<PAGE>
- --------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS
DECEMBER 31, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Tax Exempt Investments (22.50%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,500,000 Alleghany County, PA (South Hills Health System)
LOC PNC Bank, N.A. 03/31/99 3.71% $ 1,501,707 VMIG-1
4,300,000 City of Philadelphia, PA TRAN - Series A 06/30/99 3.59 4,312,357 MIG-1 SP-1+
1,570,000 Cumberland County, PA (United Methodist Homes)
LOC PNC Bank, N.A. 06/01/99 3.71 1,570,000 VMIG-1
1,500,000 Georgia State HFA RB (Single Family Mortgage) 10/01/99 3.20 1,500,000 A1+
2,200,000 Iowa School Cash Anticipation Program
(IA School Corporation Warrant Certificates)
FSA Insured 01/28/99 3.50 2,200,978 MIG-1 SP-1+
3,000,000 Kenosha, WI UFSD TRAN 10/29/99 3.00 3,000,000 MIG-1
3,000,000 Kentucky Asset/Liability Commission General Fund TRAN 06/25/99 3.52 3,012,692 MIG-1 SP-1+
3,000,000 Maryland State Community Development 01/14/00 3.05 3,000,000 MIG-1
3,000,000 Michigan Municipal Bond Authority - Series C
LOC Bank of Nova Scotia 08/27/99 3.53 3,012,477 SP-1+
1,400,000 Missouri Rural Water Finance Corporation
(Public Project Construction) 11/15/99 3.18 1,414,667 MIG-1
5,000,000 Multnomah County, OR School District 06/30/99 3.60 5,014,036 MIG-1 SP-1+
3,000,000 Municipality of Anchorage, AK General Obligation TAN 01/04/00 2.91 3,023,220 MIG-1 SP-1+
2,000,000 Passaic Valley, NJ Water Commission
Revenue System Notes - Series A (b)
LOC PNC Bank, N.A. 11/16/99 3.09 2,014,511
3,000,000 Philadelphia, PA School District - Series 1998-1999B
LOC PNC Bank, N.A. 06/30/99 3.58 3,008,704 MIG-1 SP-1
3,000,000 Puerto Rico Commonwealth TRAN 07/30/99 2.83 3,010,913 MIG-1 SP-1+
2,500,000 Temple University of the Commonwealth Systems
(Higher Education Funding Obligation) 05/14/99 3.70 2,506,429 SP-1+
2,900,000 University of Cincinnati General Receipts BAN - Series A 03/01/99 3.52 2,900,986 MIG-1 SP-1+
2,107,000 University of Cincinnati General Receipts BAN - Series A 12/21/99 2.99 2,111,510 MIG-1 SP-1+
- ------------ -------------
47,977,000 Total Other Tax Exempt Investments 48,115,187
- ------------ -------------
<CAPTION>
Other Variable Rate Demand Instruments (c) (52.36%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,590,000 Alabama HFA RB (Windscape Project)
LOC Amsouth Bank N.A. 12/01/03 4.10% $ 3,590,000 VMIG-1
1,570,000 Bloomington Normal Airport Authority - Series 1995A 01/01/13 4.15 1,570,000 VMIG-1
2,975,000 Capital Realty Investment MHRB COPS
LOC Swiss Bank 12/01/04 4.28 2,975,000 VMIG-1 A1+
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (c) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,650,000 City & County of Denver, CO Refunding MHRB
(Cottonwood Creek Project)
LOC General Electric Capital Corporation 04/15/14 4.25% $ 3,650,000 A1+
6,000,000 City of Baltimore, MD (HM Investments, Ltd.) - Series 1993
LOC Toronto-Dominion Bank 02/01/00 4.15 6,000,000 A1+
5,000,000 City of Burlington, KS Power and Light 09/01/15 4.10 5,000,000 VMIG-1 A1
1,200,000 City of Philadelphia, PA Water & Waste
AMBAC Insured 08/01/27 3.85 1,200,000 VMIG-1 A1+
2,000,000 Columbia, AL Industrial Development Board PCRB
(AL Power Company Project) - Series A 11/01/21 5.00 2,000,000 VMIG-1 A1+
4,500,000 Connecticut State HEFA (Yale University) 07/01/29 3.70 4,500,000 VMIG-1 A1+
2,000,000 Connecticut State Special Tax Obligation RB
(Second Lien Transportation Infrastructure)
LOC Commerzbank, A.G. 12/01/10 4.10 2,000,000 P1 A1+
3,000,000 County of Cuyahoga, OH Hospital RB - Series 1997C
(Cleveland Clinic) 01/01/16 4.10 3,000,000 VMIG-1 A1+
2,800,000 County of Franklin, OH Hospital Facilities RB
(Lutheran Senior City, Inc.) - Series 1994
LOC National Bank of Detroit 05/01/15 4.00 2,800,000 VMIG-1
5,400,000 County of Hamilton, OH Hospital Facilities RB - Series 1997B
MBIA Insured 01/01/18 4.00 5,400,000 VMIG-1 A1+
7,000,000 DeKalb County, GA
Refunding MHRB - (Wood Hills Apartment Project) - Series 1998
LOC Bank of Montreal 12/01/07 4.00 7,000,000 A1+
700,000 Delaware Valley, PA Local Government RB
LOC Credit Suisse First Boston 12/01/18 3.90 700,000 VMIG-1 A1+
1,200,000 Delta County, MI EDC Mead Escanaba
(Enviromental Improvement) - Series D
LOC Bank of Nova Scotia 12/01/13 5.00 1,200,000 P1
1,500,000 Erie County Hospital Authority
(Hamot Health Foundation) - Series 1998B 05/15/20 5.00 1,500,000 VMIG-1
150,000 Fulco, GA Hospital Authority - Revenue Anticipation Certificates
(Shepherd Center Inc.)
