FORM 11-K

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FORM 11-K

 

ANNUAL REPORT

Pursuant to Section 15(d) of the

Securities Exchange Act of 1934

 

(Mark One):

 

x ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

 

For the plan year ended December 31, 2003

 

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                 to

 

Commission file number 1-12188

 


 

A. Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

MARRIOTT INTERNATIONAL, INC. EMPLOYEES’

PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST

 

B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

MARRIOTT INTERNATIONAL, INC.

1 Marriott Drive

Washington, D.C. 20058

 



REQUIRED INFORMATION

 

Financial Statements and Exhibits as follows:

 

  1. Financial statements

 

  Report of Independent Registered Public Accounting Firm—Ernst & Young LLP

 

  Independent Auditors’ Report—KPMG LLP

 

  Statements of Net Assets Available for Benefits as of December 31, 2003 and December 31, 2002

 

  Statements of Changes in Net Assets Available for Benefits for the years ended December 31, 2003 and December 31, 2002

 

  Notes to Financial Statements

 

Certain schedules have been omitted because they are not applicable, not material or because the information is included in the financial statements or the notes thereto.

 

  2. Supplemental Schedule

 

Schedule H, Line 4i—Schedule of Assets (Held At End of Year)

 

  3. Exhibits

 

23.1 – Consent of Independent Registered Public Accounting Firm—Ernst & Young, LLP

 

23.2 – Consent of Independent Registered Public Accounting Firm—KPMG, LLP

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee of the Plan has duly caused this annual report to be signed on its behalf by the undersigned, hereunto duly authorized.

 

MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST

 

Dated: June 25, 2004

      By:  

/s/    Carl Berquist


               

Carl Berquist

Plan Trustee

 


As filed with the Securities and Exchange Commission on June 25, 2004

Commission File No. 1-12188


 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 


 

FINANCIAL STATEMENTS AND EXHIBITS

 

TO

 

FORM 11-K

 

ANNUAL REPORT

 

Under

 

The Securities Exchange Act of 1934

 


 

MARRIOTT INTERNATIONAL, INC.

 

EMPLOYEES’ PROFIT SHARING, RETIREMENT AND

SAVINGS PLAN AND TRUST

 


 

MARRIOTT INTERNATIONAL, INC.

1 Marriott Drive

Washington, D.C. 20058

 


 


INDEX TO FINANCIAL STATEMENTS AND EXHIBITS

 

MARRIOTT INTERNATIONAL, INC.

 

EMPLOYEES’ PROFIT SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST

 

Exhibit
Number


  Exhibit

   Sequentially
Numbered
Page


    Financial statements     
    ·  

Report of Independent Registered Public Accounting Firm—Ernst & Young LLP

   6
    ·  

Independent Auditors’ Report—KPMG LLP

   7
    ·  

Statements of Net Assets Available for Benefits as of December 31, 2003 and December 31, 2002

   8
    ·  

Statement of Changes in Net Assets Available for Benefits for the years ended December 31, 2003
and December 31, 2002

   9
    ·  

Notes to Financial Statements

   10
    Supplemental Schedule    21
    Exhibits     
Exhibit 23.1 – Consent of Independent Registered Public Accounting Firm—Ernst & Young LLP    50
Exhibit 23.2 – Consent of Independent Registered Public Accounting Firm—KPMG, LLP    51


MARRIOTT INTERNATIONAL, INC. EMPLOYEES’ PROFIT

SHARING, RETIREMENT AND SAVINGS PLAN AND TRUST

 

Financial Statements and Supplemental Schedule

 

Years ended December 31, 2003 and 2002 with Report of Independent Registered

     Public Accounting Firm and Independent Auditors’ Report


Report of Independent Registered Public Accounting

Firm—Ernst & Young LLP

 

The Profit Sharing Committee

Marriott International, Inc. Employees’

    Profit Sharing, Retirement and Savings Plan and Trust

 

We have audited the accompanying statement of net assets available for benefits of Marriott International, Inc. Employees’ Profit Sharing, Retirement and Savings Plan and Trust as of December 31, 2003, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 2003, and the changes in its net assets available for benefits for the year then ended, in conformity with U.S. generally accepted accounting principles.

 

Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2003 is presented for the purpose of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in our audit of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.

 

/s/ Ernst & Young LLP

 

June 4, 2004

McLean, Virginia

 

1


Independent Auditor’s Report—KPMG LLP

 

The Profit Sharing Committee and Participants

Marriott International, Inc. Employees’ Profit Sharing, Retirement and

    Savings Plan and Trust:

 

We have audited the accompanying statement of net assets available for benefits of Marriott International, Inc. Employees’ Profit Sharing, Retirement and Savings Plan and Trust (the Plan) as of December 31, 2002, and the related statement of changes in net assets available for benefits for the year then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Marriott International, Inc. Employees’ Profit Sharing, Retirement and Savings Plan and Trust as of December 31, 2002, and the changes in net assets available for benefits for the year then ended in conformity with accounting principles generally accepted in the United States of America.

 

/s/ KPMG LLP

 

June 2, 2003

 

2


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Statements of Net Assets Available for Benefits

 

     December 31

     2003

   2002

Assets

             

Investments, at fair value

   $ 1,486,070,012    $ 1,118,232,788

Investments, at contract value

     442,425,819      434,909,034
    

  

Total investments

     1,928,495,831      1,553,141,822

Receivables:

             

Due from Marriott International, Inc. for Company contribution

     58,267,748      60,267,398

Receivables from sale of investments

     15,892,633      1,518,952

Accrued interest and dividends

     3,490,998      2,628,609

Other

     —        102,545
    

  

Total receivables

     77,651,379      64,517,504

Total assets

     2,006,147,210      1,617,659,326
    

  

Liabilities

             

Accounts payable on investments purchased

     30,919,127      2,114,144

Custodian and advisor fees payable

     1,158,732      754,276

Other

     203,475      569,517
    

  

Total liabilities

     32,281,334      3,437,937
    

  

Net assets available for benefits

   $ 1,973,865,876    $ 1,614,221,389
    

  

 

See accompanying notes.

 

3


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Statements of Changes in Net Assets Available for Benefits

 

     Year ended December 31

 
     2003

    2002

 

Additions

                

Investment income (loss):

                

Dividends

   $ 32,779,465     $ 33,415,705  

Interest

     12,722,915       13,515,831  

Gain on forgiveness of ESOP note interest

     —         4,844,764  

Net realized and unrealized appreciation (depreciation) in fair value of investments

     297,671,294       (191,207,821 )

Less investment expense

     (2,894,495 )     (2,539,056 )
    


 


Total net investment income (loss)

     340,279,179       (141,970,577 )

Participant contributions

     103,824,301       107,216,142  

Employer contributions

     60,672,798       60,817,227  

Transfer from other plans

     3,008,615       2,288,292  

Other

     —         137,087  
    


 


Total net additions

     507,784,893       28,488,171  

Deductions

                

Benefits paid to participants

     145,388,920       126,438,621  

Administrative expenses

     2,751,486       3,073,200  

Interest expense on ESOP note

     —         4,802,515  

Transfer to other plans

     —         50,354  
    


 


Total deductions

     148,140,406       134,364,690  
    


 


Net increase (decrease)

     359,644,487       (105,876,519 )

Net assets available for benefits at beginning of year

     1,614,221,389       1,720,097,908  
    


 


Net assets available for benefits at end of year

   $ 1,973,865,876     $ 1,614,221,389  
    


 


 

See accompanying notes.

 

4


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements

 

December 31, 2003

 

1.    Description of the Plan

 

The following description of the Marriott International, Inc. (the Company) Employees’ Profit Sharing, Retirement and Savings Plan and Trust (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.

 

The Plan allows for a leveraged employee stock ownership plan feature (ESOP) to fund certain employer contributions to the Plan. During the second quarter of 2000, the ESOP, at the direction of an independent fiduciary, borrowed $1 billion from the Company to acquire 100,000 shares of special-purpose Marriott International, Inc. ESOP Convertible Preferred Stock (ESOP Convertible Preferred Stock). The ESOP Convertible Preferred Stock had a stated value and a liquidation preference of $10,000 per share, paid a quarterly dividend of 1% of the stated value, and was convertible into the Company’s Class A Common Stock at any time based on the amount of contributions the Company had made to the ESOP and the market price of the Company’s Class A Common Stock on the conversion date, subject to certain caps and a floor price. The shares of ESOP Convertible Preferred Stock were pledged as collateral for the repayment of the ESOP’s note, and those shares were released from the pledge as principal on the note was repaid. Shares of ESOP Convertible Preferred Stock released from the pledge were either converted to the Company’s Class A Common Stock or were redeemed for cash based on the value of the Class A Common Stock into which those shares could be converted for allocation to participants’ accounts. Principal and interest on the ESOP’s note were forgiven periodically to release shares of ESOP Convertible Preferred Stock with a value sufficient to fund certain employer contributions to the Plan. The last of the shares of ESOP Convertible Preferred Stock were released to fund contributions as of July 18, 2002, at which time the remainder of the principal and interest due on the ESOP’s note was forgiven. As of December 31, 2003 and 2002, there were no outstanding shares of ESOP Convertible Preferred Stock.

 

Effective December 16, 2002, the Forum Group, Inc. 401(k) Savings Plan, a qualified profit sharing plan sponsored by a subsidiary of the Company, was merged with and into the Plan (the Forum Merger), and assets under that plan were transferred to the Plan’s trust. In connection with the Forum Merger, $2,288,292 of net assets were transferred to the Plan and used to purchase investment funds offered by the Plan. These transferred net assets are included in the Plan’s Statement of Changes in Net Assets Available for Benefits for the period from the Forum Merger through December 31, 2002.

 

5


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

1.    Description of the Plan (continued)

 

General

 

Effective December 17, 2003, the Ihilani Resort, Inc. Savings and Retirement Plan, a qualified profit sharing plan sponsored by a subsidiary of the Company, was merged with and into the Plan (the Ihilani Merger), and assets under that plan were transferred to the Plan’s trust. In connection with the Ihilani Merger, $3,008,615 of net assets were transferred to the Plan and used to purchase investment funds offered by the Plan.

 

The Plan is a defined contribution plan covering eligible employees of the Company who are at least 21 years of age and have completed at least one year of service. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.

 

Contributions

 

Each pay period, participants may contribute up to 80% or a fixed dollar amount (minimum of $3 per week) of compensation. The Company’s contribution to the Plan is based on a fixed match of 100% on the first 3% of annual compensation contributed, and 50% on the next 3% of annual compensation contributed. In general, Company contributions are allocated among active participants’ accounts after the close of the Plan year based on compensation contributed. Contributions are subject to certain limitations.

 

Additional Company contributions of a fixed dollar amount per workweek are made on behalf of certain associate groups at specified locations. These contributions are limited to non-highly compensated associates who are otherwise eligible to participate in the Plan.

 

Participant Accounts

 

Each participant’s account is credited with the participant’s contributions and allocations of (a) the Company’s contributions, and (b) Plan earnings or losses, and charged with an allocation of administrative expenses. Forfeitures of terminated participants’ nonvested accounts are to be used to pay administrative expenses. Allocations are based on participant compensation contributed or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.

 

6


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

1.    Description of the Plan (continued)

 

Vesting

 

Participants are immediately vested in their contributions plus actual earnings thereon. Participants are immediately 100% vested in Company contributions attributable to the 2001 Plan year and thereafter and earnings thereon. Vesting in the Company contributions prior to 2001 and earnings thereon is based on years of service, with participants becoming fully vested, regardless of the years of service, upon divestiture of unit (place of work), death, termination of employment due to permanent disability, or attainment of age 55 for salaried participants or age 45 for most hourly participants.

 

Participant Loans

 

Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range from one to four years or up to 10 years for the purchase of a primary residence. The loans are collateralized by the vested balance in the participant’s account and bear interest at the prime rate published by the Wall Street Journal plus 100 basis points. Interest rates range from 5.0% to 10.50%. Principal and interest are paid ratably through weekly or biweekly after-tax payroll deductions. Participants are limited to one outstanding loan. As of December 31, 2003 and 2002, participant loans totaled $40,821,794 and $40,907,718, respectively, and are recorded in investments, at fair value on the Statement of Net Assets Available for Benefits.

 

Payment of Benefits

 

A participant with an account balance of $5,000 or less must take a lump sum distribution. A participant with an account balance greater than $5,000 can elect to receive either a lump sum amount or installment payments equal to the value of the participant’s vested interest in his or her account.

 

Forfeited Accounts

 

On termination of service, the unvested portion of a participant’s Company contribution account is forfeited after five consecutive one-year breaks in service or, if earlier, when the participant takes a distribution of his entire account balance. Forfeitures are used to pay Plan expenses. As of December 31, 2003 and 2002, forfeiture credit balances of $190,164 and $349,050, respectively, were available to pay plan expenses.

 

7


1.    Description of the Plan (continued)

 

Administration

 

The Company serves as the named fiduciary of the Plan. Administration of the Plan is under the direction of (i) a five-member Profit Sharing Committee, all of whom are corporate officers of the Company, (ii) two trustees, both of whom are corporate officers of the Company, and (iii) a Plan administrator, who is an employee of the Company. The trustees and their investment advisors and investment managers appointed by the Profit Sharing Committee are responsible for investment of the Plan assets.

 

Administrative and Investment Expenses

 

To the extent not paid by the Company or from forfeitures, certain administrative and all investment expenses are paid by the Plan and are allocated to participants based on account balances.

 

Plan Termination

 

Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts.

 

2.    Summary of Significant Accounting Policies

 

Basis of Accounting

 

The financial statements of the Plan are prepared under the accrual method of accounting. Benefits are recorded when paid.

 

Use of Estimates

 

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

 

8


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

2.    Summary of Significant Accounting Policies (continued)

 

Investments Valuation and Income Recognition

 

The investments directed by participants as of December 31, 2003 and 2002 are stated at fair value except for the Plan’s investments in guaranteed investment contracts (GICs) with fully benefit responsive features, which are valued at contract value. Securities traded on a national securities exchange are valued at the last reported sales price on the last business day of the Plan year. Listed securities for which no sale was reported on that date are valued at the average of the last reported bid and ask prices. Shares of mutual funds are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. Shares of common/collective trusts are valued at estimated fair value as determined by the sponsor of the fund, which represents the net asset value of shares held by the Plan at year-end. Participant loans are valued at their unpaid balances, which approximates fair value.

