<PAGE>
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FLORIDA
DAILY MUNICIPAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND 212/830-5200
================================================================================
Dear Shareholder:
We are pleased to present the annual report of Florida Daily Municipal Income
Fund for the year ended August 31, 1998.
The Fund had net assets of $144,804,106 and 850 active shareholders as of August
31, 1998.
We thank you for your support and look forward to continuing to serve your cash
management needs.
Sincerely,
\s\Steven W. Duff
Steven W. Duff
President
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<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS
AUGUST 31, 1998
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
-----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- -------
Other Tax Exempt Investments (13.86%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,000,000 County of Belknap, NH TAN (b) 12/29/98 3.65% $ 3,000,379
2,000,000 Davis County, UT TRAN (b) 12/31/98 3.69 2,003,222
750,000 Halifax Hospital Medical Center, Daytona Beach, FL
LOC Barnett Bank of Jacksonville 04/15/99 3.60 751,565 MIG-1
525,000 Palm Beach County School District Bonds (b)
AMBAC Insured 08/01/99 3.53 533,055
4,000,000 Salem, NH TAN (b) 12/17/98 3.64 4,000,554
2,750,000 School District of Martin County, FL TAN 06/30/99 3.57 2,758,355 MIG-1
5,000,000 School District of Miami - Dade County, FL TAN 06/30/99 3.52 5,017,177 MIG-1
2,000,000 School District of Palm Beach County, FL TAN - Series 1997 10/13/98 3.70 2,001,661 SP-1+
----------- -----------
20,025,000 Total Other Tax Exempt Investments 20,065,968
----------- -----------
<CAPTION>
Other Variable Rate Demand Instruments (c) (62.55%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 400,000 Broward County, FL IDRB (Allied Signal Incorporated) 03/01/99 3.35% $ 400,000 A1
2,100,000 Citrus Park Community Development District
Capital Improvement Bonds - Series 1996
LOC Dresdner Bank A.G. 11/01/16 3.22 2,100,000 VMIG-1
2,450,000 City of Gainsville, FL IDRB (Heat - Pipe Technology, Inc. Project)
LOC Amsouth Bank 05/01/18 3.45 2,450,000 Aa3
500,000 City of Tampa, FL Occupation License Tax Boards - Series 1996A
FGIC Insured 10/01/18 3.22 500,000 VMIG-1 A1+
3,500,000 Dade County, FL HFA MHRB (Gables Point) - Series 1985
Fannie Mae Collateralized 05/15/05 3.25 3,500,000 A1+
2,500,000 Dade County, FL IDA RB (Florida Convalescent Association)
LOC Bank of Tokyo - Mitsubishi, Ltd. 12/01/11 3.80 2,500,000 VMIG-1
4,215,000 Escambia County, FL IDRB (Gelman Sciences, Inc. Project)
LOC National Bank of Detroit 07/01/04 3.30 4,215,000 A1+
1,200,000 Florida Development Finance Co. (Intrepid Powerboats, Inc.) (b)
LOC Sun Trust Bank 06/01/23 3.50 1,200,000
1,000,000 Florida Development Finance Co. (Suncoast Bakeries, Inc.) (b)
LOC Sun Trust Bank 06/01/23 3.50 1,000,000
1,000,000 Florida HFA (Heron Park Project) - Series V
LOC NationsBank 12/01/29 3.37 1,000,000 VMIG-1
2,875,000 Florida HFA (Tiffany Club Project)
LOC NationsBank 09/01/26 3.37 2,875,000 VMIG-1
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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================================================================================
<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>
$ 1,000,000 Florida HFA MHRB
(Monterey Meadows Apartment Project) - Series 1985
LOC Citibank 12/01/07 3.20% $ 1,000,000 A1+
1,000,000 Florida State Board of Education Capital Outlay 01/01/14 3.20 1,000,000 A1+
580,000 Gulf Breeze, FL RB - Series 1985B
FGIC Insured 12/01/15 3.25 580,000 VMIG-1 A1+
995,000 Gulf Breeze, FL RB - Series 1985C
FGIC Insured 12/01/15 3.25 995,000 VMIG-1 A1+
2,500,000 Highlands County, FL IDRB - Series 1997 (b)
LOC PNC Bank, N.A. 12/01/17 3.45 2,500,000
1,000,000 Highlands County, FL Health Facility Authority RB
(Adventist Health System/Sunbolt Inc.) - Series 1996B
LOC Capital Markets Assurance Corp. 10/01/26 3.30 1,000,000 VMIG-1 A1+
1,080,000 Hillsborough County, FL IDA (ADP Inc. Project) (b) 02/01/01 4.05 1,080,000
