[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
MONEY MARKET
FUNDS
SEMIANNUAL REPORT
2000
FIRST AMERICAN
FUNDS, INC.
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FIRST AMERICAN
FAMILY OF FUNDS
INVESTMENTS FOR EVERY GOAL
First American Funds offers 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) EQUITY FUNDS
AND RETURN POTENTIAL |
|
(*) FUNDS OF FUNDS
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|
(*) BOND FUNDS
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(*) TAX FREE BOND FUNDS
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(*) MONEY MARKET FUNDS
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| GOVERNMENT OBLIGATIONS
| PRIME OBLIGATIONS
| TAX FREE OBLIGATIONS
| TREASURY OBLIGATIONS
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LOWER RISK (o)
AND RETURN POTENTIAL
TABLE OF CONTENTS
Message to Shareholders 1
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Statements of Net Assets 2
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Statements of Operations 11
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Statements of Changes in Net Assets 12
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Financial Highlights 14
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Notes to Financial Statements 18
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Notice to Shareholders 22
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Tribute to David T. Bennett 23
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NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
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MESSAGE TO SHAREHOLDERS MARCH 31, 2000
DEAR SHAREHOLDERS:
On behalf of the board of directors of First American Funds, thank you for
the opportunity to manage your mutual fund investments. If you are a new
investor, we welcome you to the First American family of funds. If you are
a long-term investor, we are again proud to meet your ongoing investment
needs.
Investors experienced rapidly changing markets over the past six months.
The Dow Jones Industrial Average (the "Dow") moved steadily upward during
the fourth quarter of 1999, only to surrender its gains early in the first
quarter of this year due to concerns over rising interest rates. The Dow
regained momentum late in the first quarter after investors looked past
rate hikes to another period of strong corporate profits. During the same
period, the Nasdaq reached record heights only to suffer a dramatic
correction.
Rising interest rates have helped individual and institutional investors
capture additional yields on money market funds. In fact, money market
yields are currently at their highest levels in recent years. At the same
time, money market funds provide investors with a convenient place to hold
cash while evaluating other investment opportunities.
Within this report, you'll find financial statements on the First American
money market funds during the past six months, plus a complete list of fund
holdings. In addition, the Notice to Shareholders section contains
important shareholder information.
In closing, we encourage you to maintain a diversified portfolio and to
stay the course amid volatile markets. Although dramatic fluctuations are
becoming commonplace, investors may be able to better weather volatility
through balanced portfolios, coupled with a disciplined investment
approach.
Thank you for your confidence in First American Funds.
Sincerely,
/s/ Virginia L. Stringer /s/ Paul A. Dow
VIRGINIA L. STRINGER PAUL A. DOW
Chair Chief Investment Officer and President
First American Funds, Inc. First American Asset Management
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 1)
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STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
GOVERNMENT OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 68.4%
Export-Import Bank
6.180%, 04/17/00 (A) (B) $ 34,356 $ 34,355
FFCB
5.800%, 04/20/00 10,000 9,969
5.000%, 05/03/00 10,000 9,999
5.800%, 06/12/00 13,000 12,849
FHLB
6.155%, 04/03/00 (A) 50,000 49,999
6.205%, 04/03/00 (A) 100,000 99,978
6.270%, 04/04/00 (A) 45,000 45,002
4.970%, 04/20/00 10,000 10,000
5.010%, 04/28/00 10,000 10,000
5.050%, 05/19/00 15,000 14,996
5.125%, 05/19/00 10,000 9,999
5.200%, 05/26/00 20,000 19,998
5.415%, 06/14/00 10,000 9,998
4.380%, 10/23/00 9,250 9,167
6.400%, 02/09/01 15,000 14,984
FHLMC
5.720%, 04/04/00 100,000 99,951
5.920%, 04/11/00 66,388 66,279
5.678%, 04/18/00 (A) 50,000 49,995
6.000%, 04/25/00 30,000 29,880
6.395%, 05/16/00 10,000 10,010
5.491%, 06/02/00 15,000 14,865
6.015%, 06/29/00 15,820 15,605
5.440%, 08/10/00 10,000 9,802
6.308%, 01/16/01 40,000 38,071
6.308%, 01/16/01 30,000 28,515
6.717%, 03/29/01 10,000 9,368
FNMA
6.195%, 04/03/00 (A) 100,000 99,946
5.670%, 04/07/00 19,276 19,258
5.580%, 04/17/00 64,797 64,636
4.980%, 04/20/00 10,000 10,000
5.953%, 04/22/00 (A) 50,000 49,974
5.950%, 05/19/00 25,000 24,808
5.650%, 06/12/00 7,060 7,058
6.250%, 06/16/00 10,000 10,013
5.485%, 08/11/00 10,000 9,799
5.520%, 09/27/00 10,000 9,726
5.760%, 10/02/00 15,000 14,985
5.890%, 11/24/00 10,000 9,995
5.280%, 02/20/01 11,750 11,627
6.450%, 03/09/01 10,000 9,997
5.625%, 03/15/01 5,490 5,445
SLMA
6.145%, 04/04/00 (A) 52,400 52,348
6.585%, 04/04/00 (A) 50,000 49,995
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TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $1,193,244) 1,193,244
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OTHER U.S. GOVERNMENT OBLIGATIONS -- 9.6%
Nebhelp (LOC: SLMA)
5.820%, 04/03/00 18,094 18,088
6.064%, 04/13/00 22,077 22,032
New Hampshire Higher Education (LOC: SLMA)
5.850%, 05/03/00 19,978 19,874
GOVERNMENT OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Secondary Market Services (LOC: SLMA)
6.022%, 04/19/00 $ 23,329 $ 23,259
5.950%, 04/24/00 50,000 49,810
6.001%, 04/24/00 34,377 34,246
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TOTAL OTHER U.S. GOVERNMENT OBLIGATIONS
(Cost $167,309) 167,309
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REPURCHASE AGREEMENT -- 22.1%
C S First Boston
6.150%, dated 03/31/00,
matures 04/03/00, repurchase price
$386,608,034 (collateralized by
U.S. Government Agency Obligations:
total market value $406,071,261) 386,542 386,542
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TOTAL REPURCHASE AGREEMENT
(Cost $386,542) 386,542
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TOTAL INVESTMENTS -- 100.1%
(Cost $1,747,095) 1,747,095
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OTHER ASSETS AND LIABILITIES, NET -- (0.1%) (C) (2,114)
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NET ASSETS -- 100.0%
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
436,843,662 outstanding shares 436,812
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
402,611,612 outstanding shares 402,611
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
905,854,948 outstanding shares 905,855
Distributions in excess of net investment income (38)
Accumulated net realized loss on investments (259)
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TOTAL NET ASSETS -- 100.0% $1,744,981
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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, 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) Other assets and liabilities representing greater than 5 percent of the
total net assets include the following amounts (000):
Cash collateral received for securities on loan $423,583
Payable upon return of securities on loan $(423,583)
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.
