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TAX EXEMPT
PROCEEDS
FUND, INC.
Semi-Annual Report
December 31, 1995
(Unaudited)
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<PAGE>
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TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Other Tax Exempt Investments (15.60%)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$5,000,000 City of Houston, TX TRAN - Series 1995 06/27/96 3.64% $5,018,664 MIG-1 SP-1+
5,000,000 Colorado State TRAN - Series A 06/27/96 3.64 5,018,642 SP-1+
4,000,000 Milwaukee County, WI Short-Term School Order Note,
RAN - Series 1995B 08/22/96 3.93 4,012,227 MIG-1 SP-1+
5,000,000 State of Illinois RAN 06/10/96 3.76 5,014,295 MIG-1 SP-1+
10,000,000 State of Maine GO TAN 06/28/96 3.73 10,032,798 MIG-1 SP-1+
5,000,000 State of Texas TRAN - Series 1995A 08/30/96 4.01 5,021,551 MIG-1 SP-1+
5,000,000 State of Texas TRAN - Series 1995A 08/30/96 3.99 5,022,180 MIG-1 SP-1+
- ---------- ----------
39,000,000 Total Other Tax Exempt Investments 39,140,357
- ---------- ----------
<CAPTION>
Other Variable Rate Demand Instruments (b) (58.15%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$4,000,000 Alabama HFA (Windscape Project)
LOC Amsouth Bank N.A. 12/01/03 5.25% $ 4,000,000 VMIG-1
3,800,000 Ascension Parish, LA PCR (Shell Oil Company) 09/01/23 6.00 3,800,000 P1 A1+
4,280,000 Bexar County, TX HFDC (Air Force Village II) - Series 1985B
LOC Rabobank Nederland 03/01/12 5.00 4,280,000 A1+
1,570,000 Bloomington Normal Airport Authority - Series 1995A 01/01/13 5.15 1,570,000 VMIG-1
900,000 Burke County, GA Development Authority PCRB
(Georgia Power Company Plant Vogile Project) 07/01/24 5.95 900,000 P1 A1
5,100,000 Carlton, WI PCRB
(Wisconsin Power & Light Company Project B) 09/01/05 6.10 5,100,000 P1 A1+
3,650,000 City & County of Denver, CO Refunding MHRB
(Cotton Wood Creek Project)
LOC General Electric Capital Corp. 04/15/14 5.20 3,650,000 A1+
2,000,000 Clayton County, GA MHRB (Rainwood Development Project)
LOC Bankers Trust Company 05/01/06 4.98 2,000,000 A1+
3,000,000 Connecticut State Development Authority
(CT Light & Power Co. Project) - Series 1993A
LOC Deutsche Bank A.G. 09/01/28 5.10 3,000,000 VMIG-1 A1+
2,800,000 County of Franklin, OH Hospital Facilities
(Lutheren Senior City, Inc.) RB - Series 1994
LOC National Bank of Detroit 05/01/15 5.15 2,800,000 VMIG-1
7,150,000 Dekalb County, GA Refunding MHRB - Series 1988
(Wood Hills Apartment Project)
LOC Bank of Montreal 12/01/07 5.15 7,150,000 A1+
1,500,000 Geisinger Authority, PA Health System
(Geisinger Health System) - Series 1992B 07/01/22 5.90 1,500,000 A1+
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
---------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Other Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$1,700,000 Georgetown, KY Educational Institution Improvement
(Georgetown College)
LOC PNC Bank 06/01/04 5.25% $ 1,700,000 VMIG-1
10,000,000 Greenville, SC Hospital System Hospital Facilities RB - Series B 05/01/23 5.05 10,000,000 A1+
3,400,000 Harris County, TX (Exxon Project) - Series 1984B 03/01/24 6.00 3,400,000 A1+
5,000,000 Harris County, TX HFDC
(St Luke's Episcopal Hospital) - Series 1992A 02/15/21 6.00 5,000,000 A1+
2,285,000 Homewood, AL Educational Building Authority (Samford University)
LOC Amsouth Bank N.A. 12/01/13 5.25 2,285,000 VMIG-1
1,900,000 Houston, TX - Series 1992B 04/01/98 5.10 1,900,000 A1+
3,300,000 Illinois Educational Facilities Authority
(Chicago Childrens Museum) - Series 1994
LOC National Bank of Detroit 02/01/28 5.05 3,300,000 VMIG-1 A1+
8,000,000 Illinois HFA RB (Northwestern Memorial Department) - Series 1995
LOC Northern Trust 08/15/25 6.05 8,000,000 VMIG-1 A1+
27,100,000 Illinois HFA RB (Resurrection Health Care System)
LOC First National Bank of Chicago/Comerica Bank/
Lasalle National Bank/National Bank of Detroit 05/01/11 6.10 27,100,000 VMIG-1
3,100,000 Jacksonville, FL IDRB
(Univ. of Florida Health Science Center) - Series 1989
LOC Barnett Bank of Jacksonville 07/01/19 5.10 3,100,000 VMIG-1
2,500,000 Maryland State IDA Economic Development RB
(Johnson Controls Incorporated) 12/01/03 5.25 2,500,000 VMIG-1 A1
