<PAGE>
PAINEWEBBER/
KIDDER, PEABODY
TAX EXEMPT
MONEY FUND, INC.
ANNUAL REPORT
September 30, 1995
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--64.58%
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Alabama -- 2.55%
$ 3,500 Cherokee Industrial Refunding (The BOC Group,
Inc.), Variable Rate Demand Notes.......... @ 4.400% $ 3,500,000
700 MacIntosh Industrial Development Authority
(CIBA GEIGY Corp.), Variable Rate Demand
Notes...................................... @ 4.500 700,000
6,000 St. Claire County (National Cement Company),
Project II, Variable Rate Demand Notes..... @ 4.400 6,000,000
------------
10,200,000
------------
Alaska -- 1.05%
4,200 Alaska Industrial Development Authority
(Alaska Hotel), Variable Rate Demand
Notes...................................... @ 4.500 4,200,000
------------
California -- 5.85%
2,500 California Higher Education Student Loan
Authority, Adjustable Rate Bonds........... 07/01/96 3.900 2,500,000
300 California PCR (Southern California Edison),
Series B, Variable Rate Demand Notes....... @ 4.350 300,000
800 Contra Costa County, Tax and Revenue
Anticipation Notes......................... 07/03/96 4.500 804,944
3,000 Los Angeles County Unified School, Tax and
Revenue Anticipation Notes................. 07/03/96 4.500 3,017,447
6,300 Los Angeles County, Tax and Revenue
Anticipation Notes......................... 07/01/96 4.500 6,333,539
2,000 Los Angeles Metropolitan Transportation
Authority, Revenue Anticipation Notes...... 04/25/96 5.000 2,015,755
2,400 San Bernardino County, Tax and Revenue
Anticipation Notes......................... 07/05/96 4.500 2,409,641
6,000 Santa Barbara County, Tax and Revenue
Anticipation Notes......................... 07/05/96 4.500 6,030,173
------------
23,411,499
------------
Colorado -- 2.51%
8,000 Colorado State Tax and Revenue
Anticipation Notes......................... 06/27/96 4.500 8,047,254
2,000 Moffat County PCR (Pacificorp),
Variable Rate Demand Notes................. @ 4.500 2,000,000
------------
10,047,254
------------
</TABLE>
1
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Connecticut -- 1.62%
$ 3,000 Connecticut Development Authority
(Connecticut Light & Power), Variable Rate
Demand Notes............................... @ 4.400% $ 3,000,000
1,700 Connecticut Development Authority Health
(Independent Living), Variable Rate
Demand Notes............................... @ 4.200 1,700,000
1,370 Connecticut Special Tax Obligation, Variable
Rate Demand Notes.......................... @ 4.200 1,370,000
400 Connecticut Economic Recovery, Series B,
Variable Rate Demand Notes................. @ 4.350 400,000
------------
6,470,000
------------
Florida -- 1.17%
2,000 Orange County, Florida Health Facilities,
Variable Rate Demand Notes................. @ 4.300 2,000,000
500 Pinellas County Health Facilities Authority
(Pooled Hospital), Variable Rate Demand
Notes...................................... @ 4.800 500,000
1,200 Polk County Industrial Development Authority
(IMC Fertilizer Inc.), Series A, Variable
Rate Demand Notes.......................... @ 4.400 1,200,000
1,000 Polk County Industrial Development Authority
(IMC Fertilizer Inc.), Series B, Variable
Rate Demand Notes.......................... @ 4.400 1,000,000
------------
4,700,000
------------
Georgia -- 2.60%
3,600 Brunswick & Glynn County Development
Authority (Jekyll Development Assoc.),
Variable Rate Demand Notes................. @ 4.400 3,600,000
5,000 Richmond County Development Authority (The
BOC Group Inc.), Variable Rate
Demand Notes............................... @ 4.400 5,000,000
1,800 Savannah Port Authority, Variable Rate
Demand Notes............................... @ 4.850 1,800,000
------------
10,400,000
------------
Idaho -- 0.50%
2,000 Custer County PCR (Amoco), Adjustable
Rate Bonds................................. 04/01/96 3.800 2,000,000
------------
</TABLE>
2
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Illinois -- 8.03%
$ 4,600 Chicago O'Hare Airport (American Airlines),
Series 84A, Variable Rate Demand Notes..... @ 4.850% $ 4,600,000
5,000 Illinois Development Finance Authority,
(Commonwealth Edison), Series C, Variable
Rate Demand Notes.......................... @ 4.200 5,000,000
1,210 Illinois Development Finance Authority PCR
(Amoco), Series B5, Variable Rate
Demand Notes............................... @ 4.400 1,210,000
50 Illinois Development Finance Authority
(Foundation for Safety and Health),
Variable Rate
Demand Notes............................... @ 4.350 50,000
1,000 Illinois Health Facilities Authority
(Evanston Hospital Corp.), Variable Rate
Demand Notes............................... @ 3.650 1,000,000
