Expenses

The large asset base under UTIMCO's management allows for economies of scale in management of the endowment funds. UTIMCO incurs expenses associated with strategy and analysis, portfolio management, custody and safekeeping, accounting and other investment related functions. Total expenses related to the management of PUF Investments were $15.1 million during 2003 versus $15.8 million in 2002, a decrease of .4%. PUF Investment expenses represented .23% and .22% of the average net asset value of the PUF during the years ended August 31, 2003 and 2002, respectively. The PUF also incurred expenses related to the management of the PUF Lands, representing .08% and .07% of the average net asset value of the PUF during the years ended August 31, 2003 and 2002, respectively. In total, PUF expenses incurred during fiscal years 2003 and 2002 were .31% and .29%, respectively.