(2 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
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PRIME OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
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COMMERCIAL PAPER -- 67.3%
BROKERAGE -- 13.0%
Goldman Sachs
5.907%, 04/03/00 $ 100,000 $ 99,968
5.994%, 05/02/00 62,000 61,684
6.080%, 05/22/00 100,000 99,139
6.121%, 05/22/00 50,000 49,571
JP Morgan
5.908%, 04/07/00 100,000 99,903
5.889%, 04/11/00 200,000 199,676
Merrill Lynch
5.873%, 04/04/00 50,000 49,976
5.925%, 04/10/00 100,000 99,853
5.911%, 04/13/00 100,000 99,804
5.981%, 05/03/00 30,000 29,842
Morgan Stanley Dean Witter
6.525%, 04/03/00 (B) 300,000 300,000
6.009%, 05/09/00 100,000 99,372
Salomon Smith Barney Holdings
5.906%, 04/14/00 50,000 49,894
5.911%, 04/18/00 50,000 49,862
5.925%, 04/19/00 50,000 49,853
5.926%, 04/20/00 50,000 49,845
6.079%, 05/03/00 100,000 99,464
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1,587,706
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CAPTIVE FINANCE -- 8.3%
American Express Credit
5.885%, 04/04/00 100,000 99,951
6.060%, 04/06/00 100,000 99,916
6.074%, 04/13/00 100,000 99,798
Ford Motor Credit
6.057%, 04/07/00 100,000 99,899
6.098%, 04/07/00 150,000 149,848
General Motors Acceptance
5.859%, 04/03/00 50,000 49,984
5.906%, 04/24/00 50,000 49,813
5.964%, 05/03/00 100,000 99,476
5.965%, 05/04/00 100,000 99,460
6.194%, 06/19/00 100,000 98,659
Met Life Funding
6.062%, 04/25/00 60,327 60,085
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1,006,889
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COMMERCIAL FUNDING CORPORATIONS -- 25.1%
Asset Securitization
5.885%, 04/05/00 (A) 50,000 49,968
6.068%, 04/10/00 (A) 95,000 94,856
5.978%, 05/01/00 (A) 100,000 99,508
Corporate Asset Funding
5.924%, 04/18/00 (A) 50,000 49,861
5.915%, 04/24/00 (A) 63,000 62,765
6.113%, 05/17/00 (A) 75,000 74,420
Edison Asset Securitization (Guarantor: 10% GECC)
5.902%, 04/06/00 (A) 75,783 75,721
5.957%, 04/26/00 (A) 59,408 59,164
Fleet Funding
5.895%, 04/04/00 (A) 100,777 100,728
5.897%, 04/05/00 (A) 86,293 86,237
6.116%, 05/08/00 (A) 57,767 57,407
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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Galaxy Funding
6.091%, 04/19/00 (A) $ 70,000 $ 69,788
6.116%, 04/24/00 (A) 50,000 49,806
6.116%, 04/25/00 (A) 65,000 64,737
6.118%, 04/27/00 (A) 100,000 99,561
6.147%, 05/12/00 (A) 34,900 34,658
6.112%, 05/15/00 (A) 50,000 49,630
6.203%, 06/12/00 (A) 22,000 21,731
6.270%, 07/10/00 (A) 42,000 41,283
International Securitization
5.900%, 04/03/00 (A) 50,000 49,984
5.981%, 04/04/00 (A) 40,000 39,980
6.102%, 04/12/00 (A) 42,060 41,982
6.082%, 04/13/00 (A) 85,900 85,727
6.001%, 04/14/00 (A) 70,363 70,211
6.102%, 04/20/00 (A) 100,000 99,680
Moat Funding LLC (Guarantor: 31% Chase)
6.085%, 04/04/00 (A) 75,000 74,962
5.963%, 04/05/00 (A) 100,000 99,934
5.893%, 04/06/00 (A) 100,000 99,919
6.134%, 05/12/00 (A) 33,856 33,621
6.159%, 07/18/00 (A) 100,000 98,200
Pooled Accounts Receivable Capital (Guarantor: 37% MBIA)
5.979%, 04/03/00 (A) 56,715 56,697
5.952%, 04/14/00 (A) 44,699 44,604
6.135%, 04/14/00 (A) 48,335 48,231
5.924%, 04/18/00 (A) 30,279 30,195
5.969%, 04/19/00 (A) 30,601 30,511
6.172%, 07/06/00 (A) 50,000 49,197
Quincy Capital
5.903%, 04/05/00 (A) 100,000 99,935
5.912%, 04/07/00 (A) 67,727 67,661
6.046%, 04/12/00 (A) 50,000 49,908
5.958%, 04/18/00 (A) 80,000 79,776
5.930%, 04/18/00 (A) 51,247 51,104
5.998%, 05/15/00 (A) 50,000 49,639
Receivables Capital
5.898%, 04/10/00 (A) 31,000 30,955
5.901%, 04/10/00 (A) 90,019 89,887
5.912%, 04/10/00 (A) 41,314 41,253
6.046%, 04/12/00 (A) 48,996 48,906
5.932%, 04/17/00 (A) 48,050 47,924
5.987%, 04/19/00 (A) 59,000 58,824
6.152%, 05/10/00 (A) 45,000 44,702
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3,055,938
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COMMERCIAL/INDUSTRIAL -- 1.1%
Marsh & McLennan
6.084%, 04/12/00 50,000 49,907
National Rural Utilities
6.111%, 05/18/00 80,000 79,367
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129,274
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DIVERSIFIED FINANCE -- 2.8%
Allianz America Finance
5.980%, 05/01/00 (A) 89,485 89,044
5.980%, 05/08/00 (A) 30,000 29,817
General Electric Capital
5.868%, 04/20/00 50,000 49,851
5.903%, 04/27/00 30,000 29,877
6.182%, 06/16/00 100,000 98,712
6.095%, 07/20/00 50,000 49,109
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346,410
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FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 3)
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STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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DOMESTIC BANKS -- 6.2%
Cofco Capital (LOC: BankAmerica)
6.225%, 06/20/00 $ 30,000 $ 29,591
Enterprise Funding (Guarantor: BankAmerica)
5.932%, 04/17/00 (A) 34,725 34,634
Kittyhawk Funding (Guarantor: BankAmerica)
5.938%, 04/06/00 (A) 61,200 61,150
5.910%, 04/17/00 (A) 45,500 45,382
6.110%, 04/25/00 (A) 35,070 34,928
6.036%, 05/22/00 (A) 49,000 48,586
6.215%, 06/21/00 (A) 100,000 98,623
6.392%, 09/20/00 (A) 50,000 48,521
Variable Funding Capital (Guarantor: First Union)
5.920%, 04/10/00 (A) 100,000 99,853
6.113%, 04/11/00 (A) 49,505 49,421
6.079%, 04/20/00 (A) 50,000 49,840
6.105%, 04/24/00 (A) 100,000 99,612
6.127%, 04/24/00 (A) 60,000 59,766
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759,907
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DOMESTIC BRANCH, FOREIGN BANK -- 1.8%
China Merchants Cayman (LOC: ABN AMRO, Chicago)
6.143%, 05/24/00 65,000 64,418
Galicia Buenos Aires Funding
(LOC: Dresdner Bank, New York)
6.242%, 06/22/00 100,000 98,599
Sinochem American (LOC: ABN AMRO, New York)
5.980%, 04/03/00 20,000 19,993
5.939%, 04/04/00 30,300 30,285
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213,295
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FOREIGN BANK -- 0.8%
Banco Itau (LOC: Barclays Bank)
5.997%, 05/26/00 20,000 19,825
CSN Overseas (LOC: Barclays Bank)
6.340%, 08/31/00 75,000 73,053
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92,878
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FOREIGN FUNDING CORPORATIONS -- 1.4%
Dorada Finance
5.976%, 04/10/00 (A) 25,000 24,964
5.991%, 04/25/00 (A) 30,000 29,885
Four Winds Funding (Guarantor: 49% Commerzbank) (A)
6.089%, 04/20/00 83,500 83,233
K2 USA LLC
5.955%, 05/30/00 (A) 36,500 36,159
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174,241
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RETAIL FUNDING CORPORATIONS -- 6.8%
Dakota Trust Certificates (LOC: Citibank Credit Card Trust)
5.957%, 04/04/00 (A) 50,000 49,976
5.956%, 04/04/00 (A) 75,000 74,963
5.973%, 04/05/00 (A) 25,000 24,984
5.891%, 04/06/00 (A) 50,000 49,959
5.957%, 04/20/00 (A) 75,000 74,768
5.948%, 04/24/00 (A) 50,000 49,812
5.920%, 04/25/00 (A) 75,000 74,704
PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
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Providian Master Trust Series 1993-3
5.924%, 04/18/00 (A) $ 28,600 $ 28,521
6.006%, 04/19/00 (A) 49,000 48,854
5.953%, 04/26/00 (A) 54,322 54,099
6.030%, 05/05/00 (A) 80,297 79,844
6.135%, 05/05/00 (A) 24,076 23,938
6.097%, 05/10/00 (A) 100,000 99,346
6.116%, 05/18/00 (A) 50,000 49,605
6.152%, 05/22/00 (A) 50,000 49,569
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832,942
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TOTAL COMMERCIAL PAPER
(Cost $8,199,480) 8,199,480
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CORPORATE OBLIGATIONS -- 25.6%
BROKERAGE -- 3.4%
Bear Stearns
6.625%, 07/28/00 (B) 200,000 200,000
Goldman Sachs
6.120%, 04/17/00 (A) (B) 88,000 88,000
WFP Tower B Finance Short Term Trust
(Guarantor: Merrill Lynch)
6.121%, 07/07/00 (A) (B) 120,340 120,340
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408,340
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COMMERCIAL INDUSTRIAL -- 0.3%
Wal-Mart
5.850%, 06/01/18 46,050 46,042
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DIVERSIFIED FINANCE -- 0.6%
General Electric Capital
5.976%, 04/12/00 (A) (B) 75,000 75,001
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FOREIGN BANK -- 1.7%
Restructured Asset Securities 1998-MM-7-1
(Guarantor: Caisse Des Depots)
5.930%, 04/17/00 (A) (B) 208,000 207,969
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FOREIGN FUNDING CORPORATIONS -- 13.2%
Beta Finance
6.835%, 04/04/00 (A) (B) 110,000 110,000
6.069%, 04/12/00 (A) (B) 100,000 99,995
5.160%, 04/17/00 (A) 30,000 30,000
6.580%, 01/16/01 (A) 55,000 55,000
Centauri (CC USA LLC)
5.200%, 04/03/00 (A) 25,000 25,000
6.360%, 04/03/00 (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
6.418%, 04/06/01 (A) (B) 100,000 100,000
Dorada Finance
6.315%, 04/03/00 (A) (B) 100,000 100,000
6.418%, 04/04/00 (A) (B) 125,000 125,000
5.200%, 04/07/00 (A) 20,000 20,000
5.615%, 06/15/00 (A) 50,000 50,000
6.130%, 10/13/00 (A) 30,000 30,000
The accompanying notes are an integral part of the financial statements.