2,200,000 Michigan Strategic Fund PCRB
(Consumers Power Company Project) - Series 1993A
LOC Canadian Imperial Bank of Commerce 06/15/10 5.95 2,200,000 A1+
2,000,000 Missouri HEFA (Washington University) 09/01/09 5.00 2,000,000 VMIG-1 A1+
5,500,000 Monroe County, GA Development Authority
(Georgia Power Company) 07/01/25 6.00 5,500,000 VMIG-1 A1
3,000,000 Monroe County, MI EDC (Detroit Edison) - Series CC
LOC Barclays Bank PLC 10/01/24 5.90 3,000,000 VMIG-1
4,420,000 Montgomery County, MD
Housing Opportunities Commission MHRB
LOC General Electric Capital Corp. 11/01/07 5.20 4,420,000 A1+
1,000,000 Philadelphia, PA Hospital & HEFA
(Childrens Hospital of Philadelphia) 03/01/27 5.90 1,000,000 P1 A1+
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Other Variable Rate Demand Instruments (b) (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$ 9,370,000 Pitkin County, CO IDRB
(Aspen Skiing Company Project) - Series B
LOC First National Bank of Chicago 04/01/16 6.10% $ 9,370,000 A1
5,415,000 Salt Lake City, UT PCRB (The British Petroleum Company) 08/01/07 6.00 5,415,000 P1
5,000,000 State of Kansas Department of Transportation Highway RB
- Series 1994B 09/01/14 5.05 5,000,000 VMIG-1 A1+
- ----------- -----------
145,940,000 Total Other Variable Rate Demand Instruments 145,940,000
- ----------- -----------
<CAPTION>
Put Bonds (5.32%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$5,000,000 Connecticut State Special Assessment
Unemployment Compensation Advance Fund RB
FGIC Insured 07/01/96 3.90% $ 5,000,000 VMIG-1 A1+
6,105,000 Vermont State Educational & Health Building Finance Agency
(Middlebury College) 11/01/96 3.80 6,105,000 A1+
2,235,000 Vermont State Educational & Health Building Finance Agency
(Middlebury College) Project A 05/01/96 4.35 2,235,000 A1+
- ---------- ----------
13,340,000 Total Put Bonds 13,340,000
- ---------- ----------
<CAPTION>
Tax Exempt Commercial Paper (20.10%)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$5,000,000 Burke County, GA (Oglethorpe Power Corporation) Project A
LOC Credit Suisse 02/08/96 3.40% $ 5,000,000 P1 A1+
5,000,000 Burke County, GA (Oglethorpe Power Corporation) Project A
LOC Credit Suisse 02/26/96 3.75 5,000,000 P1 A1+
5,300,000 Burlington, KS PCRB
(Kansas City Power & Light Company) - Series 1985M
LOC Toronto-Dominion Bank 03/07/96 3.65 5,300,000 A1+
1,000,000 Connecticut State HEFA (Yale University) - Series L 01/18/96 3.65 1,000,000 VMIG-1 A1+
10,000,000 Intermountain Power Agency - Series 1985E
LOC Swiss Bank Corp 01/22/96 3.45 10,000,000 VMIG-1 A1+
3,000,000 Intermountain Power Agency Variable Rate Power
Supply Refunding RB - Series 1985F2 01/11/96 3.90 3,000,000 VMIG-1 A1
1,650,000 Maricopa County, AZ Pollution Control Corporation
(Southern California Edison) - Series 1985B 02/14/96 3.75 1,650,000 P1 A1
3,400,000 Maricopa County, AZ Pollution Control Corporation
(Southern California Edison) - Series 1985C 02/08/96 3.60 3,400,000 P1 A1
3,700,000 Maricopa County, AZ Pollution Control Corporation
(Southern California Edison) - Series 1985G 02/08/96 3.85 3,700,000 P1 A1+
3,400,000 Rochester, MN Health Care Facility
(Mayo Foundation-Mayo Medical Center) - Series C 02/08/96 3.60 3,400,000 A1+
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
Ratings (a)
------------------
Face Maturity Standard
Amount Date Yield Value Moody's & Poors
------ ---- ----- ----- ------- -----
Tax Exempt Commercial Paper (Continued)
- -----------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
$2,000,000 State of Texas TRAN Series 1995B 08/20/96 3.65% $2,000,000 P1 A1+
7,000,000 Sunshine State Governmental Financial Commission RB - Series 1986
LOC Union Bank of Switzerland/Morgan Guaranty/
National Westminster 01/23/96 3.80 7,000,000 VMIG-1
- ---------- -------------
50,450,000 Total Tax Exempt Commercial Paper 50,450,000
- ---------- -------------
Total Investments (99.17%)(Cost $248,870,357+) 248,870,357
Cash and Other Assets, Net of Liabilities (0.83%) 2,088,158
-------------
Net Assets(100.00%), 250,960,696 Shares Outstanding(Note 3) $ 250,958,515
=============
Net Asset Value, offering and redemption price per share $ 1.00