8,800,000 Illinois HEFA (Northwestern Memorial Hospital) 08/15/25 3.35 8,800,000 VMIG-1 A1+
1,000,000 Indian River County, FL IDRB (Florida Convention Centers Project)
LOC Toronto-Dominion Bank 01/01/11 3.65 1,000,000 P1
1,000,000 Jacksonville, FL Educational Facilities RB
(Jacksonville University Project)
LOC First Union National Bank 10/03/22 3.20 1,000,000 A1+
1,000,000 Jacksonville, FL IDRB
(University of Florida Health Science Center) - Series 1989
LOC Barnett Bank of Jacksonville 07/01/19 3.45 1,000,000 VMIG-1
1,500,000 Jacksonville, FL EDA IDRB (Crown Products, Inc. Project) (b)
LOC Sun Trust Bank 04/01/13 3.50 1,500,000
100,000 King George County, VA IDA Birchwood Power Partners
LOC Credit Suisse First Boston 10/01/24 3.40 100,000 A1+
710,000 Lee, FL IDRB (Christian & Missionary Alliance) - Series 1985
LOC Banque Nationale De Paris 04/01/10 3.32 710,000 A1
1,700,000 Marion County, FL IDA
(Hamilton Products, Incorporation Project) - Series 1995 (b)
LOC Comerica Bank 11/01/15 3.55 1,700,000
3,000,000 Matagorda County, TX Naval District #1
(Houston Light and Power Company)
AMBAC Insured 11/01/28 3.40 3,000,000 VMIG-1 A1+
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1998
================================================================================
<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>
$ 2,000,000 Miami-Dade County, FL IDA Professional Modification
LOC Bankers Trust 08/01/18 3.32% $ 2,000,000 A1
2,000,000 North Carolina Educational Facilities
(Duke Universtiy) - Series1987 A 12/01/17 3.20 2,000,000 VMIG-1 A1+
2,150,000 North Carolina Medcare Commission Hospital
(Duke Universtiy) - Series A 06/01/23 3.20 2,150,000 VMIG-1 A1+
800,000 Ocean Highway & Port Authority, FL RB - Series 1990
LOC ABN AMRO Bank N.V. 12/01/20 3.30 800,000 VMIG-1
4,800,000 Ocean Highway & Port Authority, FL RB
(Port, Airport & Marina Improvement)
LOC ABN AMRO Bank N.V. 12/01/20 3.30 4,800,000 VMIG-1 A1+
1,000,000 Orange County, FL Health Facilities Authority RB
(Adventist Health System/Sunbelt Obligation)
LOC Rabobank Nederland 11/15/26 3.25 1,000,000 A1+
2,400,000 Orange County, FL HFA MHRB (Post Lake Project)
Fannie Mae Collateralized 06/01/25 3.30 2,400,000 A1+
1,500,000 Orange County, FL HFA RB (Smokewood/Sun) - Series A
LOC Citibank 12/01/22 3.35 1,500,000 A1+
6,840,000 Orange County, FL HFFA
(Mayflower Retirement Company Project) - Series 1998
LOC Rabobank Nederland 03/01/18 3.25 6,840,000 A1+
950,000 Orange County, FL IDRB
(Florida Convention Centers Project) - Series A
LOC Toronto-Dominion Bank 01/01/11 3.60 950,000 P1
3,300,000 Okeechobee County, FL Solid Waste
(Chambers Waste System of Florida)
LOC Morgan Guaranty Trust Company 03/01/06 3.45 3,300,000 A1+
2,000,000 Palm Beach County, FL RB
(Jewish Community Campus Corporation)
AMBAC Insured 05/01/25 3.20 2,000,000 A1+
600,000 Palm Beach County, FL IDRB
LOC Bank of Tokyo - Mitsubishi, Ltd. 11/01/11 3.80 600,000 VMIG-1
1,000,000 Pinellas County, FL (Indian Country Project) (b)
LOC Wachovia Bank & Trust Co., N.A. 10/01/01 3.25 1,000,000
1,000,000 Pinellas County, FL Industry Council IDRB
(Genca Corporation Project) (b)
LOC PNC Bank, N.A. 11/01/09 3.50 1,000,000
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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================================================================================
<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>
$ 2,200,000 St. Johns County, FL IDA Health Facility Revenue
(Coastal Health Care Investor)
LOC Kredietbank 12/01/16 3.45% $ 2,200,000 A1
1,500,000 St. Lucie County, FL Solid Waste (Florida Power & Light Company) 01/01/27 3.50 1,500,000 VMIG-1 A1+
925,000 Suwannee County, FL (Advent Christian Village Project) - Series 1989
LOC Barnett Bank of Jacksonville 10/01/19 3.40 925,000 VMIG-1
1,000,000 Tamarac City, FL IDRB
(Arch Aluminum & Glass Company) - Series 1995 (b)
LOC PNC Bank, N.A. 11/01/15 3.35 1,000,000
1,900,000 University of North Florida
LOC First Union National Bank 11/01/24 3.25 1,900,000 VMIG-1