(4 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
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PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
K2 USA LLC
6.230%, 04/03/00 (A) (B) $ 100,000 $ 100,001
5.260%, 05/08/00 (A) 50,000 50,000
5.260%, 05/15/00 (A) 50,000 50,000
5.380%, 05/25/00 (A) 50,000 50,000
5.800%, 07/06/00 (A) 50,000 50,000
5.920%, 07/31/00 (A) 25,000 25,001
6.780%, 02/02/01 (A) 42,000 42,000
Sigma Finance
6.520%, 04/03/00 (A) (B) 100,000 100,000
5.440%, 05/24/00 (A) 25,000 25,000
5.732%, 06/28/00 (A) 30,000 30,000
6.620%, 01/19/01 (A) 40,000 40,000
6.610%, 01/26/01 (A) 50,000 50,000
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1,606,997
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INSURANCE -- 6.4%
Allstate Life Insurance
6.209%, 04/03/00 (B) (C) 150,000 150,000
Anchor National Life Insurance Investment
6.250%, 04/03/00 (B) (C) 75,000 75,000
Monumental Life Insurance
6.069%, 04/03/00 (B) (C) 400,000 400,000
Sun Life Insurance of America
6.370%, 04/03/00 (B) (C) 75,000 75,000
6.500%, 04/03/00 (B) (C) 75,000 75,000
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775,000
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TOTAL CORPORATE OBLIGATIONS
(Cost $3,119,349) 3,119,349
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CERTIFICATES OF DEPOSIT -- 4.6%
Bayerische Landesbank NY
6.250%, 04/03/00 (B) 63,000 62,985
Bayerische Landesbank NY
6.610%, 03/07/01 25,000 24,977
Deutsche Bank NY
5.150%, 04/28/00 100,000 99,921
National Westminster NY
6.695%, 03/01/01 50,000 49,983
Royal Bank of Canada NY
6.470%, 01/08/01 50,000 49,983
UBS AG Stamford
5.340%, 05/24/00 50,000 49,996
5.340%, 05/30/00 10,000 9,996
6.105%, 11/29/00 25,000 24,989
6.200%, 12/04/00 25,000 24,987
6.195%, 12/08/00 50,000 49,977
6.220%, 12/11/00 50,000 49,975
6.380%, 12/26/00 65,000 64,973
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TOTAL CERTIFICATES OF DEPOSIT
(Cost $562,742) 562,742
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PRIME OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS -- 0.4%
FHLMC
6.308%, 01/16/01 $ 50,000 $ 47,624
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TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $47,624) 47,624
-------------
EURO TIME DEPOSITS -- 2.3%
Fifth Third Cincinnati Bank
5.156%, 04/03/00 284,701 284,701
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TOTAL EURO TIME DEPOSITS
(Cost $284,701) 284,701
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REPURCHASE AGREEMENTS -- 1.7%
CS First Boston
6.15%, dated 03/31/00, matures 04/03/00,
repurchase price $113,447,382 (collateralized
by U.S. Government Agency Obligations: total
market value $116,933,925) 113,458 113,458
Donaldson Lufkin & Jenrette
6.08%, dated 03/31/00, matures
04/03/00, repurchase price $88,945,019
(collateralized by U.S. Treasury Obligations:
total market value $90,709,170) 88,930 88,930
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TOTAL REPURCHASE AGREEMENTS
(Cost $202,388) 202,388
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TOTAL INVESTMENTS -- 101.9%
(Cost $12,416,284) 12,416,284
-------------
OTHER ASSETS AND LIABILITIES, NET -- (1.9%) (230,377)
-------------
NET ASSETS -- 100.0%
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
4,703,893,431 outstanding shares 4,703,873
Portfolio Capital--Class B ($.01 par value--
20 billion authorized) based on
4,003,141 outstanding shares 4,001
Portfolio Capital--Class C ($.01 par value--
20 billion authorized) based on
136,601 outstanding shares 137
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
427,947,259 outstanding shares 427,947
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
7,050,069,807 outstanding shares 7,050,023
Undistributed net investment income 121
Accumulated net realized loss on investments (195)
-------------
TOTAL NET ASSETS -- 100.0% $12,185,907
-------------
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 5)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
PRIME OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION
- --------------------------------------------------------------------------------
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 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 March 31, 2000. The date shown is the next reset
date.
(C) Private Placement Securities considered illiquid investments under
guidelines established by the Board of Directors.
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
WFP--World Financial Properties
TAX FREE OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
MUNICIPAL BONDS -- 94.0%
ALABAMA -- 1.4%
Jefferson County Sewer Revenue,
Series A54 (RB) (INS: FGIC)
4.000%, 04/07/00 (A) (C) $ 10,000 $ 10,000
-------------
ALASKA -- 1.1%
Alaska State Housing Finance
(RB) (INS: MBIA)
4.000%, 04/07/00 (A) (C) 7,355 7,355
-------------
COLORADO -- 0.4%
Colorado State Educational Facility Authority,
Naropa University Project
(LOC: Norwest Expires: 11/15/09) (RB)
3.900%, 04/07/00 (A) 3,000 3,000
-------------
DELAWARE -- 0.4%
Delaware State Series A (GO)
4.400%, 03/01/01 3,000 3,007
-------------
DISTRICT OF COLUMBIA -- 1.4%
District of Columbia Consortium Revenue Authority
(LOC: First Union Expires: 06/16/03) (RB)
3.900%, 04/07/00 (A) 10,000 10,000
-------------
GEORGIA -- 1.5%
Dekalb County Pollution Control Revenue
(GTY: General Motors Corp.) (RB)
4.000%, 04/07/00 (A) 9,000 9,000
Muscogee County School District (GTY: AMBAC) (GO)
4.500%, 11/01/00 1,750 1,754
-------------
10,754
-------------
IDAHO -- 0.7%
Boise Urban Renewal Agency, Parking Revenue
(LOC: BankAmerica Expires: 09/07/03) (RB)
3.900%, 04/07/00 (A) 5,250 5,250
-------------
ILLINOIS -- 6.6%
Chicago Gas Supply Revenue (GTY: Peoples Gas
Light & Coke Co.) (RB)
3.900%, 04/07/00 (A) 12,000 12,000
Chicago, Series A (GO) (INS: MBIA)
4.750%, 01/01/01 2,460 2,472
City of Chicago, ABN AMRO Munitops 1998-3
(GO) (INS: FGIC)
4.030%, 04/07/00 (A) (C) 10,000 10,000
Illinois State Development Finance Authority,
American College of Surgeons Project
(LOC: Northern Trust Expires: 08/31/01) (RB)
3.950%, 04/07/00 (A) 4,000 4,000
Illinois State Health Facilities Authority,
Streeterville Corporation, Series A
(LOC: First National Bank of Chicago
Expires: 08/31/02) (RB)
3.950%, 04/07/00 (A) 9,900 9,900
The accompanying notes are an integral part of the financial statements.
