[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
MONEY MARKET
FUNDS
ANNUAL REPORT
2000
CLASS A, CLASS B,
AND CLASS C SHARES
This annual report includes a prospectus that describes in detail each fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
FIRST AMERICAN
FUNDS, INC.
<PAGE>
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
MONEY MARKET
FUNDS
ANNUAL REPORT
2000
CLASS D SHARES
This annual report includes a prospectus that describes in detail each fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
FIRST AMERICAN
FUNDS, INC.
<PAGE>
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
MONEY MARKET
FUNDS
ANNUAL REPORT
2000
CLASS Y SHARES
This annual report includes a prospectus that describes in detail each fund's
objective, investment strategy, risks, sales charges, fees and other matters of
interest. Please read the prospectus carefully before you invest or send money.
FIRST AMERICAN
FUNDS, INC.
<PAGE>
FIRST AMERICAN
FAMILY OF FUNDS
INVESTMENTS FOR EVERY GOAL
FIRST AMERICAN FUNDS OFFER A FULL RANGE OF INVESTMENT STRATEGIES TO HELP YOU
CREATE A PERSONALIZED, DIVERSIFIED PORTFOLIO. WITH OUR DISCIPLINED FOCUS ON
CONSISTENT, COMPETITIVE PERFORMANCE AND HIGHLY DEVELOPED TEAM APPROACH TO
INVESTMENT DECISION MAKING, FIRST AMERICAN FUNDS CAN HELP BUILD A WINNING
STRATEGY FOR ANY INVESTOR.
HIGHER RISK (o)
AND RETURN POTENTIAL |
|
(*) EQUITY FUNDS
|
|
(*) FUNDS OF FUNDS
|
|
(*) BOND FUNDS
|
|
(*) TAX FREE BOND FUNDS
|
|
(*) MONEY MARKET FUNDS
|
| GOVERNMENT OBLIGATIONS
| PRIME OBLIGATIONS
| TAX FREE OBLIGATIONS
| TREASURY OBLIGATIONS
|
LOWER RISK (o)
AND RETURN POTENTIAL
TABLE OF CONTENTS
--------------------------------------------------------------------------------
Message to Shareholders 1
--------------------------------------------------------------------------------
Report of Independent Auditors 2
--------------------------------------------------------------------------------
Statements of Net Assets 4
--------------------------------------------------------------------------------
Statements of Operations 13
--------------------------------------------------------------------------------
Statements of Changes in Net Assets 14
--------------------------------------------------------------------------------
Financial Highlights 16
--------------------------------------------------------------------------------
Notes to Financial Statements 20
--------------------------------------------------------------------------------
Notice to Shareholders 24
--------------------------------------------------------------------------------
Prospectus
--------------------------------------------------------------------------------
An investment in money market funds is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although these
funds seek to preserve the value of your investment at $1.00 per share, it is
possible to lose money by investing in these funds.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
<PAGE>
MESSAGE TO SHAREHOLDERS NOVEMBER 15, 2000
DEAR SHAREHOLDERS:
On behalf of the entire board of directors and the staff of First American
Asset Management, thank you for the ongoing opportunity you have given us
to manage your investments. As always, we strive to provide you, our fund
shareholders, consistent and competitive investment performance over time.
The accompanying financial statements and notes detail the results of fund
operations for the fiscal year and fund holdings as of September 30, 2000.
We urge you to review the financial statements at your convenience.
Again, thank you for investing in the First American family of funds. We
look forward to serving your investment needs next year and beyond.
Sincerely,
/s/ Virginia L. Stringer /s/ Paul A. Dow
VIRGINIA L. STRINGER PAUL A. DOW
Chairperson of the Board Chief investment officer and president
First American Funds, Inc. First American Asset Management
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 1)
<PAGE>
REPORT OF INDEPENDENT AUDITORS SEPTEMBER 30, 2000
To the Shareholders and Board of Directors
First American Funds, Inc.
We have audited the accompanying statements of net assets of First American
Funds, Inc. (comprising, respectively, the Government Obligations, Prime
Obligations, Tax Free Obligations and Treasury Obligations Funds) (the
"Funds") as of September 30, 2000, and the related statements of operations
for the year then ended, and the statements of changes in net assets and
financial highlights for each of the two years in the period then ended.
These financial statements and financial highlights are the responsibility
of the Funds' management. Our responsibility is to express an opinion on
these financial statements and financial highlights based on our audits.
The financial highlights for the periods presented through September 30,
1998, were audited by other auditors whose reports dated November 13, 1998,
and September 12, 1997, expressed unqualified opinions on those financial
highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities
owned as of September 30, 2000, by correspondence with the custodian and
brokers. As to certain securities relating to uncompleted transactions, we
performed other auditing procedures. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the 2000 and 1999 financial statements and financial
highlights referred to above present fairly, in all material respects, the
financial position of each of the respective funds constituting First
American Funds, Inc. at September 30, 2000, and the results of their
operations for the year then ended, and the changes in their net assets and
their financial highlights for each of the two years in the period then
ended, in conformity with accounting principles generally accepted in the
United States.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
November 3, 2000
(2 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
(This page has been left blank intentionally.)
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 3)
<PAGE>
STATEMENTS OF NET ASSETS SEPTEMBER 30, 2000
GOVERNMENT OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 54.2%
Export-Import Bank
6.641%, 10/16/00 (A) (B) $ 20,767 $ 20,767
FFCB
6.551%, 02/27/01 50,000 48,686
7.181%, 05/18/01 12,000 11,488
FHLB
6.431%, 10/16/00 (A) 100,000 99,940
6.400%, 10/20/00 50,000 49,830
4.380%, 10/23/00 9,250 9,241
6.400%, 02/09/01 15,000 14,993
6.500%, 09/19/01 10,000 9,992
FHLMC
6.590%, 10/24/00 95,007 94,616
6.715%, 12/07/00 20,000 19,758
6.308%, 01/16/01 40,000 39,288
6.530%, 01/16/01 (C) 30,000 29,452
6.660%, 04/26/01 20,000 19,234
6.916%, 06/08/01 15,000 14,326
5.750%, 06/15/01 10,000 9,927
6.639%, 09/13/01 10,000 9,400
FNMA
5.760%, 10/02/00 15,000 15,000
6.485%, 10/02/00 (A) 50,000 49,972
6.675%, 10/02/00 (A) 100,000 99,991
4.450%, 10/16/00 9,775 9,766
6.461%, 10/23/00 (A) 50,000 49,994
5.890%, 11/24/00 10,000 9,999
6.533%, 01/08/01 50,000 49,121
5.720%, 01/09/01 10,000 9,972
5.280%, 02/20/01 11,750 11,696
6.534%, 02/22/01 10,826 10,551
6.526%, 02/27/01 20,000 19,474
6.450%, 03/09/01 10,000 9,999
6.800%, 03/13/01 15,000 14,561
5.625%, 03/15/01 5,490 5,468
6.650%, 03/30/01 15,000 15,000
6.450%, 04/23/01 5,000 4,996
6.600%, 05/04/01 16,400 16,390
6.840%, 08/15/01 (C) 15,000 14,151
SLMA
6.443%, 10/03/00 (A) 52,400 52,376
6.663%, 10/03/00 (A) 50,000 49,986
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,019,401) 1,019,401
-------------
OTHER U.S. GOVERNMENT OBLIGATIONS -- 4.3%
Nebhelp (LOC: SLMA)
6.489%, 10/03/00 18,584 18,577
6.521%, 11/03/00 39,250 39,017
New Hampshire Higher Education Loan (LOC: SLMA)
6.532%, 10/19/00 23,399 23,324
-------------
TOTAL OTHER U.S. GOVERNMENT OBLIGATIONS
(Cost $80,918) 80,918
-------------
REPURCHASE AGREEMENTS -- 41.7%
C S First Boston
6.630%, dated 09/29/00, matures 10/02/00,
repurchase price $550,303,875 (collateralized
by U.S. Government Agency Obligations:
total market value $574,835,605) 550,000 550,000
GOVERNMENT OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
Donaldson Lufkin & Jenrette
6.530%, dated 09/29/00, matures 10/02/00,
repurchase price $83,749,549 (collateralized
by U.S. Treasury Obligations: total market
value $85,378,316) $ 83,704 $ 83,704
Lehman Brothers
6.500%, dated 09/29/00, matures 10/02/00,
repurchase price $150,081,250 (collateralized
by U.S. Treasury Obligations: total market
value $152,959,158) 150,000 150,000
-------------
TOTAL REPURCHASE AGREEMENTS
(Cost $783,704) 783,704
-------------
TOTAL INVESTMENTS -- 100.2%
(Cost $1,884,023) 1,884,023
-------------
OTHER ASSETS AND LIABILITIES, NET -- (0.2%) (D) (4,128)
-------------
NET ASSETS:
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
470,569,753 outstanding shares 470,538
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
472,146,334 outstanding shares 472,146
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
937,445,427 outstanding shares 937,446
Undistributed net investment income 18
Accumulated net realized loss on investments (253)
-------------
TOTAL NET ASSETS -- 100.0% $ 1,879,895
-------------
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 September 30, 2000. 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) The rate shown is the effective yield at date of purchase.
(D) Other assets and liabilities representing greater than 5 percent of the
total net assets include the following amounts (000):
Collateral received for securities loaned, at value $332,345
Payable upon return of securities loaned ($332,345)
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.
