-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QK3Lvqo85rG7utMIOW/IY4Cpzxkfpe2XQm9EYFEVkjuSpUiKgSAABnhch3mrnBCh oN/YhChQvQmgGGJjo9Khsg== 0000278001-94-000006.txt : 19940726 0000278001-94-000006.hdr.sgml : 19940726 ACCESSION NUMBER: 0000278001-94-000006 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940531 FILED AS OF DATE: 19940725 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY PHILLIPS STREET TRUST CENTRAL INDEX KEY: 0000278001 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 042667982 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-02890 FILM NUMBER: 94539882 BUSINESS ADDRESS: STREET 1: 82 DEVONSHIRE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 2142816360 MAIL ADDRESS: STREET 1: FIDLEITY INVESTMENTS MAILZONE DW4B STREET 2: P.O. BOX 650471 CITY: DALLAS STATE: TX ZIP: 75265-0471 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY CASH RESERVES DATE OF NAME CHANGE: 19930122 N-30B-2 1 FIDELITY (registered trademark) CASH RESERVES SEMIANNUAL REPORT MAY 31, 1994 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 8 A summary of major shifts in the fund's investments over the past six months and one year. INVESTMENTS 9 A complete list of the fund's investments with their market value. FINANCIAL STATEMENTS 20 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 24 Footnotes to the financial statements. REPORT OF INDEPENDENT 26 The auditor's opinion. ACCOUNTANTS THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY THE FDIC. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: No one wants to pay more taxes than they have to. But a recent survey of 500 U.S. households, conducted by Fidelity and Yankelovich Partners, showed that few people took steps to reduce their taxes under the new tax laws that went into effect last year. In fact, many people were not completely aware of the changes until they filed their 1993 tax returns. Whether or not you're someone whose tax bill increased as a result of these changes, it may make sense to consider ways to keep more of what you earn. First, if your employer offers a 401(k) or 403(b) retirement savings plan, consider enrolling. These plans are set up so you can make regular contributions - before taxes - to a retirement savings plan. They offer a disciplined savings strategy, the ability to accumulate earnings tax-deferred, and immediate tax savings. For example, if you earn $40,000 a year and contribute 7% of your salary to your 401(k) plan, your annual contribution is $2,800. That reduces your taxable income to $37,200 and, if you're in the 28% tax bracket, saves you $784 in federal taxes. In addition, you pay no taxes on any earnings until withdrawal. It may be a good idea to contact your benefits office as soon as possible to find out when you can enroll or increase your contribution. Most employers allow employees to make changes only a few times each year. Second, consider an IRA. Many people are eligible to make an IRA contribution (up to $2,000) that is fully tax deductible. That includes people who are not covered by company pension plans, or those within certain income brackets. Even if you don't qualify for a fully deductible contribution, any IRA earnings will grow tax-deferred until withdrawal. Third, consider adding to your tax-free investments, either municipal bonds or municipal bond funds. Often these can provide higher after-tax yields than comparable taxable investments. For example, if you're in the new 36% federal income tax bracket and invest $10,000 in a taxable investment yielding 7%, you'll pay $252 in federal taxes and receive $448 in income. That same $10,000 invested in a tax-free bond fund yielding 5.5% would allow you to keep $550 in income. These are three investment strategies that could help lower your 1994 tax bill. If you're interested in learning more, please call us at 1-800-544-8888 or visit a Fidelity Investor Center. We look forward to talking with you. Best regards, Edward C. Johnson 3d, Chairman PERFORMANCE: THE BOTTOM LINE To measure a money market fund's performance, you can look at either total return or yield. Total return reflects both the change in a fund's share price over a given period, and reinvestment of its dividends (or income). Yield measures the income paid by a fund. Since a money market fund tries to maintain a $1 share price, yield is an important measure of performance. CUMULATIVE TOTAL RETURNS PERIODS ENDED MAY 31, 1994 PAST 6 PAST 1 PAST 5 PAST 10 MONTHS YEAR YEARS YEARS Fidelity Cash Reserves 1.53% 2.98% 29.81% 87.37% Consumer Price Index 1.17% 2.29% 19.14% 42.65% Average All Taxable Money Market Fund 1.46% 2.81% 28.58% 83.86% CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in this case, six months, one year, five years, or ten years. For example, if you invested $1,000 in a fund that had a 5% return over the past year, you would end up with $1,050. Comparing the fund's performance to the consumer price index helps show how your investment did compared to inflation. To measure how the fund stacked up against its peers, you can compare its return to the average taxable money market fund's total return. This average currently reflects the performance of 569 money market funds tracked by IBC/Donoghue's MONEY FUND REPORT.