PRESIDENT'S LETTER
Dear Shareholder:
Short-term interest rates during the past six months have continued at the
recent low levels, without any dramatic change. Accordingly, First Prairie
U.S. Treasury Securities Cash Management produced an annualized yield of 2.95%
for the semi-annual period ended November 30, 1993. Taking into account the
effect of compounding, the Fund produced an annualized effective yield of
2.99%.*
To obtain the maximum yields, the Fund's portfolio manager extended the
portfolio's average maturity to about 55 days.
For the immediate future, the Fund's portfolio manager intends to follow a
similar strategy because, though the economy is reviving, it does not
anticipate any strong upward movement in short-term rates in the early months
of 1994. To be sure, many economic indicators are moving upward. To cite just
a few, manufacturers' orders have increased, car and truck sales have been
strong, construction has picked up, the average workweek and overtime payments
have both increased, and there is a little progress in whittling down the
unemployment figures. Yet, inflation appears to remain under control, at least
for now.
If the pace of economic recovery quickens, it is bound eventually to
impact prices and wages. However, that might not occur for some months down
the road. At present, the Fund's portfolio manager does not anticipate much
change in short-term rate patterns until the second calendar quarter of 1994,
or later.
We will continue to follow the market movements constantly, and are geared
to change strategies if circumstances so require.
Sincerely,
(Joseph S. DiMartino Signature Logo)
Joseph S. DiMartino
President
December 9, 1993
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
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FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
STATEMENT OF INVESTMENTS NOVEMBER 30, 1993 (UNAUDITED)
ANNUALIZED
YIELD ON
DATE OF PRINCIPAL
U.S. TREASURY BILLS-56.6% PURCHASE AMOUNT VALUE
---------- ----------- ------------
<S> <C> <C> <C>
12/9/1993.................................................................. 2.97% $25,000,000 $ 24,983,597
1/13/1994.................................................................. 3.21 25,000,000 24,905,490
1/20/1994.................................................................. 3.10 70,000,000 69,700,625
2/3/1994................................................................... 3.10 60,000,000 59,672,356
5/5/1994................................................................... 3.28 22,500,000 22,191,614
6/30/1994.................................................................. 3.21 7,500,000 7,361,971
7/28/1994.................................................................. 3.27 7,500,000 7,341,414
8/25/1994.................................................................. 3.29 5,500,000 5,369,467
9/22/1994.................................................................. 3.45 15,000,000 14,588,229
------------
TOTAL U.S. TREASURY BILLS (cost $236,114,763).................................. $236,114,763
============
U.S. GOVERNMENT AGENCY-12.9%
Agency for International Development Floating Rate Notes(a)
1/1/2012................................................................... 3.34% $ 500,000 $ 500,000
2/21/2016.................................................................. 3.81 9,000,000 9,000,000
1/1/2018................................................................... 3.62 12,500,000 12,778,120
7/1/2018................................................................... 3.63 10,000,000 10,000,000
12/1/2018.................................................................. 4.09 7,500,000 7,564,920
7/1/2023................................................................... 3.50 14,100,000 14,100,000
------------
TOTAL U.S. GOVERNMENT AGENCY (cost $53,943,040)................................ $ 53,943,040
============
REPURCHASE AGREEMENTS-30.9%
Barclays de Zoete Wedd Securities Inc.
dated 11/30/1993, due 12/1/1993 in the amount of $75,006,667 (fully collateralized
by $75,990,000 U.S. Treasury Bills due 1/6/1994, value $75,769,840)........ 3.20% $75,000,000 $ 75,000,000
Fuji Securities Inc.