(4 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
PRIME OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
COMMERCIAL PAPER -- 62.5%
BROKERAGE -- 3.2%
Goldman Sachs
6.737%, 01/12/01 (A) $ 75,000 $ 73,592
6.744%, 01/12/01 (A) 50,000 49,062
Louis Dreyfus (LOC: Bank of Montreal)
6.587%, 10/23/00 50,000 49,800
Morgan Stanley Dean Witter
6.740%, 10/02/00 (B) 200,000 200,000
-------------
372,454
-------------
CAPTIVE FINANCE -- 3.9%
American Express
6.558%, 10/04/00 50,000 49,973
Ford Motor Credit
6.524%, 10/06/00 100,000 99,910
6.530%, 10/12/00 100,000 99,802
6.535%, 10/12/00 100,000 99,801
General Motors Acceptance
6.512%, 10/03/00 100,000 99,964
-------------
449,450
-------------
COMMERCIAL FUNDING CORPORATIONS -- 26.5%
Asset Securitization
6.528%, 10/02/00 (A) 150,000 149,973
Corporate Asset Funding
6.547%, 10/13/00 (A) 50,000 49,891
Edison Asset Securitization (Guarantor: 10% GECC)
6.529%, 10/05/00 (A) 100,000 99,928
6.581%, 10/18/00 (A) 100,000 99,693
6.552%, 10/19/00 (A) 50,000 49,837
Fleet Funding
6.553%, 10/17/00 (A) 96,942 96,661
6.582%, 10/18/00 (A) 87,404 87,136
Galaxy Funding
6.667%, 10/10/00 (A) 50,000 49,918
6.861%, 10/10/00 (A) 25,000 24,958
6.584%, 10/12/00 (A) 50,000 49,900
6.571%, 10/19/00 (A) 25,000 24,918
6.568%, 10/20/00 (A) 50,000 49,828
6.569%, 10/23/00 (A) 100,000 99,602
6.579%, 11/06/00 (A) 50,000 49,673
6.637%, 11/21/00 (A) 40,130 39,759
6.825%, 12/22/00 (A) 50,000 49,246
Jupiter (International Securitization)
6.585%, 10/06/00 (A) 40,000 39,964
6.562%, 10/10/00 (A) 70,000 69,886
6.575%, 10/10/00 (A) 70,000 69,886
6.554%, 10/19/00 (A) 53,525 53,350
6.562%, 10/23/00 (A) 50,000 49,801
6.559%, 10/24/00 (A) 60,905 60,651
6.574%, 11/06/00 (A) 50,000 49,675
6.912%, 12/18/00 (A) 50,000 49,276
Moat Funding LLC (Guarantor: 28% Chase)
6.691%, 10/05/00 (A) 50,000 49,963
6.714%, 10/06/00 (A) 100,000 99,908
6.647%, 10/20/00 (A) 80,000 79,723
6.578%, 11/17/00 (A) 50,000 49,576
6.761%, 02/23/01 (A) 100,000 97,374
6.814%, 05/15/01 (A) 50,000 47,963
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
Pooled Accounts Receivable Capital
(Guarantor: 46% MBIA)
6.559%, 10/05/00 (A) $ 50,000 $ 49,964
6.586%, 10/13/00 (A) 25,295 25,240
6.829%, 10/17/00 (A) 31,011 30,919
6.556%, 10/18/00 (A) 39,312 39,191
6.565%, 10/20/00 (A) 32,305 32,194
6.724%, 10/23/00 (A) 45,723 45,539
6.556%, 10/25/00 (A) 100,551 100,114
6.510%, 11/09/00 (A) 23,831 23,663
6.770%, 11/20/00 (A) 55,402 54,894
Quincy Capital
6.556%, 10/03/00 (A) 100,555 100,519
6.578%, 10/04/00 (A) 50,000 49,973
6.553%, 10/11/00 (A) 75,000 74,864
6.563%, 10/12/00 (A) 50,000 49,900
6.587%, 10/16/00 (A) 29,767 29,686
6.555%, 10/27/00 (A) 64,302 64,000
Receivables Capital
6.548%, 10/10/00 (A) 43,252 43,182
6.654%, 10/16/00 (A) 79,215 78,999
6.559%, 10/18/00 (A) 48,362 48,213
6.552%, 10/19/00 (A) 79,391 79,133
6.578%, 10/30/00 (A) 100,000 99,473
-------------
3,057,577
-------------
DIVERSIFIED FINANCE -- 5.5%
Allianz America Finance
6.592%, 11/03/00 (A) 50,000 49,702
6.545%, 11/09/00 (A) 93,435 92,780
Associates NA
6.655%, 12/01/00 22,867 22,614
6.690%, 01/26/01 50,000 48,939
General Electric Capital
6.701%, 01/22/01 100,000 97,960
6.661%, 01/24/01 50,000 48,960
6.720%, 01/25/01 50,000 48,948
6.713%, 01/26/01 50,000 48,939
6.540%, 01/29/01 50,000 48,910
6.672%, 01/31/01 50,000 48,895
6.715%, 02/01/01 50,000 48,886
6.678%, 02/06/01 30,000 29,305
-------------
634,838
-------------
DOMESTIC BANKS -- 6.4%
Enterprise Funding (Guarantor: BankAmerica)
6.549%, 10/10/00 (A) 150,000 149,756
6.564%, 10/27/00 (A) 40,858 40,665
Formosa Plastics (LOC: BankAmerica)
6.822%, 10/04/00 47,000 46,974
Kittyhawk Funding (Guarantor: BankAmerica)
6.649%, 10/11/00 (A) 65,500 65,381
Variable Funding Capital (Guarantor: First Union)
6.551%, 10/03/00 (A) 50,000 49,982
6.565%, 10/10/00 (A) 50,000 49,919
6.565%, 10/11/00 (A) 100,000 99,819
6.566%, 10/13/00 (A) 100,000 99,783
6.577%, 10/17/00 (A) 50,000 49,855
6.772%, 10/19/00 (A) 90,000 89,702
-------------
741,836
-------------
DOMESTIC BRANCH, FOREIGN BANK -- 0.2%
Banco Bradesco (LOC: Westdeustche
Landesbank NY)
6.747%, 10/02/00 (D) 25,000 24,995
-------------
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 5)
<PAGE>
STATEMENTS OF NET ASSETS SEPTEMBER 30, 2000
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
FOREIGN FUNDING CORPORATIONS -- 8.7%
Brahms Funding (Guarantor: Dresdner Bank)
6.679%, 10/27/00 $ 100,000 $ 99,523
6.645%, 11/22/00 101,154 100,194
Centauri (CC USA LLC)
6.443%, 10/04/00 (A) 27,500 27,486
Dorada Finance
6.709%, 03/13/01 (A) 40,000 38,825
Four Winds Funding (Guarantor: 30% Commerzbank)
6.559%, 10/16/00 (A) 100,000 99,728
6.552%, 10/17/00 (A) 100,000 99,710
6.560%, 10/18/00 (A) 150,000 149,538
6.540%, 10/30/00 (A) 50,000 49,737
K2 USA LLC
6.759%, 02/13/01 (A) 32,000 31,216
6.530%, 02/20/01 (A) 48,000 46,764
6.762%, 02/20/01 (A) 54,000 52,607
6.717%, 03/09/01 (A) 29,500 28,653
6.708%, 03/12/01 (A) 35,000 33,978
6.681%, 03/15/01 (A) 42,500 41,240
Sigma Finance
6.692%, 03/02/01 (A) 23,000 22,371
6.683%, 06/13/01 (A) 50,000 47,744
6.697%, 06/13/01 (A) 35,000 33,416
-------------
1,002,730
-------------
RETAIL FUNDING CORPORATIONS -- 8.1%
Bishops Gate Residential Mortgage
6.542%, 10/02/00 (A) 20,000 19,996
Dakota Trust Certificates (Citibank Credit Card Trust)
6.544%, 10/03/00 (A) 70,000 69,975
6.546%, 10/03/00 (A) 25,000 24,991
6.533%, 10/05/00 (A) 50,000 49,964
6.664%, 10/13/00 (A) 83,000 82,819
6.557%, 10/19/00 (A) 75,000 74,755
6.573%, 11/08/00 (A) 100,000 99,314
6.574%, 11/09/00 (A) 50,000 49,648
Providian Master Trust Series 1993-3
6.569%, 10/05/00 (A) 61,714 61,669
6.572%, 10/06/00 (A) 54,000 53,951
6.584%, 10/13/00 (A) 50,707 50,597
6.530%, 10/16/00 (A) 159,867 159,432
6.573%, 10/20/00 (A) 25,000 24,914
6.540%, 10/27/00 (A) 30,000 29,858
6.570%, 11/03/00 (A) 65,000 64,612
6.572%, 11/03/00 (A) 23,000 22,863
-------------
939,358
-------------
TOTAL COMMERCIAL PAPER
(Cost $7,223,238) 7,223,238
-------------
CORPORATE OBLIGATIONS -- 25.8%
BROKERAGE -- 6.5%
Bear Stearns
6.940%, 10/02/00 (B) 400,000 400,000
Goldman Sachs Series A
6.859%, 10/16/00 (A) (B) 88,000 88,000
Morgan Stanley Dean Witter
6.646%, 10/16/00 (B) 150,000 150,000
WFP Tower B Finance Short Term Trust
(Guarantor: Merrill Lynch)
6.740%, 10/09/00 (A) (B) 117,510 117,510
-------------
755,510
-------------
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
DIVERSIFIED FINANCE -- 1.1%
Associates NA (A) (B)
6.660%, 12/26/00 $ 120,000 $ 120,000
-------------
FOREIGN FUNDING CORPORATIONS -- 11.1%
Beta Finance
6.833%, 10/03/00 (A) (B) 100,000 100,000
6.691%, 10/12/00 (A) (B) 100,000 100,000
6.580%, 01/16/01 (A) 55,000 55,000
7.340%, 05/21/01 (A) 50,000 50,000
Centauri (CC USA LLC)
6.728%, 10/03/00 (A) (B) 100,000 100,000
6.810%, 02/15/01 (A) 100,000 100,000
6.820%, 02/15/01 (A) 50,000 50,000
7.130%, 05/07/01 (A) 50,000 50,000
Dorada Finance
6.728%, 10/06/00 (A) (B) 125,000 125,000
6.130%, 10/13/00 (A) 30,000 30,000
7.440%, 05/29/01 (A) 50,000 50,000
7.180%, 06/27/01 (A) 25,000 25,000
K2 USA LLC
6.621%, 10/16/00 (A) (B) 95,000 95,000
6.780%, 02/02/01 (A) 42,000 42,000
7.440%, 04/30/01 (A) 25,000 25,000
7.340%, 05/14/01 (A) 50,000 50,000
Sigma Finance
6.620%, 01/19/01 (A) 40,000 40,000
6.610%, 01/26/01 (A) 50,000 50,000
7.490%, 05/23/01 (A) 50,000 50,000
6.990%, 07/17/01 (A) 50,000 50,000
7.000%, 07/17/01 (A) 50,000 50,000
-------------
1,287,000
-------------
INSURANCE -- 7.1%
Allstate Life Insurance
6.909%, 10/02/00 (B) (C) 100,000 100,000
6.934%, 10/16/00 (B) (C) 100,000 100,000
Anchor National Life Insurance Investment
6.750%, 10/02/00 (B) (C) 75,000 75,000
Monumental Life Insurance
6.778%, 10/02/00 (B) (C) 400,000 400,000
Sun Life Insurance of America
6.850%, 10/02/00 (B) (C) 75,000 75,000
7.000%, 10/02/00 (B) (C) 75,000 75,000
-------------
825,000
-------------
TOTAL CORPORATE OBLIGATIONS
(Cost $2,987,510) 2,987,510
-------------
CERTIFICATES OF DEPOSIT/BANK NOTES -- 4.3%
American Express Centurion Bank
6.540%, 10/04/00 100,000 100,000
6.540%, 10/06/00 50,000 50,000
6.540%, 10/12/00 150,000 150,000
The accompanying notes are an integral part of the financial statements.
