<Page>
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OMB APPROVAL
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OMB Number: 3235-0570
Expires: November 30, 2005
Estimated average burden
hours per response....... 5.0
-----------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-03313
---------------------------------------------
First American Funds, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
800 Nicollet Mall Minneapolis, MN 55402
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jonathan P. Lillemoen 800 Nicollet Mall Minneapolis, MN 55402
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 800-677-3863
----------------------------
Date of fiscal year end: September 30, 2003
--------------------------
Date of reporting period: September 30, 2003
-------------------------
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street,
NW, Washington, DC 20549-0609. The OMB has reviewed this collection of
information under the clearance requirements of 44 U.S.C. Section 3507.
<Page>
Item 1. Report to Shareholders
<Page>
[GRAPHIC]
CONFIDENTIAL DRAFT
11/6/2003
[FIRST AMERICAN FUNDS LOGO]
2003 ANNUAL REPORT
MONEY MARKET FUNDS
CLASS A, B, AND C SHARES
"NOTHING BUT HARMONY, HONESTY, INDUSTRY, AND FRUGALITY ARE NECESSARY TO MAKE US
A GREAT AND HAPPY PEOPLE."
[PHOTO OF GEORGE WASHINGTON]
GEORGE WASHINGTON
JANUARY 29, 1789
<Page>
FIRST AMERICAN FUNDS
OUR IMAGE-GEORGE WASHINGTON
HIS RICH LEGACY AS PATRIOT AND LEADER IS WIDELY RECOGNIZED AS EMBODYING THE
SOUND JUDGMENT, RELIABILITY, AND STRATEGIC VISION THAT ARE CENTRAL TO OUR BRAND.
FASHIONED IN A STYLE REMINISCENT OF AN 18TH CENTURY ENGRAVING, THE ILLUSTRATION
CONVEYS THE SYMBOLIC STRENGTH AND VITALITY OF WASHINGTON, WHICH ARE ATTRIBUTES
THAT WE VALUE AT FIRST AMERICAN FUNDS.
TABLE OF CONTENTS
<Table>
Message to Shareholders 1
Report of Independent Auditors 2
Schedule of Investments 3
Statements of Assets and Liabilities 14
Statements of Operations 15
Statements of Changes in Net Assets 16
Financial Highlights 18
Notes to Financial Statements 26
Notice to Shareholders 31
</Table>
AN INVESTMENT IN MONEY MARKET FUNDS IS NOT INSURED OR GUARANTEED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THESE
FUNDS SEEK TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS
POSSIBLE TO LOSE MONEY BY INVESTING IN THESE FUNDS.
NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE
<Page>
MESSAGE TO SHAREHOLDERS November 14, 2003
DEAR SHAREHOLDERS:
We invite you to take a few minutes to review the results of the fiscal year
ended September 30, 2003.
This report includes a complete listing of portfolio holdings and additional
fund information. We hope you will find this helpful in monitoring your
investment portfolio.
Also, through our website firstamericanfunds.com, we provide quarterly
performance fact sheets on all First American funds, the economic outlook as
viewed by our senior investment officers, and other information about fund
investments and portfolio strategies.
Please contact your financial professional if you have questions about First
American Funds or contact First American Investor Services at 800.677.FUND.
We appreciate your investment with First American Funds and look forward to
serving your financial needs in the future.
Sincerely,
/s/ Virginia L. Stringer /s/ Thomas S. Schreier, Jr.
VIRGINIA L. STRINGER THOMAS S. SCHREIER, JR.
CHAIRPERSON OF THE BOARD PRESIDENT
FIRST AMERICAN FUNDS, INC. FIRST AMERICAN FUNDS, INC.
1
<Page>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
First American Funds, Inc.
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments of First American Funds, Inc.
(comprised of the Government Obligations, Prime Obligations, Tax Free
Obligations, Treasury Obligations and Treasury Reserve Funds) (the "Funds")
as of September 30, 2003, and the related statements of operations for the
year then ended, the statements of changes in net assets for each of the
two years in the period then ended, and the financial highlights for each
of the periods indicated therein, except as noted below. These financial
statements and the financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The
financial highlights of the Treasury Reserve Fund for the periods presented
through October 31, 2000, were audited by other auditors whose reports
dated December 29, 2000 and January 7, 2000, expressed unqualified opinions
on those financial highlights.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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 and
financial highlights. Our procedures included confirmation of securities
owned as of September 30, 2003, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights audited
by us as referred to above, present fairly, in all material respects, the
financial position of each of the respective funds constituting First
American Funds, Inc. at September 30, 2003, and the results of their
operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and their financial
highlights for each of the periods indicated herein, in conformity with
accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Minneapolis, Minnesota
October 31, 2003
2
<Page>
SCHEDULE OF INVESTMENTS September 30, 2003
GOVERNMENT OBLIGATIONS FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 77.5%
FAMC
3.850%, 04/15/04 $ 17,517 $ 17,758
FFCB
1.000%, 10/01/03 (a) 125,000 124,969
3.125%, 10/01/03 15,000 15,000
0.985%, 10/07/03 (a) 50,000 49,988
0.990%, 10/24/03 (a) 100,000 99,973
2.375%, 10/01/04 9,400 9,496
FHLB
0.970%, 10/06/03 (a) 75,000 74,967
1.060%, 10/07/03 100,000 99,983
1.000%, 10/08/03 100,000 99,979
1.000%, 10/11/03 (a) 80,000 79,979
5.440%, 10/15/03 1,000 1,002
1.036%, 10/24/03 100,000 99,934
0.985%, 10/25/03 (a) 100,000 99,968
1.164%, 10/28/03 (a) 100,000 99,970
1.500%, 11/04/03 13,860 13,861
3.125%, 11/14/03 36,500 36,556
3.180%, 12/03/03 60,275 60,439
3.270%, 02/12/04 37,750 38,007
1.125%, 02/24/04 10,000 9,992
1.250%, 04/15/04 15,000 14,995
3.750%, 04/15/04 17,530 17,762
4.875%, 04/16/04 29,845 30,429
1.400%, 05/14/04 9,000 9,000
1.250%, 06/01/04 25,000 25,000
3.375%, 06/15/04 15,000 15,227
1.035%, 07/23/04 25,000 24,974
4.625%, 08/13/04 3,310 3,409
6.250%, 08/13/04 5,730 5,981
1.250%, 09/22/04 9,675 9,675
FHLMC
3.250%, 01/15/04 45,000 45,227
3.400%, 02/20/04 26,950 27,158
1.230%, 02/26/04 10,000 9,950
6.950%, 04/01/04 10,000 10,278
3.750%, 04/15/04 40,510 41,054
1.020%, 05/20/04 25,000 24,834
1.000%, 06/02/04 25,000 24,832
1.133%, 07/15/04 20,000 19,821
3.000%, 07/15/04 28,160 28,597
1.328%, 08/12/04 20,000 19,770
1.245%, 09/09/04 20,000 19,765
FNMA
1.000%, 10/01/03 (a) 78,000 77,976
1.050%, 10/01/03 (a) 100,000 100,000
1.065%, 10/01/03 (a) 125,000 124,996
1.110%, 10/01/03 50,000 50,000
1.003%, 10/01/03 (a) 125,000 124,968
1.164%, 10/30/03 (a) 125,000 124,967
4.750%, 11/14/03 6,930 6,957
1.320%, 12/12/03 30,000 29,922
1.290%, 02/06/04 35,000 34,848
5.125%, 02/13/04 25,000 25,344
1.120%, 04/30/04 30,000 29,802
1.370%, 08/20/04 20,000 19,757
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $2,309,096) 2,309,096
------------
REPURCHASE AGREEMENTS - 23.2%
Goldman Sachs
1.090%, dated 9/30/03, matures 10/1/03,
repurchase price $200,006,056 (collateralized
by U.S. Treasury Obligations:
Total Market Value $204,000,000) $ 200,000 $ 200,000
Lehman Brothers
1.050%, dated 9/30/03, matures 10/1/03,
repurchase price $100,002,917 (collateralized
by U.S. Government Obligations:
Total Market Value $101,984,434) 100,000 100,000
Merrill Lynch
1.050%, dated 9/30/03, matures 10/1/03,
repurchase price $250,007,292 (collateralized
by U.S. Government Obligations:
Total Market Value $255,002,488) 250,000 250,000
UBS Warburg
1.060%, dated 9/30/03, matures 10/1/03,
repurchase price $143,306,219 (collateralized
by U.S. Government Obligations:
Total Market Value $146,169,943) 143,302 143,302
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $693,302) 693,302
------------
INVESTMENTS PURCHASED WITH PROCEEDS
FROM SECURITIES LENDING - 4.4%
REPURCHASE AGREEMENTS - 4.4%
Deutsche Bank
1.23%, dated 9/30/03, matures 10/1/03,
repurchase price $131,617,113 (collateralized
by U.S. Government Obligations:
Total Market Value $134,244,869) 131,613 131,613
------------
TOTAL INVESTMENTS PURCHASED WITH
PROCEEDS FROM SECURITIES LENDING
(Cost $131,613) 131,613
------------
TOTAL INVESTMENTS - 105.1%
(Cost $3,134,011) 3,134,011
------------
OTHER ASSETS AND LIABILITIES, NET - (5.1)% (152,879)
------------
TOTAL NET ASSETS - 100.0% $ 2,981,132
------------
</Table>
(a) Variable Rate Security - The rate shown is the rate in effect as of
September 30, 2003. The date shown is the next reset date.
FAMC - Federal Agriculture Mortgage Corporation
FFCB - Federal Farm Credit Bank
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
3
<Page>
PRIME OBLIGATIONS FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
COMMERCIAL PAPER - 32.1%
BROKERAGE - 2.5%
Citicorp Global Markets
1.050%, 10/01/03 $ 100,000 $ 100,000
1.050%, 10/02/03 75,000 74,998
1.050%, 10/07/03 75,000 74,987
1.051%, 10/23/03 75,000 74,952
CS First Boston USA
1.050%, 10/10/03 50,000 49,987
1.050%, 10/16/03 54,000 53,976
------------
TOTAL BROKERAGE 428,900
------------
COMMERCIAL FUNDING CORPORATIONS - 21.5%
Asset Securitization Co-Op Corp
1.061%, 10/06/03 (a) 50,000 49,993
1.051%, 10/22/03 (a) 45,000 44,972
1.050%, 10/27/03 (a) 110,000 109,917
1.060%, 11/04/03 (a) 65,000 64,935
1.062%, 11/05/03 (a) 150,000 149,845
Corporate Asset Funding
1.061%, 10/02/03 (a) 25,000 24,999
1.070%, 10/03/03 (a) 100,000 99,994
1.070%, 10/08/03 (a) 75,000 74,984
1.060%, 10/14/03 (a) 102,800 102,761
1.050%, 10/21/03 (a) 65,000 64,962
1.061%, 10/22/03 (a) 58,995 58,959
Edison Asset Securitization
1.050%, 10/01/03 (a) 75,000 75,000
1.060%, 10/03/03 (a) 49,686 49,683
1.050%, 10/20/03 (a) 10,000 9,994
1.052%, 11/14/03 (a) 145,088 144,902
1.060%, 12/05/03 (a) 74,600 74,457
Fleet Funding
1.060%, 10/06/03 (a) 61,563 61,554
1.050%, 10/07/03 (a) 65,181 65,170
1.050%, 10/10/03 (a) 40,095 40,085
1.051%, 10/17/03 (a) 37,379 37,362
1.051%, 10/21/03 (a) 45,884 45,857
1.051%, 10/22/03 (a) 50,000 49,969
Jupiter Securitization
1.060%, 10/02/03 (a) 50,000 49,999
1.070%, 10/08/03 (a) 75,000 74,984
1.050%, 10/10/03 (a) 50,000 49,987
1.050%, 10/14/03 (a) 40,000 39,985
1.055%, 10/17/03 (a) 46,410 46,388
1.055%, 10/20/03 (a) 105,000 104,942
1.051%, 10/22/03 (a) 100,000 99,939
Moat Funding (Guarantor: 26% JPM Chase)
1.060%, 10/16/03 (a) 50,000 49,978
1.060%, 10/17/03 (a) 50,000 49,976
1.050%, 10/20/03 (a) 100,000 99,945
1.104%, 01/14/04 (a) 100,000 99,679
1.100%, 01/15/04 (a) 50,000 49,838
1.104%, 01/16/04 (a) 100,000 99,673
Receivables Capital Corp
1.050%, 10/08/03 (a) 149,254 149,223
1.061%, 10/15/03 (a) 75,000 74,969
1.050%, 10/16/03 (a) 100,000 99,956
Sheffield Receivables
1.061%, 10/15/03 (a) 180,710 180,636
1.051%, 10/17/03 (a) 138,600 138,535
1.050%, 10/21/03 (a) 75,000 74,956
1.051%, 10/24/03 (a) 74,156 74,106
Yorktown Capital
1.050%, 10/09/03 (a) $ 50,008 $ 49,996
1.051%, 10/17/03 (a) 31,708 31,693
1.051%, 10/20/03 (a) 204,706 204,593
1.051%, 10/21/03 (a) 80,044 79,997
1.051%, 10/22/03 (a) 50,000 49,969
1.050%, 10/27/03 (a) 60,043 59,997
------------
TOTAL COMMERCIAL FUNDING CORPORATIONS 3,684,293
------------
DIVERSIFIED FINANCIALS - 0.6%
General Electric Capital Corp
1.050%, 10/07/03 100,000 99,982
------------
TOTAL DIVERSIFIED FINANCIALS 99,982
------------
DOMESTIC BANKS - 4.1%
Kitty Hawk Funding (Guarantor: Bank of America)
1.060%, 10/07/03 (a) 136,834 136,810
1.050%, 10/23/03 (a) 150,000 149,904
Variable Funding Capital (Guarantor: Wachovia)
1.060%, 10/07/03 (a) 100,000 99,982
1.060%, 10/09/03 (a) 50,000 49,988
1.050%, 10/10/03 (a) 50,000 49,987
1.061%, 10/15/03 (a) 25,000 24,990
1.051%, 10/16/03 (a) 50,000 49,978
1.050%, 10/21/03 (a) 100,000 99,942
1.062%, 11/17/03 (a) 35,000 34,952
------------
TOTAL DOMESTIC BANKS 696,533
------------
RETAIL FUNDING CORPORATION - 3.4%
Emerald Certificates (MBNA Master Certificates)
(Secured Liquidity Note)
1.050%, 10/01/03 (a) 150,000 150,000
1.060%, 10/08/03 (a) 29,263 29,257
1.081%, 10/08/03 (a) 100,000 99,979
1.070%, 10/09/03 (a) 30,000 29,993
1.070%, 10/09/03 (a) 75,000 74,982
1.080%, 10/14/03 (a) 50,000 49,981
1.080%, 10/30/03 (a) 38,000 37,967
Bishops Gate Residential
1.070%, 10/31/03 100,000 99,911
------------
TOTAL RETAIL FUNDING CORPORATION 572,070
------------
TOTAL COMMERCIAL PAPER
(Cost $5,481,778) 5,481,778
------------
CORPORATE OBLIGATIONS - 32.6%
BROKERAGE - 5.2%
CS First Boston USA
1.400%, 10/01/03 (b) 40,000 40,037
1.130%, 10/05/03 (b) 50,000 50,004
Goldman Sachs Group
1.150%, 10/15/03 (a) (b) 150,000 150,000
1.356%, 10/15/03 (a) (b) 88,000 88,000
Merrill Lynch
1.490%, 10/01/03 (b) 54,000 54,108
1.160%, 11/18/03 (b) 100,000 100,000
Morgan Stanley Dean Witter
1.143%, 10/01/03 (b) 142,000 142,000
1.240%, 10/15/03 (b) 250,000 250,000
Salomon Smith Barney
7.200%, 02/01/04 15,950 16,258
------------
TOTAL BROKERAGE 890,407
------------
DIVERSIFIED FINANCIALS - 3.6%
American Express Credit
1.140%, 10/20/03 (a) (b) 90,000 89,987
Associates First Capital
1.240%, 12/26/03 (a) (b) 120,000 120,000
</Table>
The accompanying notes are an integral part of the financial statements.
