__________________________________________________________________________
DREYFUS TAX EXEMPT CASH MANAGEMENT
CLASS A AND CLASS B SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 31, 1994
__________________________________________________________________________
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus
of Dreyfus Tax Exempt Cash Management (the "Fund"), dated May 31, 1994, as
it may be revised from time to time. To obtain a copy of the Fund's
Prospectus, please write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-0144 or, in the case of institutional investors,
call the following numbers:
Outside New York State -- Call Toll Free 1-800-346-3621
In New York State -- Call 1-718-895-1650
Individuals or entities for whom institutions may purchase or redeem
Fund shares may write to the Fund at the above address or call toll free
1-800-554-4611 to obtain a copy of the Fund's Prospectus.
The Dreyfus Corporation (the "Manager") serves as the Fund's
investment adviser.
Dreyfus Service Corporation (the "Distributor"), a wholly owned
subsidiary of the Manager, is the distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies. . . . . . . . . . . . . . B-2
Management of the Fund. . . . . . . . . . . . . . . . . . . . . . . . . B-7
Management Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . B-11
Purchase of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . . B-12
Service Plan (Class B Only) . . . . . . . . . . . . . . . . . . . . . . B-13
Shareholder Services Plan (Class A Only). . . . . . . . . . . . . . . . B-14
Redemption of Fund Shares . . . . . . . . . . . . . . . . . . . . . . . B-14
Determination of Net Asset Value. . . . . . . . . . . . . . . . . . . . B-15
Portfolio Transactions. . . . . . . . . . . . . . . . . . . . . . . . . B-16
Investor Services . . . . . . . . . . . . . . . . . . . . . . . . . . . B-17
Dividends, Distributions and Taxes. . . . . . . . . . . . . . . . . . . B-18
Yield Information . . . . . . . . . . . . . . . . . . . . . . . . . . . B-18
Information About the Fund. . . . . . . . . . . . . . . . . . . . . . . B-19
Custodian, Transfer and Dividend Disbursing Agent,
Counsel and Independent Auditors. . . . . . . . . . . . . . . . B-19
Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-21
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . B-25
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . B-36
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund."
The average distribution of investments (at value) in Municipal
Obligations by ratings for the fiscal year ended January 31, 1994,
computed on a monthly basis, was as follows:
Fitch Moody's Standard
Investors Investors & Poor's
Service, Inc. Service, Inc. Corporation Percentage
("Fitch") or ("Moody's") or ("S&P") of Value
F-1 MIG 1 SP-1 96.1%
F-2 MIG 2 SP-2 .3%
AAA/AA Aaa/Aa AAA/AA 3.6%
_______
100.0%
=======
Municipal Obligations. The term "Municipal Obligations" generally
includes debt obligations issued to obtain funds for various public
purposes, including the construction of a wide range of public facilities
such as airports, bridges, highways, housing, hospitals, mass
transportation, schools, streets and water and sewer works. Other public
purposes for which Municipal Obligations may be issued include refunding
outstanding obligations, obtaining funds for general operating expenses
and lending such funds to other public institutions and facilities. In
addition, certain types of industrial development bonds are issued by or
on behalf of public authorities to obtain funds to provide for the
construction, equipment, repair or improvement of privately operated
housing facilities, sports facilities, convention or trade show
facilities, airport, mass transit, industrial, port or parking facilities,
air or water pollution control facilities and certain local facilities for
water supply, gas, electricity, or solid waste or sewage disposal; the
interest paid on such obligations may be exempt from Federal income tax,
although current tax laws place substantial limitations on the size of
such issues. Such obligations are considered to be Municipal Obligations
if the interest paid thereon qualifies as exempt from Federal income tax
in the opinion of bond counsel to the issuer. There are, of course,
variations in the security of Municipal Obligations, both within a
particular classification and between classifications.
Floating and variable rate demand notes and bonds are tax exempt
obligations ordinarily having stated maturities in excess of 13 months,
but which permit the holder to demand payment of principal at any time, or
at specified intervals not exceeding 13 months, in each case upon not more
than 30 days' notice. The issuer of such obligations ordinarily has a
corresponding right, after a given period, to prepay in its discretion the
outstanding principal amount of the obligation plus accrued interest upon
a specified number of days' notice to the holders thereof. The interest
rate on a floating rate demand obligation is based on a known lending
rate, such as a bank's prime rate, and is adjusted automatically each time
such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals.
For the purpose of diversification under the Investment Company Act
of 1940 (the "Act"), the identification of the issuer of Municipal
Obligations depends on the terms and conditions of the security. When the
assets and revenues of an agency, authority, instrumentality or other
political subdivision are separate from those of the government creating
the subdivision and the security is backed only by the assets and revenues
of the subdivision, such subdivision would be deemed to be the sole
issuer. Similarly, in the case of an industrial development bond, if that
bond is backed only by the assets and revenues of the non-governmental
user, then such non-governmental user would be deemed to be the sole
issuer. If, however, in either case, the creating government or some
other entity guarantees a security, such a guaranty would be considered a
separate security and will be treated as an issue of such government or
other entity.
The yields on Municipal Obligations are dependent on a variety of
factors, including general economic and monetary conditions, money market
factors, conditions in the Municipal Obligations market, size of a
particular offering, maturity of the obligation and rating of the issue.
The imposition of the Fund's management fee, as well as other operating
expenses, will have the effect of reducing the yield to investors.
Municipal lease obligations or installment purchase contract
obligations (collectively, "lease obligations") have special risks not
ordinarily associated with Municipal Obligations. Although lease
obligations do not constitute general obligations of the municipality for
which the municipality's taxing power is pledged, a lease obligation
ordinarily is backed by the municipality's covenant to budget for,
appropriate and make the payments due under the lease obligation.
However, certain lease obligations contain "non-appropriation" clauses
which provide that the municipality has no obligation to make lease or
installment purchase payments in future years unless money is appropriated
for such purpose on a yearly basis. Although "non-appropriation" lease
obligations are secured by the leased property, disposition of the
property in the event of foreclosure might prove difficult. The Fund will
seek to minimize these risks by investing only in those lease obligations
that (1) are rated in one of the highest rating categories for debt
obligations by at least two nationally recognized statistical rating
organizations (or one rating organization if the lease obligation was
rated by only one such organization) or (2) if unrated, are purchased
principally from the issuer or domestic banks or other responsible third
parties, in each case only if the seller shall have entered into an
agreement with the Fund providing that the seller or other responsible
third party will either remarket or repurchase the municipal lease within
a short period after demand by the Fund. The staff of the Securities and
Exchange Commission currently considers certain lease obligations to be
illiquid. Accordingly, not more than 10% of the value of the Fund's net
assets will be invested in lease obligations that are illiquid and in
other securities that are not readily marketable. See "Investment
Restrictions No. 6" below.
Ratings of Municipal Obligations. If, subsequent to its purchase by
the Fund, (a) an issue of rated Municipal Obligations ceases to be rated
in the highest rating category by at least two rating organizations (or
one rating organization if the instrument was rated by only one such
organization) or the Fund's Board determines that it is no longer of
comparable quality or (b) the Manager becomes aware that any portfolio
security not so highly rated or any unrated security has been given a
rating by any rating organization below the rating organization's second
highest rating category, the Fund's Board will reassess promptly whether
such security presents minimal credit risk and will cause the Fund to take
such action as it determines is in the best interest of the Fund and its
shareholders; provided that the reassessment required by clause (b) is not
required if the portfolio security is disposed of or matures within five
business days of the Manager becoming aware of the new rating and the
Fund's Board is subsequently notified of the Manager's actions.
To the extent that the ratings given by Moody's, S&P or Fitch for
Municipal Obligations may change as a result of changes in such organiza-
tions or their rating systems, the Fund will attempt to use comparable
ratings as standards for its investments in accordance with the investment
policies contained in the Fund's Prospectus and this Statement of
Additional Information. The ratings of Moody's, S&P and Fitch represent
their opinions as to the quality of the Municipal Obligations which they
undertake to rate. It should be emphasized, however, that ratings are
relative and subjective and are not absolute standards of quality.
Although these ratings may be an initial criterion for selection of port-
folio investments, the Manager also will evaluate these securities and the
creditworthiness of the issuers of such securities based upon financial
and other available information.
Taxable Investments. Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ only in their interest rates, maturities and
times of issuance. Treasury Bills have initial maturities of one year or
less; Treasury Notes have initial maturities of one to ten years; and
Treasury Bonds generally have initial maturities of greater than ten
years. Some obligations issued or guaranteed by U.S. Government agencies
and instrumentalities, for example, Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury; others, such as those of the Federal Home
Loan Banks, by the right of the issuer to borrow from the U.S. Treasury;
others, such as those issued by the Federal National Mortgage Association,
by discretionary authority of the U.S. Government to purchase certain
obligations of the agency or instrumentality; and others, such as those
issued by the Student Loan Marketing Association, only by the credit of
the agency or instrumentality. These securities bear fixed, floating or
variable rates of interest. Interest may fluctuate based on generally
recognized reference rates or the relationship of rates. While the U.S.
Government provides financial support to such U.S. Government-sponsored
agencies or instrumentalities, no assurance can be given that it will
always do so, since it is not so obligated by law. The Fund will invest
in such securities only when it is satisfied that the credit risk with
respect to the issuer is minimal.
Commercial paper consists of short-term, unsecured promissory notes
issued to finance short-term credit needs.