(6 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Schaumburg, Multifamily Housing
(GTY: Merrill Lynch & Co.) (RB)
4.140%, 04/07/00 (A) (C) $ 9,000 $ 9,000
-------------
47,372
-------------
INDIANA -- 0.3%
Evansville Economic Development Authority
(LOC: Citibank Expires: 11/01/00) (RB)
4.100%, 04/07/00 (A) (C) 2,500 2,500
-------------
KENTUCKY -- 6.5%
Breckenridge County Lease Program Revenue
(LOC: Firstar Bank Expires: 12/15/02) (RB)
3.900%, 04/07/00 (A) 24,500 24,500
Clark County Pollution Control Revenue
(GTY: CFC) (RB)
3.700%, 04/15/00 (A) 9,815 9,815
Jeffersontown Lease Program, League of Cities
Funding (GTY: Firstar Bank
Expires: 03/15/03) (RB)
3.900%, 04/07/00 (A) 5,000 5,000
Louisville & Jefferson County Sewer District
(RB) (INS: FGIC)
4.000%, 04/07/00 (A) (C) 7,000 7,000
-------------
46,315
-------------
MARYLAND -- 2.7%
Anne Arrundel County (GO)
4.500%, 05/15/00 4,345 4,351
Montgomery County School Improvements
Series A (GO)
4.875%, 05/01/00 5,750 5,756
Washington Suburban Sanitary District,
Pre-refunded @ 102 (GO)
6.900%, 08/01/00 (B) 8,625 8,893
-------------
19,000
-------------
MICHIGAN -- 5.1%
Hannahville Indian Community Finance & Building
Authority, Building Program, Series A
(LOC: First of America
Expires: 06/15/05) (RB)
3.950%, 04/07/00 (A) (C) 4,000 4,000
Michigan State Hospital Finance Authority
(LOC: National City Bank
Expires: 12/15/03) (RB)
3.850%, 04/07/00 (A) 9,200 9,200
Michigan State Hospital Finance Authority,
Series A (LOC: First of America
Expires: 12/15/03) (RB)
3.850%, 04/07/00 (A) 7,800 7,800
3.850%, 04/07/00 (A) 1,500 1,500
3.850%, 04/07/00 (A) 3,125 3,125
3.850%, 04/07/00 (A) 1,500 1,500
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Michigan Strategic Fund (GO) (INS: FGIC)
3.950%, 04/07/00 (A) (C) $ 9,200 $ 9,200
-------------
36,325
-------------
MINNESOTA -- 10.8%
Bloomington Multifamily Housing Authority,
Rental Housing, Crow/Bloomington Project
(LOC: Credit Suisse NY
Expires: 06/30/05) (RB)
3.950%, 04/07/00 (A) 17,005 17,005
Eden Prairie, Multifamily Housing Authority
(LOC: Nationsbank
Expires: 10/15/00) (RB)
4.050%, 04/07/00 (A) 14,905 14,905
Minneapolis & St Paul Metro Airport
(RB) (INS: FGIC)
4.000%, 04/07/00 (A) (C) 8,250 8,250
Minneapolis, Series B (LOC: Bayerische Vereinsbank
Expires: 06/25/03) (RB)
3.750%, 04/07/00 (A) 8,160 8,160
Minnesota State, Pre-refunded @ 100 (GO)
7.000%, 08/01/00 (B) 2,850 2,877
Regents of University of Minnesota (RB)
3.900%, 04/07/00 (A) 26,000 26,000
-------------
77,197
-------------
MISSISSIPPI -- 0.6%
Mississippi State Public Improvements,
Pre-refunded @ 102 (GO)
7.125%, 10/01/00 (B) 4,300 4,454
-------------
MISSOURI -- 0.8%
Kansas City Midamerica Health Services
(LOC: Mellon Expires: 06/30/00) (RB)
3.950%, 04/07/00 (A) 5,400 5,400
-------------
NEBRASKA -- 0.7%
Omaha Nebraska Public Power District (RB)
5.000%, 02/01/01 4,930 4,964
-------------
NEVADA -- 1.0%
Nevada State (GO)
3.960%, 04/07/00 (A) (C) 5,000 5,000
Nevada State, ABN AMRO Munitops
(GO) (INS: MBIA)
4.030%, 04/07/00 (A) (C) 2,500 2,500
-------------
7,500
-------------
NEW YORK -- 1.4%
New York City Transitional Finance Authority (RB)
4.000%, 04/07/00 (A) (C) 10,000 10,000
-------------
NORTH CAROLINA -- 1.3%
Mecklenburg County Public Improvement
Series B (GO)
4.300%, 02/01/01 9,000 9,015
-------------
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 7)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
OHIO -- 3.8%
Greene County Hospital Facilities Revenue,
Series A (LOC: Keybank
Expires: 09/22/04) (RB)
3.900%, 04/07/00 (A) $ 17,065 $ 17,065
Ohio State Water Development Authority
(GTY: General Motors) (RB)
3.950%, 04/07/00 (A) 10,000 10,000
-------------
27,065
-------------
OKLAHOMA -- 3.8%
Oklahoma County Finance Authority
(GTY: Merrill Lynch & Co.) (GO)
4.090%, 04/07/00 (A) (C) 19,300 19,300
Tulsa Industrial Authority (RB) (INS: MBIA)
3.960%, 04/07/00 (A) (C) 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)
3.900%, 04/07/00 (A) 4,265 4,265
-------------
SOUTH CAROLINA -- 4.6%
Berkeley County Pollution Control Revenue
(GTY: Alcoa) (RB)
3.960%, 04/07/00 (A) 13,750 13,750
South Carolina State (GO)
5.500%, 04/01/00 4,500 4,500
South Carolina State Public Improvements (GO)
5.500%, 10/01/00 3,470 3,500
York County (GTY: Duke Power) (TECP)
4.050%, 08/08/00 5,000 5,000
York County Pollution Control, Series N3
(GTY: CFC) (RB)
4.050%, 09/15/00 (A) 6,000 6,000
-------------
32,750
-------------
SOUTH DAKOTA -- 0.6%
Yankton Industrial Development, Alumax Project
(GTY: Alcoa) (RB)
3.960%, 04/07/00 (A) (C) 4,500 4,500
-------------
TENNESSEE -- 3.8%
Clarksville County Public Building Authority Revenue
(LOC: Nationsbank Expires: 06/08/02) (RB)
4.000%, 04/07/00 (A) (C) 10,000 10,000
Maury County Health & Educational Facilities,
Southern Healthcare Systems Project A,
Series E (LOC: Bank One
Expires: 07/25/01) (RB)
4.000%, 04/07/00 (A) (C) 4,600 4,600
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Nashville & Davidson Counties, Metropolitan
Government Industrial Development
(LOC: Barclays Expires: 11/15/00) (RB)
4.050%, 04/07/00 (A) $ 7,035 $ 7,035
Tennessee State (GO)
7.000%, 03/01/01 5,355 5,485
-------------
27,120
-------------
TEXAS -- 8.8%
Comal Independent School District
(GTY: TXPSF) (GO)
4.030%, 04/07/00 (A) (C) 10,002 10,002
Dallas (GO)
5.600%, 02/15/01 3,000 3,037
5.000%, 02/15/01 3,135 3,156
Lower Neches Valley Authority, Texas Neches River
Treatment Project (GTY: Mobil Oil) (RB)
3.750%, 04/07/00 (A) 9,400 9,400
San Antonio Electric & Gas (RB) (INS: MBIA)
3.960%, 04/07/00 (A) (C) 7,455 7,455
Tarrant County Water Control Improvements,
Pre-refunded @ 100 (RB)
5.800%, 03/01/01 (B) 5,000 5,071
Texas A&M University (TECP)
3.750%, 04/11/00 7,200 7,200
Texas Public Financing Authority (TECP)
3.750%, 04/06/00 8,000 8,000
3.800%, 04/06/00 9,500 9,500
-------------
62,821
-------------
VERMONT -- 0.5%
Vermont State Student Loan Revenue
(LOC: State Street
Expires: 09/01/04) (RB)
4.100%, 04/07/00 (A) 3,440 3,440
-------------
VIRGINIA -- 2.4%
Alexandria Industrial Development Authority,
American Red Cross Project (LOC: First Union
Expires: 03/30/01) (RB)
3.900%, 04/07/00 (A) 5,900 5,900
Richmond Public Improvements, Series A
Pre-refunded @ 102 (RB)
6.700%, 01/15/01 (B) 3,995 4,150
Spotsylvania Industrial Development Authority,
Residential Care Facility, Chancellors Village,
Project A (LOC: First Union
Expires: 10/01/01) (RB)
3.900%, 04/07/00 (A) 7,300 7,300
-------------
17,350
-------------
WASHINGTON -- 9.6%
Seattle Municipal Water Utility Improvements,
Pre-refunded @ 102 (RB)
7.125%, 05/01/00 (B) 8,515 8,710
Washington State (GO) (INS: MBIA)
4.030%, 04/07/00 (A) (C) 9,000 9,000
The accompanying notes are an integral part of the financial statements.