4
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
General Electric Capital Corp
1.200%, 10/09/03 (b) $ 200,000 $ 200,000
1.150%, 10/17/03 (b) 200,000 200,000
------------
TOTAL DIVERSIFIED FINANCIALS 609,987
------------
FOREIGN FUNDING CORPORATIONS - 13.1%
Beta Finance
1.090%, 10/01/03 (a) (b) 125,000 124,996
1.540%, 11/10/03 (a) 50,000 50,000
1.600%, 11/21/03 (a) 50,000 50,000
1.450%, 08/18/04 (a) 107,000 107,000
Centauri (CC USA LLC)
1.055%, 10/01/03 (a) (b) 30,000 29,995
1.080%, 10/01/03 (a) (b) 25,000 25,000
1.080%, 10/01/03 (a) (b) 102,000 101,997
1.080%, 10/01/03 (a) (b) 50,000 49,998
1.208%, 10/01/03 (a) (b) 50,000 49,999
1.930%, 10/22/03 (a) 50,000 50,000
1.910%, 10/28/03 (a) 50,000 50,000
1.515%, 11/19/03 (a) 75,000 75,000
1.150%, 07/26/04 (a) 50,000 50,000
Dorada Finance
1.063%, 10/01/03 (a) (b) 75,000 74,994
1.090%, 10/01/03 (a) (b) 150,000 149,995
1.750%, 10/16/03 (a) 50,000 50,000
1.450%, 01/20/04 (a) 50,000 50,000
K2 USA LLC
1.070%, 10/01/03 (a) (b) 50,000 49,991
1.070%, 10/01/03 (a) (b) 75,000 74,986
1.213%, 10/01/03 (a) (b) 100,000 100,055
1.940%, 10/10/03 (a) 50,000 50,000
1.550%, 11/10/03 (a) 75,000 75,000
1.440%, 09/02/04 (a) 50,000 50,000
1.235%, 09/22/04 (a) 75,000 74,989
Sigma Finance
1.060%, 10/01/03 (a) (b) 50,000 49,993
1.065%, 10/01/03 (a) (b) 50,000 49,995
1.078%, 10/01/03 (a) (b) 100,000 99,995
1.080%, 10/01/03 (a) (b) 100,000 99,996
1.080%, 10/01/03 (a) (b) 65,000 64,999
1.090%, 10/01/03 (a) (b) 50,000 49,998
1.090%, 10/01/03 (a) (b) 85,000 84,997
1.310%, 10/01/03 (a) (b) 50,000 50,010
1.893%, 10/23/03 (a) 75,000 75,000
------------
TOTAL FOREIGN FUNDING CORPORATIONS 2,238,978
------------
INSURANCE - 7.1%
AI Life Funding Agreement
1.210%, 10/01/03 (b) 75,000 75,000
1.210%, 10/01/03 (b) 100,000 100,000
AIG Life Funding Agreement
1.230%, 10/01/03 (b) 100,000 100,000
1.230%, 10/01/03 (b) 100,000 100,000
Allstate Life Insurance Funding Agreement
1.250%, 10/01/03 (b) 100,000 100,000
1.306%, 10/15/03 (b) 100,000 100,000
Anchor National Life Funding Agreement
1.250%, 10/01/03 (b) 75,000 75,000
Metlife Global Funding
1.130%, 10/28/03 (a) (b) 95,000 95,000
Sun Life Insurance Funding Agreement
1.370%, 10/01/03 (b) 75,000 75,000
Transamerica Occidental Funding Agreement
1.270%, 10/01/03 (b) 400,000 400,000
------------
TOTAL INSURANCE 1,220,000
------------
OTHER - 3.0%
3M
5.674%, 12/12/03 (a) $ 200,000 $ 201,614
Merck & Co. Inc.
4.489%, 02/22/04 (a) 200,000 202,535
Wal-Mart Stores
5.199%, 06/01/04 100,000 102,713
------------
TOTAL OTHER 506,862
------------
TELECOMMUNICATION SERVICES - 0.6%
Bellsouth Telecom
1.180%, 12/04/03 (b) 100,000 100,000
------------
TOTAL CORPORATE OBLIGATIONS
(Cost $5,566,234) 5,566,234
------------
CERTIFICATES OF DEPOSIT - 5.8%
American Express Centurian
1.050%, 10/14/03 100,000 100,000
1.050%, 10/17/03 85,000 85,000
1.050%, 10/20/03 100,000 100,000
Bank One
1.160%, 11/10/03 50,000 50,001
LaSalle Bank
1.050%, 10/14/03 100,000 100,000
1.050%, 11/10/03 100,000 100,000
Wells Fargo Bank
1.050%, 10/06/03 115,000 115,000
1.060%, 10/10/03 150,000 150,000
1.060%, 10/10/03 120,000 120,000
1.060%, 10/17/03 80,000 80,000
------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $1,000,001) 1,000,001
------------
YANKEE CERTIFICATES OF DEPOSIT - 19.5%
Bayerische Landesbank NY
1.620%, 12/02/03 50,000 50,000
2.920%, 12/08/03 200,000 200,476
5.000%, 07/20/04 15,000 15,475
BNP Paribas NY
1.050%, 06/16/04 195,000 194,941
Canadian Imperial Bank NY
1.050%, 10/17/03 300,000 300,000
Canadian Imperial Bank NY
1.060%, 10/10/03 110,000 110,000
Credit Agricole NY
1.230%, 08/04/04 50,000 49,996
Danske Bank NY
1.060%, 10/08/03 100,000 100,000
1.540%, 12/19/03 50,000 50,024
1.250%, 09/10/04 100,000 99,990
Dexia NY
1.065%, 10/06/03 150,000 150,000
Fortis Banque
1.050%, 10/24/03 300,000 300,000
KBC NY
1.050%, 10/30/03 200,000 200,000
1.060%, 12/10/03 100,000 100,000
Landesbank Wuerttemburg NY
1.410%, 02/03/04 50,000 50,010
Nordeutche Bank NY
1.100%, 07/06/04 100,000 100,000
1.110%, 07/12/04 50,000 49,996
Rabobank Nederland NY
1.400%, 01/20/04 95,000 95,017
1.240%, 08/04/04 48,000 47,996
</Table>
5
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
Royal Bank of Scotland NY
1.930%, 11/04/03 $ 50,000 $ 50,011
1.295%, 04/16/04 50,000 49,999
1.305%, 04/16/04 50,000 50,000
Societe Generale NY
1.050%, 11/03/03 150,000 150,000
Svenska Handelsbanken NY
1.060%, 10/03/03 100,000 100,000
1.060%, 10/09/03 20,000 20,000
1.060%, 10/09/03 100,000 100,000
1.050%, 11/07/03 50,000 50,000
1.280%, 03/18/04 50,000 50,000
1.310%, 03/29/04 50,000 50,000
West Deutsche Landesbank NY
1.240%, 03/17/04 100,000 99,995
1.320%, 04/15/04 100,000 99,995
1.200%, 08/02/04 50,000 50,000
1.390%, 08/26/04 75,000 74,993
1.250%, 09/20/04 75,000 75,000
------------
TOTAL YANKEE CERTIFICATES OF DEPOSIT
(Cost $3,333,914) 3,333,914
------------
EURO TIME DEPOSITS - 0.1%
National City Time Deposit
1.094%, 10/01/03 14,245 14,245
------------
TOTAL EURO TIME DEPOSITS
(Cost $14,245) 14,245
------------
REPURCHASE AGREEMENTS - 6.3%
Bear Stearns
1.440%, dated 9/30/03, matures 10/1/03,
repurchase price $400,016,000
(collateralized by various securities:
Total Market Value $410,508,943) 400,000 400,000
UBS Warburg
0.960%, dated 9/30/03, matures 10/1/03,
repurchase price $473,377,623 (collateralized
by U.S. Treasury Obligations:
Total Market Value $482,836,674) 473,365 473,365
UBS Warburg
1.060%, dated 9/30/03, matures 10/1/03,
repurchase price $206,704,086 (collateralized
by U.S. Government Obligations:
Total Market Value $210,836,362) 206,698 206,698
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,080,063) 1,080,063
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS - 3.4%
FHLB
3.375%, 06/15/04 40,000 40,606
FHLMC
1.030%, 04/02/04 23,850 23,725
3.750%, 04/15/04 55,400 56,194
1.020%, 05/20/04 35,785 35,550
6.250%, 07/15/04 49,282 51,223
1.400%, 08/11/04 30,000 30,000
1.328%, 08/12/04 50,000 49,425
FNMA
1.110%, 10/01/03 130,000 130,000
1.120%, 04/30/04 65,000 64,571
0.995%, 05/28/04 50,000 49,668
3.500%, 09/15/04 $ 19,500 $ 19,879
1.500%, 09/27/04 35,000 35,000
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS
(Cost $585,841) 585,841
------------
TOTAL INVESTMENTS - 99.8%
(Cost $17,062,076) 17,062,076
------------
OTHER ASSETS AND LIABILITIES, NET - 0.2% 29,084
------------
TOTAL NET ASSETS - 100.0% $ 17,091,160
------------
</Table>
(a) Security sold within the terms of a private placement memorandum, exempt
from registration under Rule 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "qualified
institutional buyers." These securities have been determined to be liquid
under the guidelines established by the Funds' board of directors. As of
September 30, 2003, the value of these investments was $7,487,607,185 or
43.8% of total net assets.
(b) Variable Rate Security - The rate shown is the rate in effect as of
September 30, 2003. The date shown is the next reset date.
FHLB - Federal Home Loan Bank
FHLMC - Federal Home Loan Mortgage Corporation
FNMA - Federal National Mortgage Association
The accompanying notes are an integral part of the financial statements.
6
<Page>
TAX FREE OBLIGATIONS FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
MUNICIPAL BONDS - 101.2%
ARIZONA - 2.0%
Pima County Development Senior Living Authority
(LOC: LaSalle Bank)
1.100%, 10/07/03 (a) $ 16,650 $ 16,650
Tempe Industrial Development Authority,
Friendship Village Project Series C
(LOC: LaSalle Bank)
1.100%, 10/07/03 (a) 10,000 10,000
------------
26,650
------------
CALIFORNIA - 0.3%
Los Angeles School District, Belmont Learning
Complex A (LOC: Bank of New York)
1.070%, 10/07/03 (a) 75 75
Santa Barbara Tax and Revenue
Anticipation Notes - Series A
2.000%, 07/23/04 4,000 4,038
------------
4,113
------------
COLORADO - 3.5%
Boulder Valley School District (GO)
1.500%, 06/30/04 10,000 10,040
2.000%, 06/30/04 10,000 10,077
Colorado General Fund Tax and Anticipation
Notes Revenue
2.000%, 06/25/04 15,000 15,123
Colorado Health Facilities Authority Bethesda
Living (LOC: LaSalle Bank)
1.10%, 10/07/03 (a) 2,955 2,955
Moffat County Pollution Control (INS: AMBAC)
1.200%, 10/07/03 (a) 10,465 10,465
------------
48,660
------------
CONNECTICUT - 1.3%
Connecticut Health & Educational Facilities
Authority, Yale University
0.800%, 10/01/03 (a) 2,300 2,300
Connecticut Special Tax Obligation Revenue
(INS: AMBAC)
1.07%, 10/07/03 (a) 14,960 14,960
------------
17,260
------------
FLORIDA - 4.1%
Florida Gulf Coast University (LOC: First Union)
1.12%, 10/07/03 (a) 6,615 6,615
Florida Housing Agency (LOC: Kreidetbank)
1.070%, 10/07/03 (a) (b) 6,035 6,035
Florida Municipal Power Agency (CP)
0.860%, 10/01/03 12,271 12,271
1.100%, 10/02/03 6,077 6,077
0.850%, 11/03/03 13,776 13,776
Miami-Dade County Development Authority,
Gulliver School Project (LOC: Bank of America)
1.150%, 10/07/03 (a) 2,000 2,000
Palm Beach County Revenue,
Benjamin Private School Project
(LOC: Bank of America)
1.10%, 10/07/03 (a) 2,000 2,000
University Athletic Association,
University of Florida Stadium Project
(LOC: Suntrust)
1.230%, 10/01/03 (a) 1,200 1,200
University of Florida Research Funding Revenue
(LOC: Wachovia Bank)
1.120%, 10/07/03 (a) $ 5,000 $ 5,000
University of South Florida Funding
(LOC: First Union)
1.100%, 10/07/03 (a) 930 930
------------
55,904
------------
GEORGIA - 0.6%
Athens-Clarke County University Government
Development Authority, University of Georgia
Athletic Association Project
(LOC: Bank of America)
1.220%, 10/01/03 (a) 1,400 1,400
Dalton Development Authority Revenue,
Hamilton Health System Project
(LOC: Bank of America)
1.10%, 10/07/03 (a) 5,000 5,000
Fulton County Development Authority,
Pace Academy Project (LOC: Bank of America)
1.100%, 10/07/03 (a) 1,925 1,925
------------
8,325
------------
HAWAII - 0.2%
Hawaii Department of Budget & Finance,
Kahla Nui Project (LOC: LaSalle Bank)
1.10%, 10/07/03 (a) 3,000 3,000
------------
IDAHO - 0.7%
Boise Idaho Urban Renewal Agency,
Capital City (LOC: Bank America)
1.130%, 10/07/03 (a) 5,110 5,110
University of Idaho Foundation Authority
(LOC: First Security Bank)
1.130%, 10/07/03 (a) (b) 4,880 4,880
------------
9,990
------------
ILLINOIS - 17.3%
ABN AMRO Munitops Certificates Trust,
Chicago IL (INS:FGIC)
1.180%, 10/07/03 (a) (b) 20,000 20,000
ABN AMRO Munitops Certificates Trust,
llinois State (GO) (INS: MBIA)
1.180%, 10/07/03 (a) (b) 4,575 4,575
Chicago Illinois Mandatory Put 12/4/03 @ 100
(LOC: Landesbank - Hessen-THRGN)
1.280%, 1/08/04 12,000 12,000
Chicago Illinois Park District
1.750%, 05/01/04 12,000 12,063
Cook County Illinois
(SPA: Landesbank Hessen-THRGN)
1.040%, 10/07/03 (a) 42,250 42,250
Cook County Illinois Revenue - Claretian Project
(LOC: FHLB)
1.100%, 10/07/03 (a) 3,395 3,395
Illinois Development Finance Authority
(LOC: FHLB)
1.220%, 10/07/03 (a) 4,800 4,800
Illinois Development Finance Authority
(LOC: Northern Trust)
1.150%, 10/07/03 (a) 4,000 4,000
Illinois Development Finance Authority Aurora
(LOC: Allied Irish)
1.350%, 10/07/03 (a) 6,740 6,740
</Table>
7
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
Illinois Development Finance Authority
Lake Forest (LOC: Northern Trust)
1.100%, 10/07/03 (a) $ 6,255 $ 6,255
Illinois Development Finance Authority
Loyola Academy (LOC: Bank One)
1.100%, 10/07/03 (a) 4,000 4,000
Illinois Development Finance Authority
McCormick Theological (LOC: Northern Trust)
1.100%, 10/07/03 (a) 7,935 7,935
Illinois Development Finance Authority
Roosevelt University (LOC: American National Bank)
1.100%, 10/07/03 (a) 7,500 7,500
Illinois Development Finance Authority
St. Ignatius (LOC: Northern Trust)
1.100%, 10/07/03 (a) 9,800 9,800
Illinois Development Finance Authority
St. Pauls Housing (LOC: LaSalle Bank)
1.100%, 10/07/03 (a) 4,440 4,440
Illinois Development Finance Authority,
Chinese American Service Project
(LOC: LaSalle Bank)
1.140%, 10/07/03 (a) 5,000 5,000
Illinois Development Finance Authority,
Solomon Schechter Day School
(LOC: LaSalle Bank)
1.140%, 10/07/03 (a) 5,000 5,000
Illinois Development Finance Authority,
United Way/Crusade Mercy
(LOC: LaSalle Bank)
1.140%, 10/07/03 (a) 4,935 4,935
Illinois Development Financial Authority,
Mount Carmel High School Project
(LOC: Bank One)
1.100%, 10/07/03 (a) 2,800 2,800
Illinois Educational Facilities Authority
Chicago Zoological Society
(LOC: Northern Trust)
1.100%, 10/07/03 (a) 5,000 5,000
Illinois Health Facilities Authorities
Edgewater Hospital
1.120%, 10/07/03 (a) (b) 10,600 10,600
Illinois Health Facilities Authority
Lifelink (LOC: American National Bank)
1.150%, 10/07/03 (a) 7,225 7,225
Illinois State Toll Highway Authority (INS: FSA)
(SPA: Landesbank - Hessen-THRGN)
1.100%, 10/07/03 (a) 18,500 18,500
1.100%, 10/07/03 (a) 13,100 13,100
Macon County - Milikin University
(INS: AMBAC) (SPA: Bank One)
1.100%, 10/07/03 (a) 4,400 4,400
Northern Cook County Illinois Solid Waste Agency
(LOC: Northern Trust)
1.100%, 10/07/03 (a) 5,900 5,900
State of Illinois (GO)
5.000%, 04/01/04 5,000 5,097
------------
237,310
------------
INDIANA - 1.6%
Evansville Economic Development Authority
(LOC: Citibank)
1.050%, 10/07/03 (a) (b) 2,500 2,500
Indiana Health Facilities Finance Authority
Henry County Memorial Hospital
(LOC: Fifth Third)
1.160%, 10/07/03 (a) $ 19,685 $ 19,685
------------
22,185
------------
IOWA - 0.3%
Iowa Financial Retirement Authority,
Wesley Retirement Services
(LOC: Wells Fargo Bank)
1.160%, 10/07/03 (a) 4,000 4,000
------------
KANSAS - 0.7%
Prairie Village Revenue, Claridge Court
(LOC: LaSalle Bank)
1.110%, 10/07/03 (a) 9,410 9,410
------------
LOUISIANA - 4.7%
State of Louisiana (CP)
0.880%, 11/17/03 30,000 30,000
0.890%, 11/17/03 35,000 35,000
------------
65,000
------------
MASSACHUSETTS - 3.8%
State of Massachusetts Series C (GO)
(SPA: State Street B&T)
1.120%, 10/07/03 (a) 24,725 24,725
State of Massachusetts Series B
(SPA: Landesbank - Hessen - THRGN) (GO)
1.120%, 10/07/03 (a) 27,495 27,495
------------
52,220
------------
MICHIGAN - 6.2%
Hannahville Indian Community Finance - Series A
(LOC: National City)
1.14%, 10/07/03 (a) (b) 1,450 1,450
Michigan State Housing Development Authority
(INS: MBIA) (SPA: Merrill Lynch Cap Services)
1.130%, 10/07/03 (a) (b) 5,680 5,680
State of Michigan (CP)
0.950%, 10/14/03 15,000 15,000
0.950%, 10/14/03 30,080 30,080
State of Michigan Strategic Fund,
Lutheran Social Services
(LOC: National City Bank)
1.140%, 10/07/03 (a) 19,195 19,195
Wayne Charter County
(LOC: Allied Irish, PLC)
1.140%, 10/07/03 (a) 13,825 13,825
------------
85,230
------------
MINNESOTA - 4.7%
Eden Prairie, Multifamily Housing Authority
(Liquidity: Freddie Mac)
1.150%, 10/07/03 (a) 13,600 13,600
Mendota Heights Revenue,
St. Thomas Academy Project
(LOC: Allied Irish PLC)
1.150%, 10/07/03 (a) 1,960 1,960
Minneapolis School District Credit Support:
SD Credit Program (GO)
2.000%, 08/6/04 10,000 10,088
</Table>
The accompanying notes are an integral part of the financial statements.