Certificates of deposit are negotiable certificates representing the
obligation of a bank to repay funds deposited with it for a specified
period of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate. Investments in time deposits generally
are limited to London branches of domestic banks that have total assets in
excess of one billion dollars. Time deposits which may be held by the
Fund will not benefit from insurance from the Bank Insurance Fund or the
Savings Association Insurance Fund administered by the Federal Deposit
Insurance Corporation.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments
reflect the obligation both of the bank and of the drawer to pay the face
amount of the instrument upon maturity. Other short-term bank
obligations may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
Repurchase agreements involve the acquisition by the Fund of an
underlying debt instrument, subject to an obligation of the seller to
repurchase, and the Fund to resell, the instrument at a fixed price,
usually not more than one week after its purchase. The Fund's custodian
will have custody of, and will hold in a segregated account, securities
acquired by the Fund under a repurchase agreement. Repurchase agreements
are considered by the staff of the Securities and Exchange Commission to
be loans by the Fund. In an attempt to reduce the risk of incurring a
loss on a repurchase agreement, the Fund will enter into repurchase
agreements only with domestic banks with total assets in excess of one
billion dollars or primary government securities dealers reporting to the
Federal Reserve Bank of New York, with respect to securities of the type
in which the Fund may invest, and will require that additional securities
be deposited with it if the value of the securities purchased should
decrease below resale price. The Manager will monitor on an ongoing basis
the value of the collateral to assure that it always equals or exceeds the
repurchase price. Certain costs may be incurred by the Fund in connection
with the sale of the securities if the seller does not repurchase them in
accordance with the repurchase agreement. In addition, if bankruptcy
proceedings are commenced with respect to the seller of the securities,
realization on the securities by the Fund may be delayed or limited. The
Fund will consider on an ongoing basis the creditworthiness of the
institutions with which it enters into repurchase agreements.
Investment Restrictions. The Fund has adopted the following
restrictions as fundamental policies. These restrictions cannot be
changed without approval by the holders of a majority (as defined in the
Act) of the Fund's outstanding voting shares. The Fund may not:
1. Purchase securities other than Municipal Obligations and Taxable
Investments as those terms are defined above and in the Fund's
Prospectus.
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 10% of the value of the
Fund's total assets (including the amount borrowed) based on the
lesser of cost or market, less liabilities (not including the
amount borrowed) at the time the borrowing is made. While
borrowings exceed 5% of the value of the Fund's total assets,
the Fund will not make any additional investments.
3. Pledge, hypothecate, mortgage or otherwise encumber its assets,
except in an amount up to 10% of the value of its total assets,
but only to secure borrowings for temporary or emergency
purposes.
4. Sell securities short or purchase securities on margin.
5. Underwrite the securities of other issuers, except that the Fund
may bid separately or as part of a group for the purchase of
Municipal Obligations directly from an issuer for its own
portfolio to take advantage of the lower purchase price
available.
6. Purchase securities subject to restrictions on disposition under
the Securities Act of 1933 (so called "restricted securities").
The Fund may not enter into repurchase agreements providing for
settlement in more than seven days after notice or purchase
securities which are not readily marketable, if, in the
aggregate, more than 10% of its net assets would be so invested.
The Fund may not invest in time deposits maturing in more than
seven days, and time deposits maturing from two business days
through seven calendar days may not exceed 10% of the Fund's
total net assets.
7. Purchase or sell real estate, real estate investment trust
securities, commodities or commodity contracts, or oil and gas
interests, but this shall not prevent the Fund from investing in
Municipal Obligations secured by real estate or interests
therein.
8. Make loans to others except through the purchase of qualified
debt obligations and the entry into repurchase agreements
referred to above and in the Fund's Prospectus.
9. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the obligations of
any other issuer, except that up to 25% of the value of the
Fund's total assets may be invested, and securities issued or
guaranteed by the U.S. Government or its agencies or
instrumentalities may be purchased, without regard to any such
limitations. Notwithstanding the foregoing, to the extent
required by the rules of the Securities and Exchange Commission,
the Fund will not invest more than 5% of its assets in the
obligations of any one bank, except that up to 25% of the value
of the Fund's total assets may be invested without regard to
such limitation.
10. Invest more than 25% of its total assets in the securities of
issuers in any single industry; provided that there shall be no
such limitation on the purchase of Municipal Obligations and,
for temporary defensive purposes, securities issued by banks and
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.
11. Purchase more than 10% of the voting securities of any issuer
(this restriction applies only with respect to 75% of the Fund's
assets) or invest in companies for the purpose of exercising
control.
12. Invest in securities of other investment companies, except as
they may be acquired as part of a merger, consolidation or
acquisition of assets.
Notwithstanding Investment Restriction Nos. 1, 3 and 7, the Fund
reserves the right to enter into interest rate futures contracts, and
municipal bond index futures contracts, and any options that may be
offered in respect thereof, subject to the restrictions then in effect of
the Securities and Exchange Commission and the Commodity Futures Trading
Commission and to the receipt or taking, as the case may be, of
appropriate consents, approvals and other actions from or by those
regulatory bodies. In any event, no such contracts or options will be
entered into until a general description of the terms thereof are set
forth in a subsequent prospectus and statement of additional information,
the Registration Statement with respect to which has been filed with the
Securities and Exchange Commission and has become effective.
For purposes of Investment Restriction No. 10, industrial development
bonds, where the payment of principal and interest is the ultimate
responsibility of companies within the same industry, are grouped together
as an "industry." If a percentage restriction is adhered to at the time
of investment, a later increase or decrease in percentage resulting from a
change in values or assets will not constitute a violation of such
restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interest of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Trustees and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. The Trustee who is deemed to be an "interested person"
of the Fund, as defined in the Act, is indicated by an asterisk.
Trustees and Officers of the Fund
*DAVID W. BURKE, Trustee. Vice President and Chief Administrative Officer
of the Manager, and an officer, director or trustee of other
investment companies advised or administered by the Manager since
October 1990. During the period 1977 to 1990, Mr. Burke was involved
in the management of national television news, as Vice-President and
Executive Vice President of ABC News, and subsequently as President
of CBS News. His address is 200 Park Avenue, New York, New York
10166
ISABEL P. DUNST, Trustee. Partner in the law firm of Hogan & Hartson
since 1990. From 1986 to 1990, Deputy General Counsel of the United
States Department of Health and Human Services. She is also a
Trustee of the Clients' Security Fund of the District of Columbia Bar
and a Trustee of Temple Sinai. Her address is c/o Hogan & Hartson,
Columbia Square, 555 Thirteenth Street, N.W., Washington,D.C.
20004-1109.
LYLE E. GRAMLEY, Trustee. Consulting economist since June 1992 and Senior
Staff Vice President and Chief Economist of Mortgage Bankers
Association of America from 1985 to May 1992. Since February 1993, a
director of Countrywide Mortgage Investments. From 1980 to 1985,
member of the Board of Governors of the Federal Reserve System. His
address is 12901 Three Sisters Road, Potomac, Maryland 20854.
*RICHARD J. MOYNIHAN, Trustee, President and Investment Officer. An
employee of the Manager and an officer, director or trustee of other
investment companies advised or administered by the Manager. His
address is 200 Park Avenue, New York, New York 10166.
WARREN B. RUDMAN, Trustee. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison. From January 1981 to
January 1993, Mr. Rudman served as a United States Senator from the
State of New Hampshire. Also, since January 1993, Mr. Rudman has
served as Vice Chairman of the Federal Reserve Bank of Boston and as
a director of Chubb Corporation and Raytheon Corporation. Since
1988, Mr. Rudman has served as a trustee of Boston College and since
1986 as a member of the Senior Advisory Board of the Institute of
Politics of the Kennedy School of Government at Harvard University.
He also served as Deputy Chairman of the President's Foreign
Intelligence Advisory Board. His address is 1615 L Street, N.W.,
Suite 1300, Washington D.C. 20036.
Each of the "non-interested" Trustees is also a trustee of Dreyfus
Cash Management, Dreyfus Government Cash Management, Dreyfus Municipal
Cash Management Plus, Dreyfus New York Municipal Cash Management, Dreyfus
Treasury Cash Management and Dreyfus Treasury Prime Cash Management, and a
director of Dreyfus Cash Management Plus, Inc. Mr. Rudman is also a
trustee of Dreyfus BASIC U.S. Government Money Market Fund, Dreyfus
California Intermediate Municipal Bond Fund, Dreyfus Connecticut
Intermediate Municipal Bond Fund, Dreyfus Massachusetts Intermediate
Municipal Bond Fund, Dreyfus New Jersey Intermediate Municipal Bond Fund,
Dreyfus Pennsylvania Intermediate Municipal Bond Fund, Dreyfus Strategic
Income and Dreyfus Strategic Investing, and a director of Dreyfus BASIC
Money Market Fund, Inc. and Dreyfus Strategic Governments Income, Inc.
For so long as the Fund's plans described in the sections captioned
"Service Plan" and "Shareholder Services Plan" remain in effect, the
Trustees of the Fund who are not "interested persons" of the Fund, as
defined in the Act, will be selected and nominated by the Trustees who are
not "interested persons" of the Fund.
The Fund does not pay any remuneration to its officers and Trustees
other than fees and expenses to Trustees who are not officers, directors,
employees or holders of 5% or more of the outstanding voting securities of
the Manager, which totaled $16,167 for the fiscal year ended January 31,
1994 for all such Trustees as a group.
Each Trustee, except Mr. Burke, was elected at a meeting of
shareholders held on September 14, 1993. No further shareholder meetings
will be held for the purpose of electing Trustees unless and until such
time as less than a majority of the Trustees holding office have been
elected by shareholders, at which time the Trustees then in office will
call a shareholders' meeting for the election of Trustees. Under the Act,
shareholders of record of not less than two-thirds of the outstanding
shares of the Fund may remove a Trustee through a declaration in writing
or by vote cast in person or by proxy at a meeting called for that
purpose. Under the Fund's Agreement and Declaration of Trust, the
Trustees are required to call a meeting of shareholders for the purpose of
voting upon the question of removal of any such Trustee when requested in
writing to do so by the holders of record of not less than 10% of the
Fund's outstanding shares.
Officers of the Fund Not Listed Above
ELIE M. GENADRY, Senior Vice President. Vice President--Institutional
Sales of the Manager, Executive Vice President of the Distributor and
an officer of other investment companies advised and administered by
the Manager.
DONALD A. NANFELDT, Senior Vice President. Executive Vice President of
the Distributor and an officer of other investment companies advised
and administered by the Manager.
A. PAUL DISDIER, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
KAREN M. HAND, Vice President and Investment Officer. An employee of the
Manager and an officer of other investment companies advised and
administered by the Manager.