1,000 Illinois Health Facilities Authority
(Evangelical Hospital Corp.), Variable Rate
Demand Notes............................... @ 4.450 1,000,000
1,300 Illinois Health Facilities Authority
(Elmhurst Hospital), Variable Rate Demand
Notes...................................... @ 4.850 1,300,000
1,400 Illinois Health Facilities Authority (Ingalls
Memorial Hospital), Variable Rate Demand
Notes...................................... @ 4.500 1,400,000
6,600 Illinois Health Facilities Authority (Central
Dupage Healthcorp Project), Variable Rate
Demand Notes............................... @ 4.850 6,600,000
1,500 Illinois State General Obligation Revenue
Anticipation Certificates.................. 04/12/96 4.500 1,505,808
4,500 Lislee Multi-Family Revenue (Ashley of Lislee
Project), Variable Rate Demand Notes....... @ 4.300 4,500,000
4,000 Tinley Park Housing Authority (Edgewater Walk
Project), Variable Rate Demand Notes....... @ 4.350 4,000,000
------------
32,165,808
------------
</TABLE>
3
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Indiana -- 1.98%
$ 1,400 Hammond PCR (Amoco Oil), Variable Rate Demand
Notes...................................... @ 4.400% $ 1,400,000
1,500 Indiana Health Facilities Finance Authority
(Methodist Hospital), Series E, Variable
Rate Demand Notes.......................... @ 4.300 1,500,000
1,815 Indiana Health Facilities Finance Authority
Revenue (Capital Access Designated Pool),
Variable Rate Demand Notes................. @ 4.500 1,815,000
1,500 Indianapolis Local Public Improvement Bond
Bank Notes................................. 01/11/96 4.250 1,503,075
1,200 Jasper County (Northern Indiana Public
Service), Variable Rate Demand Notes....... @ 4.500 1,200,000
500 Rockport PCR (Aep Generating Co.), Variable
Rate Demand Notes.......................... @ 4.500 500,000
------------
7,918,075
------------
Kentucky -- 0.42%
1,700 Pendleton County, Self Insurance Funding,
Kentucky Association Counties Fund,
Adjustable Rate Bond....................... 07/01/96 4.000 1,700,000
------------
Louisiana -- 0.55%
1,000 Ascension Parish (Shell Oil Corp.), Variable
Rate Demand Notes.......................... @ 4.850 1,000,000
1,200 Parish of East Baton Rouge (Exxon Project),
Series 89, Variable Rate Demand Notes...... @ 4.850 1,200,000
------------
2,200,000
------------
Massachusetts -- 1.00%
4,000 Massachusetts Health & Education Facilities
(Harvard University), Variable Rate
Demand Notes............................... @ 4.200 4,000,000
------------
Michigan -- 1.50%
1,500 Michigan Municipal Building Authority, Series
B, Revenue Notes........................... 07/03/96 4.250 1,507,624
3,200 Michigan St. Hospital Finance Authority
(Chelsea County Hospital), Variable Rate
Demand Notes............................... @ 4.150 3,200,000
1,300 Michigan Strategic Fund (Pollution Control
Consolidation Power), Series 88A, Variable
Rate Demand Notes.......................... @ 4.400 1,300,000
------------
6,007,624
------------
</TABLE>
4
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Mississippi -- 1.85%
$ 900 Harrison County PCR (DuPont), Variable Rate
Demand Notes............................... @ 4.200% $ 900,000
6,500 Perry County PCR (Leaf River Forest Project),
Variable Rate Demand Notes................. @ 4.400 6,500,000
------------
7,400,000
------------
Missouri -- 0.27%
1,070 Missouri Environmental Improvement Pollution
Control Authority (Union Electric), Series
1985A, Adjustable Rate Bonds............... 06/01/96 4.000 1,070,000
------------
New Hampshire -- 0.25%
1,000 New Hampshire Higher Education (Dartmouth
College), Series 8S, Adjustable Rate
Bonds...................................... 06/01/96 4.100 1,000,000
------------
New Jersey -- 0.17%
700 New Jersey Environmental Development
Authority (Burman-Castrol), Variable Rate
Demand Notes............................... @ 4.200 700,000
------------
New Mexico -- 1.12%
4,500 Albuquerque Lodgers Tax Revenue, Variable
Rate Demand Notes.......................... @ 4.100 4,500,000
------------
New York -- 5.07%
1,400 New York City, New York, Sub Series EZ,
Variable Rate Demand Notes................. @ 4.850 1,400,000
6,000 New York City, New York, Variable Rate
Demand Notes............................... @ 3.800 to 4.150 6,000,000
8,400 New York City Housing Development Authority,
Related 96th St. Variable Rate
Demand Notes............................... @ 4.250 8,400,000
3,000 New York City Dorm. Auth., NY Public Library,
Series B, Variable Rate Demand Notes....... @ 4.100 3,000,000
1,500 New York State Energy, Research and
Development (New York State Electric &
