<PAGE>
FLORIDA
DAILY MUNICIPAL 600 FIFTH AVENUE, NEW YORK, N.Y. 10020
INCOME FUND 212/830-5200
================================================================================
Dear Shareholder:
We are pleased to present the semi-annual report of Florida Daily Municipal
Income Fund for the period September 1, 1998 through February 28, 1999.
The Fund had net assets of $74,245,630 and 923 active shareholders as of
February 28, 1999.
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
<PAGE>
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS
FEBRUARY 28, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Tax Exempt Investments (12.18%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 750,000 Halifax Hospital Medical Center, Daytona Beach, FL
LOC NationsBank 04/15/99 3.60% $ 750,312 MIG-1
525,000 Palm Beach County School District Bonds (b)
AMBAC Insured 08/01/99 3.63 528,690
2,750,000 School District of Martin County, FL TAN 06/30/99 3.57 2,753,347 MIG-1
5,000,000 School District of Miami - Dade County, FL TAN 06/30/99 3.52 5,006,882 MIG-1
----------- -----------
9,025,000 Total Other Tax Exempt Investments 9,039,231
----------- -----------
<CAPTION>
Other Variable Rate Demand Instruments (c) (63.27%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,000,000 Alachua County, FL IDA (Florida Rock Industries, Inc.)
LOC NationsBank 11/01/22 3.00% $ 1,000,000 A1+
400,000 Broward County, FL IDRB (Allied Signal Incorporated) 03/01/99 2.95 400,000 A1
2,450,000 City of Gainesville, FL IDRB
(Heat - Pipe Technology, Inc. Project) (b)
LOC Amsouth Bank 05/01/18 3.10 2,450,000
500,000 City of Tampa, FL Occupation License Tax Boards - Series 1996A
FGIC Insured 10/01/18 2.90 500,000 VMIG-1 A1+
4,215,000 Escambia County, FL IDRB (Gelman Sciences, Inc. Project)
LOC National Bank of Detroit 07/01/04 2.85 4,215,000 A1+
1,200,000 Florida Development Finance Company
(Intrepid Powerboats, Inc.) (b)
LOC Sun Trust Bank 06/01/23 3.15 1,200,000
1,000,000 Florida HFA (Heron Park Project) - Series V
LOC NationsBank 12/01/29 3.00 1,000,000 VMIG-1
2,875,000 Florida HFA (Tiffany Club Project)
LOC NationsBank 09/01/26 3.00 2,875,000 VMIG-1
1,000,000 Florida State Board of Education (Capital Outlay Project) 12/15/08 2.99 1,000,000 A1+
3,300,000 Greater Orlando Aviation Authority (Airport Facility Project)
FGIC Insured 10/01/23 3.40 3,300,000 VMIG-1 A1+
580,000 Gulf Breeze, FL RB - Series 1985B
FGIC Insured 12/01/15 2.95 580,000 VMIG-1 A1+
995,000 Gulf Breeze, FL RB - Series 1985C
FGIC Insured 12/01/15 2.95 995,000 VMIG-1 A1+
2,500,000 Highlands County, FL IDRB - Series 1997 (b)
LOC PNC Bank, N.A. 12/01/17 3.10 2,500,000
</TABLE>
See Notes to Financial Statements.
