FIRST AMERICAN FUNDS, INC.
MONEY
MARKET
FUNDS
1999 SEMIANNUAL REPORT
[LOGO] FIRST AMERICAN
THE POWER OF DISCIPLINED INVESTING(R)
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FIRST AMERICAN FAMILY OF FUNDS
- ------------------------
HIGHER RISK/RETURN INVESTMENTS FOR EVERY GOAL
POTENTIAL
- ------------------------ FIRST AMERICAN FUNDS OFFER A FULL RANGE OF
INVESTMENT STRATEGIES TO HELP YOU CREATE A
SECTOR FUNDS PERSONALIZED, DIVERSIFIED PORTFOLIO. SUPPORTED BY
EXTENSIVE RESEARCH AND A HIGHLY DEVELOPED
INTERNATIONAL FUNDS TEAM APPROACH TO INVESTMENT DECISION MAKING,
FIRST AMERICAN FUNDS CAN HELP BUILD A WINNING
SMALL CAP FUNDS STRATEGY FOR ANY INVESTOR.
MID CAP FUNDS
LARGE CAP FUNDS
STRATEGY FUNDS
BOND FUNDS
TAX FREE BOND FUNDS
MONEY MARKET FUNDS TABLE OF
Government Obligations CONTENTS
Prime Obligations ------------------------------------------------
Tax Free Obligations MESSAGE TO SHAREHOLDERS 1
Treasury Obligations ------------------------------------------------
STATEMENTS OF NET ASSETS 3
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LOWER RISK/RETURN STATEMENTS OF OPERATIONS 32
POTENTIAL ------------------------------------------------
- ------------------------ STATEMENTS OF CHANGES IN NET ASSETS 34
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FINANCIAL HIGHLIGHTS 36
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NOTES TO FINANCIAL STATEMENTS 40
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NOTICE TO SHAREHOLDERS 51
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An investment in money market funds is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the funds
seek to preserve the value of your investment at $1.00 per share, it is possible
to lose money by investing in the funds.
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NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
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MESSAGE TO SHAREHOLDERS MAY 14, 1999
Dear Shareholders:
On behalf of the entire board of directors and management of First American
Asset Management -- we are pleased to welcome all new fund shareholders and to
thank our long-term shareholders for your continued support.
The economic environment has changed dramatically since September 30 --
the date of our last shareholder update. At that time, worried investors drove
the Dow Jones Industrial Average down 20 percent, fueled by fears of an economic
crisis overseas. Some economists even predicted that problems in Asia could
ultimately send the U.S. economy into a recession.
Since then, the Dow has staged a non-stop rally, rising more than 2,000
points to surpass the 10,000 barrier. Many Asian nations have partially
recovered from their financial crisies, while the U.S. economy continues to
expand at an unprecedented rate. Thanks to low unemployment, low inflation,
stable interest rates and strong consumer spending, it is business as usual for
our robust economy.
No one can predict with certainty such a spectacular turnaround. That's
why we believe that successful long-term investing results from asset allocation
among equity, bond and money market funds. In increasingly volatile markets, a
well-balanced portfolio may cushion you against unfavorable developments
affecting any particular investment style or asset class. In short, an
asset-allocation plan can help smooth out market fluctuations to produce more
consistent returns year after year.
In your portfolio, First American money market funds continue to provide a
high-quality short-term investment. Our fund managers invest only in money
market securities rated in the highest short-term category by nationally
recognized statistical rating organizations. Credit quality is monitored daily.
As a result,
1 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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MESSAGE TO SHAREHOLDERS
all First American money market funds have been judged to contain securities of
the best quality, rated "AAAm" by Standard and Poor's and "Aaa" by Moody's. In
addition, our money market funds are consistently strong performers in their
asset class.
In closing, we are pleased to announce that the First American family of
funds recently surpassed $30 billion in total assets -- a significant milestone
that illustrates the broad appeal of our team approach to management and our
commitment to disciplined investment processes.
Again, thank you for your confidence in our fund family. We look forward
to continuing to serve your investment needs.
Sincerely,
/s/ Virginia L. Stringer
VIRGINIA L. STRINGER
Chairman
First American Funds, Inc.
/s/ James S. Doak
JAMES S. DOAK
Senior Managing Director, Equities
First American Asset Management
/s/ Paul A. Dow
PAUL A. DOW
Senior Managing Director, Fixed Income
First American Asset Management
2 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
GOVERNMENT OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
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U.S. GOVERNMENT AGENCY OBLIGATIONS -- 63.9%
Export-Import Bank
5.020%, 04/15/99 (A) (B) $ 18,198 $ 18,199
FFCB
4.820%, 02/01/00 50,000 49,973
FHLB
4.770%, 04/01/99 (A) 50,000 49,997
4.820%, 04/01/99 (A) 50,000 49,977
4.840%, 04/01/99 (A) 50,000 49,992
4.940%, 04/06/99 (A) 50,000 49,989
5.955%, 07/08/99 10,000 10,006
5.540%, 07/15/99 36,750 36,775
4.930%, 01/19/00 20,000 19,997
4.950%, 01/21/00 15,000 15,013
4.800%, 01/26/00 25,000 24,990
4.950%, 02/17/00 10,000 10,000
5.000%, 02/24/00 20,000 19,996
5.160%, 03/08/00 25,000 25,001
FHLMC
4.900%, 04/09/99 25,000 24,973
4.813%, 04/26/99 50,000 49,834
5.490%, 04/30/99 10,000 9,998
FNMA
4.752%, 04/01/99 (A) 5,000 5,000
4.920%, 04/01/99 20,450 20,447
4.511%, 04/06/99 (A) 3,000 2,998
5.650%, 04/09/99 2,135 2,135
4.751%, 04/15/99 (A) 50,000 49,973
4.745%, 04/24/99 (A) 50,000 49,966
4.740%, 05/03/99 32,900 32,761
4.858%, 05/04/99 61,560 61,289
4.838%, 07/01/99 50,000 49,396
6.030%, 07/07/99 14,651 14,704
5.540%, 07/16/99 10,000 9,999
5.870%, 10/25/99 6,850 6,898
4.990%, 02/22/00 10,000 9,999
4.980%, 03/29/00 8,900 8,890
SLMA
4.770%, 04/01/99 (A) 50,000 49,997
4.780%, 04/01/99 (A) 50,000 50,000
4.780%, 04/01/99 (A) 50,000 49,985
4.992%, 04/06/99 (A) 50,000 49,999
4.762%, 04/06/99 (A) 14,000 13,991
3 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
GOVERNMENT OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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U.S. AID
4.952%, 04/06/99 (A) $ 2,000 $ 2,000
U.S. Treasury Bill
4.837%, 04/19/99 (D) 100,000 99,759
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TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,154,896) 1,154,896
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OTHER U.S. GOVERNMENT AGENCY-BACKED OBLIGATIONS -- 8.0%
Nebhelp (LOC: SLMA)
4.794%, 04/02/99 25,075 25,072
USA Group Secondary Market Services (LOC: SLMA)
4.817%, 04/08/99 100,000 99,907
4.802%, 04/23/99 20,225 20,166
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TOTAL OTHER U.S. GOVERNMENT AGENCY-BACKED OBLIGATIONS
(Cost $145,145) 145,145
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REPURCHASE AGREEMENTS -- 30.9%
C S First Boston
5.100%, dated 03/31/99, matures
04/01/99, repurchase price $400,056,667
(collateralized by U.S. Treasury Obligations:
total market value: $415,129,242) 400,000 400,000
Lehman Brothers
4.875%, dated 03/31/99, matures
04/01/99, repurchase price $157,761,361
(collateralized by U.S. Treasury Notes:
total market value $160,868,041) 157,740 157,740
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TOTAL REPURCHASE AGREEMENTS
(Cost $557,740) 557,740
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TOTAL INVESTMENTS -- 102.8%
(Cost $1,857,781) 1,857,781
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OTHER ASSETS AND LIABILITIES, NET -- (2.8%) (C) (51,057)
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4 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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GOVERNMENT OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION VALUE (000)
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NET ASSETS:
Portfolio Capital--Class-A
($.01 par value--2 billion authorized)
based on 454,762,159 outstanding shares $ 454,731
Portfolio Capital--Class-D
($.01 par value--2 billion authorized)
based on 337,076,560 outstanding shares 337,076
Portfolio Capital--Class-Y
($.01 par value--2 billion authorized)
based on 1,015,191,927 outstanding shares 1,015,192
Distributions in excess of net investment income (4)
Accumulated net realized loss on investments (271)
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TOTAL NET ASSETS -- 100.0% $ 1,806,724
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Net asset value, offering price, and redemption
price per share--Class-A $ 1.00
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Net asset value, offering price, and redemption
price per share--Class-D $ 1.00
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Net asset value, offering price, and redemption
price per share--Class-Y $ 1.00
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(A)Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of March 31, 1999. The date shown is the next reset
date.
(B)Security sold within the terms of a private placement memorandum, exempt from
registration under section 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(C)Other assets and liabilities representing greater than five percent of the
total net assets include the following amounts (000):
Cash collateral received for securities on loan $ 381,774
Payable upon return of securities on loan $(381,774)
(D)The rate shown is the effective yield at the time of purchase.
AID--Agency for International Development
FFCB--Federal Farm Credit Bank
FHLB--Federal Home Loan Bank
FHLMC--Federal Home Loan Mortgage Corporation
FNMA--Federal National Mortgage Association
LOC--Letter of Credit
SLMA--Student Loan Mortgage Association
The accompanying notes are an integral part of the financial statements.