Gas), Variable Rate Demand Notes........... @ 4.300 1,500,000
------------
20,300,000
------------
North Carolina -- 0.50%
2,000 North Carolina Educational Facilities (Duke
University), Series 87A, Variable Rate
Demand Notes............................... @ 4.350 2,000,000
------------
</TABLE>
5
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
North Dakota -- 1.00%
$ 4,000 Grand Forks Hospital Facilities (United
Hospital), Variable Rate Demand Notes...... @ 4.850% $ 4,000,000
------------
Oklahoma -- 2.46%
2,000 Oklahoma Industrial Development Authority
(Baptist General), Adjustable Rate Bonds... 12/01/95 4.000 2,000,000
1,315 Oklahoma Water Resources Board (Student Loan
Program), Series A, General
Obligation Bonds........................... 03/01/96 3.950 1,315,000
6,520 Tulsa Industrial Development Authority (St.
John's Physicians), Adjustable Rate
Bonds...................................... 05/01/96 4.350 6,520,000
------------
9,835,000
------------
Pennsylvania -- 1.07%
4,300 Schuylkill County Industrial Development
Authority Resources Revenue (Northeastern
Power), Variable Rate Demand Notes......... @ 4.500 4,300,000
------------
Tennessee -- 1.65%
3,000 Chattanooga Industrial Development Board
(Seaboard), Variable Rate Demand Notes..... @ 4.400 3,000,000
100 Tennessee State General Obligation Bond
Anticipation Notes, Series 1991C, Variable
Rate Demand Notes.......................... @ 4.250 100,000
2,000 Tennessee Local Development Authority,
General Obligation Bond Anticipation
Notes...................................... 05/31/96 4.750 2,010,842
1,500 Shelby County Health Facilities Board
(Methodist Health Services), Adjustable
Rate Bonds................................. 08/01/96 3.900 1,500,000
------------
6,610,842
------------
</TABLE>
6
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Texas -- 6.80%
$ 3,500 Bowie County, Industrial Development
Authority (Texarkana Newspapers), Variable
Rate Demand Notes.......................... @ 4.650% $ 3,500,000
2,600 Calhoun County Industrial Development
Authority, Series 1987, Variable Rate
Demand Notes............................... @ 4.600 2,600,000
4,000 Capital Industrial Development Corp. (NSI
Inc. Project), Variable Rate Demand
Notes...................................... @ 4.400 4,000,000
3,000 Harris County Toll Series G Sub Lien Toll
Road, Variable Rate Demand Notes........... @ 4.300 3,000,000
7,000 Harris County Memorial Senior Services,
Variable Rate Demand Notes................. @ 4.400 7,000,000
2,100 Harris County, Health Facilities Development
Corp. (St. Luke's Hospital), Variable Rate
Demand Notes............................... @ 4.850 2,100,000
5,000 Texas Tax and Revenue Anticipation Bonds..... 08/30/96 4.750 5,030,663
------------
27,230,663
------------
Utah -- 4.14%
900 Carbon County PCR, Pacific Corp., Variable
Rate Demand Notes.......................... @ 4.500 900,000
2,000 Intermountain Power Agency (Power Supply
Revenue), Series 85F....................... 03/15/96 3.750 2,000,000
1,250 Intermountain Power Agency (Power Supply
Revenue), Adjustable Rate Bonds............ 06/15/96 3.800 1,250,000
4,650 Intermountain Power Agency (Power
Supply Revenue)............................ 12/01/95 3.850 4,650,000
3,500 Provo City Housing Authority (Multian
Beanbury Project), Variable Rate Demand
Notes...................................... @ 4.250 3,500,000
2,500 Salt Lake City Tax and Revenue
Anticipation Notes......................... 06/28/96 4.250 2,509,765
1,775 Salt Lake City PCR (Amoco)................... 10/01/95 4.400 1,775,000
------------
16,584,765
------------
Washington -- 0.72%
2,900 Washington State HealthCare (Carfred
Hutchinson Cancer Center), Variable Rate
Demand Notes............................... @ 4.850 2,900,000
------------
West Virginia -- 0.57%
2,300 West Virginia Hospital (Mid Atlantic),
Variable Rate Demand Notes................. @ 4.200 2,300,000
------------
</TABLE>
7
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MUNICIPAL BONDS AND NOTES--(CONCLUDED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Wisconsin -- 1.76%
$ 2,000 Alma PCR (Dairyland Power), Variable Rate
Demand Notes............................... @ 3.800% $ 2,000,000
5,000 Wisconsin State Operating Notes.............. 06/17/96 4.250 5,026,374
------------
7,026,374
------------
Wyoming -- 3.85%
3,400 Lincoln County PCR (Pacificorp), Variable
Rate Demand Notes.......................... @ 4.600 3,400,000
8,000 Platte County PCR, Variable Rate Demand
Notes...................................... @ 4.600 8,000,000
4,000 Sublette County (Exxon), Variable Rate
Demand Notes............................... @ 4.400 4,000,000
------------