 

The Company Stock Fund (Stock Fund) is tracked on a unitized basis. The Stock Fund consists of Marriott International, Inc. common stock, funds held in the Vanguard Money Market Fund sufficient to meet the Stock Fund’s daily cash needs, as well as interest and dividends receivable. Unitizing the Stock Fund allows for daily trades. The value of a unit reflects the combined market value of Marriott International, Inc. common stock, valued at its quoted market price, and the cash investments and receivables held by the Stock Fund. At December 31, 2003, 22,042,332 units were outstanding with a value of $15.0683 per unit (22,225,582 units were outstanding with a value of $10.6910 per unit at December 31, 2002).

 

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

 

Investment Options

 

Upon enrollment in the Plan, a participant may direct employer and employee contributions in any of the available investment options. Participants may change their investment options on a daily basis.

 

Reclassifications

 

Certain previously reported amounts have been reclassified to conform with the current-year presentation.

 

9


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

3.    Investments

 

The following presents the fair value of individual investments that represent 5% or more of the Plan’s net assets:

 

     December 31  
     2003

    2002

 

Marriott International, Inc. common stock

   $ 328,882,600     $ 235,728,257  

 

During 2003 and 2002, the Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value, as follows:

 

  

     2003

    2002

 

Investments at fair value as determined by quoted market prices:

                

Mutual funds

   $ 72,251,234     $ (100,871,697 )

Other common stock

     110,389,350       (64,934,803 )

Preferred stock

     —         (367,278 )

Corporate bonds, notes and other obligations

     3,130,138       4,183,888  

U.S. Government obligations

     (2,144,628 )     4,118,329  

Marriott International, Inc. common stock

     95,249,504       (61,578,381 )

Marriott International, Inc. ESOP Convertible Preferred Stock

     —         28,242,121  
    


 


       278,875,598       (191,207,821 )

Investments at estimated fair value:

                

Common/collective trusts

     18,795,696       —    
    


 


     $ 297,671,294     $ (191,207,821 )
    


 


 

The ESOP Preferred Stock accrued a cumulative cash dividend equal to $100 per share outstanding at each quarter-end. For the year ended December 31, 2002, the Plan recorded dividend income of $970,157. As previously noted, as of December 31, 2002, there were no outstanding shares of ESOP Convertible Preferred Stock, and therefore no dividend income was recorded in 2003. In accordance with the stock purchase agreement, the dividends earned on the ESOP Preferred Stock were used to pay principal and interest accrued on the ESOP note.

 

10


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

4.    Nonparticipant-Directed Investments

 

For the year ended December 31, 2002, investments not directed by participants related to the Marriott International, Inc. ESOP Convertible Preferred Stock.

 

Information about the significant components of changes in net assets relating to investments not directed by participants was as follows for the year ended December 31, 2002.

 

     2002

 

Net appreciation

   $ 28,242,121  

Dividend income

     970,157  

ESOP note interest expense

     (4,802,515 )

Gain on forgiveness of ESOP note interest expense

     4,844,764  
    


Increase in net assets

     29,254,527  

Net assets:

        

Beginning of year

     (29,254,527 )
    


End of year

   $ —    
    


 

5.    Party-in-Interest

 

The Plan may, at the discretion of Plan participants, invest an unlimited amount of its assets in securities issued by the Company. The Plan held 7,118,671 and 7,171,532 shares of common stock of the Company as of December 31, 2003 and 2002, respectively. Dividends on Marriott International, Inc. common stock approximated $2,100,397 and $1,518,889 for the years ended December 31, 2003 and 2002, respectively. In addition, as described in Note 1, in June 2000, the Plan purchased ESOP Convertible Preferred Stock from Marriott International, Inc. in exchange for a note (as described in Note 7). As of December 31, 2003 and 2002, the Plan held zero shares of ESOP Convertible Preferred Stock. For the year ended December 31, 2002, dividends earned on the ESOP Convertible Preferred Stock were $970,157.

 

Certain investments are managed by T. Rowe Price Stable Asset Management and T. Rowe Price Associates, Inc., entities, which are related to the Plan’s custodian (T. Rowe Price Trust Company) and the Plan record-keeper (T. Rowe Price Retirement Plan

 

11


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

5.    Party-in-Interest (continued)

 

Services, Inc.). During 2002, certain investments were purchased from Deutsche Bank (formerly Bankers Trust Company), the former custodian of the Plan’s assets. Transactions involving these investments are considered to be party-in-interest transactions for which a statutory exemption exists. Fees paid by the Plan for the investment management services amounted to approximately $42,900 and $268,000 for Deutsche Bank and $1,118,000 and $927,000 for T. Rowe Price Stable Asset Management and T. Rowe Price Associates, Inc. for the years ended December 31, 2003 and 2002, respectively.

 

6.    Guaranteed Investment Contracts

 

The Plan is invested in certain investment contracts with insurance companies. The investment managers of these investment contracts are T. Rowe Price and PRIMCO. The investment contracts are credited with earnings on the underlying investments and charged for Plan withdrawals and administrative expenses. The Plan invests in both traditional GICs and synthetic GICs. The contracts are carried at contract value (which represents contributions made under the contract, plus earnings, less withdrawals and administrative expenses), because they are fully benefit responsive. There are no reserves against contract value for credit risk of the contract issuer or otherwise. The estimated fair value of the investment contracts at December 31, 2003 and 2002 was $460,409,116 and $455,133,307, respectively.

 

The fair values for the traditional GICs have been estimated based on a discounted cash flow analysis. The estimated fair value is calculated based on the net present value of expected future payments, which include interest and a lump sum contract amount, discounted at a rate determined by the quality of the GICs and the average remaining life. This calculation is necessary, as traditional GICs are not actively traded investments for which a daily fair value is readily available.

 

The issuers of the traditional GICs are generally insurance companies. Where there are no underlying assets collateralizing the investment, the Plan’s ultimate realization of amounts invested in traditional GICs is dependent on the continued financial stability of the issuers of the GICs.

 

12


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

6.    Guaranteed Investment Contracts (continued)

 

The Plan owns the assets underlying the synthetic GICs, which consist primarily of 103-12 investment entities, U.S. government securities, corporate debt obligations, mortgage-backed and other asset-backed securities. Fair values of the underlying securities are determined by closing prices on the last business day of the year for those securities traded on national exchanges, at the average bid quotations for those securities traded in over-the-counter markets or at fair value as determined by the investment manager for securities for which there is not an established market. Synthetic GICs utilize a benefit responsive “wrapper” contract issued by a financially responsible third party that provides market and cash flow risk protection to the Plan. The value of the wrapper contracts is the difference between the fair value of the underlying assets and the contract value attributable by the wrapper to these assets.

 

The average yield was approximately 4.72% and 5.81% for the years ended December 31, 2003 and 2002, respectively. The crediting interest rate at December 31, 2003 ranged from 3.2% to 7.7%. Traditional GICs typically have fixed crediting interest rates. The synthetic GICs have crediting interest rates that reset, typically on a quarterly basis, based on a formula specified in the individual contracts. The minimum guaranteed rate is not less than 0%. However, upon the occurrence of certain events (none of which are currently known to have occurred, nor are any such events contemplated by management of the Plan), market value of the investment in the GICs (if lower than its book value) may be repaid.

 

7.    ESOP Note

 

As discussed in Note 1, the Plan included an ESOP to fund certain employer contributions to the Plan. On June 13, 2000, the Plan purchased $1.0 billion of ESOP Convertible Preferred Stock with the proceeds of a loan from the Company. The ESOP issued a note (the ESOP Note) in connection with the purchase of the ESOP Convertible Preferred Stock. The last of the shares of ESOP Convertible Preferred Stock were released to fund contributions as of July 18, 2002, at which time any remaining principal and interest due on the ESOP’s note was forgiven. As of December 31, 2002, there were no outstanding shares of ESOP Convertible Preferred Stock. The interest rate on the ESOP Note was 8.33% per annum and was due on the same dates as the principal payments. There was no penalty for prepayment of this note. Repayment of the ESOP Note principal and interest was made from: (i) collateral given for the loan (ESOP Convertible Preferred Stock), (ii) employer contributions made to the Plan to repay such loan, and (iii) earnings attributable to the ESOP Convertible Preferred Stock.

 

13


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

7.    ESOP Note (continued)

 

For the year ended December 31, 2002, the Plan recorded interest expense of $4,802,515 on the ESOP Note. For the year ended December 31, 2002, $970,157 in dividends on the ESOP Convertible Preferred Stock was used to repay the principal and interest on the ESOP Note.

 

8.    Income Tax Status

 

The Plan has received a determination letter from the Internal Revenue Service dated March 30, 2001, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Subsequent to this determination by the Internal Revenue Service, the Plan was amended. The Plan filed an application for a determination letter from the Internal Revenue Service on April 22, 2004, requesting a determination on all amendments subsequent to the most recent determination letter. The Plan is required to operate in conformity with the Code to maintain its qualification. The Plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as restated, is qualified and the related trust is tax-exempt.

 

9.    Reconciliation of Financial Statements and Form 5500

 

The following is a reconciliation of net assets available for benefits as reported in the financial statements to the Form 5500:

 

     December 31
     2003

   2002

Net assets available for benefits as reported in financial statements

   $ 1,973,865,876    $ 1,614,221,389

Less distributions payable to terminated employees

     352,071      558,597
    

  

Net assets available for benefits as reported in Form 5500

   $ 1,973,513,805    $ 1,613,662,792
    

  

 

14


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

 

Notes to Financial Statements (continued)

 

9.    Reconciliation of Financial Statements and Form 5500 (continued)

 

The following is a reconciliation of benefits paid to participants as reported in the financial statements to the Form 5500:

 

     Year ended December 31  
     2003

    2002

 

Benefits paid to participants as reported in the financial statements

   $ 145,388,920     $ 126,438,621  

Add: Amounts allocated to withdrawing participants at year-end

     352,071       558,597  

Less: Amounts allocated to withdrawing participants at prior year-end

     (558,597 )     (62,590 )
    


 


Benefits paid to participants as reported in the Form 5500

   $ 145,182,394     $ 126,934,628  
    


 


 

Amounts allocated to withdrawing participants are recorded on the Form 5500 for benefit claims that have been processed and approved for payment prior to year-end but not yet paid as of that date.

 

15


 

 

Supplemental Schedule

 


Marriott International, Inc. Employees’ Profit Sharing, Retirement and

Savings Plan and Trust

EIN: 52-2055918; Plan No.: 002

 

Schedule H, Line 4i—Schedule of Assets (Held At End of Year)

 

December 31, 2003

 

Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment

Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

Marriott Mid Cap Growth Fund

               

AXIS CAPITAL HOLDINGS LTD

   Common Stock    **   $ 512,400

GARMIN LTD

   Common Stock    **     550,248

SEAGATE TECHNOLOGY HOLDINGS

   Common Stock    **     366,660

WILLIS GROUP HOLDINGS LTD

   Common Stock    **     626,888

ASM LITHOGRAPHY HOLDING N.V.

   Common Stock    **     549,370

BONY SHORT TERM INVESTMENT FUND *

   STIF    **     177,348

ABGENIX INC

   Common Stock    **     204,344

ADOBE SYSTEMS INCORPORATED

   Common Stock    **     691,680

ADVANCED FIBRE COMMUNICATIONS

   Common Stock    **     165,230

AFFILIATED COMPUTER SVCS A

   Common Stock    **     718,872

ALKERMES INC

   Common Stock    **     275,400

ALLIANT TECHSYSTEMS INC

   Common Stock    **     1,143,648

AMERICAN STANDARD COMPANIES INC

   Common Stock    **     1,027,140

AMERISOURCEBERGEN CORPORATION

   Common Stock    **     965,780

AMIS HOLDINGS INC

   Common Stock    **     515,496

AMYLIN PHARMACEUTICALS INC.

   Common Stock    **     306,636

ANDRX GROUP

   Common Stock    **     538,496

ANTHEM INC

   Common Stock    **     1,102,500

APOLLO GROUP INC – CL A

   Common Stock    **     442,000

BJ SERVICES COMPANY.

   Common Stock    **     1,292,400

BARR PHARMACEUTICALS INC

   Common Stock    **     711,788

BEARINGPOINT INC

   Common Stock    **     614,481

BEST BUY CO INC

   Common Stock    **     950,768

BIOGEN IDEC, INC.

   Common Stock    **     496,530

BRUNSWICK CORPORATION

   Common Stock    **     1,082,220

CDW CORPORATION

   Common Stock    **     802,864

CABLEVISION SYSTEM CLASS A

   Common Stock    **     668,954

CADENCE DESIGN SYS INC

   Common Stock    **     848,656

CAPITALSOURCE INC

   Common Stock    **     422,760

CATALINA MARKETING CORPORATION –DIRECT MARKETING

   Common Stock    **     679,392

CEPHALON, INC

   Common Stock    **     716,468

CERIDIAN CORP – NEW

   Common Stock    **     942,300

CERTEGY INC

   Common Stock    **     1,082,400

THE CHEESECAKE FACTORY

   Common Stock    **     788,137

CHOICE POINT INC.

   Common Stock    **     1,435,993

CITADEL BROADCASTING COMPANY

   Common Stock    **     751,632

 

1


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current
Value


Marriott Mid Cap Growth Fund (continued)

               

COOPER CAMERON CORP (RON)

   Common Stock                **   $ 796,860

COTT CORP

   Common Stock    **     871,111

COX RADIO INC

   Common Stock    **     724,101

CROWN CASTLE INTERNATIONAL CORP.

   Common Stock    **     562,530

DST SYSTEMS INCORPORATED

   Common Stock    **     1,261,152

DANAHER CORPORATION

   Common Stock    **     954,200

DAVITA INC.

   Common Stock    **     624,000

DEVON ENERGY CORPORATION

   Common Stock    **     246,218

DIAMOND OFFSHORE DRILLING, INC.

   Common Stock    **     760,921

DIEBOLD INCORPORATED

   Common Stock    **     732,632

DOLLAR TREE STORES INC

   Common Stock    **     856,710

EOG RESOURCES INC.