STEPHEN C. KRIS, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
JILL C. SHAFFRO, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised or
administered by the Manager.
L. LAWRENCE TROUTMAN, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
SAMUEL J. WEINSTOCK, Vice President and Investment Officer. An employee
of the Manager and an officer of other investment companies advised
and administered by the Manager.
MONICA S. WIEBOLDT, Vice President and Investment Officer. An employee of
the Manager and an officer of other investment companies advised and
administered by the Manager.
JEFFREY N. NACHMAN, Vice President-Financial. Vice President-Mutual Fund
Accounting of the Manager and an officer of other investment
companies advised or administered by the Manager.
DANIEL C. MACLEAN, Vice President. Vice President and General Counsel of
the Manager, Secretary of the Distributor and an officer of other
investment companies advised or administered by the Manager.
JOHN J. PYBURN, Treasurer. Assistant Vice President of the Manager and an
officer of other investment companies advised or administered by the
Manager.
MARK N. JACOBS, Secretary. Secretary and Deputy General Counsel of the
Manager and an officer of other investment companies advised or
administered by the Manager.
PAUL T. MOLLOY, Controller. Senior Accounting Manager in the Fund
Accounting Department of the Manager and an officer of other
investment companies advised and administered by the Manager.
ROBERT I. FRENKEL, Assistant Secretary. Senior Assistant General Counsel
of the Manager and an officer of other investment companies advised
or administered by the Manager.
CHRISTINE PAVALOS, Assistant Secretary. Assistant Secretary of the
Manager, the Distributor and other investment companies advised or
administered by the Manager.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
Trustees and officers of the Fund, as a group, owned less than 1% of
the Fund's shares of beneficial interest outstanding on May 2, 1994.
The following shareholders are known by the Fund to own of record 5%
or more of the Fund's Class A shares of beneficial interest outstanding on
May 2, 1994: (1) First Union National Bank, First Union Plaza CMG-2,
Charlotte, NC 28288 (14.0%); (2) 1st Interstate Bank of Oregon, P.O. Box
2971, Portland, OR 97208-2971 (5.7%); and (3) Central Fidelity Bank,
Variable Notice Desk, 1021 E. Cary Street, Richmond, VA 23219-4000 (5.5%).
The following shareholders are known by the Fund to own of record 5% or
more of the Fund's Class B shares of beneficial interest outstanding on
May 2, 1994: (1) Republic National Bank of NY, 176 Broadway, Mezzanine
Level, New York, NY 10038 (58.6%); (2) Barnett Bank of Jacksonville, P.O.
Box 45147, Jacksonville, FL 32232-5147 (29.3%); and (3) First Bank North,
101 W. Stephenson Street, Freeport, IL 61032-4221 (6.2%).
The following persons are also officers and/or directors of the
Manager: Howard Stein, Chairman of the Board and Chief Executive Officer;
Julian M. Smerling, Vice Chairman of the Board of Directors; Joseph S.
DiMartino, President, Chief Operating Officer and a director; Alan M.
Eisner, Vice President and Chief Financial Officer; David W. Burke, Vice
President and Chief Administrative Officer; Robert F. Dubuss, Vice
President; Peter A. Santoriello, Vice President; Kirk V. Stumpp, Vice
President--New Product Development; Philip L. Toia, Vice President--Fixed-
Income Research; Katherine C. Wickham, Assistant Vice President; Maurice
Bendrihem, Controller; and Mandell L. Berman, Alvin E. Friedman, Lawrence
M. Greene, Abigail Q. McCarthy and David B. Truman, directors.
MANAGEMENT AGREEMENT
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Management
of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated June 11, 1986 with the Fund, which is
subject to annual approval by (i) the Fund's Board of Trustees or (ii)
vote of a majority (as defined in the Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance also
is approved by a majority of the Trustees who are not "interested persons"
(as defined in the Act) of the Fund or the Manager, by vote cast in person
at a meeting called for the purpose of voting on such approval.
Shareholders approved the Agreement on October 7, 1986 and the Board of
Trustees, including a majority of the Trustees who are not "interested
persons" of any party to the Agreement, last voted to renew the Agreement
at a meeting held on May 24, 1994. The Agreement is terminable without
penalty, on 60 days' notice, by the Fund's Board of Trustees or by vote of
the holders of a majority of the Fund's outstanding voting shares, or, on
not less than 90 days' notice, by the Manager. The Agreement will
terminate automatically in the event of its assignment (as defined in the
Act).
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the
Fund's Board of Trustees. The Manager is responsible for investment
decisions, and provides the Fund with Investment Officers who are
authorized by the Trustees to execute purchases and sales of securities.
The Fund's Investment Officers are A. Paul Disdier, Karen M. Hand, Stephen
C. Kris, Richard J. Moynihan, Jill C. Shaffro, L. Lawrence Troutman,
Samuel J. Weinstock and Monica S. Wieboldt. The Manager also maintains a
research department with a professional staff of portfolio managers and
securities analysts who provide research services for the Fund as well as
for other funds advised by the Manager. All purchases and sales are
reported for the Trustees' review at the meeting subsequent to such
transactions.
The Manager pays the salaries of all officers and employees employed
by both it and the Fund, maintains office facilities and furnishes
statistical and research data, clerical help, accounting, data processing,
bookkeeping and internal auditing and certain other required services.
The Manager also may make such advertising and promotional expenditures,
using its own resources, as it from time to time deems appropriate.
As compensation for its services, the Fund has agreed to pay the
Manager a monthly management fee at the annual rate of .20 of 1% of the
value of the Fund's average daily net assets, as provided in the
Agreement. All fees and expenses are accrued daily and deducted before
declaration of dividends to investors. The management fees payable for
the fiscal years ended January 31, 1992, 1993 and 1994 were $3,616,798,
$3,607,051, and $3,663,999, respectively, which amounts were reduced
pursuant to an undertaking by the Manager, resulting in net management
fees paid for such fiscal years of $2,789,345, $2,919,270 and $2,978,463,
respectively.
Unless the Manager gives the Fund's investors at least 90 days'
notice to the contrary, the Manager, and not the Fund, will be liable for
those expenses of the Fund (exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses) other than the following
expenses, which will be Fund expenses: (i) the management fee payable by
the Fund monthly at the annual rate of .20 of 1% of the Fund's average
daily net assets and (ii) as to Class B shares only, payments made at the
annual rate of .25 of 1% of the value of the average daily net assets of
Class B, pursuant to the Fund's Service Plan. See "Service Plan."
In addition, the Agreement provides that if in any fiscal year the
aggregate expenses of the Fund, exclusive of taxes, brokerage, interest on
borrowings and (with the prior written consent of the necessary state
securities commissions) extraordinary expenses, but including the
management fee, exceed 1-1/2% of the value of the Fund's average net assets
for the fiscal year, the Fund may deduct from the payment to be made to
the Manager under the Agreement, or the Manager will bear, such excess
expense. Such deduction or payment, if any, will be estimated on a daily
basis, and reconciled and effected or paid, as the case may be, on a
monthly basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor
also acts as distributor for the other funds in the Dreyfus Family of
Funds and for certain other investment companies.
Using Federal Funds. The Shareholder Services Group, Inc., the
Fund's transfer and dividend disbursing agent (the "Transfer Agent"), or
the Fund may attempt to notify the investor upon receipt of checks drawn
on banks that are not members of the Federal Reserve System as to the
possible delay in conversion into Federal Funds and may attempt to arrange
for a better means of transmitting the money. If the investor is a
customer of a securities dealer, bank or other financial institution and
his order to purchase Fund shares is paid for other than in Federal Funds,
the securities dealer, bank or other financial institution, acting on
behalf of its customer, will complete the conversion into, or itself
advance, Federal Funds generally on the business day following receipt of
the customer order. The order is effective only when so converted and
received by the Transfer Agent. An order for the purchase of Fund shares
placed by an investor with a sufficient Federal Funds or cash balance in
his brokerage account with a securities dealer, bank or other financial
institution will become effective on the day that the order, including
Federal Funds, is received by the Transfer Agent. In some states, banks
or other financial institutions effecting transactions in Fund shares may
be required to register as dealers pursuant to state law.
SERVICE PLAN
(CLASS B ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Service
Plan."
Rule 12b-1 (the "Rule") adopted by the Securities and Exchange
Commission under the Act provides, among other things, that an investment
company may bear expenses of distributing its shares only pursuant to a
plan adopted in accordance with the Rule. The Fund's Board of Trustees
has adopted such a plan (the "Service Plan") with respect to the Fund's
Class B shares, pursuant to which the Fund pays the Distributor for
advertising, marketing and distributing Class B shares and for the
provision of certain services to the holders of Class B shares. Under the
Service Plan, the Distributor may make payments to certain financial
institutions, securities dealers and other financial industry
professionals (collectively, "Service Agents") in respect to these
services. The Fund's Board of Trustees believes that there is a
reasonable likelihood that the Service Plan will benefit the Fund and the
holders of Class B shares.
A quarterly report of the amounts expended under the Service Plan,
and the purposes for which such expenditures were incurred, must be made
to the Trustees for their review. In addition, the Service Plan provides
that it may not be amended to increase materially the costs which holders
of Class B shares may bear pursuant to the Service Plan without the
approval of the holders of Class B shares and that other material
amendments of the Service Plan must be approved by the Board of Trustees,
and by the Trustees who are not "interested persons" (as defined in the
Act) of the Fund and have no direct or indirect financial interest in the
operation of the Service Plan or in any agreements entered into in
connection with the Service Plan, by vote cast in person at a meeting
called for the purpose of considering such amendments. The Service Plan
is subject to annual approval by such vote of the Trustees cast in person
at a meeting called for the purpose of voting on the Service Plan. The
Service Plan was so approved by the Trustees at a meeting held on May 24,
1994. The Service Plan may be terminated at any time by vote of a
majority of the Trustees who are not "interested persons" and have no
direct or indirect financial interest in the operation of the Service Plan
or in any agreements entered into in connection with the Service Plan or
by vote of the holders of a majority of Class B shares. For the period
January 10, 1994, (commencement of the initial offering of Class B shares)
through January 31, 1994, for Class B shares of the Fund nothing was paid
pursuant to the Service Plan.
