Letter to Shareholders
Dear Shareholder:
The yield for First Prairie Cash Management was 3.33% for the twelve
months ended June 30, 1994. This is the equivalent of an effective yield of
3.38% after taking into account the effect of compounding.*
The lower rates provided by the Federal Reserve Board over the last few
years have done their job. The U.S. economy is again on a growth path as
evidenced by the 7% gain in Gross Domestic Product for the fourth quarter
1993. Consequently, the Fed has begun the next phase of the interest rate
cycle by boosting short-term interest rates. The Fed has publicly stated that
they want the Fed Funds rate at a neutral level.
Earlier this year, in accordance with this policy, the Fed began a series
of rate hikes, initially with quarter-point moves. Federal Reserve Board
Chairman Alan Greenspan wants the bond market to know that he has been and
will be an inflation hawk. In anticipation of this change of policy, we began
to shorten the average maturity of the Fund earlier this year. After the May
17th Federal Open Market Committee meeting, the Fed raised the Fed Funds rate
and the Discount rate by 50 basis points each to 4.25% and 3.50%
respectively. We began to lengthen our portfolio maturity immediately after
these rate boosts because we felt the Fed would keep rates stable for three
to four months to observe the effect that increasing rates would have on the
economy.
Later this year, depending upon how strong the economy is, we anticipate
the Fed will again raise rates. Consequently, we currently intend to manage
the Fund with an average maturity in the 50- to 60-day range.
We thank you for your investment in this Fund and will continue to use
our best efforts to provide a high level of income, while safeguarding the
integrity of principal.
Sincerely,
(logo signature)
T. Scott McCartan
Chief Investment Officer
First Prairie Funds
July 16, 1994
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested
monthly.
<TABLE>
First Prairie Cash Management
Statement of Investments JUNE 30, 1994
Principal
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-11.9% Amount Value
- --------------------------------------------- ------------- ----------
<S> <C> <C>
Dai-Ichi Kangyo Bank Ltd. (Yankee)
4.16%, 7/20/94.......................................................... $ 10,000,000 $ 10,000,311
Mitsubishi Bank Ltd. (Yankee)
4.50%, 8/15/94.......................................................... 10,000,000 10,002,807
Rabobank Nederland N.V. (Yankee)
4.20%, 8/12/94.......................................................... 9,000,000 8,993,483
-------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $28,996,601)...................................................... $ 28,996,601
--------------
--------------
BANKERS' ACCEPTANCES-8.2%
- -------------------------
Fuji Bank Ltd. (Yankee)
4.51%, 8/15/94.......................................................... $ 10,000,000 $ 9,944,250
Sakura Bank Ltd. (Yankee)
4.39%, 7/15/94.......................................................... 10,000,000 9,983,044
--------------
TOTAL BANKERS' ACCEPTANCES (cost $19,927,294)............................... $ 19,927,294
--------------
--------------
COMMERCIAL PAPER-34.6%
- ----------------------
ABN-Amro Bank N.V.
4.53%, 8/17/94.......................................................... $ 10,000,000 $ 9,941,511
Banc One Corp.
4.51%, 8/31/94.......................................................... 10,000,000 9,924,597
Bank of Nova Scotia
3.84%, 7/11/94.......................................................... 10,000,000 9,989,444
Barclays Bank of Canada
4.67%, 10/3/94.......................................................... 10,000,000 9,879,889
Enterprise Funding Corp.
4.60%, 9/23/94 (a)...................................................... 10,000,000 9,894,300
Iris Partners L.P.
3.97%, 7/12/94 (a)...................................................... 5,084,000 5,077,895
MCA Funding Corp.
4.63%, 10/24/94......................................................... 10,000,000 9,854,653
WMX Technologies Inc.
4.71%, 10/18/94......................................................... 10,000,000 9,859,814
Woodside Finance Ltd.
4.56%, 9/12/94.......................................................... 10,000,000 9,908,750
--------------
TOTAL COMMERCIAL PAPER (cost $84,330,853)................................... $ 84,330,853
--------------
--------------
CORPORATE NOTES-8.2%
- --------------------
General Electric Capital Corp.
3.48%, 8/25/94.......................................................... $ 10,000,000 $ 9,999,311
Merrill Lynch & Co. Inc.
4.40%, 6/7/95 (b)....................................................... 10,000,000 10,000,000
--------------
TOTAL CORPORATE NOTES (cost $19,999,311).................................... $ 19,999,311
--------------
--------------
First Prairie Cash Management
Statement of Investments (continued) JUNE 30, 1994
Principal
SHORT-TERM BANK NOTES-4.1% Amount Value
- --------------------------
-------------- ------------
NationsBank of North Carolina N.A.