   Common Stock    **     1,108,080

EATON VANCE CORPORATION

   Common Stock    **     776,768

EDUCATION MANAGEMENT CORPORATION

   Common Stock    **     633,216

EDWARDS LIFESCIENCES CORPORATION

   Common Stock    **     412,096

ENTERCOM COMMUNICATIONS CORP

   Common Stock    **     301,872

EXPEDITORS INTERNATIONAL OF WASHINGTON INC

   Common Stock    **     534,772

FMC TECHNOLOGIES INC

   Common Stock    **     717,640

FAIRMONT HOTELS & RESORTS INC

   Common Stock    **     846,768

FAMILY DOLLAR STORES

   Common Stock    **     767,832

FASTENAL COMPANY

   Common Stock    **     224,730

FISERV INCORPORATED

   Common Stock    **     857,367

FRANKLIN RESOURCES INC

   Common Stock    **     171,798

GILEAD SCIENCES INC

   Common Stock    **     988,380

HARRIS CORPORATION

   Common Stock    **     1,081,575

HEALTH MANAGEMENT ASSOCIATES INC.

   Common Stock    **     1,072,800

HEWITT ASSOCIATES INC

   Common Stock    **     902,980

HUMAN GENOME SCIENCES INC

   Common Stock    **     229,225

ITT INDUSTRIES, INC.

   Common Stock    **     1,031,519

IMCLONE SYSTEMS

   Common Stock    **     372,804

INTEGRATED CIRCUIT SYSTEM

   Common Stock    **     242,165

INTERACTIVECORP

   Common Stock    **     352,872

INTERNATIONAL STEEL GROUP

   Common Stock    **     521,930

INTERSIL CORPORATION

   Common Stock    **     924,420

INTUIT, INC.

   Common Stock    **     873,015

INVITROGEN CORPORATION

   Common Stock    **     315,000

INVESTORS FINANCIAL SVCS CP

   Common Stock    **     430,192

IRON MOUNTAIN INC

   Common Stock    **     948,960

IVAX CORPORATION

   Common Stock    **     943,260

JABIL CIRCUIT INC.

   Common Stock    **     571,660

Marriott Mid Cap Growth Fund (continued)

               

JET BLUE AIRWAYS CORPORATION

   Common Stock    **   $ 433,602

L-3 COMMUNICATIONS CORPORATION

   Common Stock    **     482,784

LABORATORY CORPORATION OF AMERICA HOLDINGS

   Common Stock    **     1,064,160

 

17


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest, Collateral,
Par, or Maturity Value


   Cost

  Current Value

LAMAR ADVERTISING COMPANY

   Common Stock    **     847,164

ESTEE LAUDER COMPANIES – CLASS-A

   Common Stock    **     518,232

LEGG MASON INC.

   Common Stock    **     632,876

LEXMARK INTERNATIONAL, INC.

   Common Stock    **     558,344

MACROMEDIA INCORPORATED

   Common Stock    **     563,744

MANOR CARE INC.

   Common Stock    **     1,327,488

MANPOWER INCORPORATED

   Common Stock    **     1,266,452

MEDIMMUNE INC.

   Common Stock    **     942,340

MERCURY INTERACTIVE CORPORATION

   Common Stock    **     593,408

MICROCHIP TECHNOLOGY INC

   Common Stock    **     1,107,552

MILLENNIUM PHARMACEUTICALS INC

   Common Stock    **     306,188

MOLEX INC-CLASS A

   Common Stock    **     229,008

MONSTER WORLDWIDE INC

   Common Stock    **     601,704

MURPHY OIL CORPORATION

   Common Stock    **     1,084,146

NTL Inc

   Common Stock    **     411,525

NATIONWIDE FINANCIAL SERVICE – A

   Common Stock    **     436,392

NETWORK ASSOCIATES INC. (NETA.O)

   Common Stock    **     1,036,256

NEUROCRINE BIOSCIENCES, INC.

   Common Stock    **     479,952

NEWMONT MINING CORP

   Common Stock    **     1,035,393

NEXTEL COMMUNICATIONS INC – A

   Common Stock    **     1,209,386

MEXTEL PARTNERS INC – CL A

   Common Stock    **     442,505

99 CENTS ONLY STORES INC. (IPO)

   Common Stock    **     206,948

NOVELLUS SYSTEMS INC

   Common Stock    **     710,645

NUCOR CORPORATION

   Common Stock    **     1,237,600

OMNICARE INC.

   Common Stock    **     2,144,709

O’REILLY AUTOMOTIVE INC

   Common Stock    **     805,560

OSHKOSH TRUCK CORP

   Common Stock    **     867,510

PETSMART INC

   Common Stock    **     780,640

POTASH CORPORATION

   Common Stock    **     1,202,072

PRINCIPAL FINANCIAL GROUP

   Common Stock    **     760,610

PROTECTIVE LIFE CORPORATION

   Common Stock    **     548,208

PROTEIN DESIGN LABS, INC.

   Common Stock    **     225,540

QLOGIC CORPORATION

   Common Stock    **     350,880

RADIAN GROUP INC.

   Common Stock    **     541,125

RED HAT INC

   Common Stock    **     304,074

RESEARCH IN MOTION LIMITED

   Common Stock    **     173,758

T. ROWE RESERVE INVESTMENT FUND *

   Common/collective trust    **     2,003,722

Marriott Mid Cap Growth Fund (continued)

               

ROBERT HALF INTERNATIONAL INC

   Common Stock    **   $ 987,282

ROCKWELL COLLINS

   Common Stock    **     1,279,278

ROGERS COMMUNICATIONS, INC. – CL B

   Common Stock    **     570,900

ROPER INDUSTRIES INCORPORATED

   Common Stock    **     1,206,870

ROSS STORES INCORPORATED

   Common Stock    **     1,012,269

SCHOLASTIC CORPORATION

   Common Stock    **     667,184

THE CHARLES SCHWAB CORPORATION

   Common Stock    **     396,640

E.W. SCRIPPS COMPANY

   Common Stock    **     273,006

SEMTECH CORPORATION

   Common Stock    **     584,161

 

18


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

    Current Value

SHOPPERS DRUG MART CORP.

   Common Stock    * *     405,997

SIEBEL SYSTEMS INC

   Common Stock    * *     371,716

SILICON VALLEY BANCSHARES

   Common Stock    * *     183,957

SMITH INTERNATIONAL, INC.

   Common Stock    * *     1,104,432

STARBUCKS CORPORATION

   Common Stock    * *     654,588

SUNGARD DATA SYSTEMS, INC.

   Common Stock    * *     509,864

TEVA PHARMACEUTICAL INDS LTD. SPONS-ADR

   Common Stock    * *     737,230

3COM CORPORATION

   Common Stock    * *     151,962

TRITON PCS HOLDINGS INC – CL A

   Common Stock    * *     99,882

UNIVERSAL HEALTH SERVICES INCORPORATED – CLASS B

   Common Stock    * *     719,848

VERISIGN INC.

   Common Stock    * *     1,039,940

VERTEX PHARMACEUTICALS, INC

   Common Stock    * *     235,290

VIAD CORP

   Common Stock    * *     967,500

WADDELL & REED FINANCIAL – CLASS A

   Common Stock    * *     1,029,894

WATERS CORPORATION

   Common Stock    * *     517,296

WEBMD CORPORATION

   Common Stock    * *     97,092

WEIGHT WATCHERS INTERNATIONAL INC

   Common Stock    * *     410,559

WELLCHOICE INC

   Common Stock    * *     193,200

WELLPOINT HEALTH NETWORKS INC.

   Common Stock    * *     397,659

WESTERN GAS RESOURCES INC

   Common Stock    * *     576,450

WESTERN WIRELESS CORPORATION – CL A

   Common Stock    * *     712,368

WHOLE FOODS MARKET, INC.

   Common Stock    * *     1,215,053

WILLIAMS-SONOMA INC

   Common Stock    * *     757,986

XM SATELLITE RADIO HOLD – CL A

   Common Stock    * *     403,308

XTO ENERGY INC

   Common Stock    * *     800,890
               

                  104,459,763

Marriott Small Cap Equity Fund

                 

BONY SHORT TERM INVESTMENT FUND *

   STIF    * *   $ 4,259,940

AMERICAN GREETINGS CORPORATION – CL-A

   Common Stock    * *     905,418

ANDREW CORPORATION

   Common Stock    * *     413,209

ANIXTER INTERNATIONAL, INC

   Common Stock    * *     515,012

BOB EVANS FARMS INC

   Common Stock    * *     509,622

DEVRY INC.

   Common Stock    * *     228,683

ENERGIZER HOLDINGS INC.

   Common Stock    * *     292,968

GENERAL BINDING CORPORATION

   Common Stock    * *     219,600

GREY GLOBAL GROUP INC

   Common Stock    * *     683,050

HCC INSURANCE HOLDINGS INC

   Common Stock    * *     648,720

HASBRO, INC.

   Common Stock    * *     593,712

HORACE MANN EDUCATORS CORP.

   Common Stock    * *     454,025

INTERFACE INC

   Common Stock    * *     154,840

INVACARE CORPORATION.

   Common Stock    * *     666,105

JANUS CAPITAL GROUP, INC.

   Common Stock    * *     626,862

JONES LANG LASALLE INC.

   Common Stock    * *     493,374

JOURNAL REGISTER CO

   Common Stock    * *     358,110

LEE ENTERPRISES

   Common Stock    * *     873,000

 

19


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

LITTELFUSE INC

   Common Stock    **     279,554

MARKEL CORP

   Common Stock    **     709,828

MATTHEWS INTERNATIONAL CORPORATION – CLASS A

   Common Stock    **     331,408

MILLER (HERMAN) INC

   Common Stock    **     492,681

NEIMAN MARCUS GROUP INC. – CL-A

   Common Stock    **     928,491

PARK PLACE ENTERTAINMENT CORP.

   Common Stock    **     684,456

THE ROUSE COMPANY

   Common Stock    **     672,100

ROYCE TOTAL RETURN FUND – FIN

   Mutual Fund    **     58,996,558

SERVICEMASTER COMPANY

   Common Stock    **     499,785

THE J. M. SMUCKER COMPANY. THE NEW COM WI

   Common Stock    **     493,661

STEELCASE INC

   Common Stock    **     479,624

SYBRON DENTAL SPECIALTIES, INC.

   Common Stock    **     359,680

VALASSIS COMMUNICATIONS INC

   Common Stock    **     698,530

WADDELL & REED FINANCIAL – CLASS A

   Common Stock    **     415,242
             

                78,937,848

Marriott Large Cap Equity Fund

               

VANGUARD MONEY MARKET FUND

   STIF    **   $ 8,321,070

BONY SHORT TERM INVESTMENT FUND *

   STIF    **     4,076,883

AT&T CORP

   Common Stock    **     3,609,340

AT&T WIRELESS GROUP

   Common Stock    **     2,830,058

AKZO NOBEL NV – SPON ADR

   Common Stock    **     2,826,800

ALCOA INC

   Common Stock    **     1,527,600

AMERADA HESS CORPORATION

   Common Stock    **     1,382,420

AMERICAN ELECTRIC POWER CORP

   Common Stock    **     1,338,779

ARCHER-DANIELS MIDLAND COMPANY

   Common Stock    **     1,071,762

AVAYA INC

   Common Stock    **     931,680

BMC SOFTWARE INC. (BMCS.O)

   Common Stock    **     578,150

BAKER HUGHES INC

   Common Stock    **     1,270,320

BANK ONE CORPORATION

   Common Stock    **     3,487,635

BECTON DICKINSON & CO.

   Common Stock    **     917,422

BRISTOL-MYERS SQUIBB CO

   Common Stock    **     1,401,400

CIT GROUP INC

   Common Stock    **     2,264,850

CAPITAL ONE

   Common Stock    **     2,420,955

CARDINAL HEALTH INC

   Common Stock    **     1,467,840

CHEVRONTEXACO CORPORATION.

   Common Stock    **     2,289,335

CHUBB CORPORATION

   Common Stock    **     1,280,280

COMCAST CORP. – CL-A

   Common Stock    **     3,350,603

COMPUTER SCIENCES CORPORATION

   Common Stock    **     1,548,050

COMPUWARE CORPORATION

   Common Stock    **     950,696

CONOCOPHILLIPS

   Common Stock    **     2,209,709

CORNING INC.

   Common Stock    **     255,535

DELPHI CORP

   Common Stock    **     1,212,019

DILLARDS INC – CL-A

   Common Stock    **     362,120

R.R. DONNELLEY & SONS COMPANY

   Common Stock    **     1,055,250

 

20


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

THE DOW CHEMICALS COMPANY

   Common Stock            **     3,646,063

DUKE ENERGY CORPORATION

   Common Stock    **     1,584,875

EASTMAN KODAK COMPANY

   Common Stock    **     1,001,130

ELECTRONIC DATA SYSTEMS CORPORATION

   Common Stock    **     2,797,560

ENGELHARD CORPORATION.

   Common Stock    **     823,625

EQUITY OFFICE PROPERTIES TRUST

   Common Stock    **     2,206,050

FEDEX CORPORATION

   Common Stock    **     1,815,750

FLUOR CORPORATION. (NEW)

   Common Stock    **     1,109,920

FORD MOTOR COMPANY

   Common Stock    **     175,760

GAP INC

   Common Stock    **     1,176,747

GENUINE PARTS COMPANY

   Common Stock    **     1,660,000

Marriott Large Cap Equity Fund (continued)

               

GOLDEN WEST FINANCIAL CORPORATION

   Common Stock    **   $ 2,476,560

HCA INC

   Common Stock    **     3,127,488

HEWLETT PACKARD COMPANY

   Common Stock    **     3,332,143

HONDA MOTOR CO LTD – SPONSORED ADR

   Common Stock    **     33,750

INTERNATIONAL PAPER COMPANY

   Common Stock    **     926,865

LOWES CORPORATION

   Common Stock    **     2,002,725

LUBRIZOL CORP.

   Common Stock    **     347,964

MBIA, INC.

