate Bonds, 4.4% Corporate Notes, 5.4% Other Investments, 0.1% insured
Money Market Funds and 64.0% Common Stocks. All investments are held in trust by the Arizona subsidiary of one of the
largest banks in the world.
Even with this relatively conservative investment philosophy, the fixed income portfolio has outperformed the Lehman
Government/Credit Bond Index in twelve of the last seventeen years and the equity portfolio has outperformed the applicable
Index (NYSE until 98/99, then S&P 500) ten of the last seventeen years. The Plan’s performance resulted in a net effective
yield of –9.98% and a 17-year total rate of return of 9.25%. Graphs depicting the Plan’s extraordinary performance since
1987, the year the current Administrator took over the portfolio management, can be found in the Investment Section.
ECONOMIC OUTLOOK
We realize that we are now in a different investment environment, even from just a few years ago. In order to maintain
prudent funding levels, the Fund Manager reduced the assumed earnings rate from 9.0% to 8.75%, effective July 1, 2004,
with subsequent annual reductions of one-quarter of one percent each year thereafter until the rate is reduced to 8.0%. We
believe this is a more realistic rate for our Plan to achieve. Our employer groups continue to benefit greatly from our
outstanding past and current performance. Additionally, we will continue to follow a sensible long-term investment approach
as well as continuing to control costs.
ACTUARIAL AND FUNDING INFORMATION
Funding a retirement plan on a sound actuarial reserve basis involves the accumulation of substantial reserves to guarantee
the payment of promised benefits. These reserves are invested and the rate of investment earnings, over time, is a major
factor in determining the employer contribution requirement to meet the calculated level cost of the Plan.
There is no single all-encompassing test to measure a retirement plan's funding progress and current status. A traditional
measure is the ratio of assets to unfunded accumulated normal costs, often referred to as the "percent funded." The percent
funded for the Plan at June 30, 2003, is 110.4%, which is well ahead of schedule.
The Plan is funded through a member contribution of 7% of gross payroll, an employer contribution set by an actuarial
valuation expressed as a percent of gross payroll and a distribution of the net earnings of the Plan. State and county
employers receive credit for a portion of certain fees collected by the Clerks of the Superior Courts, Courts of Appeals, and
the Supreme Court. Currently, these fees have been stagnant which has resulted in an increase in the state and county
employer costs. This is expected to continue through fiscal year 2004/2005 when the state and county employer rate will be
6.00% and the cities and towns employer rate will be 13.49%, which is still well below the normal cost of the Plan of
22.65%.
POST RETIREMENT BENEFIT INCREASES
State law provides for an annual benefit increase for retirees or their survivors. The increases are effective July 1 of each
year and based on benefits received on the preceding June 30. The maximum amount of the increase is 4% and
contingent upon sufficient excess investment earnings for the fund.
Below is a schedule of the increases in monthly benefits granted since this program began:
July 1, 1990 – 4.0%
July 1, 1991 – 4.0%
July 1, 1992 – 2.0%
July 1, 1993 – 3.5%
July 1, 1994 – 2.0%
Page 6
July 1, 1995 – no benefit allowed by law
July 1, 1996 – no benefit allowed by law
July 1, 1997 – 1.5%
July 1, 1998 – 1.2%
July 1, 1999 – 4.0%
July 1, 2000 – 4.0%
July 1, 2001 – 4.0%
July 1, 2002 – 4.0%
July 1, 2003 – 4.0%
July 1, 2004 – 4.0%
This is a compounded increase of over 50%.
CERTIFICATE OF ACHIEVEMENT
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the EORP for its comprehensive annual financial report for the fiscal
year ended June 30, 2002. This was the ninth consecutive year that the Plan has achieved this prestigious award. In order
to be awarded a Certificate of Achievement, a government unit must publish an easily readable and efficiently organized
comprehensive annual financial report. This report must satisfy both generally accepted accounting principles and applicable
legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current comprehensive annual financial
report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to
determine its eligibility for another certificate.
SUMMARY
The Plan's actuary, Rodwan & Nichols, summarized the results of the latest Actuarial Valuation as of June 30, 2003, as
follows:
The results of the valuations indicate that Retirement Plan benefit obligations are being funded as incurred. Favorable
economic experience over the last decade has significantly accelerated the funding progress. Current assets are
110.4% of actuarial accrued liability. We believe the assumptions produce a reasonable estimate of costs likely to
emerge in the operation of the Retirement Plan.
The Plan has experienced great change during the past seventeen years. The Plan's accrual rate was raised to 4% of pay
for each year of credited service. Members can now take normal retirement with twenty years of credited service regardless
of age and they can take a reduced early retirement with five or more years of credited service with no age limit. The Plan
now provides for disability benefits, survivor benefits for spouses and children, post-retirement increases and health
insurance subsidies. Funding has increased to 110.4%. Over just the past eighteen years, membership has grown
dramatically and total assets of the Plan have increased more than four times. I am proud to have been a part of the Plan's
management team and I look forward to the Plan's continued success in the future.
Respectfully submitted,
Jack M. Cross, CPA, CFA
Administrator
Page 8
STATE OF ARIZONA
ELECTED OFFICIALS’ RETIREMENT PLAN
THE RETIREMENT BOARD AND ADMINISTRATIVE ORGANIZATION
THE FUND MANAGER Term Expires
Pat Cantelme
Retired Firefighter
City of Phoenix
Chairman January 2005
Ron Snodgrass
Police Officer
City of Phoenix
Member January 2004
Wendy Hancock
Public Member
Member January 2005
Carter Olson
Pinal County Attorney
Member January 2006
Kevin Keogh
Finance Director
City of Phoenix
Member January 2006
PROFESSIONAL ADVISORS
Standard & Poor’s Securities, Inc. Investment Counsel
Rodwan & Nichols Consulting Actuaries
Barrows & Schatza, P.L.C. Independent Auditors
Lieberman, Dodge, Gerding, Kothe & Anderson, Ltd. Legal Counsel
ADMINISTRATIVE STAFF
Jack M. Cross, CPA, CFA Administrator
James A. Nielsen, CPA, JD Assistant Administrator
Tracey D. Peterson, CPA, CFE Operations Director
Jared A. Smout Finance Director
Karen L. Lewis, CPA Controller
Donald B. Mineer DROP Coordinator/Special Projects Assistant
LaDawn M. Snodgrass Active Member Coordinator
Sheryl D. Saltsman Benefits Coordinator
Deborah S. Irwin Senior Active Member Specialist
Joann L. Lowey Senior Benefits Analyst
Lilian L. Leung Senior Accounting Specialist
Kathleen A. Mattoon Office Specialist
Annette L. Jorgensen Insurance Specialist
Lori A. Boyle Office Manager
Scott D. Willard MIS/Accounting Specialist
D. Steven Williams Legal Assistant
Tiffani M. Wright Active Member Specialist
Alliene Jonas Benefits/Insurance Specialist
Devin Delap Building Maintenance
1020 East Missouri Avenue | Phoenix, Arizona 85014
Telephone (602) 255-5575 | Fax (602) 255-5572
www.psprs.com
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
ORGANIZATION CHART
JUNE 30, 2003
The Fund Manager
Administrator
(CIO,Portfolio Manager)
Assistant Administrator
Investment Counsel
Consulting Actuaries
Independent Auditor
Legal Counsel
Legal
Assistant
Controller
Operations
Director
Finance Director
(Cash Manager)
Benefits
Coordinator
Benefits /
Insurance
Specialist
Senior
Benefits
Analyst
Senior
Accounting
Specialist
Office
Manager
MIS /
Accounting
Specialist
Building
Maintenance
Senior
Active
Member
Specialist
Active
Member
Specialist
Office
Specialist
Active Member
Coordinator
MIS Manager
Insurance
Specialist
Information Officer/
Special Projects
Chief Investment Officer
DROP
Coordinator
Page 9
FINANCIAL SECTION
ELECTED OFFICIALS’ RETIREMENT PLAN
TWENTY-SECOND COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2003
Independent Auditor's Report
Management’s Discussion and Analysis
Statements of Plan Net Assets
Statements of Changes in Plan Net Assets
Notes to Financial Statements
Schedule of Funding Progress
Schedule of Employer Contributions
Supporting Schedule of
Changes In Fund Balance Reserves
Supporting Schedule of
Administrative and Investment Expenses
Supporting Schedule of Payments to Consultants
Supplemental Schedule of
Cash Receipts and Cash Disbursements
Page 14
STATE OF ARIZONA
ELECTED OFFICIALS’ RETIREMENT PLAN
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2003 AND 2002
The Elected Officials’ Retirement Plan’s discussion and analysis is designed to assist the reader in focusing on
significant financial issues, provide an overview of the Plan’s financial activity, identify changes in the Plan’s financial
position and identify any issues or concerns.
Since the Management’s Discussion and Analysis (MD&A) is designed to focus on the current year’s activities,
resulting changes and currently known facts, it is intended to be read in conjunction with the Transmittal Letter,
Financial Statements and Notes to the Financial Statements.
Financial Highlights
Key financial highlights for 2003 are as follows:
• The Plan had a total rate of return of 6.7% this year. Our stock portfolio had a return of 3.8% and our bond
portfolio had a return of 13.6%. We continue to perform well against the market indexes on a long-term basis.
The 15-year rate of return for the equity portfolio and fixed income portfolio were 11.0% and 9.11%, respectively,
compared to the market index of 10.0% and 8.66%, for the same time period.
• As of the close of the fiscal year 2003, the Future Benefit Increase Reserve was $18.6 million. This will enable
another 4% increase for qualifying retirees or their survivors for the eighth consecutive year.
• Retirement benefits paid totaled $21.9 million for the current fiscal year, compared to $19.5 million for the
previous year. This represents a 13% increas e from the prior year. The majority of this increase is the result of
increased health insurance benefits and cost of living adjustments (COLAs) paid to the retirees or their survivors
of the Plan.
Using this Comprehensive Annual Financial Report (CAFR)
This annual report consists of a series of financial statements and notes to those financial statements. These
statements are organized so the reader can understand the Plan as an operating entity. The statements and notes
then proceed to provide an increasingly detailed look at specific financial activities.
The Statement of Net Assets and The Statement of Changes in Net Assets
These statements include all assets and liabilities of the Plan using the accrual basis of accounting, which is similar
to the accounting used by most private-sector companies.
These two statements report the Plan’s net assets and changes in them. Net assets are the difference between
assets and liabilities, one way to measure the financial health, or financial position. Over time, increases or
decreases in the net assets are one indicator of the financial health of the Plan.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the financial
statements. The notes can be found immediately following The Statement of Net Assets and The Statement of
Changes in Net Assets.
Required Supplemental Information
The basic financial statements are followed by a section of required supplemental information. This section includes
the Schedule of Funding Progress and the Schedule of Employer Contributions.
The Schedule of Funding Progress shows the ratio of assets as a percentage of the actuarial accrued liability
(funding ratio) and the ratio of unfunded actuarial accrued liabilities to member payroll. The trend in these two ratios
provides information about the financial strength of the Plan. Improvement is indicated when the funding ratio is
increasing and the ratio of the unfunded actuarial liability to payroll is decreasing.
The Schedule of Employer Contributions shows the Annual Required Contributions by fiscal year. The purpose of
this schedule is to provide information about the required contributions of the employers and the extent to which
those contributions are being made. The information should assist users in understanding the changes and possible
reasons for the changes in the Plan’s funding status over time.
Page 15
Other Supplemental Information
The Other Supplemental Information Section includes the Supporting Schedule of Changes in Fund Balance
Reserves, Supporting Schedule of Payments to Consultants, and a Supplemental Schedule of Cash Receipts and
Cash Disbursements. The total columns and information provided on these schedules carry forward to the
applicable financial statement.
Financial Analysis
Net Assets
The Plan’s Net Assets totaled $269.6 million at the close of the fiscal year 2003, compared to $265.5 million at the
close of the previous fiscal year. This is a 2% increase from the prior year. The increase is the direct result of
market conditions and investment earnings.
ELECTED OFFICIALS’ RETIREMENT PLAN
NET ASSETS
2003 2002
Book Cost* Fair Value Book Cost* Fair Value
Current Assets $ 2,058,610 $ 2,058,610 $ 1,813,939 $ 1,813,939
Investments 329,317,336 351,174,831 369,674,905 347,522,134
Total Assets 331,375,946 353,233,441 371,488,844 349,336,073
Other Liabilities 83,583,167 83,622,844 83,111,845 83,769,361
Total Liabilities 83,583,167 83,622,844 83,111,845 83,769,361
Total Net Assets $ 247,792,779 $ 269,610,597 $ 288,376,999 $ 265,566,712
*Cost information is provided for reference only.
The largest portion of the Plan’s Net Assets (64%) are invested in Equity Securities; 18% is invested in high quality
Corporate Bonds; 8% is invested in Government Securities; 5% is invested in Cash or cash equivalents; and, the
remaining 5% is invested in Other investments.
Changes in Net Assets
Market conditions and investment earnings have attributed to the increase in net assets, as noted earlier. Additional
key elements of this increase are as follows:
ELECTED OFFICIALS’ RETIREMENT PLAN
CHANGES IN NET ASSETS
2003 2002
Additions:
Contributions $ 8,111,564 $ 7,252,336
Net Investment Income (Loss) 16,377,295 (48,685,393)
Transfers 1,879,878 522,745
Total Additions 26,368,737 (40,910,312)
Deductions:
Pension Benefits 21,929,828 19,529,287
Terminated Members Refunds 115,349 (6,518)
Administrative Expenses 72,479 70,983
Transfers 207,196 88,680
Total Deductions 22,324,852 19,682,432
Change in Net Assets 4,043,885 (60,592,744)
Net Assets, Beginning of Year 265,566,712 326,159,456
Net Assets, End of Year $ 269,610,597 $ 265,566,712
Page 16
Total contributions and net investment income increased $65.0 million from those of the prior year, due primarily to
market conditions and investment earnings. Total contributions increased from the previous year by $.9 million. This
slight increase is primarily due to an increase in court fees and member contributions. Investment income increased
from the previous year by $64.1 million. The Investment Section of this report reviews the results of investment
activity for 2003.
Trend in Revenues – by Type
(Member and Employer Contributions, Investment Income (Loss) (in 000’s)
($80,000.00)
($60,000.00)
($40,000.00)
($20,000.00)
$0.00
$20,000.00
$40,000.00
$60,000.00
1998 1999 2000 2001 2002 2003
Member Contributions
Employer Contributions
Investment Income (Loss)
The primary expenses of the Plan include the payment of pension benefits to members and beneficiaries, refunds of
contributions to former members who terminated employment during the year and the cost of administering the Plan.
Total deductions for fiscal year 2003 were $22.3 million, an increase of 14% over the prior fiscal year. Pension
benefits, to include health insurance subsidies and cost of living adjustments, increased by $2.4 million or rose 13%
from the previous year. Administrative expenses increased $1,496 or rose 3% from the previous year.
Trend in Expenses – by Type
(Pension Benefits, Refunds and Administrative Expenses) (in 000’s)
($5,000)
$0
$5,000
$10,000
$15,000
$20,000
$25,000
1998 1999 2000 2001 2002 2003
Pension
Refunds
Administrative
Economic Factors and Employer Rates
Revenues to the Plan are derived from three sources: member contributions, employer contributions and investment
income. Member contribution rates are set by Statute and will remain unchanged at 7.00%. Employer contribution
rates are determined annually by an actuarial valuation. The valuation encompasses the rate of investment earnings
and the accumulation of substantial reserves to guarantee payment of promised benefits.
Investment gains and losses are smoothed over a four-year period to stabilize the employer contribution rates from
year to year. The Fund Manager, the five member governing board, decided that the current smoothing rate over a
four-year period should remain unchanged at this time. However, the Fund Manager did reduce the assumed
earnings rate from 9.0% to 8.75%, effective July 1, 2004, with subsequent annual reductions of one-quarter of one
percent each year thereafter until the rate is reduced to 8.0%. We believe this is a more realistic rate for our Plan to
achieve. The Fund Manager did reserve the right to address these issues annually or on an as needed basis.
Page 17
Employers continue to benefit greatly from our outstanding past and current investment performance. The average
employer rate, as a percentage of gross payroll, is 13.49% for the 2003/04 fiscal year. While the employer rate has
increased this past year, and may continue to do so for some time, the average contribution rate for our employers is
still below the normal cost of the Plan of 22.65%.
Management believes, and actuarial studies concur, that the Plan is in a financial position to meet its current
obligations. We believe the current financial position will continue to improve due to a prudent conservative long-term
investment approach, cost controls and strategic planning.
Requests for Information
This report is designed to provide a general overview of the Elected Officials’ Retirement Plan’s finances. Questions
concerning any of the information provided in this report or requests for additional financial information should be
addressed to: Elected Officials’ Retirement Plan, Operations Director, 1020 E. Missouri, Phoenix, AZ 85014.