(8 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
TAX FREE OBLIGATIONS FUND (CONTINUED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Washington State Housing Finance Nonprofit Authority,
Rockwood Retirement Project
(LOC: Wells Fargo Expires: 12/01/00) (RB)
4.100%, 04/01/00 (A) $ 16,675 $ 16,675
Washington State Housing Finance Authority,
YMCA Tacoma and Pierce Project A
(LOC: Keybank Expires: 12/22/03) (RB)
3.950%, 04/07/00 (A) 5,500 5,500
Washington State Housing Finance Authority,
YMCA Tacoma and Pierce Project B
(LOC: Keybank Expires: 12/22/03) (RB)
3.950%, 04/07/00 (A) 5,500 5,500
Washington State Public Power Supply System,
Nuclear Project #2,
Pre-refunded @ 102 (RB)
7.500%, 01/01/01 (B) 4,525 4,726
Washington State Public Power Supply Systems,
Nuclear Project #3 (RB)
3.960%, 04/07/00 (A) (C) 7,240 7,240
Washington State Public Power Supply Systems,
Series C, Nuclear Project #2,
Pre-refunded @ 102
7.625%, 01/01/01 (B) 6,000 6,268
Washington State, Series B,
Pre-refunded @ 100 (GO)
6.600%, 08/01/00 (B) 5,000 5,050
-------------
68,669
-------------
WISCONSIN -- 4.0%
Madison (GO)
5.000%, 05/01/00 2,200 2,203
Wisconsin Rural Water
4.250%, 09/15/00 4,000 4,005
Wisconsin State (GO)
5.750%, 05/01/00 2,000 2,004
Wisconsin State Health & Education Facilities
Authority, Blood Center Project, Series A
(LOC: M&I Expires: 06/15/02) (RB)
3.850%, 04/07/00 (A) 7,565 7,565
Wisconsin State Health & Education Facilities
Authority, Froedtert Memorial Hospital Project
(LOC: M&I Expires: 04/15/02) (RB)
3.980%, 04/07/00 (A) 12,000 12,000
Wisconsin State, Pre-refunded @ 101 (GO)
6.250%, 05/01/00 (B) 1,000 1,012
-------------
28,789
-------------
WYOMING -- 4.6%
Gillette Pollution Control Revenue
(LOC: Commerzbank A.G.
Expires: 06/07/04) (RB)
3.900%, 04/07/00 (A) 28,000 28,000
Uinta County Pollution Control, Chevron USA
Project (GTY: Chevron) (RB)
3.850%, 05/01/00 (A) 5,000 5,000
-------------
33,000
-------------
MULTISTATE -- 2.2%
Clipper Tax Exempt Trust 1998-2 (RB)
4.110%, 04/07/00 (A) (C) 15,800 15,800
-------------
TAX FREE OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION SHARES VALUE (000)
- --------------------------------------------------------------------------------
TOTAL MUNICIPAL BONDS
(Cost $672,247) $ 672,247
-------------
MONEY MARKET FUNDS -- 5.7%
AIM Tax Free Institutional Cash Reserve 21,852,000 21,852
Federated Tax Free Money Market 18,680,000 18,680
-------------
TOTAL MONEY MARKET FUNDS
(Cost $40,532) 40,532
-------------
TOTAL INVESTMENTS -- 99.7%
(Cost $712,779) 712,779
-------------
OTHER ASSETS AND LIABILITIES, NET -- 0.3% 2,257
-------------
NET ASSETS -- 100.0%
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
339,531,147 outstanding shares 339,496
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
25,500,427 outstanding shares 25,500
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
350,029,715 outstanding shares 350,027
Accumulated net realized gain on investments 13
-------------
TOTAL NET ASSETS -- 100.0% $715,036
-------------
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, 2000. The date shown is the next put
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
FGIC--Financial Guaranty Insurance Corporation
GO--General Obligation
GTY--Guaranty
INS--Insured
LOC--Letter of Credit
M&I--Marshall & Ilsley
MBIA--Municipal Bond Insurance Association
RB--Revenue Bond
TECP--Tax Exempt Commercial Paper
TXPSF--Texas Permanent School Fund
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 9)
<PAGE>
STATEMENTS OF NET ASSETS MARCH 31, 2000 (UNAUDITED)
TREASURY OBLIGATIONS FUND
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS -- 27.8%
U.S. Treasury Notes
6.375%, 05/15/00 $ 75,000 $ 75,127
5.500%, 05/31/00 75,000 75,055
6.250%, 05/31/00 100,000 100,185
5.375%, 06/30/00 50,000 50,002
5.875%, 06/30/00 50,000 50,063
5.375%, 07/31/00 25,000 24,990
6.125%, 07/31/00 50,000 50,118
8.750%, 08/15/00 50,000 50,635
5.125%, 08/31/00 125,000 124,841
6.250%, 08/31/00 25,000 25,079
6.125%, 09/30/00 75,000 75,215
4.000%, 10/31/00 175,000 173,354
5.750%, 11/15/00 50,000 49,987
4.625%, 11/30/00 75,000 74,424
5.625%, 11/30/00 50,000 49,872
4.500%, 01/31/01 100,000 98,520
5.000%, 02/28/01 50,000 49,408
U.S. Treasury Bill
5.328%, 04/20/00 400,000 398,735
-------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $1,595,610) 1,595,610
-------------
REPURCHASE AGREEMENTS -- 72.4%
ABN AMRO Securities
6.05%, dated 03/31/00, matures
04/03/00, repurchase price
$500,084,028 (collateralized by
U.S. Treasury Obligations: total market
value $510,000,492) 500,000 500,000
Banc One
6.07%, dated 03/31/00, matures
04/03/00, repurchase price
$250,042,153 (collateralized by
U.S. Treasury Obligations: total market
value $255,001,854) 250,000 250,000
Bear Stearns
6.05%, dated 03/31/00, matures
04/03/00, repurchase price
$250,042,014 (collateralized by
U.S. Treasury Obligations: total market
value $259,473,000) 250,000 250,000
CS First Boston
6.13%, dated 03/31/00, matures
04/03/00, repurchase price
$300,051,083 (collateralized by
U.S. Treasury Obligations: total market
value $307,433,410) 300,000 300,000
Donaldson Lufkin & Jenrette
6.08%, dated 03/31/00, matures
04/03/00, repurchase price $511,156,314
(collateralized by U.S. Treasury Obligations:
total market value $521,291,844) 511,070 511,070
Lehman Brothers
6.05%, dated 03/31/00,
matures 04/03/00, repurchase price
$250,042,014 (collateralized by
U.S. Treasury Obligations: total market
value $254,935,968) 250,000 250,000
TREASURY OBLIGATIONS FUND (CONCLUDED)
DESCRIPTION PAR (000) VALUE (000)
- --------------------------------------------------------------------------------
Morgan Stanley Dean Witter
6.255%, dated 03/31/00, matures
04/03/00, repurchase price $250,043,438
(collateralized by U.S. Treasury Obligations:
total market value $256,157,440) $ 250,000 $ 250,000
Prudential Securities
6.09%, dated 03/31/00, matures
04/03/00, repurchase price
$250,042,292 (collateralized by
U.S. Treasury Obligations: total market
value $255,000,868) 250,000 250,000
Salomon Smith Barney
6.08%, dated 03/31/00, matures
04/03/00, repurchase price
$600,101,333 (collateralized by
U.S. Treasury Obligations: total market
value $612,200,916) 600,000 600,000
Societe Generale
6.05%, dated 03/31/00, matures
04/03/00, repurchase price $250,042,014
(collateralized by U.S. Treasury Obligations:
total market value $255,014,551) 250,000 250,000
Warburg Dillon Reed
6.09%, dated 03/31/00, matures
04/03/00, repurchase price $750,126,875