   Common Stock    **     230,997

MASCO CORP

   Common Stock    **     1,247,155

MATSUSHITA ELECTRIC INDUSTRIAL COMPANY LTD. – ADR

   Common Stock    **     1,421,880

THE MAY DEPARTMENT STORES COMPANY

   Common Stock    **     2,529,090

MCDONALDS CORP

   Common Stock    **     2,880,280

MOTOROLA INC (MOT)

   Common Stock    **     1,575,840

NCR CORPORATION

   Common Stock    **     985,520

NEWS CORP LIMITED SPONS ADR PREFERRED.

   Common Stock    **     2,964,500

NORDSTROM INCORPORATED

   Common Stock    **     1,234,800

NOVA CHEMICALS CORP

   Common Stock    **     679,140

OCCIDENTAL PETROLEUM CORPORATION

   Common Stock    **     2,112,000

PFIZER INC

   Common Stock    **     1,346,638

PITNEY BOWES INC

   Common Stock    **     1,015,500

RIO TINTO PLC

   Common Stock    **     1,669,650

ROHM & HAAS COMPANY

   Common Stock    **     1,366,720

ST PAUL TRAVELERS COS INC

   Common Stock    **     1,804,075

SCHERING PLOUGH

   Common Stock    **     3,079,769

SCOTTISH POWER PLC-ADR

   Common Stock    **     530,010

SONY CORPORATION

   Common Stock    **     2,652,255

STORAGE TECHNOLOGY CORP.

   Common Stock    **     736,450

SYNGENTA AG

   Common Stock    **     707,700

TXU CORPORATION

   Common Stock    **     604,860

THERMO ELECTRON CORPORATION

   Common Stock    **     1,234,800

TIME WARNER COS INC

   Common Stock    **     1,800,799

TORCHMARK CORPORATION

   Common Stock    **     1,320,660

UNILEVER NV – NY SHARES

   Common Stock    **     2,433,750

UNION PACIFIC CORPORATION

   Common Stock    **     1,973,232

 

21


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

UNOCAL CORPORATION

   Common Stock    **     2,338,705

UNUMPROVIDENT CORPORATION

   Common Stock    **     906,775

VF CORPORATION

   Common Stock    **     972,900

WACHOVIA CORP

   Common Stock    **     1,970,757

WELLPOINT HEALTH NETWORKS INC.

   Common Stock    **     1,319,064

Marriott Large Cap Equity Fund (continued)

               

WELLS FARGO & COMPANY (NEW)

   Common Stock    **   $ 1,383,915

WHIRLPOOL CORPORATION

   Common Stock    **     1,213,255

WYETH

   Common Stock    **     870,225

XEROX CORP

   Common Stock    **     3,367,200

ABBOTT LABORATORIES.

   Common Stock    **     1,192,960

ADOBE SYSTEMS INCORPORATED

   Common Stock    **     668,100

ALTRIA GROUP INCORPORATED

   Common Stock    **     1,240,776

AMERICAN EXPRESS CO.

   Common Stock    **     1,008,007

AMERICAN INTERNATIONAL GROUP.

   Common Stock    **     3,025,682

AMERISOURCEBERGEN CORPORATION

   Common Stock    **     308,825

AMGEN INC

   Common Stock    **     1,588,260

ANALOG DEVICES INC

   Common Stock    **     1,396,890

APOLLO GROUP INC – CL A

   Common Stock    **     870,400

APPLIED MATERIALS INC

   Common Stock    **     628,600

BJ SERVICES COMPANY.

   Common Stock    **     294,380

BAKER HUGHES INC

   Common Stock    **     1,164,192

BANK AMERICA CORP

   Common Stock    **     1,439,697

THE BANK OF NEW YORK COMPANY INC. *

   Common Stock    **     549,792

BEST BUY CO INC

   Common Stock    **     749,644

BIOGEN IDEC, INC.

   Common Stock    **     312,630

CARDINAL HEALTH INC

   Common Stock    **     752,268

CARNIVAL CORPORATION

   Common Stock    **     1,219,711

CISCO SYSTEMS INC

   Common Stock    **     2,977,954

CITIGROUP INC

   Common Stock    **     5,409,249

CLEAR CHANNEL COMMUNICATIONS, INC.

   Common Stock    **     1,934,079

THE COCA-COLA COMPANY

   Common Stock    **     1,552,950

COLGATE PALMOLIVE CO

   Common Stock    **     625,625

COMCAST CORPORATION SPECIAL – CL-A

   Common Stock    **     1,498,312

DANAHER CORPORATION

   Common Stock    **     2,559,825

DELL INC.

   Common Stock    **     1,905,156

THE WALT DISNEY COMPANY.

   Common Stock    **     1,000,857

EBAY INC

   Common Stock    **     671,736

EXXON MOBIL CORPORATION

   Common Stock    **     1,719,458

FREDDIE MAC

   Common Stock    **     2,082,024

FANNIE MAE

   Common Stock    **     1,688,850

FNMA DN 1.06% 1/2/04

   U.S. Government Security    **     14,201,000

FIRST DATA CORPORATION.

   Common Stock    **     2,015,547

FISERV INCORPORATED

   Common Stock    **     553,140

FOREST LABORATORIES, INC.

   Common Stock    **     1,390,500

 

22


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment

Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

Marriott Large Cap Equity Fund (continued)

               

FRANKLIN RESOURCES INC

   Common Stock    **   $ 1,072,436

GENETECH INC

   Common Stock    **     645,633

GENERAL DYNAMICS CORPORATION

   Common Stock    **     551,379

GENERAL ELECTRIC COMPANY

   Common Stock    **     2,766,514

GENERAL MILLS INC

   Common Stock    **     534,540

GOLDMAN SACHS GROUP INC COM

   Common Stock    **     1,273,617

HARLEY DAVIDSON INC

   Common Stock    **     1,402,135

HARTFORD FINANCIAL SERVICES GROUP INC.

   Common Stock    **     991,704

HOME DEPOT INC.

   Common Stock    **     1,882,745

INTEL CORPORATION

   Common Stock    **     2,189,600

INTERACTIVECORP

   Common Stock    **     855,036

INTERNATIONAL BUSINESS MACHINE.

   Common Stock    **     685,832

INTERNATIONAL GAME TECHNOLOGY

   Common Stock    **     1,278,060

INTUIT, INC.

   Common Stock    **     1,354,496

JOHNSON & JOHNSON

   Common Stock    **     2,164,554

KOHL’S CORPORATION

   Common Stock    **     431,424

LEGG MASON INC.

   Common Stock    **     926,160

LEXMARK INTERNATIONAL, INC.

   Common Stock    **     880,768

ELI LILLY & COMPANY.

   Common Stock    **     1,181,544

MARSH & MCLENNAN COMPANIES INC

   Common Stock    **     1,470,223

MAXIM INTEGRATED PRODUCTS, INC.

   Common Stock    **     2,275,860

MEDIMMUNE INC.

   Common Stock    **     215,900

MEDTRONIC INC

   Common Stock    **     1,487,466

MELLON FINANCIAL CORPORATION.

   Common Stock    **     1,393,574

MERRILL LYNCH & CO INC

   Common Stock    **     1,014,645

MICROSOFT CORPORATION

   Common Stock    **     4,450,464

MORGAN STANLEY

   Common Stock    **     1,313,649

NEXTEL COMMUNICATIONS INC – A

   Common Stock    **     1,018,578

NOKIA OYJ

   Common Stock    **     547,400

NORTHERN TRUST CORPORATION.

   Common Stock    **     580,250

OMNICOM GROUP INC.

   Common Stock    **     611,310

PAYCHEX INC

   Common Stock    **     710,520

PEPSICO INC

   Common Stock    **     1,221,444

PFIZER INC

   Common Stock    **     4,628,230

THE PROCTER & GAMBLE COMPANY

   Common Stock    **     1,198,560

QUALCOMM INC

   Common Stock    **     803,557

SLM CORP

   Common Stock    **     1,055,040

SCHLUMBERGER LIMITED

   Common Stock    **     1,674,432

THE CHARLES SCHWAB CORPORATION

   Common Stock    **     269,952

E.W. SCRIPPS COMPANY

   Common Stock    **     658,980

Marriott Large Cap Equity Fund (continued)

               

SMITH INTERNATIONAL, INC.

   Common Stock    **   $ 701,688

STATE STREET CORPORATION

   Common Stock    **     1,885,296

STRYKER CORPORATION

   Common Stock    **     170,020

SYMANTEC CORPORATION

   Common Stock    **     627,165

TARGET CORPORATION

   Common Stock    **     1,505,280

 

23


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

TEXAS INSTRUMENTS INCORPORATED

   Common Stock    **     1,066,494

3M CO

   Common Stock    **     671,737

TIME WARNER COS INC

   Common Stock    **     1,154,059

TRAVELERS PROPERTY CASUALTY – A

   Common Stock    **     811,196

TYCO INTERNATIONAL INC.

   Common Stock    **     2,141,200

US BANCORP

   Common Stock    **     988,696

UNITED PARCEL SERVICE – B

   Common Stock    **     1,095,885

UNITEDHEALTH GROUP INCORPORATED.

   Common Stock    **     3,572,252

VERITAS SOFTWARE CORPORATION

   Common Stock    **     628,004

VIACOM INC B

   Common Stock    **     2,739,489

VODAFONE GROUP PLC. SPONS-ADR

   Common Stock    **     2,376,296

WAL-MART STORES INC.

   Common Stock    **     1,893,885

WALGREEN COMPANY

   Common Stock    **     436,560

WASTE MANAGEMENT INC

   Common Stock    **     660,080

WELLPOINT HEALTH NETWORKS INC.

   Common Stock    **     1,833,111

WELLS FARGO & COMPANY (NEW)

   Common Stock    **     1,507,584

WYETH

   Common Stock    **     1,787,145

XILINX INC

   Common Stock    **     1,080,846
             

                288,163,657

Marriott Balanced Fund

               

VANGUARD MONEY MARKET

   STIF    **     5,343,064

BONY SHORT TERM INVESTMENT FUND *

   STIF    **     3,604,010

TIME WARNER 7.625% 4/15/31

   Corporate Bond    **     1,124,924

AT&T CORP 8.05% 11/15/11

   Corporate Bond    **     892,010

AT&T CORP 8.50% 11/15/31 SERIES 144A

   Corporate Bond    **     1,046,898

AMERADA HESS CORP 7.875% 10/01/29

   Corporate Bond    **     219,436

AMERADA HESS 6.65% 8/15/11

   Corporate Bond    **     216,750

AMER HOME PRODCT 6.7 3/15/2011

   Corporate Bond    **     790,557

ARKANSAS STATE DEV 9.75% 11/15/2014

   Corporate Bond    **     683,205

BANK ONE CORP 6.50% 02/01/06

   Corporate Bond    **     597,017

BANK ONE CAP III 8.75 9/1/2030

   Corporate Bond    **     522,428

BOSTON PROPERTIE 6.25% 1/15/2013

   Corporate Bond    **     321,402

BOSTON PROPERTIE 5.625% 4/15/2015

   Corporate Bond    **     349,773

Marriott Balanced Fund (continued)

               

BURLINGTON/SANTA 7.57 1/2/2021

   Corporate Bond    **   $ 1,451,592

CIGNA CORP 7.4 5/15/2007

   Corporate Bond    **     554,942

CIGNA CORP 8.3 1/15/2033

   Corporate Bond    **     588,623

CIT GROUP INC 5.75 9/25/2007

   Corporate Bond    **     350,674

CITICORP CAP I 7.933 2/15/2027

   Corporate Bond    **     396,641

COMCAST CORP. 5.30% 1/15/2014

   Corporate Bond    **     747,509

CONSOL RAIL CORP 6.76 5/25/2015

   Corporate Bond    **     497,298

CONSOL RAIL CORP 7.875 5/15/2043

   Corporate Bond    **     24,113

EOP OPERATING LP 6.763 6/15/2007

   Corporate Bond    **     1,059,283

FG E57920 6.5 11/1/2008

   U.S. Government Security    **     88,521

FG G10653 6 10/1/2009

   U.S. Government Security    **     343,639

FG G11184 5.5 9/1/2016

   U.S. Government Security    **     2,423,566

 

24


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

FG G11367 6 2/1/2018

   U.S. Government Security    **     833,225

FHLMC 6% 5/1/17

   U.S. Government Security    **     1,412,119

FHLMC GOLD 6.00% 12/01/18 POOL # G11509

   U.S. Government Security    **     1,731,477

FHR 1524 J 6.5 5/15/2008

   U.S. Government Security    **     1,586,175

FG E00238 6.5 9/1/2008

   U.S. Government Security    **     106,979

FHR 1601 PJ 6 10/15/2008

   U.S. Government Security    **     795,533

FH 182224 8.5 3/1/2009

   U.S. Government Security    **     148,359

FNGT 2001-T1 A1 7.5 10/25/2040

   U.S. Government Security    **     495,174

FNS F 1 6.5 5/1/2009

   U.S. Government Security    **     343,279

FN 151963 7.5 5/1/2007

   U.S. Government Security    **     75,346

FN 303786 7.5 2/1/2011

   U.S. Government Security    **     202,279

FN 313709 6.9 6/1/2007

   U.S. Government Security    **     910,535

FN 323387 6.5 11/1/2013

   U.S. Government Security    **     997,950

FN 323623 6 3/1/2014

   U.S. Government Security    **     398,702

FN 483669 6 1/1/2009

   U.S. Government Security    **     481,753

FN 490682 7.5 6/1/2012

   U.S. Government Security    **     30,244

FN 545059 6.228% 5/1/2011

   U.S. Government Security    **     485,948

FN 545209 6.13% 10/1/2011

   U.S. Government Security    **     484,060

FN 545962 5.5 12/1/2013

   U.S. Government Security    **     885,080

FNMA 5.5% 8/1/15 POOL # 555382

   U.S. Government Security    **     1,079,290

FNMA POOL # 555803 6.50% 01/01/22

   U.S. Government Security    **     2,583,156

FN 571869 6 2/1/2013

   U.S. Government Security    **     1,145,226

FNR 2001-50 BA 7 10/25/2041

   U.S. Government Security    **     1,273,524

FNR 2002-33 A1 7 6/25/2032

   U.S. Government Security    **     740,022

FNGT 2002-T12 A3 7.5 5/25/2042

   U.S. Government Security    **     1,690,242

FNW 2001-W3 A 7.00% 09/25/41

   U.S. Government Security    **     997,033

FORD MOTOR CREDIT CO 7.875% 06/15/2010

   Corporate Bond    **     122,322

FORD MOTOR CRED 7.25 10/25/2011

   Corporate Bond    **     1,464,161

Marriott Balanced Fund (continued)