5 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
PRIME OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
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COMMERCIAL PAPER -- 56.4%
BROKERAGE -- 5.0%
Goldman Sachs
4.921%, 04/09/99 $ 25,000 $ 24,973
4.896%, 05/19/99 50,000 49,677
4.879%, 05/20/99 50,000 49,671
4.890%, 05/28/99 50,000 49,617
Morgan Stanley Dean Witter
4.885%, 05/07/99 100,000 99,514
4.892%, 05/21/99 100,000 99,326
Salomon Smith Barney Holdings
4.871%, 04/05/99 30,750 30,733
4.891%, 04/09/99 50,000 49,946
4.859%, 04/12/99 50,000 49,927
4.943%, 04/16/99 25,000 24,950
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528,334
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CAPTIVE FINANCE -- 3.4%
Ford Motor Credit
4.895%, 04/05/99 50,000 49,973
4.869%, 04/07/99 40,000 39,968
4.870%, 04/07/99 35,000 34,972
4.849%, 04/09/99 50,000 49,947
4.892%, 04/15/99 50,000 49,906
4.872%, 04/28/99 50,000 49,819
4.859%, 05/07/99 50,000 49,759
Met Life Funding
4.851%, 04/20/99 30,000 29,924
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354,268
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COMMERCIAL FUNDING CORPORATIONS -- 23.0%
Asset Securitization
5.081%, 04/16/99 (B) 15,000 14,969
5.122%, 04/16/99 (B) 23,500 23,451
5.168%, 04/16/99 (B) 50,000 49,894
4.889%, 04/20/99 (B) 41,635 41,528
4.880%, 06/24/99 (B) 75,000 74,157
Corporate Asset Funding
4.871%, 04/06/99 (B) 50,000 49,966
4.871%, 04/07/99 (B) 50,000 49,960
4.847%, 04/08/99 (B) 50,000 49,953
4.873%, 04/28/99 (B) 50,000 49,818
4.885%, 05/05/99 (B) 50,000 49,772
4.883%, 05/07/99 (B) 37,000 36,821
4.886%, 05/11/99 (B) 35,000 34,811
4.891%, 05/19/99 (B) 50,000 49,677
4.886%, 06/02/99 (B) 27,450 27,221
4.890%, 06/03/99 (B) 26,500 26,276
6 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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International Securitization
(Guarantor: 10% First National Bank of Chicago)
4.930%, 04/05/99 (B) $ 25,011 $ 24,997
4.928%, 04/12/99 (B) 30,000 29,955
4.867%, 04/19/99 (B) 45,305 45,196
4.915%, 04/19/99 (B) 45,305 45,194
4.904%, 04/22/99 (B) 50,000 49,858
4.880%, 04/26/99 (B) 24,425 24,342
4.906%, 04/30/99 (B) 25,135 25,036
4.870%, 05/06/99 (B) 50,000 49,763
4.887%, 05/17/99 (B) 15,250 15,156
4.942%, 06/01/99 (B) 33,247 32,972
5.088%, 06/15/99 (B) 12,215 12,089
4.887%, 07/15/99 (B) 15,835 15,615
4.961%, 09/09/99 (B) 10,955 10,718
Pooled Accounts Receivable Capital
(Guarantor: 43% MBIA)
4.900%, 04/12/99 (B) 25,107 25,070
4.900%, 04/22/99 (B) 30,124 30,038
4.889%, 04/23/99 (B) 29,718 29,630
4.891%, 04/26/99 (B) 50,000 49,831
4.894%, 04/29/99 (B) 50,000 49,812
4.891%, 05/12/99 (B) 15,000 14,917
4.877%, 06/01/99 (B) 37,606 37,300
4.934%, 06/29/99 (B) 19,191 18,961
Quincy Capital (Guarantor: 10% AMBAC)
4.879%, 04/05/99 (B) 50,000 49,973
4.903%, 04/07/99 (B) 49,886 49,845
4.877%, 04/08/99 (B) 49,655 49,608
4.879%, 04/08/99 (B) 32,774 32,743
4.886%, 04/13/99 (B) 50,000 49,919
4.897%, 04/21/99 (B) 75,000 74,797
4.898%, 04/21/99 (B) 48,211 48,081
4.893%, 04/22/99 (B) 35,000 34,901
4.890%, 05/17/99 (B) 26,407 26,244
Receivables Capital (Guarantor: 10% AMBAC)
4.889%, 04/05/99 (B) 36,579 36,559
4.879%, 04/06/99 (B) 85,292 85,235
4.871%, 04/08/99 (B) 50,000 49,953
4.877%, 04/08/99 (B) 50,000 49,953
4.870%, 04/13/99 (B) 100,000 99,838
4.897%, 04/20/99 (B) 50,000 49,871
4.850%, 05/05/99 (B) 25,067 24,952
Variable Funding Capital
4.890%, 04/06/99 (B) 50,000 49,966
4.891%, 04/06/99 (B) 50,000 49,966
4.923%, 04/06/99 (B) 50,000 49,966
4.902%, 04/07/99 (B) 50,000 49,959
7 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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4.892%, 04/12/99 (B) $ 50,000 $ 49,926
4.902%, 04/12/99 (B) 50,000 49,925
4.891%, 04/19/99 (B) 50,000 49,878
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2,426,782
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DIVERSIFIED FINANCE -- 4.8%
Allianz America Finance
4.920%, 04/08/99 (B) 35,300 35,266
4.879%, 05/14/99 (B) 50,000 49,712
General Electric Capital
5.140%, 04/19/99 50,000 49,874
5.078%, 04/21/99 50,000 49,861
5.088%, 04/26/99 20,000 19,931
4.861%, 05/17/99 50,000 49,694
4.890%, 05/17/99 50,000 49,691
4.862%, 05/20/99 50,000 49,673
4.866%, 05/26/99 50,000 49,634
4.820%, 06/04/99 25,000 24,786
4.895%, 06/04/99 50,000 49,572
4.871%, 06/07/99 30,000 29,733
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507,427
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DOMESTIC BANKS -- 3.9%
Chinatex Caps (LOC: BankAmerica Expires: 06/02/99)
5.167%, 04/01/99 25,715 25,715
Cofco Capital (LOC: BankAmerica Expires: 09/15/99)
4.909%, 04/06/99 20,000 19,986
4.902%, 05/24/99 25,000 24,821
Enterprise Funding (Guarantor: BankAmerica)
4.892%, 04/08/99 (B) 35,000 34,967
4.850%, 04/14/99 (B) 50,000 49,913
4.875%, 04/15/99 (B) 22,985 22,942
4.899%, 04/23/99 (B) 50,000 49,852
Kittyhawk Funding (Guarantor: BankAmerica)
4.958%, 04/01/99 (B) 20,744 20,744
4.880%, 04/09/99 (B) 30,000 29,967
4.897%, 04/16/99 (B) 42,671 42,585
4.909%, 05/27/99 (B) 25,277 25,086
5.270%, 06/01/99 (B) 35,000 34,696
4.870%, 06/30/99 (B) 35,000 34,588
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415,862
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DOMESTIC BRANCH, FOREIGN BANK -- 1.7%
Pemex Capital (LOC: Societe Generale NY)
4.856%, 04/22/99 25,000 24,930
4.868%, 04/26/99 25,000 24,917
4.878%, 04/26/99 25,000 24,916
8 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
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PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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4.872%, 05/03/99 $ 50,000 $ 49,786
4.888%, 05/18/99 25,000 24,842
4.980%, 05/27/99 33,900 33,643
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183,034
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FOREIGN BANK -- 1.8%
Banca Serfin S A Institution de Banca Multiple Grupo
(LOC: Barclays Bank Expires: 11/24/99)
5.598%, 08/26/99 25,000 24,459
5.075%, 11/19/99 35,000 33,897
Corporacion Andina de Formento
(LOC: Barclays Bank Expires: 08/13/99)
4.909%, 04/19/99 30,173 30,100
4.913%, 04/30/99 49,000 48,809
Four Winds Funding (Guarantor: Commerzbank)
4.890%, 04/07/99 (B) 50,000 49,959
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187,224
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FOREIGN FUNDING CORPORATIONS -- 2.3%
Centauri (CC USA)
5.151%, 04/07/99 (B) 25,000 24,979
Dorada Finance
4.887%, 04/22/99 (B) 34,000 33,904
4.902%, 04/27/99 (B) 20,000 19,930
4.850%, 04/30/99 (B) 17,000 16,934
4.879%, 05/04/99 (B) 30,000 29,867
4.926%, 05/11/99 (B) 36,000 35,805
4.930%, 05/17/99 (B) 31,000 30,807
4.909%, 05/24/99 (B) 18,000 17,872
4.910%, 06/11/99 (B) 30,000 29,713
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239,811
------------
RETAIL FUNDING CORPORATIONS -- 10.5%
Bishop Gate Residential Mortgage
4.903%, 04/12/99 (B) 24,000 23,964
4.893%, 04/14/99 (B) 40,000 39,930
4.895%, 04/14/99 (B) 25,000 24,956
4.900%, 04/14/99 (B) 20,000 19,965
4.903%, 04/14/99 (B) 25,000 24,956
4.903%, 04/20/99 (B) 50,000 49,871
4.904%, 04/21/99 (B) 25,000 24,932
4.912%, 04/21/99 (B) 50,000 49,864
4.893%, 04/22/99 (B) 25,000 24,929
4.909%, 05/19/99 (B) 30,000 29,805
Dakota Trust Certificates
4.909%, 04/07/99 (B) 16,000 15,987
4.930%, 04/08/99 (B) 50,000 49,953
4.856%, 04/23/99 (B) 50,000 49,853
9 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
4.890%, 05/04/99 (B) $ 50,000 $ 49,778
4.859%, 05/06/99 (B) 15,000 14,930
4.870%, 05/06/99 (B) 85,000 84,603
4.863%, 05/12/99 (B) 50,000 49,727
4.871%, 05/13/99 (B) 50,000 49,719
4.887%, 05/25/99 (B) 50,000 49,639
Providian Master Trust Series 1993-3
4.897%, 04/09/99 (B) 35,000 34,962
4.900%, 04/15/99 (B) 79,000 78,851
4.904%, 04/19/99 (B) 49,152 49,033
4.860%, 04/28/99 (B) 18,840 18,771
4.907%, 04/29/99 (B) 24,997 24,903
4.931%, 05/04/99 (B) 31,360 31,219
4.945%, 05/11/99 (B) 36,549 36,350
4.918%, 05/28/99 (B) 25,700 25,502
4.907%, 06/14/99 (B) 79,000 78,212
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1,105,164
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TOTAL COMMERCIAL PAPER
(Cost $5,947,906) 5,947,906
------------
CORPORATE OBLIGATIONS -- 34.5%
BROKERAGE -- 4.4%
Goldman Sachs
5.260%, 04/07/99 (A) (B) 100,000 100,000
5.030%, 04/15/99 (A) (B) 48,000 48,000
5.030%, 04/15/99 (A) (B) 40,000 40,000
Structured Enhanced Return Trust Series 1997
(Guarantor: Merrill Lynch)
4.984%, 04/23/99 (A) (B) 107,000 107,000
Structured Enhanced Return Trust Series 1998
(Guarantor: Merrill Lynch)
4.984%, 04/23/99 (A) (B) 52,000 52,000
WFP Tower B Finance Short Term Trust
(Guarantor: Merrill Lynch)
5.015%, 04/08/99 (A) (B) 124,751 124,751
------------
471,751
------------
DIVERSIFIED FINANCE -- 3.0%
Cit Group Holdings
4.850%, 04/01/99 (A) 200,000 199,961
4.950%, 04/01/99 (A) 100,000 100,000
International Lease Finance
6.140%, 11/10/99 5,000 5,030
6.050%, 11/18/99 6,000 6,034
------------
311,025
------------
10 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
DOMESTIC BANKS -- 2.0%
American Residential (Guarantor: Chase Manhattan)
6.160%, 04/15/99 $ 5,000 $ 5,002
Chase Manhattan
10.000%, 06/15/99 21,579 21,787
National City
5.725%, 04/19/99 40,000 40,007
Short Term Repackaged Asset Trust 98-C
(Guarantor: Morgan Stanley)
4.969%, 04/13/99 (A) (B) 150,000 150,000
------------
216,796
------------
FINANCIAL SERVICES -- 0.1%
Norwest Financial
6.050%, 11/19/99 5,000 5,032
------------
FOREIGN BANKS -- 5.2%
Bravo Trust Series 1997-1
(Guarantor: Bayerische Vereinsbank)
5.050%, 04/15/99 (A) (B) 175,000 175,000
Restructured Asset Securities 1998-MM-12-2
(Guarantor: Caisse Des Depots)
5.165%, 04/06/99 (A) (B) 125,000 125,000
Structured Products Asset Return Trust Certificate
Trust Series 98-4 (Credit Support:
CS Financial Products)
4.984%, 06/18/99 (A) (B) 250,000 250,000
------------
550,000
------------
FOREIGN FUNDING CORPORATIONS -- 12.2%
Beta Finance
5.110%, 04/06/99 (A) (B) 200,000 199,980
5.122%, 04/06/99 (A) (B) 100,000 100,000
