[TEXT]
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
FIRST <PRAIRIE LOGO> PRAIRIE
----- CASH
MANAGEMENT
----------
SEMI-ANNUAL REPORT
DECEMBER 31, 1993
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. 370SA9312
PRESIDENT'S LETTER
Dear Shareholder:
We are pleased to report to you on the activities of First
Prairie Cash Management for the semi-annual period ended December
31, 1993. For the 6-month period ended December 31, 1993, the
Fund produced an annualized yield of 3.21%. After taking into
account the effect of compounding, the annualized effective yield
was 3.26%.*
The most recent three months, October through December, saw a
small downtick in the Fund's yields to 3.11% annualized and 3.16%
after compounding.
ECONOMIC OUTLOOK
The Federal Reserve Board has been able to accommodate
economic growth through its easy monetary policy throughout 1993.
Additionally, recent data confirm the U.S. economy gained momentum
during the fourth quarter of the year. There still exist,
however, some important factors 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 Fed will tighten
credit slightly during the first half of 1994 - more likely during
the second quarter, rather than the first. Although inflation
data have been favorable, the Fed will want to reinforce
confidence in the fixed-income market that it remains committed to
combatting inflation. By acting later in the first half of the
year, the Federal Reserve will be better able to determine if the
fourth quarter momentum of 1993 will continue throughout 1994.
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.
TRIPILE-'A' RATING
As of December 21, 1993, the Fund was assigned a Aaa rating
from Moody's Investors Service, Inc. Subsequently, the Fund's
management chose to withdraw the previous rating from Standard &
Poor's Corporation, which was also triple-'A'. The Moody's rating
allows your Fund additional investment opportunities while still
maintaining the superior quality of a triple-'A' rated fund.
We would like to take this opportunity to renew our
commitment to serving your investment needs.
Sincerely,
Joseph S. DiMartino
President
January 19, 1994
New York, N.Y.
* Annualized effective yield is based upon dividends declared
daily and reinvested monthly.
<TABLE>
STATEMENT OF INVESTMENTS DECEMBER 31, 1993 (UNAUDITED)
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT-3.9%
Principal
Amount Value
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<S> <C> <C>
Sanwa Bank Ltd. (Yankee)
3.31% 1/7/94
(cost $10,000,000)................................................ $ 10,000,000 $ 10,000,000
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COMMERCIAL PAPER-39.2%
Bridgestone/Firestone Inc.
3.40% 1/13/94 (a)................................................ $ 8,000,000 $ 7,990,960
Credit Lyonnais N.A. Inc
3.28% 2/1/94..................................................... 10,000,000 9,971,841
Diamond Lease (USA) Inc
3.36% 1/14/94 (a)................................................ 9,000,000 8,989,113
Embarcadero Center Associates (Two)
3.38% 1/13/94 (a)................................................ 9,000,000 8,989,890
Golden Gate Management Inc.
3.28% 1/28/94 (a)................................................ 2,500,000 2,493,869
Goldman Sachs & Co.
3.41% 1/21/94.................................................... 9,000,000 8,983,000
Hanson Finance (UK) PLC
3.24% 1/21/94.................................................... 5,000,000 4,991,083
Kimberly-Clark Corp.
3.23% 1/31/94.................................................... 10,000,000 9,973,167
Kubota Finance (USA) Inc.
3.39% 1/28/94 (a)................................................ 5,000,000 4,987,363
Morgan Stanley Group Inc.
3.35% 1/27/94.................................................... 10,000,000 9,975,878
New Center Asset Trust
3.39% 2/7/94 .................................................... 9,000,000 9,000,000
Nichimen America Inc
3.31% 1/26/94 (a)................................................ 8,000,000 7,981,667
SRD Finance Inc.
3.37% 2/1/94 (a)................................................. 5,000,000 4,985,576
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TOTAL COMMERCIAL PAPER (cost $99,313,407)........................... $ 99,313,407
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CORPORATE NOTES-8.9%,
General Electric Capital Corp.