(registered trademark) AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED MAY 31, 1994 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity Cash Reserves 2.98% 5.36% 6.48% Consumer Price Index 2.29% 3.57% 3.62% Average All Taxable Money Market Fund 2.81% 5.15% 6.28% AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return and show you what would have happened if the fund had achieved that return by performing at a constant rate each year. YIELDS 5/31/93 8/31/93 11/30/93 2/28/94 5/31/94 2.83% 2.81% 2.87% 2.87% 3.50% Fidelity Cash Reserves Average All Taxable 2.62% 2.64% 2.69% 2.79% 3.51% Money Market Fund 2.49% 2.42% 2.35% 2.29% 2.35% MMDA Row: 1, Col: 1, Value: 2.83 Row: 1, Col: 2, Value: 2.62 Row: 1, Col: 3, Value: 2.49 Row: 2, Col: 1, Value: 2.81 Row: 2, Col: 2, Value: 2.64 Row: 2, Col: 3, Value: 2.42 Row: 3, Col: 1, Value: 2.87 Row: 3, Col: 2, Value: 2.69 Row: 3, Col: 3, Value: 2.35 Row: 4, Col: 1, Value: 2.87 Row: 4, Col: 2, Value: 2.79 Row: 4, Col: 3, Value: 2.29 Row: 5, Col: 1, Value: 3.5 Row: 5, Col: 2, Value: 3.51 Row: 5, Col: 3, Value: 2.35 Fidelity Cash Reserves Average All Taxable Money Market Fund MMDA 4% - 3% - 2% - 1% - 0% YIELD refers to the income paid by the fund over a given period. Yields for money market funds are usually for seven-day periods, expressed as annual percentage rates. A yield that assumes income earned is reinvested or compounded is called an effective yield. The chart above shows the fund's current seven-day yield at quarterly intervals over the past year. This would have been lower if Fidelity had not reimbursed certain fund expenses. This is compared to similar yields for the average all taxable money market fund and the average bank money market deposit account (MMDA). Figures for the average taxable money market fund are from the IBC/Donoghue's MONEY FUND REPORT.(registered trademark) The MMDA average is supplied by BANK RATE MONITOR.(double dagger) A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS WILL VARY, AND REFLECT PAST RESULTS RATHER THAN PREDICT FUTURE PERFORMANCE. COMPARING PERFORMANCE There are some important differences between a bank money market deposit account (MMDA) and a money market fund. First, the U.S. government neither insures nor guarantees a money market fund. In fact, there is no assurance that a money fund will maintain a $1 share price. Second, a money market fund returns to its shareholders income earned by the fund's investments after expenses. This is in contrast to banks, which set their MMDA rates periodically based on current interest rates, competitors' rates, and internal criteria. (checkmark) FUND TALK: THE MANAGER'S OVERVIEW An interview with Bob Litterst, Portfolio Manager of Cash Reserves Q. BOB, WHAT HAPPENED IN THE SHORT-TERM MARKET THE PAST SIX MONTHS? A. There were important changes in the Federal Reserve's monetary policy, and as a result short-term interest rates fluctuated considerably. Early in the period, rates rose somewhat, reflecting year-end rate pressures, but they fell back in January as we entered the new year and investors scrambled to reinvest their early January maturities. That changed dramatically on February 4. After 17 months of stable monetary policy, the Federal Reserve acted to raise short-term interest rates for the first time in five years. They raised rates four times in four months in an effort to head off inflationary pressures that could build up if the economy continued to grow too rapidly relative to its potential. As a result, the Federal funds rate ranged from 3% to 4.25% during the period. Yields on six-month Treasury bills ranged from 3.15% to 4.90%, and the fund's yield was as low as 2.83% on February 17, 1994 and as high as 3.50% on May 31, 1994 . Q. HOW DID YOU POSITION THE FUND BEFORE THE INCREASE IN RATES? A. In late 1993, I took advantage of year-end pressures that tend to push short-term rates outside their normal ranges. These opportunities tend to present themselves around financial statement dates, particularly at year end, because of bank and corporate balance sheet constraints. I increased the fund's average maturity to around 75 days so that the fund could capture those higher rates for a longer period. Q. WHAT DID YOU DO AFTER THE FEDERAL RESERVE INCREASED INTEREST RATES? A. When the Fed moved to boost rates in February, we sold securities with longer maturities such as six-month Treasury bills and discount notes, and reduced the fund's average maturity from around 76 days on January 31 to 63 days one month later. That figure continued to decline, and stood at around 48 days on May 31. Our neutral maturity is around 40 to 50 days. Q. WHY DIDN'T YOU REDUCE THE AVERAGE MATURITY EVEN MORE AS RATES CLIMBED? A. When the Fed began raising rates, the short-term yield curve began to steepen to reflect the possibility of additional future rate increases. Those yields out on the curve became attractive compared to