               

GN 780619 7 8/15/2012

   U.S. Government Security    **   $ 1,303,816

GMAC 8.875 6/1/2010

   Corporate Bond    **     1,580,051

GM ACCEPTANCE CORP 6.75% 01/15/06

   Corporate Bond    **     64,413

GMAC 7.255 03/02/11

   Corporate Bond    **     10,971

HCA-THE HEALTHCR 8.75 9/1/2010

   Corporate Bond    **     833,515

HCA INC 6.75% 7/15/2013

   Corporate Bond    **     424,200

HEALTH NET INC 8.375 4/15/2011

   Corporate Bond    **     841,100

HEWLETT-PACK CO 5.5 7/1/2007

   Corporate Bond    **     594,441

MAY DEPT STORES 7.6 6/1/2025

   Corporate Bond    **     745,640

MAY DEPT STORES 7.625 8/15/2013

   Corporate Bond    **     871,693

NORDSTROM INC 5.625 1/15/2009

   Corporate Bond    **     745,497

PG&E NATIONAL ENERGY 10.375% 5/16/2011

   Corporate Bond    **     490,000

RAYCHEM CORP 10/15/2008

   Corporate Bond    **     1,127,500

RAYTHEON CO 6.75% 08/15/07

   Corporate Bond    **     830,945

REP NY CORP 9.5 4/15/2014

   Corporate Bond    **     359,225

SAFECO CORPORATION 4.875% 02/01/2010

   Corporate Bond    **     515,481

ST. PAUL COMPANIES 5.75% 03/15/07

   Corporate Bond    **     810,246

SCHERING-PLOUGH 5.3% 12/1/2013

   Corporate Bond    **     203,490

 

25


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

SMALL BUS ADMIN 7.2 6/1/2017

   Corporate Bond    **     503,781

SMALL BUS ADMIN 6.8 8/1/2017

   Corporate Bond    **     175,411

SMALL BUS ADMIN 6.9 9/1/2017

   Corporate Bond    **     409,120

SMALL BUS ADMIN 6.3 5/1/2018

   Corporate Bond    **     325,952

SBAP 2003-20D 4.76% 04/01/2022

   Corporate Bond    **     731,255

TIME WARNER ENT 8.375 7/15/2033

   Corporate Bond    **     730,130

UNION PACIFIC RR 6.061 1/17/2023

   Corporate Bond    **     816,188

UNION PACIFIC RR 6.33 1/2/2020

   Corporate Bond    **     846,682

VENDE 1995-1 2 7.7925 2/15/2025

   Corporate Bond    **     228,483

TSY INFL IX N/B 3.50% 01/15/11

   U.S. Government Security    **     698,796

U.S. T-NOTE 04/30/04

   U.S. Government Security    **     4,510,312

US TREASURY 2% 11/30/2004

   U.S. Government Security    **     1,813,212

US TREASURY N/B 3.125 10/15/2008

   U.S. Government Security    **     174,665

US TREASURY N/B 3.375 11/15/2008

   U.S. Government Security    **     453,569

UNUMPROVIDENT 7.625 3/1/2011

   Corporate Bond    **     275,408

UNUMPROVIDENT CORP 7.375% 6/15/32

   Corporate Bond    **     353,862

WYETH 5.5% 2/1/2014

   Corporate Bond    **     328,710

AMERICAN INTERNATIONAL GROUP.

   Common Stock    **     2,125,931

AMGEN INC

   Common Stock    **     1,903,440

BED BATH & BEYOND INC

   Common Stock    **     932,025

CATERPILLAR INC.

   Common Stock    **     1,203,790

Marriott Balanced Fund (continued)

               

CISCO SYSTEMS INC

   Common Stock    **   $ 553,812

CITIGROUP INC

   Common Stock    **     1,653,564

THE COCA-COLA COMPANY

   Common Stock    **     2,187,325

COLGATE PALMOLIVE CO

   Common Stock    **     1,271,270

THE WALT DISNEY COMPANY.

   Common Stock    **     1,159,501

EBAY INC

   Common Stock    **     755,703

ELECTRONIC ARTS INC

   Common Stock    **     1,371,286

GANNET COMPANY INC

   Common Stock    **     1,997,184

GENETECH INC

   Common Stock    **     916,986

GENERAL ELECTRIC COMPANY

   Common Stock    **     539,052

GILLETTE COMPANY.

   Common Stock    **     2,159,724

INTEL CORPORATION

   Common Stock    **     544,180

JOHNSON & JOHNSON

   Common Stock    **     1,549,800

KOHL’S CORPORATION

   Common Stock    **     1,707,720

ELI LILLY & COMPANY.

   Common Stock    **     1,498,029

LOWE’S COMPANIES INC

   Common Stock    **     476,354

MARSH & MCLENNAN COMPANIES INC

   Common Stock    **     1,302,608

MASCO CORP

   Common Stock    **     964,832

MEDTRONIC INC

   Common Stock    **     2,299,253

OMNICOM GROUP INC.

   Common Stock    **     1,257,552

ORACLE CORPORATION

   Common Stock    **     2,185,920

PAYCHEX INC

   Common Stock    **     937,440

PEPSICO INC

   Common Stock    **     1,948,716

PFIZER INC

   Common Stock    **     2,731,009

THE PROCTER & GAMBLE COMPANY

   Common Stock    **     2,467,036

 

26


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

QUALCOMM INC

   Common Stock    **     2,491,566

SCHLUMBERGER LIMITED

   Common Stock    **     2,227,104

3M CO

   Common Stock    **     1,819,642

UNITED PARCEL SERVICE-B

   Common Stock    **     2,258,865

ACE LTD.

   Common Stock    **     931,950

AXIS CAPITAL HOLDINGS LTD

   Common Stock    **     114,192

NABORS INDUSTRIES LTD.

   Common Stock    **     415,000

NOBLE CORPORATION

   Common Stock    **     279,084

WEATHERFORD INTL LTD

   Common Stock    **     198,000

ALCON INC.

   Common Stock    **     332,970

ROYAL CARIBBEAN CRUISES LTD

   Common Stock    **     90,454

ALCOA INC

   Common Stock    **     228,000

ALLSTATE CORPORATION

   Common Stock    **     645,300

ALTRIA GROUP INCORPORATED

   Common Stock    **     1,224,450

Marriott Balanced Fund (continued)

               

AMERICAN INTERNATIONAL GROUP.

   Common Stock    **   $ 2,154,100

AMERICAN STANDARD COMPANIES INC

   Common Stock    **     503,500

ANHEUSER-BUSCH COMPANIES INC

   Common Stock    **     790,200

ANTHEM INC

   Common Stock    **     937,500

APPLERA CORP-APLLIED BIOSYS

   Common Stock    **     306,508

AVON PRODUCTS INC.

   Common Stock    **     776,135

BP PLC ADR

   Common Stock    **     863,625

BAKER HUGHES INC

   Common Stock    **     331,248

BANK AMERICA CORP

   Common Stock    **     1,809,675

BANK ONE CORPORATION

   Common Stock    **     1,891,985

BELLSOUTH CORPORATION

   Common Stock    **     424,500

BURLINGTON NORTHERN SANTA FE CORP.

   Common Stock    **     1,132,250

CARNIVAL CORPORATION

   Common Stock    **     297,975

CEPHALON, INC

   Common Stock    **     96,820

CITIGROUP INC

   Common Stock    **     2,427,000

CLEAR CHANNEL COMMUNICATIONS, INC.

   Common Stock    **     538,545

COLGATE PALMOLIVE CO

   Common Stock    **     750,750

COMCAST CORP. CL-A

   Common Stock    **     1,068,275

COMCAST CORPORATION SPECIAL CL-A

   Common Stock    **     469,200

COMMERCE BANCORP INC/NJ

   Common Stock    **     131,700

CONOCOPHILLIPS

   Common Stock    **     1,475,325

DEAN FOODS COMPANY

   Common Stock    **     378,005

DEVON ENERGY CORPORATION

   Common Stock    **     229,040

EDISON INTERNATIONAL

   Common Stock    **     57,018

ENTERGY CORPORATION

   Common Stock    **     399,910

EXELON CORPORATION

   Common Stock    **     265,440

EXXON MOBIL CORPORATION

   Common Stock    **     492,000

FANNIE MAE

   Common Stock    **     938,250

FIRST DATA CORPORATION.

   Common Stock    **     924,525

FISERV INCORPORATED

   Common Stock    **     395,100

HCA INC

   Common Stock    **     966,600

HARLEY DAVIDSON INC

   Common Stock    **     784,245

 

27


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

HEALTH MANAGEMENT ASSOCIATES INC.

   Common Stock    **     388,800

HEWLETT PACKARD COMPANY

   Common Stock    **     401,975

HOME DEPOT INC.

   Common Stock    **     514,605

JP MORGAN CHASE & CO.

   Common Stock    **     1,928,325

JOHNSON & JOHNSON

   Common Stock    **     464,940

JOHNSON CONTROLS, INC.

   Common Stock    **     522,540

JUNIPER NETWORKS INC

   Common Stock    **     186,800

KERR-MCGEE CORPORATION

   Common Stock    **     929,800

Marriott Balanced Fund (continued)

               

LOWES CORP-CAROLINA GROUP.

   Common Stock    **   $ 504,800

MBNA CORPORATION

   Common Stock    **     956,725

MEDIMMUNE INC.

   Common Stock    **     419,100

MERRILL LYNCH & CO INC

   Common Stock    **     381,225

MET LIFE INC

   Common Stock    **     454,545

MICROSOFT CORPORATION

   Common Stock    **     1,032,750

MOHAWK INDUSTRIES INCORPORATED

   Common Stock    **     141,080

MORGAN STANLEY

   Common Stock    **     827,541

NOBLE ENERGY INC.

   Common Stock    **     222,150

NORTHROP GRUMMAN CORPORATION

   Common Stock    **     382,400

OCCIDENTAL PETROLEUM CORPORATION

   Common Stock    **     422,400

PPL CORPORATION

   Common Stock    **     437,500

PFIZER INC

   Common Stock    **     1,589,850

THE PROCTER & GAMBLE COMPANY

   Common Stock    **     799,040

SBC COMMUNICATIONS

   Common Stock    **     456,225

SPRINT CORP (FON GROUP)

   Common Stock    **     492,600

TENET HEALTHCARE CORPORATION

   Common Stock    **     401,250

TIME WARNER COS INC

   Common Stock    **     539,700

UNION PACIFIC CORPORATION

   Common Stock    **     1,910,700

UNITED TECHNOLOGIES CORPORATION

   Common Stock    **     426,465

VERIZON COMMUNICATIONS

   Common Stock    **     877,000

VIACOM INC B

   Common Stock    **     1,730,820

WELLPOINT HEALTH NETWORKS INC.

   Common Stock    **     1,212,375

WESTWOOD ONE INCORPORATED

   Common Stock    **     530,255

WYETH

   Common Stock    **     1,018,800
             

                177,834,477

Marriott Bond Fund

               

BONY SHORT TERM INVESTMENT FUND *

   STIF    **     3,378,846

TIME WARNER 7.625% 4/15/31

   Corporate Bond    **     1,846,029

AT&T CORP 8.05%11/15/11

   Corporate Bond    **     1,150,980

AT&T CORP 8.50% 11/15/31 SERIES 144A

   Corporate Bond    **     1,581,979

ALLSTATE CORP 7.875 5/1/2005

   Corporate Bond    **     431,528

AMERADA HESS CORP 7.875% 10/01/29

   Corporate Bond    **     301,724

AMERADA HESS 6.65% 8/15/11

   Corporate Bond    **     298,031

AMER HOME PRODCT 6.50 3/15/2006

   Corporate Bond    **     808,997

ARKANSAS STATE DEV 9.75% 11/15/2014

   Corporate Bond    **     496,876

BANK ONE 7.625% 8/1/05

   Corporate Bond    **     435,584

 

28


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

BANK ONE CAP III 8.75 9/1/2030

   Corporate Bond    **     914,249

Marriott Bond Fund (continued)

               

BOSTON PROPERTIE 6.25% 1/15/2013

   Corporate Bond    **   $ 535,670

BOSTON PROPERTIE 5.625% 4/15/2015

   Corporate Bond    **     499,675

BURLINGTON/SANTA 7.57 1/2/2021

   Corporate Bond    **     1,036,852

BURLINGTON/SANTA 6.727 7/15/2022

   Corporate Bond    **     445,683

CIGNA CORP 7.4 5/15/2007

   Corporate Bond    **     554,942

CIGNA CORP 8.3 1/15/2033

   Corporate Bond    **     588,623

CIT GROUP INC 5.75 9/25/2007

   Corporate Bond    **     458,573

CIPGE 97-1 6.42% 9/25/08

   Corporate Bond    **     452,953

CISCE 1997-1 A6 6.38 9/25/2008

   Corporate Bond    **     532,255

CITICORP CAP I 7.933 2/15/2027

   Corporate Bond    **     396,641

COMCAST CORP. 5.30% 1/15/2014

   Corporate Bond    **     921,928

CONSOL RAIL CORP 6.76 5/25/2015

   Corporate Bond    **     465,214

CONSOL RAIL CORP 7.875 5/15/2043

   Corporate Bond    **     36,170

EOP OPERATING LP 6.763 6/15/2007

   Corporate Bond    **     1,103,420

FG G10653 6 10/1/2009

   U.S. Government Security    **     245,303

FG G10848 6 6/1/2011

   U.S. Government Security    **     1,054,083

FG G11157 8 3/1/2008

   U.S. Government Security    **     299,620

FGCI 6.% POOL # G11287 08/01/2017

   U.S. Government Security    **     1,983,791

FHLMC 6% 5/1/17

   U.S. Government Security    **     1,589,440

FHLMC GOLD 6.00% 12/01/18 POOL # G11509

   U.S. Government Security    **     2,885,795

FHR 1524 J 6.5 5/15/2008

   U.S. Government Security    **     1,374,685

FG E00633 5.5% 3/1/14

   U.S. Government Security    **     2,959,412

FH 140357 7.75 12/1/2007

   U.S. Government Security    **     35,636

FH 182224 8.5 3/1/2009

   U.S. Government Security    **     72,843

FNGT 2001-T1 A1 7.5 10/25/2040

   U.S. Government Security    **     371,380

FNR 1993-211 PJ 6 11/25/2008

   U.S. Government Security    **     1,056,670

FN 9454 6.75 8/1/2008

   U.S. Government Security    **     81,278

FN 57843 8 6/1/2008

   U.S. Government Security    **     96,032

FN 313672 7.007 6/1/2007

   U.S. Government Security    **     446,833

FN 323165 6 6/1/2013

   U.S. Government Security    **     218,438

FN 323492 6.041 1/1/2009

   U.S. Government Security    **     1,689,571

FN 323623 6 3/1/2014

   U.S. Government Security    **     1,092,828

FN 331197 8 6/1/2008

   U.S. Government Security    **     129,322

FN 341417 6 5/1/2011

   U.S. Government Security    **     866,937

FN 362446 7 12/1/2007

   U.S. Government Security    **     99,048

FN 545058 6.5 8/1/2011

   U.S. Government Security    **     274,917

FN 545387 5.863% 1/1/2012

   U.S. Government Security    **     612,447

FN 545927 6.5 12/1/2015

   U.S. Government Security    **     1,236,921

FN 545961 5.5 2/1/2014

   U.S. Government Security    **     985,172

FN 585013 6.5 6/1/2014

   U.S. Government Security    **     496,567

Marriott Bond Fund (continued)