(collateralized by U.S. Treasury Obligations:
total market value $765,004,816) 750,000 750,000
-------------
TOTAL REPURCHASE AGREEMENTS
(Cost $4,161,070) 4,161,070
-------------
TOTAL INVESTMENTS -- 100.2%
(Cost $5,756,680) 5,756,680
-------------
OTHER ASSETS AND LIABILITIES, NET -- (0.2%) (11,742)
-------------
NET ASSETS -- 100.0%
Portfolio Capital--Class A ($.01 par value--
20 billion authorized) based on
34,535,235 outstanding shares 34,535
Portfolio Capital--Class D ($.01 par value--
20 billion authorized) based on
3,419,803,700 outstanding shares 3,419,807
Portfolio Capital--Class Y ($.01 par value--
20 billion authorized) based on
2,290,604,686 outstanding shares 2,290,606
Undistributed net investment income 22
Accumulated net realized loss on investments (32)
-------------
TOTAL NET ASSETS -- 100.0% $5,744,938
-------------
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
-------------
The accompanying notes are an integral part of the financial statements.
(10 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
STATEMENTS OF OPERATIONS for the six months ended March 31, 2000 (unaudited),
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 $51,316+ $343,879 $12,589 $162,415
- ------------------------------------------------------------------------------------------------------
EXPENSES:
Investment advisory fees 3,656 23,517 1,375 11,995
Less: Waiver of investment advisory fees (535) (3,293) (223) (1,677)
Administrator fees 537 3,450 202 1,761
Distribution fees - class A 567 5,539 375 38
Distribution fees - class B -- 21 -- --
Distribution fees - class C -- 2 -- --
Distribution fees - class D 317 359 23 2,751
Custodian fees 274 1,765 103 900
Registration fees 46 360 28 151
Professional fees 18 116 7 61
Transfer agent fees 170 2,673 92 102
Printing 28 180 10 88
Directors' fees 18 114 7 58
Other 24 88 14 55
- ------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 5,120 34,891 2,013 16,283
======================================================================================================
Investment income - net 46,196 308,988 10,576 146,132
- ------------------------------------------------------------------------------------------------------
NET REALIZED GAIN ON INVESTMENTS -- 33 -- --
======================================================================================================
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $46,196 $309,021 $10,576 $146,132
======================================================================================================
</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 SEMIANNUAL REPORT 2000 11)
<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
3/31/00 9/30/99 3/31/00 9/30/99
- -----------------------------------------------------------------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income - net $ 46,196 $ 81,027 $ 308,988 $ 490,914
Net realized gain (loss) on investments -- 38 33 (209)
- -----------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 46,196 81,065 309,021 490,705
- -----------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
class A (11,047) (18,697) (111,519) (181,035)
class B -- -- (94) (140)
class C -- -- (8) (4)
class D (10,613) (16,906) (12,592) (16,568)
class Y (24,592) (45,419) (184,777) (293,224)
Net realized gain on investments
class A -- -- -- --
class B -- -- -- --
class C -- -- -- --
class D -- -- -- --
class Y -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
TOTAL DISTRIBUTIONS (46,252) (81,022) (308,990) (490,971)
=============================================================================================================================
CAPITAL SHARE TRANSACTIONS
AT NET ASSET VALUE OF $1.00 PER SHARE:
Class A:
Proceeds from sales 241,043 1,650,447 2,636,624 15,877,099
Reinvestment of distributions 10,697 17,873 106,130 175,570
Payments for redemptions (250,106) (1,558,123) (2,209,639) (15,581,050)
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
class A transactions 1,634 110,197 533,115 471,619
- -----------------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales -- -- 3,895 6,253
Reinvestment of distributions -- -- 82 126
Payments for redemptions -- -- (3,983) (4,770)
- -----------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in net assets from
class B transactions -- -- (6) 1,609
- -----------------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales -- -- 419 639
Reinvestment of distributions -- -- 7 3
Payments for redemptions -- -- (630) (301)
- -----------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from
class C transactions -- -- (204) 341
- -----------------------------------------------------------------------------------------------------------------------------
Class D:
Proceeds from sales 389,654 1,401,607 1,236,419 1,486,760
Reinvestment of distributions -- -- 29 --
Payments for redemptions (426,401) (1,346,477) (1,234,519) (1,294,419)
- -----------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in net assets from
class D transactions (36,747) 55,130 1,929 192,341
- -----------------------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 1,706,872 3,218,268 10,361,905 14,825,991
Reinvestment of distributions 11,178 22,941 80,840 128,234
Payments for redemptions (1,751,311) (3,302,378) (9,621,143) (14,171,383)
- -----------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in net assets from
class Y transactions (33,261) (61,169) 821,602 782,842
- -----------------------------------------------------------------------------------------------------------------------------
(Decrease) increase in net assets from
capital share transactions (68,374) 104,158 1,356,436 1,448,752
- -----------------------------------------------------------------------------------------------------------------------------
Total (decrease) increase in net assets (68,430) 104,201 1,356,467 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 (B) $ 1,744,981 $ 1,813,411 $12,185,907 $10,829,440
=============================================================================================================================
</TABLE>
(B) Includes undistributed net investment income (distributions in excess of net
investment income) (000) of $(38) and $18 for Government Obligations Fund,
$121 and $123 for Prime Obligations Fund, $0 and $(28) for Tax Free
Obligations Fund, $22 and $28 for Treasury Obligations Fund, at March 31,
2000, and September 30, 1999, respectively.
The accompanying notes are an integral part of the financial statements.