15,400,000
------------
TOTAL MUNICIPAL BONDS AND NOTES (cost--$258,577,904)..... 258,577,904
------------
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER--35.53%
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama -- 0.30%
1,200 Port County Medical Clinic Board (Mobile,
Alabama Hospital Rev. Infirmary Assn.)..... 10/25/95 3.950 1,200,000
------------
Arizona -- 0.51%
2,050 Maricopa County (Southern Cal Edison),
Series F................................... 11/30/95 3.800 2,050,000
------------
Florida -- 6.82%
10,400 Florida Municipal Loan Council............... 10/06/95 to 12/01/95 3.700 to 4.000 10,400,000
8,690 Florida Local Government Finance
Commission................................. 10/18/95 to 11/20/95 3.800 to 3.900 8,690,000
2,500 Jacksonville Electric Authority.............. 10/23/95 3.650 2,500,000
3,700 Orlando Waste Water, Series B................ 12/01/95 3.800 3,700,000
2,000 Sarasota County Public Hospital (Sarasota
Memorial Hospital Project)................. 10/02/95 3.400 2,000,000
------------
27,290,000
------------
Illinois -- 0.25%
1,000 City of Chicago Equipment Tender Notes,
Series 1987C............................... 11/27/95 3.900 1,000,000
------------
Indiana -- 1.70%
2,000 Jasper County (Northern Indiana Public
Service), Series 86B....................... 10/16/95 3.650 2,000,000
4,790 Hoosier City of Sullivan, National Rural
Utilities Corp. ........................... 10/26/95 to 11/10/95 3.750 to 3.850 4,790,000
------------
6,790,000
------------
</TABLE>
8
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(continued)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMERCIAL PAPER--(CONTINUED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Kansas -- 0.52%
$ 2,100 Burlington Power & Lighting (Kansas PCR),
Kansas City PTL............................ 10/12/95 to 11/09/95 3.650 to 3.850% $ 2,100,000
------------
Kentucky -- 2.97%
11,885 Pendleton County (Kentucky Association of
Leasing), Series 89........................ 11/09/95 to 12/08/95 3.750 to 3.800 11,885,000
------------
Louisiana -- 1.00%
4,000 Louisiana Public Finance Authority
(Sisters of Charity)....................... 10/11/95 3.700 4,000,000
------------
Maryland -- 2.00%
4,000 Baltimore City Consolidated Public
Improvement................................ 12/07/95 3.650 4,000,000
2,000 Howard County, Consolidated
Public Improvement......................... 10/31/95 3.750 2,000,000
2,000 Maryland Health and Education (Johns Hopkins
Hospital), Series A........................ 12/12/95 3.700 2,000,000
------------
8,000,000
------------
Massachusetts -- 1.00%
4,000 Massachusetts Municipal Water Authority...... 10/25/95 to 10/31/95 3.500 to 3.700 4,000,000
------------
Michigan -- 0.50%
2,000 Michigan Building Authority.................. 10/26/95 4.000 2,000,000
------------
Minnesota -- 1.12%
4,500 Regents of the University of Minnesota,
Series 85E................................. 10/02/95 to 10/20/95 3.750 to 4.250 4,500,000
------------
Montana -- 0.50%
2,000 Forsyth County PCR (Pacificorp Project)...... 10/13/95 3.700 2,000,000
------------
New York -- 1.00%
4,000 New York City Municipal Water Authority...... 11/14/95 to 11/21/95 3.800 4,000,000
------------
Ohio -- 0.87%
1,500 Montgomery County (Miami Valley Hospital),
Series B................................... 10/11/95 3.750 1,500,000
2,000 Montgomery County (Miami Valley Hospital),
Series C................................... 10/27/95 3.850 2,000,000
------------
3,500,000
------------
Oklahoma -- 0.50%
2,000 Oklahoma Industrial Development Authority
(Baptist General).......................... 10/05/95 4.000 2,000,000
------------
Pennsylvania -- 1.00%
4,000 N.E. Pennsylvania Hospital (Hospital Services
Cap), Series B............................. 10/02/95 3.450 4,000,000
------------
</TABLE>
9
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets--(concluded)
September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMMERCIAL PAPER--(CONCLUDED)
- ------------------------------------------------------------------------------------------------------------------
Principal
Amount Maturity Interest
(000) Dates Rates Value
- ---------- --------------------- -------------- ------------
<S> <C> <C> <C> <C>
Texas -- 9.43%
$ 8,433 Austin Utilities............................. 11/17/95 to 11/30/95 3.700 to 3.800% $ 8,433,000
5,600 Gulf Coast Texas, Waste Disposal Authority
(Exxon) ................................... 11/13/95 to 11/27/95 3.800 to 3.900 5,600,000
2,100 North Central Texas Health Facilities
Development Corp. (Hospital Rev. Eds.),
Series A................................... 10/20/95 3.750 2,100,000
