PRESIDENT'S LETTER
Dear Shareholder:
We are pleased to report to you on the activity of the First Prairie Tax
Exempt Money Market Fund. For the 12-month period ended December 31,
1993, the Fund produced a yield of 1.74%. After taking into account the
effect of compounding, the effective yield was 1.75%.*
FUND NAME CHANGE
Starting February 1, 1994, your Fund will change its name to First
Prairie Municipal Money Market Fund. This will allow the Fund to invest,
without limitation, in municipal securities whose income is subject to
the Federal Alternative Minimum Tax. As a result, the Fund should benefit
from additional yield without incurring any additional risk. To determine
whether you may be subject to the Federal Alternative Minimum Tax and
its consequences to you, you should consult your tax advisor.
TRIPLE-'A' RATING
As of December 21, 1993, the Fund was assigned an Aaa rating from
Moody's Investors Service, Inc. Subsequently, the Fund's management
chose to withdraw the previous rating from Standard and Poor's
Corporation, which was also triple-'A'. The Moody's rating allows your
Fund more investment opportunities while still maintaining the superior
quality of a triple-'A' rated fund.
ECONOMIC OUTLOOK
There has been a significant amount of economic data to confirm that
the economy did gain momentum during the fourth quarter of 1993. It
appears that the economy is beginning to respond to the Federal Reserve
Board's accommodative monetary policy. While economic growth did
accelerate, inflation remained favorable. However, there still exist some
important fundamentals which could keep the expansion moderate, rather
than overly robust. Among these are the President's restrictive fiscal
policies, companies continuing to announce job layoffs, the downsizing of
the defense industry, and the uncertain effects of potential health care
legislation.
FEDERAL RESERVE CREDIT TIGHTENING FORECAST
It is management's current belief that the Federal Reserve may tighten
credit slightly during the first half of 1994. Although inflation is likely to
remain subdued, a tightening will reinforce confidence in the fixed-
income market that the Fed remains committed to fighting inflation.
Consequently, management currently intends to keep the average maturity
of your Fund in the 40-60 day range in anticipation of slowly rising
interest rates.
We would like to take this opportunity to renew our commitment to
serving your investment needs.
Sincerely,
(Joseph S. DiMartino Signature Logo)
Joseph S. DiMartino
President
January 19, 1994
New York, N.Y.
* Effective yield is based upon dividends declared daily and
reinvested monthly.
<TABLE>
<CAPTION>
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS-100.0% AMOUNT VALUE
------------ ------------
ALABAMA-2.0%
<S> <C> <C>
Phenix Industrial Development Board, EIR, Refunding, VRDN
(Mead Coated Board Project) 4.75% (LOC; Sumitomo Bank) (a,b)............... $ 1,500,000 $ 1,500,000
Port City Medical Clinic Board of Mobile, HR, CP
2.40%, 2/1/94 (LOC: Fuji Bank and Mitsubishi Bank) (b)..................... 2,075,000 2,075,000
ARIZONA-2.8%
Maricopa County Pollution Control Corp., PCR, CP (Southern California Edison-
Paloverdi) 2.50%, 1/27/94 (Guaranteed by; Southern California Edison Co.).. 4,000,000 4,000,000
City of Mesa Municipal Development, Special Tax, CP
2.60%, 1/12/94 (LOC; Union Bank of Switzerland) (b)........................ 1,000,000 1,000,000
CALIFORNIA-3.0%
State of California, GO, RAN 3.50%, 6/28/94.................................... 1,600,000 1,604,302
Orange County, TRAN 3%, 6/30/94................................................ 3,750,000 3,759,012
COLORADO-1.9%
Regional Transportation District, Special Passenger Fare Revenue, VRDN:
3.20% (LOC; Banque Nationale de Paris) (a,b)............................... 2,000,000 2,000,000
3.30% (LOC; Bank of Tokyo) (a,b)........................................... 1,400,000 1,400,000
CONNECTICUT-1.7%
Connecticut Development Authority, PCR, VRDN (Connecticut Light and Power)
3.10% (LOC; Deutsche Bank) (a,b)........................................... 3,000,000 3,000,000
DELAWARE-1.1%
Delaware Economic Development Authority, IDR, CP (WL Gore and Associates-Barksdale)
2.60%, 2/24/94 (LOC; Morgan Guaranty Trust Co.) (b)........................ 2,000,000 2,000,000
DISTRICT OF COLUMBIA-2.9%
District of Columbia, Revenue Bonds (Supplemental Student Loan-Consern)
2.80%, 7/1/94 (LOC; Mitsubishi Bank) (b)................................... 5,065,000 5,065,000
FLORIDA-5.0%
Palm Beach County Health Facilities Authority, Revenue, Refunding, CP
(Pooled Hospital Loan Program) 2.20%, 2/15/94
(Insured; MBIA and Liquidity; Credit Suisse)............................... 2,000,000 2,000,000
Sarasota County Public Hospital District, HR, CP (Sarasota Memorial Hospital Project)
2.60%, 1/26/94 (LOC; Sumitomo Bank) (b).................................... 2,080,000 2,080,000
West Orange Memorial Hospital Tax District, Revenue, CP:
2.60%, Series A-1, 1/5/94 (LOC; Societe Generale) (b)...................... 1,100,000 1,100,000
2.35%, Series A-2, 1/6/94 (LOC; Societe Generale) (b)...................... 1,700,000 1,700,000
2.45%, Series A-2, 3/22/94 (LOC; Societe Generale) (b)..................... 2,000,000 2,000,000
GEORGIA-1.9%
Peachtree City Development Authority, Revenue, VRDN (Hoshizaki American Inc.)