(12 FIRST AMERICAN FUNDS SEMIANNUAL 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
3/31/00 9/30/99 3/31/00 9/30/99
- -------------------------------------------------------------------
(unaudited) (unaudited)
<S> <C> <C> <C>
$ 10,576 $ 17,794 $ 146,132 $ 263,376
-- 14 -- (32)
- -------------------------------------------------------------------
10,576 17,808 146,132 263,344
- -------------------------------------------------------------------
(4,367) (7,079) (729) (1,677)
-- -- -- --
-- -- -- --
(468) (799) (88,341) (171,457)
(5,713) (9,960) (57,068) (90,248)
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
-- -- -- --
- -------------------------------------------------------------------
(10,548) (17,838) (146,138) (263,382)
===================================================================
314,507 1,438,162 105,692 174,704
4,085 6,862 650 1,839
(247,719) (1,423,553) (95,277) (254,808)
- -------------------------------------------------------------------
70,873 21,471 11,065 (78,265)
- -------------------------------------------------------------------
-- -- -- --
-- -- -- --
-- -- -- --
- -------------------------------------------------------------------
-- -- -- --
- -------------------------------------------------------------------
-- -- -- --
-- -- -- --
-- -- -- --
- -------------------------------------------------------------------
-- -- -- --
- -------------------------------------------------------------------
34,138 60,330 6,320,892 12,947,653
-- -- -- --
(42,104) (56,959) (6,753,284) (12,950,371)
- -------------------------------------------------------------------
(7,966) 3,371 (432,392) (2,718)
- -------------------------------------------------------------------
271,273 600,968 6,146,405 8,751,666
121 87 14,336 20,667
(259,873) (535,531) (6,490,958) (7,955,114)
- -------------------------------------------------------------------
11,521 65,524 (330,217) 817,219
- -------------------------------------------------------------------
74,428 90,366 (751,544) 736,236
- -------------------------------------------------------------------
74,456 90,336 (751,550) 736,198
640,580 550,244 6,496,488 5,760,290
===================================================================
$ 715,036 $ 640,580 $ 5,744,938 $ 6,496,488
===================================================================
</TABLE>
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 13)
<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* (unaudited) $ 1.00 $ 0.024 $ (0.024) $ 1.00
1999 1.00 0.043 (0.043) 1.00
1998(1) 1.00 0.021 (0.021) 1.00
class D
2000* (unaudited) $ 1.00 $ 0.025 $ (0.025) $ 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
1995(2) 1.00 0.038 (0.038) 1.00
class Y
2000* (unaudited) $ 1.00 $ 0.026 $ (0.026) $ 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
1995 1.00 0.054 (0.054) 1.00
PRIME OBLIGATIONS FUND
class A
2000* (unaudited) $ 1.00 $ 0.025 $ (0.025) $ 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
1995(2) 1.00 0.038 (0.038) 1.00
class B
2000* (unaudited) $ 1.00 $ 0.022 $ (0.022) $ 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
1995(3) 1.00 0.032 (0.032) 1.00
class C
2000* (unaudited) $ 1.00 $ 0.022 $ (0.022) $ 1.00
1999(4) 1.00 0.024 (0.024) 1.00
class D
2000* (unaudited) $ 1.00 $ 0.026 $ (0.026) $ 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
1995(5) 1.00 0.038 (0.038) 1.00
class Y
2000* (unaudited) $ 1.00 $ 0.027 $ (0.027) $ 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
1995 1.00 0.055 (0.055) 1.00
- ---------------------------------------------------------------------------------
</TABLE>
+Returns are for the period indicated and have not been annualized.
*For the six month period ended March 31, 2000. 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 February 1, 1999. All ratios for the period have
been annualized.
(5) Commenced operations on January 24, 1995. All ratios for the period have
been annualized.
The accompanying notes are an integral part of the financial statements.
(14 FIRST AMERICAN FUNDS SEMIANNUAL 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>
2.47%+ $ 436,848 0.75% 4.86% 0.81% 4.80%
4.36 435,227 0.75 4.28 0.82 4.21
2.10+ 325,024 0.70 4.93 0.76 4.87
2.54%+ $ 402,529 0.60% 5.01% 0.66% 4.95%
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
3.85+ 198,859 0.60 5.45 0.70 5.35
2.62%+ $ 905,604 0.45% 5.15% 0.51% 5.09%
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
5.55 551,286 0.45 5.44 0.60 5.29
2.54%+ $4,704,003 0.80% 5.03% 0.87% 4.96%
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
3.84+ 96,083 0.70 5.43 0.82 5.31
2.22%+ $ 4,001 1.45% 4.38% 1.51% 4.32%
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
3.28+ 14 1.45 4.70 1.57 4.58
2.22%+ $ 136 1.45% 4.35% 1.51% 4.29%
2.47+ 341 1.45 3.75 1.51 3.69
2.65%+ $ 427,927 0.60% 5.24% 0.66% 5.18%
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
3.86+ 9,735 0.60 5.51 0.72 5.39
2.73%+ $7,049,840 0.45% 5.39% 0.51% 5.33%
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
5.64 2,911,055 0.45 5.53 0.60 5.38
- --------------------------------------------------------------------------------------
</TABLE>
FIRST AMERICAN FUNDS SEMIANNUAL 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>
TAX FREE OBLIGATIONS FUND(A)
class A
2000* (unaudited) $ 1.00 $ 0.015 $ (0.015) $ 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
1995(3)(4) 1.00 0.017 (0.017) 1.00
class D
2000* (unaudited) $ 1.00 $ 0.015 $ (0.015) $ 1.00
1999 1.00 0.026 (0.026) 1.00
1998(1) 1.00 0.025 (0.025) 1.00
1997(5) 1.00 0.000 (0.000) 1.00
class Y
2000* (unaudited) $ 1.00 $ 0.016 $ (0.016) $ 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
1995(3)(4) 1.00 0.019 (0.019) 1.00
TREASURY OBLIGATIONS FUND
class A
2000* (unaudited) $ 1.00 $ 0.024 $ (0.024) $ 1.00
1999 1.00 0.042 (0.042) 1.00
1998(6) 1.00 0.045 (0.045) 1.00
class D
2000* (unaudited) $ 1.00 $ 0.024 $ (0.024) $ 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
1995 1.00 0.051 (0.051) 1.00
1994(7) 1.00 0.031 (0.031) 1.00
class Y
2000* (unaudited) $ 1.00 $ 0.025 $ (0.025) $ 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
1995(8) 1.00 0.038 (0.038) 1.00
- ---------------------------------------------------------------------------------------
</TABLE>
+Returns are for the period indicated and have not been annualized.
*For the six month period ended March 31, 2000. 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 funds' 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 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 October 4, 1993. All ratios for the period have been
annualized.
(8) Commenced operations on January 24, 1995. All ratios for the period have
been annualized.
The accompanying notes are an integral part of the financial statements.
(16 FIRST AMERICAN FUNDS SEMIANNUAL 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>
1.47%+ $ 339,515 0.74% 2.91% 0.81% 2.84%
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
1.66+ 33,569 1.00 2.98 1.36 2.62
1.54%+ $ 25,500 0.60% 3.05% 0.66% 2.99%
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)
1.61%+ $ 350,021 0.45% 3.20% 0.51% 3.14%
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
1.88+ 1,264 0.59 3.38 0.94 3.03
2.39%+ $ 34,560 0.70% 4.74% 0.76% 4.68%
4.31 23,496 0.70 4.24 0.76 4.18
4.54+ 101,749 0.70 4.88 0.76 4.82
2.44%+ $3,419,794 0.60% 4.81% 0.66% 4.75%
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
5.22 1,038,818 0.60 5.13 0.70 5.03
3.12+ 746,090 0.58 3.19 0.68 3.09
2.52%+ $2,290,584 0.45% 4.96% 0.51% 4.90%
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
3.83+ 117,171 0.45 5.50 0.55 5.40
- ----------------------------------------------------------------------------------------
</TABLE>
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 17)
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (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
shares 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 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.
REPURCHASE AGREEMENTS - Each Fund may enter into repurchase agreements with
member banks of the Federal Reserve or registered broker dealers whom the
Advisor deems creditworthy under guidelines 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.