2,000,000 Volusia County Health Facility Authority RB - Series A
LOC First Union National Bank 11/15/23 3.20 2,000,000 A1
----------- -----------
90,570,000 Total Other Variable Rate Demand Instruments 90,570,000
----------- -----------
<CAPTION>
Put Bonds (d) (3.11%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Putnam County, FL Development Authority
(Seminole Electric) - Series 1984 D
LOC National Rural Utilities Cooperative Finance Corp. 12/15/98 3.65% $ 1,000,000 VMIG-1 A1+
3,500,000 Putnam County, FL Development Authority
(Seminole Electric) - Series H-3
LOC National Rural Utilities Cooperative Finance Corp. 09/15/98 3.50 3,500,000 MIG-1 A1+
----------- -----------
4,500,000 Total Put Bonds 4,500,000
----------- -----------
<CAPTION>
Revenue Bonds (3.18%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,605,000 Bell County Health Facilities RB
(Colonial Texas Pooled Health Care) (b) 10/01/98 3.62% $ 1,606,279
3,000,000 The School District of Broward County, FL 04/20/99 3.65 3,005,485 MIG-1 SP1+
----------- -----------
4,605,000 Total Revenue Bonds 4,611,764
----------- -----------
<CAPTION>
Tax Exempt Commercial Paper (17.30%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,543,000 City of Gainesville, FL (Utilities System) - Series C 09/30/98 3.75% $ 1,543,000 P1 A1+
3,200,000 City of Gainesville, FL (Utilities System) - Series C 10/14/98 3.60 3,200,000 P1 A1+
1,100,000 City of Orlando, FL Capital Improvement 09/10/98 3.50 1,100,000 P1 A1+
1,200,000 Florida Municipal Power Agency Initial Pooled Loan Project - Series A
LOC First Union National Bank 09/09/98 3.70 1,200,000 P1 A1
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
AUGUST 31, 1998
================================================================================
<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>
$ 1,000,000 Florida Municipal Power Agency Intital Pooled Loan Project - Series A
LOC First Union National Bank 10/08/98 3.65% $ 1,000,000 P1 A1
2,200,000 Palm Beach County, FL HFA
MBIA Insured 12/09/98 3.80 2,200,000 VMIG-1 A1+
2,000,000 Sarasota County Public Hospital District RB
(Sarasota Memorial Hospital) 09/15/98 3.75 2,000,000 VMIG-1
2,150,000 Sarasota County Public Hospital District RB
(Sarasota Memorial Hospital)
LOC Sun Trust Bank 12/15/98 3.55 2,150,000 VMIG-1 A1+
1,660,000 Sarasota County Public Hospital District
(Sarasota Memorial Hospital) - Series A
LOC Sun Trust Bank 10/15/98 3.40 1,660,000 VMIG-1 A1+
6,000,000 Sunshine State Government Finance Commission RB
AMBAC Insured 09/14/98 3.75 6,000,000 VMIG-1
2,000,000 Sunshine State Government Finance Commission RB - Series 1986
AMBAC Insured 09/09/98 3.70 2,000,000 VMIG-1
1,000,000 West Orange Memorial Tax District RB - Series 1991A
LOC Rabobank Nederland 09/09/98 3.70 1,000,000 VMIG-1
----------- -----------
25,053,000 Total Tax Exempt Commercial Paper 25,053,000
----------- -----------
Total Investments (100.00%) (Cost $144,800,732+) 144,800,732
Cash and Other Assets In Excess of Liabilities (0.00%) 3,374
-----------
Net Assets (100.00%) $144,804,106
===========
Net Asset Value, offering and redemption price per share:
Class A Shares, 119,753,050 Shares Outstanding (Note 3) $ 1.00
===========
Class B Shares, 25,049,290 Shares Outstanding (Note 3) $ 1.00
===========
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
- --------------------------------------------------------------------------------
================================================================================
FOOTNOTES:
(a) The ratings noted for variable rate demand instruments are those of the
bank whose letter of credit secures such instruments or the guarantor of
the bond. P1 and A1+ are the highest ratings assigned for tax exempt
commercial paper.
(b) Securities that are not rated which the Fund's Board of Trustees has
determined to be of comparable quality to those rated securities in which
the Fund invests.
(c) Securities payable on demand at par including accrued interest (usually
with seven days notice) and, if indicated, unconditionally secured as to