8
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
Minnesota State Higher Educational Facilities
Bethel College Credit Support: GO of Institution
(LOC: Allied Irish Bank, PLC)
1.350%, 10/07/03 (a) $ 3,585 $ 3,585
University of Minnesota (GO of University) Series A
1.120%, 10/07/03 (a) 35,065 35,065
------------
64,298
------------
MISSOURI - 1.2%
Jackson County Missouri Industrial Development
Authority, YMCA Greater Kansas City
(LOC: Bank of America)
1.150%, 10/07/03 (a) 7,000 7,000
Missouri State Health & Educational Facilities
(LOC: Bank One) (INS: AMBAC)
1.150%, 10/07/03 (a) 9,655 9,655
------------
16,655
------------
MONTANA - 0.8%
Montana State Health Facilities Authority
1.220%, 10/07/03 (a) (b) 11,250 11,250
------------
NEVADA - 1.3%
ABN AMRO Munitops Certificates Trust,
Nevada State (GO) (INS: MBIA)
1.180%, 10/07/03 (a) (b) 8,500 8,500
Clark County School District (GO) (INS: FGIC)
3.000%, 06/01/04 8,720 8,842
------------
17,342
------------
NEW HAMPSHIRE - 0.4%
New Hampshire Health & Education Facilities
Authority, Colby-Sawyer College
(LOC: Allied Irish PLC)
1.070%, 10/07/03 (a) 5,500 5,500
------------
NEW JERSEY - 0.7%
State of New Jersey
2.000%, 06/25/04 10,000 10,071
------------
NEW YORK - 1.9%
New York City Transitional Financial Authority
(SPA: Bank of New York)
1.230%, 10/01/03 (a) 7,700 7,700
New York, NY (GO) (SPA: Lehman Liquidity)
(Credit: CIFG-TRS)
1.120%, 10/07/03 (a) (b) 14,825 14,825
Yonkers (GO) (LOC: Bank of New York)
2.000%, 05/14/04 3,000 3,019
------------
25,544
------------
NORTH CAROLINA - 1.0%
Mecklenburg County (GO)
(Liquidity: Bank of America)
1.100%, 10/07/03 (a) 5,300 5,300
North Carolina Financial Agency Revenue,
Greensboro College Project
(LOC: Bank of America)
1.100%, 10/07/03 (a) 7,800 7,800
------------
13,100
------------
OHIO - 5.2%
ABN AMRO Munitops Certificates Trust,
Westerville Ohio County School
(INS: MBIA) (SPA: ABN AMRO Bank)
1.130%, 10/07/03 (a) (b) $ 4,000 $ 4,000
Cuyahoga County Ohio Hospital Revenue,
University Hospital (INS: AMBAC)
(SPA: Chase Manhattan)
1.100%, 10/07/03 (a) 3,000 3,000
Franklin County Health Care Facilities Revenue,
Mother Angeline McCrory Project
(LOC: Allied Irish Bank, PLC)
1.130%, 10/07/03 (a) 16,690 16,690
Franklin County Ohio Health Care Facilities
(LOC: National City Bank)
1.150%, 10/07/03 (a) 3,900 3,900
Hamilton County Hospital Facilities Revenue,
Elizabeth Gamle Series C (LOC: JP Morgan Chase)
1.100%, 10/07/03 (a) 3,300 3,300
Logan County Ohio Healthcare Facilities
(LOC: Fifth Third Bank)
1.180%, 10/07/03 (a) 10,800 10,800
Miami County Hospital
(LOC: National Australia Bank, NY)
(SPA: Merrill Lynch Cap SVCS)
1.220%, 10/07/03 (a) (b) 4,740 4,740
Middleburg Heights Hospital Improvement
Revenue (LOC: Keybank)
1.140%, 10/07/03 (a) 2,400 2,400
Ohio State Air Quality Development Authority,
Ohio Power (INS: AMBAC)
(Liquidity: Merrill Lynch SVCS)
1.130%, 10/07/03 (a) (b) 4,700 4,700
Ohio State Higher Education Facilities,
Lake Erie (LOC: Fifth Third Bank)
1.140%, 10/07/03 (a) 12,665 12,665
Ohio State University General Receipts
1.010%, 10/07/03 (a) 45 45
Summit County Ohio Port Authority,
Summa Health Systems Hospital
(LOC: Fifth Third Bank)
1.140%, 10/07/03 (a) 5,000 5,000
------------
71,240
------------
OKLAHOMA - 1.7%
Oklahoma Authority Revenue,
American Cancer Society Project
(LOC: Bank of America)
1.150%, 10/07/03 (a) 2,905 2,905
Tulsa Industrial Authority Revenue Floating
1.130%, 10/07/03 (a) (b) 7,970 7,970
Tulsa Industrial Authority University of Tulsa
(INS: MBIA) (SPA: Credit Local DeFrance)
1.070%, 10/07/03 (a) 12,075 12,075
------------
22,950
------------
PENNSYLVANIA - 1.5%
Philadelphia, PA Tax and Revenue
Anticipation Notes
2.000%, 06/30/04 17,000 17,127
State of Pennsylvania (GO) (INS: AMBAC)
5.125%, 03/15/04 3,660 3,728
------------
20,855
------------
</Table>
9
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
RHODE ISLAND - 0.5%
Rhode Island Health & Education Revenue,
Jewish Services Agency (LOC: Sovereign Bank)
(LOC: Bank of New York)
1.100%, 10/07/03 (a) $ 6,750 $ 6,750
------------
SOUTH CAROLINA - 2.6%
ABN AMRO Munitops Certificates Trust,
South Carolina Transportation Infrastructure
(INS: AMBAC) (SPA: ABN AMRO Bank)
1.180%, 10/07/03 (a) (b) 10,000 10,000
South Carolina Jobs Economic Development
Authority - Boros & Chaplin Business Park
(LOC: Bank of America)
1.150%, 10/07/03 (a) 11,000 11,000
University of South Carolina Revenue
1.750%, 07/24/04 15,000 15,104
------------
36,104
------------
TENNESSEE - 5.3%
Clarksville Tennessee Public Building Authority
(LOC: Bank America)
1.100%, 10/07/03 (a) (b) 12,100 12,100
Met Government Nashville & Davidson
(LOC: Societe Generale)
1.150%, 10/07/03 (a) (b) 7,035 7,035
Rutherford County Industrial
Development - Square D Company
(LOC: Societe Generale)
1.100%, 10/07/03 (a) 4,100 4,100
Shelby County Health (CP)
0.930%, 10/15/03 5,500 5,500
1.000%, 10/29/03 32,000 32,000
Memphis TN (CP)
0.850%, 10/06/03 12,500 12,500
------------
73,235
------------
TEXAS - 15.3%
ABN AMRO Munitops Certificates Trust,
Comal Texas (Credit: PSF-GTD)
(SPA: ABN AMRO Bank)
1.180%, 10/07/03 (a) (b) 10,002 10,002
ABN AMRO Munitops Certificates Trust,
Frisco Texas School District (Credit: PSF-GTD)
(SPA: ABN AMRO Bank)
1.200%, 05/12/04 (b) 9,695 9,695
ABN AMRO Munitops Certificates Trust,
Irving Texas (Credit: PSF-GTD)
(SPA: ABN AMRO Bank)
1.220%, 03/24/04 (b) 11,390 11,390
ABN AMRO Munitops Certificates Trust,
Williamson County Texas (INS: FSA)
(SPA: ABN AMRO Bank)
1.180%, 10/07/03 (a) (b) 10,395 10,395
Galena Park Independent School District
(GTY: TXPSF)
1.130%, 10/07/03 (a) (b) 20,965 20,965
Kendall County Texas Health Facilities,
Morningside Ministries
(LOC: Bank One)
1.170%, 10/07/03 (a) 15,000 15,000
Northeast Independent School District
(Credit: PSF-GTD) (Liquidity: Societe Generale)
1.130%, 10/07/03 (a) (b) 26,515 26,515
San Antonio Electric & Gas (INS: MBIA)
1.130%, 10/07/03 (a) (b) $ 7,455 $ 7,455
State of Texas
2.000%, 08/31/04 45,000 45,352
University of Texas (CP)
0.870%, 10/20/03 18,890 18,890
0.850%, 12/01/03 24,672 24,672
0.900%, 01/08/04 10,000 10,000
------------
210,331
------------
VIRGINIA - 0.7%
Spotsylvania County Industrial Development
(LOC: First Union National Bank)
1.050%, 10/07/03 (a) 6,940 6,940
Williamsburg Development Authority Revenue
(LOC: First Union National Bank)
1.050%, 10/07/03 (a) 2,150 2,150
------------
9,090
------------
WASHINGTON - 3.9%
ABN AMRO Munitops Certificates Trust,
Washington State (GO) (INS: MBIA-IBC)
(SPA: ABN AMRO Bank)
1.180%, 10/07/03 (a) (b) 14,000 14,000
Everett Public Facilities (CP)
0.990%, 05/21/04 6,240 6,240
Washington State Health Care Facilities Authority
(INS: MBIA) (SPA: Lehman Liquidity)
1.170%, 10/07/03 (a) (b) 14,000 14,000
Washington State Housing Finance Commission
(LOC: KeyBank)
1.100%, 10/07/03 (a) 4,945 4,945
Washington State Housing Finance Commission
(LOC: Federal Home Loan)
1.070%, 10/07/03 (a) 2,870 2,870
Washington State Housing Finance Commission
(LOC: Keybank)
1.100%, 10/07/03 (a) 4,945 4,945
Washington State Housing Financial Nonprofit
Revenue, Open Window School Project
(LOC: Bank of America)
1.150%, 10/07/03 (a) 6,600 6,600
------------
53,600
------------
WEST VIRGINIA - 0.3%
Monongalia County West Virginia General Hospital - A
(LOC: Bank One)
1.170%, 10/07/03 (a) 4,700 4,700
------------
WISCONSIN - 1.6%
Wisconsin State Health & Education Facilities
(LOC: Marshall & Illsley)
1.150%, 10/07/03 (a) 13,800 13,800
Wisconsin State Health Marshfield
(LOC: Morgan Guaranty)
1.100%, 10/07/03 (a) 8,000 8,000
------------
21,800
------------
WYOMING - 0.2%
Kemmerer Pollution Control, Exxon Project
1.110%, 10/01/03 (a) 2,300 2,300
------------
MULTISTATE - 3.1%
Clipper Tax Exempt Trust (SPA: State Street)
1.330%, 10/07/03 (a) (b) 27,400 27,400
</Table>
The accompanying notes are an integral part of the financial statements.
10
<Page>
<Table>
<Caption>
DESCRIPTION SHARES/PAR (000) VALUE (000)
- -------------------------------------------------------------------------------------
Clipper Tax-Exempt Trust
1.280%, 10/07/03 (a) (b) $ 15,000 $ 15,000
------------
42,400
------------
TOTAL MUNICIPAL BONDS
(Cost $1,388,372) 1,388,372
------------
MONEY MARKET FUNDS - 0.1%
AIM Tax Free Investments Company 319,689 320
Money Market Obligations Trust 921,181 921
------------
TOTAL MONEY MARKET FUNDS
(Cost $1,241) 1,241
------------
TOTAL INVESTMENTS - 101.3%
(Cost $1,389,613) 1,389,613
------------
OTHER ASSETS AND LIABILITIES, NET - (1.3)% (17,339)
------------
TOTAL NET ASSETS - 100.0% $ 1,372,274
------------
</Table>
(a) Variable Rate Security - The rate shown is the rate in effect as of
September 30, 2003. The date shown is the next put date.