5.020%, 02/04/00 (B) 40,000 40,000
5.135%, 02/22/00 (B) 30,000 30,000
5.340%, 03/09/00 (B) 25,000 25,000
Centauri (CC USA)
5.080%, 04/01/99 (A) (B) 150,000 150,000
5.101%, 04/06/99 (A) (B) 100,000 100,000
5.130%, 01/19/00 (B) 50,000 50,000
5.045%, 01/28/00 (B) 15,000 15,000
5.085%, 02/10/00 (B) 35,000 35,000
5.330%, 03/06/00 (B) 25,000 25,000
11 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Dorada Finance
5.180%, 02/23/00 (B) $ 20,000 $ 20,000
5.165%, 02/24/00 (B) 50,000 50,000
5.360%, 03/10/00 (B) 25,000 25,000
5.290%, 03/15/00 (B) 25,000 25,000
5.245%, 03/17/00 (B) 25,000 24,988
Sigma Finance
5.039%, 04/25/99 (A) (B) 100,000 100,000
5.750%, 08/02/99 (B) 25,000 25,000
5.160%, 01/14/00 (B) 40,000 40,000
5.125%, 02/09/00 (B) 50,000 50,000
5.110%, 02/16/00 (B) 50,000 50,000
5.190%, 02/25/00 (B) 25,000 25,000
5.240%, 03/01/00 (B) 50,000 50,000
5.410%, 03/13/00 (B) 30,000 30,000
------------
1,284,968
------------
INSURANCE -- 7.6%
All States Life Insurance
5.039%, 04/01/99 (A) (C) 50,000 50,000
Anchor National Life Insurance Investment
5.000%, 04/01/99 (A) (C) 75,000 75,000
First Allmerica Financial Life Funding
5.039%, 04/01/99 (A) (C) 50,000 50,000
5.098%, 04/26/99 (A) (C) 50,000 50,000
Monumental Life Insurance
5.089%, 04/01/99 (A) (C) 300,000 300,000
Sun Life Insurance of America
5.030%, 04/01/99 (A) (C) 75,000 75,000
5.250%, 04/01/99 (A) (C) 75,000 75,000
Transamerica Occidental Life Insurance
5.073%, 04/01/99 (A) (C) 50,000 50,000
4.963%, 04/07/99 (A) (C) 75,000 75,000
------------
800,000
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $3,639,572) 3,639,572
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 0.9%
Export-Import Bank
5.020%, 04/15/99 (A) (B) 36,162 36,163
FNMA
4.449%, 04/06/99 (A) 20,000 19,989
12 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
SLMA
4.760%, 04/06/99 (A) $ 38,400 $ 38,282
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $94,434) 94,434
------------
CERTIFICATES OF DEPOSIT -- 7.2%
Bank of Nova Scotia Halifax
9.000%, 10/01/99 3,000 3,057
Bank of Nova Scotia NY
5.750%, 04/27/99 25,000 24,999
Canadian Imperial Bank NY
5.750%, 04/01/99 25,000 25,000
Deutsche Bank NY
5.750%, 04/27/99 50,000 49,998
5.820%, 05/03/99 25,000 24,999
Deutsche Bank NY
5.000%, 01/06/00 50,000 49,993
Mercantile Safe Deposit & Trust
4.987%, 04/28/99 (A) 20,000 20,000
Rabobank Nederland NY
5.110%, 03/20/00 50,000 49,979
Royal Bank Canada NY
5.720%, 04/19/99 50,000 49,999
Societe Generale NY
5.750%, 04/14/99 25,000 25,000
5.740%, 06/08/99 25,000 24,997
5.690%, 07/16/99 35,000 34,994
5.700%, 08/03/99 30,000 29,994
Swiss Bank NY
5.740%, 06/11/99 50,000 49,994
UBS AG Stamford
5.075%, 01/13/00 50,000 49,987
5.220%, 03/10/00 25,000 24,993
5.180%, 03/15/00 50,000 49,968
Westpac Banking NY
5.640%, 04/09/99 65,500 65,498
5.730%, 04/23/99 50,000 49,998
5.775%, 05/14/99 50,000 49,997
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $753,444) 753,444
------------
13 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
REPURCHASE AGREEMENT -- 0.9%
Lehman Brothers
4.875%, dated 03/31/99, matures
04/01/99, repurchase price $97,805,243
(collateralized by U.S. Treasury Note:
total market value $99,699,887) $ 97,792 $ 97,792
------------
TOTAL REPURCHASE AGREEMENT
(Cost $97,792) 97,792
------------
TOTAL INVESTMENTS -- 99.9%
(Cost $10,533,148) 10,533,148
------------
OTHER ASSETS AND LIABILITIES, NET -- 0.1% 8,238
------------
NET ASSETS:
Portfolio Capital--Class-A
($.01 par value--2 billion authorized)
based on 4,210,695,158 outstanding shares 4,210,670
Portfolio Capital--Class-B
($.01 par value--2 billion authorized)
based on 4,155,608 outstanding shares 4,155
Portfolio Capital--Class-C
($.01 par value--2 billion authorized)
based on 128,651 outstanding shares 129
Portfolio Capital--Class-D
($.01 par value--2 billion authorized)
based on 309,309,948 outstanding shares 309,310
Portfolio Capital--Class-Y
($.01 par value--2 billion authorized)
based on 6,017,015,641 outstanding shares 6,016,969
Distributions in excess of net investment income (8)
Accumulated net realized gain on investments 161
------------
TOTAL NET ASSETS -- 100.0% $ 10,541,386
------------
14 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
PRIME OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net asset value, offering price, and redemption
price per share--Class-A $ 1.00
------------
Net asset value, offering price, and redemption
price per share--Class-B (D) $ 1.00
------------
Net asset value and offering price
price per share--Class-C (E) $ 1.00
------------
Net asset value, offering price, and redemption
price per share--Class-D $ 1.00
------------
Net asset value, offering price, and redemption
price per share--Class-Y $ 1.00
------------
(A)Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of March 31, 1999. The date shown is the next reset
rate.
(B)Security sold within the terms of a private placement memorandum, exempt from
registration under section 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
(C)Private Placement Securities considered illiquid investments.
(D)Class-B has a contingent deferred sales charge. For a description of possible
redemption charges, see the notes to the financial statements.
(E)Class-C has a contingent deferred sales charge. For a description of possible
redemption charges, see the notes to the financial statements.
AMBAC--American Municipal Bond Assurance Company
CC--Chamber of Commerce
FNMA--Federal National Mortgage Association
LOC--Letter of Credit
MBIA--Municipal Bond Insurance Association
SLMA--Student Loan Marketing Association
WFP--World Financial Properties
The accompanying notes are an integral part of the financial statements.
15 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TAX FREE OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS -- 97.1%
ALABAMA -- 1.7%
Jefferson County Sewer Revenue,
Series A54 (RB) (Ins: FGIC)
3.100%, 04/07/99 (A) (C) $ 9,500 $ 9,500
Jefferson County Sewer Revenue,
Series 7 (RB) (Ins: FGIC)
3.100%, 04/07/99 (A) (C) 3,000 3,000
------------
12,500
------------
ALASKA -- 0.5%
Alaska State Industrial Development Authority
(LOC: KredietBank Expires: 04/15/00) (RB)
2.900%, 04/07/99 (A) 3,400 3,400
------------
COLORADO -- 1.6%
Colorado Springs Utilities Revenue,
Series 19 (RB)
3.150%, 04/07/99 (A) (C) 8,100 8,100
Colorado State Health Facilities Authority,
Boulder Community Hospital
Project B (RB) (Ins: MBIA)
3.000%, 04/07/99 (A) 3,685 3,685
------------
11,785
------------
DELAWARE -- 1.1%
Delaware State (GO)
4.000%, 03/01/00 8,250 8,321
------------
DISTRICT OF COLUMBIA -- 1.3%
District of Columbia Consortium Revenue Authority
(LOC: First Union Expires: 06/16/03) (RB)
3.050%, 04/07/99 (A) 10,000 10,000
------------
FLORIDA -- 2.1%
Florida State Housing Finance Agency,
Multifamily Revenue (LOC: Barnett
Expires: 09/06/02) (RB)
3.125%, 04/07/99 (A) 1,500 1,500
Orlando Special Assessment, Republic Drive
Interchange-A (LOC: Morgan Guaranty
Expires: 08/25/02) (RB)
2.950%, 04/07/99 (A) 9,000 9,000
Tampa, Allegheny Health System Revenue,
Pre-refunded @ 102 (RB) (Ins: FGIC)
7.375%, 12/01/99 (B) 3,000 3,145
16 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Tampa, Catholic Health System Revenue
(RB) (Ins: MBIA)
4.500%, 11/15/99 $ 2,000 $ 2,017
------------
15,662
------------
GEORGIA -- 1.8%
Georgia State (GO)
7.250%, 07/01/99 2,000 2,022
4.500%, 08/01/99 2,920 2,934
6.500%, 12/01/99 3,000 3,069
Georgia State Municipal Electric Authority
(LOC: Morgan Guaranty Expires: 01/18/07) (TECP)
2.700%, 05/11/99 5,435 5,435
------------
13,460
------------
IDAHO -- 3.2%
Boise Urban Renewal Agency, Parking Revenue
(LOC: Bank of America Expires: 09/07/03) (RB)
3.050%, 04/07/99 (A) 5,250 5,250
Idaho State Health Facilities Authority, St. Luke's
Medical Center (LOC: Bayerische Landesbank NY
Expires: 05/22/03) (RB)
3.100%, 04/01/99 (A) 18,625 18,625
------------
23,875
------------
ILLINOIS -- 12.3%
Chicago Equipment Notes (LOC: Harris Trust
Expires: 03/15/00)
3.080%, 11/04/99 15,000 15,000
Chicago Wastewater Transmission Revenue
(RB) (Ins: FGIC)
3.070%, 04/07/99 (A) (C) 10,000 10,000
City of Chicago, ABN AMRO Munitops
1998-3 (GO) (Ins: FGIC)
3.160%, 04/07/99 (A) (C) 10,000 10,000
Illinois State (GO)
4.300%, 07/01/99 2,300 2,306
Illinois State Development Finance Authority,
American College of Surgeons Project
(LOC: Northern Trust Expires: 08/31/01) (RB)
3.100%, 04/07/99 (A) 4,000 4,000
Illinois State Development Finance Authority,
Illinois Power Project, Series B
(LOC: ABN AMRO Expires: 10/08/01) (RB)
3.050%, 04/07/99 (A) 3,900 3,900
17 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Illinois State Development Finance Authority,
Jewish Charities Revenue (LOC: Harris
Trust Expires: 07/15/99) (TRAN)
3.150%, 04/07/99 (A) $ 2,000 $ 2,000
Illinois State Finance Authority, Goodman Theater
Revenue (LOC: Harris Trust, Northern, First
National Bank of Chicago Expires: 01/27/02) (RB)
2.950%, 04/07/99 (A) 7,000 7,000
Illinois State Health Facilities Authority,
Children's Memorial Hospital, Series B
(LOC: First National Bank of Chicago Expires:
11/30/01) (RB)
2.950%, 04/07/99 (A) 4,800 4,800
Illinois State Health Facilities Authority, Dupage
Healthcare Project (LOC: Rabobank
Expires: 07/01/99) (RB)
3.100%, 04/01/99 (A) (C) 6,110 6,110
Illinois State Health Facilities Authority,
Franciscan Eldercare Project, Series B
(LOC: LaSalle National Bank Expires:
12/31/01) (RB)
3.050%, 04/07/99 (A) 1,150 1,150
Illinois State Health Facilities Authority,
Revolving Fund Pooled Project, Series C
(LOC: First National Bank of Chicago
Expires: 12/31/99) (RB)
2.950%, 04/07/99 (A) 3,000 3,000
Illinois State Health Facilities Authority,
Streeterville Corporation, Series A
(LOC: First National Bank of Chicago
Expires: 03/31/00) (RB)
2.950%, 04/07/99 (A) 9,900 9,900
Illinois State Metropolitan Pier & Exposition
Authority (RB) (Ins: AMBAC)
3.100%, 04/07/99 (A) (C) 3,000 3,000
Schaumburg, Multifamily Housing (RB)
(GTY: Merrill Lynch & Co.)