principal and interest by a bank letter of credit. The interest rates are
adjustable and are based on bank prime rates or other interest rate
adjustment indices. The rate shown is the rate in effect at the date of
this statement.
(d) The maturity date indicated is the next put date.
<TABLE>
<CAPTION>
KEY:
<S> <C> <C> <C> <C> <C>
EDA = Economic Development Authority IDRB = Industrial Development Revenue Bond
FGIC = Financial Guaranteed Insurance Company LOC = Letter of Credit
FSA = Financial Securities Assurance MHRB = Multi-family Housing Revenue Bond
HEFA = Health and Education Facilities Authority PCRB = Pollution Control Revenue Bond
HFA = Housing Finance Authority RAN = Revenue Anticipation Note
HFFA = Health Facility Finance Authority RB = Revenue Bond
HRB = Hospital Revenue Bond TRAN = Tax and Revenue Anticipation Note
IDA = Industrial Development Authority
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1998
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest.................................................................... $ 4,890,965
----------------
Expenses: (Note 2)
Investment management fee................................................... 541,446
Administration fee.......................................................... 284,259
Shareholder servicing fee................................................... 285,729
Custodian fee............................................................... 12,916
Shareholder servicing and related shareholder expenses...................... 67,149
Legal, compliance and filing fees........................................... 39,654
Audit and accounting........................................................ 60,252
Trustees' fees.............................................................. 6,083
Amortization of organization expenses....................................... 11,443
Other....................................................................... 8,808
----------------
Total expenses........................................................... 1,317,739
Less: Fees waived (Note 2)............................................... ( 365,476)
----------------
Net expenses............................................................. 952,263
----------------
Net investment income.......................................................... 3,938,702
REALIZED GAIN (LOSS) ON INVESTMENTS
Net realized gain (loss) on investments........................................ 5,663
----------------
Increase in net assets from operations......................................... $ 3,944,365
================
</TABLE>
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See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
YEARS ENDED AUGUST 31, 1998 AND 1997
================================================================================
<TABLE>
<CAPTION>
1998 1997
------------------ ------------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income...................................... $ 3,938,702 $ 2,632,561
Net realized gain (loss) on investments.................... 5,663 -0-
------------------ ------------------
Increase in net assets from operations.......................... 3,944,365 2,632,561
Dividends to shareholders from net investment income:
Class A.................................................... ( 3,272,717)* ( 2,143,306)*
Class B.................................................... ( 665,985)* ( 489,255)*
Transactions in shares of beneficial interest (Note 3):
Class A.................................................... 23,066,896 59,926,041
Class B.................................................... 13,266,676 2,169,867
------------------ ------------------
Total increase......................................... 36,339,235 62,095,908
Net assets:
Beginning of year.......................................... 108,464,871 46,368,963
------------------ ------------------
End of year................................................ $ 144,804,106 $ 108,464,871
================== ==================
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements.