(6 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
Bank One
6.950%, 01/05/01 $ 50,000 $ 50,007
6.660%, 03/27/01 100,000 100,000
7.150%, 06/29/01 50,000 49,986
-------------
TOTAL CERTIFICATES OF DEPOSIT/BANK NOTES
(Cost $499,993) 499,993
-------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 0.4%
FHLMC
6.308%, 01/16/01 50,000 49,123
-------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $49,123) 49,123
-------------
YANKEE CERTIFICATES OF DEPOSITS -- 4.0%
Bayerische Landesbank NY
6.610%, 03/07/01 25,000 24,990
National Westminster NY
6.695%, 03/01/01 50,000 49,992
Royal Bank of Canada NY
6.470%, 01/08/01 50,000 49,994
Svenska Handelsbanken NY
6.800%, 09/05/01 25,000 25,009
UBS AG Stamford
6.105%, 11/29/00 25,000 24,997
6.200%, 12/04/00 25,000 24,997
6.195%, 12/08/00 50,000 49,994
6.220%, 12/11/00 50,000 49,993
6.380%, 12/26/00 65,000 64,991
7.230%, 06/12/01 50,000 49,990
Westdeutsche Landesbank NY
7.390%, 05/29/01 50,000 49,991
-------------
TOTAL YANKEE CERTIFICATES OF DEPOSITS
(Cost $464,938) 464,938
-------------
EURO TIME DEPOSITS -- 1.1%
Key Bank Cayman Islands
6.625%, 10/02/00 128,130 128,130
-------------
TOTAL EURO TIME DEPOSITS
(Cost $128,130) 128,130
-------------
REPURCHASE AGREEMENTS -- 1.8%
Donaldson Lufkin & Jenrette
6.530%, dated 09/29/00, matures 10/02/00
repurchase price $206,061,071 (collateralized
by U.S. Treasury Obligations: total market
value $210,068,403) 205,949 205,949
-------------
TOTAL REPURCHASE AGREEMENTS
(Cost $205,949) 205,949
-------------
TOTAL INVESTMENTS -- 99.9%
(Cost $11,558,881) 11,558,881
-------------
OTHER ASSETS AND LIABILITIES, NET -- 0.1% 6,428
-------------
PRIME OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION VALUE (000)
--------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
4,614,105,161 outstanding shares $ 4,614,082
Portfolio Capital--Class B ($.01 par value--
20 billion authorized) based on
4,010,765 outstanding shares 4,009
Portfolio Capital--Class C ($.01 par value--
20 billion authorized) based on
370,607 outstanding shares 371
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
515,824,670 outstanding shares 515,825
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
6,431,087,504 outstanding shares 6,431,038
Undistributed net investment income 179
Accumulated net realized loss on investments (195)
-------------
TOTAL NET ASSETS -- 100.0% $11,565,309
-------------
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 $1.00
-------------
Net asset value, offering price, and redemption
price per share -- Class C $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) 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 the guidelines established by the Board of Directors.
(B) Variable Rate Security -- the rate reported on the Statement of Net Assets
is the rate in effect as of September 30, 2000. The date shown is the next
reset date.
(C) Private Placement Securities considered illiquid investments under
guidelines established by the Board of Directors.
(D) The rate shown is the effective yield at date of purchase
CC--Chamber of Commerce
FHLMC--Federal Home Loan Mortgage Corporation
GECC--General Electric Capital Corporation
LOC--Letter of Credit
LLC--Limited Liability Corporation
MBIA--Municipal Bond Insurance Association
NA--North America WFP--World Financial Properties
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 7)
<PAGE>
STATEMENTS OF NET ASSETS SEPTEMBER 30, 2000
TAX FREE OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
MUNICIPAL BONDS -- 97.5%
ALASKA -- 1.7%
Alaska State Housing Finance, Series 2
(RB) (INS: MBIA) (A) (C)
5.650%, 10/10/00 $ 3,400 $ 3,400
Valdez Marine Terminal, Mobil Pipeline,
Series A (GTY: Mobil Oil) (RB) (A)
5.400%, 10/10/00 8,650 8,650
-------------
12,050
-------------
ARIZONA -- 1.3%
Arizona State Transportation Board Highway,
Sub-Series A, Pre-refunded @ 101.5 (RB) (B)
6.550%, 07/01/01 5,000 5,151
Glendale (GO) (INS: FGIC)
4.950%, 07/01/01 4,000 4,019
-------------
9,170
-------------
DELAWARE -- 0.4%
Delaware State, Series A (GO)
4.400%, 03/01/01 3,000 3,003
-------------
DISTRICT OF COLUMBIA -- 1.5%
District of Columbia Consortium Issue (LOC:
First Union Expires: 06/16/03) (RB) (A)
5.400%, 10/10/00 10,000 10,000
-------------
GEORGIA -- 1.6%
Dekalb County Development Authority, Pollution
Control (GTY: General Motors) (RB) (A)
5.600%, 10/10/00 9,000 9,000
Muscogee County School District Sales Tax
(GO) (INS: AMBAC)
4.500%, 11/01/00 1,750 1,751
-------------
10,751
-------------
IDAHO -- 1.8%
Boise Urban Renewal Agency, Capital City
Development (LOC: BankAmerica
Expires: 09/07/03) (RB) (A)
5.750%, 10/10/00 5,215 5,215
Custer County, Pollution Control Authority,
Amoco Project (GTY: Amoco) (RB) (A)
4.350%, 04/01/01 7,000 7,000
-------------
12,215
-------------
ILLINOIS -- 9.1%
Cary Special Tax Authority, Special Service Area No. 1
Project, Series B (LOC: American National
Bank & Trust Expires: 05/31/02) (RB) (A)
5.550%, 10/10/00 7,118 7,118
Chicago Gas Supply, Series A (GTY: Peoples Gas
Light & Coke) (RB) (A)
5.570%, 10/10/00 12,000 12,000
Chicago, Series A (GO) (INS: MBIA)
4.750%, 01/01/01 2,460 2,464
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
City of Chicago, ABN AMRO Munitops 1998-3
(COP) (INS: FGIC) (A) (C)
5.690%, 10/10/00 $ 10,000 $ 10,000
Illinois State Development Finance Authority,
American College of Surgeons Project (LOC:
Northern Trust Expires: 08/31/01) (RB) (A)
5.600%, 10/10/00 4,000 4,000
Illinois State (GO)
5.600%, 06/01/01 3,080 3,106
5.500%, 08/01/01 2,000 2,019
Illinois State Health Facilities Authority (RB) (A) (B)
5.600%, 10/10/00 9,000 9,000
Illinois State Health Facilities Authority, Streeterville
Project, Series A (LOC: Bank One
Expires: 08/31/02) (RB) (A)
5.550%, 10/10/00 3,900 3,900
Schaumburg, Multifamily Housing
(GTY: Merrill Lynch) (RB) (A) (C)
5.820%, 10/10/00 9,000 9,000
-------------
62,607
-------------
INDIANA -- 0.4%
Evansville Economic Development Authority,
Indiana Tube Project (LOC: Citibank
Expires: 11/01/00) (RB) (A) (C)
5.700%, 10/10/00 2,500 2,500
-------------
KENTUCKY -- 5.3%
Breckenridge County Lease Program (LOC:
Firstar Bank Expires: 12/15/02) (RB) (A)
5.550%, 10/10/00 24,100 24,100
Clark County Pollution Control Authority,
National Rural Project, Series J-2
(GTY: CFC) (RB) (A)
4.150%, 10/15/00 5,000 5,000
Jeffersontown Lease Program, League of Cities
Funding (LOC: Firstar Bank
Expires: 03/15/03) (RB) (A)
5.550%, 10/10/00 7,300 7,300
-------------
36,400
-------------
LOUISIANA -- 1.5%
Louisiana PFA (TECP)
4.300%, 11/09/00 10,000 10,000
-------------
MICHIGAN -- 5.8%
Hannahville Indian Community Finance & Building
Authority, Building Program, Series A (LOC:
National City Bank Expires: 06/15/05) (RB) (A) (C)
5.500%, 10/10/00 3,400 3,400
Michigan State Hospital Finance Authority, Hospital
Equipment Loan Program, Series A (LOC:
National City Bank Exp. 12/15/03) (RB) (A)
5.500%, 10/10/00 27,000 27,000
Michigan State Strategic Fund, Series A8
(GO) (INS: FGIC) (A) (C)
5.500%, 10/10/00 9,200 9,200