<PAGE>
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Other Variable Rate Demand Instruments (c) (63.27%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,700,000 Highlands County, FL Health Facility Authority RB
(Adventist Health System/Sunbolt Inc.) - Series 1996B
LOC Capital Markets Assurance Corp. 10/01/26 3.00% $ 3,700,000 VMIG-1 A1+
900,000 Indian River County, FL IDRB (Florida Convention Centers Project)
LOC Toronto-Dominion Bank 01/01/11 3.05 900,000 P1
710,000 Lee, FL IDRB (Christian & Missionary Alliance) - Series 1985
LOC Banque Nationale De Paris 04/01/10 3.02 710,000 A1
1,650,000 Marion County, FL IDA
(Hamilton Products, Incorporation Project) - Series 1995 (b)
LOC Comerica Bank 11/01/15 3.02 1,650,000
2,000,000 Miami-Dade County, FL IDA Professional Modification
LOC Bankers Trust Company 08/01/18 3.10 2,000,000 A1
700,000 Ocean Highway & Port Authority, FL RB - Series 1990
LOC ABN AMRO Bank N.V. 12/01/20 2.85 700,000 VMIG-1
4,100,000 Ocean Highway & Port Authority, FL RB
(Port, Airport & Marina Improvement)
LOC ABN AMRO Bank N.V. 12/01/20 2.85 4,100,000 VMIG-1 A1+
1,000,000 Orange County, FL Health Facilities Authority RB
(Adventist Health System/Sunbelt Obligation)
LOC Rabobank Nederland 11/15/26 2.95 1,000,000 A1+
900,000 Orange County, FL IDRB
(Florida Convention Centers Project) - Series A
LOC Toronto-Dominion Bank 01/01/11 3.00 900,000 P1
3,300,000 Okeechobee County, FL Solid Waste
(Chambers Waste System of Florida)
LOC Morgan Guaranty Trust Company 03/01/06 3.05 3,300,000 A1+
2,000,000 Palm Beach County, FL IDRB (Northern Gallery of Arts Project)
LOC Northern Trust 05/01/25 2.80 2,000,000 A1+
1,000,000 Pinellas County, FL Industry Council IDRB
(Genca Corporation Project) (b)
LOC PNC Bank, N.A. 11/01/09 3.15 1,000,000
900,000 Polk County, FL IDRB (Florida Convention Center Project)
LOC Toronto-Dominion Bank 01/01/11 3.00 900,000 P1
2,100,000 St. Johns County, FL IDA Health Facility Revenue
(Coastal Health Care Investor)
LOC Kredietbank 12/01/16 3.05 2,100,000 A1
------------ ------------
46,975,000 Total Other Variable Rate Demand Instruments 46,975,000
------------ ------------
</TABLE>
See Notes to Financial Statements.
<PAGE>
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF NET ASSETS (CONTINUED)
FEBRUARY 28, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
Ratings (a)
----------------
Face Maturity Value Standard
Amount Date Yield (Note 1) Moody's & Poor's
------ ---- ----- ------ ------- ------
Put Bond (d) (2.69%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 2,000,000 Putnam County, FL Development Authority
(Seminole Electric) - Series 1984 D
LOC National Rural Utilities Cooperative Finance Corporation 06/15/99 2.85% $ 2,000,000 VMIG-1 A1+
------------ ------------
2,000,000 Total Put Bond 2,000,000
------------ ------------
<CAPTION>
Revenue Bond (4.04%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 3,000,000 The School District of Broward County, FL 04/20/99 3.65% $ 3,001,187 MIG-1 SP1+
------------ ------------
3,000,000 Total Revenue Bond 3,001,187
------------ ------------
<CAPTION>
Tax Exempt Commercial Paper (14.48%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$ 1,100,000 City of Orlando, FL Capital Improvement 03/11/99 3.15% $ 1,100,000 P1 A1+
200,000 City of Orlando, FL Capital Improvement 03/11/99 3.00 200,000 P1 A1+
1,000,000 Palm Beach County, FL HFA
MBIA Insured 04/08/99 2.95 1,000,000 VMIG-1 A1+
2,200,000 Palm Beach County, FL HFA
MBIA Insured 07/28/99 2.85 2,200,000 VMIG-1 A1+
2,150,000 Sarasota County Public Hospital District RB
(Sarasota Memorial Hospital)
LOC Sun Trust Bank 04/06/99 2.90 2,150,000 VMIG-1 A1+
1,000,000 St. Lucie County, FL PCRB
(Florida Power & Light) 05/12/99 2.90 1,000,000 VMIG-1 A1+
2,000,000 Sunshine State Government Finance Commission RB - Series 1986
AMBAC Insured 05/19/99 2.85 2,000,000 A1+
1,100,000 West Orange Memorial Tax District RB - Series 1991A
LOC Rabobank Nederland 04/07/99 2.95 1,100,000 VMIG-1
------------ ------------
10,750,000 Total Tax Exempt Commercial Paper 10,750,000
------------ ------------
Total Investments (96.66%) (Cost $71,765,418+) 71,765,418
Cash and Other Assets in Excess of Liabilities (3.34%) 2,480,212
------------
Net Assets (100.00%) $ 74,245,630
============
Net Asset Value, offering and redemption price per share:
Class A Shares, 55,141,342 Shares Outstanding (Note 3) $ 1.00
============
Class B Shares, 19,104,288 Shares Outstanding (Note 3) $ 1.00
============
+ Aggregate cost for federal income tax purposes is identical.