3.100%, 04/07/99 (A) (C) 9,000 9,000
------------
91,166
------------
INDIANA -- 4.0%
Allen County Economic Development Authority,
Golden Years Homestead Project
(LOC: Norwest Bank Expires: 09/15/01) (RB)
3.050%, 04/07/99 (A) 1,400 1,400
Evansville Economic Development Authority
(LOC: Bank of Nova Scotia Evergreen) (RB)
3.100%, 04/07/99 (A) (C) 2,500 2,500
18 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Indiana State Health Facilities Financing
Authority (LOC: Comerica Bank
Expires: 04/15/03) (RB)
2.950%, 04/07/99 (A) $ 4,200 $ 4,200
Indiana State Health Facilities Financing
Authority, Pathfinder Services Project
(LOC: Norwest Bank Expires: 12/01/01) (RB)
3.050%, 04/07/99 (A) 2,505 2,505
Indiana State Hospital Equipment Financing
Authority, Series 1985-A (RB) (Ins: MBIA)
2.950%, 04/07/99 (A) 18,800 18,800
------------
29,405
------------
KANSAS -- 0.3%
Shawnee Industrial Development Revenue,
Shawnee Village Association (LOC: Texas
Commerce Expires: 03/31/00) (RB)
3.050%, 04/07/99 (A) 1,900 1,900
------------
KENTUCKY -- 1.8%
Kentucky State Hospital Finance Authority,
Pre-refunded @ 102 (RB) (Ins: BIG)
7.000%, 09/01/99 (B) 3,000 3,100
Pendleton County (LOC: Commonwealth Bank of
Australia, NY Expires: 03/16/01) (TECP)
3.050%, 08/13/99 10,000 10,000
------------
13,100
------------
LOUISIANA -- 0.7%
Louisiana State Offshore Term Authority Deepwater
Port Revenue (LOC: Morgan Guaranty Trust
Expires: 08/29/00) (RB)
2.950%, 04/07/99 (A) 4,900 4,900
------------
MARYLAND -- 0.2%
Fredrick County Retirement Community, Buckinghams
Choice, Series E (LOC: LaSalle National Bank
Expires: 01/15/03) (RB)
3.050%, 04/07/99 (A) 1,500 1,500
------------
MASSACHUSETTS -- 1.7%
Natick (BAN)
4.000%, 08/06/99 13,055 13,071
------------
19 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
MICHIGAN -- 2.9%
Hannahville Indian Community Finance & Building
Authority, Building Program, Series A
(LOC: First of America Expires: 06/15/05) (RB)
3.100%, 04/07/99 (A) (C) $ 4,000 $ 4,000
Michigan State Hospital Financing Authority,
Series A (LOC: First of America
Expires: 12/25/03) (RB)
3.150%, 04/07/99 (A) 3,200 3,200
Michigan State Hospital Financing Authority,
Series A (LOC: First of America
Expires: 12/15/03) (RB)
3.150%, 04/07/99 (A) 2,800 2,800
3.150%, 04/07/99 (A) 4,125 4,125
Michigan Strategic Fund (GO) (Ins: FGIC)
3.070%, 04/07/99 (A) (C) 7,495 7,495
------------
21,620
------------
MINNESOTA -- 8.1%
Bloomington Multifamily Housing Authority, Rental
Housing, Crow/Bloomington Project (LOC: Credit
Suisse NY Expires: 06/30/05) (RB)
3.100%, 04/07/99 (A) 17,005 17,005
Eden Prairie, Multifamily Housing Authority
(LOC: Barclays Expires: 11/15/00) (RB)
3.150%, 04/07/99 (A) 14,905 14,905
Hennepin County, Series A (GO)
4.500%, 12/01/99 1,985 2,004
Maple Grove Multifamily Revenue (LOC: Norwest Bank
Expires: 10/19/99) (RB)
3.000%, 04/07/99 (A) 2,660 2,660
Minneapolis Hospital Revenue Lifespan Inc-Abbott
Northwestern, Pre-refunded @ 102 (RB)
7.000%, 12/01/99 (B) 1,200 1,254
Minnesota State Agriculture & Economic Development
Board, Evangelical Lutheran Project
(LOC: Rabobank Expires: 03/26/07) (RB)
3.100%, 04/07/99 (A) 2,000 2,000
Regents of University of Minnesota (RB)
3.000%, 04/07/99 (A) 20,000 20,000
------------
59,828
------------
MISSOURI -- 0.6%
Missouri State Environmental Improvement
(LOC: UBS Expires: 06/15/99) (TECP)
2.950%, 06/14/99 1,500 1,500
20 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Missouri State Health & Educational Revenue,
Drury College, Series B (RB)
4.250%, 04/07/99 $ 3,120 $ 3,120
------------
4,620
------------
NEVADA -- 1.0%
Nevada State (GO)
3.070%, 04/07/99 (A) (C) 5,000 5,000
Nevada State, ABN AMRO Munitops
(GO) (Ins: MBIA)
3.160%, 04/07/99 (A) (C) 2,500 2,500
------------
7,500
------------
NEW HAMPSHIRE -- 0.3%
New Hampshire State Higher Educational &
Health Authority, Alice Peck Day Lifecare
Project (LOC: First Union
Expires: 02/15/01) (RB)
3.000%, 04/07/99 (A) 2,700 2,700
------------
NEW JERSEY -- 0.3%
New Jersey State (GO)
5.100%, 02/15/00 2,000 2,036
------------
NEW YORK -- 2.1%
New York State Dormitory Authority, Founding
Charitable Project (RB) (Ins: AMBAC)
3.050%, 04/07/99 (A) (C) 13,000 13,000
New York State Dormitory Authority, Founding
Charitable Project (LOC: Allied Irish
Expires: 07/01/07) (RB)
2.950%, 04/07/99 (A) 2,700 2,700
------------
15,700
------------
NORTH CAROLINA -- 0.5%
New Hanover County, Gang Nail Systems Project
(LOC: Harris Trust Expires: 12/10/99) (RB)
3.150%, 04/07/99 (A) (C) 3,500 3,500
North Carolina Medical Care Community Hospital
Revenue, Lexington Memorial Hospital Project
(LOC: First Union Expires: 04/08/00) (RB)
3.200%, 04/01/99 (A) 300 300
------------
3,800
------------
21 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
OHIO -- 1.4%
Ohio State (GO)
4.700%, 05/15/99 $ 3,075 $ 3,079
Warren County Industrial Development Authority,
Cincinnati Electric Project (LOC: Royal Bank
of Canada NY Expires: 06/17/99) (RB)
3.300%, 04/07/99 (A) 7,650 7,650
------------
10,729
------------
OKLAHOMA -- 6.2%
Garfield County Pollution Control (RB)
(GTY: Oklahoma Gas and Electric)
3.150%, 04/07/99 (A) 2,300 2,300
Muskogee Pollution Control (RB) (GTY: Oklahoma
Gas & Electric)
3.150%, 04/07/99 (A) 12,000 12,000
Oklahoma County Finance Authority (GO)
(GTY: Merrill)
3.120%, 04/07/99 (A) (C) 19,300 19,300
Tulsa Airport Improvement Trust, Tulsa
International Airport Project (RB) (Ins: FGIC)
3.000%, 04/07/99 (A) 4,000 4,000
Tulsa Industrial Authority (RB) (Ins: MBIA)
3.070%, 04/07/99 (A) (C) 7,970 7,970
------------
45,570
------------
PENNSYLVANIA -- 3.3%
Beaver County Pollution Control Revenue (LOC: Swiss
Bank of NY Expires: 10/26/99) (TECP)
2.800%, 04/15/99 1,400 1,400
Harrisburg Finance Authority Revenue (LOC: Anchor
National Life Insurance Expires: 05/01/99) (RB)
3.150%, 04/07/99 (A) (C) 13,300 13,300
Pittsburgh (GO) (Ins: FGIC)
3.050%, 04/07/99 (A) (C) 9,705 9,705
------------
24,405
------------
SOUTH CAROLINA -- 2.9%
South Carolina Public Service Authority (RB)
(Ins: FGIC)
3.070%, 04/07/99 (A) (C) 2,000 2,000
York County Pollution Control, Series N3
(National Rural) (RB)
3.000%, 09/15/99 (A) 5,950 5,950
York County (TECP) (GTY: Duke Power)
3.000%, 04/05/99 10,400 10,400
2.600%, 04/26/99 3,550 3,550
------------
21,900
------------
22 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
SOUTH DAKOTA -- 1.4%
South Dakota Health Facility,
Pre-refunded @ 102 (RB) (Ins: MBIA)
7.000%, 09/01/99 (B) $ 2,645 $ 2,733
Yankton Industrial Development, Alumax
Project (LOC: Bank of America
Expires: 05/20/99) (RB)
3.000%, 04/07/99 (A) (C) 7,700 7,700
------------
10,433
------------
TENNESSEE -- 3.3%
Maury County Health & Educational Facilities,
Southern Healthcare Systems Project A,
Series E (LOC: Bank One
Expires: 07/25/01) (RB)
3.050%, 04/07/99 (A) (C) 4,700 4,700
Montgomery County Public Building Authority,
Pooled Financing Revenue (LOC: NationsBank
Expires: 11/25/00) (RB)
3.000%, 04/07/99 (A) (C) 13,000 13,000
Nashville & Davidson Counties, Metropolitan
Government Industrial Development
(LOC: Barclays Expires: 11/15/00) (RB)
3.150%, 04/07/99 (A) 7,035 7,035
------------
24,735
------------
TEXAS -- 9.4%
Austin Combined Utility System (LOC: Morgan Guaranty
Expires: 12/12/99) (TECP)
3.050%, 08/13/99 4,650 4,650
Carroll Independent School District (GO) (PSF)
3.070%, 04/07/99 (A) (C) 4,450 4,450
Dallas (GO)
4.750%, 02/15/00 2,530 2,569
Houston Water & Sewer Revenue (RB) (Ins: FGIC)
3.070%, 04/07/99 (A) (C) 9,000 9,000
Hunt County Industrial Development Authority,
Trico Industries Project (LOC: ABN AMRO
Expires: 10/02/02) (RB)
3.000%, 04/07/99 (A) 5,730 5,730
Joshua Independent School District (GO)
(PSF)
3.070%, 04/07/99 (A) (C) 7,115 7,115
San Antonio Electric & Gas (Ins: MBIA) (RB)
3.070%, 04/07/99 (A) (C) 7,455 7,455
23 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Texas State Public Financing Authority
(TECP) (GTY: State of Texas)
2.950%, 05/12/99 $ 14,000 $ 14,000
2.950%, 06/16/99 8,500 8,500
Texas State Public Financing Authority,
Series A (GO) (GTY: State of Texas)
8.000%, 10/01/99 3,180 3,260
Texas State University System Revenue
(RB) (Ins: FSA)
4.500%, 03/15/00 3,095 3,138
------------
69,867
------------
UTAH -- 1.4%
Salt Lake County Housing Authority, Multifamily
Revenue, Santa Fe Apartments Project
(LOC: Dresdner Expires: 02/15/01) (RB)
3.000%, 04/07/99 (A) 1,900 1,900
Utah Highway (TECP) (GTY: State of Utah)
2.850%, 04/06/99 8,300 8,300
------------
10,200
------------
VERMONT -- 0.5%
Vermont State Student Loan Revenue
(LOC: NATWEST Expires: 12/06/01) (RB)
3.000%, 04/07/99 (A) 3,640 3,640
------------
VIRGINIA -- 1.9%
Alexandria Industrial Development Authority,
American Red Cross Project (LOC: First Union
Expires: 03/30/00) (RB)
3.050%, 04/07/99 (A) 6,980 6,980
Spotsylvania Industrial Development Authority,
Residential Care Facility, Chancellors Village,
Project A (LOC: First Union Expires: 10/01/01) (RB)
3.050%, 04/07/99 (A) 7,400 7,400
------------
14,380
------------
WASHINGTON -- 7.7%
Port of Seattle, Alaska Airlines Project,
(LOC: Bank of New York Expires: 07/31/00) (RB)
3.100%, 04/07/99 (A) (C) 4,600 4,600
Seattle (GO)
4.500%, 03/01/00 3,085 3,128
Washington State (GO)
3.000%, 04/07/99 (A) 4,000 4,000
24 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Washington State Housing Finance Authority,
YMCA Tacoma and Pierce Project A
(LOC: Keybank Expires: 12/22/03) (RB)
2.950%, 04/07/99 (A) $ 5,500 $ 5,500
Washington State Housing Finance Authority,
YMCA Tacoma and Pierce Project B
(LOC: Keybank Expires: 12/22/03) (RB)
2.950%, 04/07/99 (A) 5,500 5,500
Washington State, Non-profit Housing Authority,
Panorama City Project (LOC: Keybank
Expires: 11/15/04) (RB)
3.150%, 04/01/99 (A) 14,250 14,250
Washington State Public Power Supply Systems,
Nuclear Project #3 (RB)
3.070%, 04/07/99 (A) (C) 6,590 6,590
Washington State Public Power Supply Systems,
Nuclear Project #1 (RB)
3.100%, 04/07/99 (A) (C) 7,000 7,000
Washington State, Series R-98B (GO)
4.000%, 01/01/00 6,430 6,475
------------
57,043
------------
WISCONSIN -- 4.2%
Wisconsin State Health & Education Facilities
Authority, Blood Center Project, Series A
(LOC: M&I Expires: 06/15/02) (RB)
3.050%, 04/07/99 (A) 7,695 7,695
Wisconsin State Health & Education Facilities
Authority, Franciscan Healthcare, Series A-2
(LOC: Toronto Dominion Expires: 01/14/02) (RB)
3.050%, 04/07/99 (A) 7,320 7,320
Wisconsin State Health & Education Facilities
Authority, Froedtert Memorial Hospital Project
(LOC: M&I Expires: 04/15/02) (RB)
3.100%, 04/07/99 (A) 11,200 11,200
Wisconsin State Health & Education Facilities
Authority, Wheaton Franciscan Services
(LOC: Toronto Dominion Expires: 01/14/02) (RB)
3.050%, 04/07/99 (A) 625 625
Wisconsin State (TECP)
2.550%, 04/26/99 4,159 4,159
------------
30,999
------------
25 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
- --------------------------------------------------------------------------------
WYOMING -- 2.2%
Converse County (LOC: Deutsche Bank
Expires: 06/29/00) (TECP)
3.050%, 06/04/99 $ 3,800 $ 3,800
Gillette & Campbell Counties (LOC: Deutsche
Bank Expires: 06/29/99) (TECP)
2.700%, 04/06/99 3,700 3,700
2.700%, 04/06/99 1,200 1,200
Sweetwater County (LOC: UBS
Expires: 05/02/00) (TECP)
3.000%, 05/06/99 7,500 7,500
------------
16,200
------------
MULTISTATE -- 1.2%
Clipper Tax Exempt Trust 1998-2 (RB)
3.260%, 04/07/99 (A) (C) 8,600 8,600
------------
TOTAL MUNICIPAL BONDS
(Cost $720,550) 720,550
------------
MONEY MARKET FUNDS -- 2.7%
AIM Tax Free Institutional Cash Reserve 4,986,000 4,986
Federated Tax Free Money Market 14,606,000 14,606
------------
TOTAL MONEY MARKET FUNDS
(Cost $19,592) 19,592
------------
TOTAL INVESTMENTS -- 99.8%
(Cost $740,142) 740,142
------------
OTHER ASSETS AND LIABILITIES, NET -- 0.2% 1,799
------------
NET ASSETS:
Portfolio Capital--Class-A
($.01 par value--2 billion authorized)
based on 293,563,909 outstanding shares 293,529
Portfolio Capital--Class-D
($.01 par value--2 billion authorized)
based on 29,710,008 outstanding shares 29,709
Portfolio Capital--Class-Y
($.01 par value--2 billion authorized)
based on 418,670,895 outstanding shares 418,669
Undistributed net investment income 21
Accumulated net realized gain on investments 13
------------
TOTAL NET ASSETS -- 100.0% $ 741,941
------------
26 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TAX FREE OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION VALUE
- --------------------------------------------------------------------------------
Net asset value, offering price, and redemption
price per share--Class-A $ 1.00
------------
Net asset value, offering price, and redemption
price per share--Class-D $ 1.00
------------
Net asset value, offering price, and redemption
price per share--Class-Y $ 1.00
------------
(A)Variable Rate Security--the rate reported on the Statement of Net Assets is
the rate in effect as of March 31, 1999. The date shown is the next reset
date.