-------------
39,600
-------------
(8 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
MINNESOTA -- 10.4%
Bloomington Multifamily Housing Authority,
Rental Housing, Crow/Bloomington
Project (LOC: Credit Suisse First Boston
Expires: 06/30/05) (RB) (A)
5.600%, 10/10/00 $ 17,005 $ 17,005
Eden Prairie, Multifamily Housing Authority,
Park at City West Project (LOC: NationsBank
Expires: 10/15/01) (RB) (A)
5.650%, 10/10/00 14,905 14,905
Minneapolis, Series B (GO) (A)
5.450%, 10/10/00 8,655 8,655
Minnesota State (GO)
4.750%, 05/01/01 5,000 5,013
University of Minnesota, Series A (RB) (A)
5.450%, 10/10/00 26,000 26,000
-------------
71,578
-------------
MISSISSIPPI -- 0.6%
Mississippi State Capital Improvements,
Pre-refunded @ 102 (GO) (B)
7.125%, 10/01/00 2,235 2,280
7.125%, 10/01/00 2,065 2,106
-------------
4,386
-------------
MISSOURI -- 2.8%
Kansas City Industrial Development Authority,
Midamerica Health Services (LOC: Mellon Bank
Expires: 06/30/01) (RB) (A)
5.700%, 10/10/00 5,400 5,400
Missouri State Health & Educational Facilities
Authority, Deaconess Long Term Care,
Series A (LOC: Bank One Texas
Expires: 12/11/01) (RB) (A)
5.500%, 10/10/00 10,615 10,615
Missouri State, Third State Building, Series A (GO)
5.000%, 08/01/01 3,200 3,217
-------------
19,232
-------------
NEBRASKA -- 0.7%
Omaha Public Power District Authority, Nebraska
Electric Power Project, Series A (RB)
5.000%, 02/01/01 4,930 4,944
-------------
NEVADA -- 0.4%
Nevada State, ABN AMRO Munitops 1998-1
(GO) (INS: MBIA) (A) (C)
5.690%, 10/10/00 2,500 2,500
-------------
NORTH CAROLINA -- 1.3%
Mecklenburg County, Public Improvement,
Series B (GO)
4.300%, 02/01/01 9,000 9,006
-------------
OHIO -- 5.7%
Greene County Hospital Facilities Authority,
Med-Health Systems, Series A (LOC:
Keybank Expires: 09/22/04) (RB) (A)
5.500%, 10/10/00 17,065 17,065
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
Ohio State Water Development Authority,
Series B (GTY: General Motors) (RB) (A)
5.550%, 10/10/00 $ 10,000 $ 10,000
Warren County Health Care Otterbein Homes
Project, Series B (LOC: Fifth Third Bank
Expires: 07/15/03) (RB) (A)
5.650%, 10/10/00 12,351 12,351
-------------
39,416
-------------
OKLAHOMA -- 4.0%
Oklahoma County Finance Authority,
Series PT 1087 (GTY: Merrill Lynch
Expires: 09/15/01(GO) (A) (C)
5.770%, 10/10/00 19,300 19,300
Tulsa Industrial Authority, Series SG-102
(RB) (INS: MBIA) (A) (C)
5.000%, 10/10/00 7,970 7,970
-------------
27,270
-------------
PENNSYLVANIA -- 0.6%
Lehigh County General Purpose Authority,
Phoebe-Devitt Homes Project, Series B
(LOC: First Union National Bank
Expires: 10/29/01) (RB) (A)
5.400%, 10/10/00 4,265 4,265
-------------
SOUTH CAROLINA -- 4.1%
Berkeley County Pollution Control Authority,
Alumax Project (GTY: Alcoa) (RB)
5.620%, 10/10/00 13,750 13,750
South Carolina State Capital Improvements,
Series A (GO)
5.500%, 10/01/00 3,470 3,470
4.500%, 08/01/01 3,000 3,006
York County (GTY: Duke Power) (TECP)
4.250%, 10/24/00 7,850 7,850
-------------
28,076
-------------
SOUTH DAKOTA -- 0.7%
Yankton Industrial Development Authority,
Alumax Project (GTY: Alcoa) (RB) (A) (C)
5.620%, 10/10/00 4,500 4,500
-------------
TENNESSEE -- 4.7%
Clarksville County Public Building Authority,
Pooled Financing Municipal Bond Fund
(LOC: Bank of America
Expires: 06/08/02) (RB) (A) (C)
5.700%, 10/10/00 15,500 15,500
Maury County Health & Educational Facilities,
Southern Healthcare Systems Project,
Series E (LOC: Bank One Texas
Expires: 07/25/01) (RB) (C)
5.650%, 10/10/00 4,600 4,600
Nashville & Davidson Counties, Metropolitan
Government Multifamily Housing (LOC:
Barclays Expires: 11/15/00) (RB) (A)
5.650%, 10/10/00 7,035 7,035
Tennessee State, Series A (GO)
7.000%, 03/01/01 5,355 5,414
-------------
32,549
-------------
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 9)
<PAGE>
STATEMENTS OF NET ASSETS SEPTEMBER 30, 2000
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
TEXAS -- 9.8%
Comal Texas Industrial School District, ABN AMRO
Munitops 1999-9 (GTY: PSF) (GO) (A) (C)
5.690%, 10/10/00 $ 10,002 $ 10,002
Dallas (GO)
5.000%, 02/15/01 3,135 3,144
5.600%, 02/15/01 3,000 3,016
Lower Neches Valley Authority, Neches River
Treatment Project (GTY: Mobil Oil) (RB) (A)
5.400%, 10/10/00 9,400 9,400
San Antonio Electric & Gas, Series SG-79
(RB) (INS: MBIA) (A) (C)
5.620%, 10/10/00 7,455 7,455
Tarrant County Water Control Improvements,
Pre-refunded @ 100 (RB) (B)
5.800%, 03/01/01 5,000 5,032
Texas State PFA (TECP)
4.250%, 11/06/00 10,000 10,000
4.100%, 11/08/00 19,000 19,000
-------------
67,049
-------------
VERMONT -- 0.5%
Vermont State Student Assistance (LOC: State Street
Bank & Trust Expires: 09/01/04) (RB) (A)
4.400%, 10/10/00 3,440 3,440
-------------
VIRGINIA -- 6.7%
Alexandria Industrial Development Authority,
American Red Cross Project (LOC: First Union
Expires: 03/30/01) (RB) (A)
5.400%, 10/10/00 5,900 5,900
Clark County Industrial Development Authority,
Winchester Medical Center (RB) (INS: FSA) (A)
5.600%, 10/10/00 26,450 26,450
Norfolk Capital Improvements (GO) (INS: FGIC)
5.375%, 06/01/01 2,200 2,216
Richmond Public Improvements, Series A,
Pre-refunded @ 102 (GO) (B)
6.700%, 01/15/01 3,995 4,102
Spotsylvania County Industrial Development
Authority, Residential Care Facility,
Chancellors Village Project (LOC: First Union
Expires: 10/01/01) (RB) (A)
5.400%, 10/10/00 7,300 7,300
-------------
45,968
-------------
WASHINGTON -- 6.1%
Washington State Health Care Facilities Authority,
Fred Hutchinson Cancer Center (LOC: Morgan
Guaranty Trust Expires: 07/15/03) (RB) (A)
5.550%, 10/10/00 3,900 3,900
Washington State, ABN AMRO Munitops 1999-12
(GO) (INS: MBIA) (A) (C)
5.690%, 10/10/00 9,000 9,000
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000)/SHARES VALUE (000)
--------------------------------------------------------------------------------
Washington State Housing Finance Commission,
YMCA Tacoma & Pierce Project A (LOC:
Keybank Expires: 12/22/03) (RB) (A)
5.550%, 10/10/00 $ 5,500 $ 5,500
Washington State Housing Finance Commission,
YMCA Tacoma & Pierce Project B (LOC:
Keybank Expires: 12/22/03) (RB) (A)
5.550%, 10/10/00 5,500 5,500
Washington State Public Power Supply System,
Nuclear Project #2, Series C,
Pre-refunded @ 102 (RB) (B)
7.500%, 01/01/01 4,525 4,652
7.625%, 01/01/01 6,000 6,169
Washington State Public Power Supply System,
Nuclear Project #3, Series SG 13 (RB) (A) (C)
5.620%, 10/10/00 7,240 7,240
-------------
41,961
-------------
WISCONSIN -- 4.2%
Wisconsin State (GO)
5.800%, 05/01/01 3,250 3,277
Wisconsin State, Health & Education Facilities
Authority, Blood Center Project, Series A
(LOC: M&I Expires: 06/15/02) (RB) (A)
5.500%, 10/10/00 7,420 7,420
Wisconsin State, Health & Education Facilities
Authority, Froedtert Memorial Hospital
Project (LOC: M&I Expires: 04/15/02) (RB) (A)
5.500%, 10/10/00 14,800 14,800
Wisconsin State, Series C (GO)
5.000%, 05/01/01 3,265 3,277
-------------
28,774
-------------
WYOMING -- 1.6%
Gillette Pollution Control Authority (LOC:
Commerzbank A.G.