2003 2002
ASSETS
Receivables
Members' Contributions $ 49,410 $ 84,518
Employers' Contributions 9,394 4,167
Court Fees 309,452 288,613
Interest and Dividends 1,690,354 1,436,641
Total Receivables 2,058,610 1,813,939
[Book Cost - [Book Cost -
Investments at Fair Value (Note 2): For Reference Only] For Reference Only]
U.S. Government Securities $ 19,915,600 23,671,966 $ 34,169,572 37,487,412
Corporate Bonds 44,225,048 50,426,505 46,297,202 45,293,655
Corporate Notes 10,995,235 10,995,235 10,494,805 10,494,805
Corporate Stocks 157,068,364 168,928,359 187,762,407 162,637,827
Other Investments 13,201,580 13,201,580 7,612,230 7,612,230
Money Market Account 328,342 328,342 226,844 226,844
Collateral Held in Trust
for Securities on Loan 83,583,167 83,622,844 83,111,845 83,769,361
Total Investments $ 329,317,336 351,174,831 $ 369,674,905 347,522,134
Total Plan Assets 353,233,441 349,336,073
Liability- Collateral Subject to
Return to Borrower (83,622,844) (83,769,361)
Net Assets Held in Trust
for Pension Benefits 269,610,597 265,566,712
Net Asset Reserves
Refundable Members' Reserve $ 27,466,353 $ 25,853,543
Employers' Reserve 223,552,344 216,313,081
Future Benefit Increase Reserve 18,591,900 23,400,088
Total Net Asset Reserves $ 269,610,597 $ 265,566,712
A schedule of funding progress is presented immediately following the notes to the financial statements.
The accompanying notes are an integral part of these financial statements.
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
STATEMENTS OF PLAN NET ASSETS
AS OF JUNE 30, 2003 AND 2002
Page 18
2003 2002
Additions
Contributions
Member Contributions (Notes 1 and 3) $ 4,355,934 $ 3,595,732
Employer Contributions (Notes 1 and 3) 187,758 171,945
Court Fees 3,567,872 3,484,659
Total Contributions 8,111,564 7,252,336
Net (Depreciation) Appreciation
in Fair Value of Investments (Note 2) 7,987,401 (57,507,423)
Interest 6,936,120 7,540,509
Dividends 1,363,830 1,143,973
Securities Lending Activities
Securities Lending Income $ 1,258,693 $ 2,447,776
Borrower Rebates (1,072,975) (2,191,327)
Agents Share of Income (64,993) (89,750)
Net Securities Lending Income (Note 2) 120,725 166,699
16,408,076 (48,656,242)
Less Investment Expense (30,781) (29,151)
Net Investment Income 16,377,295 (48,685,393)
Amounts Transferred from Other State-
Sponsored Pension Plans and
Service Credits Purchased 1,879,878 522,745
Total Additions 26,368,737 (40,910,312)
Deductions
Pension and Insurance Benefits (Note 1) 21,929,828 19,529,287
Refunds to Terminated Members (Note 1) 115,349 (6,518)
Administrative Expenses 72,479 70,983
Amounts Transferred to Other State-
Sponsored Pension Plans 207,196 88,680
Total Deductions 22,324,852 19,682,432
Net (Decrease) Increase 4,043,885 (60,592,744)
Net Assets Held In Trust
for Pension Benefits
Beginning of Year - July 1 265,566,712 326,159,456
Ending of Year - June 30 $ 269,610,597 $ 265,566,712
The accompanying notes are an integral part of these financial statements.
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
STATEMENTS OF CHANGES IN PLAN NET ASSETS
FOR THE YEARS ENDED JUNE 30, 2003 AND 2002
Page 19
Page 20
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003 AND 2002
NOTE 1 - PLAN DESCRIPTION
Organization
The Elected Officials' Retirement Plan (EORP), a pension trust fund of the State of Arizona, is a cost-sharing multiple-employer
public employee retirement plan established by Title 38, Chapter 5, Article 3 of the Arizona Revised Statutes, to
provide benefits for elected officials and judges of certain state, county and local governments. The Plan is administered by
the Fund Manager of the Public Safety Personnel Retirement System (PSPRS).
The Fund Manager is a five-member board. Effective August 6, 1999, it became the Governor’s responsibility to appoint all
members of the Fund Manager, who serve a fixed three-year term. The Fund Manager is responsible for the investment of
the Plan's assets, setting employer contribution rates in accordance with an actuarial study, adopting a budget, hiring
personnel to administer the Plan, setting up records, setting up accounts for each member, paying benefits and the general
protection and administration of the Plan.
The addition or deletion of eligible groups does not require the approval of the other participating employers. New eligible
groups are approved for participation by the Fund Manager. The EORP is not reported as a component unit of any other
organization.
The Fund Manager of the EORP is also responsible for the investment and general administration of two other statewide
retirement plans—the Public Safety Personnel Retirement System and the Corrections Officer Retirement Plan. The
investments and expenses of these plans are held and accounted for separately from those of the EORP. Since none of the
plans have the authority to impose their will on any of the other plans, each plan is reported as its own stand-alone
government.
At June 30, 2003 and 2002, the number of participating local government employer groups was:
2003 2002
Cities and Towns 17 16
Counties 15 15
State Agencies 1 1
Total Employers 33 32
All state and county elected officials and judges are members of the Plan. Any city in the State of Arizona may elect to
have its’ elected officials covered by the EORP. At June 30, 2003 and 2002, statewide EORP membership consisted of:
2003 2002
Retirees and beneficiaries currently
receiving benefits 709 659
Terminated vested employees 186 165
Current employees
Vested 419 444
Non-vested 332 294
Total Members 1,646 1,562
EORP provides retirement benefits as well as death and disability benefits. Generally, all benefits vest after five years of
credited service. A Summary of Benefits and Plan provisions follows:
SUMMARY OF BENEFITS
Purpose (A.R.S. §38-810.02.B)
To provide a uniform, consistent and equitable statewide program for those eligible elected officials as defined by the Plan.
Eligibility (A.R.S. §38-801 and §38-804.A)
All elected officials are members of the Plan, except that an elected official who is subject to term limits may elect not to
participate in the Plan for that specific term of office. An elected official means every elected official of this state, every
Page 21
elected official of each county of this state, every justice of the supreme court, every judge of the court of appeals, every
judge of the superior court, every full-time superior court commissioner, the administrator of the fund manager if the
administrator is a natural person and each elected official of an incorporated city or town whose employer has executed a
proper joinder agreement for coverage of its elected officials.
Contributions (A.R.S. §38-810.A)
Each member shall contribute 7.00% of salary to the Plan on a pre-tax basis. Each employer shall contribute the following:
For state and county employers, a designated portion of certain fees collected by the Clerks of the Superior Courts,
Courts of Appeals and the Supreme Court plus additional contributions as determined by actuarial valuation to ensure
proper funding for the Plan, but not less than 2% of salary. (A.R.S. §38-810)
For incorporated city or town employers, a level percent of salary as determined by actuarial valuation to ensure proper
funding for the Plan but not less than 2% of salary. (A.R.S. §38-810)
Credited Service (A.R.S. §38-801, ¶ 3)
Means the number of whole and fractional years of a member's service as an elected official after the elected official's
effective date of participation for which member and employer contributions are on deposit with the fund, plus credited
service as an elected official transferred to the Plan from another retirement system or plan for public employees of this
state, plus service as an elected official before the elected official's effective date of participation which is being funded
pursuant to a joinder agreement or which was redeemed pursuant to §38-816.
Average Yearly Salary (A.R.S. §38-801, ¶ 2)
Means the highest average total salary over a period of three consecutive years within the last ten completed years of
credited service which was paid to the elected official at the time of death or retirement or at the time the elected official
ceases to hold office.
Normal Retirement (No Reduction for Age) (A.R.S. Sections 38-805.A and 38-808.B, ¶ 1)
An elected official may retire upon meeting one of the following age and service requirements:
1. Age sixty-five years, with five or more years of credited service.
2. Age sixty-two years, with ten or more years of credited service.
3. Twenty or more years of credited service regardless of age.
The amount of a normal retirement pension is four percent (4%) of the member's average yearly salary multiplied by the
years of the member's credited service. Maximum is eighty percent (80%) of the member's average yearly salary.
Early Retirement (Reduction for Age) (A.R.S. §38-805.B and §38-808.B, ¶ 1)
An elected official who has five or more years of credited service may retire before meeting the age or service requirement for
normal retirement. The amount of an early retirement pension is computed by determining the amount of accrued normal
retirement pension and then reducing the amount determined by three-twelfths of one percent for each month early
retirement precedes the member's normal retirement age as noted above. The maximum reduction is 30%.
Vested Termination (Deferred Retirement)
An elected official with five or more years of credited service retains entitlement to deferred pension, upon ceasing to be an
elected official, if the elected official's accumulated contributions are left on deposit in the retirement plan. The amount of
pension is determined in the same manner as a normal or early pension, whichever is applicable.
Disability Retirement (A.R.S. §38-806 and §38-808.B, ¶ 2)
The Fund Manager may retire an elected official who becomes incapacitated for the purpose of performing the duties of the
member’s office based on a certification by a board of physicians that the member is mentally or physically incapacitated
and qualifies for a disability retirement. The amount of pension is eighty percent (80%) of member's average yearly salary if
the elected official has ten (10) or more years of credited service or forty percent (40%) of the member's average yearly
salary if the elected official has five (5) but less than ten (10) years of credited service or twenty percent (20%) of the
member's average yearly salary if the elected official has fewer than five (5) years of credited service.
Survivor Pension (A.R.S. §38-807)
Payable to the eligible beneficiary of a retired member or an active or inactive member who dies before retirement. An
eligible beneficiary is a surviving spouse who was married to the retired or active or inactive member for at least two years;
or, if there is no eligible spouse, then to a minor child. A surviving spouse's pension terminates upon death. A surviving
child's pension terminates upon marriage, adoption or death or upon attainment of age 18 years, unless the child is a full-
Page 22
time student under the age of 23 or the child is under a disability which began before the child attained the age of 23. The
amount of a surviving spouse's pension is three-fourths of the pension being paid the deceased retired elected official or
three-fourths of the pension which the member would have received assuming he had retired under a disability. The amount
of a surviving child's pension is an equal share of the amount of a surviving spouse's pension.
Death Benefit (A.R.S. §38-807.E)
If a member dies and no pension is payable on account of the member’s death, the deceased member’s accumulated
contributions shall be paid to the beneficiary named by the member.
Termination Refund (A.R.S. §38-804.B)
Upon termination of employment for any reason other than death or retirement, a member shall, within twenty days after
filing an application with the Fund Manager, receive a lump-sum payment, equal to the accumulated contributions, as of the
date of termination, less any benefits paid or any amounts owed to the Plan. A member forfeits all membership rights and
credited service in the Plan upon receipt of refund of contributions. If the member has 5 or more years of credited service
upon termination they shall receive an additional amount according to the schedule below:
5 to 5.9—25% of member contributions deducted from the member’s salary pursuant to ARS 38-810.A
6 to 6.9—40% of member contributions deducted from the member’s salary pursuant to ARS 38-810.A
7 to 7.9—55% of member contributions deducted from the member’s salary pursuant to ARS 38-810.A
8 to 8.9—70% of member contributions deducted from the member’s salary pursuant to ARS 38-810.A
9 to 9.9—85% of member contributions deducted from the member’s salary pursuant to ARS 38-810.A
10 or more—100% of member contributions deducted from the member’s salary pursuant to ARS 38-810.A plus interest
at 3% if left on deposit after 30 days.
Reemployment And Repayment Of Contributions (A.R.S. §38-804.F)
An elected official who terminates membership in the Plan and takes a refund of his contributions and is later re-employed
as an elected official may restore prior service credits, if the elected official signs a written election within
ninety days after re-employment to reimburse the Plan within one year after the date of re-employment. The
reimbursement will equal the amount previously withdrawn plus interest from the date of withdrawal to the date of
repayment at the rate of 9% compounded annually.
Reemployment After Retirement (A.R.S. §38-804.G and §38-804.H)
If a retired member subsequently becomes an elected official, contributions shall not be made to the Plan nor shall additional
years of credited service accrue. Additionally, if a retired member, by reason of election or reelection, becomes an elected
official of the same office from which the member retired within a time period that is less than one full term for that office, the
member shall not receive a pension until the member ceases to hold the same office.
Redemption Of Prior Service (A.R.S.§38-816)
Active members who had previous service in this state as an elected official with an employer now covered by the Plan
before the effective date of participation and who received a refund of accumulated contributions from the applicable
retirement system upon termination or who was not covered by a retirement system or plan during the elected official’s prior
elected official service may elect to redeem any part of the prior service by paying into the Plan the amounts required in
A.R.S. §38-816.B. (Use Form E2)
Purchase Of Prior Active Military Service (A.R.S. §38-820)
A member may purchase up to four years of prior active military time even if the member will receive a military pension1.
The member must pay the actuarial present value of the increase of credited service resulting from this purchase. (Use
Form 18)
Transfer Between State Retirement Systems (A.R.S. §38-921 and §38-922)
Members of any of the four Arizona state retirement systems or plans who have credited service under another Arizona state
retirement system or plan may transfer or redeem the credited service to their current Arizona state retirement system or
plan by paying or transferring the full actuarial present value of the credited service into their current Arizona retirement
system or plan with approval of the Fund Manager or retirement boards involved. A reduced credited service amount may be
transferred based on the transfer of the actuarial present value of the credited service under the prior Arizona state system or
plan. (Use Form U-2)
1 Pursuant to Cantwell v. County of San Mateo, 631 F.2d 631, 637 (9th Cir. 1980), cert. denied, 450 U.S. 998 (1981), the Plan must allow its
participants to use up to 48 months of their prior active duty military service on account with the federal government to purchase a
corresponding period of credited service with the Plan, notwithstanding any prohibition in § 38-820(A)(3) to the contrary.
Page 23
Cola Benefit Increases (A.R.S. §38-818)
Effective July 1 of each year, each retired member or survivor of a retired member may be entitled to a permanent benefit
increase in their base benefit. The maximum amount of the increase is four percent (4%) of the EORP benefit being received
on the preceding June 30 and is contingent upon sufficient excess investment earnings for the fund. To be eligible for the
increase the member or survivor must be age 55 or older on July 1 of the current year and was receiving benefits on or before
July 31 of the previous year. A member or survivor is also eligible if they were receiving benefits on or before July 31 of the
two previous years regardless of age.
Health Insurance Premium Subsidy (A.R.S. §38-817)
For EORP retirees who have elected group health and accident insurance coverage provided and administered by the state
or another EORP employer and who had 8 or more years of credited service, the EORP will pay up to the following amounts.
Those retired members who had between 5 and 8 years of credited service will receive a proportionate share of the
subsidies:
Single Family
Not Medicare Eligible Medicare Eligible
All Not Medicare
Eligible All Medicare Eligible One with Medicare
$150.00 $100.00 $260.00 $170.00 $215.00
Until June 30, 2005, a retiree or survivor who lives in a non-service area receives up to the following amounts in addition
to the subsidy listed above after they have paid an out-of-pocket expense as set forth below. A non-service area is
defined as an area in this state where the state retiree group insurance program or employer’s retiree health insurance
program does not provide or administer a health maintenance organization (HMO) for which the member or survivor is
eligible. The subsidy consists of up to the following amounts:
Single Family
Not Medicare Eligible Medicare Eligible
All Not Medicare
Eligible All Medicare Eligible One with Medicare
$300.00
after $125.00 paid out-of-
pocket
$170.00
after $100.00 paid
out-of-pocket
$600.00
after $425.00 paid
out-of-pocket
$350.00
after $200.00 paid
out-of-pocket
$470.00
after $400.00 paid
out-of-pocket
State Taxation Of EORP Benefits (A.R.S. §38-811 and §43-1022)
Effective tax year commencing January 1, 1989, all EORP retirement benefits in excess of $2500 annually will be
subject to Arizona state tax.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND PLAN ASSET MATTERS
Basis of Accounting
EORP financial statements are prepared using the accrual basis of accounting. Member and employer contributions are
recognized as revenues when they are due and payable in the period in which employee services are performed. Benefits
are recognized when due and payable in accordance with the terms of the Plan. Refunds are due and payable by state law
within 20 days of receipt of a written application for a refund. Refunds are recorded when paid. Furniture and equipment
purchases, which are not material in amount, are expensed in the year of purchase. Investment income net of administrative
and investment expenses is allocated to each employer group based on the average relative fund size for each employer
group for that year.
The Plan implemented Statement No. 25 of the Governmental Accounting Standards Board (GASB) for Fiscal Year End
1997. As such, the Plan reports assets on a Fair Value Basis. Certain cost information is provided for reference only and
to comply with state law.
The Plan implemented GASB Statement No. 34 for the Fiscal Year End 2002. The purpose of Statement No. 34 is to
enhance the understandability and usefulness of state and local government financial reports. To accomplish this,
Statement No. 34 requires supplemental information titled Management’s Discussion and Analysis (MDA) which precedes
the basic financial statements. The MDA will provide an analytical overview of the government’s financial activities.