=============
+ Aggregate cost for federal income tax purpose is identical.
FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings are those of the holding company of the bank whose letter of
credit guarantees the issue or the insurance company who insures the issue.
All letters of credit and insurance are irrevocable and direct pay covering
both principal and interest.
(b) Interest rates are adjustable on a daily, weekly, or monthly basis. The
rate shown is the rate in effect at the date of this statement.
</TABLE>
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
EDC = Economic Development Corporation LOC = Letter of Credit
GO = General Obligation MHRB = Multifamily Housing Revenue Bonds
HEFA = Health and Education Facilities Authority PCRB = Pollution Control Revenue Bond
HFA = Housing Finance Authority RAN = Revenue Anticipation Note
HFDC = Health Facilities Development Corporation RB = Revenue Bond
IDA = Industrial Development Authority Revenue Bond TAN = Tax Anticipation Note
IDRB = Industrial Development Revenue Bond TRAN = Tax and Revenue Anticipation Note
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1995
(UNAUDITED)
===============================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Interest income.......................................................................... $ 4,513,642
Expenses (Note 2)........................................................................ ( 473,997)
------------
Net investment income.................................................................... 4,039,645
============
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments...................................................... -0-
------------
Net increase in net assets from operations.................................................. $ 4,039,645
============
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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TAX EXEMPT PROCEEDS FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
December 31, 1995 Ended
(Unaudited) June 30, 1995
--------- -------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income......................................... $ 4,039,645 $ 5,249,669
Net realized gain (loss) on investments....................... -0- ( 221)
-------------- --------------
Net increase in net assets from operations.................... 4,039,645 5,249,448
Dividends to shareholders from net investment income.............. ( 4,039,645) ( 5,249,669)
Net increase from capital share transactions (Note 3)............. 37,826,206 79,205,497
-------------- --------------
Total increase in net assets.............................. 37,826,206 79,205,276
Net assets:
Beginning of period........................................... 213,132,309 133,927,033
-------------- --------------
End of period................................................. $250,958,515 $213,132,309
============== ==============
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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TAX EXEMPT PROCEEDS FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
===============================================================================
1. Summary of Accounting Policies.
Tax Exempt Proceeds Fund, Inc. is a no-load, diversified, open-end management
investment company registered under the Investment Company Act of 1940. Its
financial statements are prepared in accordance with generally accepted
accounting principles for investment companies as follows:
a) Valuation of Securities -
Investments are valued at amortized cost. Under this valuation method, a
portfolio instrument is valued at cost and any discount or premium is
amortized on a constant basis to the maturity of the instrument. The
maturity of variable rate demand instruments is deemed to be the longer of
the period required before the Fund is entitled to receive payment of the
principal amount or the period remaining until the next interest rate
adjustment.
b) Federal Income Taxes -
It is the Fund's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its tax exempt and taxable income, if any, to its shareholders.