SHAREHOLDER SERVICES PLAN
(CLASS A ONLY)
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Shareholder Services Plan."
The Fund has adopted a Shareholder Services Plan (the "Plan")
pursuant to which the Fund has agreed to reimburse the Distributor for
certain allocated expenses of providing personal services and/or
maintaining shareholder accounts with respect to Class A shares only. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts.
A quarterly report of the accounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Trustees for their review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board of Trustees, and by
the Trustees who are not "interested persons" (as defined in the Act) of
the Fund or the Manager and have no direct or indirect financial interest
in the operation of the Plan, by vote cast in person at a meeting called
for the purpose of considering such amendments. The Plan is subject to
annual approval by such vote of the Trustees cast in person at a meeting
called for the purpose of voting on the Plan. The Plan was so approved at
a meeting held on February 24, 1994. The Plan is terminable at any time
by vote of a majority of the Trustees who are not "interested persons" and
have no direct or indirect financial interest in the operation of the
Plan.
For the period May 25, 1993 (effective date of the Shareholder
Services Plan) through January 31, 1994, $117,186 was charged to the Fund,
with respect to Class A shares, pursuant to the Shareholder Services Plan.
REDEMPTION OF FUND SHARES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to
Redeem Fund Shares."
Redemption by Wire or Telephone. By using this procedure, the
investor authorizes the Transfer Agent, to act on wire or telephone
redemption instructions from any person representing himself or herself to
be an authorized representative of the investor, and reasonably believed
by the Transfer Agent to be genuine. Ordinarily, the Fund will initiate
payment for shares redeemed pursuant to this procedure on the same
business day if the Distributor receives the redemption request in proper
form prior to 12:00 Noon, New York time, on such day; otherwise the Fund
will initiate payment on the next business day. Such payment will be made
to a bank that is a member of the Federal Reserve System.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
________________ ________________
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.
Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of
the Fund's net assets at the beginning of such period. Such commitment is
irrevocable without the prior approval of the Securities and Exchange
Commission. In the case of requests for redemption in excess of such
amount, the Board of Trustees reserves the right to make payments in whole
or in part in securities or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of
the Fund to the detriment of the existing shareholders. In such event,
the securities would be valued in the same manner as the Fund's portfolio
is valued. If the recipient sold such securities, brokerage charges would
be incurred.
Suspension of Redemptions. The right of redemption may be suspended
or the date of payment postponed (a) during any period when the New York
Stock Exchange is closed (other than customary weekend and holiday
closings), (b) when trading in the markets the Fund ordinarily utilizes is
restricted, or when an emergency exists as determined by the Securities
and Exchange Commission so that disposal of the Fund's investments or
determination of its net asset value is not reasonably practicable, or (c)
for such other periods as the Securities and Exchange Commission by order
may permit to protect the Fund's shareholders.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "How to Buy
Fund Shares."
Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized capital gains or losses. This involves valuing an
instrument at its cost and thereafter assuming a constant amortization to
maturity of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the instrument. While
this method provides certainty in valuation, it may result in periods
during which value, as determined by amortized cost, is higher or lower
than the price the Fund would receive if it sold the instrument.
The Board of Trustees has established, as a particular responsibility
within the overall duty of care owed to the Fund's investors, procedures
reasonably designed to stabilize the Fund's price per share as computed
for the purpose of purchases and redemptions at $1.00. Such procedures
include review of the Fund's portfolio holdings by the Board of Trustees,
at such intervals as it deems appropriate, to determine whether the Fund's
net asset value calculated by using available market quotations or market
equivalents deviates from $1.00 per share based on amortized cost. Market
quotations and market equivalents used in such review are obtained from an
independent pricing service (the "Service") approved by the Board of
Trustees. The Service will value the Fund's investments based on methods
which include consideration of: yields or prices of municipal obligations
of comparable quality, coupon, maturity and type; indications of values
from dealers; and general market conditions. The Service also may employ
electronic data processing techniques and/or a matrix system to determine
valuations.
The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Board of Trustees. If
such deviation exceeds 1/2 of 1%, the Board of Trustees will consider
promptly what action, if any, will be initiated. In the event the Board
of Trustees determines that a deviation exists which may result in
material dilution or other unfair results to investors or existing
shareholders, it has agreed to take such corrective action as it regards
as necessary and appropriate including: selling portfolio instruments
prior to maturity to realize capital gains or losses or to shorten average
portfolio maturity; withholding dividends or paying distributions from
capital or capital gains; redeeming shares in kind; or establishing a net
asset value per share by using available market quotations or market
equivalents.
New York Stock Exchange Closings. The holidays (as observed) on
which the New York Stock Exchange is closed currently are: New Year's
Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
PORTFOLIO TRANSACTIONS
Portfolio securities ordinarily are purchased from and sold to
parties acting as either principal or agent. Newly-issued securities
ordinarily are purchased directly from the issuer or from an underwriter;
other purchases and sales usually are placed with those dealers from which
it appears that the best price or execution will be obtained. Usually no
brokerage commissions, as such, are paid by the Fund for such purchases
and sales, although the price paid usually includes an undisclosed
compensation to the dealer acting as agent. The prices paid to
underwriters of newly-issued securities usually include a concession paid
by the issuer to the underwriter, and purchases of after-market securities
from dealers ordinarily are executed at a price between the bid and asked
price. No brokerage commissions have been paid by the Fund to date.
Transactions are allocated to various dealers by the Fund's
Investment Officers in their best judgment. The primary consideration is
prompt and effective execution of orders at the most favorable price.
Subject to that primary consideration, dealers may be selected for
research, statistical or other services to enable the Manager to
supplement its own research and analysis with the views and information of
other securities firms and may be selected based upon their sales of Fund
shares.
Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses
of its research department.
INVESTOR SERVICES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Investor
Services."
Exchange Privilege. By using this Privilege, the investor authorizes
the Distributor to act on exchange instructions from any person
representing himself or herself to be an authorized representative of the
investor and reasonably believed by the Distributor to be genuine.
Telephone exchanges may be subject to limitations as to the amount
involved or the number of telephone exchanges permitted. Shares will be
exchanged at the net asset value next determined after receipt of an
exchange request in proper form. Shares in certificate form are not
eligible for telephone exchange.
Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund,
shares of Dreyfus Cash Management, Dreyfus Cash Management Plus, Inc.,
Dreyfus Government Cash Management, Dreyfus Municipal Cash Management
Plus, Dreyfus New York Municipal Cash Management, Dreyfus Treasury Cash
Management or Dreyfus Treasury Prime Cash Management. This Privilege is
available only for existing accounts. Shares will be exchanged on the
basis of relative net asset value. Enrollment in or modification or
cancellation of this Privilege is effective three business days following
notification by the investor. An investor will be notified if its account
falls below the amount designated under this Privilege. In this case, an
investor's account will fall to zero unless additional investments are
made in excess of the designated amount prior to the next Auto-Exchange
transaction. Shares in certificate form are not eligible for this
Privilege.
The Exchange Privilege and Dreyfus Auto-Exchange Privilege are
available to investors resident in any state in which shares of the fund
being acquired may legally be sold. Shares may be exchanged only between
accounts having identical names and other identifying designations.
The Fund reserves the right to reject any exchange request in whole
or in part. The Exchange Privilege or Dreyfus Auto-Exchange Privilege may
be modified or terminated at any time upon notice to investors.
DIVIDENDS, DISTRIBUTION AND TAXES
The following information supplements and should be read in
conjunction with the section in Fund's Prospectus entitled "Dividends,
Distributions and Taxes."
Ordinarily, gains and losses realized from portfolio transactions
will be treated as capital gain or loss. However, all or a portion of the
any gains realized from the sale or other disposition of certain market
discount bonds will be treated as ordinary income under Section 1276 of
the Internal Revenue Code of 1986, as amended.
YIELD INFORMATION
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "Yield
Information."
For the seven-day period ended January 31, 1994, yield and effective
yield on Class A shares were 2.19% and 2.22%, respectively, and on Class B
share were 1.94% and 1.96%, respectively. Yield is computed in accordance
with a standardized method which involves determining the net change in
the value of a hypothetical pre-existing Fund account having a balance of
one share at the beginning of a seven calendar day period for which yield
is to be quoted, dividing the net change by the value of the account at
the beginning of the period to obtain the base period return, and
annualizing the results (i.e., multiplying the base period return by
365/7). The net change in the value of the account reflects the value of
additional shares purchased with dividends declared on the original share
and any such additional shares and fees that may be charged to the
shareholder's account, in proportion to the length of the base period and
the Fund's average account size, but does not include realized gains and
losses or unrealized appreciation and depreciation. Effective yield is
computed by adding 1 to the base period return (calculated as described
above), raising that sum to a power equal to 365 divided by 7, and
subtracting 1 from the result.
Based upon a 1994 Federal tax rate of 39.6%, the Fund's tax
equivalent yield for the seven-day period ended January 31, 1994 was
4.07%. Tax equivalent yield is computed by dividing that portion of the
yield or effective yield (calculated as described above) which is tax
exempt by 1 minus a stated tax rate and adding the quotient to that
portion, if any, of the yield of the Fund that is not tax exempt.
The tax equivalent yield noted above represents the application of
the highest Federal marginal personal income tax rate presently in effect.
The tax equivalent figure, however, does not include the potential effect
of any state or local (including, but not limited to, county, district or
city) taxes, including applicable surcharges. In addition, there may be
pending legislation which could affect such stated tax rates or yields.
Each investor should consult its tax adviser, and consider its own factual
circumstances and applicable tax laws, in order to ascertain the relevant
tax equivalent yield.
Yields will fluctuate and are not necessarily representative of
future results. Each investor should remember that yield is a function of
the type and quality of the instruments in the portfolio, portfolio
maturity and operating expenses. An investor's principal in the Fund is
not guaranteed. See "Determination of Net Asset Value" for a discussion
of the manner in which the Fund's price per share is determined.