Expires: 06/07/04) (RB) (A)
5.700%, 10/10/00 10,900 10,900
-------------
MULTISTATE -- 2.2%
Clipper Tax Exempt Trust 1998-2, Series A (A) (C)
5.140%, 10/10/00 15,335 15,335
-------------
TOTAL MUNICIPAL BONDS
(Cost $669,445) 669,445
-------------
MONEY MARKET FUNDS -- 3.3%
AIM Tax Free Institutional Cash Reserve 5,000,000 5,000
Federated Tax Free Money Market 17,540,000 17,540
-------------
TOTAL MONEY MARKET FUNDS
(Cost $22,540) 22,540
-------------
TOTAL INVESTMENTS -- 100.8%
(Cost $691,985) 691,985
-------------
OTHER ASSETS AND LIABILITIES, NET -- (0.8%) (5,533)
-------------
The accompanying notes are an integral part of the financial statements.
(10 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
TAX FREE OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION VALUE (000)
--------------------------------------------------------------------------------
NET ASSETS:
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
286,460,761 outstanding shares $ 286,427
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
24,111,585 outstanding shares 24,111
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
375,894,184 outstanding shares 375,891
Undistributed net investment income 24
Accumulated net realized loss on investments (1)
-------------
TOTAL NET ASSETS -- 100.0% $ 686,452
-------------
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 September 30, 2000. The date shown is the next
reset date.
(B) Pre-refunded Security -- Pre-refunded issues are backed by U.S. Government
Obligations. These bonds mature at the call date. 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 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
CFC--National Rural Utilities Cooperative Finance Corporation
COP--Certificate of Participation
FGIC--Financial Guaranty Insurance Corporation
FSA--Financial Security Assistance
GO--General Obligation
GTY--Guaranty
INS--Insured
LOC--Letter of Credit
M&I--Marshall & Ilsley
MBIA--Municipal Bond Insurance Association
PSF--Permanent School Fund
RB--Revenue Bond
TECP--Tax Exempt Commercial Paper
TREASURY OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 20.5%
U.S. Treasury Notes
4.000%, 10/31/00 $ 275,000 $ 274,566
5.750%, 11/15/00 50,000 49,997
4.625%, 11/30/00 75,000 74,858
5.625%, 11/30/00 50,000 49,969
4.500%, 01/31/01 100,000 99,408
5.000%, 02/28/01 50,000 49,733
5.000%, 04/30/01 75,000 74,376
6.250%, 04/30/01 100,000 99,898
8.000%, 05/15/01 25,000 25,170
5.250%, 05/31/01 50,000 49,602
6.500%, 05/31/01 50,000 49,989
5.500%, 07/31/01 50,000 49,624
5.500%, 08/31/01 50,000 49,608
6.500%, 08/31/01 100,000 100,178
-------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,096,976) 1,096,976
-------------
REPURCHASE AGREEMENTS -- 78.3%
ABN AMRO Securities
6.500%, dated 09/29/00, matures 10/02/00,
repurchase price $650,352,083 (collateralized
by U.S. Treasury Obligations: total market
value $663,000,733) 650,000 650,000
Banc One
6.510%, dated 09/29/00, matures 10/02/00,
repurchase price $250,135,625 (collateralized
by U.S. Treasury Obligations: total market
value $255,005,188) 250,000 250,000
Bear Stearns
6.500%, dated 09/29/00, matures 10/02/00,
repurchase price $250,135,417 (collateralized
by U.S. Treasury STRIPS: total market
value $256,088,000) 250,000 250,000
C S First Boston
6.550%, dated 09/29/00, matures 10/02/00,
repurchase price $400,218,333 (collateralized
by U.S. Treasury STRIPS: total market
value $411,632,496) 400,000 400,000
Donaldson Lufkin & Jenrette
6.530%, dated 09/29/00, matures 10/02/00,
repurchase price $285,502,276 (collateralized
by U.S. Treasury STRIPS: total market
value $291,054,063) 285,347 285,347
Goldman Sachs
6.510%, dated 09/29/00, matures 10/02/00,
repurchase price $250,135,625 (collateralized
by U.S. Treasury Obligations: total market
value $255,000,354) 250,000 250,000
Lehman Brothers
6.500%, dated 09/29/00, matures 10/02/00,
repurchase price $250,135,417 (collateralized
by U.S. Treasury Obligations: total market
value $254,879,722) 250,000 250,000
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 11)
<PAGE>
STATEMENTS OF NET ASSETS SEPTEMBER 30, 2000
TREASURY OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION PAR (000) VALUE (000)
--------------------------------------------------------------------------------
Morgan Stanley Dean Witter
6.660%, dated 09/29/00, matures 10/02/00,
repurchase price $250,138,750 (collateralized
by U.S. Treasury STRIPS: total market
value $258,250,135) $ 250,000 $ 250,000
Prudential Securities
6.520%, dated 09/29/00, matures 10/02/00,
repurchase price $250,135,833 (collateralized
by U.S. Treasury Obligations: total market
value $255,000,100) 250,000 250,000
Salomon Smith Barney
6.470%, dated 09/29/00, matures 10/02/00,
repurchase price $500,269,583 (collateralized
by U.S. Treasury Obligations: total market
value $510,243,749) 500,000 500,000
Societe Generale
6.510%, dated 09/29/00, matures 10/02/00,
repurchase price $200,108,500 (collateralized
by U.S. Treasury Obligations: total market
value $204,024,297) 200,000 200,000
UBS Warburg
6.520%, dated 09/29/00, matures 10/02/00,
repurchase price $650,353,167 (collateralized
by U.S. Treasury STRIPS: total market
value $663,002,092) 650,000 650,000
-------------
TOTAL REPURCHASE AGREEMENTS
(Cost $4,185,347) 4,185,347
-------------
TOTAL INVESTMENTS -- 98.8%
(Cost $5,282,323) 5,282,323
-------------
OTHER ASSETS AND LIABILITIES, NET -- 1.2% 66,389
-------------
NET ASSETS:
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
30,481,745 outstanding shares 30,482
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
3,252,580,451 outstanding shares 3,252,586
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
2,065,691,461 outstanding shares 2,065,692
Undistributed net investment income 51
Accumulated net realized loss on investments (99)
-------------
TOTAL NET ASSETS -- 100.0% $ 5,348,712
-------------
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
-------------
STRIPS--Separate Trading of Registered Interest and Principal of Securities
The accompanying notes are an integral part of the financial statements.
(12 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
STATEMENTS OF OPERATIONS for the year ended September 30, 2000, in thousands
<TABLE>
<CAPTION>
GOVERNMENT PRIME TAX FREE TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS OBLIGATIONS
FUND FUND FUND FUND
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Interest $108,695+ $734,893 $ 27,510 $339,666
------------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 7,198 47,309 2,766 23,309
Less: Waiver of investment advisory fees (1,066) (4,715) (441) (3,282)
Administrator fees 1,057 6,938 405 3,424
Distribution fees - Class A 1,114 11,347 747 76
Distribution fees - Class B -- 41 -- --
Distribution fees - Class C -- 3 -- --
Distribution fees - Class D 647 742 45 5,312
Custodian fees 540 3,549 208 1,748
Registration fees 83 569 32 293
Professional fees 50 282 17 140
Transfer agent fees 342 5,315 192 194
Printing 54 358 21 173
Directors' fees 28 187 11 92
Other 54 201 31 130
------------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 10,101 72,126 4,034 31,609
============================================================================================================
Investment income - net 98,594 662,767 23,476 308,057
------------------------------------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS 6 33 (1) --
============================================================================================================
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 98,600 $662,800 $ 23,475 $308,057
============================================================================================================
</TABLE>
+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.