Therefore, no provision for federal income tax is required. At December 31,
1995, the Fund had a capital loss carry-forward to $2,181 available to
offset future capital gains expiring through June 30, 2001.
c) Dividends and Distributions -
Dividends from investment income (excluding capital gains and losses, if
any, and amortization of market discount) are declared daily and paid
monthly. Distributions of net capital gains, if any, realized on sales of
investments are made after the close of the Fund's fiscal year, as declared
by the Fund's Board of Directors.
d) General -
Securities transactions are recorded on a trade date basis. Interest income
is accrued as earned. Realized gains and losses from securities
transactions are recorded on the identified cost basis.
2. Investment Management Fees and Other Transactions with Affiliates.
Under the Investment Management Contract, the Fund pays an investment management
fee to Reich & Tang Asset Management, L.P. (the Manager) at the annual rate of
.40 of 1% per annum of the Fund's average daily net assets up to $250 million;
.35 of 1% per annum of the average daily net assets between $250 million and
$500 million; and .30 of 1% per annum of the average daily net assets over $500
million. The Management Contract also provides that the Manager will bear the
cost of, or reimburse the Fund for, all other expenses of the Fund. Therefore,
the fee payable under the Management Contract will be the only expense of the
Fund.
Pursuant to a Distribution Plan adopted under Securities and Exchange Commission
Rule 12b-1, the Fund and the Manager have entered into a Distribution Agreement.
The Fund's Board of Directors has adopted the plan in case certain expenses of
the Fund are deemed to constitute indirect payments by the Fund for distribution
expenses.
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<PAGE>
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TAX EXEMPT PROCEEDS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
===============================================================================
3. Capital Stock.
At December 31, 1995, 20,000,000,000 shares of $.001 par value stock were
authorized and capital paid in amounted to $250,960,696. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
December 31, 1995 June 30, 1995
----------------- -------------
<S> <C> <C>
Sold...................................... 277,541,006 577,528,829
Issued on reinvestment of dividends....... 1,057,508 1,823,879
Redeemed.................................. ( 240,772,308) ( 500,147,211)
-------------- --------------
Net increase.............................. 37,826,206 79,205,497
============== ==============
</TABLE>
At December 31, 1995, the Fund had an accumulated net realized loss of $2,181.
4. Liabilities.
At December 31, 1995, the Fund had the following liabilities:
<TABLE>
<CAPTION>
<S> <C>
Accrued management fee.................... $ 90,755
Dividends payable......................... 622,965
--------------
Total liabilities..................... $ 713,720
==============
</TABLE>
5. Financial Highlights.
<TABLE>
<CAPTION>
Six Months
Ended Year Ended June 30,
-----------------------------------------------------------
December 31, 1995 1995 1994 1993 1992 1991
----------------- ---- ---- ---- ---- ----
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
Income from investment operations:
Net investment income................. 0.017 0.032 0.021 0.022 0.035 0.049
Less distributions:
Dividends from net investment income 0.017 0.032 0.021 0.022 0.035 0.049
------ ------ ------ ------ ------ ------
Net asset value, end of period........... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ======
Total Return............................. 3.44%* 3.22% 2.14% 2.27% 3.52% 4.97%
Ratios/Supplemental Data
Net assets, end of period (000).......... $250,959 $213,134 $133,927 $133,230 $135,123 $127,707
Ratios to average net assets:
Expenses............................... 0.40%* 0.40% 0.40% 0.40% 0.40% 0.40%
Net investment income.................. 3.40%* 3.22% 2.13% 2.25% 3.48% 4.85%
* Annualized
</TABLE>
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<PAGE>
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This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors in the Fund
unless preceded or accompanied by an effective prospectus, which includes
information regarding the Fund's objectives and policies, experience of its
management, marketability of shares, and other information.
- -------------------------------------------------------------------------------
Tax Exempt Proceeds Fund, Inc.
600 Fifth Avenue
New York, New York 10020
Manager
Reich & Tang Asset Management, L.P.
600 Fifth Avenue
New York, New York 10020
Custodian
Investors Fiduciary Trust Company
127 West 10th Street
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
DST Systems, Inc.
210 West 10th Street
Kansas City, Missouri 64105
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