-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Px9lG7vaoJPIUau93jgvkf8MmILcP5zFMEvMRVf4NpLiT8twtPZrywzCVeTpWgqi fAMw8nNjEzxWCGSz+PyQYQ== 0000278001-97-000003.txt : 19970109 0000278001-97-000003.hdr.sgml : 19970109 ACCESSION NUMBER: 0000278001-97-000003 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961130 FILED AS OF DATE: 19970108 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY PHILLIPS STREET TRUST CENTRAL INDEX KEY: 0000278001 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042667982 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-02890 FILM NUMBER: 97502815 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-30D 1 FIDELITY (registered trademark) CASH RESERVES ANNUAL REPORT NOVEMBER 30, 1996 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. 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 values. FINANCIAL STATEMENTS 22 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 26 Notes to the financial statements. REPORT OF INDEPENDENT 28 The auditor's opinion. ACCOUNTANTS To reduce expenses and demonstrate respect for our environment, we have initiated a project through which we will begin eliminating duplicate copies of most financial reports and prospectuses to most households, even if they have more than one account in the fund. If additional copies of financial reports, prospectuses or historical account information are needed, please call 1-800-544-6666. 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. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. PRESIDENT'S MESSAGE (PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER: Although stocks have managed to post solid returns throughout 1996, signs of strength in the economy have led to inflation fears, causing some uncertainty in bond markets so far this year. In 1995, both stock and bond markets posted strong results, while the year before, stocks posted below-average returns and bonds had one of the worst years in history. These market ups and downs are a normal part of investing, and there are some basic principles that can help investors in every type of market. First, take a long-term approach when investing. If you can afford to leave your money invested through the inevitable ups and downs of financial markets, you will greatly reduce your vulnerability to any single decline. Over time, for example, stock prices have gone up - and have significantly outperformed other types of investments and stayed ahead of inflation. Second, you can further manage risk by diversifying your investments. A stock mutual fund is already diversified, because it invests in many different companies. You can increase your diversification by investing in a number of different stock funds, or in different investment categories, such as bonds. You should also keep money you'll need in the near future in a more stable investment. Finally, it makes good sense to follow a regular investment plan, investing a set amount of money at the same time each month or quarter. That way, you can avoid getting caught up in the excitement of a rapidly-rising market - and won't end up buying all your shares at market highs. This strategy won't assure a profit or protect you from a loss in a declining market, but it should help you lower the average cost of your purchases. For this to be effective, you must continue to buy shares in both up and down markets. If you have questions, please call us at 1-800-544-8888. We would be happy to send you a Fidelity FundMatch kit, which can help you determine the mix of investments that is right for you. You might also find it convenient to set up a regular investment plan using the Fidelity Automatic Account Builder.SM We look forward to hearing from you. Best regards, Edward C. Johnson 3d 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 NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity Cash Reserves 5.18% 23.35% 75.37% All Taxable Money Market Funds Average 4.97% 21.82% 72.08% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, 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, the value of your investment would be $1,050. To measure how the fund's performance stacked up against its peers, you can compare it to the all taxable money market funds average, which reflects the performance of 815 money market funds with similar objectives tracked by IBC Financial Data, Inc. over the past 12 months. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity Cash Reserves 5.18% 4.29% 5.78% All Taxable Money Market Funds Average 4.97% 4.02% 5.57% 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 11/28/95 2/27/96 5/28/96 9/3/96 12/03/96 5.28% 5.04% 4.96% 4.96% 5.00% Fidelity Cash Reserves All Taxable Money 5.26% 4.78% 4.74% 4.83% 4.88% Market Funds Average 11/29/95 2/28/96 5/29/96 8/28/96 12/4/96 2.86% 2.76% 2.66% 2.68% 2.63% MMDA Row: 1, Col: 1, Value: 5.28 Row: 1, Col: 2, Value: 5.26 Row: 1, Col: 3, Value: 2.86 Row: 2, Col: 1, Value: 5.04 Row: 2, Col: 2, Value: 4.78 Row: 2, Col: 3, Value: 2.76 Row: 3, Col: 1, Value: 4.96 Row: 3, Col: 2, Value: 4.74 Row: 3, Col: 3, Value: 2.66 Row: 4, Col: 1, Value: 4.96 Row: 4, Col: 2, Value: 4.83 Row: 4, Col: 3, Value: 2.68 Row: 5, Col: 1, Value: 5.0 Row: 5, Col: 2, Value: 4.88 Row: 5, Col: 3, Value: 2.63 6% - 5% - 4% - 3% - 2% - 1% - 0% Fidelity Cash Reserves All Taxable Money Market Funds Average MMDA 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. You can compare these yields to the all taxable money market funds average and the bank money market deposit account (MMDA) average. Figures for the all taxable money market funds average are from IBC Financial Data, Inc. The MMDA average is supplied by BANK RATE MONITOR.