Other GASB Statements were required to be implemented in conjunction with GASB Statement No. 34. Therefore, the Plan
has also implemented the following GASB Statements in the current fiscal year: Statement No. 37 – Basic Financial
Statements – and MDA for State and Local Governments-Omnibus; and, Statement No. 38 – Certain Financial Statement
Page 24
Note Disclosures.
By state statute, this Plan is required to provide information in the financial statements used to calculate Net Effective Yield.
Net Effective Yield includes only realized gains and losses. The Net Realized Gain (Loss) used in this calculation totaled
$(36,640,705) for FYE 2003 and $(2,016,036) for FYE 2002.
Investments
EORP investments are reported at Fair Value. Fair Values are determined as follows: Short-term investments are reported
at Fair Value, which approximates Cost. Equity securities are valued at the last reported sales price. Fixed-income
securities are valued using the last reported sales price or the estimated fair market value as determined by one of the
world's largest and most prominent fixed-income broker/dealers. Investments that do not have an established market are
reported at estimated fair value. Investment income is recognized as earned.
Statutes enacted by the Arizona Legislature authorize the Fund Manager to make investments in accordance with the
"Prudent Man" rule. The Fund Manager is not limited to so-called "Legal Investments for Trustees." (A.R.S. §38-848.D) In
making every investment, the Fund Manager shall exercise the judgment and care under the circumstances then prevailing
which men of ordinary prudence, discretion and intelligence exercise in the management of their own affairs, not in regard to
speculation but in regard to the permanent disposition of their funds, considering the probable income from their funds as
well as the probable safety of their capital, provided:
1) That not more than seventy percent of the pension fund shall be invested at any given time in corporate stocks, based
on cost value of such stocks irrespective of capital appreciation.
2) That not more than five percent of the pension fund shall be invested in securities issued by any one institution, agency
or corporation, other than securities issued as direct obligations of and fully guaranteed by the United States
Government.
3) That not more than five percent of the voting stock of any one corporation shall be owned.
4) That corporate stocks eligible for purchase shall be restricted to stocks that, except for bank stocks and insurance
stocks, are either:
a) Listed or approved on issuance for listing on an exchange registered under the Securities Exchange Act of 1934, as
amended (15 United States Code §78a through §7811);
b) Designated or approved on notice of issuance for designation on the national market system of a national securities
association registered under the Securities Exchange Act of 1934, as amended (15 United States Code §78a
through §7811);
c) Listed or approved on issuance for listing on an exchange registered under the laws of this [Arizona] state or any
other state; or
d) Listed or approved on issuance for listing on an exchange of a foreign country with which the United States is
maintaining diplomatic relations at the time of purchase, except that no more than ten percent of the pension fund
shall be invested in foreign equity securities on these exchanges, based on the cost value of the stocks irrespective
of capital appreciation.
A.R.S. §38-848.D
The Plan's investment portfolio is in compliance with state law.
Statement No. 3 of the GASB requires government entities to categorize investments for the purpose of giving an indication
of the level of risk assumed by the entity at year-end. Category 1 includes investments that are insured or registered or for
which securities are held by the Plan or its agent in the name of the Plan holds securities. Category 2 includes uninsured
and unregistered investments for which the securities are held by the counterparty, or by its trust department or agent but
not in the Plan's name.
All investments of the Plan (other than those held by broker/dealers under the security loan program and those investments
categorized as "Other Investments”) meet the criteria of Category 1. "Other Investments", which primarily consists of loans
and real estate investments, are not considered securities for purposes of credit risk classification. Substantially all
investments are held in the name of the Plan by its custodian bank.
Money Market Account
The money market account is on deposit with an Arizona bank. These deposits are insured by Federal depository
insurance. The money market account is subject to the general depository laws of the State of Arizona that require deposits
to be either insured by the Federal Deposit Insurance Corporation or collateralized by certain securities including U.S.
Government obligations and first mortgages.
Page 25
Securities Lending Income
The Plan is party to a securities lending agreement with a bank. The bank, on behalf of the Plan, enters into agreements
with brokers to loan securities and have the same securities returned at a later date. The loans are fully collateralized
primarily by cash. Collateral is marked-to-market on a daily basis. Non-cash collateral can be sold only upon borrower
default. The Plan requires collateral of at least 102% of the fair value of the loaned U.S. Government or corporate security.
Securities on loan are carried at fair value. As of June 30, 2003 and 2002 the fair value of securities on loan was
$80,941,835 (consisting of Stocks-$49,785,152, Corporate Bonds-$10,792,189 and Treasuries and Agencies-$20,364,493)
and $81,493,029 (consisting of Stocks-$38,003,099, Corporate Bonds-$8,563,980 and Treasuries and Agencies-
$34,925,950), respectively. The Plan receives a negotiated fee for its loan activities and is indemnified for broker default by
the securities lending agent. The Plan participates in a collateral investment pool. All security loans may be terminated on
demand by either the lender or the borrower. The total cash collateral investments received for unmatched loans (any loan
for which the cash collateral has not been invested for a specific maturity) will have a maximum effective duration of 233
days. And, at least 20% of total collateral investments shall be invested on an overnight basis. All matched loans shall
have matched collateral investments. At June 30, 2003, the weighted average maturity was 3 days for all investments
purchased with cash collateral from unmatched loans. The Plan has no credit risk because the amounts owed to the
borrowers exceed the amounts the borrowers owe to the Plan. Under this program, the Plan has not experienced any
defaults or losses on these loans.
NOTE 3 - CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE
The Retirement Plan's funding policy provides for periodic employer contributions at actuarially determined rates that,
expressed as percentages of annual covered payroll, are designed to accumulate sufficient assets to pay benefits when due.
The normal cost and actuarial accrued liability are determined using an entry age actuarial funding method. Unfunded
actuarial accrued liabilities and assets in excess of actuarial accrued liabilities are being amortized as a level percent of
payroll over a rolling twenty (20) year period. Beginning with fiscal year 2001-2002, the employer contribution rate shall not
be less than two percent of salary.
During the year ended June 30, 2003, contributions totaling $8,111,564 ($3,755,630 employer and $4,355,934 member)
were made in accordance with contribution requirements determined by an actuarial valuation of the Plan as of June 30,
2001. The employer contributions consisted of approximately $13,067,802 for normal cost less ($9,312,172) for amortization
of the assets in excess of the actuarial accrued liability in aggregate. Employer contributions represented 7.55% of covered
payroll. [21.00% for normal costs and (13.45)% for amortization of assets in excess of the actuarial accrued liability in
aggregate.] Member contributions represented 7.00% of covered payroll and are attributable to normal costs.
During the year ended June 30, 2002, contributions totaling $7,252,336 ($3,656,604 employer and $3,595,732 member)
were made in accordance with contribution requirements determined by an actuarial valuation of the Plan as of June 30,
2000. The employer contributions consisted of approximately $8,573,252 for normal cost less ($4,916,648) for amortization
of the assets in excess of the actuarial accrued liability in aggregate. Employer contributions represented 6.97% of covered
payroll. [16.69% for normal costs and (9.72)% for amortization of assets in excess of the actuarial accrued liability in
aggregate.] Member contributions represented 7.00% of covered payroll and are attributable to normal costs.
NOTE 4 – REQUIRED SCHEDULES
The Schedule of Funding Progress and the Schedule of Employer Contributions are presented immediately following the
notes to the financial statements.
Actuarial Unfunded UAAL as a
Actuarial Accrued (Excess) Percentage
Actuarial Value of Liability (AAL) AAL Funded Covered of Covered
Valuation Assets at Entry Age (UAAL) Ratio Payroll Payroll
Date (a)2 (b) (b-a) (a/b) (c) ((b-a)/c))
6-30-82 $ 13,162 $ 18,357 $ 5,195 71.7% $ 7,444 69.8%
6-30-83 $ 15,350 $ 19,013 $ 3,663 80.7% $ 8,087 45.3%
6-30-84 $ 17,694 $ 19,694 $ 2,000 89.8% $ 8,113 24.7%
6-30-85 *3 $ 49,900 $ 48,969 $ (931) 101.9% $ 17,691 -5.3%
6-30-86 $ 58,757 $ 53,427 $ (5,330) 110.0% $ 17,842 -29.9%
6-30-87 1 $ 65,818 $ 66,642 $ 824 98.8% $ 20,409 4.0%
6-30-88 1 $ 73,993 $ 77,908 $ 3,915 95.0% $ 21,444 18.3%
6-30-89 *1 $ 84,258 $ 90,951 $ 6,693 92.6% $ 24,605 27.2%
6-30-90 *1 $ 92,421 $ 100,433 $ 8,012 92.0% $ 25,776 31.1%
6-30-91 *1 $ 103,570 $ 109,650 $ 6,080 94.5% $ 27,838 21.8%
6-30-92 *1 $ 115,869 $ 115,098 $ (771) 100.7% $ 27,777 -2.8%
6-30-93 * $ 127,984 $ 127,478 $ (506) 100.4% $ 29,708 -1.7%
6-30-94 1 $ 140,145 $ 138,322 $ (1,823) 101.3% $ 29,633 -6.2%
6-30-95 1 $ 159,111 $ 149,366 $ (9,745) 106.5% $ 30,324 -32.1%
6-30-96 * $ 181,754 $ 158,126 $ (23,628) 114.9% $ 29,967 -78.8%
6-30-97 * $ 214,035 $ 169,593 $ (44,442) 126.2% $ 33,896 -131.1%
6-30-98 $ 241,884 $ 199,662 $ (42,222) 121.1% $ 40,441 -104.4%
6-30-99 $ 283,337 $ 227,100 $ (56,237) 124.8% $ 43,087 -130.5%
6-30-00 $ 329,777 $ 253,478 $ (76,299) 130.1% $ 45,382 -168.1%
6-30-01 $ 355,768 $ 250,987 $ (104,781) 141.7% $ 48,669 -215.3%
6-30-02 $ 351,349 $ 279,947 $ (71,402) 125.5% $ 48,729 -146.5%
6-30-03 $ 328,811 $ 297,891 $ (30,920) 110.4% $ 49,351 -62.7%
*
1.
2.
AAL is calculated using the entry-age normal method. Significant assumptions used in determining AAL include: (a) a
rate of return on the investment of present and future assets of 9.0% per year compounded annually; (b) projected salary
increases of 6.5% per year compounded annually, attributable to an assumed inflation rate of 5.5% and other across-the-board
factors of 1.5%; and (c) additional projected salary increases ranging from 0.0% to 3.0% per year, depending on
age, attributable to seniority/merit.
Excludes the amount held in reserve for future benefit increases. Beginning 6-30-95, includes an amount for partial recognition of the
difference between market value and book value of Plan assets amortized over a four-year period.
One-time cost-of-living adjustments for retired members and survivors, effective July 1 were included in this valuation. Future
increases for retirees and their survivors are dependent upon excess earnings created by the System.
Reflects significant Plan amendments or assumption changes.
While not any one or two numeric indices can fully describe the financial condition of a retirement plan, the ratio
of unfunded actuarial accrued liabilities to active member payroll is significant. The ratio of unfunded actuarial
accrued liabilities to member payroll is a relative index of condition where inflation is present in both items.
Observation of the ratio over a period of years gives an indication of funding achievement. The smaller the
index, the stronger the plan's condition. Shown below is a Comparative Schedule ($ in thousands) since
legislation was enacted in 1987, setting up a 40-year amortization schedule. Effective June 30,1997, Unfunded
(Excess) Actuarial Accrued Liabilities are being amortized on a level percent method over a rolling twenty (20)
year period.
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF FUNDING PROGRESS
Page 26
Fiscal Annual
Year Ended Required Percentage
June 30 Contributions Contributed
1990 $3,048,190 100.0%
1991 $4,141,666 100.0%
1992 $4,830,326 100.0%
1993 $4,941,470 100.0%
1994 $5,555,890 100.0%
1995 $5,224,545 100.0%
1996 $4,886,479 100.0%
1997 $4,934,939 100.0%
1998 $3,668,144 100.0%
1999 $3,941,018 100.0%
2000 $4,126,694 100.0%
2001 $4,155,874 100.0%
2002 $3,656,604 100.0%
2003 $3,755,630 100.0%
Employer Contributions
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
REQUIRED SUPPLEMENTARY INFORMATION
SCHEDULE OF EMPLOYER CONTRIBUTIONS
Page 27
Refundable Future Benefit
Members' Employers' Increase
Reserve Reserve Reserve
Balance - June 30, 2001 $ 24,060,967 $ 267,662,327 $ 34,436,162
Distribution of Revenues and Expenses
Members' Contributions 3,595,732
Employers' Contributions 3,656,604
Earnings (Loss) on Investments Net of Investment Expenses (48,685,392)
Pension and Insurance Benefits (19,529,287)
Refunds to Terminated Members (30,636) 37,153
Administrative Expenses (70,983)
Distribution of Transfers
Excess Investment Earnings to be used
for Future Benefit Increases - -
Earnings on Excess Investment Earnings Account Assets 5,234,297 (5,234,297)
Amount Utilized by Benefit Increases Granted 5,801,777 (5,801,777)
Net Transfers from Other State-Sponsored Pension Plans 156,613 277,452
Inter-System Transfers -- Member Account
Balances Transferred to Employers' Reserve
due to Retirement (1,929,133) 1,929,133
Balance - June 30, 2002 $ 25,853,543 $ 216,313,081 $ 23,400,088
Distribution of Revenues and Expenses
Members' Contributions 4,355,934
Employers' Contributions 3,755,630
Earnings (Loss) on Investments Net of Investment Expenses 16,377,295
Pension and Insurance Benefits (21,929,828)
Refunds to Terminated Members (58,440) (56,909)
Administrative Expenses (72,479)
Distribution of Transfers
Excess Investment Earnings to be used
for Future Benefit Increases - -
Earnings (Loss) on Excess Investment Earnings Account Assets (1,567,806) 1,567,806
Amount Utilized by Benefit Increases Granted 6,375,994 (6,375,994)
Net Transfers from Other State-Sponsored Pension Plans 553,185 1,119,497
Inter-System Transfers -- Member Account
Balances Transferred to Employers' Reserve
due to Retirement (3,237,869) 3,237,869
Balance - June 30, 2003 $ 27,466,353 $ 223,552,344 $ 18,591,900
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SUPPORTING SCHEDULE OF CHANGES IN FUND BALANCE RESERVES
FOR THE YEARS ENDED JUNE 30, 2003 AND 2002
Page 28
Administrative Investment Total
Accounting and Auditing Services $ 4,850 $ - $ 4,850
Actuarial Services 12,075 - 12,075
Computer Equipment 1,204 561 1,765
Contractual Services 2,031 946 2,977
Educational Expenses 1,710 2,455 4,165
Furniture and Equipment 261 122 383
Occupancy Expenses 1,541 240 1,781
Office Supplies 448 157 605
Payroll Taxes and Fringe Benefits 6,896 4,822 11,718
Postage Expenses 2,340 256 2,596
Printing, Publications and Subscriptions 7,319 92 7,411
Professional Services 1,688 262 1,950
Salaries and Wages 29,502 20,631 50,133
Telephone Expenses 502 124 626
Travel Expenses 112 113 225
$ 72,479 $ 30,781 $ 103,260
Fees Paid
$ (1)
12,075
4,850
1,950
$ 18,875
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SUPPORTING SCHEDULE OF ADMINISTRATIVE AND INVESTMENT EXPENSES
FOR THE YEAR ENDED JUNE 30, 2003
SUPPORTING SCHEDULE OF PAYMENTS TO CONSULTANTS
The value of their services is approximately $7,500.00
Lieberman, Dodge, Gerding, Kothe & Anderson Ltd. - Legal Counsel
Consultants
Standard & Poor's Securities, Inc. - Investment Counsel
Rodwan & Nichols - Consulting Actuaries
Barrows & Schatza, P.L.C. - Auditors
(1) This service was provided to the Plan without charge by Standard & Poor's Securities, Inc.
Page 29
2003 2002
RECEIPTS
Members' Contributions $ 4,391,042 $ 3,627,191
Employers' Contributions 182,531 186,865
Court Fees 3,547,033 3,484,311
Interest 6,774,753 7,825,250
Dividends 1,324,930 1,143,059
Securities Lending Income 127,992 167,127
Amounts Transferred from Other
State-Sponsored Pension Plans 1,879,878 522,745
Maturities and Sales of
U.S. Government Securities 14,253,972 14,827,952
Corporate Bonds 9,215,368 6,798,498
Corporate Notes 495,497,590 678,172,923
Other Investments 3,839,805 1,853,132
Common Stock 41,568,665 33,118,720
Net Decrease in Money Market Funds - 117,228
Total Receipts 582,603,559 751,845,001
DISBURSEMENTS
Pension Benefits 21,929,828 19,529,287
Refunds to Terminated Members 115,349 (6,518)
Investment and Administrative Expenses 103,260 93,887
Amounts Transferred to Other
State-Sponsored Pension Plans 207,196 88,681
Acquisitions of:
U.S. Government Securities - 2,989,688
Corporate Bonds 10,322,491 9,113,875
Corporate Notes 495,998,020 685,668,810
Other Investments 9,429,156 1,252,715
Common Stock 44,396,761 33,114,576
Net Increase in Money Market Fund 101,498 -
Total Disbursements 582,603,559 751,845,001
DECREASE IN CASH - -
BEGINNING CASH BALANCE - July 1 - -
ENDING CASH BALANCE - June 30 $ - $ -
FOR THE YEARS ENDED JUNE 30, 2003 AND 2002
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SUPPLEMENTAL SCHEDULE OF
CASH RECEIPTS AND CASH DISBURSEMENTS
Page 30
INVESTMENT SECTION
ELECTED OFFICIALS’ RETIREMENT PLAN
TWENTY-SECOND COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2003
Fund Objectives
Investment Performance Data
Supporting Schedule of Commissions Paid to Brokers
Summary of Changes in Investment Portfolio
Detailed List of Investments Acquired
Detailed List of Sales and Redemption of Investments
Detailed List of Investments Owned
FUND OBJECTIVES
1. The intent of the Public Safety Personnel Retirement System, the Elected Officials’ Retirement Plan and the
Corrections Officer Retirement Plan (hereinafter referred to as the Plan) is to provide the Plan participants
benefits as defined in Title 38, chapter 5, articles 3, 4 and 6 of the Arizona Revised Statutes.