3,000 Port of Corpus Christi PCR (Koch Ind.)....... 11/13/95 3.550 3,000,000
4,000 Texas A&M, (Board of Regents)................ 10/02/95 3.900 4,000,000
3,000 Texas Municipal Power Authority.............. 10/30/95 3.850 3,000,000
2,100 Texas Public Finance Authority, Series B..... 10/12/95 4.150 2,100,000
2,000 Tyler Health Facilities Development Corp. ... 11/10/95 4.000 2,000,000
7,516 University of Texas (Board of Regents)....... 12/06/95 3.800 7,516,000
------------
37,749,000
------------
Utah -- 2.67%
3,000 Emery County PCR (Pacific Corp. Project),
Series 1991................................ 10/05/95 4.200 3,000,000
7,675 Salt Lake City Pooled Hospital............... 10/10/95 to 12/11/95 3.650 to 3.900 7,675,000
------------
10,675,000
------------
Vermont -- 0.87%
3,500 State of Vermont............................. 12/13/95 3.700 3,500,000
------------
TOTAL COMMERCIAL PAPER (cost--$142,239,000).............. 142,239,000
------------
TOTAL INVESTMENTS (cost--$400,816,904, which approximates
cost for federal income tax purposes)--100.11%........... 400,816,904
Liabilities in excess of other assets--(0.11%)........... (432,911)
------------
NET ASSETS (applicable to 400,385,965 shares outstanding
at $1.00 per share)--100%.............................. $400,383,993
------------
------------
</TABLE>
- ------------
@ Variable rate demand notes and variable rate certificates of participation are
payable on demand. The interest rates shown are the current rates as of
September 30, 1995 and reset periodically.
PCR--Pollution Control Revenue
Weighted average maturity--58 days
See accompanying notes to financial statements
10
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Statement of Operations
For the Year Ended September 30, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 17,670,027
---------------
EXPENSES:
Investment advisory and administration...................... 2,404,540
Distribution fees........................................... 579,060
Transfer agency and service fees............................ 164,173
Custody and accounting...................................... 65,301
Legal and audit............................................. 57,867
Reports and notices to shareholders......................... 47,039
Directors' fees and expenses................................ 32,650
Other expenses.............................................. 50,122
---------------
3,400,752
---------------
NET INVESTMENT INCOME....................................... 14,269,275
Net realized losses from investment transactions............ (2,109)
Net change in unrealized appreciation/depreciation of
investments............................................... (24)
---------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........ $ 14,267,142
---------------
---------------
</TABLE>
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the For the
Year Ended Year Ended
September 30, September 30,
1995 1994
------------ ------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income....................................... $14,269,275 $13,629,265
Net realized losses from investment transactions............ (2,109) (461,701)
Net change in unrealized appreciation/depreciation of
investments............................................... (24) (1,085)
------------ ------------
Net increase in net assets resulting from operations........ 14,267,142 13,166,479
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Net investment income....................................... (14,269,275) (13,629,265)
NET DECREASE IN NET ASSETS DERIVED FROM CAPITAL STOCK
TRANSACTIONS.............................................. (205,090,419) (64,463,671)
Contribution to capital from predecessor adviser............ 731,243 --
------------ ------------
Net decrease in net assets.................................. (204,361,309) (64,926,457)
NET ASSETS:
Beginning of period......................................... 604,745,302 669,671,759
------------ ------------
End of period............................................... $400,383,993 $604,745,302
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements
11
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements
- --------------------------------------------------------------------------------
ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
PaineWebber/Kidder, Peabody Tax Exempt Money Fund, Inc. (the 'Fund') was
organized under the laws of Maryland on January 18, 1983 and is registered with
the Securities and Exchange Commission under the Investment Company Act of 1940,
as amended ('1940 Act'), as an open-end, diversified management investment
company.