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 13)
<PAGE>
STATEMENTS OF CHANGES IN NET ASSETS in thousands
<TABLE>
<CAPTION>
GOVERNMENT PRIME
OBLIGATIONS FUND OBLIGATIONS FUND
---------------------------------------------------------------------------------------------------------------------------
10/1/99 10/1/98 10/1/99 10/1/98
to to to to
9/30/00 9/30/99 9/30/00 9/30/99
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income - net $ 98,594 $ 81,027 $ 662,767 $ 490,914
Net realized gain (loss) on investments 6 38 33 (209)
---------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 98,600 81,065 662,800 490,705
---------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (23,549) (18,697) (244,987) (181,035)
Class B -- -- (193) (140)
Class C -- -- (13) (4)
Class D (23,555) (16,906) (27,766) (16,568)
Class Y (51,490) (45,419) (389,752) (293,224)
---------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (98,594) (81,022) (662,711) (490,971)
===========================================================================================================================
CAPITAL SHARE TRANSACTIONS
AT NET ASSET VALUE OF $1.00 PER SHARE:
Class A:
Proceeds from sales 532,464 1,650,447 4,513,563 15,877,099
Reinvestment of distributions 22,811 17,873 236,180 175,570
Payments for redemptions (519,915) (1,558,123) (4,306,419) (15,581,050)
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class A transactions 35,360 110,197 443,324 471,619
---------------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales -- -- 6,747 6,253
Reinvestment of distributions -- -- 173 126
Payments for redemptions -- -- (6,918) (4,770)
---------------------------------------------------------------------------------------------------------------------------
Increase in net assets from
Class B transactions -- -- 2 1,609
---------------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales -- -- 1,108 639
Reinvestment of distributions -- -- 11 3
Payments for redemptions -- -- (1,089) (301)
---------------------------------------------------------------------------------------------------------------------------
Increase in net assets from
Class C transactions -- -- 30 341
---------------------------------------------------------------------------------------------------------------------------
Class D:
Proceeds from sales 864,355 1,401,607 2,719,435 1,486,760
Reinvestment of distributions -- -- 270 --
Payments for redemptions (831,567) (1,346,477) (2,629,898) (1,294,419)
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class D transactions 32,788 55,130 89,807 192,341
---------------------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 2,748,048 3,218,268 19,231,234 14,825,991
Reinvestment of distributions 22,411 22,941 173,681 128,234
Payments for redemptions (2,772,129) (3,302,378) (19,202,298) (14,171,383)
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
Class Y transactions (1,670) (61,169) 202,617 782,842
---------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
capital share transactions 66,478 104,158 735,780 1,448,752
---------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 66,484 104,201 735,869 1,448,486
NET ASSETS AT BEGINNING OF PERIOD 1,813,411 1,709,210 10,829,440 9,380,954
===========================================================================================================================
NET ASSETS AT END OF PERIOD (A) $ 1,879,895 $ 1,813,411 $ 11,565,309 $ 10,829,440
===========================================================================================================================
</TABLE>
(A) Includes undistributed net investment income (distributions in excess of net
investment income) (000) of $18 and $18 for Government Obligations Fund,
$179 and $123 for Prime Obligations Fund, $24 and $(28) for Tax Free
Obligations Fund, $51 and $28 for Treasury Obligations Fund, at September
30, 2000, and September 30, 1999, respectively.
The accompanying notes are an integral part of the financial statements.
(14 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
<TABLE>
<CAPTION>
TAX FREE TREASURY
OBLIGATIONS FUND OBLIGATIONS FUND
-------------------------------------------------------------------
10/1/99 10/1/98 10/1/99 10/1/98
to to to to
9/30/00 9/30/99 9/30/00 9/30/99
-------------------------------------------------------------------
<S> <C> <C> <C>
$ 23,476 $ 17,794 $ 308,057 $ 263,376
(1) 14 -- (32)
-------------------------------------------------------------------
23,475 17,808 308,057 263,344
-------------------------------------------------------------------
(9,634) (7,079) (1,573) (1,677)
-- -- -- --
-- -- -- --
(1,003) (799) (121,498) (171,457)
(12,800) (9,960) (185,030) (90,248)
-------------------------------------------------------------------
(23,437) (17,838) (308,101) (263,382)
===================================================================
548,438 1,438,162 209,009 174,704
9,274 6,862 1,495 1,839
(539,908) (1,423,553) (203,492) (254,808)
-------------------------------------------------------------------
17,804 21,471 7,012 (78,265)
-------------------------------------------------------------------
-- -- -- --
-- -- -- --
-- -- -- --
-------------------------------------------------------------------
-- -- -- --
-------------------------------------------------------------------
-- -- -- --
-- -- -- --
-- -- -- --
-------------------------------------------------------------------
-- -- -- --
-------------------------------------------------------------------
104,581 60,330 10,677,903 12,947,653
1 -- -- --
(113,937) (56,959) (11,277,516) (12,950,371)
-------------------------------------------------------------------
(9,355) 3,371 (599,613) (2,718)
-------------------------------------------------------------------
644,258 600,968 12,296,779 8,751,666
167 87 28,831 20,667
(607,040) (535,531) (12,880,741) (7,955,114)
-------------------------------------------------------------------
37,385 65,524 (555,131) 817,219
-------------------------------------------------------------------
45,834 90,366 (1,147,732) 736,236
-------------------------------------------------------------------
45,872 90,336 (1,147,776) 736,198
640,580 550,244 6,496,488 5,760,290
===================================================================
$ 686,452 $ 640,580 $ 5,348,712 $ 6,496,488
===================================================================
</TABLE>
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 15)
<PAGE>
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GOVERNMENT OBLIGATIONS FUND
Class A
2000 $ 1.00 $ 0.053 $ (0.053) $ 1.00
1999 1.00 0.043 (0.043) 1.00
1998(1) 1.00 0.021 (0.021) 1.00
Class D
2000 $ 1.00 $ 0.055 $ (0.055) $ 1.00
1999 1.00 0.044 (0.044) 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
Class Y
2000 $ 1.00 $ 0.056 $ (0.056) $ 1.00
1999 1.00 0.046 (0.046) 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
PRIME OBLIGATIONS FUND
Class A
2000 $ 1.00 $ 0.054 $ (0.054) $ 1.00
1999 1.00 0.044 (0.044) 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
Class B
2000 $ 1.00 $ 0.047 $ (0.047) $ 1.00
1999 1.00 0.038 (0.038) 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
Class C
2000 $ 1.00 $ 0.047 $ (0.047) $ 1.00
1999(2) 1.00 0.024 (0.024) 1.00
Class D
2000 $ 1.00 $ 0.056 $ (0.056) $ 1.00
1999 1.00 0.046 (0.046) 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
Class Y
2000 $ 1.00 $ 0.057 $ (0.057) $ 1.00
1999 1.00 0.048 (0.048) 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
-------------------------------------------------------------------------------
</TABLE>
+Returns are for the period indicated and have not been annualized.
(1)Commenced operations on April 29, 1998. All ratios for the period have been
annualized.
(2)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.
(16 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME TO
RATIO OF INVESTMENT AVERAGE AVERAGE
NET ASSETS EXPENSES TO INCOME TO NET ASSETS NET ASSETS
TOTAL END OF AVERAGE AVERAGE (EXCLUDING (EXCLUDING
RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
5.43% $ 470,587 0.76% 5.29% 0.82% 5.23%
4.36 435,227 0.75 4.28 0.82 4.21
2.10+ 325,024 0.70 4.93 0.76 4.87
5.59% $ 472,078 0.60% 5.47% 0.66% 5.41%
4.52 439,287 0.60 4.44 0.67 4.37
5.15 384,143 0.60 5.03 0.67 4.96
5.04 337,199 0.60 4.92 0.67 4.85
5.08 269,382 0.60 4.96 0.69 4.87
5.75% $ 937,230 0.45% 5.59% 0.51% 5.53%
4.67 938,897 0.45 4.57 0.52 4.50
5.30 1,000,043 0.45 5.18 0.52 5.11
5.20 946,196 0.45 5.07 0.52 5.00
5.24 777,594 0.45 5.10 0.54 5.01
5.52% $4,614,094 0.82% 5.40% 0.86% 5.36%
4.51 4,170,881 0.80 4.42 0.87 4.35
5.15 3,699,197 0.70 5.00 0.79 4.91
5.06 218,261 0.70 4.95 0.77 4.88
5.08 135,146 0.70 4.94 0.79 4.85
4.85% $ 4,009 1.47% 4.72% 1.51% 4.68%
3.85 4,007 1.45 3.78 1.51 3.72
4.37 2,397 1.45 4.29 1.53 4.21
4.27 2,018 1.45 4.17 1.52 4.10
4.29 1,763 1.45 4.15 1.54 4.06
4.85% $ 371 1.46% 4.63% 1.51% 4.58%
2.47+ 341 1.45 3.75 1.51 3.69
5.74% $ 515,806 0.62% 5.62% 0.66% 5.58%
4.73 426,004 0.60 4.62 0.66 4.56
5.26 233,675 0.60 5.13 0.68 5.05
5.16 113,064 0.60 5.02 0.67 4.95
5.18 109,213 0.60 4.98 0.69 4.89
5.90% $6,431,029 0.47% 5.75% 0.51% 5.71%
4.89 6,228,207 0.45 4.78 0.51 4.72
5.42 5,445,685 0.45 5.28 0.53 5.20
5.32 3,615,873 0.45 5.19 0.52 5.12
5.34 3,166,213 0.45 5.20 0.54 5.11
--------------------------------------------------------------------------------------
</TABLE>
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 17)
<PAGE>
FINANCIAL HIGHLIGHTS For a share outstanding, throughout the periods ended
September 30, unless otherwise indicated
<TABLE>
<CAPTION>
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX FREE OBLIGATIONS FUND(A)
Class A
2000 $ 1.00 $ 0.032 $ (0.032) $ 1.00
1999 1.00 0.025 (0.025) 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
Class D
2000 $ 1.00 $ 0.034 $ (0.034) $ 1.00
1999 1.00 0.026 (0.026) 1.00
1998(1) 1.00 0.025 (0.025) 1.00
1997(4) 1.00 0.000 (0.000) 1.00
Class Y
2000 $ 1.00 $ 0.035 $ (0.035) $ 1.00
1999 1.00 0.028 (0.028) 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
TREASURY OBLIGATIONS FUND
Class A
2000 $ 1.00 $ 0.052 $ (0.052) $ 1.00
1999 1.00 0.042 (0.042) 1.00
1998(5) 1.00 0.045 (0.045) 1.00
Class D
2000 $ 1.00 $ 0.052 $ (0.052) $ 1.00
1999 1.00 0.043 (0.043) 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
Class Y
2000 $ 1.00 $ 0.054 $ (0.054) $ 1.00
1999 1.00 0.045 (0.045) 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
-----------------------------------------------------------------------------------
</TABLE>
+Returns are for the period indicated and have not 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 fund's fiscal year end changed 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 funds' fiscal year end changed from July 31 to
November 30, effective November 30, 1997.