2. The Fund Manager and the Administrator will discharge their duties with respect to the Plan solely in the interest
of the Plan participants, beneficiaries and employer sponsors. In making every investment, the Fund Manager
shall exercise the judgment and care under the circumstances then prevailing which men of ordinary prudence,
discretion and intelligence exercise in the management of their own affairs, not in regard to speculation but in
regard to the permanent disposition of their funds, considering the probable income from their funds as well as
the probable safety of their capital, provided these investments are made in conformity with all applicable laws.
3. The intention of the Plan is to maintain the benefit level as stated in Title 38, chapter 5, articles 3, 4 and 6 of the
Arizona Revised Statutes and as amended from time to time by the Arizona State Legislature. In order to
maintain this benefit level the Plan will annually adjust the employer contribution rate based on the
recommendations made by the annual actuarial valuations. The Plan’s funding goal is for the Plan assets to be
equal to Plan liabilities within any twenty-year period.
4. It is the intent of the Plan to level off or reduce the employer contribution rate to the Plan as well as to provide
the opportunity for increased benefits for retirees as the legislature may from time to time enact, through the
systematic growth of the investments of the fund.
5. The primary objective of the investment program of the Plan is a reasonable, long-range total rate of return.
Inherent in this goal is the preservation and enhancement of capital through effective management of the
portfolio in order to take advantage of attractive opportunities various market sectors have to offer.
Adopted this 17th day of June, 1998, by the Fund Manager.
Fair Total Balanced
FYE Value Contribution Return Index*
06-30-03 $ 267,551,987 $ (12,608,863) 6.69% 6.18%
06-30-02 $ 263,752,773 $ (11,539,231) -15.36% -4.13%
06-30-01 $ 323,948,245 $ (8,619,538) -16.96% -1.07%
06-30-00 $ 399,600,916 $ (3,551,579) 13.20% 5.75%
06-30-99 $ 356,162,525 $ (5,775,793) 17.51% 11.94%
06-30-98 $ 308,491,389 $ (3,624,820) 21.26% 17.66%
06-30-97 $ 257,721,510 $ (2,741,757) 24.59% 17.87%
06-30-96 $ 209,379,157 $ (2,779,807) 17.70% 13.98%
06-30-95 $ 180,418,272 $ (1,649,899) 18.78% 16.30%
06-30-94 $ 153,422,862 $ 54,156 -0.19% 0.25%
06-30-93 $ 153,665,647 $ (794,301) 10.70% 12.26%
06-30-92 $ 139,529,010 $ 844,693 16.29% 12.12%
06-30-91 $ 119,192,732 $ 625,797 12.31% 8.32%
06-30-90 $ 105,498,890 $ 420,839 12.26% 9.21%
06-30-89 $ 93,578,548 $ 1,095,348 16.61% 13.98%
06-30-88 $ 79,125,721 $ 1,018,730 1.80% 1.19%
06-30-87 $ 76,655,143 $ 554,007 11.01% 12.61%
06-30-86 $ 68,508,067
3-year -9.15% 0.23%
5-year -0.05% 3.58%
10-year 7.72% 8.19%
15-year 9.65% 9.17%
Prior to 1990, the weightings in each asset class were calculated using the fiscal year-end market values. Since
1990, the asset class weightings have been calculated using the average weightings of the quarter's beginning and
ending market values.
Our investment universe is the New York Stock Exchange (NYSE) prior to July 21, 1997. Prior to FYE June 30,
1998, the Fund's stock benchmark was the NYSE Composite. S&P 500 is the stock benchmark for each FYE
thereafter. The Lehman Government/Credit bond index includes more than 5,000 publicly traded bond issues of
$25 million or more rated Baa or better for a total market value of more than $2 trillion.
*The Balanced Index is calculated using the following formula: 45% Stock Benchmark + 45% Lehman
Government/Credit + 10% 91 Day T-bill.
Investment Performance Data
Annualized Returns
Cumulative Return - Total Fund
Elected Officials' Retirement Plan
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03
EORP Total Fund Balanced Index
Page 35
Fair Total Stock* NYSE S&P
FYE Value Contribution Return Benchmark Index 500
06-30-03 $ 168,928,360 $ 1,403,555 3.77% 0.25% -0.05% 0.25%
06-30-02 $ 162,637,827 $ (1,087,377) -26.20% -17.99% -12.80% -17.99%
06-30-01 $ 221,189,751 $ (11,629,031) -25.47% -14.83% -1.77% -14.83%
06-30-00 $ 310,309,992 $ (2,522,218) 16.58% 7.25% 0.84% 7.25%
06-30-99 $ 268,364,567 $ (2,803,445) 23.05% 22.76% 13.86% 22.76%
06-30-98 $ 219,970,996 $ 3,973,823 25.61% 27.29% 27.29% 30.16%
06-30-97 $ 172,058,639 $ (1,803,251) 33.72% 31.51% 31.51% 34.71%
06-30-96 $ 130,754,134 $ 2,472,037 25.69% 25.91% 25.91% 26.00%
06-30-95 $ 100,984,922 $ (4,284,646) 24.88% 22.40% 22.40% 26.06%
06-30-94 $ 84,956,830 $ 858,704 -0.41% 1.24% 1.24% 1.23%
06-30-93 $ 84,488,875 $ 9,068,166 9.90% 13.32% 13.32% 13.52%
06-30-92 $ 68,365,688 $ 6,044,772 18.05% 11.59% 11.59% 13.45%
06-30-91 $ 52,650,675 $ 9,161,349 12.20% 5.50% 5.50% 7.39%
06-30-90 $ 37,844,300 $ 5,083,288 22.43% 11.25% 11.25% 16.44%
06-30-89 $ 26,506,185 $ (3,016,405) 24.94% 16.81% 16.81% 20.53%
06-30-88 $ 24,034,290 $ (805,321) -8.16% -8.57% -8.57% -6.92%
06-30-87 $ 27,185,325 $ 4,220,210 21.22% 21.46% 21.46% 25.08%
06-30-86 $ 18,284,450
3-year -17.05% -11.20% -5.05% -11.20%
5-year -3.92% -1.61% -0.34% -1.61%
10-year 7.95% 9.19% 9.89% 10.02%
15-year 11.00% 10.00% 10.47% 11.39%
Cumulative Return - Domestic Equities
Elected Officials' Retirement Plan
Investment Performance Data
Annualized Returns
Prior to 1990, the weightings in each asset class were calculated using the fiscal year-end market values. Since 1990,
the asset class weightings have been calculated using the average weightings of the quarter's beginning and ending
market values.
*Our investment universe is the New York Stock Exchange (NYSE) prior to July 21, 1997. Prior to FYE June 30, 1998,
the Fund's stock benchmark was the NYSE Composite. S&P 500 is the stock benchmark for each FYE thereafter.
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03
EORP Equities Stock Benchmark NYSE S&P 500
Page 36
Fair Total 91-Day
FYE Value Contribution Return Lehman* T-Bill
06-30-03 $ 98,623,628 $ (14,012,418) 12.22% 13.14% 1.53%
06-30-02 $ 101,114,946 $ (10,451,854) 8.73% 8.24% 2.57%
06-30-01 $ 102,758,495 $ 3,009,493 11.58% 11.14% 5.89%
06-30-00 $ 89,290,924 $ (1,029,361) 2.97% 4.29% 5.53%
06-30-99 $ 87,797,958 $ (2,972,348) 2.56% 2.69% 4.90%
06-30-98 $ 88,520,393 $ (7,598,643) 12.29% 11.08% 5.28%
06-30-97 $ 85,666,634 $ (938,506) 9.98% 7.76% 5.43%
06-30-96 $ 78,625,023 $ (5,251,844) 6.02% 4.65% 5.52%
06-30-95 $ 79,433,350 $ 2,634,747 11.67% 12.75% 5.52%
06-30-94 $ 68,466,032 $ (804,548) 0.08% -1.45% 3.37%
06-30-93 $ 69,176,772 $ (9,862,467) 11.75% 13.15% 3.37%
06-30-92 $ 71,163,322 $ (5,200,079) 15.01% 14.17% 5.19%
06-30-91 $ 66,542,057 $ (8,535,552) 11.55% 10.21% 7.55%
06-30-90 $ 67,654,590 $ (4,662,449) 8.06% 7.11% 8.50%
06-30-89 $ 67,072,363 $ 4,111,753 13.40% 12.33% 8.47%
06-30-88 $ 55,091,431 $ 1,824,079 7.61% 7.47% 6.75%
06-30-87 $ 49,469,818 $ (3,666,202) 6.12% 4.68% 6.17%
06-30-86 $ 50,223,617
3-year 10.83% 10.82% 3.31%
5-year 7.53% 7.83% 4.07%
10-year 7.72% 7.33% 4.54%
15-year 9.11% 8.66% 5.22%
Our Fixed Income is comprised of all Bonds, Notes, Other Investments and Money Market securities.
Prior to 1990, the weightings in each asset class were calculated using the fiscal year-end market values. Since
1990, the asset class weightings have been calculated using the average weightings of the quarter's beginning and
ending market values.
Investment Performance Data
*The Lehman Government/Credit bond index includes more than 5,000 publicly traded bond issues of $25 million or
more and rated Baa or better for a total market value of more than $2 trillion.
Cumulative Return - Fixed Income
Elected Officials' Retirement Plan
Annualized Returns
$100
$125
$150
$175
$200
$225
$250
$275
$300
$325
$350
$375
$400
$425
$450
$475
$500
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03
EORP Fixed Income Lehman T-Bill
Page 37
Number of Shares Average
Broker Traded Commission Commissions
Greenberg Financial Group 364,280 0.048 $ 17,598.00
Investors Capital Corporation 113,000 0.050 $ 5,650.00
ISI Group, Inc. 265,900 0.048 $ 12,835.00
Merrill Lynch 280,300 0.039 $ 10,875.00
Morgan Stanley Dean Witter 306,223 0.048 $ 14,771.15
Salomon Smith Barney (Phoenix) 488,628 0.037 $ 18,076.40
Salomon Smith Barney (Scottsdale) 225,298 0.046 $ 10,474.90
Standard & Poor's Securities 470,200 0.050 $ 23,510.00
U.S. Financial Investments, Inc. 303,400 0.048 $ 14,610.00
UBS | Paine Webber 346,300 0.038 $ 13,319.60
Wells Fargo Securities 396,800 0.049 $ 19,260.00
Total Commissions 3,560,329 0.045 $ 160,980.05
The Plan typically pays $ .05 per share traded plus SEC charges on sale transactions. Over the Counter stocks are
typically traded net of commissions. The firms with an average commission of less than $.05 have traded Over the
Counter stocks net of commissions for the Plan.
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SUPPORTING SCHEDULE OF COMMISSIONS PAID TO BROKERS
FISCAL YEAR ENDED JUNE 30, 2003
Page 38
Percent Percent
at Fair Fair Book Maturites (Premium) Fair Book at Fair
Description Value Value Value Acquisitions and Sales Discount Value Value Value
U.S. Treasury
Obligations 2.5% 6,620,010.00 4,965,760.55 - - 2,361.36 7,451,880.00 4,968,121.91 2.0%
Federal Agency
Obligations 11.7% 30,867,401.60 29,203,811.74 - 14,256,333.44 - 16,220,085.86 14,947,478.30 6.1%
Total U.S. Government
Securities 14.2% 37,487,411.60 34,169,572.29 - 14,256,333.44 2,361.36 23,671,965.86 19,915,600.21 8.1%
Corporate Bonds 17.2% 45,293,654.94 46,297,202.03 10,322,491.26 12,398,292.65 3,647.82 50,426,504.79 44,225,048.46 18.0%
Total Bond
Portfolio 31.4% 82,781,066.54 80,466,774.32 10,322,491.26 26,654,626.09 6,009.18 74,098,470.65 64,140,648.67 26.1%
Corporate Notes 4.0% 10,494,804.99 10,494,804.99 495,998,019.59 495,497,589.75 - 10,995,234.83 10,995,234.83 4.4%
Common Stock 61.7% 162,637,826.77 187,762,407.01 44,396,790.53 75,090,833.93 - 168,928,359.66 157,068,363.61 64.0%
Other Investments 2.9% 7,612,230.00 7,612,230.00 9,429,155.19 3,839,805.00 - 13,201,580.19 13,201,580.19 5.4%
Money Market Account 0.0% 226,844.33 226,844.33 101,497.53 - - 328,341.86 328,341.86 0.1%
Total Portfolio 100.0% 263,752,772.63 286,563,060.65 560,247,954.10 601,082,854.77 6,009.18 267,551,987.19 245,734,169.16 100.0%
Balance June 30, 2002 Balance June 30, 2003
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SUMMARY OF CHANGES IN INVESTMENT PORTFOLIO
FOR THE FISCAL YEAR ENDED JUNE 30, 2003
Page 39
Purchase (Premium) Accrued Book
Security Coupon Maturity Price Par Value Principal Discount Interest Total Amount Yield
CORPORATE BONDS
AT&T BROADBAND CORP 9.455 11/15/2022 101.97585 497,160.00 506,983.12 (9,823.12) 15.53 506,998.65 9.27%
AT&T CORP 6.500 03/15/2013 87.34801 500,000.00 436,740.05 63,259.95 (85.50) 436,654.55 7.44%
BAYER HYPO-VEREINSBANK 8.741 06/30/2031 81.37500 1,000,000.00 813,750.00 186,250.00 35,449.61 849,199.61 10.74%
BAYER HYPO-VEREINSBANK 8.741 06/30/2031 81.12500 1,000,000.00 811,250.00 188,750.00 34,478.39 845,728.39 10.77%
BAYER HYPO-VEREINSBANK 8.741 06/30/2031 84.98900 2,000,000.00 1,699,780.00 300,220.00 14,568.33 1,714,348.33 10.28%
DELTA AIR LINES 7.379 05/18/2010 100.00000 804,663.09 804,663.09 - 28,698.44 833,361.53 7.38%
GENERAL MOTORS NOVA SCOTIA 6.850 10/15/2008 104.35000 1,000,000.00 1,043,500.00 (43,500.00) 5,518.06 1,049,018.06 6.56%