Valuation and Accounting for Investments--Investments are valued at amortized
cost which approximates market value. Investment transactions are accounted for
on trade date. Realized gains and losses from investment transactions are
calculated using the identified cost method. Interest income is recorded on an
accrual basis. Premiums are amortized and discounts are accreted as adjustments
to interest income and the identified cost of securities.
The ability of the issuers of the debt securities held by the Fund to meet their
obligations may be affected by economic developments, including those particular
to a specific industry or region.
Federal Tax Status--The Fund intends to distribute all of its tax-exempt income
and any taxable income and to comply with the other requirements of the Internal
Revenue Code applicable to regulated investment companies. Accordingly, no
provision for federal income taxes is required. In addition, by distributing
during each calendar year substantially all of its net investment income,
capital gains and certain other amounts, if any, the Fund intends not to be
subject to a federal excise tax. At September 30, 1995, the Fund had net capital
loss carryforwards of $2,135. These loss carryforwards are available as
reductions, to the extent provided in the regulations, of future net realized
capital gains, and will expire September 30, 2002. To the extent that these
losses are used to offset future capital gains, it is probable that the gains so
offset will not be distributed.
Dividends and Distributions--The Fund declares dividends on a daily basis from
net investment income. Dividends from net investment income and distributions
from realized gains from investment transactions have been determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles. These differences are either considered temporary or
permanent in nature. To the extent these differences are permanent in nature,
such amounts are reclassified within the capital accounts based on their federal
tax-basis treatment; temporary differences do not require reclassification. Net
capital gains, if any, will be distributed annually, but the Fund may make more
frequent distributions of such gains, if necessary, to maintain its net asset
value per share at $1.00 or to avoid income or excise taxes.
12
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements--(continued)
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
The Fund's investment adviser and administrator receives compensation from the
Fund for its services. Fees paid by the Fund for investment advisory and
administration services are accrued daily and paid monthly at the annual rate of
0.50% of the Fund's average daily net assets.
At a special meeting of shareholders that took place on April 13, 1995,
shareholders approved the appointment of PaineWebber Incorporated
('PaineWebber') as investment adviser and administrator of the Fund and Mitchell
Hutchins Asset Management Inc. ('Mitchell Hutchins') as the Fund's sub-adviser
and sub-administrator. The Fund pays the same fee for investment advisory and
administration services to PaineWebber as previously paid to Kidder Peabody
Asset Management, Inc. ('KPAM'), as described in the Fund's Prospectus.
PaineWebber (not the Fund) pays Mitchell Hutchins a fee for sub-advisory and
sub-administration services at the annual rate of 20% of the fee received by
PaineWebber from the Fund. PaineWebber and Mitchell Hutchins continue to manage
the Fund in accordance with the Fund's investment objective, policies and
restrictions as stated in the Prospectus. At September 30, 1995, the Fund owed
PaineWebber $182,565 in investment advisory and administration fees.
Investment advisory functions for the Fund were previously transferred from KPAM
to Mitchell Hutchins on an interim basis as a result of an asset purchase
transaction by and among Kidder, Peabody Group Inc., its parent, General
Electric Company, and Paine Webber Group Inc. That period commenced on January
30, 1995 and ended April 13, 1995.
In compliance with applicable state securities laws, PaineWebber, the Fund's
investment adviser, will reimburse the Fund if and to the extent that the
aggregate operating expenses in any fiscal year, exclusive of taxes, interest,
brokerage fees, distribution fees and extraordinary expenses, exceed limitations
imposed by various state regulations. Currently, the most restrictive limitation
is 2.5% on the first $30 million of average daily net assets, 2.0% of the next
$70 million and 1.5% of average daily net assets in excess of $100 million. For
the year ended September 30, 1995, no reimbursements were required pursuant to
the above limitation.
13
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Notes to Financial Statements--(concluded)
- --------------------------------------------------------------------------------
DISTRIBUTION PLAN
Since January 30, 1995, PaineWebber has been serving as the exclusive
distributor of the Fund's shares. For its services, which include payment of
sales commissions to registered representatives and various other promotional
and sales related expenses, it receives from the Fund a distribution fee accrued
daily and paid monthly at the annual rate of 0.12% of the Fund's average daily
net assets. At September 30, 1995, $43,816 was payable to PaineWebber for these
services.