(b) Security sold within the terms of a private placement memorandum, exempt
from registration under Rule 144A of the Securities Act of 1933, as amended,
and may be sold only to dealers in that program or other "qualified
institutional buyers." These securities have been determined to be liquid
under the guidelines established by the Funds' board of directors. As of
September 30, 2003, the value of these investments was $209,122,000 or 15.2%
of total net assets.
AMBAC - American Municipal Bond Assurance Company
CP - Commercial Paper
FGIC - Financial Guaranty Insurance Corporation
FSA - Financial Security Assistance
GO - General Obligation
GTY - Guaranty
INS - Insured
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
SPA - Standby Purchase Agreement
TXPSF - Texas Permanent School Fund
TREASURY OBLIGATIONS FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 22.6%
U.S. Treasury Notes
2.750%, 10/31/03 $ 600,000 $ 600,616
3.250%, 12/31/03 75,000 75,319
3.625%, 03/31/04 350,000 354,191
3.375%, 04/30/04 375,000 379,665
3.250%, 05/31/04 125,000 126,765
2.875%, 06/30/04 400,000 405,498
2.125%, 08/31/04 495,000 498,990
1.875%, 09/30/04 80,000 80,438
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $2,521,482) 2,521,482
------------
REPURCHASE AGREEMENTS - 77.3%
ABN AMRO
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $1,410,037,208 (collateralized
by U.S. Treasury Obligations:
Total Market Value $1,438,200,718) 1,410,000 1,410,000
Banc One
0.980%, dated 9/30/03, matures 10/1/03,
repurchase price $500,013,611 (collateralized
by U.S. Treasury Obligations:
Total Market Value $510,002,707) 500,000 500,000
Bank of America
0.930%, dated 9/30/03, matures 10/1/03,
repurchase price $320,008,267 (collateralized
by U.S. Treasury Obligations:
Total Market Value $326,400,077) 320,000 320,000
Bear Stearns
0.970%, dated 9/30/03, matures 10/1/03,
repurchase price $1,000,026,944 (collateralized
by U.S. Treasury Obligations:
Total Market Value $1,021,483,802) 1,000,000 1,000,000
CS First Boston
0.980%, dated 9/30/03, matures 10/1/03,
repurchase price $460,012,522 (collateralized
by U.S. Treasury Obligations:
Total Market Value $469,200,322) 460,000 460,000
Deutsche Bank
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $500,013,194 (collateralized
by U.S. Treasury Obligations:
Total Market Value $510,000,129) 500,000 500,000
Goldman Sachs
0.920%, dated 9/30/03, matures 10/1/03,
repurchase price $1,670,042,678 (collateralized
by U.S. Treasury Obligations:
Total Market Value $1,703,401,352) 1,670,000 1,670,000
Greenwich Capital
0.970%, dated 9/30/03, matures 10/1/03,
repurchase price $525,014,146 (collateralized
by U.S. Treasury Obligations:
Total Market Value $535,503,181) 525,000 525,000
Lehman Brothers
0.990%, dated 9/30/03, matures 10/1/03,
repurchase price $110,003,025 (collateralized
by U.S. Treasury Obligations:
Total Market Value $112,188,994) 110,000 110,000
Merrill Lynch
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $335,008,840 (collateralized
by cash and U.S. Treasury Obligations:
Total Market Value $341,507,195) 335,000 335,000
</Table>
11
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
Morgan Stanley
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $400,010,556 (collateralized
by U.S. Treasury Obligations:
Total Market Value $408,000,245) $ 400,000 $ 400,000
Prudential Securities
0.960%, dated 9/30/03, matures 10/1/03,
repurchase price $300,008,000 (collateralized
by cash and U.S. Treasury Obligations:
Total Market Value $303,236,156) 300,000 300,000
Societe Generale
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $125,032,986 (collateralized
by U.S. Treasury Obligations:
Total Market Value $127,518,665) 125,000 125,000
UBS Warburg
0.960%, dated 9/30/03, matures 10/1/03,
repurchase price $937,721,005 (collateralized
by U.S. Treasury Obligations:
Total Market Value $956,451,495) 937,696 937,696
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $8,592,696) 8,592,696
------------
TOTAL INVESTMENTS - 99.9%
(Cost $11,114,178) 11,114,178
------------
OTHER ASSETS AND LIABILITIES, NET - 0.1% 9,167
------------
TOTAL NET ASSETS - 100.0% $ 11,123,345
------------
</Table>
TREASURY RESERVE FUND
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
U.S. TREASURY OBLIGATIONS - 29.1%
U.S. Treasury Notes
2.750%, 10/31/03 $ 165,000 $ 165,169
3.250%, 12/31/03 50,000 50,212
3.625%, 03/31/04 85,000 86,011
3.375%, 04/30/04 25,000 25,308
3.250%, 05/31/04 20,000 20,282
2.875%, 06/30/04 95,000 96,290
2.125%, 08/31/04 105,000 105,844
1.875%, 09/30/04 20,000 20,110
------------
TOTAL U.S. TREASURY OBLIGATIONS
(Cost $569,226) 569,226
------------
REPURCHASE AGREEMENTS - 70.8%
ABN AMRO
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $90,002,375 (collateralized
by U.S. Treasury Obligations:
Total Market Value $91,800,197) 90,000 90,000
Bank of America
0.930%, dated 9/30/03, matures 10/1/03,
repurchase price $80,002,067 (collateralized
by U.S. Treasury Obligations:
Total Market Value $81,601,321) 80,000 80,000
Bear Stearns
0.970%, dated 9/30/03, matures 10/1/03,
repurchase price $500,013,472 (collateralized
by U.S. Treasury Obligations:
Total Market Value $516,051,112) 500,000 500,000
CS First Boston
0.980%, dated 9/30/03, matures 10/1/03,
repurchase price $90,002,450 (collateralized
by U.S. Treasury Obligations:
Total Market Value $91,800,019) 90,000 90,000
Goldman Sachs
0.920%, dated 9/30/03, matures 10/1/03,
repurchase price $80,002,044 (collateralized
by U.S. Treasury Obligations:
Total Market Value $81,600,494) 80,000 80,000
Greenwich Capital
0.970%, dated 9/30/03, matures 10/1/03,
repurchase price $225,006,063 (collateralized
by U.S. Treasury Obligations:
Total Market Value $229,501,196) 225,000 225,000
Lehman Brothers
0.990%, dated 9/30/03, matures 10/1/03,
repurchase price $90,002,475 (collateralized
by U.S. Treasury Obligations:
Total Market Value $91,775,617) 90,000 90,000
Merrill Lynch
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $90,002,375 (collateralized
by U.S. Treasury Obligations:
Total Market Value $91,801,235) 90,000 90,000
Morgan Stanley
0.950%, dated 9/30/03, matures 10/1/03,
repurchase price $100,002,639 (collateralized
by U.S. Treasury Obligations:
Total Market Value $102,000,406) 100,000 100,000
</Table>
The accompanying notes are an integral part of the financial statements.
12
<Page>
<Table>
<Caption>
DESCRIPTION PAR (000) VALUE (000)
- ------------------------------------------------------------------------------------
UBS Warburg
0.960%, dated 9/30/03, matures 10/1/03,
repurchase price $38,940,038 (collateralized
by U.S. Treasury Obligations:
Total Market Value $39,717,786) $ 38,939 $ 38,939
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $1,383,939) 1,383,939
------------
TOTAL INVESTMENTS - 99.9%
(Cost $1,953,165) 1,953,165
------------
OTHER ASSETS AND LIABILITIES, NET - 0.1% 2,187
------------
TOTAL NET ASSETS - 100.0% $ 1,955,352
------------
</Table>
13
<Page>
STATEMENTS OF ASSETS AND LIABILITIES September 30, 2003, in thousands, except
per share data
<Table>
<Caption>
GOVERNMENT PRIME TAX FREE TREASURY TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS OBLIGATIONS RESERVE
FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
ASSETS:
Investments in securities, at amortized cost* $ 2,440,709 $ 15,982,013 $ 1,389,613 $ 2,521,482 $ 569,226
Repurchase agreements, at amortized cost 693,302 1,080,063 -- 8,592,696 1,383,939
Cash -- -- -- 1 --
Receivable for securities sold -- -- 7,520 -- --
Dividends and interest receivable 6,897 46,347 2,407 18,251 3,808
Capital shares sold 28 1,164 -- 101 402
Prepaid expenses and other assets 83 336 64 253 58
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS 3,141,019 17,109,923 1,399,604 11,132,784 1,957,433
===================================================================================================================================
LIABILITIES:
Bank overdraft 9 -- 60 -- --
Dividends payable 1,380 8,758 508 4,404 235
Payable for investment securities purchased 25,039 -- 26,100 -- --
Payable upon return of securities loaned 131,613 -- -- -- --
Capital shares redeemed 446 3,474 -- 142 --
Payable to affiliates 532 2,566 257 1,481 387
Payable for distribution and shareholder servicing fees 864 3,940 403 3,395 1,455
Accrued expenses and other liabilities 4 25 2 17 4
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 159,887 18,763 27,330 9,439 2,081
===================================================================================================================================
NET ASSETS $ 2,981,132 $ 17,091,160 $ 1,372,274 $ 11,123,345 $ 1,955,352
===================================================================================================================================
COMPOSITION OF NET ASSETS:
Portfolio capital 2,981,171 17,090,982 1,372,192 11,123,412 1,955,352
Undistributed (distributions in excess of)
net investment income (27) 172 (4) (5) --
Accumulated net realized gain (loss) on investments (12) 6 86 (62) --
- -----------------------------------------------------------------------------------------------------------------------------------
NET ASSETS $ 2,981,132 $ 17,091,160 $ 1,372,274 $ 11,123,345 $ 1,955,352
===================================================================================================================================
* Including securities loaned, at amortized cost $ 129,420 $ -- $ -- $ -- $ --
CLASS A:
Net assets $ 467,541 $ 4,632,371 $ 348,974 $ 478,627 $ 1,955,352
Shares issued and outstanding
($0.01 par value - 20 billion authorized) 467,472 4,632,408 348,989 478,603 1,955,369
Net asset value, offering price, and
redemption price per share $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
CLASS B:
Net assets -- $ 8,079 -- -- --
Shares issued and outstanding
($0.01 par value - 20 billion authorized) -- 8,084 -- -- --
Net asset value, offering price, and redemption
price per share -- $ 1.00 -- -- --
CLASS C:
Net assets -- $ 6,736 -- -- --
Shares issued and outstanding
($0.01 par value - 1 billion authorized) -- 6,737 -- -- --
Net asset value, offering price, and
redemption price per share -- $ 1.00 -- -- --
CLASS D:
Net assets $ 902,940 $ 632,464 $ 19,343 $ 5,720,129 --
Shares issued and outstanding
($0.01 par value - 20 billion authorized) 902,959 632,472 19,343 5,720,179 --
Net asset value, offering price, and
redemption price per share $ 1.00 $ 1.00 $ 1.00 $ 1.00 --
CLASS I:
Net assets -- $ 1,631,687 -- -- --
Shares issued and outstanding
($0.01 par value - 20 billion authorized) -- 1,631,727 -- -- --
Net asset value, offering price, and
redemption price per share -- $ 1.00 -- -- --
CLASS S:
Net assets $ 60,206 $ 120,863 $ 123,272 $ 1,354,195 --
Shares issued and outstanding
($0.01 par value - 5 billion authorized) 60,275 120,863 123,284 1,354,195 --
Net asset value, offering price, and
redemption price per share $ 1.00 $ 1.00 $ 1.00 $ 1.00 --
CLASS Y:
Net assets $ 1,550,445 $ 6,830,595 $ 880,685 $ 3,570,394 --
Shares issued and outstanding
($0.01 par value - 20 billion authorized) 1,550,552 6,830,520 880,641 3,570,424 --
Net asset value, offering price, and
redemption price per share $ 1.00 $ 1.00 $ 1.00 $ 1.00 --
CLASS Z:
Net assets -- $ 3,228,365 -- -- --
Shares issued and outstanding
($0.01 par value - 20 billion authorized) -- 3,228,365 -- -- --
Net asset value, offering price, and
redemption price per share -- $ 1.00 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
</Table>
The accompanying notes are an integral part of the financial statements.
14
<Page>
STATEMENTS OF OPERATIONS For the fiscal year ended September 30, 2003, in
thousands
<Table>
<Caption>
GOVERNMENT PRIME TAX FREE TREASURY TREASURY
OBLIGATIONS OBLIGATIONS OBLIGATIONS OBLIGATIONS RESERVE
FUND FUND FUND FUND FUND
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 41,911 $ 248,738 $ 17,106 $ 140,144 $ 33,630
Securities lending 126 -- -- -- --
Other income -- -- -- 6 --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT INCOME 42,037 248,738 17,106 140,150 33,630
===================================================================================================================================
EXPENSES:
Investment advisory fees 9,460 53,010 4,414 33,178 7,765
Co-administration fees and expenses
(including per account transfer agency fees) 4,226 27,154 2,071 15,073 3,280
Custodian fees 308 1,711 144 1,085 250
Directors' fees 47 269 21 167 41
Registration fees 88 153 58 73 47
Printing 45 276 21 163 44
Professional fees 102 585 45 389 84
Other 105 492 64 319 104
Distribution and shareholder servicing
fees - Class A 1,547 15,250 1,155 1,123 13,455
Distribution and shareholder servicing
fees - Class B -- 87 -- -- --
Distribution and shareholder servicing
fees - Class C -- 60 -- -- --
Distribution and shareholder servicing
fees - Class D 1,545 1,495 42 10,418 --
Distribution and Shareholder servicing
fees - Class S 226 195 511 4,146 --
Shareholder servicing fees - Class I -- 557 -- -- --
Shareholder servicing fees - Class Y 698 2,924 398 1,621 --
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL EXPENSES 18,397 104,218 8,944 67,755 25,070
===================================================================================================================================
Less: Fee waivers (1,627) (5,973) (804) (5,694) (1,603)
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NET EXPENSES 16,770 98,245 8,140 62,061 23,467
===================================================================================================================================
INVESTMENT INCOME - NET 25,267 150,493 8,966 78,089 10,163
===================================================================================================================================
NET REALIZED GAIN ON INVESTMENTS -- 6 95 2 --
===================================================================================================================================
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 25,267 $ 150,499 $ 9,061 $ 78,091 $ 10,163
===================================================================================================================================
</Table>
The accompanying notes are an integral part of the financial statements.