3.05% (LOC; Bank of Tokyo) (a,b)........................................... 3,300,000 3,300,000
ILLINOIS-3.4%
Decatur, Water Revenue, CP (Newsouth Water Treatment)
2.30%, 3/7/94 (LOC; Sumitomo Bank) (b)..................................... 1,000,000 1,000,000
State of Illinois, GO, Notes:
3.25%, 5/16/94............................................................. 2,000,000 2,002,540
3.50%, 6/15/94............................................................. 3,000,000 3,007,277
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
INDIANA-2.9%
Indiana Development Finance Authority, Solid Waste Disposal Revenue, CP
(Pure Air On Lake Project) 2.50%, 1/5/94 (LOC; Fuji Bank) (b).............. $ 1,100,000 $ 1,100,000
Jasper County, PCR, Refunding, CP (Northern Indiana Public Service)
2.40%, 3/8/94 (LOC; Barclays Bank) (b)..................................... 4,000,000 4,000,000
KANSAS-2.8%
Burlington, PCR, Refunding, CP (Kansas City Power and Light Project)
2.30%, 2/16/94 (LOC; Deutsche Bank) (b).................................... 4,900,000 4,900,000
KENTUCKY-1.7%
Trimble County, PCR, CP 2.55%, 1/25/94 (LOC; Louisville Gas and Electric Co.) (b) 3,000,000 3,000,000
LOUISIANA-.6%
East Baton Rouge Parish, PCR, VRDN (Georgia-Pacific Corp.)
2.85% (LOC; Toronto-Dominion Bank) (a,b)................................... 1,000,000 1,000,000
MINNESOTA-1.1%
City of Rochester, Health Care Facilities, Revenue, CP
(Mayo Foundation Project) 2.45%, 3/2/94 (Guaranteed by; Mayo Foundation)... 2,000,000 2,000,000
MISSOURI-3.7%
City of Columbia, Special Obligation, VRDN 3.20% (LOC; Toronto-Dominion Bank) (a,b) 1,500,000 1,500,000
Missouri Environmental Improvement and Energy Resource Authority, PCR, CP
(Union Electric Co. Project):
2.60%, 1/5/94 (LOC; Union Bank of Switzerland) (b)..................... 1,000,000 1,000,000
2.55%, 3/10/94 (LOC; Union Bank of Switzerland) (b).................... 4,000,000 4,000,000
MONTANA-3%
City of Forsyth, PCR, VRDN (Portland General Electric)
3.40% (LOC; Banque Nationale de Paris) (a,b)............................... 5,200,000 5,200,000
NEBRASKA-.9%
Nebraska Public Power District, Revenue, CP
2.75%, 1/11/94 (LOC; Morgan Guaranty Trust) (b)............................ 1,500,000 1,500,000
NEW HAMPSHIRE-.6%
New Hampshire Business Finance Authority, PCR, Refunding, VRDN (Connecticut Power
and Light Co. Project) 3.40% (LOC; Canadian Imperial Bank of Commerce) (a,b) 1,000,000 1,000,000
NEW JERSEY-2.8%
State of New Jersey, TRAN 3%, 6/15/94.......................................... 5,000,000 5,023,521
NEW MEXICO-3.8%
Hurley, PCR, CP (Kennecott Sante Fe):
2.35%, 1/11/94 (Guaranteed by; British Petroleum).......................... 3,000,000 3,000,000
2.40%, 3/9/94 (Guaranteed by; British Petroleum)........................... 3,700,000 3,700,000
NEW YORK-1.1%
New York State Energy, Research and Development Authority, PCR Bonds
(Electric and Gas Co.) 2.85%, 10/15/94 (LOC; Union Bank of Switzerland) (b) 2,000,000 2,000,000
NORTH CAROLINA-4.7%
North Carolina Municipal Power Agency, Power System Revenue
2.50%, 2/9/94 (LOC; Industrial Bank of Japan) (b).......................... 5,000,000 5,000,000