From time to time, the Fund may use hypothetical tax equivalent
yields or charts in its advertising. These hypothetical yields or charts
will be used for illustrative purposes only and are not indicative of the
Fund's past or future performance.
From time to time, advertising materials for the Fund may refer to or
discuss then-current or past economic conditions, developments and/or
events, or actual or proposed tax legislation. From time to time,
advertising materials for the Fund may also refer to statistical or other
information concerning trends relating to investment companies, as
compiled by industry associations such as the Investment Company
Institute.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled "General
Information."
Each Fund share has one vote and, when issued and paid for in
accordance with the terms of the offering, is fully paid and
nonassessable. Fund shares have no preemptive, subscription or conversion
rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
In early 1974, the Manager commenced offering the first money market
fund to be widely offered on a retail basis, Dreyfus Liquid Assets, Inc.
Money market mutual funds have subsequently grown into a multibillion
dollar industry.
The Fund is a member of the Family of Dreyfus Cash Management Funds
which are designed to meet the needs of an array of institutional
investors. As of April 4, 1994, the total net assets of the Dreyfus Cash
Management Funds amounted to approximately $17.5 billion.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, COUNSEL
AND INDEPENDENT AUDITORS
The Bank of New York, 110 Washington Street, New York, New York
10286, is the Fund's custodian. The Shareholder Services Group, Inc., a
subsidiary of First Data Corporation, P.O. Box 9671, Providence, Rhode
Island 02940-9671, is the Fund's transfer and dividend disbursing agent.
Neither The Bank of New York nor The Shareholder Services Group, Inc. has
any part in determining the investment policies of the Fund or which
securities are to be purchased or sold by the Fund.
Stroock & Stroock & Lavan, 7 Hanover Square, New York, New York
10004-2696, as counsel for the Fund, has rendered its opinion as to
certain legal matters regarding the due authorization and valid issuance
of the shares of beneficial interest being sold pursuant to the Fund's
Prospectus.
Ernst & Young, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Description of S&P's, Moody's and Fitch ratings:
S&P
Municipal Bond Ratings
An S&P municipal bond rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation.
The ratings are based on current information furnished by the issuer
or obtained by S&P from other sources it considers reliable, and will
include: (1) likelihood of default-capacity and willingness of the
obligor as to the timely payment of interest and repayment of principal in
accordance with the terms of the obligation; (2) nature and provisions of
the obligation; and (3) protection afforded by, and relative position of,
the obligation in the event of bankruptcy, reorganization or other
arrangement under the laws of bankruptcy and other laws affecting
creditors' rights.
AAA
Debt rated AAA has the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest rated issues only in a small
degree. The AA rating may be modified by the addition of a plus (+) or
minus (-) sign designation to show relative standing within the category.
Municipal Note Ratings
SP-1
The issuers of these municipal notes exhibit very strong or strong
capacity to pay principal and interest. Those issues determined to
possess overwhelming safety characteristics are given a plus (+) sign
designation.
Commercial Paper Ratings
The rating A is the highest rating and is assigned by S&P to issues
that are regarded as having the greatest capacity for payment. Issues in
this category are delineated with the numbers 1, 2 and 3 to indicate the
relative degree of safety. Paper rated A-1 indicates that the degree of
safety regarding timely payment is either overwhelming or very strong.
Those issues determined to possess overwhelming safety characteristics are
denoted with a plus (+) sign designation.
Moody's
Municipal Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to
as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong position
of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in Aaa securities or
fluctuation of protective elements may be of greater amplitude or there
may be other elements present which make the long-term risks appear
somewhat larger than in Aaa securities. Moody's applies the numerical
modifiers 1, 2 and 3 to show relative standing within the major rating
categories, except in the Aaa category. The modifier 1 indicates a ranking
for the security in the higher end of a rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates a ranking in
the lower end of a rating category.
Municipal Note Ratings
Moody's ratings for state and municipal notes and other short-term
loans are designated Moody's Investment Grade (MIG). Such ratings
recognize the difference between short-term credit risk and long-term
risk. Factors affecting the liquidity of the borrower and short-term
cyclical elements are critical in short-term ratings, while other factors
of major importance in bond risk, long-term secular trends for example,
may be less important over the short run.
A short-term rating may also be assigned on an issue having a demand
feature. Such ratings will be designated as VMIG or, if the demand
feature is not rated, as NR. Short-term ratings on issues with demand
features are differentiated by the use of the VMIG symbol to reflect such
characteristics as payment upon periodic demand rather than fixed maturity
dates and payment relying on external liquidity. Additionally, investors
should be alert to the fact that the source of payment may be limited to
the external liquidity with no or limited legal recourse to the issuer in
the event the demand is not met.
Moody's short-term ratings are designated Moody's Investment Grade as
MIG 1 or VMIG 1 through MIG 4 or VMIG 4. As the name implies, when
Moody's assigns an MIG or VMIG rating, all categories define an investment
grade situation.
MIG 1/VMIG 1
This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG 2/VMIG 2
This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity
for repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins
in earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets
and assured sources of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have
a strong capacity for repayment of short-term promissory obligations.
Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
Fitch
Municipal Bond Ratings
The ratings represent Fitch's assessment of the issuer's ability to
meet the obligations of a specific debt issue or class of debt. The
ratings take into consideration special features of the issue, its
relationship to other obligations of the issuer, the current financial
condition and operative performance of the issuer and of any guarantor, as
well as the political and economic environment that might affect the
issuer's future financial strength and credit quality.
AAA
Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability
to pay interest and repay principal, which is unlikely to be affected by
reasonably foreseeable events.
AA
Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal
is very strong, although not quite as strong as bonds rated AAA. Because
bonds rated in the AAA and AA categories are not significantly vulnerable
to foreseeable future developments, short-term debt of these issuers is
generally rated F-1+.
Plus (+) and minus (-) signs are used with a rating symbol to
indicate the relative position of a credit within the rating category.
Short-Term Ratings
Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and
municipal and investment notes.
Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings
on the existence of liquidity necessary to meet the issuer's obligations
in a timely manner.
F-1+
Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.
F-1
Very Strong Credit Quality. Issues carrying this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
F-1+.
F-2
Good Credit Rating. Issues carrying this rating have a satisfactory
degree of assurance for timely payments, but the margin of safety is not
as great as the F-1+ and F-1 categories.
<TABLE>
<CAPTION>
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS JANUARY 31, 1994
PRINCIPAL
TAX EXEMPT INVESTMENTS-100.0% AMOUNT VALUE
-------------- --------------
<S> <C> <C>
ALABAMA-.9%
Alabama Higher Education Loan Corp., Student Loan Revenue, VRDN
2.45%, Series A (LOC; Fuji Bank) (a,b)..................................... $ 2,450,000 $ 2,450,000
Birmingham Medical Clinic Board, Revenue, VRDN (University of Alabama)
2.10% (LOC; Morgan Guaranty Trust) (a,b)................................... 9,400,000 9,400,000
Mobile Industrial Development Board, Industrial Revenue, VRDN
(IB Chemical Co. Project) 2.575% (LOC; Industrial Bank of Japan) (a,b)..... 4,000,000 4,000,000
ALASKA-3.2%
Alaska Housing Finance Corp., VRDN
2.15%, Series C (Investment Agreement; Swiss Bank Corp.) (a)............... 21,000,000 21,000,000
City of Valdez, Marine Terminal Revenue (Exxon Pipeline Co. Project):
Bonds, Refunding 2.30%, Series C, 9/1/94 (Corp. Guaranty; Exxon Corp.)..... 25,000,000 25,028,046
VRDN 2.15% (Corp. Guaranty; Exxon Corp.) (a)............................... 10,000,000 10,000,000
CALIFORNIA-4.4%