GMAC 8.000 11/01/2031 100.00000 1,000,000.00 1,000,000.00 - 16,888.89 1,016,888.89 8.00%
HOUSEHOLD FINANCE CORP 7.625 05/17/2032 90.32500 1,000,000.00 903,250.00 96,750.00 30,288.19 933,538.19 8.44%
HOUSEHOLD FINANCE CORP 6.500 11/15/2008 91.67500 1,000,000.00 916,750.00 83,250.00 27,263.89 944,013.89 7.09%
SEARS ROEBUCK ACCEPTANCE 7.000 06/01/2032 83.75000 1,000,000.00 837,500.00 162,500.00 33,250.00 870,750.00 8.36%
SECURITY BENEFIT 8.750 05/15/2016 109.66500 500,000.00 548,325.00 (48,325.00) 13,125.00 561,450.00 7.98%
TOTAL CORPORATE BONDS 11,301,823.09 10,322,491.26 979,331.83 239,458.83 10,561,950.09 8.64%
TOTAL BONDS PURCHASED 11,301,823.09 10,322,491.26 979,331.83 239,458.83 10,561,950.09 8.64%
ELECTED OFFICIALS' RETIREMENT PLAN
BONDS ACQUIRED
STATE OF ARIZONA
INVESTMENTS ACQUIRED
JULY 1, 2002 THROUGH JUNE 30, 2003
Page 40
Page 1 of 2
Amount of Maturity
Description Cost Interest Value
ALABAMA POWER COMPANY 999,615.00 385.00 1,000,000.00
ALCON FINANCE 3,899,393.61 606.39 3,900,000.00
AMSTEL FUNDING 2,998,975.27 1,024.73 3,000,000.00
AMSTERDAM FUNDING CORP 3,499,291.12 708.88 3,500,000.00
ASSET ONE SECURITIZATION 7,545,850.03 4,149.97 7,550,000.00
ASSET SECURT. COOPERATIVE 1,998,611.11 1,388.89 2,000,000.00
ATLANTIS ONE FUNDING 1,374,862.50 137.50 1,375,000.00
AUTOBAHN FUNDING CORP 28,992,884.18 7,115.82 29,000,000.00
BARCLAYS U.S. FUNDING CORP 1,374,906.81 93.19 1,375,000.00
BARTON CAPITAL CORP 4,372,479.72 2,520.28 4,375,000.00
BAVARIA FINANCE FUNDING 1,499,929.58 70.42 1,500,000.00
BEETHOVEN FUNDING CORPORATION 25,239,831.52 10,168.48 25,250,000.00
BRYANT PARK FUNDING LLC 2,997,823.33 2,176.67 3,000,000.00
CARGILL INC 499,983.89 16.11 500,000.00
CBA (DELAWARE) FINANCE INC 1,499,848.75 151.25 1,500,000.00
CENTRICA PLC 1,998,714.44 1,285.56 2,000,000.00
CHARTA CORP 1,999,375.00 625.00 2,000,000.00
CHECK POINT CHARLIE INC 9,142,928.17 7,071.83 9,150,000.00
CLIPPER RECEIVABLES 8,049,395.53 604.47 8,050,000.00
CONCORD MINUTEMAN CAPITAL 1,698,878.47 1,121.53 1,700,000.00
CONSOLIDATED EDISON COMPANY 1,624,838.85 161.15 1,625,000.00
COOPERATIVE ASSN OF TRACTOR DEALERS 14,448,094.29 1,905.71 14,450,000.00
CROWN POINT CAPITAL 20,974,425.93 5,574.07 20,980,000.00
DEALERS CAPITAL ACCEPTANCE 1,999,928.89 71.11 2,000,000.00
DEALERS CAPITAL ACCESS TRUST INC. 1,499,925.00 75.00 1,500,000.00
EAGLE FUNDING CAPITAL 39,342,780.90 7,219.10 39,350,000.00
EMINENT FUNDING 4,495,497.22 4,502.78 4,500,000.00
ENTERPRISE FUNDING CORPORATION 3,498,756.25 1,243.75 3,500,000.00
FALCON ASSET SECURITIZATION 1,499,583.33 416.67 1,500,000.00
FORRESTAL FUNDING MASTER TRUST 3,399,088.34 911.66 3,400,000.00
FORTIS FUNDING 999,479.17 520.83 1,000,000.00
GALLEON CAPITAL 23,047,089.58 2,910.42 23,050,000.00
GE CAPITAL CORP 999,669.44 330.56 1,000,000.00
GENERAL ELECTRIC COMPANY 999,667.50 332.50 1,000,000.00
GIRO MULTI-FUNDING US CORP 1,898,757.25 1,242.75 1,900,000.00
GOTHAM FUNDING 6,497,506.53 2,493.47 6,500,000.00
HALOGEN CAPITAL COMPANY 12,522,830.90 2,169.10 12,525,000.00
HANNOVER FUNDING 3,999,138.89 861.11 4,000,000.00
HOLDENBY CAPITAL COMPANY LLC 499,964.17 35.83 500,000.00
HOLLAND LIMITED SECURITZATION 13,245,237.78 4,762.22 13,250,000.00
HUDSON AMERICAN REALTY 5,247,432.16 2,567.84 5,250,000.00
KITTY HAWK FUNDING CORP 2,499,383.47 616.53 2,500,000.00
LEXINGTON PARKER CAPITAL CORP 3,998,088.61 1,911.39 4,000,000.00
LIBERTY STREET FUNDING 1,499,927.08 72.92 1,500,000.00
LONG LANE MASTER TRUST 3,397,831.00 2,169.00 3,400,000.00
LONG LANE MASTER TRUST IV 3,673,428.36 1,571.64 3,675,000.00
MARKET STREET FUNDING 4,499,823.61 176.39 4,500,000.00
MAXIMILIAN CAPITAL CORP 4,996,544.44 3,455.56 5,000,000.00
MERRILL LYNCH & CO, INC. 4,179,760.89 239.11 4,180,000.00
NAPEXIS BANQUES POPULAIRES 1,399,706.00 294.00 1,400,000.00
NATIONAL AUSTRALIA FUNDING 1,999,278.61 721.39 2,000,000.00
NEPTUNE FUNDING 6,497,155.27 2,844.73 6,500,000.00
SHORT TERM INVESTMENTS MATURED
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS ACQUIRED
JULY 1, 2002 THROUGH JUNE 30, 2003
Page 41
Page 2 of 2
Amount of Maturity
Description Cost Interest Value
SHORT TERM INVESTMENTS MATURED
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS ACQUIRED
JULY 1, 2002 THROUGH JUNE 30, 2003
NORDDEUTSCHE LANDESBANK 3,998,002.22 1,997.78 4,000,000.00
OLD LINE FUNDING 4,873,771.28 1,228.72 4,875,000.00
PARADIGM FUNDING 4,999,184.17 815.83 5,000,000.00
PREFERRED RECEIVABLES FUNDING CORP 2,699,034.72 965.28 2,700,000.00
RECEIVABLES CAPITAL CORP 999,722.22 277.78 1,000,000.00
REGENCY MARKETS NO. 1 5,196,914.55 3,085.45 5,200,000.00
SAINT GERMAIN HOLDINGS LTD 3,398,268.36 1,731.64 3,400,000.00
SIGMA FINANCE 5,199,507.70 492.30 5,200,000.00
SPECIAL PURPOSE ACCTS. REC. 3,172,717.36 2,282.64 3,175,000.00
STARBIRD FUNDING CORPORATION 22,270,267.27 4,732.73 22,275,000.00
STEAMBOAT FUNDING 11,896,547.32 3,452.68 11,900,000.00
SUNBELT FUNDING CORP 6,195,951.94 4,048.06 6,200,000.00
SYDNEY CAPITAL CORP 1,999,505.28 494.72 2,000,000.00
THREE CROWNS FUNDING 54,691,352.17 8,647.83 54,700,000.00
THREE RIVERS FUNDING 749,871.87 128.13 750,000.00
THUNDER BAY FUNDING 2,997,639.44 2,360.56 3,000,000.00
TORONTO DOMINION HOLDING 1,999,027.78 972.22 2,000,000.00
TOTAL FINA ELF SA 3,374,791.60 208.40 3,375,000.00
TRANSAMERICA ASSET FUNDING 8,597,496.67 2,503.33 8,600,000.00
TRANSAMERICA FINANCE CORP 1,749,841.04 158.96 1,750,000.00
TRIPLE A-1 FUNDING 8,298,208.22 1,791.78 8,300,000.00
UBS AMERICAS INC 7,304,507.69 492.31 7,305,000.00
UBS FINANCE (DELAWARE) 10,773,226.70 1,773.30 10,775,000.00
VICTORIA REC 999,486.67 513.33 1,000,000.00
WELLS FARGO & COMPANY 1,999,299.44 700.56 2,000,000.00
WINDMILL FUNDING CORPORATION 999,963.89 36.11 1,000,000.00
WORLD OMNI VEHICLE LEASING 999,284.44 715.56 1,000,000.00
TOTAL SHORT TERM INVESTMENTS MATURED 495,497,589.75 142,410.25 495,640,000.00
Page 42
Page 1 of 2
No. Dividend Annual Book Average Book
Company Shares Rate Income Yield Cost Cost
ACCREDO HEALTH 4,500 - 0.00% 1 8.53 83,383.20
ADVANCED ENERGY INDUSTRIES 4,000 - 0.00% 1 0.44 41,748.24
ALCOA INC 12,600 0 .60 7 ,560.00 3.17% 1 8.93 238,486.62
ALLTEL CORPORATION 7,000 1 .40 9 ,800.00 2.62% 5 3.52 374,621.10
AMBAC FINANCIAL GROUP INC 14,000 0 .44 6 ,160.00 0.77% 5 7.14 799,972.60
AMERICAN STATES WATER 2,300 - 0.00% 2 4.22 55,702.40
AMSURG CORPORATION 3,200 - 0.00% 2 6.01 83,242.92
ANIXTER INTERNATIONAL 3,400 - 0.00% 2 4.49 83,257.37
AT&T CORP 12,800 0 .75 9 ,600.00 4.45% 1 6.84 215,591.68
ATMI INC 3,900 - 0.00% 2 1.33 83,181.15
AUTOZONE INC 7,000 - 0.00% 8 7.45 612,151.40
BANK OF AMERICA CORPORATION 33,000 3 .20 1 05,600.00 4.64% 6 8.91 2,274,021.20
BLACK BOX CORPORATION 2,800 0 .20 5 60.00 0.67% 3 0.05 84,140.00
BOSTON COMMUNICATIONS GROUP 5,700 - 0.00% 1 5.04 85,746.50
BOSTON SCIENTIFIC CORPORATION 22,000 - 0.00% 4 2.64 938,052.56
CABOT OIL & GAS 3,500 - 0.00% 2 3.85 83,481.40
CACI INTERNATIONAL 2,500 - 0.00% 3 2.73 81,826.50
CAL DIVE INTL 4,200 - 0.00% 2 2.05 92,593.17
CARDINAL HEALTH INC. 7,000 0 .12 8 40.00 0.20% 5 8.76 411,286.40
CATERPILLAR INC 5,300 1 .40 7 ,420.00 3.11% 4 5.07 238,849.80
CEPHALON INC 1,800 - 0.00% 4 6.26 83,268.00
CHELSEA PROPERTY GROUP 14,000 2 .14 2 9,960.00 6.41% 3 3.36 467,057.78
COCA-COLA CO 30,000 0 .88 2 6,400.00 1.77% 4 9.83 1,494,803.00
COINSTAR INC 5,600 - 0.00% 1 5.58 87,275.28
COMMERCE BANCORP, INC. 14,000 0 .66 9 ,240.00 1.54% 4 2.83 599,657.92
COMMUNITY FIRST BANKSHARES 3,200 0 .88 2 ,816.00 3.35% 2 6.27 84,050.75
CORINTHIAN COLLEGES, INC 29,000 - 0.00% 4 0.07 1,161,910.42
CULLEN/FROST BANKERS 2,600 0 .96 2 ,496.00 3.12% 3 0.73 79,887.99
CUNO INC 1,900 - 0.00% 3 2.93 62,559.60
DEAN FOODS 25,000 - 0.00% 4 4.13 1,103,276.74
DOWNEY FINANCIAL 2,100 0 .36 7 56.00 0.92% 3 9.29 82,502.90
E.I. du PONT de NEMOURS AND CO 6,700 1 .40 9 ,380.00 3.92% 3 5.74 239,433.88
EASTMAN KODAK COMPANY 8,300 1 .80 1 4,940.00 6.21% 2 8.98 240,514.08
EVERGREEN RESOURCES 1,800 - 0.00% 4 5.12 81,218.29
FACTSET RESEARCH SYSTEMS 2,500 - 0.00% 3 1.55 78,872.70
FAIR ISAAC & CO 10,800 0 .08 8 64.00 0.15% 5 2.49 566,859.94
FEDEX CORPORATION 15,000 0 .20 3 ,000.00 0.41% 4 8.28 724,205.20
FLEXTRONICS INTERNATIONAL 33,000 - 0.00% 1 0.86 358,302.00
GANNETT COMPANY 15,000 0 .96 1 4,400.00 1.31% 7 3.23 1,098,462.95
GENERAL MOTORS CORPORATION 7,700 2 .00 1 5,400.00 6.53% 3 0.64 235,912.60
GILEAD SCIENCES, INC 27,000 - 0.00% 3 4.85 940,993.70
HAIN CELESTIAL GROUP 5,500 - 0.00% 1 5.29 84,111.24
HARTFORD FINANCIAL SERVICES GROUP 25,000 1 .08 2 7,000.00 2.17% 4 9.69 1,242,139.20
HELIX TECHNOLOGY 3,500 0 .16 5 60.00 1.32% 1 2.15 42,541.45
HILB, ROGAL & HAMILTON 2,600 0 .37 9 62.00 1.17% 3 1.51 81,915.32
HONEYWELL INTERNATIONAL INC 11,300 0 .75 8 ,475.00 3.52% 2 1.31 240,773.62
HUDSON UNITED BANCORP 2,700 1 .20 3 ,240.00 3.86% 3 1.10 83,958.00
INAMED CORPORATION 500 - 0 00% 42 63 21 312 50
COMMON STOCK ACQUIRED
JULY 1, 2002 THROUGH JUNE 30, 2003
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS ACQUIRED
Page 43
Page 2 of 2
No. Dividend Annual Book Average Book
Company Shares Rate Income Yield Cost Cost
COMMON STOCK ACQUIRED
JULY 1, 2002 THROUGH JUNE 30, 2003
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS ACQUIRED
LANDRY'S RESTAURANTS 4,900 0 .10 4 90.00 0.59% 1 7.00 83,314.54
LANDSTAR SYSTEMS, INC 7,400 - 0.00% 5 5.05 407,366.83
LENNAR CORP Class A 8,000 0 .05 4 00.00 0.07% 7 6.70 613,597.80
MANITOWOC COMPANY INC. 2,200 0 .28 6 16.00 1.44% 1 9.50 42,895.38
MEDTRONIC, INC. 11,000 0 .29 3 ,190.00 0.60% 4 8.04 528,413.60
MEN'S WEARHOUSE 5,600 - 0.00% 1 5.10 84,545.56
MENTOR CORPORATION 5,500 0 .08 4 40.00 0.46% 1 7.24 94,797.90
MICROCHIP TECHNOLOGY INC. 8,000 0 .10 8 00.00 0.36% 2 7.72 221,749.28
MICROSOFT CORPORATION 33,000 0 .08 2 ,640.00 0.15% 5 4.89 1,811,207.87
NATIONAL CITY CORP 22,000 1 .28 2 8,160.00 3.98% 3 2.13 706,961.40
NBTY INC 4,600 - 0.00% 1 8.28 84,091.23
NOKIA CORPORATION 66,000 0 .26 1 7,160.00 1.62% 1 6.02 1,057,397.90
O'REILLY AUTOMOTIVE 3,000 - 0.00% 2 7.09 81,275.70
PACIFIC SUNWEAR OF CALIFORNIA 4,100 - 0.00% 2 0.36 83,478.05
PAXAR CORP 8,200 - 0.00% 1 0.61 86,993.99
PEPSICO INC. 23,000 0 .64 1 4,720.00 1.46% 4 3.78 1,007,011.00
PERFORMANCE FOOD GROUP 2,800 - 0.00% 3 2.97 92,305.76
PFIZER INC. 10,000 0 .60 6 ,000.00 1.88% 3 1.85 318,500.00
PHOTRONICS, INC 6,400 - 0.00% 1 3.16 84,214.85
POLARIS INDUSTRIES 1,500 1 .24 1 ,860.00 2.50% 4 9.57 74,357.35
PROCTER & GAMBLE COMPANY 29,000 1 .82 5 2,780.00 2.02% 8 9.91 2,607,468.40
PROVIDENT BANKSHARES 3,600 - 0.00% 2 3.34 84,020.72
QUEST DIAGNOSTIC 11,000 - 0.00% 5 3.66 590,305.00
QUIKSILVER, INC 2,700 - 0.00% 3 2.04 86,516.37
REGENERON PHARMACEUTICALS 4,200 - 0.00% 2 0.22 84,916.56
REGIS CORPORATION 3,400 0 .12 4 08.00 0.48% 2 5.14 85,487.70
REHAB CARE GROUP 2,300 - 0.00% 1 8.49 42,532.35
RELIANCE STEEL & ALUMINUM 5,400 0 .24 1 ,296.00 1.55% 1 5.53 83,879.37
RESMED INC 2,800 - 0.00% 3 0.08 84,237.51
RESPIRONICS INC 2,300 - 0.00% 3 5.14 80,813.83
ROADWAY CORPORATION 2,400 - 0.00% 3 5.96 86,311.92
SBC COMMUNICATIONS INC. 12,200 1 .53 1 8,666.00 7.81% 1 9.60 239,089.50
SCOTTS CO'A' 1,600 - 0.00% 5 2.43 83,883.01
SMURFIT-STONE CONTAINER CORP 19,000 - 0.00% 1 4.98 284,697.32
ST. JUDE MEDICAL 14,000 - 0.00% 3 8.69 541,677.81
STEEL DYNAMICS 7,000 - 0.00% 1 2.15 85,036.91
SURMODICS INC 2,700 - 0.00% 3 1.30 84,499.47