               

FNR 2001-50 BA 7 10/25/2041

   U.S. Government Security    **   $ 1,215,637

FNR 2002-3 OD 6 12/25/2014

   U.S. Government Security    **     3,158,167

FNW 2002-W6 2A1 7 6/25/2042

   U.S. Government Security    **     1,825,328

FNR 2002-90 A1 6.5 6/25/2042

   U.S. Government Security    **     1,643,356

 

29


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

FSPC T-48 1A 7.19371 7/25/2033

   U.S. Government Security    **     766,358

FHR 2479 TD 5.5 11/15/2015

   U.S. Government Security    **     1,562,805

FSPC T-54 3A 7 2/25/2043

   U.S. Government Security    **     1,965,927

FIRST NATIONWIDE 10 10/1/2006

   Corporate Bond    **     235,022

FORD MOTOR CREDIT CORP 5.8% 01/12/09

   Corporate Bond    **     1,283,438

FORD MOTOR CRED 7.25 10/25/2011

   Corporate Bond    **     813,423

GN 780619 7 8/15/2012

   U.S. Government Security    **     1,294,834

GN 780836 8.25 4/15/2020

   U.S. Government Security    **     157,431

GE COMPANY 5.00% 02/01/13

   Corporate Bond    **     556,234

GMAC 8.875 6/1/2010

   Corporate Bond    **     1,931,173

GMAC 7.75% 01/19/10

   Corporate Bond    **     510,101

GMAC 7.255 03/02/11

   Corporate Bond    **     10,971

HCA-THE HEALTHCR 8.75 9/1/2010

   Corporate Bond    **     1,339,577

HCA INC 6.75% 7/15/2013

   Corporate Bond    **     636,299

HEALTH NET INC 8.375 4/15/2011

   Corporate Bond    **     1,021,335

HEWLETT-PACK CO 5.5 7/1/2007

   Corporate Bond    **     864,641

MAY DEPT STORES 7.6 6/1/2025

   Corporate Bond    **     860,354

MAY DEPT STORES 8 7/15/2012

   Corporate Bond    **     1,203,890

NORDSTROM INC 5.625 1/15/2009

   Corporate Bond    **     745,497

PG&E NATIONAL ENERGY 10.375% 5/16/2011

   Corporate Bond    **     490,000

RAYCHEM CORP 10/15/2008

   Corporate Bond    **     1,127,500

RAYTHEON CO 6.75% 08/15/07

   Corporate Bond    **     1,218,720

REP NY CORP 9.5 4/15/2014

   Corporate Bond    **     261,255

REP NY CORP 9.3 6/1/2021

   Corporate Bond    **     659,473

SAFECO CORPORATION 4.875% 02/01/2010

   Corporate Bond    **     721,673

ST PAUL COS 8.125 4/15/2010

   Corporate Bond    **     478,372

ST. PAUL COMPANIES 5.75% 03/15/07

   Corporate Bond    **     378,115

SCHERING-PLOUGH 5.3% 12/1/2013

   Corporate Bond    **     279,798

SMALL BUS ADMIN 7.15 1/1/2017

   Corporate Bond    **     1,075,856

SMALL BUS ADMIN 7.3 5/1/2017

   Corporate Bond    **     207,262

SMALL BUS ADMIN 7.2 6/1/2017

   Corporate Bond    **     451,188

SMALL BUS ADMIN 6.3 5/1/2018

   Corporate Bond    **     130,381

SMALL BUS ADMIN 5.875 11/1/2018

   Corporate Bond    **     181,619

SBAP 2003-20D 4.76% 04/01/2022

   Corporate Bond    **     1,072,507

TIME WARNER ENT 8.375 7/15/2033

   Corporate Bond    **     895,203

UNION PACIFIC RR 6.061 1/17/2023

   Corporate Bond    **     1,088,250

Marriott Bond Fund (continued)

               

UNION PACIFIC CO 6.85 1/2/2019

   Corporate Bond    **   $ 491,186

U.S. TREASURY NOTE 7.50% 02/15/05

   U.S. Government Security    **     320,707

U.S. TREASURY NOTE 6.50% 10/15/06

   U.S. Government Security    **     2,896,054

TSY INFL IX N/B 3.50% 01/15/11

   U.S. Government Security    **     1,045,208

US T-NOTE 4.625% 05/15/06

   U.S. Government Security    **     5,829,142

US TREASURY NOTE 3.25% 5/31/04

   U.S. Government Security    **     2,220,196

US TREASURY N/B 3.125 10/15/2008

   U.S. Government Security    **     299,426

US TREASURY N/B 3.375 11/15/2008

   U.S. Government Security    **     282,220

UNUMPROVIDENT 7.625 3/1/2011

   Corporate Bond    **     330,489

UNUMPROVIDENT CORP 7.375% 6/15/32

   Corporate Bond    **     606,620

 

30


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,
Rate of Interest,

Collateral, Par, or

Maturity Value


  Cost

  Current Value

WYETH 5.5% 2/1/2014

   Corporate Bond   **     657,420
            

               93,226,029

Marriott Company Stock Fund

              

Vanguard Money Market

   STIF   **     2,763,889

Marriott International, Inc. Common Stock *

   Common Stock   **     328,882,600
            

               331,646,489

Stable Value Fund

              

Vanguard Money Market

   STIF   **     7,598,916

BONY Short Term Investment Fund *

   STIF   **     14,229,400
            

               21,828,316

Fidelity Contrafund

              

Fidelity Investments

   Mutual Fund   **     82,209,723
            

               82,209,723

Morgan Stanley Equity Growth Fund

              

Morgan Stanley

   Mutual Fund   **     73,610,807
            

               73,610,807

State Street S&P 500 Index Fund

              

State Street Global Advisors

   Common/Collective
  Trust
  **     59,508,582
            

               59,508,582

Dodge & Cox Stock Fund

              

Dodge & Cox

   Mutual Fund   **     81,585,931
            

               81,585,931

Morgan Stanley International Equity Fund

              

Morgan Stanley

   Mutual Fund   **   $ 52,233,024
            

               52,233,024

Interest Bearing Cash

              

Interest Bearing Cash

   Interest Bearing Cash   **     3,572
            

               3,572

Participant Loans

              

Participant Loans *

   Interest rates range from
  5.00% to 5.25%; varying
  maturities
  **     40,821,794
            

               40,821,794

Investments stated at fair value

           $ 1,486,070,012
            

 

31


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

 

Stable Value Fund

                 

Synthetic General Investment Contracts:

                 

Bank of America:

                 

INVESCO Multi-Manager Intermediate G/C Fund

   103-12 Investment Entities    **   $ 43,880,148  

Wrapper Contract

   GIC Wrapper    **     (1,950,693 )

CDC Financial:

                 

AAA Asset-Backed Security

   103-12 Investment Entities    **     27,639,320  

Wrapper Contract

   GIC Wrapper    **     (757,634 )

John Hancock Life:

                 

Hanc SA SFA

   Insurance Co. Pooled Sep.    **     11,284,735  

Wrapper Contract

   GIC Wrapper    **     (682,950 )

JP Morgan Chase:

                 

STIF

   STIF    **     57,806  

UAC 01-A A4

   AB-SubPrimeAuto    **     2,502,024  

USTN 1.5 02-05

   US Treasury Note    **     2,014,513  

USTN 4.375 05-04

   US Treasury Note    **     4,258,844  

USTN 875 11-04

   US Treasury Note    **     1,047,586  

Wrapper Contract

   GIC Wrapper    **     (729,969 )

Stable Value Fund (continued)

                 

Synthetic General Investment Contracts (continued):

                 

Monumental:

                 

INVESCO Short-Term Bond

   103-12 Investment Entities    **   $ 20,351,515  

Wrapper Contract

   GIC Wrapper    **     (279,954 )

Rabobank Nederland:

                 

INVESCO Multi-Manager Intermediate G/C Fund

   103-12 Investment Entities    **     43,880,746  

Wrapper Contract

   GIC Wrapper    **     (1,949,895 )

State Street Bank:

                 

INVESCO Short-Term Bond

   103-12 Investment Entities    **     27,407,976  

Wrapper Contract

   GIC Wrapper    **     (1,011,382 )

UBS AG:

                 

INVESCO Multi-Manager Core

   103-12 Investment Entities    **     36,658,278  

Wrapper Contract

   GIC Wrapper    **     (1,201,689 )

Bank of America:

                 

Monumental Life:

                 

State Street Bank & Trust Co.:

                 

UBS AG:

                 

BONY SHORT TERM INVESTMENT FUND *

   STIF    **     4,412,487  

INTEREST-BEARING CASH

   Interest-Bearing Cash    **     14,501  

 

32


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current
Value


ABN-AMRO BK NV (CHICAGO)

   Corporate Bond    **     64,792

ABN AMRO BK N V CHICAGO

   Corporate Bond    **     915,847

AESOP 2003-5A A1 144A

   Corporate Bond    **     599,010

ABBOTT LABORATORIES

   Corporate Bond    **     828,154

ACE LIMITED

   Corporate Bond    **     546,960

ALLSTATE CORP

   Corporate Bond    **     545,738

ALLSTATE CORP

   Corporate Bond    **     807,502

ALLTEL CORP

   Corporate Bond    **     515,643

AMERICAN EXPRESS

   Corporate Bond    **     510,505

AMXCA 2003-4 A

   Corporate Bond    **     2,777,374

AMERICAN GENERAL CORP NTS

   Corporate Bond    **     534,675

AMERICAN HONDA FINANCE 144A

   Corporate Bond    **     609,707

ANHEUSER-BUSCH COS INC

   Corporate Bond    **     552,441

ARISTAR INC

   Corporate Bond    **     154,078

ARISTAR INC SR NT

   Corporate Bond    **     248,574

BP CANADA FINANCE BV

   Corporate Bond    **     858,822

BMWOT 2003-A A4

   Corporate Bond    **     1,298,884

BALT GAS & ELEC

   Corporate Bond    **     255,375

Bank of America:

               

Monumental Life:

               

State Street Bank & Trust Co.:

               

UBS AG: (continued)

               

BOAMS 2003-L 2A2

   Corporate Bond    **   $ 250,363

BANCO SANTANDER CHILE

   Corporate Bond    **     589,646

BANK OF NEW YORK CO INC *

   Corporate Bond    **     200,490

BANK ONE CORPORATION SR NTS

   Corporate Bond    **     560,365

BOIT 2002 A3 A3

   Corporate Bond    **     1,265,294

BOIT 2002-A4 A4

   Corporate Bond    **     1,244,241

BOAST 2003-1 A4

   Corporate Bond    **     271,556

BANKAMERICA CORP NT

   Corporate Bond    **     513,332

BEAR STEARNS

   Corporate Bond    **     620,741

BELLSOUTH CORP

   Corporate Bond    **     1,071,006

BOEING CAP CORP

   Corporate Bond    **     549,654

BRITISH TELECOM PLC

   Corporate Bond    **     607,332

BROWN-FORMAN CORPORATION

   Corporate Bond    **     642,573

CIT GROUP

   Corporate Bond    **     537,093

CVS CORP

   Corporate Bond    **     512,664

CWHL 2003-60 3A1

   Corporate Bond    **     406,491

CARAT 2002 1 A4

   Corporate Bond    **     513,834

CARAT 2002 4 A4

   Corporate Bond    **     1,215,280

CATERPILLAR FINANCIAL SERV

   Corporate Bond    **     425,667

CATERPILLAR INC SNR NTS

   Corporate Bond    **     148,463

CHAMT 1999-3 A

   Corporate Bond    **     1,037,940

CFAB 2002-2 1A3

   Corporate Bond    **     962,117

CMAOT 2001-B A4

   Corporate Bond    **     1,024,939

CMAOT 2003-C A4

   Corporate Bond    **     598,299

CHEMT 1996-3 A

   Corporate Bond    **     1,099,111

 

33


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

CHEVRONTEXACO CAPITAL COMPANY

   Corporate Bond    **     514,851

CHUBB CORP NTS

   Corporate Bond    **     542,447

CITIGROUP INC

   Corporate Bond    **     610,016

CCIMT 98-2 A

   Corporate Bond    **     1,121,527

CCCIT 2000-A1

   Corporate Bond    **     822,028

CCCIT 2000-A3 A3

   Corporate Bond    **     792,564

CCCIT 2003-A3 A3

   Corporate Bond    **     875,165

CFMSI 2003-3 AF2

   Corporate Bond    **     802,479

COCA-COLA ENTERPRISES

   Corporate Bond    **     551,627

COMERICA BANK

   Corporate Bond    **     756,038

COMED 1998-1 A6

   Corporate Bond    **     1,396,159

COMED 1998-1 A7

   Corporate Bond    **     1,418,595

CONOCO INC SNR NTS

   Corporate Bond    **     1,025,006

Bank of America:

               

Monumental Life:

               

State Street Bank & Trust Co.:

               

UBS AG: (continued)

               

COSTCO WHOLESALE CORP

   Corporate Bond    **   $ 546,422

COUNTRYWIDE HOME LOAN

   Corporate Bond    **     493,346

CREDIT SUISSE FIRST BOSTON USA

   Corporate Bond    **     751,223

JOHN DEERE CAPITAL CORP

   Corporate Bond    **     637,299

DEN DANSKE BK SB NT 144A

   Corporate Bond    **     533,741

DCMT 1996-3A

   Corporate Bond    **     822,229

DCMT 2000-9 A

   Corporate Bond    **     834,218

DLJ SNR NTS

   Corporate Bond    **     546,944

DOW CHEMICAL

   Corporate Bond    **     657,909

DU PONT (EI) DE NEMOURS

   Corporate Bond    **     608,420

ENTERGY MISSISSIPPI INC

   Corporate Bond    **     204,065

EQUITABLE LIFE ASSURANCE SOCIETY 144A

   Corporate Bond    **     709,008

FPL GROUP CAPITAL

   Corporate Bond    **     461,103

FHR 2367 PJ

   U.S. Government Security    **     23,655

FNMA 93-173H

   U.S. Government Security    **     172,872

FEDERAL NATIONAL MORTGAGE ASSOCIATION 5.