State of California, RAN 3.50%, 6/28/94........................................ 15,000,000 15,033,306
California Public Capital Improvements Financing Authority, Revenue
(Pooled Project) 2.35%, Series C, 3/15/94
(LOC; National Westminster Bank) (b)....................................... 5,000,000 5,000,000
California School Cash Reserve Program Authority, Notes 3.40%, Series A, 7/5/94 40,000,000 40,081,854
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue,
Refunding, VRDN 2.20%, Series A (Insured; MBIA and SBPA;
Industrial Bank of Japan) (a).............................................. 16,000,000 16,000,000
COLORADO-1.1%
Arapohoe County Capital Improvement Trust Fund, Highway Revenue (E-470 Project)
2.85%, Series G, 2/28/94 (Escrowed In; Credit Lyonnais).................... 8,000,000 8,000,000
City and County of Denver, MFHR, Refunding, VRDN (Parliament Apartments Project)
2.35% (LOC; Connecticut General Life Insurance) (a,b)...................... 10,800,000 10,800,000
CONNECTICUT-2.2%
State of Connecticut, Special Tax Obligation Revenue, VRDN
(Transportation Infrastructure-1) 2.20%
(LOC; Industrial Bank of Japan) (a,b)...................................... 16,900,000 16,900,000
Connecticut Special Assessment Unemployment Compensation Advanced Fund, Revenue,
(Connecticut Unemployment) 3%, Series C, 7/1/94 (Insured; FGIC)............ 22,000,000 22,017,498
DELAWARE-1.6%
Delaware Economic Development Authority, Revenue, VRDN (Hospital Billing Collection):
2.25%, Series A (Insured; MBIA) (a)........................................ 9,700,000 9,700,000
2.25%, Series B (Insured; MBIA) (a)........................................ 10,000,000 10,000,000
2.25%, Series C (Insured; MBIA) (a)........................................ 6,400,000 6,400,000
New Castle County, EDR, VRDN (Toys "R" Us Inc.) 2.30%
(LOC; Bankers Trust) (a,b)................................................. 2,480,000 2,480,000
DISTRICT OF COLUMBIA-4.2%
District of Columbia, VRDN:
General Fund Recovery:
2.25%, Series A-4 (LOC; Industrial Bank of Japan) (a,b)................ 13,600,000 13,600,000
2.25%, Series A-5 (LOC; Mitsubishi Bank) (a,b)......................... 26,700,000 26,700,000
Refunding:
2.25%, Series B (LOC; Sanwa Bank) (a,b)................................ 20,100,000 20,100,000
2.25%, Series B-3 (LOC; Industrial Bank of Japan) (a,b)................ 12,000,000 12,000,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
FLORIDA-3.5%
Dade County Housing Finance Authority, MFMR, VRDN (Flamingo Plaza Apartments)
2.25%, Series 18 (LOC; The Bank of New York) (a,b)......................... $ 9,000,000 $ 9,000,000
Florida Housing Finance Agency, MFHR, VRDN:
(Kings Colony Project) 2.175%, Series D (LOC; Bankers Trust) (a,b)......... 20,000,000 20,000,000
(Monterey Meadow) 2.15%, Series YY (LOC; Citibank) (a,b)................... 3,000,000 3,000,000
(Sunpoint Cove) 2.15%, Series XX (LOC; Citibank) (a,b)..................... 3,100,000 3,100,000
Hillsboro County Industrial Development Authority, PCR, Refunding, VRDN
(Tampa Electric Co.) 2.10% (Guaranteed by; Tampa Electric Co.) (a)......... 4,100,000 4,100,000
City of Jacksonville, HR, VRDN (Baptism Medical Center Project)
2.25% (LOC; First Union National Bank of North Carolina) (a,b)............. 10,000,000 10,000,000
Jacksonville Health Facilities Authority, Health Facilities Revenue, VRDN
(HSI Support Systems) 2.15% (LOC; Sun Bank) (a,b).......................... 3,000,000 3,000,000
Pasco County Industrial Development Authority, Revenue, VRDN
(Woodhaven Partners Ltd. Project) 2.575% (LOC; Kredietbank) (a,b).......... 8,800,000 8,800,000
GEORGIA-4.0%
De Kalb County Housing Authority, MFHR, VRDN (Rent-Timber Trace Apartments)
2.40%, Series K (LOC; Citibank) (a,b)...................................... 13,100,000 13,100,000
Marietta Housing Authority, MFHR, VRDN (Franklin Walk Apartments Project)
2.325% (LOC; Bankers Trust) (a,b).......................................... 7,640,000 7,640,000
Municipal Electric Authority:
CP (Money Market Municipal-Sub-Project 1):
2.60%, Series 87A, 2/8/94 (SBPA; Credit Suisse)........................ 7,200,000 7,200,000
2.60%, Series 85A, 2/8/94 (SBPA; Credit Suisse)........................ 8,200,000 8,200,000
2.60%, Series 85B, 2/8/94 (SBPA; Credit Suisse)........................ 19,330,000 19,330,000
Revenue Bonds (Sub-General Resolution)
2.55%, Series B, 6/1/94 (SBPA; Morgan Guaranty Trust).................. 10,000,000 10,000,000
Savannah Port Authority, IDR, VRDN (Colonial Terminals Inc. Project)
2.45% (LOC; Citizens and Southern National Bank) (a,b)..................... 4,080,000 4,080,000
ILLINOIS-9.0%
City of Chicago, GO Tender Notes 2.75%, 4/5/94 (LOC: Dai-Ichi Kangyo Bank,
Industrial Bank of Japan, Mitsubishi Bank, Sanwa Bank and Sumitomo Bank) (b) 45,000,000 45,000,000
Chicago O'Hare International Airport, Revenue, VRDN (American Airlines):
2.25%, Series C (LOC; Sanwa Bank) (a,b).................................... 6,700,000 6,700,000
2.25%, Series D (LOC; Sanwa Bank) (a,b).................................... 5,500,000 5,500,000
Chicago Park District, Notes 3%, 4/1/94........................................ 33,000,000 33,023,459
Cook County, TAN 3.20%, 4/1/94................................................. 25,000,000 25,027,810
Illinois Health Facilities Authority, Revenue, VRDN:
(Resurrection Health Care Systems) 2.20% (Liquidity Facility: Dai-Ichi Kangyo Bank,
Dresdner Bank, Industrial Bank of
Japan, Northern Trust and Sanwa Bank) (a).............................. 32,700,000 32,700,000
(SSM Health Care Project) 2.20%, Series A
(LOC; Industrial Bank of Japan) (a,b).................................. 7,500,000 7,500,000
INDIANA-1.7%
Indiana Bond Bank Advanced Fund Program 3.03%, Series A2, 1/17/95.............. 30,000,000 30,078,173
IOWA-.6%
Iowa School Corporations, Warrant Certificates, Revenue Bonds
3.60%, 12/30/94 (Insured; Capital Guaranty)................................ 10,000,000 10,092,014
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
KANSAS-.2%
City of Osage, IDR, VRDN (Marley Continental Homes of Kansas Project)
2.70% (LOC; Bankers Trust) (a,b)........................................... $ 3,800,000 $ 3,800,000
LOUISIANA-1.5%
Orleans Levee District, VRDN (Capital Recovery Funding Program)
3.50%, Series A (LOC; Fuji Bank) (a,b)..................................... 10,000,000 10,000,000
Parish of Calcasieu Industrial Development Board, Industrial Revenue, Refunding, VRDN
(Olin Corp. Project) 2.10%, Series B (LOC; Credit Suisse) (a,b)............ 4,900,000 4,900,000
Parish of East Baton Rouge, PCR, Refunding, VRDN (Exxon Corp. Project)
2.05% (Guaranteed by; Exxon Corp.) (a)..................................... 10,400,000 10,400,000
MAINE-1.9%
Orrington, RRR, VRDN (Penobscott Energy Recovery Co. Project)
2.30%, Series A (LOC: Bank of Nova Scotia, Bankers Trust,
Canadian Imperial Bank of Commerce, Long-Term Credit Bank of
Japan and Toronto Dominion Bank) (a,b)..................................... 33,160,000 33,160,000
MASSACHUSETTS-2.1%
Commonwealth of Massachusetts, Notes 3.40%, Series B, 11/22/94................. 30,000,000 30,199,754
Massachusetts Health and Educational Facilities Authority, Revenue, VRDN
(Capital Asset Program) 2.30%, Series C (BPA;
Sanwa Bank and Insured; MBIA) (a).......................................... 5,800,000 5,800,000
MICHIGAN-2.0%
Michigan Higher Education Facilities Authority, Revenue, VRDN
(Aces-Pooled Financing Project) 2.05%
(BPA; Comerica Bank and Insured; MBIA) (a)................................. 500,000 500,000
Michigan Hospital Finance Authority, VRDN (Hospital Equipment Loan Program)
3.05% (LOC; Manufacturers National Bank) (a,b)............................. 16,800,000 16,800,000
Michigan Housing Development Authority, Limited Obligation Revenue, VRDN
(Laurel Valley) 2.50% (LOC; National Westminster Bank) (a,b)............... 5,900,000 5,900,000
Michigan Municipal Bond Authority, RAN
3%, Series A-3, 5/5/94 (LOC; Comerica Bank) (b)............................ 7,465,000 7,475,204
Michigan Strategic Fund, PCR, Refunding, VRDN (Consumer Power Project)
2.20%, Series A (LOC; Union Bank of Switzerland) (a,b)..................... 4,800,000 4,800,000
MINNESOTA-1.7%
Minnesota Housing Finance Agency, Single Family Mortgage Revenue Bonds
2.50%, Series F, 1/12/95 (GIC; Societe Generale)........................... 30,000,000 30,000,000
MISSISSIPPI-1.4%
Jackson County, Pollution Facilities Revenue, Refunding, VRDN
(Chevron USA Inc. Project) 2.15% (Corp. Guaranty; Chevron USA Inc.)........ 23,550,000 23,550,000
MISSOURI-.6%
Cole County Industrial Development Authority, Industrial Revenue, VRDN
(Mobine Manufacturing Co. Project) 2.70% (LOC; Fuji Bank) (a,b)............ 2,940,000 2,940,000
Missouri Health and Educational Facilities Authority, Health Facilities
Revenue, VRDN (SSM Health Care Project) 2.20%, Series A (LOC;
Industrial Bank of Japan) (a,b)............................................ 7,600,000 7,600,000
NEBRASKA-1.7%
Nebraska Higher Education Loan Program Inc., Revenue, VRDN (Student Loan Program)
2.25%, Series C (Insured; MBIA) (a)........................................ 27,340,000 27,340,000
Nebraska Investment Finance Authority, HR, VRDN (Depreciation Assets)
2.20%, Series A (Insured; FGIC) (a)........................................ 2,920,000 2,920,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
NEW JERSEY-3.7%
New Jersey Economic Development Authority, Industrial and
Economic Development Revenue, VRDN (White House Pike Limited Project)