SWIFT ENERGY 9,200 - 0.00% 8 .86 81,557.84
SYSCO CORPORATION 31,000 0 .44 1 3,640.00 1.55% 2 8.39 879,975.38
SYSTEMS & COMPUTER TECH 5,500 - 0.00% 7 .44 40,919.38
TECHNE CORP 3,200 - 0.00% 2 6.94 86,222.08
TENET HEALTHCARE CORPORATION 12,000 - 0.00% 4 8.54 582,441.60
TRACTOR SUPPLY CO. 2,400 - 0.00% 3 5.25 84,600.00
TRIUMPH GROUP 1,500 - 0.00% 2 8.05 42,075.00
TYSON FOODS, INC. 72,000 0 .16 1 1,520.00 1.36% 1 1.74 845,209.84
UNITED NATURAL FOODS 3,300 - 0.00% 2 5.54 84,285.06
VIACOM INC. 11,000 0 .24 2 ,640.00 0.50% 4 7.93 527,213.50
VORNADO REALTY TRUST 36,000 2 .72 9 7,920.00 6.71% 4 0.55 1,459,979.57
WAL-MART STORES 48,000 0 .36 1 7,280.00 0.68% 5 3.09 2,548,508.00
WATSON WYATT 'A' 4,200 - 0.00% 1 9.99 83,974.78
WATTS INDUSTRIES 'A' 5,100 0 .24 1 ,224.00 1.47% 1 6.38 83,512.90
WILLIAMS COMPANIES, INC. 37,000 0 .04 1 ,480.00 0.52% 7 .63 282,396.45
WINTRUST FINANCIAL 3,000 0 .16 4 80.00 0.57% 2 8.20 84,585.00
YELLOW CORPORATION 3,300 - 0.00% 2 5.77 85,039.68
TOTAL COMMON STOCK ACQUIRED 679,095.00 1.53% 44,396,790.53
Page 44
Name Coupon Maturity Book Cost
BRIDGE FINANCIAL
BRIDGE FINANCIAL-GRAND INN 12.500 9/25/2000 16,321.23
TOTAL BRIDGE FINANCIAL ACQUIRED 16,321.23
MISCELLANEOUS
APEX CAPITAL FUND I, LLC 11.000 15,593.30
DESERT TROON FINANCE, LLC 10.000 8/27/2005 4,512,500.00
PIVOTAL DEBT FUND 10.000 12/1/2011 1,453,500.00
PROSPECTOR EQUITY CAPITAL 6/1/2009 13,447.01
VALLEY VENTURES III 8.000 9/17/2006 154,543.65
TOTAL MISCELLANEOUS ACQUIRED 6,149,583.96
PIVOTAL EQUITY
CENTURY PLAZA HOTEL 45,000.00
NXTV, LLC 45,000.00
PIVOTAL PROMONTORY 112,500.00
PIVOTAL PROMONTORY-LOANS 643,500.00
SPA AT RED CANYON 29,250.00
TOTAL PIVOTAL EQUITY ACQUIRED 875,250.00
DESERT TROON EQUITY
DESERT TROON-DTR, LLC 1,600,000.00
TOTAL DESERT TROON EQUITY ACQUIRED 1,600,000.00
DIVERSIFIED FUNDING GROUP
TIERRA DEL RIO (TDR), LLC 12.000 10/22/2004 788,000.00
TOTAL DIVERSIFIED FUNDING GROUP ACQUIRED 788,000.00
TOTAL OTHER INVESTMENTS ACQUIRED 9,429,155.19
STATE OF ARIZONA
OTHER INVESTMENTS ACQUIRED
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS ACQUIRED
JULY 1, 2002 THROUGH JUNE 30, 2003
Page 45
Accrued Amortized
Security Coupon Maturity Par Value Sale Price Interest Principal Cost Gain or (Loss) Amount Due
14,473,546.59 0.00 14,256,333.44 14,256,333.44 0.00 14,256,333.44
CORPORATE BONDS
AT&T BROADBAND CORP 9.455 11/15/2022 160.00 - 160.00 - - - 160.00
AT&T CORP 6.500 3/15/2013 500,000.00 87.65 12,458.33 510,390.00 438,258.29 72,131.71 450,716.62
AT&T CORPORATES 8.350 1/15/2025 500,000.00 101.40 (1.76) 521,424.99 507,000.41 14,424.58 506,998.65
AT&T CORPORATES 6.500 3/15/2029 500,000.00 87.33 13.60 436,640.95 436,640.95 - 436,654.55
AUTO BOND RECEIVABLE TRUST 6.400 4/15/2001 38,018.85 - - - 38,018.85 (38,018.85) 38,018.85
DELTA AIR LINES 7.379 5/18/2010 39,773.49 100.00 - 39,773.49 39,773.49 - 39,773.49
HOUSEHOLD FINANCE CORP 7.625 5/17/2032 1,000,000.00 90.41 12,708.33 1,107,500.00 904,056.25 203,443.75 916,764.58
HOUSEHOLD FINANCE CORP 6.500 11/15/2008 1,000,000.00 91.90 6,138.89 1,023,000.00 919,000.00 104,000.00 925,138.89
KEY CORP CAPITAL III 7.750 7/15/2029 1,000,000.00 95.60 22,388.89 1,068,400.00 955,992.27 112,407.73 978,381.16
LUMBERMANS MUTUAL CASUALTY CO 9.150 7/1/2026 3,000,000.00 113.38 - 277,500.00 3,401,317.36 (3,123,817.36) 3,401,317.36
MERRILL LYNCH & COMPANY 8.000 6/1/2007 1,000,000.00 100.00 11,333.33 1,148,750.00 1,000,000.00 148,750.00 1,011,333.33
NORTHWEST AIR LINES 7.935 4/1/2019 30,000.12 113.46 - 34,038.05 34,038.05 - 34,038.05
SEARS ROEBUCK & CO. 9.375 11/1/2011 1,000,000.00 100.00 12,239.58 1,040,000.00 1,000,000.00 40,000.00 1,012,239.58
SECURITY NATIONAL MORTGAGE 99-1 8.353 9/25/2030 350,628.32 100.00 - 350,628.32 350,628.32 - 350,628.32
SECURITY NATIONAL MORTGAGE LOA 7.870 8/25/2030 308,770.07 100.00 - 308,770.07 308,770.07 - 308,770.07
STANDARD CHARTERED BANK 8.000 5/30/2031 1,000,000.00 104.43 26,000.00 1,131,200.00 1,044,306.44 86,893.56 1,070,306.44
WORLDCOM INC. 8.250 5/15/1931 1,000,000.00 102.05 - 221,000.00 1,020,491.90 (799,491.90) 1,020,491.90
TOTAL CORPORATE BONDS 12,267,350.85 103,439.19 9,219,015.87 12,398,292.65 (3,179,276.78) 12,501,731.84
TOTAL BONDS SOLD 26,740,897.44 103,439.19 23,475,349.31 26,654,626.09 (3,179,276.78) 26,758,065.28
ELECTED OFFICIALS' RETIREMENT PLAN
STATE OF ARIZONA
SALES AND REDEMPTION OF INVESTMENTS
JULY 1, 2002 THROUGH JUNE 30, 2003
TOTAL FEDERAL AGENCY OBLIGATIONS
FEDERAL AGENCY OBLIGATIONS
Detailed information for the redemptions of Federal Agency Obligations are too lengthy to include in this report; therefore, only totals are given.
BONDS SOLD
Page 46
Page 1 of 2
Shares Sale Gain (Loss) % Gain
Company Sold Price Amount + SEC Fee Net Amount Book Cost on Sale on Sale
AMERICAN INT'L GROUP 45,000 49.79 2,240,537.40 2,317.47 2,238,219.93 1,055,671.08 1,182,548.85 112.02%
AMERICAN STATES WATER 2,300 25.75 59,227.52 117.81 59,109.71 55,702.40 3,407.31 6.12%
APACHE CORPORATION 34,800 60.82 2,116,691.16 1,803.76 2,114,887.40 1,686,036.88 428,850.52 25.44%
APPLIED MATERIALS 216,000 13.80 2,980,151.60 10,669.77 2,969,481.83 1,892,430.00 1,077,051.83 56.91%
BIOGEN INC 29,000 33.87 982,355.45 1,479.58 980,875.87 1,433,889.25 (453,013.38) -31.59%
BJ SERVICES COMPANY 77,000 32.85 2,529,114.24 3,928.19 2,525,186.05 2,931,768.71 (406,582.66) -13.87%
BJ'S WHOLESALE CLUB, INC. 55,000 19.01 1,045,287.36 2,781.51 1,042,505.85 2,228,346.10 (1,185,840.25) -53.22%
BROADWING INC. 65,000 1.90 123,311.56 1,613.74 121,697.82 1,597,938.55 (1,476,240.73) -92.38%
CABLEVISION SYSTEMS CORP 39,000 8.39 327,308.40 1,959.87 325,348.53 1,751,256.71 (1,425,908.18) -81.42%
CABOT OIL & GAS 3,500 24.94 87,280.20 179.09 87,101.11 83,481.40 3,619.71 4.34%
CHEVRONTEXACO CORP 14,000 73.32 1,026,439.40 730.90 1,025,708.50 1,171,759.20 (146,050.70) -12.46%
CISCO SYSTEMS 46,000 13.27 610,321.10 2,318.38 608,002.72 398,890.20 209,112.52 52.42%
COVAD COMMUNICATIONS GROUP 185,500 1.25 231,803.05 3,717.05 228,086.00 7,823,364.85 (7,595,278.85) -97.08%
CYTYC CORPORATION 78,000 11.27 879,365.80 3,780.96 875,584.84 1,302,601.73 (427,016.89) -32.78%
ELECTRONICS BOUTIQUE HOLDINGS CORP. 10,800 13.01 140,470.88 544.25 139,926.63 396,836.21 (256,909.58) -64.74%
EXPRESS SCRIPTS 22,000 50.44 1,109,575.50 1,133.40 1,108,442.10 439,730.72 668,711.38 152.07%
EXXON MOBIL CORP 11,928 35.77 426,664.56 616.37 426,048.19 374,872.44 51,175.75 13.65%
FACTSET RESEARCH SYSTEMS 2,500 35.72 89,308.20 129.19 89,179.01 78,872.70 10,306.31 13.07%
FLEETBOSTON FINANCIAL CORPORATION 29,000 23.86 692,002.96 1,470.84 690,532.12 1,096,357.40 (405,825.28) -37.02%
GLOBALSANTAFE CORP 2,000 22.32 44,639.60 101.35 44,538.25 69,062.70 (24,524.45) -35.51%
HEALTHSOUTH CORP 14,000 5.55 77,756.00 702.35 77,053.65 210,383.60 (133,329.95) -63.37%
HOME DEPOT 37,000 26.06 964,333.77 1,882.78 962,450.99 377,317.89 585,133.10 155.08%
INAMED CORPORATION 500 49.26 24,630.00 26.16 24,603.84 21,312.50 3,291.34 15.44%
INTEGRA LIFESCIENCES HOLDINGS 3,700 28.77 106,439.50 189.99 106,249.51 83,848.00 22,401.51 26.72%
INTEL CORPORATION 117,000 17.74 2,075,703.20 5,912.51 2,069,790.69 2,534,800.53 (465,009.84) -18.35%
JDS UNIPHASE CORPORATION 81,000 2.90 235,263.01 2,716.95 232,546.06 5,777,980.25 (5,545,434.19) -95.98%
JEFFERIES GROUP 2,100.0 38.88 81,656.31 108.84 81,547.47 82,058.80 (511.33) -0.62%
JP MORGAN CHASE & CO 60,000 21.32 1,279,318.61 2,475.30 1,276,843.31 3,121,220.00 (1,844,376.69) -59.09%
KIMBERLY-CLARK CORPORATION 44,000 45.28 1,992,208.70 2,259.99 1,989,948.71 2,291,364.27 (301,415.56) -13.15%
LENNAR CORP Class B 2,500 72.44 181,109.35 133.49 180,975.86 100,442.72 80,533.14 80.18%
LEXMARK INTERNATIONAL GROUP 15,000 59.66 894,827.06 776.94 894,050.12 1,115,216.43 (221,166.31) -19.83%
LSI LOGIC 97,000 4.82 467,571.51 3,467.48 464,104.03 3,667,355.00 (3,203,250.97) -87.34%
MEN'S WEARHOUSE 5,600 18.48 103,490.49 284.85 103,205.64 84,545.56 18,660.08 22.07%
NABORS INDUSTRIES, LTD 7,000 40.30 282,100.00 358.50 281,741.50 382,001.96 (100,260.46) -26.25%
NATIONAL-OILWELL, INC. 26,000 21.78 566,381.83 1,318.58 565,063.25 998,819.20 (433,755.95) -43.43%
NBTY INC 4,600 15.69 72,193.33 233.38 71,959.95 84,091.23 (12,131.28) -14.43%
NEWS CORPORATION 18,000 20.11 362,044.80 910.90 361,133.90 390,479.77 (29,345.87) -7.52%
NOBLE CORPORATION 7,000 35.76 250,335.58 357.54 249,978.04 314,233.58 (64,255.54) -20.45%
P.F. CHANG'S CHINA BISTRO 8,000 45.92 367,328.70 417.21 366,911.49 213,494.40 153,417.09 71.86%
PAXAR CORP 8,200 10.21 83,687.52 413.92 83,273.60 86,993.99 (3,720.39) -4.28%
PHARMACEUTICAL PRODUCT DEVELOPMENT, INC 30,000 22.61 678,433.00 1,520.44 676,912.56 721,032.30 (44,119.74) -6.12%
PROVIDENT BANKSHARES 3,600 24.54 88,341.00 184.15 88,156.85 84,020.72 4,136.13 4.92%
Commission
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SALES AND REDEMPTION OF INVESTMENTS
COMMON STOCK SOLD
JULY 1, 2002 THROUGH JUNE 30, 2003
Page 47
Page 2 of 2
Shares Sale Gain (Loss) % Gain
Company Sold Price Amount + SEC Fee Net Amount Book Cost on Sale on Sale
Commission
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SALES AND REDEMPTION OF INVESTMENTS
COMMON STOCK SOLD
JULY 1, 2002 THROUGH JUNE 30, 2003
QUORUM HEALTHGROUP (Class action proceeds) - - - - - - 9,947.31 0.00%
REGENERON PHARMACEUTICALS 4,200 7.42 31,164.00 127.46 31,036.54 84,916.56 (53,880.02) -63.45%
ROADWAY CORPORATION 2,400 29.81 71,539.92 123.35 71,416.57 86,311.92 (14,895.35) -17.26%
SAFEWAY INC 59,000 18.56 1,095,192.30 2,990.07 1,092,202.23 1,896,914.16 (804,711.93) -42.42%
SANMINA CORP. 50,800 4.35 221,221.49 1,531.32 219,690.17 1,336,105.16 (1,116,414.99) -83.56%
SCHOLASTIC CORPORATION 19,000 25.81 490,306.40 964.76 489,341.64 496,175.11 (6,833.47) -1.38%
SCOTTS CO'A' 1,600 47.62 76,188.32 83.57 76,104.75 83,883.01 (7,778.26) -9.27%
SEARS, ROEBUCK AND COMPANY 14,000 26.13 365,838.00 711.03 365,126.97 789,158.88 (424,031.91) -53.73%
SEITEL, INC 37,000 0.30 11,062.72 132.96 10,929.76 691,732.40 (680,802.64) -98.42%
SIEBEL SYSTEMS 22,000 8.91 195,967.20 1,105.90 194,861.30 767,702.30 (572,841.00) -74.62%
SOLECTRON 89,000 3.73 332,329.80 2,982.79 329,347.01 3,801,831.20 (3,472,484.19) -91.34%
SPRINT CORPORATION (PCS GROUP) 43,000 3.15 135,239.80 2,154.08 133,085.72 1,148,860.80 (1,015,775.08) -88.42%
SWIFT ENERGY 9,200 10.59 97,403.30 464.58 96,938.72 81,557.84 15,380.88 18.86%
SYMANTEC CORPORATION 78,000 43.62 3,402,738.86 4,010.42 3,398,728.44 1,964,381.32 1,434,347.12 73.02%
TARGET CORP 59,000 31.66 1,867,901.06 3,006.25 1,864,894.81 1,695,974.03 168,920.78 9.96%
TECHNE CORP 3,200 29.01 92,828.16 164.35 92,663.81 86,222.08 6,441.73 7.47%
TENET HEALTHCARE CORPORATION 61,500 17.04 1,047,912.56 3,106.56 1,044,806.00 2,118,498.20 (1,073,692.20) -50.68%
TRAVELERS PROPERTY CASUALTY-CL A 5,998 15.55 93,286.88 302.72 92,984.16 118,703.81 (25,710.90) -21.66%
TRAVELERS PROPERTY CASUALTY-CL B 12,323 15.69 193,350.46 621.98 192,728.48 263,186.72 (70,455.60) -26.77%
TXU CORP 37,000 12.48 461,575.00 1,863.91 459,711.09 1,520,844.71 (1,061,133.62) -69.77%
TYCO INTERNATIONAL LTD. 39,480 14.21 560,928.00 2,000.26 558,927.74 1,272,831.11 (713,903.37) -56.09%
TYSON FOODS, INC. 12,000 8.48 101,704.80 604.77 101,100.03 140,868.30 (39,768.27) -28.23%
UNITED RENTALS, INC 9,000 6.57 59,091.24 451.79 58,639.45 195,732.90 (137,093.45) -70.04%