LOC Wachovia Bank, N.A. 09/01/17 3.95 150,000 A1+
1,300,000 Georgetown, KY Educational Institution Improvement RB
(Georgetown College)
LOC PNC Bank, N.A. 06/01/04 4.05 1,300,000 VMIG-1
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (c) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 300,000 Glynn-Brunswick Memorial Hospital (Southeast GA Health System)
MBIA Insured 08/01/16 3.85% $ 300,000 VMIG-1 A1+
2,400,000 Greystone RB Certificate
(Variable Senior Certificates of Beneficial Ownership)
LOC Credit Suisse First Boston 05/01/20 4.13 2,400,000 VMIG-1 A1+
300,000 Gwinnett County, GA (Gwinnett Hospital System Inc.)
MBIA Insured 09/01/27 4.05 300,000 A1+
5,300,000 Harris County, TX Health Facilities Hospital RB
(Memorial Hospital Systems)
MBIA Insured 06/01/24 3.90 5,300,000 VMIG-1 A1+
5,000,000 Harris County, TX IDRB 02/15/27 4.85 5,000,000 A1+
3,600,000 Illinois Development Finance Authority RB (Glenwood School for Boys)
LOC Harris Trust 02/01/33 4.10 3,600,000 A1+
3,300,000 Illinois Educational Facilities Authority
(Chicago Children's Museum) - Series 1994
LOC National Bank of Detroit 02/01/28 4.10 3,300,000 VMIG-1 A1+
2,400,000 Illinois HFA (Resurrection Health Care System) 05/01/11 5.15 2,400,000 VMIG-1
2,400,000 Indiana HEFA (Rehabilitation Hospital of Indiana)
LOC National Bank of Detroit 11/01/20 3.90 2,400,000 VMIG-1
2,000,000 Jackson County, MS Port Facilities RB (Chevron USA Inc. Project) 06/01/23 5.10 2,000,000 P1
2,000,000 Kentucky EDFA (Pooled Hospital Loan Program)
LOC Capital Reinsurance 08/01/18 3.30 2,000,000 A1+
700,000 Lancaster, PA Higher Education
LOC Chase Manhattan Bank, N.A. 04/15/27 4.10 700,000 VMIG-1 A1
1,300,000 Lincoln County, WY Pollution Control
(Exxon Corporation) - Series 1985 08/01/15 5.05 1,300,000 P1 A1+
2,500,000 Maryland State IDA Economic Development RB (Johnson Control Inc.) 12/01/03 4.45 2,500,000 VMIG-1
600,000 Michigan Strategic Fund PCR (Consumer's Power Co. Project)
LOC Canadian Imperial Bank of Commerce 06/15/10 5.15 600,000 A1+
2,860,000 Missouri HEFA (Washington University) 09/01/10 4.10 2,860,000 VMIG-1 A1+
4,420,000 Montgomery County, MD Housing Opportunities Commission MHRB
(Oakwood - Gainesburg)
LOC Freddie Mac 11/01/07 4.05 4,420,000 A1+
300,000 Municipal Gas Authority of Georgia (Gas Revenue Bonds) - Series A
LOC ABN AMRO/Bayers Landes/CSFB/MGT/Wachovia 11/01/06 3.90 300,000 A1+
3,530,000 New Hampshire HEFA Hospital RB - Series 1995
LOC Bank of Scotland 09/01/05 4.25 3,530,000 VMIG-1
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
DECEMBER 31, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Other Variable Rate Demand Instruments (c) (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,925,000 New Hampshire HEFA RB (Alice Peck Day Memorial Hospital)
LOC Corestates Bank, N.A. 11/01/05 4.05% $ 1,925,000 VMIG-1
1,400,000 New Jersey EDA Dock Facility Revenue
(Bayonne/IMTT Project) - Series 1
LOC First National Bank of Chicago 12/01/27 5.10 1,400,000 VMIG-1
1,300,000 North Carolina Educational Facilities (Duke University) - Series 1991B 12/01/21 3.95 1,300,000 VMIG-1 A1+
2,000,000 Raleigh-Durham, NC Airport Authority
(American Airlines) - Series 1995A
LOC NationsBank 11/01/05 5.10 2,000,000 A1+
900,000 Reading, PA (York County General Authority)
AMBAC Insured 09/01/26 4.05 900,000 A1+
1,700,000 Roanoke, VA IDA Hospital RB (Carilion Health Systems) 07/01/27 5.05 1,700,000 VMIG-1 A1+