15
<Page>
STATEMENTS OF CHANGES IN NET ASSETS in thousands
<Table>
<Caption>
GOVERNMENT
OBLIGATIONS FUND
- ----------------------------------------------------------------------------------------------------
10/1/02 10/1/01
9/30/03 9/30/02
- ----------------------------------------------------------------------------------------------------
OPERATIONS:
Investment income - net $ 25,267 $ 38,804
Net realized gain on investments -- --
- ----------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 25,267 38,804
- ----------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (3,478) (7,539)
Class B -- --
Class C -- --
Class D (5,707) (9,103)
Class I -- --
Class S (523) (1,476)
Class Y (15,558) (20,686)
Class Z -- --
- ----------------------------------------------------------------------------------------------------
Total distributions (25,266) (38,804)
====================================================================================================
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE:
Class A:
Proceeds from sales 813,989 2,789,789
Reinvestment of distributions 3,488 7,682
Payments for redemptions (878,280) (2,759,292)
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A transactions (60,803) 38,179
- ----------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
- ----------------------------------------------------------------------------------------------------
Decrease in net assets from Class B transactions -- --
- ----------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
- ----------------------------------------------------------------------------------------------------
Increase in net assets from Class C transactions -- --
- ----------------------------------------------------------------------------------------------------
Class D:
Proceeds from sales 3,531,232 1,329,170
Reinvestment of distributions 54 65
Payments for redemptions (3,056,653) (1,510,243)
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class D transactions 474,633 (181,008)
- ----------------------------------------------------------------------------------------------------
Class I:
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
- ----------------------------------------------------------------------------------------------------
Decrease in net assets from Class I transactions -- --
- ----------------------------------------------------------------------------------------------------
Class S:
Proceeds from sales 215,734 266,533
Reinvestment of distributions 1 2
Payments for redemptions (257,042) (261,058)
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class S transactions (41,307) 5,477
- ----------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 12,298,176 3,904,853
Reinvestment of distributions 6,776 9,599
Payments for redemptions (12,317,387) (3,393,272)
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y transactions (12,435) 521,180
- ----------------------------------------------------------------------------------------------------
Class Z:
Proceeds from sales -- --
Reinvestment of distributions -- --
Payments for redemptions -- --
- ----------------------------------------------------------------------------------------------------
Increase in net assets from Class Z transactions -- --
- ----------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions 360,088 383,828
- ----------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 360,089 383,828
NET ASSETS AT BEGINNING OF PERIOD 2,621,043 2,237,215
====================================================================================================
NET ASSETS AT END OF PERIOD $ 2,981,132 $ 2,621,043
====================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME (LOSS) AT END OF PERIOD $ (27) $ (28)
====================================================================================================
</Table>
The accompanying notes are an integral part of the financial statements.
16
<Page>
<Table>
<Caption>
PRIME TAX FREE
OBLIGATIONS FUND OBLIGATIONS FUND
- ----------------------------------------------------------------------------------------------------------------------------------
10/1/02 10/1/01 10/1/02 10/1/01
9/30/03 9/30/02 9/30/03 9/30/02
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Investment income - net $ 150,493 $ 300,662 $ 8,966 $ 13,146
Net realized gain on investments 6 10 95 --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 150,499 300,672 9,061 13,146
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (33,928) (83,069) (1,927) (4,099)
Class B (11) (57) -- --
Class C (6) (16) -- --
Class D (6,265) (12,504) (131) (240)
Class I (25,049) (49,175) -- --
Class S (348) (289) (880) (2,543)
Class Y (81,697) (155,552) (6,028) (6,264)
Class Z (3,190) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (150,494) (300,662) (8,966) (13,146)
==================================================================================================================================
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE:
Class A:
Proceeds from sales 10,000,038 8,447,072 430,912 502,664
Reinvestment of distributions 35,428 84,726 2,073 4,195
Payments for redemptions (11,131,842) (8,587,209) (490,240) (598,285)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A transactions (1,096,376) (55,411) (57,255) (91,426)
- ----------------------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales 4,397 7,652 -- --
Reinvestment of distributions 13 58 -- --
Payments for redemptions (6,680) (4,754) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from Class B transactions (2,270) 2,956 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales 15,669 7,738 -- --
Reinvestment of distributions 4 18 -- --
Payments for redemptions (11,894) (6,961) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class C transactions 3,779 795 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class D:
Proceeds from sales 6,138,802 4,423,759 69,558 94,998
Reinvestment of distributions 556 1,435 -- 6
Payments for redemptions (6,130,325) (4,540,635) (71,168) (106,667)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class D transactions 9,033 (115,441) (1,610) (11,663)
- ----------------------------------------------------------------------------------------------------------------------------------
Class I:
Proceeds from sales 8,342,321 6,398,570 -- --
Reinvestment of distributions 2,257 2,516 -- --
Payments for redemptions (9,291,624) (6,754,619) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from Class I transactions (947,046) (353,533) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class S:
Proceeds from sales 504,642 130,907 389,270 443,750
Reinvestment of distributions 1 -- -- 2
Payments for redemptions (417,928) (96,759) (472,655) (639,920)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class S transactions 86,715 34,148 (83,385) (196,168)
- ----------------------------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 66,564,151 29,324,181 2,638,663 1,341,373
Reinvestment of distributions 37,417 79,425 741 191
Payments for redemptions (68,437,758) (28,313,972) (2,342,910) (1,200,708)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y transactions (1,836,190) 1,089,634 296,494 140,856
- ----------------------------------------------------------------------------------------------------------------------------------
Class Z:
Proceeds from sales 4,895,562 -- -- --
Reinvestment of distributions 62 -- -- --
Payments for redemptions (1,667,259) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class Z transactions 3,228,365 -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions (553,990) 603,148 154,244 (158,401)
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets (553,985) 603,158 154,339 (158,401)
NET ASSETS AT BEGINNING OF PERIOD 17,645,145 17,041,987 1,217,935 1,376,336
==================================================================================================================================
NET ASSETS AT END OF PERIOD $ 17,091,160 $ 17,645,145 $ 1,372,274 $ 1,217,935
==================================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME (LOSS) AT END OF PERIOD $ 172 $ 163 $ (4) $ (4)
==================================================================================================================================
<Caption>
TREASURY TREASURY
OBLIGATIONS FUND RESERVE FUND
- ----------------------------------------------------------------------------------------------------------------------------------
10/1/02 10/1/01 10/1/02 10/1/01
9/30/03 9/30/02 9/30/03 9/30/02
- ----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Investment income - net $ 78,089 $ 140,792 $ 10,163 $ 32,018
Net realized gain on investments 2 -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations 78,091 140,792 10,163 32,018
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Investment income - net:
Class A (2,047) (2,190) (10,163) (32,018)
Class B -- -- -- --
Class C -- -- -- --
Class D (36,523) (61,842) -- --
Class I -- -- -- --
Class S (8,107) (25,018) -- --
Class Y (31,412) (51,742) -- --
Class Z -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (78,089) (140,792) (10,163) (32,018)
==================================================================================================================================
CAPITAL SHARE TRANSACTIONS AT NET ASSET VALUE OF $1.00 PER SHARE:
Class A:
Proceeds from sales 1,329,721 759,331 3,491,491 2,952,368
Reinvestment of distributions 318 977 9,039 28,410
Payments for redemptions (1,081,952) (662,012) (4,339,951) (2,946,484)
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class A transactions 248,087 98,296 (839,421) 34,294
- ----------------------------------------------------------------------------------------------------------------------------------
Class B:
Proceeds from sales -- -- -- --
Reinvestment of distributions -- -- -- --
Payments for redemptions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from Class B transactions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class C:
Proceeds from sales -- -- -- --
Reinvestment of distributions -- -- -- --
Payments for redemptions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class C transactions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class D:
Proceeds from sales 36,795,843 13,766,667 -- --
Reinvestment of distributions 32 198 -- --
Payments for redemptions (36,231,031) (12,608,284) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class D transactions 564,844 1,158,581 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class I:
Proceeds from sales -- -- -- --
Reinvestment of distributions -- -- -- --
Payments for redemptions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from Class I transactions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class S:
Proceeds from sales 2,891,552 2,909,929 -- --
Reinvestment of distributions 48 93 -- --
Payments for redemptions (3,185,732) (3,297,128) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class S transactions (294,132) (387,106) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class Y:
Proceeds from sales 20,137,572 16,329,970 -- --
Reinvestment of distributions 7,504 11,009 -- --
Payments for redemptions (19,571,299) (16,274,127) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from Class Y transactions 573,777 66,852 -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Class Z:
Proceeds from sales -- -- -- --
Reinvestment of distributions -- -- -- --
Payments for redemptions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase in net assets from Class Z transactions -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) in net assets from capital share transactions 1,092,576 936,623 (839,421) 34,294
- ----------------------------------------------------------------------------------------------------------------------------------
Total increase (decrease) in net assets 1,092,578 936,623 (839,421) 34,294
NET ASSETS AT BEGINNING OF PERIOD 10,030,767 9,094,144 2,794,773 2,760,479
==================================================================================================================================
NET ASSETS AT END OF PERIOD $ 11,123,345 $ 10,030,767 $ 1,955,352 $ 2,794,773
==================================================================================================================================
UNDISTRIBUTED (DISTRIBUTIONS IN EXCESS OF)
NET INVESTMENT INCOME (LOSS) AT END OF PERIOD $ (5) $ (5) $ -- $ --
==================================================================================================================================
</Table>
17
<Page>
FINANCIAL HIGHLIGHTS For a share outstanding throughout the periods ended
September 30, unless otherwise indicated.
<Table>
<Caption>
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
- ---------------------------------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND
Class A
2003 $ 1.00 $ 0.006 $ (0.006) $ 1.00
2002 1.00 0.014 (0.014) 1.00
2001 1.00 0.044 (0.044) 1.00
2000 1.00 0.053 (0.053) 1.00
1999 1.00 0.043 (0.043) 1.00
Class D
2003 $ 1.00 $ 0.008 $ (0.008) $ 1.00
2002 1.00 0.015 (0.015) 1.00
2001 1.00 0.046 (0.046) 1.00
2000 1.00 0.055 (0.055) 1.00
1999 1.00 0.044 (0.044) 1.00
Class S
2003 $ 1.00 $ 0.006 $ (0.006) $ 1.00
2002 1.00 0.014 (0.014) 1.00
2001 (1) 1.00 0.001 (0.001) 1.00
Class Y
2003 $ 1.00 $ 0.009 $ (0.009) $ 1.00
2002 1.00 0.017 (0.017) 1.00
2001 1.00 0.047 (0.047) 1.00
2000 1.00 0.056 (0.056) 1.00
1999 1.00 0.046 (0.046) 1.00
</Table>
(1) Commenced operations on September 24, 2001. All ratios for the period have
been annualized, except total return.
(2) Total return would have been lower had certain expenses not been waived.
The accompanying notes are an integral part of the financial statements.
18
<Page>
<Table>
<Caption>
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
RATIO OF INVESTMENT AVERAGE INCOME
NET ASSETS EXPENSES TO INCOME NET ASSETS TO AVERAGE NET
TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING ASSETS (EXCLUDING
RETURN (2) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------------
GOVERNMENT OBLIGATIONS FUND
Class A
2003 0.65% $ 467,541 0.73% 0.65% 0.78% 0.60%
2002 1.41 528,343 0.75 1.39 0.81 1.33
2001 4.53 490,164 0.75 4.41 0.81 4.35
2000 5.43 470,587 0.76 5.29 0.82 5.23
1999 4.36 435,227 0.75 4.28 0.82 4.21
Class D
2003 0.78% $ 902,940 0.60% 0.73% 0.65% 0.68%
2002 1.56 428,307 0.60 1.57 0.66 1.51
2001 4.68 609,315 0.60 4.51 0.66 4.45
2000 5.59 472,078 0.60 5.47 0.66 5.41
1999 4.52 439,287 0.60 4.44 0.67 4.37
Class S
2003 0.52% $ 60,206 0.75% 0.67% 0.81% 0.61%
2002 1.41 101,513 0.75 1.42 0.81 1.36
2001 (1) 0.05 96,036 0.70 2.66 0.80 2.56
Class Y
2003 0.93% $ 1,550,445 0.45% 0.93% 0.51% 0.87%
2002 1.71 1,562,880 0.45 1.68 0.51 1.62
2001 4.84 1,041,700 0.45 4.75 0.51 4.69
2000 5.75 937,230 0.45 5.59 0.51 5.53
1999 4.67 938,897 0.45 4.57 0.52 4.50
</Table>
19
<Page>
<Table>
<Caption>
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
- ---------------------------------------------------------------------------------------------------------
PRIME OBLIGATIONS FUND
Class A
2003 $ 1.00 $ 0.006 $ (0.006) $ 1.00
2002 1.00 0.014 (0.014) 1.00
2001 1.00 0.045 (0.045) 1.00
2000 1.00 0.054 (0.054) 1.00
1999 1.00 0.044 (0.044) 1.00
Class B
2003 $ 1.00 $ 0.001 $ (0.001) $ 1.00
2002 1.00 0.007 (0.007) 1.00
2001 1.00 0.038 (0.038) 1.00
2000 1.00 0.047 (0.047) 1.00
1999 1.00 0.038 (0.038) 1.00
Class C
2003 $ 1.00 $ 0.001 $ (0.001) $ 1.00
2002 1.00 0.007 (0.007) 1.00
2001 1.00 0.038 (0.038) 1.00
2000 1.00 0.047 (0.047) 1.00
1999 (1) 1.00 0.024 (0.024) 1.00
Class D
2003 $ 1.00 $ 0.008 $ (0.008) $ 1.00
2002 1.00 0.016 (0.016) 1.00
2001 1.00 0.047 (0.047) 1.00
2000 1.00 0.056 (0.056) 1.00
1999 1.00 0.046 (0.046) 1.00
Class I
2003 $ 1.00 $ 0.010 $ (0.010) $ 1.00
2002 1.00 0.018 (0.018) 1.00
2001 (2) 1.00 0.001 (0.001) 1.00
Class S
2003 $ 1.00 $ 0.007 $ (0.007) $ 1.00
2002 1.00 0.014 (0.014) 1.00
2001 (2) 1.00 -- -- 1.00
Class Y
2003 $ 1.00 $ 0.010 $ (0.010) $ 1.00
2002 1.00 0.017 (0.017) 1.00
2001 1.00 0.048 (0.048) 1.00
2000 1.00 0.057 (0.057) 1.00
1999 1.00 0.048 (0.048) 1.00
Class Z
2003 (3) $ 1.00 $ 0.002 $ (0.002) $ 1.00
</Table>
(1) Commenced operations on February 1, 1999. All ratios for the period have
been annualized, except total return.
(2) Commenced operations on September 24, 2001. All ratios for the period have
been annualized, except total return.
(3) Commenced operations on August 1, 2003. All ratios for the period have been
annualized, except total return.
(4) Total return does not reflect sales charges applicable to Class B and Class
C shares. Total return would have been lower had certain expenses not been
waived.
The accompanying notes are an integral part of the financial statements.