Wake County Industrial Facilities and Pollution Control Financing Authority,
Revenue, VRDN (Carolina Power and Light Co.) 4.40% (LOC; Sumitomo Bank) (a,b) 3,200,000 3,200,000
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
Allen County, IDR, VRDN (Nickles Bakery) 3% (LOC; Society National Bank) (a,b) $ 4,200,000 $ 4,200,000
City of Bedford Heights, IDR, VRDN (Olympic Steel Inc. Project)
3% (LOC; Society National Bank) (a,b)...................................... 900,000 900,000
Village of Brooklyn Heights, IDR, VRDN (Keynote Office Centre Limited Project)
3% (LOC; Society National Bank) (a,b)...................................... 3,500,000 3,500,000
Cuyahoga County, IDR, VRDN:
(Puritas Association Project) 3% (LOC; Society National Bank) (a,b)........ 2,125,000 2,125,000
(Suburban Pavillion) 3% (LOC; Society National Bank) (a,b)................. 4,450,000 4,450,000
Hancock County, EDR, VRDN (Quality Material Equipment)
3% (LOC; Society National Bank) (a,b)...................................... 2,300,000 2,300,000
Village of Oakwood, IDR, VRDN (Oakleaf Industrial Mall Project)
3% (LOC; Society National Bank) (a,b)...................................... 1,800,000 1,800,000
Ohio Air Quality Development Authority, PCR, CP (Cleveland Electric)
2.70%, 2/1/94 (Insured; FGIC).............................................. 4,000,000 4,000,000
OKLAHOMA-1.6%
Oklahoma Industries Authority, Health Revenue, CP (Saint Anthony's Hospital Project)
2.60% 1/3/94 (LOC; Mitsubishi Bank) (a,b).................................. 2,900,000 2,900,000
OREGON-.6%
State of Oregon, EDR, VRDN (Stagg Foods Inc. Project)
3.50% (LOC; Bank of America) (a,b)......................................... 1,050,000 1,050,000
PENNSYLVANIA-7.9%
Beaver County Industrial Development Authority, PCR, Refunding, VRDN
(Duquesne-Beaver UV) 3.40% (LOC; Barclays Bank) (a,b)...................... 700,000 700,000
Carbon County Industrial Development Authority, RRR, CP (Panther Creek
Partners Project) 2.30%, 2/2/94 (LOC; National Westminster Bank) (b)....... 4,000,000 4,000,000
Emmaus General Authority, Local Government Revenue, VRDN:
3.40% (LOC; Canadian Imperial Bank of Commerce) (a,b)...................... 2,000,000 2,000,000
3.45% (LOC; Hong Kong Shanghai Banking Corp.) (a,b)........................ 3,700,000 3,700,000
Montgomery County Industrial Development Authority, IDR, VRDN
(Valley Square Association) 3.30% (LOC: Banca Nazionale del
Lavoro and Mellon Bank) (a,b).............................................. 2,500,000 2,500,000
City of Philadelphia, TRAN 3.25%, 6/15/94
(LOC; Canadian Imperial Bank of Commerce) (b).............................. 1,000,000 1,002,200
SOUTH CAROLINA-1.1%
York County, PCR, Refunding, CP (Duke Power Co. Project)
2.40%, 1/11/94 (Guaranteed by; Duke Power Co. Project)..................... 2,000,000 2,000,000
TEXAS-15.8%
Austin County Industrial Corp., IDR, CP (Travis and Williamson Counties
Combined Utilities) 2.60%, 1/24/94 (LOC; Swiss Bank Corp.) (b)............. 4,050,000 4,050,000
Capital Industrial Development Corp., PCR, VRDN (Motorola Inc. Project)
3.10% (Guaranteed by; Motorola Inc.) (a)................................... 2,100,000 2,100,000