   U.S. Government Security    **     3,746,988

FANNIE MAE

   U.S. Government Security    **     3,733,791

FNMA ARM

   U.S. Government Security    **     863,916

FNR 2003-3 GC

   U.S. Government Security    **     987,904

FSPC T 45 A3

   U.S. Government Security    **     1,022,595

FHR 2500 GC

   U.S. Government Security    **     840,637

FNW 2003-W16 AF3

   U.S. Government Security    **     324,998

FIRST BANK SYSTEM SUB NT

   Corporate Bond    **     536,414

FIRST UNION CORP

   Corporate Bond    **     558,971

FUSAM 1998-9 A

   Corporate Bond    **     1,203,728

FCCMT 2000-C A

   Corporate Bond    **     1,078,880

FRANKLIN RESOURCES INC.

   Corporate Bond    **     555,754

GENERAL ELECTRIC CAPITAL CORP

   Corporate Bond    **     345,580

 

34


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

GENERAL MILLS

   Corporate Bond    **     460,803

GOLDMAN SACHS GROUP INC

   Corporate Bond    **     303,842

TURKEY TR GOVT BACKED TR T-1

   Corporate Bond    **     1,274,238

ISRAEL TRUST

   Corporate Bond    **     1,287,300

GRAND METRO INV

   Corporate Bond    **     530,425

HBOS TREASURY SRVCS PLC 144A

   Corporate Bond    **     405,775

HBOS TREASURY SERVICES 144A

   Corporate Bond    **     202,000

JOHN HANCOCK GLOBAL FDG II 144A

   Corporate Bond    **     541,659

Bank of America:

               

Monumental Life:

               

State Street Bank & Trust Co.:

               

UBS AG: (continued)

               

HDMOT 2003-1 A2

   Corporate Bond    **   $ 556,440

HERSHEY FOODS CORP

   Corporate Bond    **     384,566

HAROT 2002 4 A4

   Corporate Bond    **     1,215,792

HAROT 2003-4 A4

   Corporate Bond    **     500,940

HOUSEHOLD FINANCE CORP MTN

   Corporate Bond    **     670,421

HPLCC 2002 1 A

   Corporate Bond    **     960,097

HART 2003-A A4

   Corporate Bond    **     775,202

IPSPT 1998-1 A7

   Corporate Bond    **     817,231

JP MORGAN CHASE & CO

   Corporate Bond    **     201,701

KEY BANK NA

   Corporate Bond    **     314,190

KEY BANK NA

   Corporate Bond    **     352,527

KIMBERLY CLARK CORP

   Corporate Bond    **     553,358

LINCOLN NATIONAL CORP

   Corporate Bond    **     613,809

MILT 2003-1 A4

   Corporate Bond    **     527,239

M & I MARSHALL & ILSLEY BANK

   Corporate Bond    **     236,065

MBNAM 1997-1 A

   Corporate Bond    **     517,176

MBNAM 1999-B A

   Corporate Bond    **     1,095,402

MBNAM 2000-A A

   Corporate Bond    **     532,348

MBNAM 2000-I A

   Corporate Bond    **     1,468,913

MARSH & MCLENNAN COMPANIES INC

   Corporate Bond    **     512,972

MARSH & MCLENNAN COS INC

   Corporate Bond    **     254,019

MASSMUTUAL GLOBAL FUNDING LLC 144A

   Corporate Bond    **     639,865

MCCORMICK & CO

   Corporate Bond    **     663,274

MERITA BANK

   Corporate Bond    **     398,500

MERRILL LYNCH & CO

   Corporate Bond    **     606,819

METLIFE

   Corporate Bond    **     267,749

METLIFE INS CO 144A

   Corporate Bond    **     547,363

MONUMENTAL GLOBAL FUNDING 144A

   Corporate Bond    **     549,458

MONUMENTAL GLOBAL FUNDING 144A

   Corporate Bond    **     543,031

MORGAN STANLEY GROUP INC.

   Corporate Bond    **     513,443

NCNB CORP SUB CAP NTS

   Corporate Bond    **     519,093

NATIONAL CITY BANK

   Corporate Bond    **     302,385

NATIONAL CITY CORP

   Corporate Bond    **     325,130

NATIONWIDE BLDG SOCIETY 144A

   Corporate Bond    **     606,315

 

35


Identity of Issue, Borrower,

Lessor, or Similar Party


   Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

  Current Value

NATIONWIDE LIFE GLOBAL FUNDING 144A

   Corporate Bond    **     542,406

NAROT 2003-A A4

   Corporate Bond    **     1,202,100

NORTHERN BORDER PIPELINE

   Corporate Bond    **     276,557

Bank of America:

               

Monumental Life:

               

State Street Bank & Trust Co.:

               

UBS AG: (continued)

               

NORTHERN TRUST CO

   Corporate Bond    **   $ 200,647

OCCIDENTAL PETROLEUM CORP

   Corporate Bond    **     507,207

ONEOK INC

   Corporate Bond    **     574,419

ONTARIO GLOBAL BOND SNR

   Corporate Bond    **     823,783

ONYX 2000-B A4

   Corporate Bond    **     117,561

PECO ENERGY CO

   Corporate Bond    **     701,185

PNC BK N A PITTS SUBNT

   Corporate Bond    **     545,453

PPL ELECTRIC UTILITIES

   Corporate Bond    **     564,435

PSNH 2001 1 A2

   Corporate Bond    **     998,421

PECO 1999-A A4

   Corporate Bond    **     442,346

PECO 2000 A A3

   Corporate Bond    **     1,200,097

PEDERNALES ELECTRIC CORP 144A

   Corporate Bond    **     410,766

PEPCO HOLDINGS INC

   Corporate Bond    **     437,460

PEPSICO INC.144A

   Corporate Bond    **     512,313

PHARMACIA CORP

   Corporate Bond    **     1,341,352

CONOCOPHILLIPS

   Corporate Bond    **     662,160

PCCMT 2000-1 A

   Corporate Bond    **     642,983

PROCTER & GAMBLE

   Corporate Bond    **     397,174

PUB SERVICE ELEC & GAS SR BB MTG

   Corporate Bond    **     573,848

REGIONS BANK

   Corporate Bond    **     566,877

ROCKWELL INTL CORP NTS

   Corporate Bond    **     800,611

ROYAL BANK OF SCOTLAND GROUP

   Corporate Bond    **     340,239

ST PAUL COMPANIES INC

   Corporate Bond    **     256,930

BK OF SCOTLAND 144A SUB

   Corporate Bond    **     208,519

SCAMT 1995-5A

   Corporate Bond    **     41,905

SCAMT 1996-3A

   Corporate Bond    **     148,479

SEMPRA ENERGY

   Corporate Bond    **     529,533

SOUTHERN N/E TCM MTN

   Corporate Bond    **     441,706

SUNTRUST BANKS INC

   Corporate Bond    **     547,135

SWEDISH EXPORT CREDIT

   Corporate Bond    **     483,171

SYSCO CORP

   Corporate Bond    **     638,630

TIAA GLOBAL MARKETS 144A

   Corporate Bond    **     539,098

TJX COMPANIES INC

   Corporate Bond    **     582,771

TARGET CORP

   Corporate Bond    **     382,359

TARGET CORP

   Corporate Bond    **     375,392

TELEFONOS DE MEXICO SA 144A

   Corporate Bond    **     111,130

TAOT 2003-B A4

   Corporate Bond    **     1,205,361

TOYOTA MOTOR CREDIT CORP

   Corporate Bond    **     396,787

Bank of America:

               

Monumental Life:

               

 

36


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

    Current Value

 

State Street Bank & Trust Co.:

                   

UBS AG: (continued)

                   

TOYOTA MOTOR CREDIT CORP. 5.650 01/15/20

   Corporate Bond    * *   $ 306,238  

TRAVELERS PPTY CASUALTY

   Corporate Bond    * *     177,307  

USAA CAPITAL CORP 144A

   Corporate Bond    * *     629,621  

UNILEVER CAPITAL CORP

   Corporate Bond    * *     657,461  

BEARER CORP CONVERSION SYS

   U.S. Government Security    * *     1,319,066  

UNITED STATES TREASURY

   U.S. Government Security    * *     1,557,644  

U S TREASURY NT/BD

   U.S. Government Security    * *     1,548,414  

UNITED TECHNOLOGIES CORP

   Corporate Bond    * *     534,473  

VERIZON GLOBAL FUNDING

   Corporate Bond    * *     708,146  

VIACOM INC

   Corporate Bond    * *     554,242  

VIRGINIA ELEC & POWER

   Corporate Bond    * *     325,579  

VWALT 2002 A A4

   Corporate Bond    * *     909,785  

WACHOVIA CORP

   Corporate Bond    * *     559,051  

WALMART STORES INC NOTE

   Corporate Bond    * *     515,972  

WASHINGTON MUTUAL INC

   Corporate Bond    * *     351,444  

WPP 1999-A A4

   Corporate Bond    * *     1,244,112  

WISCONSIN PWR & LIGHT NTS

   Corporate Bond    * *     561,546  

WOART 2002 A A4

   Corporate Bond    * *     1,034,006  

Wrapper Contract

   GIC Wrapper – Bank of
  America
   * *     (1,151,426 )

Wrapper Contract

   GIC Wrapper –
  Monumental Life
   * *     (1,151,426 )

Wrapper Contract

   GIC Wrapper – State
  Street Bank
   * *     (1,151,426 )

Wrapper Contract

   GIC Wrapper – UBS    * *     (1,151,608 )
               


                  124,659,074  

Rabobank Nederland:

                   

BONY SHORT TERM INVESTMENT FUND *

   STIF    * *     1,268,722  

ABN AMRO BK SUB NT

   Corporate Bond    * *     113,106  

AIG SUNAMERICA GLOB FINANCING XII 144A

   Corporate Bond    * *     107,255  

AOL TIME WARNER

   Corporate Bond    * *     116,559  

AT&T WIRELESS SERVICES

   Corporate Bond    * *     88,348  

AT&T WIRELESS SVCS INC

   Corporate Bond    * *     94,291  

ABBOTT LABORATORIES

   Corporate Bond    * *     132,505  

ALCAN INC

   Corporate Bond    * *     94,896  

FNMA 15 YR TBA

   U.S. Government Security    * *     467,619  

Rabobank Nederland: (continued)

                   

FNMA 30 YR TBA

   U.S. Government Security    * *   $ 1,471,597  

GNMA I TBA

   U.S. Government Security    * *     408,035  

ALLSTATE FINANCIAL GLOBAL FUNDING 144A

   Corporate Bond    * *     125,044  

AMERICAN ELECTRIC POWER CO

   Corporate Bond    * *     74,289  

FHLM GOLD 30 YR TBA

   U.S. Government Security    * *     1,097,404  

 

37


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

APPALACHIAN POWER CO

   Corporate Bond    **     119,521

B B & T CORP

   Corporate Bond    **     51,700

BHP FINANCE USA LTD

   Corporate Bond    **     91,334

BAKER HUGHES INC

   Corporate Bond    **     133,507

BOAMS 2003-L 2A2

   Corporate Bond    **     475,690

BANK OF AMERICA CORP

   Corporate Bond    **     142,964

BANK ONE CORP

   Corporate Bond    **     115,475

BEAR STEARNS

   Corporate Bond    **     124,148

BOEING CO DEB

   Corporate Bond    **     72,187

BRITISH TELECOM PLC

   Corporate Bond    **     109,852

BUCKEYE PARTNERS

   Corporate Bond    **     47,993

BUNGE LTD FINANCE CORP 144A

   Corporate Bond    **     75,480

CIT GROUP HOLDINGS

   Corporate Bond    **     83,905

CIT GROUP INC

   Corporate Bond    **     50,277

CWL 2003-5 AF3

   Corporate Bond    **     166,946

CWHL 2003-60 2A1

   Corporate Bond    **     81,763

CANADIAN NATL RAILWAY CO

   Corporate Bond    **     82,754

CANADIAN NATURAL RESOURCES

   Corporate Bond    **     137,742

CAPITAL ONE BANK

   Corporate Bond    **     95,521

CATERPILLAR FINANCIAL SERVICES CORP

   Corporate Bond    **     86,011

CELULOSA ARAUCO CONSTITU

   Corporate Bond    **     94,665

CFAB 2002-1 1A3

   Corporate Bond    **     228,730

CFAB 03-1 IA-6

   Corporate Bond    **     175,232

CFAB 2003-3 1A6

   Corporate Bond    **     359,549

CMAOT 2002 A A4

   Corporate Bond    **     180,891

CMAOT 2003 A A4

   Corporate Bond    **     186,680

CHEVRON PHILLIPS CHEM CO

   Corporate Bond    **     90,281

CITIGROUP INC

   Corporate Bond    **     214,737

CCCIT 2000-A3 A3

   Corporate Bond    **     452,894

CCCIT 2003-A6 A6

   Corporate Bond    **     368,083

CLEAR CHANNEL COMMUNICATIONS INC

   Corporate Bond    **     94,586

COCA-COLA ENTERPRISES INC

   Corporate Bond    **     54,012

COMCAST CORP

   Corporate Bond    **     203,001

CONOCOPHILLIPS

   Corporate Bond    **     91,335

GNMA II TBA

   U.S. Government Security    **     941,843

Rabobank Nederland: (continued)