20
<Page>
<Table>
<Caption>
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
RATIO OF INVESTMENT AVERAGE INCOME
NET ASSETS EXPENSES TO INCOME NET ASSETS TO AVERAGE NET
TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING ASSETS (EXCLUDING
RETURN (4) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------------
PRIME OBLIGATIONS FUND
Class A
2003 0.63% $ 4,632,371 0.81% 0.64% 0.83% 0.62%
2002 1.43 5,728,745 0.81 1.42 0.84 1.39
2001 4.61 5,784,153 0.83 4.46 0.85 4.44
2000 5.52 4,614,094 0.82 5.40 0.86 5.36
1999 4.51 4,170,881 0.80 4.42 0.87 4.35
Class B
2003 0.04% $ 8,079 1.36% 0.10% 1.38% 0.08%
2002 0.75 10,350 1.48 0.73 1.51 0.70
2001 3.92 7,393 1.48 3.74 1.51 3.71
2000 4.85 4,009 1.47 4.72 1.51 4.68
1999 3.85 4,007 1.45 3.78 1.51 3.72
Class C
2003 0.14% $ 6,736 1.33% 0.07% 1.35% 0.05%
2002 0.75 2,958 1.48 0.71 1.51 0.68
2001 3.90 2,163 1.49 3.66 1.51 3.64
2000 4.85 371 1.46 4.63 1.51 4.58
1999 (1) 2.47 341 1.45 3.75 1.51 3.69
Class D
2003 0.82% $ 632,464 0.63% 0.80% 0.65% 0.78%
2002 1.61 623,431 0.63 1.61 0.66 1.58
2001 4.81 738,871 0.63 4.55 0.65 4.53
2000 5.74 515,806 0.62 5.62 0.66 5.58
1999 4.73 426,004 0.60 4.62 0.66 4.56
Class I
2003 1.05% $ 1,631,687 0.40% 1.07% 0.42% 1.05%
2002 1.84 2,578,732 0.40 1.85 0.43 1.82
2001 (2) 0.06 2,932,264 0.48 3.00 0.54 2.94
Class S
2003 0.67% $ 120,863 0.78% 0.59% 0.80% 0.57%
2002 1.46 34,147 0.78 1.31 0.81 1.28
2001 (2) 0.04 -- -- -- -- --
Class Y
2003 0.97% $ 6,830,595 0.48% 0.98% 0.50% 0.96%
2002 1.76 8,666,782 0.48 1.73 0.51 1.70
2001 4.96 7,577,143 0.48 4.78 0.50 4.76
2000 5.90 6,431,029 0.47 5.75 0.51 5.71
1999 4.89 6,228,207 0.45 4.78 0.51 4.72
Class Z
2003 (3) 0.16% $ 3,228,365 0.20% 0.97% 0.22% 0.95%
</Table>
21
<Page>
<Table>
<Caption>
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
- ---------------------------------------------------------------------------------------------------------
TAX FREE OBLIGATIONS FUND
Class A
2003 $ 1.00 $ 0.005 $ (0.005) $ 1.00
2002 1.00 0.008 (0.008) 1.00
2001 1.00 0.027 (0.027) 1.00
2000 1.00 0.032 (0.032) 1.00
1999 1.00 0.025 (0.025) 1.00
Class D
2003 $ 1.00 $ 0.006 $ (0.006) $ 1.00
2002 1.00 0.010 (0.010) 1.00
2001 1.00 0.028 (0.028) 1.00
2000 1.00 0.034 (0.034) 1.00
1999 1.00 0.026 (0.026) 1.00
Class S
2003 $ 1.00 $ 0.005 $ (0.005) $ 1.00
2002 1.00 0.008 (0.008) 1.00
2001 (1) 1.00 -- -- 1.00
Class Y
2003 $ 1.00 $ 0.008 $ (0.008) $ 1.00
2002 1.00 0.011 (0.011) 1.00
2001 1.00 0.029 (0.029) 1.00
2000 1.00 0.035 (0.035) 1.00
1999 1.00 0.028 (0.028) 1.00
TREASURY OBLIGATIONS FUND
Class A
2003 $ 1.00 $ 0.006 $ (0.006) $ 1.00
2002 1.00 0.013 (0.013) 1.00
2001 1.00 0.043 (0.043) 1.00
2000 1.00 0.052 (0.052) 1.00
1999 1.00 0.042 (0.042) 1.00
Class D
2003 $ 1.00 $ 0.007 $ (0.007) $ 1.00
2002 1.00 0.015 (0.015) 1.00
2001 1.00 0.045 (0.045) 1.00
2000 1.00 0.052 (0.052) 1.00
1999 1.00 0.043 (0.043) 1.00
Class S
2003 $ 1.00 $ 0.006 $ (0.006) $ 1.00
2002 1.00 0.013 (0.013) 1.00
2001 (1) 1.00 0.001 (0.001) 1.00
Class Y
2003 $ 1.00 $ 0.009 $ (0.009) $ 1.00
2002 1.00 0.016 (0.016) 1.00
2001 1.00 0.046 (0.046) 1.00
2000 1.00 0.054 (0.054) 1.00
1999 1.00 0.045 (0.045) 1.00
</Table>
(1) Commenced operations on September 24, 2001. All ratios for the period have
been annualized, except total return.
(2) Total return would have been lower had certain expenses not been waived.
The accompanying notes are an integral part of the financial statements.
22
<Page>
<Table>
<Caption>
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
RATIO OF INVESTMENT AVERAGE INCOME (LOSS)
NET ASSETS EXPENSES TO INCOME NET ASSETS TO AVERAGE NET
TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING ASSETS (EXCLUDING
RETURN (2) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------------
TAX FREE OBLIGATIONS FUND
Class A
2003 0.48% $ 348,974 0.72% 0.48% 0.77% 0.43%
2002 0.85 406,204 0.75 0.85 0.81 0.79
2001 2.72 497,631 0.74 2.63 0.80 2.57
2000 3.28 286,449 0.75 3.23 0.81 3.17
1999 2.51 268,626 0.74 2.47 0.82 2.39
Class D
2003 0.60% $ 19,343 0.60% 0.59% 0.65% 0.54%
2002 1.01 20,952 0.60 1.03 0.66 0.97
2001 2.86 32,615 0.60 2.84 0.66 2.78
2000 3.43 24,112 0.60 3.36 0.66 3.30
1999 2.66 33,464 0.60 2.62 0.67 2.55
Class S
2003 0.45% $ 123,272 0.75% 0.48% 0.81% 0.42%
2002 0.85 206,647 0.75 0.88 0.81 0.82
2001 (1) 0.02 402,813 0.70 1.67 0.76 1.61
Class Y
2003 0.76% $ 880,685 0.45% 0.72% 0.50% 0.67%
2002 1.16 584,132 0.45 1.14 0.51 1.08
2001 3.02 443,276 0.45 2.93 0.51 2.87
2000 3.59 375,891 0.45 3.53 0.51 3.47
1999 2.82 338,490 0.45 2.75 0.52 2.68
TREASURY OBLIGATIONS FUND
Class A
2003 0.61% $ 478,627 0.70% 0.55% 0.75% 0.50%
2002 1.34 230,541 0.75 1.29 0.81 1.23
2001 4.44 132,245 0.70 4.00 0.76 3.94
2000 5.27 30,506 0.70 5.16 0.76 5.10
1999 4.31 23,496 0.70 4.24 0.76 4.18
Class D
2003 0.71% $ 5,720,129 0.60% 0.68% 0.65% 0.63%
2002 1.49 5,155,284 0.60 1.48 0.66 1.42
2001 4.54 3,996,702 0.60 4.40 0.66 4.34
2000 5.37 3,252,551 0.60 5.23 0.66 5.17
1999 4.41 3,852,189 0.60 4.32 0.66 4.26
Class S
2003 0.56% $ 1,354,195 0.75% 0.57% 0.80% 0.52%
2002 1.34 1,648,326 0.75 1.34 0.81 1.28
2001 (1) 0.05 2,035,433 0.70 2.46 0.82 2.34
Class Y
2003 0.86% $ 3,570,394 0.45% 0.85% 0.51% 0.79%
2002 1.64 2,996,616 0.45 1.62 0.51 1.56
2001 4.70 2,929,764 0.45 4.48 0.51 4.42
2000 5.53 2,065,655 0.45 5.39 0.51 5.33
1999 4.57 2,620,803 0.45 4.49 0.51 4.43
</Table>
23
<Page>
<Table>
<Caption>
NET ASSET DIVIDENDS NET ASSET
VALUE NET FROM NET VALUE
BEGINNING INVESTMENT INVESTMENT END OF
OF PERIOD INCOME INCOME PERIOD
- ---------------------------------------------------------------------------------------------------------
TREASURY RESERVE FUND (1)
Class A
2003 $ 1.00 $ 0.004 $ (0.004) $ 1.00
2002 1.00 0.011 (0.011) 1.00
2001 (2) 1.00 0.039 (0.039) 1.00
2000 (3) 1.00 0.05 (0.05) 1.00
1999 (4) 1.00 0.04 (0.04) 1.00
1998 (4) 1.00 0.05 (0.05) 1.00
</Table>
(1) The financial highlights for the Treasury Reserve Fund as set forth herein
include the historical financial highlights of the Firstar U.S. Treasury
Money Market Fund Class A shares. The assets of the Firstar U.S. Treasury
Money Market Fund were acquired by the Treasury Reserve Fund on September
24, 2001. In connection with such acquisition, Class A shares of the Firstar
U.S. Treasury Money Market Fund were exchanged for Class A shares of the
Treasury Reserve Fund.
(2) For the period November 1, 2000 to September 30, 2001. Effective in 2001,
the Fund's fiscal year end changed from October 31 to September 30. All
ratios for the period have been annualized, except total return.
(3) For the period December 1, 1999 to October 31, 2000. Effective in 2000,
the Fund's fiscal year end changed from November 30 to October 31. All
ratios for the period have been annualized, except total return.
(4) For the year ended November 30.
(5) Total return would have been lower had certain expenses not been waived.
The accompanying notes are an integral part of the financial statements.
24
<Page>
<Table>
<Caption>
RATIO OF RATIO OF NET
RATIO OF NET EXPENSES TO INVESTMENT
RATIO OF INVESTMENT AVERAGE INCOME
NET ASSETS EXPENSES TO INCOME NET ASSETS TO AVERAGE NET
TOTAL END OF AVERAGE TO AVERAGE (EXCLUDING ASSETS (EXCLUDING
RETURN (5) PERIOD (000) NET ASSETS NET ASSETS WAIVERS) WAIVERS)
- ------------------------------------------------------------------------------------------------------------------------------
TREASURY RESERVE FUND (1)
Class A
2003 0.39% $ 1,955,352 0.94% 0.41% 1.00% 0.35%
2002 1.15 2,794,773 0.94 1.15 1.00 1.09
2001 (2) 3.97 2,760,479 0.94 3.92 0.95 3.91
2000 (3) 5.04 2,284,168 0.99 4.98 1.09 4.88
1999 (4) 4.02 1,049,641 0.92 3.98 1.08 3.82
1998 (4) 4.69 542,430 0.88 4.58 1.08 4.38
</Table>
25
<Page>
NOTES TO FINANCIAL STATEMENTS September 30, 2003
1 > Organization
The First American Government Obligations Fund, Prime Obligations Fund, Tax
Free Obligations Fund, Treasury Obligations Fund, and Treasury Reserve Fund
(each a "Fund" and collectively, the "Funds") are mutual funds offered by
First American Funds, Inc. ("FAF"), which is a member of the First American
Family of Funds. FAF is registered under the Investment Company Act of
1940, as amended, as an open-end investment management company. FAF's
articles of incorporation permit the Board of Directors to create
additional funds in the future.
FAF offers Class A, Class B, Class C, Class D, Class I, Class S, Class Y
and Class Z shares. Class A shares are not subject to sales charges. Class
B and Class C shares of the Prime Obligations Fund are only available
pursuant to an exchange from Class B and Class C shares, respectively, of
another fund in the First American Family of Funds. Class B shares are
subject to a contingent deferred sales charge for six years and
automatically convert to Class A shares after eight years. Class C shares
may be subject to a contingent deferred sales charge for 18 months. Class
D, Class I, Class S, Class Y, and Class Z shares are offered only to
qualifying institutional investors and certain other qualifying accounts.
Treasury Reserve Fund offers only a single class of shares, which are not
subject to sales charges. Class B, Class C and Class I shares are not
offered by the Government Obligations Fund, Tax Free Obligations Fund,
Treasury Obligations Fund, or Treasury Reserve Fund. Class Z shares were
not offered by the Government Obligations Fund, Tax Free Obligations Fund,
Treasury Obligations Fund, or Treasury Reserve Fund during the fiscal year
ended September 30, 2003.
The Funds' prospectuses provide descriptions of each Fund's investment
objective, policies and strategies. All classes of shares in FAF have
identical voting, dividend, liquidation and other rights, and the same
terms and conditions, except that the level of distribution and shareholder
servicing fees charged may differ among classes and each class has
exclusive voting rights on any matters relating to that class' servicing or
distribution arrangements.
2 > Summary of Significant Accounting Policies
The significant accounting policies followed by the Funds are as follows:
SECURITY VALUATION - Investment securities held are stated at amortized
cost, which approximates market value. Under the amortized cost method, any
discount or premium is amortized ratably to the expected maturity of the
security and is included in interest income. In accordance with Rule 2a-7
of the Investment Company Act of 1940, the market value of the securities
held in the Funds are determined weekly using prices supplied by the Funds'
pricing services. This value is then compared to the securities' amortized
cost. Securities whose market price varies by more than 0.5% are identified
and validated with the pricing agent. If the difference between the
aggregate market price and aggregate amortized cost of all securities held
by a Fund exceeds 50% of the allowable 0.5% threshold, the administrators
will notify the Funds' Board of Directors. The Board of Directors will be
kept apprised of the situation until the difference is under the 50% of the
allowable 0.5% threshold. During the period no such notification was
required.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - The Funds record security
transactions on the trade date of the security purchase or sale. Interest
income, including amortization of bond premium and discount, is recorded on
an accrual basis.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions from net investment income
are declared on a daily basis and are payable on the first business day of
the following month.
EXPENSES - Expenses that are directly related to one of the Funds are
charged directly to that Fund. Other operating expenses are generally
allocated to the Funds on the basis of relative net assets of all Funds
within the First American Fund complex. Class specific expenses, such as
12b-1 fees, are borne by that class. Income, other expenses, and realized
and unrealized gains and losses of a Fund are allocated to each respective
class in proportion to the relative net assets of each class.
FEDERAL TAXES - Each Fund is treated as a separate taxable entity. Each
Fund intends to continue to qualify as a regulated investment company as
provided in Subchapter M of the Internal Revenue Code, as amended, and to
distribute all taxable income, if any, to its shareholders. Accordingly, no
provision for federal income taxes is required.
Net investment income and net realized gains (losses) may differ for
financial statement and tax purposes because of temporary or permanent
book/tax differences. For the fiscal year ended September 30, 2003, the
Funds' income and gains for tax purposes were not significantly different
from income and gains for financial statement purposes.
The character of distributions made during the year from net investment
income or net realized gains may differ from its ultimate characterization
for federal income tax purposes. In addition, due to the timing of dividend
distributions, the fiscal year in which the amounts are distributed may
differ from the year that the income or realized gains (losses) were
recorded by the Fund. To the extent these differences are permanent,
adjustments are made to the appropriate equity accounts in the period that
the differences arise.
26
<Page>
On the Statements of Assets and Liabilities, the following adjustments were
made (000):
<Table>
<Caption>
UNDISTRIBUTED ACCUMULATED
NET INVESTMENT NET REALIZED PORTFOLIO
FUND INCOME GAIN (LOSSES) CAPITAL
----------------------------------------------------------------------------------------------------------------------------
Prime Obligations $ 10 $ (10) $ --
Tax Free Obligations -- 5 (5)
</Table>
The character of the distributions paid and declared for the fiscal years
ended September 30, 2003 and 2002, were as follows (000):
<Table>
<Caption>
2003
----------------------------------------------------------------------------------------------------------------------------
ORDINARY TAX-EXEMPT
FUND INCOME INCOME TOTAL
----------------------------------------------------------------------------------------------------------------------------
Government Obligations $ 25,266 $ -- $ 25,266
Prime Obligations 150,494 -- 150,494
Tax Free Obligations -- 8,966 8,966
Treasury Obligations 78,089 -- 78,089
Treasury Reserve 10,163 -- 10,163
</Table>
<Table>
<Caption>
2002
----------------------------------------------------------------------------------------------------------------------------
ORDINARY TAX-EXEMPT
FUND INCOME INCOME TOTAL
----------------------------------------------------------------------------------------------------------------------------
Government Obligations $ 38,804 $ -- $ 38,804
Prime Obligations 300,662 -- 300,662
Tax Free Obligations -- 13,146 13,146
Treasury Obligations 140,792 -- 140,792
Treasury Reserve 32,018 -- 32,018
</Table>
As of September 30, 2003, the components of accumulated earnings (deficit)
on a tax basis were:
<Table>
<Caption>
GOVERNMENT PRIME TAX FREE
OBLIGATIONS OBLIGATIONS OBLIGATIONS
----------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary income $ 1,356 $ 8,943 $ 20
Undistributed tax exempt income -- -- 507
Undistributed long term capital gains -- -- 66
----------------------------------------------------
Accumulated earnings 1,356 8,943 593
Accumulated capital and post-October losses (12) -- --
----------------------------------------------------
Total accumulated earnings $ 1,344 $ 8,943 $ 593
----------------------------------------------------
</Table>
<Table>
<Caption>
TREASURY TREASURY
OBLIGATIONS RESERVE
----------------------------------------------------------------------------------------------------------------------------
Undistributed ordinary income $ 4,402 $ 235
Undistributed tax exempt income -- --
Undistributed long term capital gains -- --
-------------------------------
Accumulated earnings 4,402 235
Accumulated capital and post-October losses (62) --
-------------------------------
Total accumulated earnings $ 4,340 $ 235
-------------------------------
</Table>
The differences between book-basis and tax-basis undistributed/accumulated
income, gains and losses are primarily due to distributions declared but
not paid by September 30, 2003.