(B)Pre-refunded Security--Pre-refunded issues are typically backed by U.S.
Government Obligations. These bonds mature at the call date indicated. The
pre-refunded date is shown as the maturity date on the Statement of Net
Assets. See also the notes to the financial statements.
(C)Security sold within the terms of a private placement memorandum, exempt from
registration under section 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "qualified
institutional investors". These securities have been determined to be liquid
under guidelines established by the Board of Directors.
AMBAC--American Municipal Bond Assurance Company
BAN--Bond Anticipation Note
BIG--Bond Investors Guaranty Insurance Company
FGIC--Financial Guaranty Insurance Corporation
FSA--Financial Security Assurance
GO--General Obligation
GTY--Guaranty
Ins--Insured
LOC--Letter of Credit
M&I--Marshall & Ilsley
MBIA--Municipal Bond Insurance Association
NATWEST--National Westminster
PSF--Permanent School Fund
RB--Revenue Bond
TECP--Tax Exempt Commercial Paper
TRAN--Tax and Revenue Anticipation Note
UBS--United Bank of Switzerland
The accompanying notes are an integral part of the financial statements.
27 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TREASURY OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 24.9%
U.S. Treasury Bill
4.763%, 04/22/99 (A) $ 200,000 $ 199,448
U.S. Treasury Notes
7.000%, 04/15/99 50,000 50,026
6.375%, 04/30/99 125,000 125,077
6.000%, 06/30/99 50,000 50,055
6.750%, 06/30/99 75,000 75,218
6.375%, 07/15/99 50,000 50,128
5.875%, 08/31/99 125,000 125,372
5.750%, 09/30/99 100,000 100,544
7.125%, 09/30/99 50,000 50,694
5.875%, 11/15/99 100,000 100,701
5.625%, 11/30/99 50,000 50,315
7.750%, 11/30/99 50,000 50,997
7.750%, 12/31/99 50,000 51,116
5.375%, 01/31/00 25,000 25,124
7.750%, 01/31/00 50,000 51,255
5.875%, 02/15/00 75,000 75,642
5.500%, 02/29/00 25,000 25,173
7.125%, 02/29/00 75,000 76,426
6.875%, 03/31/00 100,000 101,886
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,435,197) 1,435,197
------------
REPURCHASE AGREEMENTS -- 75.2%
ABN AMRO Securities
4.900%, dated 03/31/99, matures
04/01/99 repurchase price $280,038,111
(collateralized by U.S. Treasury Obligations:
total market value $285,601,072) 280,000 280,000
Bear Stearns
4.950%, dated 03/31/99, matures
04/01/99 repurchase price $ 280,038,500
(collateralized by U.S. Treasury STRIPS:
total market value $285,711,000) 280,000 280,000
C S First Boston
4.930%, dated 03/31/99, matures
04/01/99 repurchase price $250,034,236
(collateralized by U.S. Treasury Obligations:
total market value $256,497,675) 250,000 250,000
Donaldson Lufkin & Jenrette
4.900%, dated 03/31/99, matures
04/01/99 repurchase price $700,095,278
(collateralized by U.S. Treasury Obligations:
total market value $714,000,143) 700,000 700,000
28 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TREASURY OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Goldman Sachs
4.900%, dated 03/31/99, matures
04/01/99, repurchase price $260,035,389
(collateralized by U.S. Treasury Obligations:
total market value $265,201,010) $ 260,000 $ 260,000
Lehman Brothers
4.875%, dated 03/31/99, matures
04/01/99, repurchase price $350,372,440
(collateralized by U.S. Treasury Obligations:
total market value $357,331,500) 350,325 350,325
Morgan Stanley Dean Witter
5.075%, dated 03/31/99, matures
04/01/99, repurchase price $250,035,243
(collateralized by U.S. Treasury Bill:
total market value $256,252,889) 250,000 250,000
Prudential Securities
4.900%, dated 03/31/99, matures
04/01/99, repurchase price $280,038,111
(collateralized by U.S. Treasury Obligations:
total market value $285,600,230) 280,000 280,000
Salomon Smith Barney
4.950%, dated 03/31/99, matures
04/01/99, repurchase price $600,082,500
(collateralized by U.S. Treasury Obligations:
total market value $612,765,761) 600,000 600,000
Societe Generale
4.900%, dated 03/31/99, matures
04/01/99, repurchase price $800,108,889
(collateralized by U.S. Treasury Obligations:
total market value $817,190,407) 800,000 800,000
Warburg Dillon
4.920%, dated 03/31/99, matures
04/01/99, repurchase price $280,038,267
(collateralized by U.S. Treasury Obligations:
total market value $285,604,514) 280,000 280,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $4,330,325) 4,330,325
------------
TOTAL INVESTMENTS -- 100.1%
(Cost $5,765,522) 5,765,522
------------
OTHER ASSETS AND LIABILITIES, NET -- (0.1%) (8,010)
------------
29 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
NET ASSETS MARCH 31, 1999 (UNAUDITED)
TREASURY OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION VALUE (000)
- --------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class-A
($.01 par value--2 billion authorized)
based on 27,830,257 outstanding shares $ 27,830
Portfolio Capital--Class-D
($.01 par value--2 billion authorized)
based on 3,734,422,203 outstanding shares 3,734,425
Portfolio Capital--Class-Y
($.01 par value--2 billion authorized)
based on 1,995,159,140 outstanding shares 1,995,160
Undistributed net investment income 10
Accumulated net realized gain on investments 87
------------
TOTAL NET ASSETS -- 100.0% $ 5,757,512
------------
Net asset value, offering price, and redemption
price per share--Class-A $ 1.00
------------
Net asset value, offering price, and redemption
price per share--Class-D $ 1.00
------------
Net asset value, offering price, and redemption
price per share--Class-Y $ 1.00
------------
(A) The rate shown is the effective yield at time of purchase.
STRIPS--Separately Traded Registered Interest and Principal Securities
The accompanying notes are an integral part of the financial statements.
30 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.
31 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
OPERATIONS
FOR THE SIX MONTHS ENDED MARCH 31, 1999 (UNAUDITED), IN THOUSANDS
GOVERNMENT PRIME
OBLIGATIONS OBLIGATIONS
FUND FUND
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 43,644+ $273,037
- --------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 3,476 20,617
Less: Waiver of investment advisory fees (640) (2,884)
Administrator fees 540 3,039
Distribution fees - Class-A 520 4,997
Distribution fees - Class-B -- 17
Distribution fees - Class-D 267 195
Custodian fees 261 1,547
Registration fees 83 39
Professional fees 26 129
Transfer agent fees 148 1,698
Printing 61 361
Directors' fees 17 103
Other 36 75
- --------------------------------------------------------------------------------
TOTAL NET EXPENSES 4,795 29,933
================================================================================
Investment income - net 38,849 243,104
- --------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS 26 180
================================================================================
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 38,875 $ 243,284
================================================================================
+ Includes income from securities lending program. See the Notes to the
Financial Statements for additional information.
The accompanying notes are an integral part of the financial statements.
32 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
TAX FREE TREASURY
OBLIGATIONS OBLIGATIONS
FUND FUND
- --------------------------------
$ 10,639 $ 145,896
- --------------------------------
1,350 11,864
(268) (1,864)
199 1,749
363 66
-- --
23 2,944
101 890
50 221
9 74
78 99
24 208
7 59
18 48
- --------------------------------
1,954 16,358
================================
8,685 129,538
- --------------------------------
14 61
================================
$ 8,699 $ 129,599
================================
33 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
STATEMENTS OF
CHANGES IN NET ASSETS IN THOUSANDS
<TABLE>
<CAPTION>
GOVERNMENT
OBLIGATIONS FUND
- -----------------------------------------------------------------------------------------------------
10/1/98 10/1/97
to to
3/31/99 9/30/98
(unaudited)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS:
Investment income - net $ 38,849 $ 77,013
Net realized gain (loss) on investments 26 (260)
- -----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 38,875 76,753
- -----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class-A (8,885) (3,226)
Class-B -- --
Class-C -- --
Class-D (7,864) (20,839)
Class-Y (22,117) (52,935)
Net realized gain on investments
Class-A -- --
Class-B -- --
Class-C -- --
Class-D -- --
Class-Y -- --
- -----------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (38,866) (77,000)
=====================================================================================================
CAPITAL SHARE TRANSACTIONS
AT NET ASSET VALUE OF $1.00 PER SHARE:
Class-A:
Proceeds from sales 785,631 560,552
Shares issued in connection with acquisition of Qualivest Fund -- --
Reinvestment of distributions 8,359 1,907
Payments for redemptions (664,240) (237,478)
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class-A transactions 129,750 324,981
- -----------------------------------------------------------------------------------------------------
Class-B:
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
- -----------------------------------------------------------------------------------------------------
Increase in net assets from
Class-B transactions -- --
- -----------------------------------------------------------------------------------------------------
Class-C:
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
- -----------------------------------------------------------------------------------------------------
Increase in net assets from
Class-C transactions -- --
- -----------------------------------------------------------------------------------------------------
Class-D:
Proceeds from sales 637,598 2,648,770
Payments for redemptions (684,750) (2,601,752)
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class-D transactions (47,152) 47,018
- -----------------------------------------------------------------------------------------------------
Class-Y:
Proceeds from sales 1,529,648 3,130,459
Shares issued in connection with acquisition of Qualivest Fund -- --
Reinvestment of distributions 12,197 29,035
Payments for redemptions (1,526,938) (3,105,431)
- -----------------------------------------------------------------------------------------------------
Increase in net assets from
Class-Y transactions 14,907 54,063
- -----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 97,505 426,062
- -----------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 97,514 425,815
NET ASSETS AT BEGINNING OF PERIOD 1,709,210 1,283,395
=====================================================================================================
NET ASSETS AT END OF PERIOD (B) $ 1,806,724 $ 1,709,210
=====================================================================================================
</TABLE>
(A)The Statements of Changes in Net Assets for the Tax Free Obligations Fund
reflect the change of the Fund's year end from November 30th to September
30th.