2,000,000 York County, PA IDA PCRB (Philadelphia Electric Company)
LOC Toronto-Dominion Bank 08/01/16 5.10 2,000,000 P1 A1+
- ------------- ------------
111,970,000 Total Other Variable Rate Demand Instruments 111,970,000
- ------------- ------------
<CAPTION>
Put Bonds (7.46%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 7,500,000 Connecticut State Special Assessment Unemployment Compensation
Advance Fund RB - Series 1993C
FGIC Insured 07/01/99 3.60% $ 7,500,000 VMIG-1 A1+
1,500,000 Intermountain Power Authority Power Supply RB - Series E
AMBAC Insured 03/15/99 3.25 1,500,000 VMIG-1 A1+
6,950,000 Vermont State Educational & Health Building Finance Agency
(Middlebury College) 11/01/99 3.10 6,950,000 A1+
- ------------- ------------
15,950,000 Total Put Bonds 15,950,000
- ------------- ------------
<CAPTION>
Tax Exempt Commercial Paper (19.36%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,497,000 Austin, TX Utility System Notes - Series A
LOC Morgan Guaranty 01/07/99 3.35% $ 2,497,000 P1 A1+
1,000,000 Development Authority of Burke County, GA
(Ogelthorpe Power) - Series 1998B
AMBAC Insured 01/20/99 3.10 1,000,000 VMIG1 A1+
5,000,000 Illinois HFA RB (Rush-Presbyterian St. Luke's)
LOC Northern Trust 02/10/99 3.10 5,000,000 VMIG-1 A1+
3,000,000 Illinois HFA RB (Rush-Presbyterian St. Luke's)
LOC Northern Trust 01/07/99 3.20 3,000,000 VMIG-1 A1+
10,000,000 Intermountain Power Agency Power Supply RB - Series 1985F
AMBAC Insured 01/14/99 3.35 10,000,000 VMIG-1 A1+
2,000,000 Intermountain Power Agency Power Supply RB - Series 1985F
AMBAC Insured 01/08/99 3.20 2,000,000 VMIG-1 A1+
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- --------
Tax Exempt Commercial Paper (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Maricopa County, AZ PCRB (Southern California Edison Company) 03/11/99 3.00% $ 2,000,000 P1 A1
3,000,000 Philadelphia, PA Revenue Notes - Series B
LOC Canadian Imperial Bank of Commerce 01/07/99 3.35 3,000,000 P1 A1+
2,500,000 Putman County, GA Development Authority PC Georgia Power 01/20/99 3.00 2,500,000 P1 A1
3,400,000 Rochester, MN Health Care Mayo Foundation
(Mayo Medical Center) - Series C 02/17/99 3.15 3,400,000 A1+
5,000,000 State of Connecticut HEFA RB (Yale Universtity) 01/08/99 2.95 5,000,000 VMIG-1 A1+
2,000,000 State of Connecticut Special Assessment (Second Injury Fund)
LOC Credit Agricole/Credit Belique 01/26/99 3.05 2,000,000 P1 A1+
- ------------- ------------
41,397,000 Total Tax Exempt Commercial Paper 41,397,000
- ------------- ------------
Total Investments (101.68%) (Cost $217,432,187+) $ 217,432,187
Cash and Other Assets in Excess of Liabilities (-1.68%) ( 3,598,117)
------------
Net Assets (100.00%) 213,838,720 Shares Outstanding (Note 3) $ 213,834,070
============
+ Aggregate cost for Federal income tax purposes is identical.
</TABLE>
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. Certain issuers have either a line of credit,
a liquidity facility, a standby purchase agreement or some other financing
mechanism to ensure the remarketing of the securities. This is not a
guarantee and does not serve to insure or collateralize the issue.
(b) Securities that are not rated have been determined by the Fund's Board of
Trustees to be of comparable quality to the rated securities in which the
Fund may invest.