(3)For the period ended July 31.
(4)Commenced operations November 26, 1997. All ratios for the period have been
annualized. For the period ended November 30.
(5)Commenced operations on November 3, 1997. All ratios for the period have been
annualized.
The accompanying notes are an integral part of the financial statements.
(18 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
<TABLE>
<CAPTION>
RATIO OF NET
RATIO OF INVESTMENT
RATIO OF NET EXPENSES TO INCOME TO
RATIO OF INVESTMENT AVERAGE AVERAGE
NET ASSETS EXPENSES TO INCOME TO NET ASSETS NET ASSETS
TOTAL END OF AVERAGE AVERAGE (EXCLUDING (EXCLUDING
RETURN PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
3.28% $ 286,449 0.75% 3.23% 0.81% 3.17%
2.51 268,626 0.74 2.47 0.82 2.39
2.45+ 247,154 0.70 2.84 0.83 2.71
0.96+ 28,662 0.89 2.83 1.23 2.49
2.76 31,668 0.88 2.73 1.23 2.38
2.81 30,143 0.89 2.78 1.25 2.42
3.43% $ 24,112 0.60% 3.36% 0.66% 3.30%
2.66 33,464 0.60 2.62 0.67 2.55
2.51+ 30,095 0.60 3.02 0.73 2.89
0.04+ 1 0.60 3.20 9.07 (5.27)
3.59% $ 375,891 0.45% 3.53% 0.51% 3.47%
2.82 338,490 0.45 2.75 0.52 2.68
2.67+ 272,995 0.45 3.13 0.58 3.00
1.08+ 10,703 0.64 3.09 0.97 2.76
3.17 9,137 0.48 3.13 0.83 2.78
3.22 3,895 0.41 2.92 0.79 2.54
5.27% $ 30,506 0.70% 5.16% 0.76% 5.10%
4.31 23,496 0.70 4.24 0.76 4.18
4.54+ 101,749 0.70 4.88 0.76 4.82
5.37% $3,252,551 0.60% 5.23% 0.66% 5.17%
4.41 3,852,189 0.60 4.32 0.66 4.26
5.10 3,854,933 0.60 4.98 0.66 4.92
4.98 2,847,215 0.60 4.88 0.68 4.80
5.00 1,616,130 0.60 4.86 0.70 4.76
5.53% $2,065,655 0.45% 5.39% 0.51% 5.33%
4.57 2,620,803 0.45 4.49 0.51 4.43
5.26 1,803,608 0.45 5.13 0.51 5.07
5.14 897,797 0.45 5.03 0.53 4.95
5.15 317,392 0.45 5.00 0.55 4.90
--------------------------------------------------------------------------------------
</TABLE>
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 19)
<PAGE>
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000
1 > ORGANIZATION
The First American Government Obligations Fund, Prime Obligations Fund, Tax
Free Obligations Fund and Treasury Obligations Fund (collectively, the
"Funds") are mutual 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 A
shares are not subject to sales charges. Class B and Class C shares of the
Prime Obligations Fund are only available pursuant to an exchange for Class
B and Class C shares, respectively, of another fund in the First American
Family of Funds. 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' prospectuses provide descriptions 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 the amortized cost method, any
discount or premium is amortized ratably to the expected 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 distribute all of its taxable income.
Accordingly, no provision for federal income taxes is required.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes because of temporary or permanent
book/tax differences. These differences are primarily due to losses
deferred due to wash sales.
The character of distributions made during the year from net investment
income or net realized gains may differ from its ultimate characterization
for federal income tax purposes. In addition, due to the timing of dividend
distributions, the fiscal year in which the amounts are distributed may
differ from the year that the income or realized gains (losses) were
recorded by the fund. To the extent these differences are permanent,
adjustments are made to the appropriate equity accounts in the period that
the difference arises.
As of September 30, 2000, the following funds had capital loss
carryforwards (000):
FUND AMOUNT EXPIRATION DATE
---------------------------------------------------------------------------
Government Obligations $253 2003-2008
Prime Obligations 196 2003-2008
Treasury Obligations 99 2008
---------------------------------------------------------------------------
On the Statements of Net Assets, the following adjustments were made (000):
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED
FUND INCOME GAIN (LOSS)
---------------------------------------------------------------------------
Tax Free Obligations $13 $(13)
Treasury Obligations 67 (67)
---------------------------------------------------------------------------
(20 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
REPURCHASE AGREEMENTS - Each Fund may enter into repurchase agreements with
member banks of the Federal Reserve or registered broker dealers whom the
Funds' investment advisor deems creditworthy under guidelines approved by
the Funds' 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.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, requires management to
make estimates and assumptions that affect the reported 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"), First American Asset Management (the "Advisor"), a division
of U.S. Bank National Association ("U.S. Bank"), 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 0.40% of the average daily net assets. The Advisor intends
to waive fees during the current fiscal year so that total fund operating
expenses do not exceed expense limitations described in the Funds'
prospectuses. Fee waivers may be discontinued at any time.
ADMINISTRATION FEES - SEI Investments Mutual Funds Services ("SIMFS")
provided administrative services, including certain accounting, legal, and
shareholder services to the First American Family of Funds from October 1,
1999 through December 31, 1999. Effective January 1, 2000, U.S. Bank was
appointed as the administrator and began providing administrative services
to the First American Family of Funds. Under both arrangements, the Funds
are charged an annual rate of 0.07% of each FAF Fund's average daily net
assets, with a minimum annual fee of $50,000. To the extent that aggregate
net assets of the First American Family of Funds exceed $8 billion, the
annual rate for each FAF Fund is reduced to 0.055% of its respective share
of excess net assets. Fees are computed daily and paid monthly.
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 21)
<PAGE>
NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2000
SUB-ADMINISTRATION FEES - U.S. Bank assisted SIMFS and provided
sub-administration services for the Funds from October 1, 1999 through
December 31, 1999. For these services SIMFS compensated U.S. Bank, as
sub-administrator, monthly at an annual rate of up to 0.05% of each Fund's
average daily net assets. The fees for each Fund from October 1, 1999
through December 31, 1999 were approximately 0.017% of average daily net
assets. Under this arrangement, SIMFS paid U.S. Bank $2,646,000 in
aggregate for this three month period for the First American Family of
Funds. Effective January 1, 2000 SIMFS was appointed sub-administrator and
began assisting U.S. Bank in providing sub-administration services for the
Funds. For these services, U.S. Bank compensates SIMFS monthly at an annual
rate equal to 0.05% of aggregate average daily net assets of FAIF. In
addition, SIMFS also receives 0.015% on assets up to $34.5 billion, 0.0075%
on the next $25.5 billion and 0.005% on assets over $60 billion for all
Funds. There is a minimum $50,000 per Fund fee (the oldest 38 Funds are
excluded). U.S. Bank paid SIMFS $8,501,000 in aggregate from January 1,
2000 through September 30, 2000 for the First American Family of Funds. For
the Funds included in this annual report the amounts paid to U.S. Bank and
SIMFS for their respective periods were as follows (000):
U.S. BANK SIMFS
---------------------------------------------------------------------------
Government Obligations Fund $ 157 $ 197
Prime Obligations Fund 938 1,338
Tax Free Obligations Fund 54 79
Treasury Obligations Fund 509 637
---------------------------------------------------------------------------
CUSTODIAN FEES - Through a separate contractual agreement, U.S. Bank serves
as the Funds' custodian. The fee for each Fund is equal to an annual rate
of 0.03% of average daily net assets, which is computed daily and paid
monthly.
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 0.25% of each Fund's
average daily net assets of the Class A shares, 1.00% of the Class B and
Class C shares, and 0.15% 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 U.S. Bank and its affiliates the following amounts for the Funds
included in this annual report, for the year ended September 30, 2000
(000):
U.S. BANCORP U.S. BANK
U.S. BANK PIPER JAFFRAY TRUST
---------------------------------------------------------------------------
Government Obligations Fund $ 777 $ 980 $ 2
Prime Obligations Fund 3,829 8,248 2
Tax Free Obligations Fund 127 665 --
Treasury Obligations Fund 5,374 11 1
---------------------------------------------------------------------------
TRANSFER AGENT FEES - From October 1, 1999 to December 31, 1999, DST
Systems, Inc. provided transfer agency services for the Funds. Effective
January 1, 2000 U.S. Bank was appointed as transfer agent and dividend
disbursement agent. As the servicing agent, U.S. Bank was paid $9,862,000
in aggregate for the year ended September 30, 2000 for the First American
Family of Funds. For the year ended September 30, 2000, transfer agent fees
paid to U.S. Bank for the Funds included in this report were as follows
(000):
---------------------------------------------------------------------------
Government Obligations Fund $ 314
Prime Obligations Fund 5,468
Tax Free Obligations Fund 166
Treasury Obligations Fund 186
---------------------------------------------------------------------------
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 of shareholder reports, legal, auditing, insurance and other
miscellaneous expenses.
For the year ended September 30, 2000, legal fees and expenses were paid to
a law firm of which the Assistant Secretaries of the Funds are partners.
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%
---------------------------------------------------------------------------
(22 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
Class B shares will automatically convert to Class A shares eight years
after the first day of the month shares are purchased.