3.52%, 8/18/94.......................................................... $ 5,000,000 $ 4,999,869
PNC Bank N.A.
3.63%, 1/20/95.......................................................... 5,000,000 4,997,859
--------------
TOTAL SHORT-TERM BANK NOTES (cost $9,997,728)............................... $ 9,997,728
--------------
--------------
U.S. TREASURY BILLS-4.0%
- ------------------------
4.59%, 12/15/94
(cost $9,792,410)....................................................... $ 10,000,000 $ 9,792,410
--------------
--------------
U.S. GOVERNMENT AGENCIES-16.4%
- ------------------------------
Agency for International Development
Floating Rate Notes
5.05%, 5/1/2023 (b)..................................................... $ 5,000,000 $ 5,000,000
Federal Home Loan Banks
Floating Rate Notes
4.92%, 3/17/2000 (b).................................................... 10,000,000 10,000,000
Student Loan Marketing Association
Floating Rate Notes
3.99%, 6/8/95 (b)....................................................... 25,000,000 25,000,000
--------------
TOTAL U.S. GOVERNMENT AGENCIES (cost $40,000,000)........................... $ 40,000,000
--------------
--------------
TOTAL INVESTMENTS
(cost $213,044,197)............................................ 87.4% $213,044,197
------- --------------
------- --------------
CASH AND RECEIVABLES (NET)......................................... 12.6% $ 30,775,727
------- --------------
------- --------------
NET ASSETS .................................................. 100.0% $243,819,924
------- --------------
------- --------------
Notes To Statement of Investments:
(a) Backed by an irrevocable letter of credit.
(b) Variable interest rate - subject to periodic change.
See notes to financial statements.
</TABLE>
<TABLE>
First Prairie Cash Management
Statement of Assets and Liabilities JUNE 30, 1994
<S> <C> <C>
ASSETS:
Investments in securities, at value-Note 1(a)........................... $213,044,197
Cash.................................................................... 4,934,072
Receivable for investment securities sold............................... 25,168,213
Interest receivable..................................................... 779,843
Prepaid expenses........................................................ 65,750
--------------
243,992,075
LIABILITIES:
Due to The First National Bank of Chicago............................... $ 96,084
Accrued expenses and other liabilities.................................. 76,067 172,151
------------ ------------
NET ASSETS ................................................................ $243,819,924
--------------
--------------
REPRESENTED BY:
Paid-in capital......................................................... $243,979,657
Accumulated net realized (loss) on investments.......................... (159,733)
--------------
NET ASSETS at value applicable to 243,979,657 outstanding shares of
Beneficial Interest, equivalent to $1.00 per share (unlimited number of
$.001 par value shares authorized)...................................... $243,819,924
--------------
--------------
NET ASSET VALUE, offering and redemption price per share
($243,819,924 / 243,979,657 shares)..................................... $1.00
-----
-----
Statement of Operations YEAR ENDED JUNE 30, 1994
INVESTMENT INCOME:
Interest Income......................................................... $ 9,285,026
Expenses:
Management fee-Note 2(a).............................................. $ 892,114
Professional fees..................................................... 49,300
Registration fees..................................................... 48,880
Custodian fees........................................................ 42,222
Prospectus and shareholders' reports.................................. 17,514
Trustees' fees and expenses-Note 2(b)................................. 6,262
Shareholder servicing costs........................................... 3,753
Miscellaneous......................................................... 35,851
------------
1,095,896
Less-reduction in management fee due
to undertakings-Note 2(a)......................................... 304,836
------------
Total Expenses.................................................. 791,060
-------------
INVESTMENT INCOME-NET....................................................... 8,493,966
NET REALIZED (LOSS) ON INVESTMENTS-Note 1(b)................................ (136,023)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 8,357,943
------------
------------
See notes to financial statements.