</TABLE>
See Notes to Financial Statements.
<PAGE>
================================================================================
FOOTNOTES:
(a) Unless the variable rate demand instruments are assigned their own ratings,
the ratings are those of the holding company of the bank whose letter of
credit guarantees the issue or the insurance company who insures the issue.
All letters of credit and insurance are irrevocable and direct pay covering
both principal and interest. Certain issuers have either a line of credit,
a liquidity facility, a standby purchase agreement or some other financing
mechanism to ensure the remarketing of the securities. This is not a
guarantee and does not serve to insure or collateralize the issue.
(b) Securities that are not rated 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>
AMBAC = American Municipal Bond Assurance Corporation MBIA = Municipal Bond Insurance Association
FGIC = Financial Guaranteed Insurance Company PCRB = Pollution Control Revenue Bond
HFA = Housing Finance Authority RB = Revenue Bond
IDA = Industrial Development Authority TAN = Tax Anticipation Note
IDRB = Industrial Development Revenue Bond TRAN = Tax and Revenue Anticipation Note
LOC = Letter of Credit
</TABLE>
See Notes to Financial Statements.
<PAGE>
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1999
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C>
Income:
Interest....................................................................$ 1,886,848
----------------
Expenses: (Note 2)
Investment management fee................................................... 227,069
Administration fee.......................................................... 119,211
Shareholder servicing fee (Class A)......................................... 98,154
Custodian fee............................................................... 10,439
Shareholder servicing and related shareholder expenses...................... 23,534
Legal, compliance and filing fees........................................... 13,520
Audit and accounting........................................................ 24,207
Trustees' fees.............................................................. 3,053
Amortization of organization expenses....................................... 5,674
Other....................................................................... 3,445
----------------
Total expenses........................................................... 528,306
Less: Fees waived (Note 2)...............................................( 153,272)
Less: Expenses paid indirectly (Note 2)..................................( 54)
----------------
Net expenses............................................................. 374,980
----------------
Net investment income.......................................................... 1,511,868
<CAPTION>
REALIZED GAIN (LOSS) ON INVESTMENTS
<S> <C>
Net realized gain (loss) on investments........................................ -0-
----------------
Increase in net assets from operations.........................................$ 1,511,868
================
</TABLE>
See Notes to Financial Statements.
<PAGE>
FLORIDA DAILY MUNICIPAL INCOME FUND
STATEMENTS OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Six Months
Ended Year
February 28, 1999 Ended
(Unaudited) August 31, 1998
--------- ---------------
INCREASE (DECREASE) IN NET ASSETS
<S> <C> <C>
Operations:
Net investment income........................................ $ 1,511,868 $ 3,938,702
Net realized gain (loss) on investments...................... -0- 5,663
----------------- ------------------
Increase in net assets from operations........................... 1,511,868 3,944,365
Dividends to shareholders from:
Net investment income:
Class A...................................................... ( 1,015,936)* ( 3,272,717)*
Class B...................................................... ( 495,932)* ( 665,985)*
Net realized gain on investments:
Class A...................................................... ( 1,463) ( -- )
Class B...................................................... ( 303) ( -- )
Transactions in shares of beneficial interest (Note 3):
Class A...................................................... ( 64,611,708) 23,066,896
Class B...................................................... ( 5,945,002) 13,266,676
----------------- ------------------
Total increase........................................... ( 70,558,476) 36,339,235
Net assets:
Beginning of period.......................................... 144,804,106 108,464,871
----------------- ------------------
End of period................................................ $ 74,245,630 $ 144,804,106
================= ==================
* Designated as exempt-interest dividends for federal income tax purposes.
</TABLE>
See Notes to Financial Statements.
<PAGE>
FLORIDA DAILY MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
================================================================================
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>
================================================================================
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 period ended February 28, 1999 the Manager voluntarily waived
investment management fees and administration fees of $39,737 and $113,535,
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 $21,486 paid to Reich & Tang
Services, Inc., an affiliate of the Manager, as servicing agent for the Fund.
Also included in the Statement of Operations under the caption "Shareholder
servicing and related shareholder expenses" are expense offsets of $54.