<PAGE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
================================================================================
1. Summary of Accounting Policies.
Florida Daily Municipal Income Fund, a Massachusetts Business Trust, is a
no-load, non-diversified, open-end management investment company registered
under the Investment Company Act of 1940. The Fund is a short-term, tax exempt
money market fund. The Fund has two classes of stock authorized, Class A and
Class B. The Class A shares are subject to a service fee pursuant to the
Distribution and Service Plan. The Class B shares are not subject to a service
fee. Additionally, the Fund may allocate among its classes certain expenses, to
the extent allowable to specific classes, including transfer agent fees,
government registration fees, certain printing and postage costs, and
administrative and legal expenses. Class Specific expenses of the Fund were
limited to distribution fees and transfer agent expenses. In all other respects
the Class A and Class B shares represent the same interest in the income and
assets of the 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 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. (Manager) at the annual rate of .40%
of the Fund's average daily net assets.
Pursuant to an Administrative Services Contract the Fund pays to the Manager an
annual fee of .21% of the Fund's average daily net assets.
- --------------------------------------------------------------------------------
<PAGE>
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================================================================================
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 Reich & Tang Distributors, Inc. (the Distributor) have
entered into a Distribution Agreement and a Shareholder Servicing Agreement,
only with respect to Class A shares of the Fund. For its services under the
Shareholder Servicing Agreement, the Distributor receives from the Fund with
respect only to the Class A shares, a fee equal to .25% of the Fund's average
daily net assets. There were no additional expenses borne by the Fund pursuant
to the Distribution Plan.
During the year ended August 31, 1998, the Manager voluntarily waived investment
management fees and administration fees of $94,753 and $270,723, respectively.
Fees are paid to Trustees who are unaffiliated with the Manager on the basis of
$1,000 per annum plus $250 per meeting attended.
Included in the Statement of Operations under the caption "Shareholder servicing
and related shareholder expenses" are fees of $59,396 paid to Reich & Tang
Services, Inc., an affiliate of the Manager, as servicing agent for the Fund.
3. Transactions in Shares of Beneficial Interest.
At August 31, 1998, an unlimited number of shares of beneficial interest ($.01
par value) were authorized and capital paid in amounted to $144,802,340.
Transactions, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Class A Year Ended Year Ended
August 31, 1998 August 31, 1997
--------------- ---------------
<S> <C> <C>
Sold............................................ 320,606,336 290,402,555
Issued on reinvestment of dividends............. 3,368,914 2,012,037
Redeemed........................................ ( 300,908,354) ( 232,488,551)
--------------- ---------------
Net increase ................................... 23,066,896 59,926,041
=============== ===============
Class B Year Ended Year Ended
August 31, 1998 August 31, 1997
--------------- ---------------
Sold............................................ 133,547,316 92,064,894
Issued on reinvestment of dividends............. 633,588 461,971
Redeemed........................................ ( 120,914,228) ( 90,356,998)
--------------- ---------------
Net increase.................................... 13,266,676 2,169,867
=============== ===============
</TABLE>
4. Sales of Securities.
Accumulated undistributed realized gain at August 31, 1998, amounted to $1,766.