those on extremely short maturity securities. Q. HOW DID THE FUND PERFORM? A. The fund's seven-day yield on May 31, 1994, was 3.50%, compared to 2.87% at the end of November. For the six months ended May 31, the fund's total return was 1.53%. That beat the 1.46% average total return for all taxable money market funds tracked by IBC/Donoghue. Q. WHAT'S YOUR OUTLOOK FOR THE SHORT-TERM MARKET? A. After the Federal Reserve's fourth interest rate increase in May, policymakers at the Fed indicated that for the time being they had achieved their goal of essentially removing through higher short-term rates, the degree of monetary accommodation which prevailed throughout 1993. Simply stated, the Fed will likely pause for a brief period to assess the affect of the rate increases already implemented. After a brief hiatus, it is likely that fundamental factors will induce the fed to resume the process of raising short-term interest rates. Meanwhile, I plan to maintain the fund's average maturity at around 40 to 50 days, though I will move toward the longer end of that range when I spot opportunities to increase the fund's yield without taking undue interest rate risk. FUND FACTS GOAL: income and share price stability by investing in high quality, short-term investments START DATE: May 10, 1979 SIZE: as of May 31, 1994, more than $13.2 billion MANAGER: Robert Litterst, since January 1992; manager, Capital Reserves Money Market, Fidelity VIP: Money Market Portfolio, and Fidelity Money Market Trust: Retirement Money Market, since January 1992; joined Fidelity in 1991 (checkmark) MONEY MARKETS AND DERIVATIVES: The word "derivatives" covers a wide range of financial agreements, of varying degrees of complexity, that have market values based on security or market indices. All "derivative" securities in Fidelity's money market funds are designed to have the price characteristics of typical money market securities. During the recent Federal Reserve Board interest rate increases, all Fidelity money market holdings performed as designed and the funds maintained a stable share price of $1.00. The more complex of these instruments, such as floating rate notes with unusual and complex floating rate formulas, frequently have too much price volatility to be appropriate investments for money market funds. Many of them do not offer the degree of price stability Fidelity believes is required in order for its funds to maintain a stable $1.00 share price. Therefore, despite their frequent higher yields at the time they are sold, Fidelity has not purchased these volatile securities. While this may sometimes have caused Fidelity money market funds to have lower gross yields than certain other funds, Fidelity believes its investors value prudence as well as performance. INVESTMENT CHANGES MATURITY DIVERSIFICATION DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS 5/31/94 11/30/93 5/31/93 0 - 30 58 28 38 31 - 90 20 46 28 91 - 180 18 18 25 181 - 397 4 8 9 WEIGHTED AVERAGE MATURITY 5/31/94 11/30/93 5/31/93 Fidelity Cash Reserves 48 days 79 days 73 days Average All Taxable Money Market Fund* 44 days 61 days 64 days ASSET ALLOCATION AS OF MAY 31, 1994 AS OF NOVEMBER 30, 1993 Row: 1, Col: 1, Value: 44.0 Row: 1, Col: 2, Value: 42.0 Row: 1, Col: 3, Value: 7.0 Row: 1, Col: 4, Value: 7.0 Row: 1, Col: 1, Value: 28.0 Row: 1, Col: 2, Value: 34.0 Row: 1, Col: 3, Value: 22.0 Row: 1, Col: 4, Value: 16.0 Bank CDs, BAs, TDs, and notes 44% Commercial paper 42% Government securities 7% Other 7% Bank CDs, BAs, TDs, and notes 28% Commercial paper 34% Government securities 22% Other 16% * SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark) INVESTMENTS MAY 31, 1994 Showing Percentage of Total Value of Investments BANKERS' ACCEPTANCES - 0.2% DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) DOMESTIC BANKERS ACCEPTANCE - 0.1% Sakura Bank, Ltd. 6/14/94 4.40% $ 20,000 $ 19,968 NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.1% Bank of Tokyo 6/20/94 4.31 2,000 1,996 Dai-Ichi Kangyo Bank, Ltd. 7/11/94 4.42 1,200 1,194 Fuji Bank, Ltd. 7/14/94 4.43 3,600 3,581 7/18/94 4.43 5,400 5,369 12,140 TOTAL BANKERS' ACCEPTANCES 32,108 CERTIFICATES OF DEPOSIT - 10.8% DOMESTIC CERTIFICATES OF DEPOSIT - 0.2% Swedish National Housing Finance Corp. (a) 8/23/94 4.53 33,000 33,000 NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 8.3% Banque Nationale de Paris 7/19/94 3.92 30,000 29,976 Credit Lyonnais 6/1/94 4.44 80,000 80,000 7/1/94 4.40 20,000 20,001 Fuji Bank, Ltd. 6/1/94 3.90 50,000 50,000 HYPO U.S. Finance 9/1/94 3.90 50,000 50,000 Industrial Bank of Japan, Ltd. 6/13/94 4.37 70,000 70,000 Mitsubishi Bank, Ltd. 6/22/94 3.45 25,000 25,000 7/7/94 3.45 110,000 110,000 10/18/94 4.60 13,000 12,945 National Bank of Canada 7/11/94 4.65 55,000 55,000 Sakura Bank, Ltd. 7/5/94 4.37 20,000 20,000 7/5/94 4.37 50,000 50,000 CERTIFICATES OF DEPOSIT - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - CONTINUED Sanwa Bank, Ltd. 6/30/94 3.41% $ 25,000 $ 25,000 7/20/94 4.23 125,000 125,000 10/19/94 4.60 5,000 5,000 Societe Generale 6/1/94 3.75 80,000 80,000 8/17/94 4.30 