3. Transactions in Shares of Beneficial Interest.
At February 28, 1999, an unlimited number of shares of beneficial interest ($.01
par value) were authorized and capital paid in amounted to $74,245,630.
Transactions, all at $1.00 per share, were as follows:
<TABLE>
<CAPTION>
Class A Six Months Ended Year Ended
February 28, 1999 August 31, 1998
----------------- ---------------
<S> <C> <C>
Sold............................................ 102,135,819 320,606,336
Issued on reinvestment of dividends............. 913,204 3,368,914
Redeemed........................................ ( 167,660,731) ( 300,908,354)
---------------- ----------------
Net increase (decrease)......................... ( 64,611,708) 23,066,896
================ ================
<CAPTION>
Class B Six Months Ended Year Ended
February 28, 1999 August 31, 1998
----------------- ----------------
<S> <C> <C>
Sold............................................ 113,555,327 133,547,316
Issued on reinvestment of dividends............. 466,480 633,588
Redeemed........................................ ( 119,966,809) ( 120,914,228)
---------------- ----------------
Net increase (decrease)......................... ( 5,945,002) 13,266,676
================ ================
</TABLE>
4. 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 64% 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)
(UNAUDITED)
================================================================================
<TABLE>
<CAPTION>
5. Financial Highlights.
Year Ended August 31,
Six Months Ended --------------------------------- Period Ended
Class A February 28, 1999 1998 1997 1996 August 31, 1995**
------- ----------------- -------- -------- -------- -----------------
Per Share Operating Performance:
(for a share outstanding throughout the period)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........................ 0.013 0.029 0.030 0.031 0.032
Less distributions:
Dividends from net investment income......... ( 0.013) ( 0.029) ( 0.030) ( 0.031) ( 0.032)
--------- --------- --------- --------- ---------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total Return.................................... 2.57%* 2.92% 3.08% 3.09% 3.60%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 55,142 $ 119,754 $ 96,683 $ 36,758 $ 20,974
Ratios to average net assets:
Expenses (Net of waivers and reimbursements).... 0.75%* 0.75% 0.57% 0.56% 0.40%*
Net investment income........................... 2.59%* 2.86% 3.03% 3.05% 3.54%*
Expenses paid indirectly........................ -- -- -- 0.06% --
Management and Administration fees waived and
expense reimbursed......................... 0.27%* 0.27% 0.51% 0.67% 0.95%*
<CAPTION>
Year Ended August 31,
Six Months Ended --------------------------------- Period Ended
Class B February 28, 1999 1998 1997 1996 August 31, 1995**
------- ----------------- -------- -------- -------- -----------------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance:
(for a share outstanding throughout the period)
Net asset value, beginning of period............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
--------- --------- --------- --------- ---------
Income from investment operations:
Net investment income........................ 0.014 0.032 0.033 0.033 0.036
Less distributions:
Dividends from net investment income......... ( 0.014) ( 0.032) ( 0.033) ( 0.033) ( 0.036)
--------- --------- --------- --------- ---------
Net asset value, end of period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ========= ========= =========
Total Return.................................... 2.87%* 3.22% 3.34% 3.35% 3.84%*
Ratios/Supplemental Data
Net assets, end of period (000)................. $ 19,104 $ 25,050 $ 11,782 $ 9,611 $ 10,174
Ratios to average net assets:
Expenses (Net of waivers and reimbursements).... 0.46%* 0.46% 0.30% 0.31% 0.14%*
Net investment income........................... 2.83%* 3.16% 3.27% 3.34% 3.78%*
Expenses paid indirectly........................ -- -- -- 0.06% --
Management and Administration fees waived and
expense reimbursed......................... 0.27%* 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>
<PAGE>
- ------------------------------------------------------
This report is submitted for the general information
of the shareholders of the Fund. It is not
authorized for distribution to prospective investors
in the Fund unless preceded or accompanied by an
effective prospectus, which includes information
regarding the Fund's objectives and policies,
experience of its management, marketability of
shares, and other information.
- ------------------------------------------------------
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, NY 10020
FL299S
<PAGE>
FLORIDA
DAILY
MUNICIPAL
INCOME
FUND
Semi-Annual Report
February 28, 1999
(Unaudited)
<PAGE>