VALERO ENERGY CORPORATION 13,000 31.61 410,992.40 662.38 410,330.02 650,382.20 (240,052.18) -36.91%
VISHAY INTERTECHNOLOGY INC 7,000 9.45 66,150.70 352.00 65,798.70 182,668.97 (116,870.27) -63.98%
VODAFONE GROUP PLC 39,000 16.72 652,138.50 1,969.63 650,168.87 810,279.33 (160,110.46) -19.76%
WATERS CORPORATION 14,000 19.85 277,925.20 708.37 277,216.83 480,179.00 (202,962.17) -42.27%
WHIRLPOOL CORP 7,000 46.90 328,289.50 359.89 327,929.61 542,720.92 (214,791.31) -39.58%
WORLDCOM INC. 37,000 0.10 3,774.00 0.12 3,773.88 1,170,329.06 (1,166,555.18) -99.68%
TOTAL COMMON STOCK SOLD 2,345,829 41,721,049.78 101,603.00 41,619,446.78 75,090,833.93 (33,461,428.45) -44.56%
Page 48
Capital
Name Coupon Maturity Book Cost Gains (Loss)
BRIDGE FINANCIAL
BRIDGE FINANCIAL-DYNAMITE MOUNTAIN RANCH 12.750 6/30/2002 133,805.00 -
TOTAL BRIDGE FINANCIAL SOLD 133,805.00 -
PIVOTAL
PIVOTAL DEBT FUND 10.000 12/1/2011 580,000.00 -
PIVOTAL PROMONTORY-LOANS 10.000 418,500.00 -
TOTAL PIVOTAL SOLD 998,500.00 -
DESERT TROON
DESERT TROON FINANCE, LLC 14.000 9/15/2001 2,707,500.00 -
TOTAL DESERT TROON SOLD 2,707,500.00 -
TOTAL OTHER INVESTMENTS SOLD 3,839,805.00 -
OTHER INVESTMENTS SOLD
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
SALES AND REDEMPTION OF INVESTMENTS
JULY 1, 2002 THROUGH JUNE 30, 2003
Page 49
Page 1 of 3
Book Current Gain or Annual Book
Par Value Security Coupon Maturity Book Cost Price Price Current Value (Loss) Income Yield YTM Duration
U.S. TREASURY OBLIGATIONS
1,000,000 U.S. TREASURY BOND 7.500 11/15/16 968,121.91 96.81219 135.75000 1,357,500.00 389,378.09 75,000.00 7.75 4.04 9.00
2,000,000 U.S. TREASURY BOND 9.125 05/15/18 2,000,000.00 100.00000 155.09400 3,101,880.00 1,101,880.00 182,500.00 9.13 4.15 8.45
1,000,000 U.S. TREASURY BOND 9.000 11/15/18 1,000,000.00 100.00000 154.37500 1,543,750.00 543,750.00 90,000.00 9.00 4.19 8.64
1,000,000 U.S. TREASURY BOND 8.000 11/15/21 1,000,000.00 100.00000 144.87500 1,448,750.00 448,750.00 80,000.00 8.00 4.42 9.95
5,000,000.00 4,968,121.91 99.36244 7,451,880.00 2,483,758.09 427,500.00 8.60 4.19 8.90
FEDERAL AGENCY OBLIGATIONS
938.30 GNMA Pool #007766 8.500 02/15/06 295.37 31.47927 106.43700 998.70 703.33 79.76 27.00 4.02 4.21
19,804.59 GNMA Pool #143093 9.000 06/15/16 19,204.26 96.96873 111.44100 22,070.43 2,866.17 1,782.41 9.28 3.18 5.47
23,567.26 GNMA Pool #148408 9.000 05/15/16 22,639.28 96.06242 111.44100 26,263.59 3,624.31 2,121.05 9.37 3.18 5.50
98,439.17 GNMA Pool #157733 9.000 05/15/16 91,240.81 92.68750 111.44100 109,701.60 18,460.79 8,859.53 9.71 3.18 5.70
139,941.25 GNMA Pool #158992 9.000 06/15/16 139,197.80 99.46874 111.44100 155,951.93 16,754.13 12,594.71 9.05 3.18 5.33
60,779.20 GNMA Pool #163336 9.000 07/15/16 58,936.86 96.96880 111.44100 67,732.95 8,796.09 5,470.13 9.28 3.18 5.50
108,872.20 GNMA Pool #165863 9.000 08/15/16 104,092.04 95.60938 111.44100 121,328.27 17,236.23 9,798.50 9.41 3.18 5.60
21,419.85 GNMA Pool #168530 9.000 08/15/16 20,931.18 97.71861 111.44100 23,870.50 2,939.32 1,927.79 9.21 3.18 5.48
56,473.87 GNMA Pool #181945 9.000 04/15/20 53,950.19 95.53124 111.51000 62,974.01 9,023.82 5,082.65 9.42 3.18 6.72
22,158.89 GNMA Pool #182127 9.000 11/15/16 21,719.40 98.01664 111.44100 24,694.09 2,974.69 1,994.30 9.18 3.18 5.55
195,887.10 GNMA Pool #207671 9.000 07/15/18 185,358.17 94.62500 111.53000 218,472.88 33,114.71 17,629.84 9.51 3.18 6.27
11,285.93 GNMA Pool #208705 9.000 05/15/20 10,580.57 93.75009 111.51000 12,584.94 2,004.37 1,015.73 9.60 3.18 6.87
24,050.69 GNMA Pool #227210 9.000 09/15/17 22,825.59 94.90618 111.51300 26,819.65 3,994.06 2,164.56 9.48 3.18 5.99
35,318.51 GNMA Pool #229798 9.000 10/15/17 34,479.71 97.62504 111.51300 39,384.73 4,905.02 3,178.67 9.22 3.18 5.85
6,417.91 GNMA Pool #230557 9.000 04/15/18 6,136.12 95.60932 111.53000 7,157.90 1,021.78 577.61 9.41 3.18 6.13
23,202.81 GNMA Pool #234695 10.000 12/15/17 23,101.30 99.56251 115.06200 26,697.62 3,596.32 2,320.28 10.04 8.69 5.63
86,126.03 GNMA Pool #235280 9.000 04/15/18 81,119.94 94.18748 111.53000 96,056.36 14,936.42 7,751.34 9.56 3.18 6.22
42,623.06 GNMA Pool #247096 9.000 05/15/18 40,278.79 94.50000 111.53000 47,537.50 7,258.71 3,836.08 9.52 3.18 6.23
19,287.94 GNMA Pool #247310 9.000 04/15/18 18,528.45 96.06236 111.53000 21,511.84 2,983.39 1,735.91 9.37 3.18 6.10
43,161.10 GNMA Pool #250933 9.000 06/15/18 41,947.22 97.18756 111.53000 48,137.57 6,190.35 3,884.50 9.26 3.18 6.08
13,460.99 GNMA Pool #252138 9.000 10/15/18 12,869.97 95.60939 111.53000 15,013.04 2,143.07 1,211.49 9.41 3.18 6.28
30,356.84 GNMA Pool #252306 9.000 04/15/18 28,042.12 92.37496 111.53000 33,856.98 5,814.86 2,732.12 9.74 3.18 6.34
30,803.32 GNMA Pool #252538 9.000 05/15/18 29,936.98 97.18751 111.53000 34,354.94 4,417.96 2,772.30 9.26 3.18 6.06
29,284.08 GNMA Pool #255161 9.000 03/15/19 26,941.33 91.99992 111.52500 32,659.07 5,717.74 2,635.57 9.78 3.18 6.65
30,321.00 GNMA Pool #262845 9.000 03/15/20 28,928.12 95.40622 111.51000 33,810.95 4,882.83 2,728.89 9.43 3.18 6.70
271,877.07 GNMA Pool #377589 7.500 08/15/25 271,112.39 99.71874 106.80800 290,386.46 19,274.07 20,390.78 7.52 2.89 8.22
184,583.15 GNMA Pool #390014 7.000 06/15/24 173,248.59 93.85937 106.29900 196,210.04 22,961.45 12,920.82 7.46 2.11 8.59
1,268,072.07 GNMA Pool #391992 7.000 03/15/24 1,186,537.46 93.57019 106.29900 1,347,947.93 161,410.47 88,765.04 7.48 2.11 8.55
217,742.56 GNMA Pool #398831 8.000 08/15/26 217,402.34 99.84375 108.40500 236,043.82 18,641.48 17,419.40 8.01 3.24 8.26
111,605.62 GNMA Pool #403979 8.500 10/15/24 109,704.84 98.29688 109.27900 121,961.51 12,256.67 9,486.48 8.65 4.02 7.79
125,719.57 GNMA Pool #406811 7.500 01/15/26 125,562.44 99.87502 106.74300 134,196.84 8,634.40 9,428.97 7.51 2.89 8.31
244,416.54 GNMA Pool #427558 7.500 04/15/26 243,690.94 99.70313 106.74300 260,897.55 17,206.61 18,331.24 7.52 2.89 8.38
242,120.03 GNMA Pool #432701 8.000 06/15/26 242,120.03 100.00000 108.40500 262,470.22 20,350.19 19,369.60 8.00 3.24 8.21
1,186,610.70 GNMA Pool #434237 6.000 03/15/29 1,098,912.71 92.60937 104.96700 1,245,549.65 146,636.94 71,196.64 6.48 2.77 10.51
72,665.61 GNMA Pool #439645 8.000 09/15/26 72,620.20 99.93751 108.40500 78,773.15 6,152.95 5,813.25 8.01 3.24 8.27
283,320.31 GNMA Pool #441619 7.500 11/15/29 282,213.59 99.60937 106.30700 301,189.32 18,975.73 21,249.02 7.53 2.89 9.20
206,558.69 GNMA Pool #458918 7.000 08/15/28 202,814.81 98.18750 105.77700 218,491.59 15,676.78 14,459.11 7.13 2.11 9.29
BOND PORTFOLIO
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS OWNED
JUNE 30, 2003
TOTAL U.S. TREASURY OBLIGATIONS
Page 50
Page 2 of 3
Book Current Gain or Annual Book
Par Value Security Coupon Maturity Book Cost Price Price Current Value (Loss) Income Yield YTM Duration
BOND PORTFOLIO
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS OWNED
JUNE 30, 2003
595,113.16 GNMA Pool #472997 7.000 06/15/29 591,951.62 99.46875 105.69600 629,010.81 37,059.19 41,657.92 7.04 2.11 9.36
242,008.03 GNMA Pool #486761 7.000 12/15/28 237,243.49 98.03125 105.77700 255,988.83 18,745.34 16,940.56 7.14 2.11 9.38
835,561.38 GNMA Pool #499907 7.000 05/15/29 800,963.93 95.85938 105.69600 883,154.96 82,191.03 58,489.30 7.30 2.11 9.69
605,213.04 GNMA Pool #507496 7.000 06/15/29 586,678.38 96.93750 105.69600 639,685.97 53,007.59 42,364.91 7.22 2.11 9.60
995,075.68 GNMA Pool #510958 7.000 05/15/29 987,923.57 99.28125 105.69600 1,051,755.19 63,831.62 69,655.30 7.05 2.11 9.36
256,249.68 GNMA Pool #513367 7.000 08/15/29 245,359.07 95.75000 105.69600 270,845.66 25,486.59 17,937.48 7.31 2.11 9.76
843,855.34 GNMA Pool #530611 6.500 05/15/31 843,130.15 99.91406 105.00900 886,124.05 42,993.90 54,850.60 6.51 1.67 10.01
1,377,732.00 GNMA Pool #530631 6.500 06/15/31 1,371,596.96 99.55470 105.00900 1,446,742.60 75,145.64 89,552.58 6.53 1.67 10.07
1,073,844.60 GNMA Pool #539629 6.500 04/15/31 1,069,817.68 99.62500 105.00900 1,127,633.48 57,815.80 69,799.90 6.52 1.67 10.02
768,799.62 GNMA Pool #548963 6.500 03/15/31 766,877.62 99.75000 105.00900 807,308.79 40,431.17 49,971.98 6.52 1.67 9.99
1,574,307.34 GNMA Pool #552514 6.500 04/15/32 1,568,895.66 99.65625 105.00300 1,653,069.94 84,174.28 102,329.98 6.52 1.67 10.24
527,983.27 GNMA Pool #780220 7.500 08/15/25 527,818.26 99.96875 107.01200 565,005.46 37,187.20 39,598.75 7.50 2.89 8.20
15,285,016.95 14,947,478.30 97.79170 16,220,085.86 1,272,607.56 1,067,865.33 7.14 2.22 9.27
CORPORATE BONDS
1,000,000.00 AGL CAPITAL TRUST 8.170 06/01/37 1,017,203.06 101.72031 114.83600 1,148,360.00 131,156.94 81,700.00 8.03 7.02 11.70
1,500,000.00 AMERICAN UNITED LIFE INS CO 7.750 03/30/26 1,427,092.65 95.13951 104.74600 1,571,190.00 144,097.35 116,250.00 8.15 7.32 11.64
2,750,000.00 ANTHEM INSURANCE COMPANY INC 9.000 04/01/27 2,900,873.23 105.48630 134.28600 3,692,865.00 791,991.77 247,500.00 8.53 6.23 9.68
497,000.00 AT&T BROADBAND CORP 9.455 11/15/22 506,655.07 101.94267 136.29600 677,391.12 170,736.05 46,991.35 9.27 6.22 9.07
1,000,000.00 BANC ONE CORP 8.000 04/29/27 1,024,185.98 102.41860 131.34700 1,313,470.00 289,284.02 80,000.00 7.81 5.61 10.76
1,000,000.00 BANKERS TRUST CORP 144A 8.090 12/01/26 1,000,000.00 100.00000 114.77600 1,147,760.00 147,760.00 80,900.00 8.09 6.82 10.87
4,000,000.00 BAYER HYPO-VEREINSBANK 8.741 06/30/31 3,338,606.80 83.46517 105.13800 4,205,520.00 866,913.20 349,640.00 10.47 8.27 13.00
764,889.60 DELTA AIR LINES 7.379 05/18/10 764,889.60 100.00000 102.72900 785,763.44 20,873.84 56,441.20 7.38 6.88 5.59
500,000.00 DELTA AIRLINES SERIES 01-1B 7.711 09/18/11 497,903.05 99.58061 84.17500 420,875.00 (77,028.05) 38,555.00 7.74 10.71 6.14
1,000,000.00 FARMERS INSURANCE EXCHANGE 8.625 05/01/24 931,910.40 93.19104 97.50000 975,000.00 43,089.60 86,250.00 9.26 8.89 10.77
1,000,000.00 FIRST HAWAIIAN CAPITAL TRUST 8.343 07/01/27 1,050,801.12 105.08011 119.24600 1,192,460.00 141,658.88 83,430.00 7.94 6.72 10.21
500,000.00 FIRST UNION CAPITAL II 7.950 11/15/29 454,862.43 90.97249 126.96300 634,815.00 179,952.57 39,750.00 8.74 5.92 12.56
500,000.00 FORD HOLDINGS INC 9.375 03/01/20 558,379.00 111.67580 105.22600 526,130.00 (32,249.00) 46,875.00 8.39 8.77 7.79
1,000,000.00 FORD MOTOR COMPANY 9.500 09/15/11 999,662.97 99.96630 115.04200 1,150,420.00 150,757.03 95,000.00 9.50 7.01 5.78
500,000.00 FORD MOTOR CREDIT 7.250 10/25/11 507,796.50 101.55930 102.80700 514,035.00 6,238.50 36,250.00 7.14 6.81 6.39
1,000,000.00 GENERAL AMERICAN LIFE INSURANCE 7.625 01/15/24 899,051.09 89.90511 107.77900 1,077,790.00 178,738.91 76,250.00 8.48 6.91 11.88
1,000,000.00 GENERAL MOTORS NOVA SCOTIA FINA 6.850 10/15/08 1,042,161.54 104.21615 104.99500 1,049,950.00 7,788.46 68,500.00 6.57 5.78 4.48
1,000,000.00 GMAC 8.000 11/01/31 1,000,000.00 100.00000 98.11600 981,160.00 (18,840.00) 80,000.00 8.00 8.17 11.61
1,000,000.00 GOODRICH CORPORATION 7.100 11/15/27 913,604.83 91.36048 98.57800 985,780.00 72,175.17 71,000.00 7.77 7.23 13.07
920,000.00 GTE CORPORATION 7.900 02/01/27 899,425.76 97.76367 113.85700 1,047,484.40 148,058.64 72,680.00 8.08 6.72 11.28
500,000.00 HUNTINGTON BANKS SUB NTS 6.600 06/15/18 461,036.06 92.20721 116.73100 583,655.00 122,618.94 33,000.00 7.16 5.00 10.57
2,000,000.00 JOHN HANCOCK MUTUAL LIFE INS CO 7.375 02/15/24 1,892,218.75 94.61094 117.89100 2,357,820.00 465,601.25 147,500.00 7.80 5.86 11.49