40,000 40,000 9/1/94 4.00 127,000 127,000 Sumitomo Bank, Ltd. 6/7/94 3.43 30,000 30,000 6/20/94 4.05 40,000 40,000 7/27/94 4.40 35,000 34,988 7/29/94 4.40 25,000 24,991 1,104,901 LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 2.3% Mitsubishi Bank, Ltd. 11/16/94 5.25 50,000 50,002 NBD Bank, N.A. 7/29/94 3.87 25,000 24,980 Sumitomo Bank, Ltd. 6/8/94 3.82 130,000 130,000 6/13/94 3.82 50,000 50,000 6/20/94 3.31 20,000 20,001 7/6/94 3.42 25,000 25,002 299,985 TOTAL CERTIFICATES OF DEPOSIT 1,437,886 COMMERCIAL PAPER - 42.1% American Brands, Inc. 7/12/94 4.58 50,000 49,741 Associates Corporation of North America 6/9/94 3.99 55,000 54,951 6/14/94 4.37 37,000 36,942 7/25/94 4.43 37,000 36,756 B.B.V. Finance (Delaware), Inc. 7/1/94 4.37 32,000 31,884 BHF Finance (Delaware), Inc. 6/17/94 4.31 30,000 29,943 6/20/94 4.32 38,000 37,914 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) Bear Stearns Companies Inc. 6/6/94 4.33% $ 20,000 $ 19,988 7/14/94 4.42 40,000 39,790 7/27/94 4.43 50,000 49,658 Beneficial Corporation 6/7/94 3.99 65,000 64,957 Berliner Handels-und Frankfurter Bank 6/3/94 4.11 100,000 99,977 Bradford & Bingley Building Society 6/14/94 3.99 30,000 29,957 Budget Funding Corporation 6/9/94 4.41 20,000 19,980 CIT Group Holdings, Inc. 6/6/94 3.99 30,000 29,983 6/7/94 3.99 40,000 39,973 6/28/94 4.18 75,000 74,767 7/21/94 4.75 35,000 34,771 7/26/94 4.43 39,000 38,738 7/27/94 4.43 25,000 24,829 9/6/94 3.53 30,000 29,721 Commercial Credit Company 6/10/94 4.02 25,000 24,975 7/25/94 4.43 12,000 11,921 Concord Leasing, Inc. (LOC Hong Kong & Shanghai Banking Corp.) 6/9/94 4.00 20,000 19,982 8/30/94 4.60 25,000 24,716 CoreStates Capital Corp. (a) 6/15/94 4.38 25,000 25,000 Dean Witter, Discover & Co. 6/1/94 3.92 35,000 35,000 6/14/94 4.02 10,000 9,985 6/27/94 4.31 50,000 49,845 7/11/94 4.64 30,000 29,847 Den Danske Corporation, Inc. 6/30/94 3.79 25,000 24,925 Eastman Kodak 6/7/94 4.36 10,000 9,993 6/8/94 4.57 13,000 12,988 6/13/94 4.36 50,000 49,927 6/14/94 4.36 50,000 49,921 Electronic Data Systems Corporation 6/1/94 4.36 10,000 10,000 6/8/94 3.82 15,000 14,989 6/13/94 3.87 19,000 18,976 Ford Motor Credit Corporation 6/8/94 3.95 155,000 154,882 6/9/94 4.41 16,400 16,384 6/13/94 3.95 45,000 44,941 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) Ford Motor Credit Corporation - continued 6/14/94 4.37% $ 40,000 $ 39,937 7/6/94 4.43 100,000 99,572 7/7/94 4.43 100,000 99,560 9/26/94 4.75 150,000 147,723 Ford Motor Credit PLC, UK 6/9/94 4.41 50,000 49,951 Grand Metropolitan Investment Corporation 10/24/94 5.12 43,000 42,134 11/17/94 4.90 38,500 37,638 GTE Corporation 6/30/94 4.31 100,000 99,654 General Electric Capital Corporation 6/10/94 3.78 (a) 50,000 50,000 6/15/94 4.08 (a) 30,000 30,000 9/7/94 3.51 150,000 148,599 9/8/94 3.51 50,000 49,528 9/19/94 4.09 67,000 66,181 10/5/94 3.43 50,000 49,414 10/6/94 3.43 50,000 49,409 12/20/94 4.85 50,000 48,681 12/21/94 4.85 50,000 48,675 General Motors Acceptance Corporation 6/1/94 3.75 25,000 25,000 6/1/94 3.75 50,000 50,000 6/6/94 3.89 24,000 23,987 6/6/94 4.12 50,000 49,971 6/13/94 4.50 50,000 49,925 6/13/94 4.50 5,000 4,993 6/15/94 4.45 50,000 49,914 6/27/94 4.00 284,000 283,196 7/26/94 4.49 24,000 23,836 Goldman Sachs Group, L.P. (The) 7/5/94 4.00 100,000 99,626 7/6/94 4.00 20,000 19,923 10/25/94 3.42 25,000 24,661 Government Development Bank of Puerto Rico 6/17/94 4.04 10,000 9,982 Government of Canada 10/18/94 4.50 100,000 98,301 Hanson Finance (UK), PLC 6/6/94 3.85 36,000 35,981 6/20/94 4.42 68,000 67,842 Household Finance Corporation 6/1/94 3.81 50,000 50,000 6/1/94 4.35 25,000 25,000 6/20/94 4.05 25,000 24,947 6/21/94 4.03 40,000 39,911 7/5/94 4.04 40,000 39,849 8/23/94 4.55 20,000 19,793 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) IBM Corporation 6/9/94 4.42% $ 83,000 $ 82,919 6/13/94 4.41 31,500 31,454 6/13/94 4.42 30,000 29,956 6/14/94 4.41 50,000 49,921 7/18/94 4.48 50,000 49,709 IBM Credit Corporation 6/13/94 4.42 33,000 32,952 ITT Corporation 6/13/94 3.82 26,000 25,967 7/18/94 4.45 28,000 27,838 8/15/94 4.60 7,000 6,934 ITT Financial 6/1/94 4.00 32,000 32,000 6/16/94 4.42 100,000 99,816 7/11/94 4.64 50,000 49,744 7/26/94 4.48 25,000 24,830 Merrill Lynch & Co., Inc. 6/1/94 3.80 25,000 25,000 7/12/94 4.58 20,000 19,896 Morgan Stanley Group, Inc. 7/1/94 4.58 25,000 24,905 7/1/94 4.58 50,000 49,810 7/6/94 4.63 150,000 149,328 Nationwide Building Society 6/13/94 4.42 27,000 26,960 7/25/94 4.43 25,000 24,835 New Center Asset Trust 6/9/94 4.42 53,000 52,948 7/20/94 4.45 10,000 9,940 7/20/94 4.45 50,000 49,699 7/28/94 4.43 20,000 19,861 New South Wales Treasury Corp. 8/30/94 3.90 46,000 45,560 Norwest Corporation 6/2/94 4.00 10,000 9,999 Ontario Hydro 7/6/94 4.01 75,000 74,711 PHH Corporation 6/14/94 4.31 20,000 19,969 6/14/94 4.33 38,000 37,941 PNC Financial/PNC Funding 10/11/94 4.34 75,000 73,831 Preferred Receivables Funding Corporation 6/7/94 4.01 40,000 39,973 6/10/94 4.39 20,000 19,978 6/13/94 4.38 12,450 12,432 6/13/94 4.39 50,000 49,927 6/14/94 4.38 25,000 24,961 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) Prudential Home Mortgage