(B)Includes (distribution in excess of) undistributed net investment income
(000) of $(4) and $13 for Government Obligations Fund, $(8) and $180 for
Prime Obligations Fund, and $10 and $8 for Treasury Obligations Fund at March
31, 1999, and September 30, 1998, respectively. Includes undistributed net
investment income of $21, $16, $2 for Tax Free Obligations Fund for March 31,
1999, September 30, 1998, and November 30, 1997, respectively.
The accompanying notes are an integral part of the financial statements.
34 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
<TABLE>
<CAPTION>
PRIME TAX FREE TREASURY
OBLIGATIONS FUND OBLIGATIONS FUND (A) OBLIGATIONS FUND
- ------------------------------------------------------------------------------------------------------------------------------
10/1/98 10/1/97 10/1/98 12/1/97 8/1/97 10/1/98 10/1/97
to to to to to to to
3/31/99 9/30/98 3/31/99 9/30/98 11/30/97 3/31/99 9/30/98
(unaudited) (unaudited) (unaudited)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 243,104 $ 335,494 $ 8,685 $ 7,595 $ 379 $ 129,538 $ 242,187
180 (19) 14 -- -- 61 26
- ------------------------------------------------------------------------------------------------------------------------------
243,284 335,475 8,699 7,595 379 129,599 242,213
- ------------------------------------------------------------------------------------------------------------------------------
(90,334) (64,277) (3,500) (2,317) (287) (1,109) (3,426)
(65) (88) -- -- -- -- --
(1) -- -- -- -- -- --
(6,084) (13,417) (404) (441) -- (84,736) (167,637)
(146,808) (257,527) (4,776) (4,823) (94) (43,691) (71,113)
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- -- (9)
-- -- -- -- -- -- (4)
- ------------------------------------------------------------------------------------------------------------------------------
(243,292) (335,309) (8,680) (7,581) (381) (129,536) (242,189)
==============================================================================================================================
7,897,239 7,409,332 763,641 574,201 13,623 93,944 267,966
-- 226,201 -- -- -- -- 86,624
87,661 48,974 3,395 1,714 295 1,261 3,024
(7,473,369) (4,203,635) (720,659) (357,424) (16,923) (169,110) (255,879)
- ------------------------------------------------------------------------------------------------------------------------------
511,531 3,480,872 46,377 218,491 (3,005) (73,905) 101,735
- ------------------------------------------------------------------------------------------------------------------------------
3,569 3,185 -- -- -- -- --
57 81 -- -- -- -- --
(1,869) (2,888) -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
1,757 378 -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
147 -- -- -- -- -- --
-- -- -- -- -- -- --
(18) -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
129 -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
549,266 1,278,512 29,208 59,995 1 6,866,373 10,374,909
(473,633) (1,157,905) (29,594) (29,901) -- (6,986,865) (9,367,195)
- ------------------------------------------------------------------------------------------------------------------------------
75,633 120,607 (386) 30,094 1 (120,492) 1,007,714
- ------------------------------------------------------------------------------------------------------------------------------
6,105,835 9,928,887 365,256 500,926 13,113 4,179,627 8,698,622
-- 257,499 -- -- -- -- 11,790
63,932 98,240 58 129 62 9,531 12,681
(5,598,377) (8,454,911) (219,627) (238,776) (11,608) (3,997,602) (7,817,288)
- ------------------------------------------------------------------------------------------------------------------------------
571,390 1,829,715 145,687 262,279 1,567 191,556 905,805
- ------------------------------------------------------------------------------------------------------------------------------
1,160,440 5,431,572 191,678 510,864 (1,437) (2,841) 2,015,254
- ------------------------------------------------------------------------------------------------------------------------------
1,160,432 5,431,738 191,697 510,878 (1,439) (2,778) 2,015,278
9,380,954 3,949,216 550,244 39,366 40,805 5,760,290 3,745,012
==============================================================================================================================
$ 10,541,386 $ 9,380,954 $ 741,941 $ 550,244 $ 39,366 $ 5,757,512 $ 5,760,290
==============================================================================================================================
</TABLE>
35 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING, THROUGHOUT THE PERIODS ENDED SEPTEMBER 30,
UNLESS OTHERWISE INDICATED
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
- --------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND
Class-A
1999* (unaudited) $ 1.00 $ 0.021 $ (0.021) $ 1.00
1998(1) 1.00 0.021 (0.021) 1.00
Class-D
1999* $ 1.00 $ 0.022 $ (0.022) $ 1.00
1998 1.00 0.050 (0.050) 1.00
1997 1.00 0.049 (0.049) 1.00
1996 1.00 0.050 (0.050) 1.00
1995(2) 1.00 0.038 (0.038) 1.00
Class-Y
1999* (unaudited) $ 1.00 $ 0.023 $ (0.023) $ 1.00
1998 1.00 0.052 (0.052) 1.00
1997 1.00 0.051 (0.051) 1.00
1996 1.00 0.051 (0.051) 1.00
1995 1.00 0.054 (0.054) 1.00
1994 1.00 0.034 (0.034) 1.00
PRIME OBLIGATIONS FUND
Class-A
1999* (unaudited) $ 1.00 $ 0.023 $ (0.023) $ 1.00
1998 1.00 0.050 (0.050) 1.00
1997 1.00 0.049 (0.049) 1.00
1996 1.00 0.050 (0.050) 1.00
1995(2) 1.00 0.038 (0.038) 1.00
Class-B
1999* (unaudited) $ 1.00 $ 0.019 $ (0.019) $ 1.00
1998 1.00 0.042 (0.042) 1.00
1997 1.00 0.042 (0.042) 1.00
1996 1.00 0.042 (0.042) 1.00
1995(3) 1.00 0.032 (0.032) 1.00
Class-C
1999(5) $ 1.00 $ 0.006 $ (0.006) $ 1.00
Class-D
1999* (unaudited) $ 1.00 $ 0.024 $ (0.024) $ 1.00
1998 1.00 0.051 (0.051) 1.00
1997 1.00 0.050 (0.050) 1.00
1996 1.00 0.051 (0.051) 1.00
1995(4) 1.00 0.038 (0.038) 1.00
Class-Y
1999* (unaudited) $ 1.00 $ 0.024 $ (0.024) $ 1.00
1998 1.00 0.053 (0.053) 1.00
1997 1.00 0.052 (0.052) 1.00
1996 1.00 0.052 (0.052) 1.00
1995 1.00 0.055 (0.055) 1.00
1994 1.00 0.035 (0.035) 1.00
- --------------------------------------------------------------------------------
+ Returns are for the period indicated and have not been annualized.
* For the period ended March 31, 1999. All ratios have been annualized.
(1)Commenced operations on April 29, 1998. All ratios for the period have been
annualized.
(2)Commenced operations on January 21, 1995. All ratios for the period have been
annualized.
(3)Commenced operations on January 23, 1995. All ratios for the period have been
annualized.
(4)Commenced operations on January 24, 1995. All ratios for the period have been
annualized.
(5)For the period ended March 31, 1999. Commenced operations on February 1,
1999. All ratios for the period have been annualized.
The accompanying notes are an integral part of the financial statements.
36 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
RATIO OF
RATIO OF NET EXPENSES TO
RATIO OF INVESTMENT AVERAGE
NET ASSETS EXPENSES TO INCOME TO NET ASSETS
TOTAL END OF AVERAGE AVERAGE (EXCLUDING
RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- -----------------------------------------------------------------------------
2.15%+ $ 454,770 0.75% 4.27% 0.82%
2.10+ 325,024 0.70 4.93 0.76
2.23%+ $ 336,998 0.60% 4.43% 0.67%
5.15 384,143 0.60 5.03 0.67
5.04 337,199 0.60 4.92 0.67
5.08 269,382 0.60 4.96 0.69
3.85+ 198,859 0.60 5.45 0.70
2.30%+ $1,014,956 0.45% 4.57% 0.52%
5.30 1,000,043 0.45 5.18 0.52
5.20 946,196 0.45 5.07 0.52
5.24 777,594 0.45 5.10 0.54
5.55 551,286 0.45 5.44 0.60
3.48 455,869 0.45 3.61 0.61
2.28%+ $4,210,888 0.78% 4.52% 0.84%
5.15 3,699,197 0.70 5.00 0.79
5.06 218,261 0.70 4.95 0.77
5.08 135,146 0.70 4.94 0.79
3.84+ 96,083 0.70 5.43 0.82
1.94%+ $ 4,154 1.45% 3.85% 1.51%
4.37 2,397 1.45 4.29 1.53
4.27 2,018 1.45 4.17 1.52
4.29 1,763 1.45 4.15 1.54
3.28+ 14 1.45 4.70 1.57
0.59%+ $ 129 1.45% 3.64% 1.51%
2.37%+ $ 309,306 0.60% 4.68% 0.66%
5.26 233,675 0.60 5.13 0.68
5.16 113,064 0.60 5.02 0.67
5.18 109,213 0.60 4.98 0.69
3.86+ 9,735 0.60 5.51 0.72
2.45%+ $6,016,909 0.45% 4.85% 0.51%
5.42 5,445,685 0.45 5.28 0.53
5.32 3,615,873 0.45 5.19 0.52
5.34 3,166,213 0.45 5.20 0.54
5.64 2,911,055 0.45 5.53 0.60
3.56 1,307,347 0.45 3.58 0.60
- -----------------------------------------------------------------------------
37 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FINANCIAL HIGHLIGHTS
FOR A SHARE OUTSTANDING, THROUGHOUT THE PERIODS ENDED SEPTEMBER 30,
UNLESS OTHERWISE INDICATED
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
- --------------------------------------------------------------------------------
TAX FREE OBLIGATIONS FUND(A)
Class-A
1999* (unaudited) $ 1.00 $ 0.012 $ (0.012) $ 1.00
1998(1) 1.00 0.024 (0.024) 1.00
1997(2) 1.00 0.010 (0.010) 1.00
1997(3) 1.00 0.027 (0.027) 1.00
1996(3) 1.00 0.028 (0.028) 1.00
1995(3)(4) 1.00 0.017 (0.017) 1.00
Class-D
1999* (unaudited) $ 1.00 $ 0.013 $ (0.013) $ 1.00
1998(1) 1.00 0.025 (0.025) 1.00
1997(5) 1.00 0.000 (0.000) 1.00
Class-Y
1999* (unaudited) $ 1.00 $ 0.014 $ (0.014) $ 1.00
1998(1) 1.00 0.026 (0.026) 1.00
1997(2) 1.00 0.011 (0.011) 1.00
1997(3) 1.00 0.031 (0.031) 1.00
1996(3) 1.00 0.032 (0.032) 1.00
1995(3)(4) 1.00 0.019 (0.019) 1.00
TREASURY OBLIGATIONS FUND
Class-A
1999* (unaudited) $ 1.00 $ 0.021 $ (0.021) $ 1.00
1998(6) 1.00 0.045 (0.045) 1.00
Class-D
1999* $ 1.00 $ 0.022 $ (0.022) $ 1.00
1998 1.00 0.050 (0.050) 1.00
1997 1.00 0.049 (0.049) 1.00
1996 1.00 0.049 (0.049) 1.00
1995 1.00 0.051 (0.051) 1.00
1994(8) 1.00 0.031 (0.031) 1.00
Class-Y
1999* (unaudited) $ 1.00 $ 0.023 $ (0.023) $ 1.00
1998 1.00 0.051 (0.051) 1.00
1997 1.00 0.050 (0.050) 1.00
1996 1.00 0.050 (0.050) 1.00
1995(7) 1.00 0.038 (0.038) 1.00
- --------------------------------------------------------------------------------
+ Returns are for the period indicated and have not been annualized.