Grapevine Industrial Development Corp., Revenue, VRDN
(Multiple Mode-American Airlines):
4.75%, Series A-3 (LOC; Sanwa Bank) (a,b).............................. 1,500,000 1,500,000
4.75%, Series A-4 (LOC; Sanwa Bank) (a,b).............................. 2,900,000 2,900,000
4.75%, Series B-2 (LOC; Sanwa Bank) (a,b).............................. 800,000 800,000
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1993
PRINCIPAL
TAX EXEMPT INVESTMENTS (CONTINUED) AMOUNT VALUE
------------ ------------
TEXAS (CONTINUED)
Harris County Industrial Development Corp., IDR, VRDN (Zeon Chemicals Project)
3.30% (LOC; Industrial Bank of Japan) (a,b)................................ $ 4,100,000 $ 4,100,000
North Central Health Facility Development Corp., HR, VRDN
(Presbyterian Medical Center) 4.30% (Insured; MBIA and BPA; Nations Bank) (a) 4,100,000 4,100,000
State of Texas, TRAN 3.25%, 8/31/94............................................ 4,000,000 4,013,849
Texas Health Facilities Development, Revenue, VRDN (Aces North Texas Pooled Health)
3.50% (LOC; Banque Paribas) (a,b).......................................... 4,200,000 4,200,000
UTAH-2.3%
Intermountain Power Agency, Power Supply Revenue Bonds
2.70%, 6/15/94 (SBPA; Bank of America) (b)................................. 4,000,000 4,000,000
WASHINGTON-.9%
Student Loan Finance Association of Washington, Guaranteed Student Loan Program
Revenue, VRDN (Second Series) 2.90% (LOC; Sanwa Bank) (a,b)................ 1,500,000 1,500,000
WEST VIRGINIA-.6%
Marshall County, PCR, CP (Mountaineer Carbon Co.)
2.40%, 3/9/94 (Guaranteed by; British Petroleum)........................... 1,000,000 1,000,000
WYOMING-.6%
Lincoln County, PCR, Refunding, CP (Pacificorp Project)
2.20%, 1/27/94 (LOC; Union Bank of Switzerland) (b)........................ 1,000,000 1,000,000
------------
TOTAL INVESTMENTS (cost $176,107,701).......................................... $176,107,701
============
SUMMARY OF ABBREVIATIONS
BPA Bond Purchase Agreement LOC Letter of Credit
CP Commercial Paper MBIA Municipal Bond Insurance Association
EDR Economic Development Revenue PCR Pollution Control Revenue
EIR Environmental Improvement Revenue RAN Revenue Anticipation Notes
FGIC Financial Guaranty Insurance Corporation RRR Resources Recovery Revenue
GO General Obligation SBPA Standby Bond Purchase Agreeement
HR Hospital Revenue TRAN Tax and Revenue Anticipation Notes
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
SUMMARY OF COMBINED RATINGS (UNAUDITED)
FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- --------- ------- ----------------- -------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 88.0%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 1.1
Not Rated (f) Not Rated (f) Not Rated (f) 10.9
------
100.0%
======
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 December 31, 1993, 70.2% of the Fund's
net assets are backed by letters of credit issued by domestic
banks, foreign banks and corporations, of which Society National Bank
provided letters of credit to 10.9% of the Fund's net assets.
(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.