27
<Page>
As of September 30, 2003, the following Funds had capital loss
carryforwards (000):
<Table>
<Caption>
FUND AMOUNT EXPIRATION DATE
-----------------------------------------------------------
Government Obligations $ 12 2006-2007
Treasury Obligations 62 2008
</Table>
REPURCHASE AGREEMENTS - Each Fund may enter into repurchase agreements with
member banks of the Federal Reserve or registered broker dealers whom the
Funds' investment advisor deems creditworthy under guidelines approved by
the Funds' board of directors, subject to the seller's agreement to
repurchase such securities at a mutually agreed upon date and price. The
repurchase price generally equals the price paid by the Fund plus interest
negotiated on the basis of current short-term rates.
Securities pledged as collateral for repurchase agreements are held by the
custodian bank until the respective agreements mature. Each Fund may also
invest in triparty repurchase agreements. Securities held as collateral for
triparty repurchase agreements are maintained in a segregated account by
the broker's custodian bank until the maturity of the repurchase agreement.
Provisions of the repurchase agreements ensure that the market value of the
collateral, including accrued interest thereon, is sufficient in the event
of default of the counterparty. If the counterparty defaults and the value
of the collateral declines or if the counterparty enters an insolvency
proceeding, realization of the collateral by the Fund may be delayed or
limited.
SECURITIES LENDING - In order to generate additional income, a Fund may
lend securities representing up to one-third of the value of its total
assets (which includes collateral for securities on loan) to
broker-dealers, banks or other institutional borrowers of securities. Each
Fund's policy is to maintain collateral in the form of cash, U.S.
Government securities, or other high-grade debt obligations equal to at
least 100% of the value of securities loaned. The collateral is then
"marked to market" daily until the securities are returned. As with other
extensions of credit, there may be risks of delay in recovery of the
securities or even loss of rights in the collateral should the borrower of
the security fail financially.
U.S. Bancorp Asset Management, Inc. ("USBAM") serves as the securities
lending agent for the Funds in transactions involving the lending of
portfolio securities on behalf of the Funds. For these services, USBAM
received $96,586 in securities lending fees for the fiscal year ended
September 30, 2003 from the Government Obligations Fund.
INTERFUND LENDING PROGRAM - Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Funds, along with other registered
investment companies in the First American Family of Funds, may participate
in an interfund lending program. This program provides an alternative
credit facility allowing the Funds to borrow from, or lend money to, other
participating funds. The Funds did not have any interfund lending
transactions during the fiscal year ended September, 30, 2003.
DEFERRED COMPENSATION PLAN - Under a Deferred Compensation Plan (the Plan),
non-interested directors of the First American Fund family may participate
and elect to defer receipt of their annual compensation. Deferred amounts
are treated as though equivalent dollar amounts had been invested in shares
of selected open-end First American Funds as designated by the directors.
All amounts in the Plan are 100% vested and accounts under the Plan are
obligations of the Funds. Deferred amounts remain in the Funds until
distributed in accordance with the Plan.
USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS - The
preparation of financial statements, in conformity with accounting
principles generally accepted in the United States, requires management to
make estimates and assumptions that affect the reported amount of net
assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported results of
operations during the reporting period. Actual results could differ from
those estimates.
3 > Fees and Expenses
ADVISOR FEES - Pursuant to an investment advisory agreement (the
"Agreement"), USBAM manages each Fund's assets and furnishes related office
facilities, equipment, research and personnel. The Agreement requires each
Fund to pay USBAM a monthly fee based upon average daily net assets. For
the period October 1, 2002 to July 31, 2003, the fee for the Funds was
equal to an annual rate of 0.35% of the average daily net assets of each
Fund. Effective August 1, 2003, the fee for the Funds is equal to an annual
rate of 0.10% of the average daily net assets of each Fund. USBAM
contractually waived fees during the most recently completed fiscal year so
that the total fund operating expenses did not exceed expense limitations
described in the Funds' prospectuses.
CO-ADMINISTRATION FEES - USBAM, and U.S. Bancorp Fund Services, LLC,
("USBFS"), (collectively, the "Administrators"), serve as co-administrators
pursuant to a co-administration agreement between the Administrators
28
<Page>
and the Funds. USBAM is a subsidiary of U.S. Bank National Association
("U.S. Bank"). Both U.S. Bank and USBFS are direct subsidiaries of U.S.
Bancorp. Under the co-administration agreement, the Administrators are
compensated to provide, or compensate other entities to provide, services
to the Funds. These services include various legal, oversight and
administrative services, accounting services, transfer agency and dividend
disbursing services, and shareholder services. The Funds pay the
Administrators at an annual rate, calculated daily and paid monthly based
on the average daily net assets of all open-end mutual funds in the First
American Family of Funds, equal to each Fund's pro rata share of an amount
equal to 0.15% of the aggregate average daily net assets up to $8 billion,
0.135% of the next $17 billion of the aggregate average daily net assets,
0.12% of the next $25 billion of the aggregate average daily net assets,
and 0.10% of the aggregate average daily net assets of all open-end mutual
funds in the First American Family of Funds in excess of $50 billion. Class
S shares pay an additional fee equal to 0.05% of average daily net assets
attributable to such shares. The Funds, along with all other open-end
mutual funds in the First American Family of Funds, pay transfer agent fees
of $18,500 per share class. These fees are allocated to each Fund based
upon the Fund's pro rata share of the aggregate average daily net assets of
the Fund's that comprise FAF. Each Fund also pays additional per
account fees for transfer agent services. For the fiscal year ended
September 30, 2003, administration fees paid to USBAM and USBFS for the
Funds included in this annual report were as follows (000):
<Table>
<Caption>
FUND AMOUNT
------------------------------------------------------------
Government Obligations Fund $ 3,924
Prime Obligations Fund 20,706
Tax Free Obligations Fund 1,910
Treasury Obligations Fund 14,171
Treasury Reserve Fund 3,248
</Table>
During the year ended September 30, 2003, administration fees of
$1,646,785 and $16,472 were waived on Class I and Class Z shares,
respectively, of Prime Obligations Fund.
CUSTODIAN FEES - U.S. Bank serves as the Funds' custodian pursuant to a
custodian agreement with FAF. The fee for each Fund is equal to an annual
rate of 0.01% of average daily net assets. All fees are computed daily and
paid monthly.
DISTRIBUTION AND SHAREHOLDER SERVICING (12b-1) FEES - Quasar Distributors,
LLC, ("Quasar"), a subsidiary of U.S. Bancorp, serves as distributor of the
Funds pursuant to a distribution agreement with FAF. Under the distribution
agreement, and pursuant to a plan adopted by each Fund under Rule 12b-1 of
the Investment Company Act, each of the Funds pay Quasar a monthly
distribution and/or shareholder servicing fee equal to an annual rate of
0.25% of each Fund's average daily net assets of Class A shares, 1.00% of
the Class B shares, 1.00% of the Class C shares, 0.15% of the Class D
shares, 0.25% of the Class S shares, and 0.50% of the Treasury Reserve
Fund. These fees may be used by Quasar to provide compensation for sales
support and distribution activities for each class of the Funds. In
addition, for Class B shares and Class C shares, a portion of these fees
may be used to provide compensation for shareholder servicing activities.
No distribution and shareholder servicing fees are paid to Quasar by Class
Y or Class I shares.
The Rule 12b-1 plan was adopted by the Class S shareholders effective
August 1, 2003. Prior to August 1, 2003, Quasar performed services with
respect to the Class S shares pursuant to a shareholder service plan and
agreement. Pursuant to this agreement, each fund paid Quasar a monthly
shareholder servicing fee equal to an annual rate of 0.25% of each Fund's
average daily net assets of the Class S shares.
Under these distribution and service agreements, the following amounts were
retained by Quasar for the year ended September 30, 2003 (000):
<Table>
<Caption>
FUND AMOUNT
------------------------------------------------------------
Government Obligations Fund $ 1,181
Prime Obligations Fund 8,549
Tax Free Obligations Fund 929
Treasury Obligations Fund 6,436
Treasury Reserve Fund 11,096
</Table>
SHAREHOLDER SERVICING (NON-12b-1) FEES - Effective August 1, 2003, FAF
entered into a shareholder service plan and agreement with USBAM, under
which USBAM has agreed to provide FAF, or will enter into written
agreements with other service providers pursuant to which the service
providers will provide FAF, with non-distribution-related services to
shareholders of Class A, Class D, Class I, Class S, and Class Y shares, and
Treasury Reserve Fund. Under this plan and agreement, the Funds have agreed
to pay USBAM a fee at an annual rate of 0.25% of the average net asset
value of the Class A, Class D, Class S, and Class Y shares, and Treasury
Reserve
29
<Page>
Fund, and a fee at an annual rate of 0.20% of the average net asset value
of the Class I shares, computed daily and paid monthly. For the year ended
September 30, 2003, shareholder servicing fees paid by the Funds to USBAM
were as follows (000):
<Table>
<Caption>
FUND AMOUNT
------------------------------------------------------------
Government Obligations Fund $ 1,309
Prime Obligations Fund 5,826
Tax Free Obligations Fund 619
Treasury Obligations Fund 4,800
Treasury Reserve Fund 973
</Table>
SALES CHARGES - A contingent deferred sales charge ("CDSC") is imposed on
redemptions made in the Class B shares. The CDSC varies depending on the
number of years from time of payment for the purchase of Class B shares
until the redemption of such shares. Class B shares automatically convert
to Class A shares after eight years.
<Table>
<Caption>
CONTINGENT DEFERRED SALES CHARGE
AS A PERCENTAGE OF DOLLAR
YEAR SINCE PURCHASE AMOUNT SUBJECT TO CHARGE
-----------------------------------------------------------
First 5.00%
Second 5.00%
Third 4.00%
Fourth 3.00%
Fifth 2.00%
Sixth 1.00%
Seventh --
Eighth --
</Table>
A CDSC of 1.00% is imposed on redemptions made in Class C shares for the
first eighteen months.
The CDSC for Class B shares and Class C shares is imposed on the value of
the purchased shares, or the value at the time of redemption, whichever is
less.
For the fiscal year ended September 30, 2003, total sales charges retained
by affiliates of USBAM for distributing shares of the Prime Obligations
Fund were $22,960.
OTHER FEES - In addition to the investment advisory fees, custodian fees,
distribution and shareholder servicing fees, and co-administration fees,
each Fund is responsible for paying most other operating expenses including
fees and expenses of outside directors, registration fees, printing of
shareholder reports, legal, auditing, insurance and other miscellaneous
expenses. For the fiscal year ended September 30, 2003, legal fees and
expenses were paid to a law firm of which the Secretary and two Assistant
Secretaries of the Funds are partners.
4 > Concentration of Credit Risk
The Tax Free Obligations Fund invests in securities that include revenue
bonds, tax and revenue anticipation notes, and general obligation bonds. At
September 30, 2003, the percentage of portfolio investments by each revenue
source was as follows:
<Table>
<Caption>
TAX FREE
OBLIGATIONS FUND
---------------------------------------------------------------
Revenue Bonds 88%
General Obligations 12
-------------------
100%
-------------------
</Table>
The credit ratings of long-term debt as a percentage of total market value
of investments at September 30, 2003, were as follows:
<Table>
<Caption>
STANDARD & POOR'S/
MOODY'S TAX FREE
RATINGS: OBLIGATIONS FUND
---------------------------------------------------------------
AAA/Aaa 39%
AA/Aa 60
A/A 1
NR --
-------------------
100%
-------------------
</Table>
Securities rated by only one agency are shown in that category. Securities
rated by both agencies are shown with their lowest rating.
30
<Page>
NOTICE TO SHAREHOLDERS September 30, 2003 (unaudited)
TAX NOTICE - THE INFORMATION SET FORTH BELOW IS FOR EACH FUND'S FISCAL YEAR
AS REQUIRED BY FEDERAL LAWS. MOST SHAREHOLDERS, HOWEVER, MUST REPORT
DISTRIBUTIONS ON A CALENDAR YEAR BASIS FOR INCOME TAX PURPOSES, WHICH MAY
INCLUDE DISTRIBUTIONS FOR PORTIONS OF TWO FISCAL YEARS OF A FUND.
ACCORDINGLY, THE INFORMATION NEEDED FOR INCOME TAX PURPOSES WILL BE SENT IN
EARLY 2004 ON FORM 1099. PLEASE CONSULT YOUR TAX ADVISOR FOR PROPER
TREATMENT OF THIS INFORMATION.
Dear First American Shareholders:
For the fiscal year ended September 30, 2003, each Fund has designated
long-term capital gains, ordinary income and exempt income with regard to
distributions paid during the year as follows:
<Table>
<Caption>
LONG TERM ORDINARY
CAPITAL GAINS INCOME TAX TOTAL
DISTRIBUTIONS DISTRIBUTIONS EXEMPT DISTRIBUTIONS
FUND (TAX BASIS) (TAX BASIS) INTEREST (TAX BASIS)
--------------------------------------------------------------------------------------------------
Treasury Obligations 0% 100% 0% 100%
Treasury Reserve 0 100 0 100
Government Obligations 0 100 0 100
Prime Obligations 0 100 0 100
Tax Free Obligations 0 0 100 100
</Table>
SHAREHOLDER MEETING - At a special meeting of the holders of the Class S
shares of Government Obligations Fund, Prime Obligations Fund, Tax Free
Obligations Fund and Treasury Obligations Fund on July 21, 2003, the
shareholders voted to approve the following proposal:
Approval of a new Rule 12b-1 Distribution Plan for the Class S shares of
each of the above named funds.
At the meeting, shareholders approved this proposal as follows:
<Table>
<Caption>
SHARES SHARES
VOTED VOTED SHARES
FUND FOR AGAINST ABSTAINED
--------------------------------------------------------------------------------------------------
Government Obligations 35,635,428 5,261,741 --
Prime Obligations 29,716,954 135,474 779,947
Tax Free Obligations 123,219,764 3,288,496 --
Treasury Obligations 953,572,215 15,451,409 10,821,401
</Table>
HOW TO OBTAIN A COPY OF THE FUNDS' PROXY VOTING POLICIES - A description of
the policies and procedures that the Funds use to determine how to vote
proxies relating to portfolio securities is available (1) without charge
upon request by calling 800.677.FUND; (2) at firstamericanfunds.com; and
(3) on the U.S. Securities and Exchange Commission's website at sec.gov.