* For the period ended March 31, 1999. All ratios have been annualized.
(A)The financial highlights for Tax Free Obligations Fund as set forth herein
include the historical financial highlights of the Qualivest Tax-Free Money
Market Fund class-A and class-Y shares. The assets of Qualivest Tax Free
Money Market Fund were acquired by Tax Free Obligations Fund on November 25,
1997. In connection with such acquisition, (i) class-A shares of the
Qualivest Tax-Free Money Market Fund were exchanged for class-A shares of Tax
Free Obligations Fund; and (ii) Qualivest class-Y and class-Q shares were
exchanged for class-Y shares of Tax Free Obligations Fund.
(1)For the period December 1, 1997 to September 30, 1998. All ratios for the
period have been annualized. The First American Board of Directors approved a
change in the funds' fiscal year end from November 30 to September 30,
effective September 30, 1998.
(2)For the period August 1, 1997 to November 30, 1997. All ratios for the period
have been annualized. The First American Board of Directors approved a change
to the funds' fiscal year end from July 31 to November 30, effective November
30, 1997.
(3)For the period ended July 31.
(4)Commenced operations January 9, 1995. All ratios for the period have been
annualized.
(5)Commenced operations November 26, 1997. All ratios for the period have been
annualized. For the period ended November 30.
(6)Commenced operations on November 3, 1997. All ratios for the period have been
annualized.
(7)Commenced operations on January 24, 1995. All ratios for the period have been
annualized.
(8)Commenced operations on October 4, 1993. All ratios for the period have been
annualized.
The accompanying notes are an integral part of the financial statements.
38 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
RATIO OF
RATIO OF NET EXPENSES TO
RATIO OF INVESTMENT AVERAGE
NET ASSETS EXPENSES TO INCOME TO NET ASSETS
TOTAL END OF AVERAGE AVERAGE (EXCLUDING
RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS)
- -----------------------------------------------------------------------------
1.22%+ $ 293,552 0.73% 2.43% 0.81%
2.45+ 247,154 0.70 2.84 0.83
0.96+ 28,662 0.89 2.83 1.23
2.76 31,668 0.88 2.73 1.23
2.81 30,143 0.89 2.78 1.25
1.66+ 33,569 1.00 2.98 1.36
1.29%+ $ 29,710 0.60% 2.58% 0.68%
2.51+ 30,095 0.60 3.02 0.73
0.04+ 1 0.60 3.20 9.07
1.37%+ $ 418,679 0.45% 2.69% 0.53%
2.67+ 272,995 0.45 3.13 0.58
1.08+ 10,703 0.64 3.09 0.97
3.17 9,137 0.48 3.13 0.83
3.22 3,895 0.41 2.92 0.79
1.88+ 1,264 0.59 3.38 0.94
2.12%+ $ 27,856 0.70% 4.28% 0.76%
4.54+ 101,749 0.70 4.88 0.76
2.17%+ $3,734,480 0.60% 4.32% 0.66%
5.10 3,854,933 0.60 4.98 0.66
4.98 2,847,215 0.60 4.88 0.68
5.00 1,616,130 0.60 4.86 0.70
5.22 1,038,818 0.60 5.13 0.70
3.12+ 746,090 0.58 3.19 0.68
2.25%+ $1,995,176 0.45% 4.47% 0.51%
5.26 1,803,608 0.45 5.13 0.51
5.14 897,797 0.45 5.03 0.53
5.15 317,392 0.45 5.00 0.55
3.83+ 117,171 0.45 5.50 0.55
- -----------------------------------------------------------------------------
39 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS MARCH 31, 1999 (UNAUDITED)
1 ORGANIZATION
The First American Government Obligations Fund, Prime Obligations Fund, Tax Free
Obligations Fund, and Treasury Obligations Fund (collectively, the "Funds") are
funds offered by First American Funds, Inc. ("FAF"). FAF is registered under the
Investment Company Act of 1940, as amended, as an open-end investment management
company. FAF's articles of incorporation permit the Board of Directors to create
additional funds in the future.
FAF offers class-A, class-B, class-C, class-D and class-Y shares. Class-B of the
Prime Obligations Fund are only available pursuant to an exchange for class-B
shares of another fund in the First American Family of Funds. Class-A shares are
not subject to sales charges. Class-B shares may be subject to a contingent
deferred sales charge for six years and automatically convert to class-A shares
after eight years. Class-C shares may be subject to a contingent deferred sales
charge for 18 months. Class-D and class-Y shares are offered only to qualifying
institutional investors. Class-B and class-C shares are not offered by the
Government Obligations Fund, Tax Free Obligations Fund, or Treasury Obligations
Fund.
The Funds' prospectus provides a description of each Fund's investment
objectives, policies and strategies. All classes of shares in FAF have identical
voting, dividend, liquidation and other rights, and the same terms and
conditions, except that the level of distribution fees charged may differ among
classes.
2 SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
The significant accounting policies followed by the Funds are as follows:
SECURITY VALUATION - Investment securities held are stated at amortized cost,
which approximates market value. Under
40 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
the amortized cost method, any discount or premium is amortized ratably to the
maturity of the security and is included in interest income.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - The Funds record security
transactions on the trade date of the security purchase or sale. Interest
income, including amortization of bond premium and discount, is recorded on the
accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions from net investment income are
declared on a daily basis and are payable on the first business day of the
following month.
EXPENSES - Expenses that are directly related to one of the Funds are charged
directly to that Fund. Other operating expenses are allocated to the Funds on
the basis of relative net assets. Class specific expenses are borne by that
class. Income, other expenses and realized and unrealized gains and losses of a
Fund are allocated to the respective class on the basis of the relative net
assets each day.
FEDERAL TAXES - It is each Fund's intention to continue to qualify as a
regulated investment company and to distribute all of its taxable income.
Accordingly, no provision for Federal income taxes is required. For Federal
income tax purposes, required distributions related to realized gains from
security transactions are computed as of October 31st. The amounts of
distributions from net investment income and net realized capital gains are
determined in accordance with federal income tax regulations, which may differ
from those amounts determined under generally accepted accounting principles.
These book/tax differences are either temporary or permanent in nature.
REPURCHASE AGREEMENTS - Each Fund may enter into repurchase agreements with
member banks of the Federal Deposit Insurance Corporation or registered broker
dealers whom the Advisor deems creditworthy under guidelines
41 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS MARCH 31, 1999 (UNAUDITED)
approved by the Board of Directors, subject to the seller's agreement to
repurchase such securities at a mutually agreed upon date and price. The
repurchase price generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates.
Securities pledged as collateral for repurchase agreements are held by the
custodian bank until the respective agreements mature. Each Fund may also invest
in tri-party repurchase agreements. Securities held as collateral for tri-party
repurchase agreements are maintained in a segregated account by the broker's
custodian bank until the maturity of the repurchase agreement. Provisions of the
repurchase agreements ensure that the market value of the collateral, including
accrued interest thereon, is sufficient in the event of default of the
counterparty. If the counterparty defaults and the value of the collateral
declines or if the counterparty enters an insolvency proceeding, realization of
the collateral by the Fund may be delayed or limited.
SECURITIES LENDING - Each Fund may lend up to one-third of the value of its
total assets to broker-dealers, banks or other institutional borrowers of
securities in order to earn additional income. Each Fund's policy is to maintain
collateral in the form of cash, United States Government securities or other
high grade debt obligations equal to at least 100% of the value of securities
loaned. The collateral is then marked to market daily until the securities are
returned.
HISTORICAL FINANCIAL STATEMENT INFORMATION - The financial information presented
for Tax Free Obligations Fund prior to November 25, 1997, is that of the former
Qualivest Tax Free Money Market Fund. The historical financial information of
the Qualivest Fund was carried over to the newly formed FAF Fund.
42 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The preparation of
financial statements, in conformity with generally accepted accounting
principles, requires management to make estimates and assumptions that affect
the reported amount of net assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
results of operations during the reporting period. Actual results could differ
from those estimates.
3 FEES AND EXPENSES
ADVISORY FEES - Pursuant to an investment advisory agreement (the Agreement),
U.S. Bank National Association (the Advisor) manages each Fund's assets and
furnishes related office facilities, equipment, research and personnel. The
Agreement requires each Fund to pay the Advisor a monthly fee based upon average
daily net assets. The fee for each of the Funds is equal to an annual rate of
.40% of the average daily net assets.
ADMINISTRATION FEES - SEI Investments Management Corporation (SIMC) provides
administrative services, including certain accounting, legal and shareholder
services, at an annual rate of .07% of each Fund's average daily net assets. To
the extent that the aggregate net assets of the First American Family of Funds
exceed $8 billion, the annual rate for each FAF Fund is reduced to .055% for its
relative share of the excess net assets. Fees are computed daily and paid
monthly.
SUB-ADMINISTRATION FEES - U.S. Bank National Association assists the
Administrator and provides sub-administration services for the Funds. For these
services, the Administrator compensates the sub-administrator monthly at an
annual rate of up to 0.05% of each Fund's average daily net assets. The fees for
the six months ended March 31, 1999, were approximately .025% of average daily
net assets. Under this agreement, SIMC paid U.S. Bank National Association
43 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS MARCH 31, 1999 (UNAUDITED)
$2,289,000 in aggregate for the six months ended March 31, 1999 for the Funds
included in this report.
CUSTODIAN FEES - Through a separate contractual agreement, U.S. Bank National
Association serves as the Funds' custodian. The fee for each fund is equal to an
annual rate of .03% of average daily net assets.
DISTRIBUTION FEES - SEI Investments Distribution Co. (SIDCO) serves as
distributor of the Funds. Under the distribution plan, each Fund pays SIDCO a
monthly distribution fee at an annual rate of .25% of each Fund's average daily
net assets of the class-A shares, 1.00% of the class-B and class-C shares, and
.15% of the class-D shares, which may be used by SIDCO to provide compensation
for sales support and distribution activities. No distribution fees are paid by
class-Y shares. Under the agreement, SIDCO paid affiliates of U.S. Bank National
Association and its affiliates the following amounts, for the period ended March
31, 1999:
---------------------------------------------
U.S. Bank National Association $4,386,000
U.S. Bancorp Piper Jaffray 4,853,958
Var & Co. 638
---------------------------------------------
TRANSFER AGENT FEES - DST Systems, Inc. provides transfer agency services for
the Funds. Effective October 1, 1998, FAF has appointed U.S. Bank National
Association as servicing agent to perform certain transfer agent and dividend
disbursing agent services with respect to the class-A, class-B and class-C
shares of the Funds held through accounts at U.S. Bank National Association and
its affiliates. For the six months ended March 31, 1999, fees paid to U.S. Bank
were as follows (000):
---------------------------------------------
Government Obligations Fund $ 107
Prime Obligations Fund 1,994
Tax Free Obligations Fund 58
Treasury Obligations Fund --
---------------------------------------------
44 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
OTHER FEES - In addition to the investment advisory and management fees,
custodian fees, distribution fees, administrator and transfer agent fees, each
Fund is responsible for paying most other operating expenses including
organization costs, fees and expenses of outside directors, registration fees,
printing shareholder reports, legal, auditing, insurance and other miscellaneous
expenses.
For the six months ended March 31, 1999, legal fees and expenses were paid to a
law firm of which the Secretary of the Funds is a partner.
SALES CHARGES - Class-B shares are subject to a Contingent Deferred Sales Charge
(CDSC), imposed on redemptions, made in class-B shares for the first six years,
and automatically convert to class-A shares after eight years. The CDSC varies
depending on the number of years from time of payment for the purchase of
class-B shares until the redemption of such shares.
CONTINGENT DEFERRED SALES CHARGE
AS A PERCENTAGE OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
------------------------------------------------------
First 5.00%
Second 5.00%
Third 4.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh 0.00%
Eighth 0.00%
------------------------------------------------------
A CDSC of 1.00% is imposed on redemptions made in class-C shares for the first
18 months.
The CDSC for class-B shares and class-C shares is imposed on the value of the
purchased shares, or the value at the time of redemption, whichever is less.