OTHER LIABILITIES
At September 30, 1995, the amount payable for dividends and securities purchases
were $362,030, and $2,000,211, respectively.
CAPITAL STOCK TRANSACTIONS
There are 5 billion shares of $0.01 par value common stock authorized.
Transactions in shares of common stock, at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
SEPTEMBER 30, SEPTEMBER 30,
1995 1994
-------------- --------------
<S> <C> <C>
Shares sold................................. 2,121,890,424 3,192,477,480
Shares repurchased.......................... (2,340,305,431) (3,270,064,782)
Dividends reinvested in additional Fund
shares.................................... 13,324,588 13,123,631
-------------- --------------
Net decrease in shares outstanding.......... (205,090,419) (64,463,671)
-------------- --------------
-------------- --------------
</TABLE>
On January 27, 1995, the Fund recorded a capital contribution from KPAM in
the amount of $731,243 or $0.0015 per share to compensate the Fund for realized
losses incurred on the sale of certain securities to unrelated third parties.
PLAN OF REORGANIZATION
The board of directors of the Fund has approved a Plan of Reorganization
and Termination ('Reorganization') which was submitted to and approved by the
Fund's shareholders at a special meeting held on November 10, 1995. The
Reorganization occurred on November 20, 1995, when all of the Fund's assets were
acquired and its liabilities were assumed by PaineWebber RMA Tax-Free Fund in a
tax-free reorganization. As a result of the Reorganization, the two funds'
assets were combined and each of the Fund's shareholders received shares of
PaineWebber RMA Tax-Free Fund having an aggregate value equal to the value of
the shareholder's holdings in the Fund.
14
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for a share of common stock outstanding throughout each period is
presented below:
<TABLE>
<CAPTION>
FOR THE
YEAR
ENDED
FOR THE YEARS ENDED SEPTEMBER 30, JUNE 30,
-------------------------------------------------------- --------
1995 1994 1993 1992 1991+ 1991
----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------- -------- -------- -------- -------- --------
Net investment income........................ 0.03 0.02 0.02 0.03 0.01 0.05
Dividends from net investment income......... (0.03) (0.02) (0.02) (0.03) (0.01) (0.05)
----------- -------- -------- -------- -------- --------
Net asset value, end of year................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- --------
Total investment return (1).................. 3.02% 2.00% 1.95% 2.83% 0.99% 4.92%
----------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's)............ $ 400,384 $604,745 $669,672 $691,231 $722,224 $725,183
Ratio of expenses to average net assets...... 0.71% 0.69% 0.70% 0.70% 0.69%* 0.68%
Ratio of net investment income to
average net assets.......................... 2.97% 1.97% 1.89% 2.78% 3.91%* 4.83%
</TABLE>
- ------------------
* Annualized
+ Effective July 1, 1991, the Fund changed its fiscal year end to September
30. The figures represent such three-month period.
(1) Total investment return is calculated assuming a $1,000 investment on the
first day of each period reported, reinvestment of all dividends and capital
gain distributions at net asset value on the payable dates, and a sale at
net asset value on the last day of each period reported. Total returns for
periods of less than one year have not been annualized.
15
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
- --------------------------------------------------------------------------------
The Board of Directors and Shareholders
PaineWebber/Kidder, Peabody Tax Exempt Money Fund, Inc.
We have audited the accompanying statement of net assets of
PaineWebber/Kidder, Peabody Tax Exempt Money Fund, Inc. as of September 30,
1995, and the related statements of operations, changes in net assets, and
financial highlights for the year then ended. These financial statements and
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit. The statement of changes in net assets
for the year ended September 30, 1994 and the financial highlights for each of
the five periods then ended were audited by other auditors whose report dated
November 11, 1994, expressed an unqualified opinion on that statement and
financial highlights.
We have conducted our audit in accordance with generally accepted auditing
standards. 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. Our procedures included confirmation of securities owned at
September 30, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.
In our opinion, the 1995 financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of PaineWebber/Kidder, Peabody Tax Exempt Money Fund, Inc. at September
30, 1995, the results of its operations, the changes in its net assets, and the
financial highlights for the year then ended in conformity with generally
accepted accounting principles.
Ernst & Young LLP
New York, New York
November 22, 1995
16
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Tax Information
- --------------------------------------------------------------------------------
We are required by Subchapter M of the Internal Revenue Code of 1986, as
amended, to advise you within 60 days of the Fund's fiscal year end as to the
federal tax status of distributions received by shareholders during such fiscal
year. Accordingly, we are advising you that all dividends paid during the fiscal
year by the Fund were federally tax exempt interest dividends. Since the Fund
did not invest in any security which paid interest subject to the federal
alternative minimum tax for individual taxpayers during its fiscal year, none of
the dividends paid by the Fund were subject to such tax.