31
<Page>
Directors and Officers of the Funds
Independent Directors
<Table>
<Caption>
OTHER
POSITION(S) TERM OF OFFICE NUMBER OF PORTFOLIOS DIRECTORSHIPS
NAME, ADDRESS, AND HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) IN FUND COMPLEX HELD BY
YEAR OF BIRTH WITH FUND TIME SERVED DURING PAST 5 YEARS OVERSEEN BY DIRECTOR DIRECTOR +
- ------------------------------------------------------------------------------------------------------------------------------------
Benjamin R. Field III, Director Term expiring earlier of Senior Financial Advisor, First American Funds None
800 Nicollet Mall, death, resignation, Bemis Company, Inc. since Complex: twelve
Minneapolis, MN removal, 2002; Senior Vice registered investment
55402 (1939) disqualification, or President, Chief companies, including
successor duly elected Financial Officer and sixty one portfolios
and qualified. Director Treasurer, Bemis, through
of FAF, since September 2002
2003
Mickey P. Foret, Director Term expiring earlier of Consultant to Northwest First American Funds ADC
800 Nicollet Mall, death, resignation, Airlines, Inc. since Complex: twelve Telecommuni-
Minneapolis, MN removal, 2002; Executive Vice registered investment cations,
55402 (1946) disqualification, or President and Chief companies, including Inc., URS
successor duly elected Financial Officer, sixty one portfolios Corporation,
and qualified. Director Northwest Airlines, Champion
of FAF since September through 2002 Airlines,
2003 Inc.
Roger A. Gibson, Director Term expiring earlier of Vice President, Cargo - First American Funds None
800 Nicollet Mall, death, resignation, United Airlines, since Complex: twelve
Minneapolis, MN removal, July 2001; Vice registered investment
55402 (1946) disqualification, or President, North America companies, including
successor duly elected - Mountain Region, United sixty one portfolios
and qualified. Director Airlines, prior to July
of FAF since October 2001
1997
Victoria J. Herget, Director Term expiring earlier of Investment consultant and First American Funds None
800 Nicollet Mall, death, resignation, non-profit board member Complex: twelve
Minneapolis, MN removal, since 2001; Managing registered investment
55402 (1952) disqualification, or Director of Zurich companies, including
successor duly elected Scudder Investments sixty one portfolios
and qualified. Director through 2001
of FAF since September
2003
Leonard W. Kedrowski, Director Term expiring earlier of Owner, Executive and First American Funds None
800 Nicollet Mall, death, resignation, Management Consulting, Complex: twelve
Minneapolis, MN removal, Inc., a management registered investment
55402 (1941) disqualification, or consulting firm; former companies, including
successor duly elected Chief Executive Officer, sixty one portfolios
and qualified. Director Creative Promotions
of FAF since November International, LLC, a
1993 promotional award
programs and products
company, through October
2003; Board member, GC
McGuiggan Corporation
(DBA Smyth Companies), a
label printer; Advisory
Board member, Designer
Doors, manufacturer of
designer doors, through
2002; acted as CEO of
Graphics Unlimited
Director through 1998
Richard K. Riederer, Director Term expiring earlier of Retired; Director, First American Funds None
800 Nicollet Mall, death, resignation, President and Chief Complex: twelve
Minneapolis, MN removal, Executive Officer, registered investment
55402 (1944) disqualification, or Weirton Steel through companies, including
successor duly elected 2001 sixty one portfolios
and qualified. Director
of FAF since August 2001
</Table>
32
<Page>
<Table>
<Caption>
OTHER
POSITION(S) TERM OF OFFICE NUMBER OF PORTFOLIOS DIRECTORSHIPS
NAME, ADDRESS, AND HELD AND LENGTH OF PRINCIPAL OCCUPATION(S) IN FUND COMPLEX HELD BY
YEAR OF BIRTH WITH FUND TIME SERVED DURING PAST 5 YEARS OVERSEEN BY DIRECTOR DIRECTOR +
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph D. Strauss, Director Term expiring Owner and President, First American Funds None
800 Nicollet Mall, earlier of death, Excensus TM LLC, a Complex: twelve
Minneapolis, MN resignation, consulting firm, registered
55402 (1940) removal, since 2001; Owner investment
disqualification, or and President, companies, including
successor duly Strauss Management sixty one portfolios
elected and Company, a Minnesota
qualified. Director holding company for
of FAF since various
September 1984 organizational
management business
ventures; Owner,
Chairman and Chief
Executive Officer,
Community Resource
Partnerships, Inc.,
a strategic
planning, operations
management,
government
relations,
transportation
planning and public
relations
organization;
attorney at law
Virginia L. Stringer, Chair; Chair Term three Owner and President, First American Funds None
800 Nicollet Mall, Director years. Directors Strategic Management Complex: twelve
Minneapolis, MN Term expiring Resources, Inc., a registered
55402 (1944) earlier of death, management investment
resignation, consulting firm; companies, including
removal, Executive Consultant sixty one portfolios
disqualification, or for State Farm
successor duly Insurance Company
elected and
qualified. Chair of
FAF's Board since
September 1997;
Director of FAF
since June 1991
James M. Wade, Director Term expiring Owner and President, First American Funds None
800 Nicollet Mall, earlier of death, Jim Wade Homes, a Complex: twelve
Minneapolis, MN resignation, homebuilding registered
55402 (1943) removal, company, since 1999 investment
disqualification, or companies, including
successor duly sixty one portfolios
elected and
qualified. Director
of FAF since August
2001
</Table>
+ Includes only directorships in a company with a class of securities
registered pursuant to Section 12 of the Securities Exchange Act or subject
to the requirements of Section 15(d) of the Securities Exchange Act, or any
company registered as an investment company under the Investment Company Act.
The Statement of Additional Information (SAI) includes additional information
about fund directors and is available upon request without charge by calling
800-677-FUND or writing to First American Funds, P.O. Box 1330, Minneapolis,
Minnesota, 55440-1330.
33
<Page>
Officers
<Table>
<Caption>
POSITION(S) TERM OF OFFICE
NAME, ADDRESS, AND HELD AND LENGTH OF
YEAR OF BIRTH WITH FUND TIME SERVED PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas S. Schreier, Jr., President Re-elected by the Board Chief Executive Officer of U.S. Bancorp Asset
U.S. Bancorp Asset annually; President of Management, Inc. since May 2001; Chief
Management, Inc., FAF since February 2001 Executive Officer of First American Asset
800 Nicollet Mall, Management from December 2000 through May
Minneapolis, MN 2001 and of Firstar Investment & Research
55402 (1962) * Management Company from February 2001 through
May 2001; Senior Managing Director and Head
of Equity Research of U.S. Bancorp Piper
Jaffray from October 1998 through December
2000; prior to October 1998, Senior Airline
Equity Analyst and a Director in the Equity
Research Department, Credit Suisse First Boston
Mark S. Jordahl, Vice Re-elected by the Board Chief Investment Officer of U.S. Bancorp
U.S. Bancorp Asset President - annually; Vice President - Asset Management, Inc. since September 2001;
Management, Inc. Investments Investments of FAF President and Chief Investment Officer, ING
800 Nicollet Mall, since September 2001 Investment Management - Americas, September
Minneapolis, MN 2000 to June 2001; Senior Vice President and
55402 (1960) * Chief Investment Officer, ReliaStar Financial
Corp., January 1998 to September 2000
Jeffery M. Wilson, Vice Re-elected by the Board Senior Vice President of U.S. Bancorp Asset
U.S. Bancorp Asset President - annually; Vice President - Management since May 2001; prior thereto,
Management, Inc. Administration Administration of FAF Senior Vice President of First American Asset
800 Nicollet Mall, since March 2000 Management
Minneapolis, MN
55402 (1956) *
Robert H. Nelson, Treasurer Re-elected by the Board Senior Vice President of U.S. Bancorp Asset
U.S. Bancorp Asset annually; Treasurer of Management since May 2001; prior thereto,
Management, Inc. FAF since March 2000 Senior Vice President of First American Asset
800 Nicollet Mall, Management since 1998 and of Firstar
Minneapolis, MN Investment & Research Management Company
55402 (1963) * since February 2001; Senior Vice President of
Piper Capital Management Inc. through 1998
James D. Alt, Secretary Re-elected by the Board Partner, Dorsey & Whitney LLP, a Minneapolis-
50 South Sixth Street, annually; Assistant based law firm
Suite 1500, Secretary of FAF from
Minneapolis, MN September 1998 through
55402 (1951) June 2002. Secretary of
FAF since June 2002
Michael J. Radmer, Assistant Re-elected by the Board Partner, Dorsey & Whitney LLP, a Minneapolis-
50 South Sixth Street, Secretary annually; Assistant based law firm
Suite 1500, Secretary of FAF since
Minneapolis, MN March 2000; Secretary of
55402 (1945) FAF from September 1999
through March 2000
Kathleen L. Prudhomme, Assistant Re-elected by the Board Partner, Dorsey & Whitney LLP, a Minneapolis-
50 South Sixth Street, Secretary annually; Assistant based law firm
Suite 1500, Secretary of FAF since
Minneapolis, MN September 1998
55402 (1953)
James R. Arnold, Assistant Re-elected by the Board Vice President, U.S. Bancorp Fund Services,
615 E. Michigan Street, Secretary annually; Assistant LLC since March 2002; Senior Administration
Milwaukee, WI Secretary of FAF since Services Manager, UMB Fund Services, Inc.
53202 (1957) * June 2003 through March 2002
Richard J. Ertel, Assistant Re-elected by the Board Disclosure Counsel, U.S. Bancorp Asset
U.S. Bancorp Asset Secretary annually; Assistant Management, Inc. since May 2003; Associate
Management, Inc. Secretary of FAF since Counsel, Hartford Life and Accident Insurance
800 Nicollet Mall, June 2003 Company from April 2001 through May 2003;
Minneapolis, MN Attorney and Law Clerk, Fortis Financial
55402 (1967) * Group, through March 2001
Douglas G. Hess, Assistant Re-elected by the Board Vice President, U.S. Bancorp Fund Services, LLC
615 E. Michigan Street, Secretary annually; Assistant since November 2002; prior thereto, Assistant
Milwaukee, WI Secretary of FAF since Vice President, Fund Compliance Administrator,
53202 (1967) * September 2001 U.S. Bancorp Fund Services, LLC
</Table>
* Messrs. Schreier, Jordahl, Wilson, Nelson, and Ertel are each officers of
U.S. Bancorp Asset Management, Inc., which serves as investment advisor and
co-administrator for FAF. Messrs. Hess and Arnold are officers of U.S.
Bancorp Fund Services, LLC, which is a subsidiary of U.S. Bancorp and which
serves as co-administrator for FAF.
34
<Page>
Board of Directors First American Funds, Inc.
Virginia Stringer
Chairperson of First American Funds, Inc.
Owner and President of Strategic Management Resources, Inc.
Benjamin Field III
Director of First American Funds, Inc.
Senior Financial Advisor to, and formerly Senior Vice President, Chief Financial
Officer, and Treasurer of, Bemis Company, Inc.
Mickey Foret
Director of First American Funds, Inc.
Consultant to, and formerly Executive Vice President and Chief Financial Officer
of, Northwest Airlines, Inc.
Roger Gibson
Director of First American Funds, Inc.
Vice President, Cargo-United Airlines
Victoria Herget
Director of First American Funds, Inc.
Investment Consultant; former Managing Director of Zurich Scudder Investments
Leonard Kedrowski
Director of First American Funds, Inc.
Owner and President of Executive and Management Consulting, Inc.
Richard Riederer
Director of First American Funds, Inc.
Retired; former President and Chief Executive Officer of Weirton Steel
Joseph Strauss
Director of First American Funds, Inc.
Former Chairman of First American Funds, Inc.
Owner and President of Strauss Management Company
James Wade
Director of First American Funds, Inc.
Owner and President of Jim Wade Homes
FIRST AMERICAN FUNDS' BOARD OF DIRECTORS IS COMPRISED ENTIRELY OF INDEPENDENT
DIRECTORS.
<Page>
[FIRST AMERICAN FUNDS LOGO]
DIRECT FUND CORRESPONDENCE TO:
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
This report and the financial statements contained herein are submitted for the
general information of the shareholders of the corporation and are not intended
to be a forecast of future events, a guarantee of future results, nor investment
advice. Further, there is no assurance that certain securities will remain in or
out of each Fund's portfolio.
Please refer to the enclosed prospectus, which contains more complete
information on First American Funds, including risks, fees, and expenses. Please
read it carefully before investing or sending money. This report must be
preceded or accompanied by the prospectus.
Past performance does not guarantee future results. The principal value of an
investment will fluctuate so that an investor's shares, when redeemed, may be
worth more or less than their original cost.
INVESTMENT ADVISOR
U.S. BANCORP ASSET MANAGEMENT, INC.
800 Nicollet Mall
Minneapolis, Minnesota 55402
CO-ADMINISTRATORS
U.S. BANCORP ASSET MANAGEMENT, INC.
800 Nicollet Mall
Minneapolis, Minnesota 55402
U.S. BANCORP FUND SERVICES, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
CUSTODIAN
U.S. BANK NATIONAL ASSOCIATION
180 East Fifth Street
St. Paul, Minnesota 55101
DISTRIBUTOR
QUASAR DISTRIBUTORS, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
220 South Sixth Street
Suite 1400
Minneapolis, Minnesota 55402
COUNSEL
DORSEY & WHITNEY LLP
50 South Sixth Street
Suite 1500
Minneapolis, Minnesota 55402
FIRST AMERICAN FUNDS
P.O. Box 1330
Minneapolis, MN 55440-1330
In an attempt to reduce shareholder costs and help eliminate duplication,
First American Funds will try to limit their mailing to one report for each
address that lists one or more shareholders with the same last name. If you
would like additional copies, please call First American Investor Services at
800.677.FUND or visit firstamericanfunds.com.
0210-03 11/2003 AR-MMY
Bulk Rate
U.S. Postage
Paid
Mpls. MN
Permit No. 28388
USPS Mailer 881
Approved Poly
<Page>
ITEM 2--CODE OF ETHICS
RESPONSE: The registrant has adopted a code of ethics (designated as the "Code
of Ethical Conduct") that applies to its principal executive officer and
principal financial officer. The registrant undertakes to furnish a copy of such
Code of Ethical Conduct to any person upon request, without charge, by calling
1-800-677-3863.
ITEM 3--AUDIT COMMITTEE FINANCIAL EXPERT
RESPONSE: The registrant's Board of Directors has determined that Leonard
Kedrowski, Benjamin Field, and Mickey Foret, members of the registrant's Audit
Committee, are each an "audit committee financial expert" and are "independent,"
as these terms are defined in this Item. This designation will not increase the
designees' duties, obligations or liability as compared to their duties,
obligations and liability as members of the Audit Committee and of the Board of
Directors.
ITEM 4--PRINCIPAL ACCOUNTANT FEES AND SERVICES
RESPONSE: Not required for annual reports filed for periods ending before
December 15, 2003.
ITEM 5--AUDIT COMMITTEE OF LISTED REGISTRANTS
RESPONSE: Not applicable to the registrant.
ITEM 6 - Reserved.
ITEM 7--DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
RESPONSE: Not applicable to the registrant.
ITEM 8 - Reserved.
ITEM 9--CONTROLS AND PROCEDURES
(a) RESPONSE: The registrant's Principal Executive Officer and Principal
Financial Officer have evaluated the registrant's disclosure controls and
procedures within 90 days of the date of this filing and have concluded that
the registrant's disclosure controls and procedures were effective, as of
that date, in ensuring that information required to be disclosed by the
registrant in this Form N-CSR was recorded, processed, summarized and
reported timely. Notwithstanding this conclusion, the registrant's Principal
Executive Officer and Principal Financial Officer seek continuous
improvements to the registrant's disclosure controls and procedures.
(b) RESPONSE: There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's most recent fiscal
half-year that have
<Page>
materially affected, or are reasonably likely to materially affect, the
registrant's internal control over financial reporting.
ITEM 10 - EXHIBITS
10(a) - Code of Ethical Conduct
RESPONSE: Attached hereto.
10(b) - Attach certifications (4 in total pursuant to Sections 302 and 906 for
PEO/PFO).
RESPONSE: Attached hereto.
<Page>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
First American Funds, Inc.
By /s/ Thomas S. Schreier, Jr.
---------------------------
Thomas S. Schreier, Jr.
President
Date: December 8, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Thomas S. Schreier, Jr.
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Thomas S. Schreier, Jr.
President
Date: December 8, 2003
By /s/ Jonathan P. Lillemoen
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Jonathan P. Lillemoen
Director, USBAM Fund Treasury
Date: December 8, 2003