3.38% 8/25/94..................................................... $ 10,000,000 $ 9,997,044
Merrill Lynch & Co. Inc.
3.27% 6/7/94 (b).................................................. 7,500,000 7,500,000
PNC National Bank
3.39% 6/10/94..................................................... 5,000,000 4,996,907
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TOTAL CORPORATE NOTES (cost $22,493,951)............................. $ 22,493,951
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SHORT-TERM BANK NOTES-2.0%
NationsBank of North Carolina NA
3.52% 8/18/94
(cost $4,999,375).................................................... $ 5,000,000 $ 4,999,375
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U.S. TREASURY BILLS-6.8%
3.49% 6/30/94..................................................... $ 12,500,000 $ 12,289,125
3.35% 8/25/94..................................................... 5,000,000 4,893,636
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TOTAL U.S. TREASURY BILLS (cost $17,182,761).......................... $ 17,182,761
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U.S. GOVERNMENT AGENCIES-25.7% Principal
Amount Value
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Agency for International Development
Floating Rate Notes
3.24% 5/1/2023(b).................................................. $ 5,000,000 $ 5,000,000
Federal Home Loan Banks
Floating Rate Notes
4.88% 3/17/2000(b)................................................. 10,000,000 10,000,000
Student Loan Marketing Association
Floating Rate Notes
3.38%,, 6/8/95(b)................................................... 25,000,000 25,000,000
4.71%,, 10/30/96(b)................................................. 25,000,000 25,000,000
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TOTAL U.S. GOVERNMENT AGENCIES (cost $65,000,000)..................... $ 65,000,000
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REPURCHASE AGREEMENT-12.2%
National Westminster Bank USA, 3.25%
dated 12/31/93,, due 1/3/94 in the amount of $31,008,396
(fully collateralized by $28,080,000 U.S. Treasury Notes 7.25%,
due 11/15/2001,, value $31,610,443)
(cost $31,000,000)................................................... $ 31,000,000 $ 31,000,000
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TOTAL INVESTMENTS
(cost $249,989,494)............................................. 98.7% $249,989,494
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CASH AND RECEIVABLES (NET)....................................... 1.3% $ 3,314,659
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NET ASSETS....................................................... 100.0% $253,304,153
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NOTES TO STATEMENT OF INVESTMENTS:
(a) Backed by irrevocable letter of credit.
(b) Variable interest rate-subject to periodic change.
See notes to financial statements.
</TABLE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1993 (UNAUDITED)
<S> <C> <C>
ASSETS:
Investments in securities, at value
(including repurchase agreement of $31,000,000)-Note 1(a,b)....... $ 249,989,494
Cash................................................................ 2,666,251
Interest receivable................................................. 798,611
Prepaid expenses.................................................... 97,728
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253,552,084
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LIABILITIES:
Due to The First National Bank of Chicago........................... $ 186,526
Accrued expenses and other liabilities.............................. 61,405 247,931
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NET ASSETS............................................................. $ 253,304,153
REPRESENTED BY:
Paid-in capital..................................................... $ 253,323,200
Accumulated net realized (loss) on investments...................... (19,047)
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NET ASSETS at value applicable to 253,323,200 outstanding shares of
Beneficial Interest, equivalent to $1.00 per share (unlimited number
of $.001 par value shares authorized)............................... $ 253,304,153
===============
</TABLE>
<TABLE>
STATEMENT OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 1993 (UNAUDITED)
<S> <C> <C>
INVESTMENT INCOME:
INTEREST
INTEREST INCOME.................................................... $ 4,134,131
EXPENSES:
Management fee-Note 2(a)......................................... $ 416,980
Registration fees................................................ 39,970
Auditing fees.................................................... 21,363
Legal fees....................................................... 18,916
Custodian fees................................................... 16,775
Prospectus and shareholders' reports............................. 9,823
Shareholder servicing costs...................................... 5,698
Trustees' fees and expenses-Note 2(b)............................ 2,696
Miscellaneous.................................................... 14,128
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546,349
Less-reduction in management fee due
to undertakings-Note 2(a)....................................... 230,454
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TOTAL EXPENSES................................................ 315,895
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INVESTMENT INCOME-NET............................................... 3,818,236
NET REALIZED GAIN ON INVESTMENTS--Note 1(b)......................... 4,663