dated 11/30/1993, due 12/1/1993 in the amount of $54,004,875 (fully collateralized
by $12,460,000 U.S. Treasury Notes 8.875%, due 2/15/1996 and $42,065,000
U.S. Treasury Bills due from 5/19/1994 to 9/22/1994, value $55,096,461).... 3.25 54,000,000 54,000,000
------------
TOTAL REPURCHASE AGREEMENTS (cost $129,000,000)................................ $129,000,000
============
TOTAL INVESTMENTS (cost $419,057,803).................................. 100.4% $419,057,803
====== ============
LIABILITIES, LESS CASH AND RECEIVABLES................................. (.4%) $ (1,589,958)
====== ============
NET ASSETS............................................................. 100.0% $417,467,845
====== ============
NOTE TO STATEMENT OF INVESTMENTS;
(a) Variable interest rate - subject to periodic change.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
STATEMENT OF ASSETS AND LIABILITIES NOVEMBER 30, 1993 (UNAUDITED)
ASSETS:
<S> <C> <C>
Investments in securities, at value (including repurchase
agreements of $129,000,000)-Note 1(a,b)................................ $419,057,803
Interest receivable........................................................ 834,048
Prepaid expenses........................................................... 88,814
------------
419,980,665
LIABILITIES:
Due to The First National Bank of Chicago.................................. $ 29,958
Accrued expenses and other liabilities..................................... 2,482,862 2,512,820
---------- ------------
NET ASSETS $417,467,845
============
REPRESENTED BY:
Paid-in capital............................................................ $417,480,374
Accumulated net realized (loss) on investments............................. (12,529)
------------
NET ASSETS at value applicable to 417,480,374 outstanding shares of
Beneficial Interest, equivalent to $1.00 per share
(unlimited number of $.001 par value shares authorized).................... $417,467,845
============
STATEMENT OF OPERATIONS SIX MONTHS ENDED NOVEMBER 30, 1993 (UNAUDITED)
INVESTMENT INCOME:
INTEREST INCOME............................................................ $ 5,517,441
EXPENSES:
Management fee-Note 2(a)............................................... $ 606,372
Registration fees...................................................... 70,336
Custodian fees......................................................... 45,315
Professional fees...................................................... 24,079
Prospectus and shareholders' reports................................... 16,345
Shareholder servicing costs............................................ 4,846
Trustees' fees and expenses-Note 2(b).................................. 3,303
Miscellaneous.......................................................... 12,657
----------
783,253
Less-reduction in management fee due
to undertakings-Note 2(a).......................................... 373,305
----------
TOTAL EXPENSES................................................. 409,948
------------
INVESTMENT INCOME-NET.......................................................... 5,107,493
NET REALIZED (LOSS) ON INVESTMENTS-NOTE 1(B)................................... (8,652)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 5,098,841
============
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SIX MONTHS ENDED
MAY 31, NOVEMBER 30, 1993
1993* (UNAUDITED)
-------------- --------------
OPERATIONS:
<S> <C> <C>
Investment income-net...................................................... $ 5,009,723 $ 5,107,493
Net realized (loss) on investments......................................... (3,877) (8,652)
-------------- --------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... 5,005,846 5,098,841
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net...................................................... (5,009,723) (5,107,493)
-------------- --------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.............................................. 2,224,947,105 2,022,925,623
Dividends reinvested....................................................... 101,156 217,167
Cost of shares redeemed.................................................... (1,960,617,531) (1,870,193,146)
-------------- --------------
INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS........... 264,430,730 152,949,644
-------------- --------------
TOTAL INCREASE IN NET ASSETS....................................... 264,426,853 152,940,992
NET ASSETS:
Beginning of period........................................................ 100,000 264,526,853
-------------- --------------
End of period.............................................................. $ 264,526,853 $ 417,467,845
============== ==============
- ------------------
*From June 2, 1992 (commencement of operations) to May 31, 1993.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
FIRST PRAIRIE U.S. TREASURY SECURITIES 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 period indicated. This
information has been derived from information provided in the Fund's financial statements.
YEAR ENDED SIX MONTHS ENDED
MAY 31, NOVEMBER 30, 1993
PER SHARE DATA: 1993(1) (UNAUDITED)
-------------- --------------
<S> <C> <C>
Net asset value, beginning of period....................................... $1.0000 $1.0000
------- -------
INVESTMENT OPERATIONS;
Investment income-net...................................................... .0319 .0148
------- -------
DISTRIBUTIONS;
Dividends from investment income-net....................................... (.0319) (.0148)
------- -------
Net asset value, end of period............................................. $1.0000 $1.0000
======= =======
TOTAL INVESTMENT RETURN(2) 3.25% 2.97%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(2)................................. .02% .24%
Ratio of net investment income to average net assets(2).................... 3.10% 2.95%
Decrease reflected in above expense ratios due to
undertakings by the Manager(2)......................................... .47% .22%
Net Assets, end of period (000's Omitted).................................. $264,527 $417,468
- ---------------------
(1) From June 2, 1992 (commencement of operations) to May 31, 1993.
(2) Annualized.
See notes to financial statements.
</TABLE>
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
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 represents amortized
cost.
The Fund may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the Fund's 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
dditional 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, 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, 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 November 30, 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).
FIRST PRAIRIE U.S. TREASURY SECURITIES CASH MANAGEMENT
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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.
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 $373,305 for the six
months ended November 30, 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").
Upon closing of the merger, it is planned that Dreyfus will retain its New
York headquarters and will be a separate subsidiary within the Mellon
organization. It is expected that Dreyfus' management team and mutual fund
managers will remain in place, and the Dreyfus mutual funds will be operated
in the same manner as they are currently.
Following the merger, Dreyfus will be either a direct or indirect
subsidiary of Mellon, whose principal banking subsidiary is 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.
FIRST PRAIRIE
U.S. TREASURY SECURITIES
CASH MANAGEMENT
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. 371SA9311
FIRST
(First Prairie Logo)
PRAIRIE
U.S. TREASURY
SECURITIES CASH
MANAGEMENT
Semi-Annual Report
November 30, 1993