2.70% (Guaranteed by; Household Finance Corp.) (a)......................... $ 7,600,000 $ 7,600,000
New Jersey Turnpike Authority, Turnpike Revenue, Refunding, VRDN
2.35%, Series D (Insured; FGIC and Liquidity Agreement;
Societe Generale) (a)...................................................... 57,000,000 57,000,000
NEW MEXICO-1.8%
City of Farmington, PCR, (Arizona Public Service Project- Four Corners):
Bonds 2.80%, Series 85A, 2/1/94 (LOC; Union Bank of Switzerland) (b)....... 11,000,000 11,000,000
VRDN 2.05% (LOC; Barclays Bank) (a,b)...................................... 20,000,000 20,000,000
NEW YORK-16.1%
Erie County, RAN 3.30%, 8/5/94 (LOC; Mitsubishi Bank) (b)...................... 4,250,000 4,254,157
City of New York:
RAN:
3.50%, Series 94A, 4/15/94............................................. 20,000,000 20,027,493
3.50%, Series 94B, 6/30/94............................................. 10,000,000 10,024,991
TAN 3.125%, Series A, 4/8/94............................................... 70,000,000 70,064,495
VRDN:
2.05%, Series D (SBPA; Citibank) (a)................................... 6,500,000 6,500,000
2.05%, Series 93D (SBPA; Citicorp) (a)................................. 6,600,000 6,600,000
2.20%, Subseries A-6 (LOC; Landesbank Hessea Thuringer) (a,b).......... 24,035,000 24,035,000
2.25%, Series 93C-2 (LOC; Industrial Bank of Japan) (a,b).............. 5,800,000 5,800,000
2.25%, Subseries E-2 (LOC; Industrial Bank of Japan) (a,b)............. 5,400,000 5,400,000
2.25%, Subseries E-5 (LOC; Sumitomo Bank) (a,b)........................ 5,000,000 5,000,000
2.25%, Series 93E-5 (LOC; Sumitomo Bank) (a,b)......................... 6,200,000 6,200,000
New York City Industrial Development Agency, Civil Facility Revenue, VRDN
(Children's Oncology Society-Ronald McDonand House) 1.80% (LOC;
Barclays Bank)(a,b)........................................................ 6,100,000 6,100,000
New York City Municipal Water Finance Authority, Water and Sewer Systems Revenue, VRDN
2.15%, Series C (Insured; FGIC)(a)......................................... 32,800,000
32,800,000 New York State Dormitory Authority, Revenue, VRDN (Cornell University)
2.05% (Liquidity; Morgan Guaranty Trust) (a)............................... 3,200,000 3,200,000
New York State Local Assistance Corp., VRDN 2.05% (LOC: Credit Suisse,
Swiss Bank Corp. and Union Bank of Switzerland) (a,b)...................... 40,000,000 40,000,000
New York State Thruway Authority, General Revenue, VRDN 2.25%
(Insured; FGIC) (a)........................................................ 10,000,000 10,000,000
Smithtown Central School District, TAN 3.25%, 6/23/94.......................... 22,500,000 22,528,796
NORTH CAROLINA-1.4%
North Carolina Medical Care Commission, HR, VRDN:
(Duke University Hospital Project) 2.15%, Series C (Liquidity Facility;
First National Bank of Chicago) (a).................................... 9,200,000 9,200,000
(Pooled Financing Project) 2.25%, Series A
(LOC; Dai-Ichi Kangyo Bank) (a,b).......................................... 14,500,000 14,500,000
OHIO-1.8%
Cincinnati and Hamilton County Port Authority, IDR, VRDN (Multi-Color Corp. Project)
2.10% (LOC; Barclays Bank) (a,b)........................................... 3,000,000 3,000,000
Hamilton County, Health Systems Revenue, VRDN (Franciscan Sisters-Poor Health)
2.25%, Series A (LOC; Chemical Bank) (a,b)................................. 10,700,000 10,700,000
Ohio Air Quality Development Authority, PCR, CP (Cleveland Electric)
2.50%, Series B, 3/10/94 (Insured; FGIC)................................... 11,000,000 11,000,000
Scioto County, Marine Terminal Facility Revenue, Refunding, VRDN
(Norfolk Southern Corp. Project) 2.15%
(Guaranteed by; Norfolk Southern Corp.) (a)................................ 6,000,000 6,000,000
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
OKLAHOMA-1.1%
Tulsa Industrial Authority, Revenue VRDN:
(Holland Hall School Project) 2.30% (LOC; National Australia Bank) (a,b)... $ 7,350,000 $ 7,350,000
(University of Tulsa Project) 2.45% (LOC; Fuji Bank) (a,b)................. 11,600,000 11,600,000
OREGON-.7%
Port of Portland, Public Grain Elevator Revenue, VRDN (Columbia Grain Inc. Project)
2.45% (LOC; Fuji Bank) (a,b)............................................... 12,100,000 12,100,000
PENNSYLVANIA-3.1%
Emmaus General Authority, Local Government Revenue, VRDN
2.30%, Series C-1 (GIC; Goldman, Sachs and Co.) (a)........................ 7,000,000 7,000,000
Schuylkill County Industrial Development Authority, RRR, VRDN
(Northeastern Power Co.) 2.15% (LOC; Sumitomo Bank) (a,b).................. 5,900,000 5,900,000
Upper Allegheny Joint Sanitation Authority, Electric Revenue (Allegheny Valley North)
2.85%, Series E, 7/15/94 (GIC; American International Group)............... 34,500,000 34,500,000
Washington County Authority, Lease Revenue, VRDN (Higher Education Pooled
Equipment Lease Project) 2.20%, Series 1985A (LOC; Sanwa Bank) (a,b)....... 5,900,000 5,900,000
SOUTH CAROLINA-1.0%
South Carolina Jobs Economic Development Authority, EDR, VRDN (St. Francis Hospital)
2.25% (LOC; Chemical Bank) (a,b)........................................... 16,900,000 16,900,000
TEXAS-10.0%
Dallas County, Revenue Bonds 2.70%, 6/15/94 (SBPA; Sanwa Bank)................. 11,250,000 11,250,000
Greater East Texas Higher Education Authority Inc., Student Loan Revenue, Refunding
2.55%, Series A, 5/1/94 (LOC; Student Loan Marketing Association) (b)...... 21,000,000 21,000,000
Harris County, VRDN (Toll Unlimited Tax-Sublien)
2.05%, Series E (SBPA; Sumitomo Bank) (a).................................. 10,000,000 10,000,000
Harris County Health Facilities Development Corp., HR, VRDN:
(Memorial Hospital Systems Project) 2.20% (LOC; Societe Generale) (a,b).... 11,100,000 11,100,000
(Texas Children's Hospital) 2.30%, Series B (LOC; Fuji Bank) (a,b)......... 2,600,000 2,600,000
(TIRR Project) 2.25% (LOC; Texas Commerce Bank) (a,b)...................... 10,200,000 10,200,000
City of Houston, VRDN:
Certificates of Obligation 2.20%, Series A (Liquidity Facility;
Morgan Guaranty Trust) (a)............................................. 10,200,000 10,200,000
Public Improvement 2.20%, Series A
(Liquidity Facility; Morgan Guaranty Trust) (a)........................ 6,400,000 6,400,000
Houston Health Facilities Development Corp., HR, VRDN (Methodist Hospital Project)
2.10% (SBPA: Methodist Hospital and Morgan Bank) (a)....................... 49,500,000 49,500,000
Lower Colorado River Authority, Revenue, CP
2.25%, 3/24/94 (Line of Credit; Morgan Guaranty Trust)..................... 7,500,000 7,500,000
Port Development Corp., IDR, VRDN (Pasadena Terminals Project)
2.45% (LOC; ABN-Amro Bank) (a,b)........................................... 10,400,000 10,400,000
Texas Health Facilities Development Corp., HR, VRDN (North Texas Pooled Health-85A)
2.25% (LOC; Citibank) (a,b)................................................ 18,700,000 18,700,000
VIRGINIA-3.6%
Virginia Housing Development Authority, Commonwealth Mortgage Revenue:
(Series C-Subseries C-Stem III) 2.95%, 5/12/94 (Escrowed In; Franklin Funds) 20,000,000 20,000,000
(Series F-Subseries F-Stem) 2.90%, 8/10/94................................. 42,000,000 42,010,469
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF INVESTMENTS (CONTINUED) JANUARY 31, 1994
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
-------------- --------------
WASHINGTON-1.0%
Washington Housing Finance Commission, Non-Profit Housing Revenue, VRDN
(Emerald Heights Project) 2.30% (LOC; Banque Paribas) (a,b)................ $ 7,500,000 $ 7,500,000
Washington Public Power Supply System, Revenue, Refunding, VRDN (Nuclear Project No.3)
2.20%, Series 3A-3 (LOC; National Westminster Bank) (a,b).................. 10,000,000 10,000,000
WYOMING-.3%
Lincoln County, PCR, VRDN (Exxon Project)
2.15%, Series A (Corp. Guaranty; Exxon Corp.) (a).......................... 5,000,000 5,000,000
U.S. RELATED-4.9%
Commonwealth of Puerto Rico, TRAN 3%, 7/29/94.................................. 85,100,000 85,325,471
--------------
TOTAL INVESTMENTS (cost $1,729,417,990) $1,729,417,990
==============
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
<S> <C> <S> <C>
BPA Bond Purchase Agreeement MFHR Multi-Family Housing Revenue
CP Commercial Paper MFMR Multi-Family Mortgage Revenue
EDR Economic Development Revenue PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Corporation RAN Revenue Anticipation Notes
GIC Guaranteed Investment Contract RRR Resources Recovery Revenue
GO General Obligation SBPA Standby Bond Purchase Agreeement
HR Hospital Revenue TAN Tax Anticipation Notes
IDR Industrial Development Revenue TRAN Tax and Revenue Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
MBIA Municipal Bond Insurance Association
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
--------- ------- ----------------- -------------------
<S> <C> <S> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 95.6%
F2 VMIG2/MIG2, P2 SP2, A2 1.9
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 2.5
-----
100.0%
=====
</TABLE>
NOTES TO STATEMENT OF INVESTMENTS:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(b) Secured by letters of credit. At January 31, 1994, 39.2% of the Fund's
net assets are backed by letters of credit issued by domestic
banks, foreign banks, brokerage firms, corporations and U.S. Government
Agencies.
(c) Fitch currently provides creditworthiness information for a limited
amount of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings
of the issuers.