(18 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
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 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"), 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. Fee waivers may be discontinued
at any time.
ADMINISTRATION FEES - SEI Investments Management Corporation ("SIMC")
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 their respective
share of excess net assets. Fees are computed daily and paid monthly.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 19)
<PAGE>
NOTES TO FINANCIAL STATEMENTS March 31, 2000 (unaudited)
SUB-ADMINISTRATION FEES - U.S. Bank assisted SIMC and provided
sub-administration services for the Funds from October 1, 1999 through
December 31, 1999. For these services SIMC compensates U.S. Bank, as
sub-administrator, monthly at an annual rate of up to 0.05% of each Fund's
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, SIMC paid U.S. Bank $2,646,000 in aggregate for
this three month period. Effective January 1, 2000 SIMC 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 SIMC monthly at an annual rate equal to 0.05% of aggregate
average daily net assets of FAIF. In addition, SIMC 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 SIMC $2,820,000 in
aggregate from January 1, 2000 through March 31, 2000 for the First
American Family of Funds. For the Funds included in this semi-annual report
the amounts paid to U.S. Bank and SIMC for their respective periods were as
follows (000):
U.S. BANK SIMC
---------------------------------------------------------------------------
Government Obligations Fund $157 $ 65
Prime Obligations Fund 938 450
Tax Free Obligations Fund 54 27
Treasury Obligations Fund 509 215
---------------------------------------------------------------------------
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 six months ended March 31, 2000
(000):
U.S. BANCORP U.S. BANK
U.S. BANK PIPER JAFFRAY TRUST
---------------------------------------------------------------------------
Government Obligations Fund $ 414 $ 468 $ 1
Prime Obligations Fund 2,234 3,659 1
Tax Free Obligations Fund 90 308 --
Treasury Obligations Fund 2,782 6 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 $4,252,000 in
aggregate for the six month period ended March 31, 2000. For the six month
period ended March 31, 2000 fees paid to U.S. Bank for the funds included
in this report were as follows (000):
---------------------------------------------------------------------------
Government Obligations Fund $ 137
Prime Obligations Fund 2,508
Tax Free Obligations Fund 75
Treasury Obligations Fund 25
---------------------------------------------------------------------------
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 six months ended March 31, 2000, 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%
---------------------------------------------------------------------------
(20 FIRST AMERICAN FUNDS SEMIANNUAL 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 March 31, 2000, the collateral held at March 31, 2000, with respect to
such loans, and income generated during the six months ended March 31,
2000, from the program were as follows (000):
MARKET VALUE OF INCOME RECEIVED FROM
FUND LOANED SECURITIES SECURITIES LENDING
---------------------------------------------------------------------------
Government Obligations $414,494 $61
---------------------------------------------------------------------------
MARKET VALUE OF COLLATERAL PURCHASED WITH CASH RECEIVED
----------------------------------------------------------------
REPURCHASE MONEY MARKET FIXED INCOME
FUND AGREEMENTS INSTRUMENTS SECURITIES TOTAL
---------------------------------------------------------------------------
Government
Obligations $422,743 $840 $ -- $423,583
---------------------------------------------------------------------------
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 $1,286,000 in aggregate for the six months
ended March 31, 2000, for the First American Family of Funds. For the six
months ended March 31, 2000, securities lending fees for the Funds included
in this semiannual report were as follows (000):
---------------------------------------------------------------------------
Government Obligations Fund $41
Prime Obligations Fund --
Tax Free Obligations Fund --
Treasury Obligations Fund --
---------------------------------------------------------------------------
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, 2000, the percentage of portfolio investments by each revenue
source was as follows (000):
TAX FREE
OBLIGATIONS
FUND
---------------------------------------------------------------------------
Revenue Bonds:
Education 5%
Health Care Bonds 15
Utility Bonds 10
Pollution Control Bonds 12
Public Facility Bonds 8
Housing Bonds 11
Other 12
General Obligations 23
Anticipation Notes 4
---------------------------------------------------------------------------
100%
---------------------------------------------------------------------------
The credit ratings of long-term debt as a percentage of total market value
of investments at March 31, 2000, were as follows:
TAX FREE
OBLIGATIONS
STANDARD & POOR'S/MOODY'S RATINGS: FUND
---------------------------------------------------------------------------
AAA/Aaa 17%
AA/Aa 26
A/A 45
NR 12
---------------------------------------------------------------------------
100%
---------------------------------------------------------------------------
Securities rated by only one agency are shown in that category. Securities
rated by both agencies are shown with their lowest rating.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 21)
<PAGE>
NOTICE TO SHAREHOLDERS
PRIME OBLIGATIONS FUND-EXPENSE RATIO CHANGE
Effective April 1, 2000, Prime Obligations Fund expense ratios increased as
follows:
Share Class Old Ratio New Ratio
A 0.81% 0.84%
B 1.45% 1.48%
C 1.45% 1.48%
D 0.60% 0.63%
Y 0.45% 0.48%
(22 FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
TRIBUTE TO DAVID T. BENNETT
As friends and colleagues, the Board of Directors of the First American
Funds wishes to recognize David T. Bennett for the significant and lasting
contributions he made as a Director of the First American Funds. His
services were cut short by his recent and untimely death following a
13-year battle with cancer.
David was an attorney with the law firm of Gray, Plant, Mooty, Mooty &
Bennett since graduating from law school in 1967. David was also a
successful entrepreneur, owning controlling interests in Highland
Manufacturing, Kiefer Built, and USL Products. He also devoted countless
hours to numerous civic and charitable groups, including the Minneapolis
Institute of Arts, the Guthrie Theater, the Nature Conservancy, and
Dunwoody Institute.
His association with the funds began in 1987, when he joined the Board of
Directors of the Piper Funds. The First American Funds have been the
beneficiary of David's experience, wisdom, and insight during challenging
periods of change and growth. His knowledge of the industry and mutual fund
board experience were invaluable during the critical transition period
integrating the Piper and First American Fund Families. David's abilities
were particularly appreciated by the Audit, Pricing, and Board Development
Committees on which he served. The Directors with whom he served value
greatly their time spent together.
We gratefully and sincerely recognize David's contributions and extend our
sincere condolences to David's family and friends.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000 23)
<PAGE>
(This page has been left blank intentionally.)
<PAGE>
BOARD OF DIRECTORS FIRST AMERICAN FUNDS, INC.
MR. ROBERT DAYTON
Director of First American Funds, Inc.
Chief Executive Officer of Okabena Company
MR. ROGER GIBSON
Director of First American Funds, Inc.
Vice President of North America-Mountain Region for United Airlines
MR. ANDREW HUNTER III
Director of First American Funds, Inc.
Chairman of Hunter Keith Industries
MR. LEONARD KEDROWSKI
Director of First American Funds, Inc.
Owner and President of Executive Management Consulting, Inc.
MR. JOHN MURPHY JR.
Director of First American Funds, Inc.
Executive Vice President, U.S. Bancorp
MR. ROBERT SPIES
Director of First American Funds, Inc.
Retired Vice President, U.S. Bank National Association
MR. JOSEPH STRAUSS
Director of First American Funds, Inc.
Former Chairman of First American Investment Funds, Inc.
Owner and President of Strauss Management Company
MS. VIRGINIA STRINGER
Chairperson of First American Funds, Inc.
Owner and President of Strategic Management Resources, Inc.
FIRST AMERICAN FUNDS SEMIANNUAL REPORT 2000
<PAGE>
[LOGO] FIRST AMERICAN FUNDS(R)
THE POWER OF DISCIPLINED INVESTING(R)
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.
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.
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
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
- --------------------------------------------------------------------------------
Bulk Rate
U.S. Postage
PAID
Mpls, MN
Permit No. 26388
FIRST AMERICAN FUNDS
c/o Fulfillment Agent, American Financial Printing Inc.
404 Industrial Boulevard, N.E.
Minneapolis, MN 55413
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.
3010-00 5/2000