(f) Securities which, while not rated by Fitch, Moody's or Standard & Poor's
have been determined by the Fund's Board of Directors to be of
comparable quality to those rated securities in which the Fund may invest.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993
ASSETS:
<S> <C> <C>
Investments in securities, at value-Note 1(a).............................. $176,107,701
Cash....................................................................... 1,077,961
Interest receivable........................................................ 704,194
Prepaid expenses........................................................... 60,072
------------
177,949,928
LIABILITIES:
Due to The First National Bank of Chicago.................................. $ 88,169
Due to The Dreyfus Corporation............................................. 96,875
Accrued expenses........................................................... 66,950 251,994
------------ ------------
NET ASSETS..................................................................... $177,697,934
============
REPRESENTED BY:
Paid-in capital............................................................ $177,715,005
Accumulated net realized (loss) on investments............................. (17,071)
------------
NET ASSETS at value applicable to 177,715,005 shares outstanding (unlimited
number of $.01 par value shares of Beneficial Interest authorized)......... $177,697,934
============
NET ASSET VALUE, offering and redemption price per share
($177,697,934 / 177,715,005 shares)........................................ $1.00
=====
STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1993
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 4,883,738
EXPENSES:
Management fee-Note 2(a)............................................... $1,098,945
Shareholder servicing costs-Note 2(b).................................. 562,984
Professional fees...................................................... 82,390
Custodian fees......................................................... 36,925
Prospectus and shareholders' reports-Note 2(b)......................... 22,225
Registration fees...................................................... 18,465
Trustees' fees and expenses-Note 2(c).................................. 9,247
Miscellaneous.......................................................... 8,116
------------
1,839,297
Less-reduction in investment advisory fee
due to undertakings-Note 2(a)...................................... 317,993
------------
TOTAL EXPENSES................................................. 1,521,304
------------
INVESTMENT INCOME-NET.......................................................... 3,362,434
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................... (2,293)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 3,360,141
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRE TAX EXEMPT MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED DECEMBER 31,
-----------------------------
1992 1993
------------ ------------
OPERATIONS:
<S> <C> <C>
Investment income-net...................................................... $ 5,443,268 $ 3,362,434
Net realized (loss) on investments......................................... (2,293)
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... 5,443,268 3,360,141
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net...................................................... (5,443,268) (3,362,434)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.............................................. 562,179,580 409,972,617
Dividends reinvested....................................................... 2,618,570 1,647,251
Cost of shares redeemed.................................................... (588,473,031) (443,919,511)
------------ ------------
(DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS......... (23,674,881) (32,299,643)
------------ ------------
TOTAL (DECREASE) IN NET ASSETS.................................... (23,674,881) (32,301,936)
------------ ------------
NET ASSETS:
Beginning of year.......................................................... 233,674,751 209,999,870
------------ ------------
End of year................................................................ $209,999,870 $177,697,934
============ ============
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment
return, from information provided in the Fund's financial statements.
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
PER SHARE DATA: 1989 1990 1991 1992 1993
------ ------ ------ ------ ------
Net asset value, beginning of year....................... $.9999 $.9999 $.9999 $.9999 $.9999
------ ------ ------ ------ ------
INVESTMENT OPERATIONS;
Investment income-net.................................... .0580 .0527 .0413 .0236 .0174
------ ------ ------ ------ ------
DISTRIBUTIONS:
Dividends from investment income-net..................... (.0580) (.0527) (.0413) (.0236) (.0174)
------ ------ ------ ------ ------
Net asset value, end of year............................. $.9999 $.9999 $.9999 $.9999 $.9999
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN 5.96% 5.40% 4.21% 2.38% 1.75%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................. .98% 1.00% .98% .95% .79%
Ratio of net investment income to average net assets..... 5.79% 5.27% 4.11% 2.38% 1.74%
Decrease reflected in above expense
ratios due to undertakings by the Manager............ .01% .16%
Net Assets, end of year (000's Omitted).................. $158,515 $176,009 $233,675 $210,000 $177,698
See notes to financial statements.
</TABLE>
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
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. The
First National Bank of Chicago ("Manager") serves as the Fund's
investment adviser. The Dreyfus Corporation ("Dreyfus") provides certain
administrative services to the Fund-see Note 2(a). Dreyfus Service
Corporation ("Distributor"), a wholly-owned subsidiary of Dreyfus, acts
as the distributor of the Fund's shares, which are sold without a sales
load.
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.
Effective February 1, 1994 the Fund changed its name from "First
Prairie Tax Exempt Money Market" to "First Prairie Municipal Money
Market."
(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, if any, 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, 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.
The Fund has an unused capital loss carryover of approximately $17,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1993. If
not applied, $14,000 of the carryover expires in 1994, $1,000 expires in
1999, and $2,000 expires in 2001.
At December 31, 1993, 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-INVESTMENT ADVISORY FEE, ADMINISTRATION 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 .55 of 1%
of the average daily value of the Fund's net assets and is payable monthly.