5. Concentration of Credit Risk.
The Fund invests primarily in obligations of political subdivisions of the State
of Florida and, accordingly, is subject to the credit risk associated with the
non-performance of such issuers. Approximately 50% of these investments are
further secured, as to principal and interest, by letters of credit issued by
financial institutions. The Fund maintains a policy of monitoring its exposure
by reviewing the credit worthiness of the issuers, as well as that of the
financial institutions issuing the letters of credit, and by limiting the amount
of holdings with letters of credit from one financial institution.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
================================================================================
<TABLE>
<CAPTION>
6. Financial Highlights.
Year Ended Year Ended Year Ended Period Ended
Class A August 31, 1998 August 31, 1997 August 31, 1996 August 31, 1995**
- ------- --------------- --------------- --------------- -----------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- -------------
Income from investment operations:
Net investment income...................... 0.029 0.030 0.031 0.032
Less distributions:
Dividends from net investment income....... ( 0.029 ) ( 0.030 ) ( 0.031 ) ( 0.032 )
------------- ------------- ------------- -------------
Net asset value, end of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= =============
Total Return................................. 2.92% 3.08% 3.09% 3.60%*
Ratios/Supplemental Data
Net assets, end of period (000).............. $ 119,754 $ 96,683 $ 36,758 $ 20,974
Ratios to average net assets:
Expenses (Net of waivers and reimbursements). 0.75% 0.57% 0.56% 0.40%*
Net investment income........................ 2.86% 3.03% 3.05% 3.54%*
Expenses paid indirectly..................... -- -- 0.06% --
Management and Administration fees waived
and expense reimbursed..................... 0.27% 0.51% 0.67% 0.95%*
Year Ended Year Ended Year Ended Period Ended
Class B August 31, 1998 August 31, 1997 August 31, 1996 August 31, 1995**
- ------- --------------- --------------- --------------- -----------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C>
Net asset value, beginning of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00
------------- ------------- ------------- -------------
Income from investment operations:
Net investment income...................... 0.032 0.033 0.033 0.036
Less distributions:
Dividends from net investment income....... ( 0.032 ) ( 0.033 ) ( 0.033 ) ( 0.036 )
------------- ------------- ------------- -------------
Net asset value, end of period............... $ 1.00 $ 1.00 $ 1.00 $ 1.00
============= ============= ============= =============
Total Return................................. 3.22% 3.34% 3.35% 3.84%*
Ratios/Supplemental Data
Net assets, end of period (000).............. $ 25,050 $ 11,782 $ 9,611 $ 10,174
Ratios to average net assets:
Expenses (Net of waivers and reimbursements). 0.46% 0.30% 0.31% 0.14%*
Net investment income........................ 3.16% 3.27% 3.34% 3.78%*
Expenses paid indirectly..................... -- -- 0.06% --
Management and Administration fees waived
and expense reimbursed..................... 0.27% 0.51% 0.67% 0.95%*
* Annualized
** Class A commenced operations on October 6, 1994 and Class B commenced operations on September 19, 1994.
</TABLE>
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FLORIDA DAILY MUNICIPAL INCOME FUND
INDEPENDENT AUDITOR'S REPORT
================================================================================
The Board of Trustees and Shareholders
Florida Daily Municipal Income Fund
We have audited the accompanying statement of net assets of Florida Daily
Municipal Income Fund as of August 31, 1998 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 the financial highlights for
each of the three years in the period then ended and for the period from
September 19, 1994 (Commencement of Operations) to August 31, 1995. 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
August 31, 1998, by correspondence with the custodian. 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
Florida Daily Municipal Income Fund as of August 31, 1998, the results of its
operations, the changes in its net assets and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
\s\McGladrey & Pullen, LLP
New York, New York
September 25, 1998
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<PAGE>
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FLORIDA
DAILY
MUNICIPAL
INCOME
FUND
Annual Report
August 31, 1998
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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.
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Florida Daily Municipal Income Fund
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
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