45 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS MARCH 31, 1999 (UNAUDITED)
4 SECURITIES LENDING TRANSACTIONS
In order to generate additional income, certain Funds may lend portfolio
securities representing up to one-third of the value of total assets (which
includes collateral received for securities on loan) to broker dealers, banks,
or other institutional borrowers of securities. As with other extensions of
credit, there may be risks of delay in recovery of the securities or even loss
of rights in the collateral should the borrower of the security fail
financially. The market value of the securities on loan at March 31, 1999, the
collateral held at March 31, 1999, with respect to such loans, and income
generated during the six months ended March 31, 1999, from the program were as
follows (000):
MARKET VALUE OF INCOME RECEIVED FROM
FUND LOANED SECURITIES SECURITIES LENDING
- --------------------------------------------------------------------------------
Government Obligations $380,978 $76
- --------------------------------------------------------------------------------
MARKET VALUE OF COLLATERAL PURCHASED WITH CASH RECEIVED
-------------------------------------------------------
REPURCHASE MONEY MARKET FIXED INCOME
FUND AGREEMENTS INSTRUMENTS SECURITIES TOTAL
- --------------------------------------------------------------------------------
Government Obligations $380,163 $1,611 $ -- $381,774
- --------------------------------------------------------------------------------
U.S. Bank National Association acts as the securities lending agent in
transactions involving the lending of portfolio securities on behalf of the
Funds. For these services, U.S. Bank National Association received $47,000 for
the six months ended March 31, 1999.
46 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
5 CONCENTRATION OF CREDIT RISK
The Tax Free Obligations Fund invests in securities that include revenue bonds,
tax and revenue anticipation notes, and general obligation bonds. At March 31,
1999, the percentage of portfolio investments by each revenue source was as
follows:
TAX FREE
OBLIGATIONS
FUND
-------------------------------------------------
Revenue Bonds:
Education 5%
Health Care Bonds 22
Transportation Bonds 1
Utility Bonds 19
Pollution Control Bonds 3
Public Facility Bonds 4
Housing Bonds 14
Other 6
General Obligations 21
Anticipation Notes 5
-------------------------------------------------
100%
-------------------------------------------------
The credit ratings of long-term debt as a percentage of total market value of
investments at March 31, 1999, was as follows:
TAX FREE
OBLIGATIONS
STANDARD & POOR'S/MOODY'S RATINGS: FUND
-------------------------------------------------
AAA/Aaa 36%
AA/Aa 34
A/A 23
NR 7
-------------------------------------------------
100%
-------------------------------------------------
Securities rated by only one agency are shown in that category. Securities rated
by both agencies are shown with their lowest rating.
47 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS MARCH 31, 1999 (UNAUDITED)
6 COMMON TRUST FUND CONVERSIONS
On August 8, 1997, certain Common Trust Funds of the Advisor and its affiliates
were converted into FAF. The Funds involved in the conversion are as follows:
COMMON TRUST FUND FAF FUND
- --------------------------------------------------------------------------------
US Bancorp Daily Intermediate Trust Prime Obligations Fund
US Bancorp Daily Intermediate Trust Treasury Treasury Obligations Fund
- --------------------------------------------------------------------------------
The assets, which consisted of securities and related receivables, were
converted on a tax-free basis. The number of shares issued for each Fund and the
net assets of each Fund (including net unrealized gains and losses) immediately
before the conversion were as follows:
NET UNREALIZED
COMMON TRUST FUND ASSETS GAIN/(LOSS)
- --------------------------------------------------------------------------------
US Bancorp Daily Intermediate Trust $140,497,316 $ --
US Bancorp Daily Intermediate Trust
Treasury 6,884,236 --
- --------------------------------------------------------------------------------
FAF FUND NET ASSETS SHARES ISSUED
- --------------------------------------------------------------------------------
Prime Obligations Fund $3,851,371,412 140,497,316
Treasury Obligations Fund 3,574,473,062 6,884,236
- --------------------------------------------------------------------------------
The value and number of shares issued in exchange for each Common Trust Fund's
assets and shares outstanding in the tax-free conversions are included in the
capital share transactions of class-Y in the Statement of Changes in Net Assets
for each respective Fund.
48 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
7 MERGERS
On November 21, 1997, (November 25, 1997 for Tax Free Obligations Fund) the
following reorganization of certain Qualivest Funds into certain FAF Funds took
place pursuant to a Plan of Reorganization approved by the Qualivest
shareholders on October 31, 1997:
QUALIVEST ACQUIRED FUND FAF ACQUIRING FUND
- --------------------------------------------------------------------------------
Money Market Fund Prime Obligations Fund
U.S. Treasury Money Market Fund Treasury Obligations Fund
Tax Free Money Market Fund Tax Free Obligations Fund
- --------------------------------------------------------------------------------
Under the Agreement and Plan of Reorganization, Qualivest class-A and class-C
shares were exchanged for FAF class-A shares and Qualivest class-Q and class-Y
shares were exchanged for FAF class-Y shares.
Net assets prior to reorganization and shares issued by the corresponding FAF
funds were as follows:
FAF ACQUIRING FUND NET ASSETS SHARES ISSUED
- --------------------------------------------------------------------------------
Prime Obligations Fund $4,178,199,365 483,699,838
Treasury Obligations Fund 3,798,925,742 98,413,424
Tax Free Obligations Fund -- 38,183,594
- --------------------------------------------------------------------------------
The shares redeemed by the corresponding Qualivest Funds were as follows:
QUALIVEST ACQUIRED FUND SHARES REDEEMED
- --------------------------------------------------------------------------------
Money Market Fund 483,699,838
U.S. Treasury Money Market Fund 98,413,424
Tax Free Money Market Fund 38,183,594
- --------------------------------------------------------------------------------
49 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTES TO
FINANCIAL STATEMENTS MARCH 31, 1999 (UNAUDITED)
Included in the net assets from the Qualivest Funds were the following
components:
<TABLE>
<CAPTION>
DISTRIBUTIONS IN EXCESS OF ACCUMULATED NET NET
QUALIVEST ACQUIRED FUND NET INVESTMENT INCOME REALIZED GAIN ASSETS
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Money Market Fund $ (5,261) $191 $483,699,838
U.S. Treasury Money Market Fund (3,183) -- 98,413,424
Tax Free Money Market Fund -- 470 38,183,594
- ---------------------------------------------------------------------------------------------
</TABLE>
8 SIGNIFICANT EVENTS
On May 1, 1998, U.S. Bancorp acquired Piper Jaffray Companies, Inc. As a result
of this acquisition, all shares of the Piper Money Market Funds were redeemed,
the Funds discontinued operations, and the sweep vehicles used by Piper Jaffray
Inc. in its brokerage accounts were changed to corresponding FAF Funds.
In connection with this acquisition, the Prime Obligations Fund purchased the
assets of the Piper Institutional Money Market Fund through a purchase in kind
transaction on June 29, 1998. The assets received totaled approximately
$372,875,000, which represented a 5.6% increase to the total net assets of the
Fund.
On July 20, 1998, the Prime Obligations Fund, Government Obligations Fund, and
Tax Free Obligations Fund purchased the assets of the Piper Money Market Fund,
Piper U.S. Government Money Market Fund, and Piper Tax-Exempt Money Market Fund,
respectively, through a purchase in kind transaction. The assets purchased by
Prime Obligations Fund totaled approximately $2,890,315,000, which represented a
44.7% increase to its total net assets of that Fund. The assets purchased by the
Government Obligations Fund totaled approximately $332,369,000, which
represented a 24.7% increase to its total net assets. The assets purchased by
the Tax Free Obligations Fund totaled approximately $223,954,000, which
represented a 65.1% increase to its total net assets.
50 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
NOTICE TO
SHAREHOLDERS MARCH 31, 1999
ON SEPTEMBER 9, 1998, THE FUNDS' BOARD OF DIRECTORS, UPON THE RECOMMENDATION OF
THE AUDIT COMMITTEE, APPOINTED ERNST & YOUNG LLP THE INDEPENDENT ACCOUNTANTS FOR
THE FUNDS' FISCAL YEAR ENDING SEPTEMBER 30, 1999, AND DISMISSED KPMG PEAT
MARWICK LLP ("KPMG"). KPMG'S REPORTS ON THE FUNDS' FINANCIAL STATEMENTS FOR THE
PAST TWO YEARS HAVE NOT CONTAINED AN ADVERSE OPINION OR A DISCLAIMER OF OPINION
AND HAVE NOT BEEN QUALIFIED AS TO UNCERTAINTY, AUDIT SCOPE, OR ACCOUNTING
PRINCIPLES. IN ADDITION, THERE HAVE NOT BEEN ANY DISAGREEMENTS WITH KPMG DURING
THE FUNDS' TWO MOST RECENT FISCAL YEARS ON ANY MATTER OF ACCOUNTING PRINCIPLES
OR PRACTICES, FINANCIAL STATEMENT DISCLOSURE, OR AUDITING SCOPE OR PROCEDURE
WHICH, IF NOT RESOLVED TO THE SATISFACTION OF KPMG, WOULD HAVE CAUSED IT TO MAKE
A REFERENCE TO THE SUBJECT MATTER OF THE DISAGREEMENT IN THE CONNECTION WITH ITS
REPORTS.
51 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.
52 '99 SEMIANNUAL REPORT FIRST AMERICAN FUNDS
<PAGE>
FIRST AMERICAN FUNDS, INC.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
INVESTMENT ADVISOR BOARD OF DIRECTORS
FIRST AMERICAN ASSET MR. DAVID BENNETT
MANAGEMENT, A DIVISION OF Director of the First American Funds, Inc.
U.S. BANK NATIONAL ASSOCIATION Of counsel with Gray, Plant, Mooty,
601 Second Avenue South Mooty and Bennett,
Minneapolis, Minnesota 55402 Owner of three privately-held businesses
CUSTODIAN MR. ROBERT DAYTON
U.S. BANK NATIONAL ASSOCIATION Director of the First American Funds, Inc.
180 East Fifth Street Chief Executive Officer of
St. Paul, Minnesota 55101 Okabena Company
ADMINISTRATOR MR. ROGER GIBSON
SEI INVESTMENTS MANAGEMENT Director of the First American Funds, Inc.
CORPORATION Vice President of North America-Mountain
1 Freedom Valley Drive Region for United Airlines
Oaks, Pennsylvania 19456
MR. ANDREW HUNTER III
TRANSFER AGENT Director of the First American Funds, Inc.
DST SYSTEMS, INC. Chairman of Hunter Keith Industries
330 West Ninth Street
Kansas City, Missouri 64105 MR. LEONARD KEDROWSKI
Director of the First American Funds, Inc.
DISTRIBUTOR Owner and President of Executive
SEI INVESTMENTS DISTRIBUTION CO. Management Consulting, Inc.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456 MR. ROBERT SPIES
Director of the First American Funds, Inc.
INDEPENDENT AUDITORS Retired Vice President, U.S. Bank
ERNST & YOUNG LLP National Association
1400 Pillsbury Center
200 South Sixth Street MR. JOSEPH STRAUSS
Minneapolis, Minnesota 55402 Director of the First American Funds, Inc.
Former Chairman of First
COUNSEL American Funds,
DORSEY & WHITNEY LLP Owner and President of Strauss
220 South Sixth Street Management Company
Minneapolis, Minnesota 55402
MS. VIRGINIA STRINGER
Chairman of the First American Funds, Inc.
Owner and President of Strategic
Management Resources, Inc.
<PAGE>
----------------
[LOGO] FIRST AMERICAN Bulk Rate
THE POWER OF DISCIPLINED INVESTING(R) U.S. Postage
PAID
FIRST AMERICAN FUNDS Mpls., MN
601 Second Avenue South Permit No. 26388
Minneapolis, MN 55402-3804 ----------------
5/1999 199-99
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the corporation. The report is not
authorized for distribution to prospective investors in the corporation unless
preceded or accompanied by an effective prospectus for each of the funds
included. Shares in the funds are not deposits or obligations of, or guaranteed
or endorsed by, U.S. Bank or any of its affiliates. Such shares are also not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board, or any other agency. Investment in the shares involves investment
risk including loss of principal amount invested.
Past performance does not guarantee future results. The principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