               

COUNTRYWIDE HOME LOANS

   Corporate Bond    **   $ 92,950

COX COMMUNICATIONS INC

   Corporate Bond    **     96,687

DLJCM 1999-CG2 A1B

   Corporate Bond    **     231,817

DAIMLERCHRYSLER NA HLDG

   Corporate Bond    **     175,106

JOHN DEERE CAPITAL CORP

   Corporate Bond    **     152,542

JDOT 2001 A A4

   Corporate Bond    **     255,133

DEUTSCHE TELEKOM INT FIN

   Corporate Bond    **     92,438

DEVON FINANCING CORP

   Corporate Bond    **     102,900

DOW CHEMICAL COMPANY

   Corporate Bond    **     76,608

DUKE CAPITAL CORP SNR NTS

   Corporate Bond    **     104,340

ENTERGY GULF STATES INC

   Corporate Bond    **     101,966

 

38


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current Value

ENTERGY LOUISIANA 1ST MTG

   Corporate Bond    **     191,983

EXELON GENERATION CO LLC 144A

   Corporate Bond    **     79,907

FALCONBRIDGE LTD

   Corporate Bond    **     130,297

FHLMC 7YR BALLOON

   U.S. Government Security    **     131,808

FHLMC GOLD

   U.S. Government Security    **     34,661

FHLMC GOLD

   U.S. Government Security    **     89,197

FHLMC GOLD

   U.S. Government Security    **     52,438

FHLMC 15YR GOLD

   U.S. Government Security    **     362,369

FHLMC GOLD

   U.S. Government Security    **     86,734

FHLMC GOLD

   U.S. Government Security    **     148,656

FHL ARM

   U.S. Government Security    **     263,477

FREDDIE MAC

   U.S. Government Security    **     240,215

FREDDIE MAC

   U.S. Government Security    **     1,129,981

FED NATL MTG ASSOC BENCHMARK BONDS

   U.S. Government Security    **     59,379

FANNIE MAE

   U.S. Government Security    **     85,756

FNMA 15 YR

   U.S. Government Security    **     452,812

FNMA 30 YR

   U.S. Government Security    **     310,155

FNMA 15 YR

   U.S. Government Security    **     90,109

FNMA 15 YR

   U.S. Government Security    **     199,201

FNMA 15YR

   U.S. Government Security    **     573,074

FNMA 30 YR

   U.S. Government Security    **     24,163

FNMA 30 YR

   U.S. Government Security    **     4,455

FNMA 30 YR

   U.S. Government Security    **     10,916

FNMA 15 YR

   U.S. Government Security    **     1,393,848

FNMA 15 YR

   U.S. Government Security    **     99,989

FNMA 30 YR

   U.S. Government Security    **     130,037

FNW 2002 W5 A15

   U.S. Government Security    **     384,824

FNR 2002-74 PJ

   U.S. Government Security    **     339,234

FNR 2003-40 NI

   U.S. Government Security    **     19,834

Rabobank Nederland: (continued)

               

FHR 2614 IH

   U.S. Government Security    **   $ 46,423

FHR 2631 IG

   U.S. Government Security    **     40,533

FHR 2631 PC

   U.S. Government Security    **     680,616

FNW 2003-W16 AF3

   U.S. Government Security    **     129,999

FHR 2686 JG

   U.S. Government Security    **     463,965

FNMA 30 YR

   U.S. Government Security    **     26,052

FNMA 15 YR

   U.S. Government Security    **     463,571

FNMA 30 YR

   U.S. Government Security    **     522,117

FNMA 30 YR

   U.S. Government Security    **     27,722

FNMA 30 YR

   U.S. Government Security    **     550,182

FNMA 30 YR

   U.S. Government Security    **     104,877

FNMA 30 YR

   U.S. Government Security    **     157,978

FNMA 30 YR

   U.S. Government Security    **     63,191

WACHOVIA CORPORATION

   Corporate Bond    **     162,929

FLORIDA POWER & LIGHT

   Corporate Bond    **     82,553

FORD MOTOR CREDIT

   Corporate Bond    **     251,458

 

39


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

  Current
Value


FRANCE TELECOM

   Corporate Bond    **     49,180

FRANKLIN RESOURCES INC.

   Corporate Bond    **     35,366

FUND AMERICAN COS INC

   Corporate Bond    **     45,264

GECMC 2001 1 A2

   Corporate Bond    **     264,606

GMACC 2001-C2 A2

   Corporate Bond    **     255,995

GNMA 15 YR

   U.S. Government Security    **     464,472

GOVT NATL MTG ASSN II

   U.S. Government Security    **     39,263

GOVT NATL MTG ASSN II

   U.S. Government Security    **     6,047

GOVT NATL MTG ASSN II

   U.S. Government Security    **     1,266

GOVT NATL MTG ASSN II 30YR

   U.S. Government Security    **     12,305

GOVT NATL MTG ASSN II

   U.S. Government Security    **     30,646

GNMA ll 30 YR

   U.S. Government Security    **     101,199

GNMA ll 30 YR

   U.S. Government Security    **     468,075

GOVT NATL MTG ASSN I

   U.S. Government Security    **     471,102

GOVT NATL MTG ASSN I

   U.S. Government Security    **     4,053

GOVT NATL MTG ASSN I

   U.S. Government Security    **     24,015

GOVT NATL MTG ASSN I

   U.S. Government Security    **     26,143

GOVT NATL MTG ASSN I

   U.S. Government Security    **     33,362

GOVT NATL MTG ASSN

   U.S. Government Security    **     20,600

GOVT NATL MTG ASSN GPM

   U.S. Government Security    **     7,595

GNMA 30 YR

   U.S. Government Security    **     34,921

GNMA 30 YR

   U.S. Government Security    **     4,480

GNMA 30 YR

   U.S. Government Security    **     21,339

GNMA 15 YR

   U.S. Government Security    **     20,669

GNMA 15 YR

   U.S. Government Security    **     230,193

Rabobank Nederland: (continued)

               

GNMA 15 YR

   U.S. Government Security    **   $ 56,747

GENERAL ELEC CAP CORP

   Corporate Bond    **     125,609

GENERAL ELECTRIC CAPITAL CORP

   Corporate Bond    **     238,611

GEN MOTORS ACCEPT CORP

   Corporate Bond    **     140,258

GENL MOTORS ACCEPT CORP

   Corporate Bond    **     78,718

GENERAL MOTORS

   Corporate Bond    **     59,001

GOLDMAN SACHS GROUP INC

   Corporate Bond    **     140,640

GOLDMAN SACHS GROUP INC

   Corporate Bond    **     46,239

HBOS PLC 144A

   Corporate Bond    **     90,263

HARVARD UNIVERSITY

   Other Bond    **     365,249

HEARST ARGYLE

   Corporate Bond    **     91,242

HERTZ CORP

   Corporate Bond    **     46,106

HIGHMARK INC 144A

   Corporate Bond    **     49,890

HOUSEHOLD FINANCE CORP

   Corporate Bond    **     44,065

HOUSEHOLD FINANCE CORP

   Corporate Bond    **     38,452

HUTCHISON WHAMP INTL LTD 144A

   Corporate Bond    **     101,655

HART 2003-A A4

   Corporate Bond    **     150,039

INTL TELECOM SATELLITE 144A

   Corporate Bond    **     41,524

IBM CORP

   Corporate Bond    **     103,554

INTL LEASE FINANCE

   Corporate Bond    **     141,394

JP MORGAN CHASE & CO

   Corporate Bond    **     118,919

 

40


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,
Rate of Interest,
Collateral, Par, or
Maturity Value


   Cost

    Current
Value


JERSEY CEN-AMBAC 1ST MORTG

   Corporate Bond    * *     413,490

KERN RIVER FUNDING CORP 144A

   Corporate Bond    * *     96,716

KINDER MORGAN INC

   Corporate Bond    * *     123,628

LEHMAN BROTHERS HOLDINGS

   Corporate Bond    * *     120,817

MARSH & MCLENNAN COS INC

   Corporate Bond    * *     45,723

MASCO CORP

   Corporate Bond    * *     109,743

MCCORMICK & CO

   Corporate Bond    * *     165,819

MERCK & CO INC

   Corporate Bond    * *     194,144

METLIFE INC

   Corporate Bond    * *     125,447

FRED MEYER INC

   Corporate Bond    * *     110,623

JPMC 1999-PLSI A2 144A

   Corporate Bond    * *     458,297

MORGAN STANLEY

   Corporate Bond    * *     70,527

MOTOROLA INC

   Corporate Bond    * *     65,916

NATIONAL RURAL UTILITIES

   Corporate Bond    * *     122,904

NATIONWIDE FINANCIAL SERVICES

   Corporate Bond    * *     142,704

NEWS AMERICA INC

   Corporate Bond    * *     127,072

NLV FINANCIAL CORP 144A

   Corporate Bond    * *     47,307

NORAM ENERGY CORP

   Corporate Bond    * *     25,321

NORTHERN TRUST COMPANY SNR NTS

   Corporate Bond    * *     157,777

NORTHERN TRUST COMPANY

   Corporate Bond    * *     70,232

Rabobank Nederland: (continued)

                 

OCCIDENTAL PETROLEUM CORP

   Corporate Bond    * *   $ 45,649

OFFICE DEPOT INC

   Corporate Bond    * *     42,889

OHIO EDISON 144A

   Corporate Bond    * *     99,555

PANHANDLE EASTERN PIPELINE 144A

   Corporate Bond    * *     46,816

PEMEX PROJ FDG MASTER TR

   Corporate Bond    * *     145,230

PEPCO HOLDINGS INC

   Corporate Bond    * *     92,639

PINNACLE WEST CAPITAL CORP

   Corporate Bond    * *     103,212

PCCMT 2000-1 A

   Corporate Bond    * *     669,774

PRINCIPAL LIFE GLOBAL 144A

   Corporate Bond    * *     96,149

PRUDENTIAL FINANCIAL INC

   Corporate Bond    * *     90,875

PUBLIC SERVICE NEW MEX

   Corporate Bond    * *     92,422

RNLT 2001-1 A4

   Corporate Bond    * *     190,342

SCA COORDINATION CENTER 144A

   Corporate Bond    * *     72,122

SLM CORP

   Corporate Bond    * *     116,323

SEALED AIR CORP 144A

   Corporate Bond    * *     100,726

SECURITY BENEFIT LIFE 144A

   Corporate Bond    * *     45,873

SEMPRA ENERGY ESOP

   Corporate Bond    * *     118,579

SBHEL 2000-1 A6

   Corporate Bond    * *     309,827

SPRINT CAPITAL CORP

   Corporate Bond    * *     195,002

STATE STREET CORPORATION

   Corporate Bond    * *     95,074

SUMT 2002 1 A2 144A

   Corporate Bond    * *     75,961

TELEFONOS DE MEXICO SA 144A

   Corporate Bond    * *     50,514

TVA

   Corporate Bond    * *     673,906

TRANSOCEAN INC

   Corporate Bond    * *     69,988

TXU ENERGY CO

   Corporate Bond    * *     50,376

UST INC

   Corporate Bond    * *     124,781

 

41


Identity of Issue, Borrower,

Lessor, or Similar Party


  

Description of Investment
Including Maturity Date,

Rate of Interest,

Collateral, Par, or

Maturity Value


   Cost

    Current Value

 

UNION PACIFIC CORP

   Corporate Bond    * *     106,620  

UNION PLANTERS CORP

   Corporate Bond    * *     59,863  

US CELLULAR CORP

   Corporate Bond    * *     55,146  

U S TREASURY BONDS

   U.S. Government Security    * *     433,834  

U S TREASURY BONDS

   U.S. Government Security    * *     494,665  

U S TREASURY BONDS

   U.S. Government Security    * *     277,427  

US TREASURY NOTES

   U.S. Government Security    * *     1,185,583  

US TREASURY

   U.S. Government Security    * *     459,041  

US TREASURY

   U.S. Government Security    * *     85,049  

US TREASURY NOTE

   U.S. Government Security    * *     2,384,327  

US TREASURY

   U.S. Government Security    * *     234,313  

UNITED STATES TREASURY

   U.S. Government Security    * *     711,324  

U S TREASURY NOTES

   U.S. Government Security    * *     441,385  

UNITED STATES TREASURY

   U.S. Government Security    * *     460,415  

US TREASURY

   U.S. Government Security    * *     1,221,750  

Rabobank Nederland: (continued)

                   

US TREASURY NT/BD

   U.S. Government Security    * *   $ 203,741  

TREASURY INFL INDX

   U.S. Government Security    * *     695,836  

US TREASURY NT/BD

   U.S. Government Security    * *     340,954  

US TREASURY NT/BD

   U.S. Government Security    * *     70,341  

VERIZON GLOBAL FUNDING

   Corporate Bond    * *     111,526  

VERIZON VIRGINA INC

   Corporate Bond    * *     68,347  

VERIZON FLORIDA INC

   Corporate Bond    * *     71,183  

VIACOM INC

   Corporate Bond    * *     59,624  

WPD HOLDINGS UK 144A

   Corporate Bond    * *     56,988  

WAL-MART STORES INC

   Corporate Bond    * *     143,757  

WASHINGTON MUTUAL INC

   Corporate Bond    * *     95,392  

WEYERHAEUSER CO

   Corporate Bond    * *     110,977  

WFNMT 2003-A A2

   Corporate Bond    * *     226,421  

XL CAPITAL LTD

   Corporate Bond    * *     162,106  

BOTTLING GROUP LLC

   Corporate Bond    * *     99,995  

LIBERTY MEDIA CORP

   Corporate Bond    * *     45,285  

Wrapper Contract

   GIC Wrapper    * *     (2,029,592 )
               


                  44,809,886  

General Investment Contracts:

                   

MetLife

   Insurance Co. Gen. Contract