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF ASSETS AND LIABILITIES JANUARY 31, 1994
ASSETS:
<S> <C> <C>
Investments in securities, at value-Note 1(a).............................. $1,729,417,990
Cash....................................................................... 641,494
Interest receivable........................................................ 9,975,551
Prepaid expenses........................................................... 42,840
--------------
1,740,077,875
LIABILITIES;
Due to The Dreyfus Corporation............................................. 290,516
--------------
NET ASSETS..................................................................... $1,739,787,359
==============
REPRESENTED BY:
Paid-in capital............................................................ $1,739,675,883
Accumulated undistributed net realized gain on investments................. 111,476
--------------
NET ASSETS at value............................................................ $1,739,787,359
==============
Shares of Beneficial Interest Outstanding:
Class A Shares
(unlimited number of $.001 par value shares authorized)................ 1,739,675,382
==============
Class B Shares
(unlimited number of $.001 par value shares authorized)................ 501
==============
NET ASSET VALUE per share:
Class A Shares
($1,739,786,858 / 1,739,675,382 shares)................................ $1.00
=====
Class B Shares
($501 / 501 shares).................................................... $1.00
=====
STATEMENT OF OPERATIONS YEAR ENDED JANUARY 31, 1994
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 45,093,253
EXPENSES:
Management fee-Note 2(a)............................................... $ 3,663,999
Shareholder servicing costs-Note 2(c).................................. 390,247
Custodian fees......................................................... 131,209
Professional fees...................................................... 57,270
Registration fees...................................................... 37,207
Trustees' fees and expenses-Note 2(d).................................. 16,167
Prospectus and shareholders' reports................................... 10,957
Miscellaneous.......................................................... 43,132
--------------
4,350,188
Less-reduction in management fee due to
undertaking-Note 2(a).............................................. 685,536
--------------
TOTAL EXPENSES................................................. 3,664,652
--------------
INVESTMENT INCOME-NET.......................................... 41,428,601
REALIZED AND UNREALIZED GAIN ON INVESTMENTS-Note 1(b):
Net realized gain on investments........................................... $ 118,355
Net unrealized (depreciation) on investments............................... (24,221)
--------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................ 94,134
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 41,522,735
==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS TAX EXEMPT CASH MANAGEMENT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED JANUARY 31,
----------------------------------
OPERATIONS: 1993 1994
-------------- --------------
<S> <C> <C>
Investment income-net...................................................... $ 50,013,591 $ 41,428,601
Net realized gain on investments........................................... 291,152 118,355
Net unrealized appreciation (depreciation) on investments for the year..... 24,221 (24,221)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............... 50,328,964 41,522,735
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A Shares......................................................... (50,013,591) (41,428,601)
Class B Shares......................................................... __ __
-------------- --------------
TOTAL DIVIDENDS.................................................... (50,013,591) (41,428,601)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Class A Shares......................................................... 11,046,777,602 14,041,812,260
Class B Shares......................................................... __ 501
Dividends reinvested:
Class A Shares......................................................... 10,532,519 6,662,571
Class B Shares......................................................... __ __
Cost of shares redeemed:
Class A Shares......................................................... (10,887,509,961) (14,147,568,464)
Class B Shares......................................................... __ __
-------------- --------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL
INTEREST TRANSACTIONS.......................................... 169,800,160 (99,093,132)
-------------- --------------
TOTAL INCREASE (DECREASE) IN NET ASSETS........................ 170,115,533 (98,998,998)
NET ASSETS:
Beginning of year.......................................................... 1,668,670,824 1,838,786,357
-------------- --------------
End of year................................................................ $1,838,786,357 $1,739,787,359
============== ==============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS TAX EXEMPT CASH MANAGEMENT
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Beneficial Interest
outstanding, total investment return, ratios to average net assets and other supplemental data
for each year indicated. This information has been derived from information provided in the
Fund's financial statements.
CLASS A SHARES CLASS B SHARES
----------------------------------------------------------- -------
YEAR ENDED JANUARY 31, Year Ended
----------------------------------------------------------- JANUARY 31,
PER SHARE DATA: 1990 1991 1992 1993 1994 1994(1)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.. $ .9988 $ .9987 $ .9994 $ .9998 $1.0000 $1.0000
------- ------- ------- ------- ------- -------
INVESTMENT OPERATIONS:
Investment income-net............... .0617 .0570 .0417 .0279 .0226 .0011
Net realized and unrealized gain
(loss) on investments........... (.0001) .0007 .0004 .0002 .0001 --
------- ------- ------- ------- ------- -------
TOTAL FROM INVESTMENT OPERATIONS .0616 .0577 .0421 .0281 .0227 .0011
------- ------- ------- ------- ------- -------
DISTRIBUTIONS;
Dividends from investment
income-net...................... (.0617) (.0570) (.0417) (.0279) (.0226) (.0011)
------- ------- ------- ------- ------- -------
Net asset value, end of year........ $ .9987 $ .9994 $ .9998 $1.0000 $1.0001 $1.0000
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 6.35% 5.85% 4.25% 2.83% 2.29% 1.83%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets...................... .20% .20% .20% .20% .20% .45%(2)
Ratio of net investment income to
average net assets.............. 6.15% 5.70% 4.16% 2.77% 2.26% 1.87%(2)
Decrease reflected in above expense
ratios due to undertaking by
the Manager..................... .04% .03% .05% .04% .04% --
Net Assets, end of year
(000's Omitted).................$1,147,753 $1,905,522 $1,668,671 $1,838,786 $1,739,787 $1
-------------------------
(1) From January 10, 1994 (commencement of initial offering) to January 31, 1994.
(2) Annualized.
See notes to financial statements.
</TABLE>
DREYFUS TAX EXEMPT CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act of 1940
("Act") as a diversified open-end management investment company.
Dreyfus Service Corporation ("Distributor") acts as the distributor of the
Fund's shares, which are sold to the public without a sales load. The
Distributor is a wholly-owned subsidiary of The Dreyfus Corporation
("Manager").
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00; the Fund has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so.
On July 14, 1993, the Fund's Board of Trustees approved an amendment
to the Fund's Agreement and Declaration of Trust to provide for the
issuance of additional classes of shares of the Fund. The amendment was
approved by Fund shareholders on January 6, 1994. Effective January 10,
1994, existing Fund shares were classified as Class A shares and an
unlimited number of Class B shares were authorized. The Fund began
offering both Class A and Class B shares on January 10, 1994. Class B
shares are subject to a Service Plan adopted pursuant to Rule 12b-1 under
the Act. Other differences between the two Classes include the services
offered to and the expenses borne by each Class and certain voting rights.
(A) PORTFOLIO VALUATION: Investments are valued at amortized cost,
which has been determined by the Fund's Board of Trustees to represent
the fair value of the Fund's investments.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Interest income, adjusted
for amortization of premiums and, when appropriate, discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Realized gain and loss from securities transactions are recorded on
the identified cost basis.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain are normally declared
and paid annually, but the Fund may make distributions on a more frequent
basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax
exempt dividends, by complying with the provisions available to certain
investment companies, as defined in applicable sections of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from all, or substantially all, Federal income
taxes.
At January 31, 1994, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) Pursuant to a management agreement ("Agreement") with the
Manager, the management fee is computed at the annual rate of .20 of 1%
of the average daily value of the Fund's net assets and is payable monthly.
The Agreement provides for an expense reimbursement from the
Manager should the Fund's aggregate expenses, exclusive of taxes, interest
on borrowings, brokerage commissions and extraordinary expenses, exceed
1 1/2% of the average value of the Fund's net assets for any full fiscal
year. However, the Manager had undertaken through January 9, 1994 to
reduce the management fee paid by, or bear such excess expenses of the
Fund, to the extent that the Fund's aggregate expenses (excluding certain
expenses as described above) exceeded an annual rate of .20 of 1% of
DREYFUS TAX EXEMPT CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the average daily value of the Fund's net assets. The reduction in
management fee, pursuant to the undertakings, amounted to $685,536 for
the period from February 1, 1993 through January 9, 1994.
Commencing January 10, 1994, the Manager and not the Fund, will be
liable for those expenses of the Fund (excluding certain expenses as
described above) other than management fee, and with respect to the
Fund's Class B shares, Rule 12b-1 Service Plan expenses.
The Manager may modify the existing undertaking provided that the
Fund's shareholders are given 90 days prior notice.
(B) Under the Service Plan ("Class B Service Plan") adopted pursuant to
Rule 12b-1 under the Act, effective January 10, 1994, the Fund pays the
Distributor, at an annual rate of .25 of 1% of the value of the Fund's Class
B shares average daily net assets, for costs and expenses in connection
with advertising, marketing and distributing Class B shares and for
providing certain services to holders of Class B shares. The Distributor
will make payments to one or more Service Agents (financial institutions,
securities dealers, or other industry professional) based on the value of
the Fund's Class B shares owned by clients of the Service Agent. From
January 10, 1994 through January 31, 1994, pursuant to the Class B
Service Plan, the Fund was not charged.
(C) Pursuant to the Fund's Shareholder Services Plan ("Class A
Shareholder Services Plan"), the Fund reimburses the Distributor an
amount not to exceed an annual rate of .25 of 1% of the value of the
average daily net assets of Class A shares for servicing shareholder
accounts. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding
the Fund and providing reports and other information, and services related
to the maintenance of shareholder accounts. During the period from
February 1, 1993 through January 9, 1994, the Fund was charged an
aggregate of $117,186 pursuant to the Class A Shareholder Services Plan.
(D) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager and/or the Distributor. Each trustee
who is not an "affiliated person" receives an annual fee of $3,000 and an
attendance fee of $500 per meeting.
(E) On December 5, 1993, the Manager entered into an Agreement and
Plan of Merger providing for the merger of the Manager with a subsidiary
of Mellon Bank Corporation ("Mellon").
Following the merger, it is planned that the Manager will be a direct
subsidiary of Mellon Bank, N.A. Closing of this merger is subject to a
number of contingencies, including the receipt of certain regulatory
approvals and the approvals of the stockholders of the Manager and of
Mellon. The merger is expected to occur in mid-1994, but could occur
later.
Because the merger will constitute an "assignment" of the Fund's
Management Agreement with the Manager under the Investment Company
Act of 1940, and thus a termination of such Agreement, the Manager will
seek prior approval from the Fund's Board and shareholders.
DREYFUS TAX EXEMPT CASH MANAGEMENT
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
DREYFUS TAX EXEMPT CASH MANAGEMENT
We have audited the accompanying statement of assets and liabilities
of Dreyfus Tax Exempt Cash Management, including the statement of
investments, as of January 31, 1994, and the related statement of
operations for the year then ended, the statement of changes in net assets
for each of the two years in the period then ended, and financial highlights
for each of the years indicated therein. 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 audits.
We conducted our audits 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 as of January 31, 1994 by
correspondence with the custodian and others. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Tax Exempt Cash Management at January 31, 1994, the
results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the
financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
(Ernst and Young Signature Logo)
New York, New York
March 8, 1994