(c) 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>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
AMBAC = American Municipal Bond Assurance IDRB = Industrial Development Revenue Bond
BAN = Bond Anticipation Note LOC = Letter of Credit
COPS = Certificates of Participations MBIA = Municipal Bond Insurance Association
EDA = Economic Development Authority MHRB = Multi-family Housing Revenue Bond
EDC = Education Development Corporation PCR = Pollution Control Revenue
EDFA = Economic Development Finance Authority PCRB = Pollution Control Revenue Bond
FGIC = Financial Guaranteed Insurance Company RB = Revenue Bond
FSA = Financial Securities Assurance TAN = Tax Anticipation Note
HFA = Housing Finance Authority TRAN = Tax and Revenue Anticipation Note
HEFA = Health and Education Facilities Authority UFSD = Unified School District
IDA = Industrial Development Authority
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Interest income............................................................................. $ 3,414,005
Expenses (Note 2)........................................................................... ( 400,648)
-------------
Net investment income....................................................................... 3,013,357
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments..................................................... 49
-------------
Net increase in net assets from operations.................................................. $ 3,013,406
=============
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
December 31, 1998 Ended
(Unaudited) June 30, 1998
--------- -------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income............................................ $ 3,013,357 $ 6,656,468
Net realized gain (loss) on investments.......................... 49 ( 1,453)
--------------- ---------------
Net increase in net assets from operations....................... 3,013,406 6,655,015
Dividends to shareholders from net investment income................ ( 3,013,357)* ( 6,656,468)*
Net increase (decrease) from capital share transactions (Note 3).... 21,818,214 ( 7,032,901)
--------------- ---------------
Total increase (decrease) in net assets...................... 21,818,263 ( 7,034,354)
Net assets:
Beginning of period.............................................. 192,015,807 199,050,161
--------------- ---------------
End of period.................................................... $ 213,834,070 $ 192,015,807
=============== ===============
* Designated as exempt-interest dividends for federal income tax purpose.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
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. This
Fund is a short term, tax exempt money market fund. 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.
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) Use of Estimates -
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in
net assets from operations during the reporting period. Actual results
could differ from those estimates.
e) 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 all other expenses of the Fund. Therefore, the fee payable under the
Management Contract will be the only expense of the Fund.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
2. Investment Management Fees and Other Transactions with Affiliates.
(Continued)
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.
3. Capital Stock.
At December 31, 1998, 20,000,000,000 shares of $.001 par value stock were
authorized and paid in capital amounted to $213,838,720. Transactions in capital
stock, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year
December 31, 1998 Ended
(Unaudited) June 30, 1998
--------- -------------
<S> <C> <C>
Sold...................................... 289,108,369 439,480,605
Issued on reinvestment of dividends....... 880,771 2,022,495
Redeemed.................................. ( 268,170,926) ( 448,536,001)
-------------- ---------------
Net increase (decrease)................... 21,818,214 ( 7,032,901)
============== ===============
<CAPTION>
4. Liabilities.
At December 31, 1998, the Fund had the following liabilities:
<S> <C>
Payables for securities purchased......... $ 6,023,220
Accrued management fee.................... 80,920
Dividends payable......................... 436,693
--------------
Total liabilities....................... $ 6,540,833
==============
</TABLE>
5. Sales of Securities.
Accumulated undistributed realized losses at December 31, 1998 amounted to
$4,650. This amount represents tax basis capital losses which may be carried
forward to offset future gains. Such losses expire on June 30, 2006.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
TAX EXEMPT PROCEEDS FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
6. Financial Highlights.
Six Months Year Ended June 30,
Ended --------------------------------------------------------------
December 31, 1998 1998 1997 1996 1995 1994
----------------- ---------- ---------- ---------- ---------- ----------
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.................. 0.015 0.033 0.032 0.033 0.032 0.021
Less distributions:
Dividends from net investment income... 0.015 0.033 0.032 0.033 0.032 0.021
--------- --------- --------- --------- --------- ---------
Net asset value, end of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= ========= =========
Total Return............................. 3.05%* 3.31% 3.23% 3.31% 3.22% 2.14%
Ratios/Supplemental Data
Net assets, end of period (000).......... $ 213,834 $ 192,016 $ 199,050 $ 254,251 $ 213,134 $ 133,927
Ratios to average net assets:
Expenses............................... 0.40%* 0.40% 0.40% 0.40% 0.40% 0.40%
Net investment income.................. 3.01%* 3.26% 3.18% 3.26% 2.22% 2.13%
* Annualized
</TABLE>
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- ------------------------------------------------------
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
801 Pennsylvania
Kansas City, Missouri 64105
Transfer Agent &
Dividend Disbursing Agent
Reich & Tang Services, Inc.
600 Fifth Avenue
New York, New York 10020
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
TAX EXEMPT
PROCEEDS
FUND, INC.
Semi-Annual Report
December 31, 1998
(Unaudited)
- --------------------------------------------------------------------------------
<PAGE>