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.
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 September 30, 2000, the collateral held at September 30, 2000, with
respect to such loans, and income generated during the year ended September
30, 2000, from the program were as follows (000):
MARKET VALUE OF INCOME RECEIVED FROM
FUND LOANED SECURITIES SECURITIES LENDING
---------------------------------------------------------------------------
Government Obligations $327,534 $138
---------------------------------------------------------------------------
MARKET VALUE OF COLLATERAL PURCHASED WITH CASH RECEIVED
----------------------------------------------------------------
REPURCHASE MONEY MARKET FIXED INCOME
FUND AGREEMENTS INSTRUMENTS SECURITIES TOTAL
---------------------------------------------------------------------------
Government
Obligations $331,810 $535 $ -- $332,345
---------------------------------------------------------------------------
U.S. Bank 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 received $2,580,000 in aggregate securities lending
fees for the year ended September 30, 2000, for the First American Family
of Funds. For the year ended September 30, 2000, securities lending fees
for the Funds included in this annual report were as follows (000):
---------------------------------------------------------------------------
Government Obligations Fund $92
---------------------------------------------------------------------------
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
September 30, 2000, the percentage of portfolio investments by each revenue
source was as follows (000):
TAX FREE
OBLIGATIONS
FUND
---------------------------------------------------------------------------
Revenue Bonds:
Education 6%
Health Care Bonds 18
Housing Bonds 8
Industrial Bonds 13
Pollution Control Bonds 8
Transportation 1
Utility Bonds 9
Other 7
General Obligations 18
Anticipation Notes 3
Certificates of Participation 2
Tax Exempt Commercial Paper 7
---------------------------------------------------------------------------
100%
---------------------------------------------------------------------------
The credit ratings of long-term debt as a percentage of total market value
of investments at September 30, 2000, were as follows:
TAX FREE
OBLIGATIONS
STANDARD & POOR'S/MOODY'S RATINGS: FUND
---------------------------------------------------------------------------
AAA/Aaa 23%
AA/Aa 27
A/A 45
NR 5
---------------------------------------------------------------------------
100%
---------------------------------------------------------------------------
Securities rated by only one agency are shown in that category. Securities
rated by both agencies are shown with their lowest rating.
6 > PENDING ACQUISITION
On October 4, 2000, U.S. Bancorp, the parent company of the Funds'
investment advisor, announced that it had entered into an agreement to be
acquired by Firstar Corporation. It is anticipated that this acquisition
will be completed in the first quarter of 2001, subject to regulatory
approval, the approval of U.S. Bancorp shareholders and the satisfaction of
customary closing conditions.
FIRST AMERICAN FUNDS ANNUAL REPORT 2000 23)
<PAGE>
NOTICE TO SHAREHOLDERS September 30, 2000 (unaudited)
THE INFORMATION SET FORTH BELOW IS FOR EACH FUND'S FISCAL YEAR AS REQUIRED
BY FEDERAL LAWS. MOST SHAREHOLDERS, HOWEVER, MUST REPORT DISTRIBUTIONS ON A
CALENDAR YEAR BASIS FOR INCOME TAX PURPOSES, WHICH MAY INCLUDE
DISTRIBUTIONS FOR PORTIONS OF TWO FISCAL YEARS OF A FUND. ACCORDINGLY, THE
INFORMATION NEEDED FOR INCOME TAX PURPOSES WILL BE SENT IN EARLY 2001 ON
FORM 1099. PLEASE CONSULT YOUR TAX ADVISOR FOR PROPER TREATMENT OF THIS
INFORMATION.
Dear First American Fund Shareholders:
For the fiscal year ended September 30, 2000, each Fund has designated long
term capital gains, ordinary income and exempt income with regard to
distributions paid during the year as follows:
LONG TERM ORDINARY
CAPITAL GAINS INCOME TAX TOTAL
DISTRIBUTIONS DISTRIBUTIONS EXEMPT DISTRIBUTIONS
FUND (TAX BASIS) (TAX BASIS) INTEREST (TAX BASIS)
---------------------------------------------------------------------------
Government Obligations 0% 100% 0% 100%
Prime Obligations 0 100 0 100
Tax Free Obligations 0 0 100 100
Treasury Obligations 0 100 0 100
---------------------------------------------------------------------------
(24 FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
BOARD OF DIRECTORS First American Investment Funds, Inc.
MR. ROBERT DAYTON
Director of First American Investment Funds, Inc.
Chief executive officer of Okabena Company
MR. ROGER GIBSON
Director of First American Investment Funds, Inc.
Vice president of North America-Mountain Region for United Airlines
MR. ANDREW HUNTER III
Director of First American Investment Funds, Inc.
Chairman of Hunter Keith Industries
MR. LEONARD KEDROWSKI
Director of First American Investment Funds, Inc.
Owner and president of Executive Management Consulting, Inc.
MR. JOHN MURPHY JR.
Director of First American Investment Funds, Inc.
Executive vice president, U.S. Bancorp
MR. ROBERT SPIES
Director of First American Investment Funds, Inc.
Retired vice president, U.S. Bank National Association
MR. JOSEPH STRAUSS
Director of First American Investment Funds, Inc.
Former chairman of First American Investment Funds, Inc.
Owner and president of Strauss Management Company
MS. VIRGINIA STRINGER
Chairperson of First American Investment Funds, Inc.
Owner and president of Strategic Management Resources, Inc.
FIRST AMERICAN FUNDS ANNUAL REPORT 2000
<PAGE>
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
DIRECT FUND CORRESPONDENCE TO:
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
This report and the financial statements contained herein are submitted
for the general information of the shareholders of the corporation and
are not intended to be a forecast of future events, a guarantee of future
results, nor investment advice. Further, there is no assurance that
certain securities will remain in or out of each fund's portfolio.
For a prospectus or fund profile containing more information on First
American Funds, including investment policies, fees and expenses, please
contact your investment professional, call Investor Services at
1-800-637-2548, or visit us on the web at www.firstamericanfunds.com.
Please read the prospectus or profile carefully before you invest or send
money.
INVESTMENT ADVISOR AND ADMINISTRATOR
FIRST AMERICAN ASSET MANAGEMENT,
A DIVISION OF U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
U.S. BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
SEI IS NOT AN AFFILIATE OF U.S. BANK
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
1400 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
--------------------------------------------------------------------------------
FIRST AMERICAN FUNDS Bulk Rate
c/o American Financial Printing Inc. U.S. Postage
404 Industrial Boulevard, N.E. PAID
Minneapolis, MN 55413 Mpls, MN
Permit No. 26388
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailing to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 1-800-637-2548.
3109-00 11/2000
AR-MMR-00
<PAGE>
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
DIRECT FUND CORRESPONDENCE TO:
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
This report and the financial statements contained herein are submitted
for the general information of the shareholders of the corporation and
are not intended to be a forecast of future events, a guarantee of future
results, nor investment advice. Further, there is no assurance that
certain securities will remain in or out of each fund's portfolio.
For a prospectus or fund profile containing more information on First
American Funds, including investment policies, fees and expenses, please
contact your investment professional, call Investor Services at
1-800-637-2548, or visit us on the web at www.firstamericanfunds.com.
Please read the prospectus or profile carefully before you invest or send
money.
INVESTMENT ADVISOR AND ADMINISTRATOR
FIRST AMERICAN ASSET MANAGEMENT,
A DIVISION OF U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
U.S. BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
SEI IS NOT AN AFFILIATE OF U.S. BANK
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
1400 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
--------------------------------------------------------------------------------
FIRST AMERICAN FUNDS Bulk Rate
c/o American Financial Printing Inc. U.S. Postage
404 Industrial Boulevard, N.E. PAID
Minneapolis, MN 55413 Mpls, MN
Permit No. 26388
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailing to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 1-800-637-2548.
3109-00 11/2000
AR-MMD-00
<PAGE>
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
DIRECT FUND CORRESPONDENCE TO:
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
This report and the financial statements contained herein are submitted
for the general information of the shareholders of the corporation and
are not intended to be a forecast of future events, a guarantee of future
results, nor investment advice. Further, there is no assurance that
certain securities will remain in or out of each fund's portfolio.
For a prospectus or fund profile containing more information on First
American Funds, including investment policies, fees and expenses, please
contact your investment professional, call Investor Services at
1-800-637-2548, or visit us on the web at www.firstamericanfunds.com.
Please read the prospectus or profile carefully before you invest or send
money.
INVESTMENT ADVISOR AND ADMINISTRATOR
FIRST AMERICAN ASSET MANAGEMENT,
A DIVISION OF U.S. BANK NATIONAL ASSOCIATION
601 Second Avenue South
Minneapolis, Minnesota 55402
CUSTODIAN
U.S. BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
SEI INVESTMENTS DISTRIBUTION CO.
1 Freedom Valley Drive
Oaks, Pennsylvania 19456
SEI IS NOT AN AFFILIATE OF U.S. BANK
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
1400 Pillsbury Center
200 South Sixth Street
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
220 South Sixth Street
Minneapolis, Minnesota 55402
--------------------------------------------------------------------------------
FIRST AMERICAN FUNDS Bulk Rate
c/o American Financial Printing Inc. U.S. Postage
404 Industrial Boulevard, N.E. PAID
Minneapolis, MN 55413 Mpls, MN
Permit No. 26388
In an attempt to reduce shareholder costs and help eliminate duplication, the
funds will try to limit their mailing to one report for each address that lists
one or more shareholders with the same last name. If you would like additional
copies, please call Investor Services at 1-800-637-2548.
3109-00 11/2000
AR-MMI-00