The Agreement further provides that if in any full fiscal year the
aggregate expenses of the Fund exclusive of taxes, brokerage, interest on
borrowings and extraordinary expenses, exceed the expense limitation of
any state having jurisdiction over the Fund, the Fund may deduct from the
payments to be made to the Manager, or the Manager will bear such excess
to the extent required by state law. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement of
expenses in any full year that such expenses (exclusive of distribution
expenses and certain expenses as described above) exceed 2 1/2% of the
first $30 million, 2% of the next $70 million and
1 1/2% of the excess over $100 million of the average value of the Fund's
net assets in accordance with California "blue sky" regulations. However,
the Manager has undertaken from January 1, 1993 through December 19,
1993
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
to reduce the management fee paid by the Fund to the extent that the
Fund's aggregate expenses (excluding certain expenses as described above)
exceeded specified annual percentages of the Fund's average daily net
assets. The Manager has currently undertaken from December 20, 1993 to
assume all expenses of the Fund in excess of an annual rate of .65 of 1% of
the Fund's average daily net assets. The reduction in management fee,
pursuant to the undertakings, amounted to $317,993 for the year ended
December 31, 1993.
The undertaking may be modified by the Manager from time to time,
provided that the resulting expense
reimbursement would not be less than the amount required pursuant to the
Agreement.
Effective April 30, 1993 the Manager has engaged Dreyfus to assist it
in providing certain administrative services for the Fund pursuant to a
Master Administration Agreement between the Manager and Dreyfus.
Pursuant to its agreement with Dreyfus, the Manager has agreed to pay
Dreyfus for Dreyfus' services.
Prior to April 30, 1993, pursuant to an Investment Advisory Agreement
with the Manager and an Administration Agreement with Dreyfus, the
Investment Advisory Fee and the Administration Fee were computed at
annual rates of .40 of 1% and .20 of 1%, respectively, of the average daily
value of the Fund's net assets. The agreements provided that if in any full
year the aggregate expenses of the Fund (excluding certain expenses as
described above), exceeded the expense limitation of any state having
jurisdiction over the Fund, the Fund could deduct from the payments to be
made to the Manager and Dreyfus, or the Manager and Dreyfus would bear
their proportionate share of such excess to the extent required by state
law.
(B) The Fund has adopted a Service Plan (the "Plan") pursuant to which
it has agreed to pay costs and expenses in connection with advertising and
marketing shares of the Fund and payments made to one or more Service
Agents (which may include the Manager, Dreyfus and the Distributor) based
on the value of the Fund's shares owned by clients of the Service Agent.
These advertising and marketing expenses and fees of the Service Agents
may not exceed an annual rate of .25 of 1% of the Fund's average daily net
assets. The Plan also separately provides for the Fund to bear the costs of
preparing, printing and distributing certain of the Fund's prospectuses and
statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater of
$100,000 or .005 of 1% of the Fund's average daily net assets for any full
year. For the year ended December 31, 1993, the Fund was charged
$493,466 pursuant to the Plan, substantially all of which was retained by
the Manager and Dreyfus.
(C) Certain officers and trustees of the Fund are "affiliated persons,"
as defined in the Act, of the Manager or Dreyfus. Each trustee who is not
an "affiliated person" receives an annual fee of $2,500 and an attendance
fee of $500 per meeting.
(D) On December 5, 1993, Dreyfus entered into an Agreement and Plan of
Merger providing for the merger of Dreyfus with a subsidiary of Mellon
Bank Corporation ("Mellon").
Following the merger, it is planned that Dreyfus 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
significantly later.
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE TAX EXEMPT MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities
of First Prairie Tax Exempt Money Market Fund, including the statement of
investments, as of December 31, 1993, 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 December 31, 1993 by
correspondence with the custodian. 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 First Prairie Tax Exempt Money Market Fund at December 31,
1993, 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 & Young Signature Logo)
New York, New York
February 4, 1994
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the calendar year ended
December 31, 1993 as "exempt-interest dividends" (not generally subject
to regular Federal income tax).
FIRST PRAIRIE
TAX EXEMPT MONEY MARKET FUND
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
Investment Adviser
THE FIRST NATIONAL BANK OF CHICAGO
Three First National Plaza
Chicago, IL 60670
Distributor
DREYFUS SERVICE CORPORATION
200 Park Avenue
New York, NY 10166
Custodian
THE BANK OF NEW YORK
110 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
THE SHAREHOLDER SERVICES
GROUP, INC.
P.O. Box 9671
Providence, RI 02940
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 369AR9312
FIRST (First Prairie Logo) PRAIRIE
TAX EXEMPT
MONEY MARKET
FUND
ANNUAL REPORT
DECEMBER 31, 1993