Because the Fund's fiscal year is not the calendar year, another notification
will be sent in respect of calendar year 1995. The second notification, which
will reflect the amount to be used by calendar year taxpayers on their federal
income tax returns, will be made in conjunction with Form 1099 DIV and will be
mailed in January 1996. Shareholders are advised to consult their own tax
advisers with respect to the tax consequences of their investment in the Fund.
17
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Shareholder Information
- --------------------------------------------------------------------------------
A special meeting of shareholders of PaineWebber/Kidder, Peabody Tax Exempt
Money Fund, Inc. ('Fund') was held on April 13, 1995. At the meeting David J.
Beaubien, William W. Hewitt, Jr., Thomas R. Jordan, Frank P.L. Minard and Carl
W. Schafer were elected as directors to serve without limit in time, subject to
resignation, retirement or removal. The selection of Deloitte & Touche LLP as
the Fund's independent accountants was ratified.
The votes were as follows:
<TABLE>
<CAPTION>
SHARES VOTED FOR SHARES WITHHOLD AUTHORITY
---------------- -------------------------
<S> <C> <C>
David J. Beaubien................................................. 261,499,722 16,339,456
William W. Hewitt, Jr............................................. 261,499,722 16,339,456
Thomas R. Jordan.................................................. 261,499,722 16,339,456
Frank P.L. Minard................................................. 261,499,722 16,339,456
Carl W. Schafer................................................... 261,499,722 16,339,456
</TABLE>
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
----------- ------------- ------------------
<S> <C> <C> <C>
Ratification of the selection
of Deloitte & Touche LLP.................................. 261,269,528 2,579,684 13,989,966
</TABLE>
On July 20, 1995, the Board of Directors appointed Ernst & Young, LLP as
the Fund's independent auditors.
In addition the following agreements were approved for the Fund:
1) An interim investment advisory agreement between the Fund and Mitchell
Hutchins Asset Management Inc. ('Mitchell Hutchins') containing substantially
the same terms, conditions and fees as the previous investment advisory
agreement with Kidder Peabody Asset Management, Inc. ('KPAM').
The votes were as follows:
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
----------- ------------- ------------------
<S> <C> <C> <C>
260,544,364 4,170,364 13,124,449
</TABLE>
18
<PAGE>
PAINEWEBBER/KIDDER, PEABODY TAX EXEMPT MONEY FUND, INC.
- --------------------------------------------------------------------------------
Shareholder Information--(concluded)
- --------------------------------------------------------------------------------
2) A new investment advisory and administration agreement between the Fund
and PaineWebber Incorporated ('PaineWebber') containing the same fees and
substantively similar material terms and conditions as the previous investment
advisory agreement with KPAM to commence on the termination of the interim
agreement.
The votes were as follows:
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
----------- ------------- ------------------
<S> <C> <C> <C>
261,345,394 4,001,701 12,492,083
</TABLE>
3) A new sub-advisory and sub-administration agreement between PaineWebber
and Mitchell Hutchins to commence on the termination of the interim agreement
for the Fund.
The votes were as follows:
<TABLE>
<CAPTION>
SHARES SHARES SHARES
VOTED FOR VOTED AGAINST WITHHOLD AUTHORITY
----------- ------------- ------------------
<S> <C> <C> <C>
259,979,125 4,411,525 13,448,528
</TABLE>
Broker non-votes and abstentions are included within the 'Shares Withhold
Authority' totals.
19
<PAGE>
- ------------------------------------------------------
DIRECTORS
David J. Beaubien
William W. Hewitt, Jr.
Thomas R. Jordan
Frank P.L. Minard
Carl W. Schafer
- ------------------------------------------------------
OFFICERS
Margo N. Alexander
President
Victoria E. Schonfeld
Vice President
Dianne E. O'Donnell
Vice President and Secretary
Julian F. Sluyters
Vice President and Treasurer
Gregory W. Serbe
Vice President
- ------------------------------------------------------
INVESTMENT ADVISER, ADMINISTRATOR AND DISTRIBUTOR
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
- ------------------------------------------------------
SUB-ADVISER AND
SUB-ADMINISTRATOR
Mitchell Hutchins Asset Management Inc.
1285 Avenue of the Americas
New York, New York 10019
- ------------------------------------------------------
This report is not to be used in connection with the
offering of shares of the Fund unless accompanied or
preceded by an effective prospectus.
(Copyright) 1995 PaineWebber Incorporated
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