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................ $ 3,822,899
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</TABLE>
See notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
YEAR ENDED SIX MONTHS ENDED
JUNE 30, DECEMBER 31, 1993
1993(1) (UNAUDITED)
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<S> <C> <C>
OPERATIONS:
Investment income-net............................................. $ 2,487,708 $ 3,818,236
Net realized gain (loss) on investments........................... (23,710) 4,663
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NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........... 2,463,998 3,822,899
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DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net............................................. (2,487,708) (3,818,236)
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BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold..................................... 1,971,179,813 1,313,337,616
Dividends reinvested.............................................. 100,330 138,285
Cost of shares redeemed........................................... (1,795,643,634) (1,235,889,210)
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INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS....... 175,636,509 77,586,691
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TOTAL INCREASE IN NET ASSETS....................................... 175,612,799 77,591,354
NET ASSETS:
Beginning of period............................................... 100,000 175,712,799
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End of period .................................................... $ 175,712,799 $ 253,304,153
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</TABLE>
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 period
indicated. This information has been derived from information provided
in the Fund's financial statements.
<TABLE>
YEAR ENDED SIX MONTHS ENDED
PER SHARE DATA: JUNE, 30 DECEMBER 31, 1993
1993(1) (UNAUDITED)
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<S> <C> <C>
Net asset value, beginning of period......................... $1.0000 $.9999
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INVESTMENTS OPERATIONS:
Investment income-net........................................ .0297 .0162
Net realized gain (loss) on investments...................... (.0001) _____
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TOTAL FROM INVESTMENT OPERATIONS........................... .0296 .0162
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DISTRIBUTIONS;
Dividends from investment income net......................... (.0297) (.0162)
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Net asset value, end of period............................... $.9999 $.9999
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TOTAL INVESTMENT RETURN (2) 3.25% 3.23%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets (2).................. .05% .27%
Ratio of net investment income to average net assets(2)...... 3.19% 3.20%
Decrease reflected in above expense ratios due to
undertakings by the Manager (2).............................. .51% .19%
Net Assets, end of period (000's Omitted)..................... $175,713 $253,304
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(1) From July 30, 1992 (commencement of operations) to June 30, 1993.
(2) Annualized.
See notes to financial statements.
</TABLE>
[TEXT]
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
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 exclusive 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.
(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.
The Fund may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the Manager, subject to the seller's
agreement to repurchase and the Fund's agreement to resell such securities
at a mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the Fund's custodian and, pursuant to
the terms of the repurchase agreement, must have an aggregate market
value greater than or equal to the repurchase price plus accrued interest
at all times. If the value of the underlying securities falls below
the value of the repurchase price plus accrued interest, the Fund
will require the seller to deposit additional collateral by the next
business day. If the request for additional collateral is not met,
or the seller defaults on its repurchase obligation, the Fund maintains
the right to sell the underlying securities at market value and may
claim any resulting loss against the seller.
(C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Fund
to declare dividends daily from investment income-net. Such dividends
are paid monthly. Dividends from net realized capital gain are normally
declared and paid annually, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy
of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue
to qualify as a regulated investment company, 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.
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-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 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 six months ended December 31, 1993, $59,569
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 $230,454 for the six months 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.
(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 the receipt of certain regulatory approvals and the
approvals of the stockholders of Dreyfus and of Mellon. The merger is expected
to occur in mid-1994, but could occur significantly later.