1,000,000.00 JPM CAPITAL TRUST II 7.950 02/01/27 1,039,004.70 103.90047 115.13600 1,151,360.00 112,355.30 79,500.00 7.65 6.67 10.57
1,000,000.00 KEY CORP CAPITAL III 7.750 07/15/29 957,210.97 95.72110 122.64400 1,226,440.00 269,229.03 77,500.00 8.10 6.02 12.06
1,000,000.00 LEHMAN BROTHERS HOLDINGS INC 8.800 03/01/15 1,086,434.94 108.64349 132.94400 1,329,440.00 243,005.06 88,000.00 8.10 5.00 6.86
1,000,000.00 LIBERTY MUTUAL INSURANCE 7.875 10/15/26 944,062.56 94.40626 85.11300 851,130.00 (92,932.56) 78,750.00 8.34 9.47 11.70
2,000,000.00 NATIONWIDE MUTUAL INS CO 7.500 02/15/24 1,908,233.45 95.41167 104.55500 2,091,100.00 182,866.55 150,000.00 7.86 7.08 11.29
897,506.55 NORTHWEST AIR LINES 7.935 04/01/19 973,782.20 108.49862 107.47800 964,622.09 (9,160.11) 71,217.14 7.31 7.14 8.60
1,000,000.00 PMI CAPITAL 8.309 02/01/27 1,027,637.41 102.76374 105.14000 1,051,400.00 23,762.59 83,090.00 8.09 7.83 10.40
1,000,000.00 PRINCIPAL MUTUAL LIFE INSURANCE C 7.875 03/01/24 958,832.66 95.88327 104.24700 1,042,470.00 83,637.34 78,750.00 8.21 7.47 10.94
1,000,000.00 ROCKWELL INTERNATIONAL 6.700 01/15/28 914,545.27 91.45453 115.01400 1,150,140.00 235,594.73 67,000.00 7.33 5.57 13.51
TOTAL FEDERAL AGENCY OBLIGATIONS
Page 51
Page 3 of 3
Book Current Gain or Annual Book
Par Value Security Coupon Maturity Book Cost Price Price Current Value (Loss) Income Yield YTM Duration
BOND PORTFOLIO
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS OWNED
JUNE 30, 2003
1,500,000.00 SAFECO CAPITAL TRUST 8.072 07/15/37 1,508,968.30 100.59789 115.78000 1,736,700.00 227,731.70 121,080.00 8.02 6.87 11.94
1,000,000.00 SEARS ROEBUCK ACCEPTANCE 7.000 06/01/32 841,121.20 84.11212 111.85500 1,118,550.00 277,428.80 70,000.00 8.32 6.12 15.19
500,000.00 SECURITY BENEFIT 8.750 05/15/16 545,413.90 109.08278 121.56700 607,835.00 62,421.10 43,750.00 8.02 6.30 7.34
1,000,000.00 SECURITY MUTUAL LIFE NEW YORK 9.375 12/15/16 1,092,090.09 109.20901 131.42300 1,314,230.00 222,139.91 93,750.00 8.58 5.96 7.26
649,371.68 SECURITY NATIONAL MORTGAGE 99-1 8.353 09/25/30 649,371.68 100.00000 103.03000 669,047.64 19,675.96 54,242.02 8.35 8.08 10.80
418,720.81 SECURITY NATIONAL MORTGAGE LOAN 7.870 08/25/30 418,720.81 100.00000 106.81800 447,269.19 28,548.38 32,953.33 7.87 7.29 11.26
1,000,000.00 SOUTHERN COMPANY CAPITAL TRUST 8.190 02/01/37 1,071,724.72 107.17247 117.26100 1,172,610.00 100,885.28 81,900.00 7.64 6.87 11.05
627,000.00 UNION CARBIDE CORP 7.875 04/01/23 607,242.37 96.84886 101.03300 633,476.91 26,234.54 49,376.25 8.13 7.77 10.72
1,000,000.00 UNION CENTRAL LIFE 8.200 11/01/26 1,010,506.32 101.05063 110.99900 1,109,990.00 99,483.68 82,000.00 8.11 7.22 10.66
500,000.00 US WEST COMMUNICATIONS 7.500 06/15/23 478,531.07 95.70621 96.00000 480,000.00 1,468.93 37,500.00 7.84 7.90 11.14
1,000,000.00 USF&G CAPITAL II, SERIES B 8.470 01/10/27 1,090,779.87 109.07799 114.08200 1,140,820.00 50,040.13 84,700.00 7.77 7.22 9.68
1,000,000.00 ZURICH CAPITAL TRUST I 8.376 06/01/37 1,012,514.08 101.25141 109.81800 1,098,180.00 85,665.92 83,760.00 8.27 7.57 11.53
45,024,488.64 44,225,048.46 98.22443 50,426,504.79 6,201,456.33 3,643,281.29 8.24 6.94 10.62
65,309,505.59 BOND PORTFOLIO TOTALS 64,140,648.67 98.21028 74,098,470.65 9,957,821.98 5,138,646.62 8.01 5.63 10.18
TOTAL CORPORATE BONDS
Page 52
Date Interest Maturity Amount of Maturity
Acquired Description Rate Date Cost Interest Value
6/30/2003 UBS FINANCE (DELAWARE) 1.300 7/1/2003 999,963.89 36.11 1,000,000.00
6/30/2003 MERRILL LYNCH & CO, INC. 1.120 7/2/2003 999,937.78 62.22 1,000,000.00
6/25/2003 ASSET ONE SECURITIZATION 1.020 7/9/2003 1,749,305.83 694.17 1,750,000.00
6/26/2003 NORDDEUTSCHE LANDESBANK 1.100 7/9/2003 1,374,453.82 546.18 1,375,000.00
6/30/2003 STEAMBOAT FUNDING 1.130 7/10/2003 999,686.11 313.89 1,000,000.00
6/26/2003 CROWN POINT CAPITAL 1.070 7/11/2003 1,374,386.98 613.02 1,375,000.00
6/27/2003 INTERNATIONAL LEASE FINANCE 1.020 7/18/2003 1,748,958.75 1,041.25 1,750,000.00
6/25/2003 WORLD OMNI VEHICLE LEASING 1.000 7/25/2003 1,748,541.67 1,458.33 1,750,000.00
TOTAL CORPORATE NOTES 10,995,234.83 4,765.17 11,000,000.00
ELECTED OFFICIALS' RETIREMENT PLAN
CORPORATE NOTES
STATE OF ARIZONA
INVESTMENTS OWNED
JUNE 30, 2003
Page 53
Page 1 of 4
Div Book Cost Market Annual Gain or (Loss)
Description Rate per Share Book Cost Price Market Value Income Amount
74,000 ABBOTT LABORATORIES 0.98 11.3534 840,149.75 43.7600 3,238,240.00 72,520.00 2,398,090.25
4,500 ACCREDO HEALTH - 18.5296 83,383.20 21.6500 97,425.00 - 14,041.80
52,000 ADOBE SYSTEMS 0.05 34.2924 1,783,207.10 32.0700 1,667,640.00 2,600.00 (115,567.10)
4,000 ADVANCED ENERGY INDUSTRIES - 10.4371 41,748.24 14.3000 57,200.00 - 15,451.76
14,000 ALBERTO CULVER CO 0.42 54.3177 760,447.26 51.1000 715,400.00 5,880.00 (45,047.26)
12,600 ALCOA INC 0.60 18.9275 238,486.62 25.5000 321,300.00 7,560.00 82,813.38
63,000 ALLSTATE CORPORATION 0.92 22.2783 1,403,533.34 35.6500 2,245,950.00 57,960.00 842,416.66
44,000 ALLTEL CORPORATION 1.40 62.8694 2,766,255.31 48.2200 2,121,680.00 61,600.00 (644,575.31)
14,000 AMBAC FINANCIAL GROUP INC 0.40 57.1409 799,972.60 66.2500 927,500.00 5,600.00 127,527.40
59,000 AMERICAN EXPRESS 0.40 34.9620 2,062,758.79 41.8100 2,466,790.00 23,600.00 404,031.21
37,000 AMERICAN INT'L GROUP 0.21 23.4594 867,996.22 55.1800 2,041,660.00 7,696.00 1,173,663.78
11,000 AMERICAN STANDARD COMPANY INC - 76.5643 842,207.68 73.9300 813,230.00 - (28,977.68)
89,000 AMGEN - 38.8074 3,453,856.43 65.9400 5,868,660.00 - 2,414,803.57
3,200 AMSURG CORPORATION - 26.0134 83,242.92 30.5300 97,696.00 - 14,453.08
48,000 ANALOG DEVICES, INC. - 77.9262 3,740,455.90 34.8200 1,671,360.00 - (2,069,095.90)
3,400 ANIXTER INTERNATIONAL - 24.4875 83,257.37 23.4300 79,662.00 - (3,595.37)
53,550 APACHE CORPORATION 0.40 46.1422 2,470,916.12 65.0600 3,483,963.00 21,420.00 1,013,046.88
12,800 AT&T CORP 0.75 16.8431 215,591.68 19.2500 246,400.00 9,600.00 30,808.32
3,900 ATMI INC - 21.3285 83,181.15 24.9500 97,305.00 - 14,123.85
7,000 AUTOZONE INC - 87.4502 612,151.40 75.9700 531,790.00 - (80,361.40)
33,000 BANK OF AMERICA CORPORATION 3.20 68.9097 2,274,021.20 79.0300 2,607,990.00 105,600.00 333,968.80
33,000 BJ SERVICES COMPANY - 38.0749 1,256,472.29 37.3600 1,232,880.00 - (23,592.29)
2,800 BLACK BOX CORPORATION 0.20 30.0500 84,140.00 36.1200 101,136.00 560.00 16,996.00
5,700 BOSTON COMMUNICATIONS GROUP - 15.0432 85,746.50 16.9100 96,387.00 - 10,640.50
22,000 BOSTON SCIENTIFIC CORPORATION - 42.6388 938,052.56 61.1000 1,344,200.00 - 406,147.44
43,000 CABLEVISION SYSTEMS CORP - 44.9040 1,930,872.79 20.7600 892,680.00 - (1,038,192.79)
2,500 CACI INTERNATIONAL - 32.7306 81,826.50 34.3000 85,750.00 - 3,923.50
4,200 CAL DIVE INTL - 22.0460 92,593.17 21.7800 91,476.00 - (1,117.17)
25,000 CANADIAN NATIONAL RAILWAY 0.74 47.1626 1,179,064.40 48.2600 1,206,500.00 18,510.00 27,435.60
7,000 CARDINAL HEALTH INC. 0.12 58.7552 411,286.40 64.3000 450,100.00 840.00 38,813.60
5,300 CATERPILLAR INC 1.40 45.0660 238,849.80 55.6600 294,998.00 7,420.00 56,148.20
1,800 CEPHALON INC - 46.2600 83,268.00 41.0500 73,890.00 - (9,378.00)
14,000 CHELSEA PROPERTY GROUP 2.14 33.3613 467,057.78 40.3100 564,340.00 29,960.00 97,282.22
38,666 CHOICEPOINT INCORPORATED - 39.3995 1,523,421.20 34.5200 1,334,750.32 - (188,670.88)
176,000 CISCO SYSTEMS - 8.6715 1,526,188.55 16.7900 2,955,040.00 - 1,428,851.45
138,833 CITIGROUP, INC. 0.80 40.4317 5,613,251.15 42.8000 5,942,052.40 111,066.40 328,801.25
30,000 COCA-COLA CO 0.88 49.8268 1,494,803.00 46.4100 1,392,300.00 26,400.00 (102,503.00)
5,600 COINSTAR INC - 15.5849 87,275.28 18.9300 106,008.00 - 18,732.72
Shares
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS OWNED
COMMON STOCK PORTFOLIO
JUNE 30, 2003
Page 54
Page 2 of 4
Div Book Cost Market Annual Gain or (Loss)
Shares Description Rate per Share Book Cost Price Market Value Income Amount
STATE OF ARIZONA
ELECTED OFFICIALS' RETIREMENT PLAN
INVESTMENTS OWNED
COMMON STOCK PORTFOLIO
JUNE 30, 2003
143,000 COMCAST CORP-SPECIAL CL A - 32.4440 4,639,486.28 28.9900 4,145,570.00 - (493,916.28)
14,000 COMMERCE BANCORP, INC. 0.66 42.8327 599,657.92 37.1000 519,400.00 9,240.00 (80,257.92)
3,200 COMMUNITY FIRST BANKSHARES 0.88 26.2659 84,050.75 27.2300 87,136.00 2,816.00 3,085.25
15,000 CONSTELLATION ENERGY GROUP INC 1.04 43.8045 657,067.50 34.3000 514,500.00 15,600.00 (142,567.50)
29,000 CORINTHIAN COLLEGES, INC - 40.0659 1,161,910.42 48.3100 1,400,990.00 - 239,079.58
2,600 CULLEN/FROST BANKERS 0.96 30.7262 79,887.99 32.1000 83,460.00 2,496.00 3,572.01
1,900 CUNO INC - 32.9261 62,559.60 36.2100 68,799.00 - 6,239.40
30,000 CYTYC CORPORATION - 16.7000 501,000.67 10.5500 316,500.00 - (184,500.67)
37,500 DEAN FOODS - 29.4207 1,103,276.74 31.5000 1,181,250.00 - 77,973.26
2,100 DOWNEY FINANCIAL 0.36 39.2871 82,502.90 41.3000 86,730.00 756.00 4,227.10
6,700 E.I. du PONT de NEMOURS AND CO 1.40 35.7364 239,433.88 41.6400 278,988.00 9,380.00 39,554.12
8,300 EASTMAN KODAK COMPANY 1.80 28.9776 240,514.08 27.3500 227,005.00 14,940.00 (13,509.08)
29,200 ELECTRONICS BOUTIQUE HOLDINGS CORP. - 36.7441 1,072,927.55 22.9400 669,848.00 - (403,079.55)
117,000 EMC CORP - 11.2874 1,320,623.39 10.4700 1,224,990.00 - (95,633.39)
1,800 EVERGREEN RESOURCES - 45.1213 81,218.29 54.3100 97,758.00 - 16,539.71
66,000 EXPRESS SCRIPTS - 19.9878 1,319,192.13 68.4100 4,515,060.00 - 3,195,867.87
120,000 EXXON MOBIL CORP 1.00 31.4279 3,771,352.55 35.9100 4,309,200.00 120,000.00 537,847.45
10,800 FAIR ISAAC & CO 0.08 52.4870 566,859.94 51.4500 555,660.00 864.00 (11,199.94)
15,000 FEDEX CORPORATION 0.20 48.2803 724,205.20 62.0300 930,450.00 3,000.00 206,244.80
33,000 FLEXTRONICS INTERNATIONAL - 10.8576 358,302.00 10.4300 344,190.00 - (14,112.00)
11,000 FORTUNE BRANDS, INC. 1.08 52.2001 574,201.10 52.2000 574,200.00 11,880.00 (1.10)
15,000 GANNETT COMPANY 0.96 73.2309 1,098,462.95 76.8100 1,152,150.00 14,400.00 53,687.05
15,000 GENENTECH, INC. - 45.0459 675,688.50 72.1200 1,081,800.00 - 406,111.50
7,700 GENERAL MOTORS CORPORATION 2.00 30.6380 235,912.60 36.0000 277,200.00 15,400.00 41,287.40
29,000 GENZYME CORPORATION - 57.5882 1,670,056.65 41.8600 1,213,940.00 - (456,116.65)
27,000 GILEAD SCIENCES, INC - 34.8516 940,993.70 55.5500 1,499,850.00 - 558,856.30
40,000 GLOBALSANTAFE CORP 0.15 34.5314 1,381,254.10 23.3400 933,600.00 6,000.00 (447,654.10)
5,500 HAIN CELESTIAL GROUP - 15.2930 84,111.24 15.9700 87,835.00 - 3,723.76
25,000 HARTFORD FINANCIAL SERVICES GROUP 1.08 49.6856 1,242,139.20 50.3600 1,259,000.00 27,000.00 16,860.80
3,500 HELIX TECHNOLOGY 0.16 12.1547 42,541.45 13.0900 45,815.00 560.00 3,273.55
2,600 HILB, ROGAL & HAMILTON 0.37 31.5059 81,915.32 34.0400 88,504.00 962.00 6,588.68
70,000 HOME DEPOT 0.24 10.1978 713,844.63 33.1200 2,318,400.00 16,800.00 1,604,555.37
11,300 HONEYWELL INTERNATIONAL INC 0.75 21.3074 240,773.62 26.8500 303,405.00 8,475.00 62,631.38
2,700 HUDSON UNITED BANCORP 1.20 31.0956 83,958.00 34.1500 92,205.00 3,240.00 8,247.00
43,000 INTERACTIVECORP - 35.4233 1,523,201.32 39.3300 1,691,190.00 - 167,988.68
37,000 INTERNATIONAL BUSINESS MACH. 0.64 40.9794 1,516,239.39 82.5000 3,052,500.00 23,680.00 1,536,260.61
7,000 INTERNATIONAL PAPER COMPANY 1.00 34.3499 240,449.30 35.7300 250,110.00 7,000.00 9,660.7