Company 6/13/94 4.34% $ 20,000 $ 19,971 7/25/94 4.43 50,000 49,670 Smith Barney Shearson, Inc. 7/21/94 4.43 25,000 24,847 7/26/94 4.45 25,000 24,831 Sears Credit Corp. - B 6/13/94 4.39 28,000 27,959 Sears Roebuck Acceptance Corp. 6/6/94 4.16 17,000 16,990 6/7/94 4.49 45,000 44,966 6/20/94 4.36 39,000 38,910 Texaco Inc. 6/1/94 4.40 30,300 30,300 7/29/94 4.43 25,000 24,823 UNOCAL Corp. 6/7/94 4.38 5,000 4,996 6/15/94 4.41 12,000 11,979 WCP Funding 6/13/94 4.39 43,700 43,636 Whirlpool Corporation 7/13/94 4.53 5,000 4,974 Whirlpool Financial Corporation 6/8/94 4.12 12,000 11,990 6/16/94 3.82 23,000 22,964 7/22/94 4.43 10,000 9,938 TOTAL COMMERCIAL PAPER 5,607,959 FEDERAL AGENCIES - 5.7% FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 0.6% 8/12/94 4.51 20,000 19,822 8/17/94 4.54 55,014 54,486 74,308 FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 3.8% 10/4/94 4.23 45,000 44,351 10/4/94 4.27 25,000 24,637 10/26/94 4.45 180,000 176,803 10/27/94 4.50 260,000 255,297 501,088 FEDERAL AGENCIES - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) INTERNATIONAL BANK OF RECONSTRUCTION AND DEVELOPMENT - DISCOUNT NOTES - 0.9% 12/27/94 3.54% $ 40,000 $ 39,206 12/30/94 3.57 80,000 78,374 117,580 TENNESSEE VALLEY AUTHORITY - DISCOUNT NOTES - 0.4% 7/21/94 4.43 55,000 54,664 TOTAL FEDERAL AGENCIES 747,640 U.S. TREASURY OBLIGATIONS - 1.5% U.S. TREASURY BILLS 1/12/95 3.52 80,000 78,297 1/12/95 3.55 76,000 74,371 1/12/95 3.59 50,000 48,916 201,584 BANK NOTES - 4.0% Bank of New York 6/6/94 3.78 20,000 20,000 6/6/94 3.78 50,000 50,000 Fifth Third Bank, Cincinnati 6/6/94 3.95 60,000 59,999 7/5/94 4.35 50,000 49,999 7/7/94 4.33 24,000 23,999 First National Bank of Boston 8/22/94 4.58 60,000 60,000 Old Kent Bank - Southwest 6/15/94 4.39 25,000 25,000 PNC Bank, N.A. 6/10/94 3.46 45,000 44,997 11/10/94 4.74 40,000 39,794 1/20/95 3.69 50,000 49,956 Trust Company Bank 1/31/95 3.75 61,000 60,869 1/31/95 3.78 50,000 49,893 TOTAL BANK NOTES 534,506 MEDIUM-TERM NOTES (A) - 9.4% DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) Abbey National PLC, UK 6/24/94 4.05% $ 45,000 $ 45,000 Abbey National Treasury Service 9/30/94 3.87 435,000 435,000 Bank of New York 6/1/94 4.97 30,000 29,987 Comerica Bank-Detroit 6/1/94 4.97 60,000 59,987 General Motors Acceptance Corporation 6/23/94 4.12 5,000 5,005 8/7/94 4.67 93,000 93,000 Goldman Sachs Group, L.P. (The) 6/1/94 4.89 27,000 27,000 6/16/94 (c) 3.50 95,000 95,000 9/1/94 3.50 94,000 94,000 12/13/94 4.97 35,000 34,448 Huntington National Bank 6/1/94 4.94 50,000 49,917 Norwest Corporation 9/15/94 3.89 114,000 114,000 PHH Corporation 6/1/94 4.95 50,000 50,000 Society National Bank 6/1/94 4.97 70,000 69,969 6/2/94 4.54 49,945 49,945 TOTAL MEDIUM-TERM NOTES 1,252,258 SHORT-TERM NOTES (A) - 11.3% CSA Funding - A 6/7/94 4.59 22,000 22,000 CSA Funding - B 6/7/94 4.59 6,000 6,000 CSA Funding - C 6/7/94 4.59 22,000 22,000 J.P. Morgan Securities 6/1/94 4.60 190,000 190,000 6/1/94 4.62 150,000 150,000 Morgan Stanley Group, Inc. 6/1/94 4.58 100,000 100,000 Norwest Corporation 6/1/94 4.36 78,000 78,000 PepsiCo. 6/1/94 4.44 60,000 60,000 SMM Trust Company (1993-D)(b) 7/28/94 4.28 79,000 79,000 SHORT-TERM NOTES (A) - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) SMM Trust Company (1994-A)(b) 6/18/94 3.89% $ 395,000 $ 395,000 6/18/94 3.99 22,000 21,984 SMM Trust Company (1994-E)(b) 7/13/94 4.03 66,000 66,000 7/13/94 4.11 19,986 18,986 Sweden, Kingdom of - A 6/23/94 4.25 72,000 72,000 Sweden, Kingdom of - B 6/23/94 4.62 72,000 72,000 Sweden, Kingdom of - C 6/23/94 3.94 71,500 71,500 Swedish National Housing Finance Corp. 8/23/94 4.40 32,000 32,000 8/23/94 4.65 32,000 32,000 U.S. Leasing International, Inc. 6/16/94 3.84 15,000 15,031 SHORT-TERM NOTES 1,503,501 TIME DEPOSITS - 8.0% Bank of Nova Scotia 6/13/94 4.37 105,000 105,000 Bank of Tokyo 6/1/94 4.34 100,000 100,000 Fuji Bank, Ltd. 6/1/94 4.34 350,000 350,000 Mitsubishi Bank, Ltd. 6/1/94 4.37 170,000 170,000 6/1/94 4.37 100,000 100,000 Sakura Bank, Ltd. 6/8/94 4.25 130,000 130,000 Sumitomo Bank, Ltd. 6/1/94 4.31 100,000 100,000 TOTAL TIME DEPOSITS 1,055,000 MUNICIPAL BONDS (A) - 0.3% Louisiana Public Facilities Authority 7/5/94 4.37 25,000 25,000 New York Public Housing Authority 6/28/94 3.98 20,055 20,055 TOTAL MUNICIPAL BONDS 45,055 REPURCHASE AGREEMENTS - 6.7% MATURITY AMOUNT VALUE (NOTE 1) (000S) (000S) WITH FIRST BOSTON CORPORATION At 4.26%, dated 5/24/94 due 6/7/94: $ 230,381 $ 230,000 U.S. Goovervment Obligations (principal amount $236,031) 0% to 9%, 3/1/2 to 9/1/23 At 4.25%, dated 5/25/94 due 6/8/94: 35,058 35,000 U.S. Treasury Obligations (principal amount $37,591) 0% to 12.50%, 2/1/9 to 9/1/23 At 4.26%, dated 5/25/94 due 6/8/94: 400,663 400,000 U.S. Treasury Obligations (principal amount $413,108) 0% to 11%, 3/1/8 to 2/1/24 WITH PAINE WEBBER, INC. At 4.30%, dated 5/26/94 due 6/20/94: 100,098 99,800 U.S. Government Obligations (principal amount $102,929) 4.137% to 8.956%, 1/1/20 to 10/1/23 In a joint trading account (U.S. Treasury Obligations) dated 5/31/94, due 6/1/94 (Note 2) At 4.26% 2,019 2,019 At 4.37% 125,371 125,356 TOTAL REPURCHASE AGREEMENTS 892,175 TOTAL INVESTMENTS - 100% $ 13,309,672 Total Cost for Income Tax Purposes $ 13,309,672 LEGEND (1.) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (2.) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (see Note 2 of Notes to Financial Statements). Additional information on each holding is as follows: ACQUISITION ACQUISITION SECURITY DATE COST (000'S) SMM Trust Company: (1993-D) 10/28/93 $ 79,000 (1994-A) 3/18/94 $ 395,000(1994-A) 5/12/94 $ 21,985(1994-E) 4/13/94 $ 66,000(1994-E) 5/23/94 $ 18,987 (3.) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $95,000,000 or 0.7% of net assets. INCOME TAX INFORMATION At November 30, 1993, the fund had a capital loss carryforward of approximately $1,195,000 which will expire on November 30, 2001. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) MAY 31, 1994 4.ASSETS 5. 6. 7.Investment in securities, at value (including repurchas 8. $ 13,309,672 e agreements of $892,175) (Notes 1 and 2) - See accompanying schedule 9.Cash 10. 435 11.Interest receivable 12. 32,968 13. 14.TOTAL ASSETS 15. 13,343,075 16.LIABILITIES 17. 18. 19.Payable for investments purchased $ 119,945 20. 21.Share transactions in process 9,711 22. 23.Dividends payable 235 24. 25.Accrued management fee 2,160 26. 27.Other payables and accrued expenses 3,706 28. 29. 30.TOTAL LIABILITIES 31. 135,757 32.33.NET ASSETS 34. $ 13,207,318 35.Net Assets consist of: 36. 37. 38.Paid in capital 39. $ 13,208,574 40.Accumulated net realized gain (loss) on investments 41. (1,256) 42.43.NET ASSETS, for 13,208,574 shares outstanding 44. $ 13,207,318 45.46.NET ASSET VALUE, offering price and redemption p 47. $1.00 rice per share ($13,207,318(divided by)13,208,574 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED MAY 31, 1994 48.49.INTEREST INCOME 50. $ 208,081 51.EXPENSES 52. 53. 54.Management fee (Note 4) $ 10,843 55. 56.Transfer agent fees (Note 4) 21,042 57. 58.Accounting fees and expenses (Note 4) 375 59. 60.Non-interested trustees' compensation 34 61. 62.Custodian fees and expenses 129 63. 64.Registration fees 255 65. 66.Audit 57 67. 68.Legal 36 69. 70.Miscellaneous 54 71. 72. 73.TOTAL EXPENSES 74. 32,825 75.76.NET INTEREST INCOME 77. 175,256 78.79.NET REALIZED GAIN (LOSS) ON INVESTMENTS (NOT 80. (1,289) E 1) 81.82.NET INCREASE IN NET ASSETS RESULTING FROM OPER 83. $ 173,967 ATIONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED ENDED MAY 31, NOVEMBER 30, 1994 1993 84.INCREASE (DECREASE) IN NET ASSETS 85.Operations $ 175,256 $ 284,873 Net interest income 86. Net realized gain (loss) on investments (1,289) (1,196) 87. 88.NET INCREASE (DECREASE) IN NET ASSETS RESULTI 173,967 283,677 NG FROM OPERATIONS 89.Dividends to shareholders from net interest income (175,256) (284,873) 90.Share transactions at net asset value of $1.00 per sh 15,101,884 17,583,679 are Proceeds from sales of shares 91. Reinvestment of dividends from net interest income 168,973 276,200 92. Cost of shares redeemed (12,376,189) (17,584,689) 93. Net increase (decrease) in net assets resulting fro 2,894,668 275,190 m share transactions 94. 95.TOTAL INCREASE (DECREASE) IN NET ASSETS 2,893,379 273,994 96.NET ASSETS 97. 98. 99. Beginning of period 10,313,939 10,039,945 100. End of period $ 13,207,318 $ 10,313,939
FINANCIAL HIGHLIGHTS
101. SIX MONTHS YEARS ENDED NOVEMBER 30, ENDED MAY 31, 102. 1994 1993 1992 1991 1990 1989 103.SELECTED PER-SHARE DATA 104.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 105.Income from .015 .029 .038 .061 .076 .086 Investment Operations Net interest income 106. Dividends from (.015) (.029) (.038) (.061) (.076) (.086) net interest income 107.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 end of period 108.TOTAL RETURN (dagger) 1.53% 2.97 3.90 6.23 7.87 8.94 % % % % % 109.RATIOS AND SUPPLEMENTAL D ATA 110.Net assets, end $ 13,207 $ 10,314 $ 10,040 $ 10,519 $ 10,921 $ 10,897 of period (in millions) 111.Ratio of expens .58% .48 .48 .58 .69 .74 es to * % % % % % average net assets 112.Ratio of net inter 3.08% 2.92 3.86 6.03 7.62 8.60 est * % % % % % income to average net assets
* ANNUALIZED (dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. NOTES TO FINANCIAL STATEMENTS For the period ended May 31, 1994 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Cash Reserves (the fund) is a fund of Fidelity Phillips Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Delaware business trust. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. As permitted under Rule 2a-7 of the Act, and certain conditions therein, securities are valued initially at cost and thereafter assume a constant amortization to maturity of any discount or premium. INCOME TAXES. As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the fund is not subject to income taxes to the extent that it distributes all of its taxable income for its fiscal year. The schedule of investments includes information regarding income taxes under the caption "Income Tax Information." INTEREST INCOME. Interest income, which includes amortization of premium and accretion of original issue discount, is accrued as earned. DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid monthly from net interest income. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 2. OPERATING POLICIES. REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery of the underlying securities, whose market value is required to be at least 102% of the resale price at the time of purchase. The fund's investment adviser, Fidelity Management & Research Company (FMR), is responsible for determining that the value of these underlying securities remains at least equal to the resale price. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with other registered investment companies having management contracts with FMR, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Federal Agency obligations. RESTRICTED SECURITIES. The fund is permitted to invest in privately placed restricted securities. These securities may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. At the end of the period, restricted securities (excluding 144A issues) amounted to $580,972,000 or 4.4% of net assets. 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly fee that is calculated on the basis of a basic fund fee rate of .03% of the fund's average net assets, plus a fixed income group fee rate and an income-based fee. The group fee rate is the weighted average of a series of rates ranging from .1325% to .3700% and is based on the monthly average net assets of all the mutual funds advised by FMR. The income-based fee is added only when the fund's yield exceeds 5%. At that time the income-based fee would equal 6% of that portion of the fund's gross income that represents a gross yield of more than 5% per year. The maximum income-based component is 0.24% (annualized) of average net assets. For the period, the management fee was equivalent to an annual rate of .19% of average net assets. SUB-ADVISER FEE. As the fund's investment sub-adviser, FMR Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of 50% of the management fee payable to FMR. The fee is paid prior to any voluntary expense reimbursements which may be in effect, and after reducing the fee for any payments by FMR pursuant to the fund's Distribution and Service Plan. TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives fees based on the type, size, number of accounts and the number of transactions made by shareholders. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. ACCOUNTING FEE. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and Shareholders of Fidelity Cash Reserves: We have audited the accompanying statement of assets and liabilities of Fidelity Cash Reserves including the schedule of portfolio investments, as of May 31, 1994, and the related statement of operations for the six months then ended, the statements of changes in net assets for the six months then ended and for the year ended November 30, 1993, and the financial highlights for the six months ended May 31, 1994 and for each of the five years in the period ended November 30, 1993. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of May 31, 1994 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 referred to above present fairly, in all material respects, the financial position of Fidelity Cash Reserves as of May 31, 1994, the results of its operations for the six months then ended, the changes in its net assets for the six months then ended and for the year ended November 30, 1993, and the financial highlights for for the six months ended May 31, 1994 and for each of the five years in the period ended November 30, 1993, in conformity with generally accepted accounting principles. COOPERS & LYBRAND Dallas, Texas June 23, 1994 TO WRITE FIDELITY Please locate the address that is closest to you. We'll give your correspondence immediate attention and send you written confirmation upon completion of your request. Please send ALL correspondence about retirement accounts to Dallas. (LETTER_GRAPHIC)MAKING CHANGES TO YOUR ACCOUNT (such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 2269 Boston, MA 02107-2269 Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 Fidelity Investments P.O. Box 30280 Salt Lake City, UT 84130-0280 (LETTER_GRAPHIC)FOR NON-RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments Additional Payments P.O. Box 2656 Boston, MA 02293-0656 Fidelity Investments Additional Payments P.O. Box 620024 Dallas, TX 75262-0024 Fidelity Investments Additional Payments P.O. Box 31455 Salt Lake City, UT 84131-0455 OVERNIGHT EXPRESS Fidelity Investments Additional Payments World Trade Center 164 Northern Avenue Boston, MA 02210 SELLING SHARES Fidelity Investments P.O. Box 193 Boston, MA 02103-0878 Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 Fidelity Investments P.O. Box 30281 Salt Lake City, UT 84130-0281 OVERNIGHT EXPRESS Fidelity Investments Attn: Redemptions World Trade Center 164 Northern Avenue Boston, MA 02210 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 193 Boston, MA 02101-0193 Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 (LETTER_GRAPHIC)FOR RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments P.O. Box 620024 Dallas, TX 75262-0024 SELLING SHARES Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 851 Hamilton Avenue Campbell, CA 527 North Brand Boulevard Glendale, CA 19100 Von Karman Avenue Irvine, CA 10100 Santa Monica Blvd. Los Angeles, CA 811 Wilshire Boulevard Los Angeles, CA 251 University Avenue Palo Alto, CA 1760 Challenge Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 455 Market Street San Francisco, CA 1400 Civic Drive Walnut Creek, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 185 Asylum Street Hartford, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. 