</TABLE>
<TABLE>
First Prairie Cash Management
Statement of Changes in Net Assets
Year Ended June 30,
------------------------------------
1993* 1994
-------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income-net................................................ $ 2,487,708 $ 8,493,966
Net realized (loss) on investments................................... (23,710) (136,023)
-------------- --------------
Net Increase In Net Assets Resulting From Operations............... 2,463,998 8,357,943
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net................................................ (2,487,708) (8,493,966)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold........................................ 1,971,179,813 2,167,517,783
Dividends reinvested................................................. 100,330 654,107
Cost of shares redeemed.............................................. (1,795,643,634) (2,099,928,742)
-------------- --------------
Increase In Net Assets From Beneficial Interest Transactions....... 175,636,509 68,243,148
-------------- --------------
Total Increase In Net Assets................................... 175,612,799 68,107,125
NET ASSETS:
Beginning of year.................................................... 100,000 175,712,799
-------------- --------------
End of year.......................................................... $ 175,712,799 $ 243,819,924
-------------- --------------
-------------- --------------
* From July 30, 1992 (commencement of operations) to June 30, 1993.
See notes to financial statements.
</TABLE>
<TABLE>
First Prairie 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 the Fund's financial statements.
Year Ended June 30,
-----------------------
PER SHARE DATA: 1993(1) 1994
-------- --------
<S> <C> <C>
Net asset value, beginning of year............................................... $1.0000 $ .9999
-------- --------
Investment Operations:
Investment income-net............................................................ .0297 .0333
Net realized (loss) on investments............................................... (.0001) (.0006)
-------- --------
Total from Investment Operations............................................... .0296 .0327
-------- --------
Distributions;
Dividends from investment income-net............................................. (.0297) (.0333)
-------- --------
Net asset value, end of year..................................................... $ .9999 $ .9993
-------- --------
-------- --------
TOTAL INVESTMENT RETURN.............................................................. 3.25%(2) 3.38%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.......................................... .05%(2) .31%
Ratio of net investment income to average net assets............................. 3.19%(2) 3.33%
Decrease reflected in above expense ratios due to undertakings
by the Manager................................................................. .51%(2) .12%
Net Assets, end of year (000's omitted).......................................... $175,713 $243,820
- -------------------------------------------
(1) From July 30, 1992 (commencement of operations) to June 30, 1993.
(2) Annualized.
See notes to financial statements.
</TABLE>
First Prairie Cash Management
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Fund is registered under the Investment Company Act ("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 exclusive distributor of the
Fund's shares, which are sold without a sales charge.
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.
(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. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represent
amortized cost.
(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, if such qualification is in the
best interests of its shareholders, 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 taxable income
sufficient to relieve it from all, or substantially all, Federal income
taxes.
The Fund has an unused capital loss carryover of approximately $19,000
available for Federal income tax purposes to be applied against future net
securities profits, if any realized subsequent to June 30, 1994. The
carryover does not include net realized securities losses from November 1,
1993 through June 30, 1994 which are treated, for Federal income tax
purposes, as arising in fiscal 1995. If not applied, the carryover expires in
fiscal 2002.
At June 30, 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 .35 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
First Prairie Cash Management
NOTES TO FINANCIAL STATEMENTS (continued)
state law. The most stringent state expense limitation applicable to the Fund
presently requires reimbursement of expenses in any full fiscal year that
such expenses (excluding 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.
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 a monthly fee at the annual
rate of .05 of 1% of the value of the Fund's average daily net assets. During
the year ended June 30, 1994, $127,445 is payable to Dreyfus by the Manager
pursuant to the agreement.
However, the Manager had undertaken from June 1, 1993 to November 30,
1993 to reduce the management fee paid by and reimburse such excess expenses
of 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 1, 1993 to assume all expenses of the Fund in excess of an
annual rate of .35 of 1% of the Fund's average daily net assets. The
reduction in management fee, pursuant to the undertakings, amounted to
$304,836, for the year ended June 30, 1994.
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.
(B) 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 $1,500 and an
attendance fee of $250 per meeting.
(C) 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 receipt of certain regulatory approvals and
approvals of the stockholders of Dreyfus and of Mellon. The merger is
expected to occur in August 1994, but could occur later.
First Prairie Cash Management
Report of Ernst & Young LLP, Independent Auditors
SHAREHOLDERS AND BOARD OF TRUSTEES
FIRST PRAIRIE CASH MANAGEMENT
We have audited the accompanying statement of assets and liabilities of
First Prairie Cash Management, including the statement of investments, as of
June 30, 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 June 30, 1994 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our 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 Cash Management at June 30, 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.
(Signature Logo)
New York, New York
August 3, 1994
FIRST PRAIRIE
CASH MANAGEMENT
144 Glenn Curtiss Boulevard
Uniondale, NY 11556
Investment Adviser
THE FIRST NATIONAL BANK
OF CHICAGO
Three First National Plaza
Chicago, IL 60670
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. 370AR946
FIRST
PRAIRIE
CASH
MANAGEMENT
Annual Report
June 30, 1994