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Southfield, MI MINNESOTA 38 South Sixth Street Minneapolis, MN MISSOURI 700 West 47th Street Kansas City, MO 200 North Broadway St. Louis, MO NEW JERSEY 60B South Street Morristown, NJ 501 Route 17, South Paramus, NJ 505 Millburn Avenue Short Hills, NJ NEW YORK 1050 Franklin Avenue Garden City, NY 999 Walt Whitman Road Melville, L.I., NY 71 Broadway New York, NY 350 Park Avenue New York, NY 10 Bank Street White Plains, NY NORTH CAROLINA 2200 West Main Street Durham, NC OHIO 600 Vine Street Cincinnati, OH 1903 East Ninth Street Cleveland, OH 28699 Chagrin Boulevard Woodmere Village, OH OREGON 121 S.W. Morrison Street Portland, OR PENNSYLVANIA 1735 Market Street Philadelphia, PA 439 Fifth Avenue Pittsburgh, PA TENNESSEE 5100 Poplar Avenue Memphis, TN TEXAS 10000 Research Boulevard Austin, TX 7001 Preston Road Dallas, TX 1155 Dairy Ashford Houston, TX 1010 Lamar Street Houston, TX 2701 Drexel Drive Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX UTAH 175 East 400 South Street Salt Lake City, UT VERMONT 199 Main Street Burlington, VT VIRGINIA 8180 Greensboro Drive McLean, VA WASHINGTON 411 108th Avenue, N.E. Bellevue, WA 1001 Fourth Avenue Seattle, WA WASHINGTON, DC 1775 K Street, N.W. Washington, DC WISCONSIN 222 East Wisconsin Avenue Milwaukee, WI TO CALL FIDELITY FOR FUND INFORMATION AND QUOTES The Fidelity Telephone Connection offers you special automated telephone services for quotes and balances. The services are easy to use, confidential and quick. All you need is a Touch Tone telephone. YOUR PERSONAL IDENTIFICATION NUMBER (PIN) The first time you call one of our automated telephone services, we'll ask you to set up your Personal Identification Number (PIN). The PIN assures that only you have automated telephone access to your account information. Please have your Customer Number (T-account #) handy when you call -- you'll need it to establish your PIN. If you would ever like to change your PIN, just choose the "Change your Personal Identification Number" option when you call. If you forget your PIN, please call a Fidelity representative at 1-800- 544-6666 for assistance. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES* 1-800-544-8544 Just make a selection from this record-ed menu: PRESS For quotes on funds you own. 1. For an individual fund quote. 2. For the ten most frequently requested Fidelity fund quotes. 3. For quotes on Fidelity Select Portfolios(registered trademark). 4. To change your Personal Identification Number (PIN). 5. To speak with a Fidelity representative. 6. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT BALANCES 1-800-544-7544 Just make a selection from this record- ed menu: PRESS For balances on funds you own. 1. For your most recent fund activity (purchases, redemptions, and dividends). 2. To change your Personal Identification Number (PIN). 3. To speak with a Fidelity representative. 4. * WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE INFORMATION ON ANY FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. Page 31 = BLANK Do NOT strip-in this type INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA SUB-ADVISER FMR Texas Inc. Irving, TX OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President Robert Litterst, Vice President Thomas D. Maher, Assistant Vice President Gary L. French, Treasurer John H. Costello, Assistant Treasurer Arthur S. Loring, Secretary BOARD OF TRUSTEES J. Gary Burkhead Ralph F. Cox* Phyllis Burke Davis* Richard J. Flynn* Edward C. Johnson 3d E. Bradley Jones* Donald J. Kirk* Peter S. Lynch Edward H. Malone* Marvin L. Mann* Gerald C. McDonough* Thomas R. Williams* GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN The Bank of New York New York, NY FIDELITY'S TAXABLE MONEY MARKET FUNDS Fidelity Cash Reserves Fidelity Daily Income Trust Fidelity U.S. Government Reserves Spartan(registered trademark) Money Market Fund Spartan U.S. Government Money Market Fund Spartan U.S. Treasury Money Market Fund THE FIDELITY TELEPHONE CONNECTION MUTUAL FUND 24-HOUR SERVICE Account Balances 1-800-544-7544 Exchanges/Redemptions 1-800-544-7777 Mutual Fund Quotes 1-800-544-8544 Account Assistance 1-800-544-6666 Product Information 1-800-544-8888 Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.) TDD Service 1-800-544-0118 for the deaf and hearing impaired (9 a.m. - 9 p.m. Eastern time) * INDEPENDENT TRUSTEES AUTOMATED LINES FOR QUICKEST SERVICE -----END PRIVACY-ENHANCED MESSAGE-----