(Trademark) 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 Fidelity Cash Reserves. Q. BOB, WHAT WAS THE INVESTING ENVIRONMENT LIKE OVER THE PAST YEAR? A. It has gone through some interesting changes. At the beginning of the period, the economy was growing slowly, inflationary pressures were mild and it seemed a balanced budget agreement was in the offing. The Federal Reserve Board reduced short-term rates in December and again in January, and market participants were optimistic that additional rate cuts would occur in the months ahead. But things changed dramatically, beginning with Fed Chairman Alan Greenspan's Congressional testimony in February suggesting that market expectations of further rate cuts were excessive. February's employment report then came in well above most analysts' predictions, depicting a much stronger labor market than previously thought. Stronger economic signals caused participants to revise their expectations regarding monetary policy, and short-term rates rose. Ultimately, the economy grew at a 4.7% annual rate in the second quarter, well above a non-inflationary pace. As a result, short-term interest rates rose higher through the second quarter and into the summer. Q. BUT THE FED DIDN'T RAISE RATES... A. That's right, for two reasons. First, the key inflation indices were well behaved. Rising wages didn't get translated into higher prices. And second, the Fed anticipated a slowdown in economic activity in the second half of the year. The Fed did adopt a tightening bias in July and maintained that bias throughout the third quarter. Recently, the market breathed a sigh of relief as the Fed's projections turned out to be correct. Job growth has decelerated, third quarter gross domestic product (GDP) slowed sharply and inflation numbers were reassuring. With the economy slowing, what had been a potentially troubling environment downshifted into one that is much more favorable, if not ideal. Q. WHAT HAS YOUR STRATEGY BEEN THROUGH THIS FLUCTUATING MARKET? A. At the start of the period, the fund's average maturity was 71 days because I felt rates were on a downward trend and I wanted to lock in higher yields. When the market sentiment shifted and rates rose in anticipation of an increase in the federal funds rate, I shortened the average maturity somewhat - to help me position the fund so I could reinvest at ever-higher yields as the fund's existing holdings matured. In the summer, I shortened the maturity further to the 50-day range because the potential for Fed tightening was strong, and, again, I wanted to be able to obtain higher yields going forward. From that point, I increased the average maturity of the fund by purchasing some securities further out on the yield curve that I felt were factoring in the worst case scenario regarding potential Fed tightening. At the end of September, the fund's average maturity was back out to 65 days, reflecting my opinion that Fed policy would remain steady for the foreseeable future. Since that time, I've kept the maturity in the 60-65 day range, looking for value in the four- to six-month range of the yield curve. Q. HOW DID THE FUND PERFORM? A. On November 30, 1996, the fund's seven-day yield was 5.00%, compared to 5.28% 12 months ago. The fund's total return for the 12-month period was 5.18%. That beat the average total return during the same peroid of 4.97% for the all taxable money market funds average, according to IBC Financial Data, Inc. Q. WHAT DO YOU SEE LOOKING OUT OVER THE NEXT SIX MONTHS? A. The consumer retrenched a great deal in the third quarter after contributing to strong GDP growth in the first half of the year. The debate at this point is whether this slowdown is a "pause to refresh" or the beginning of a new trend where consumers are too debt-strapped to keep on spending. Retail activity during the holiday season and other fourth quarter economic statistics should shed some light on the state of the economy. I expect Fed monetary policy to be stable at least through the first quarter of 1997. If the economy shows unusual strength and wage and price pressures re-emerge, expectations of tightening should reappear. On the other hand, I think it's unlikely the Fed will ease because of concern about tight labor market conditions, rising wage pressures and the potential for further inflating a stock market that the Fed seems to feel is fully valued. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND FACTS GOAL: income and a stable $1 share price by investing in high quality, short-term money market securities of all types START DATE: May 10, 1979 SIZE: as of November 30, 1996, more than $21 billion MANAGER: Robert Litterst, since 1992; manager, Capital Reserves Money Market, Variable Insurance Products: Money Market Portfolio, and Fidelity Money Market Trust: Retirement Money Market, since 1992; joined Fidelity in 1992 (checkmark) INVESTMENT CHANGES MATURITY DIVERSIFICATION DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS 11/30/96 5/31/96 11/30/95 0 - 30 44 41 42 31 - 90 27 41 25 91 - 180 25 12 27 181 - 397 4 6 6 WEIGHTED AVERAGE MATURITY 11/30/96 5/31/96 11/30/95 Fidelity Cash Reserves 62 days 62 days 71 days All Taxable Money Market Funds Average* 53 days 52 days 54 days ASSET ALLOCATION (% OF FUND'S INVESTMENTS) AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996 Row: 1, Col: 1, Value: 48.0 Row: 1, Col: 2, Value: 32.0 Row: 1, Col: 3, Value: 15.0 Row: 1, Col: 4, Value: 5.0 Row: 1, Col: 1, Value: 49.0 Row: 1, Col: 2, Value: 34.0 Row: 1, Col: 3, Value: 17.0 Row: 1, Col: 4, Value: 0.0 Bank CDs, BAs, TDs, and notes 48% Commercial paper 32% Government securities 15% Other 5% Bank CDs, BAs, TDs, and notes 49% Commercial paper 34% Government securities 17% Other 0% * SOURCE: IBC'S MONEY FUND REPORT(registered trademark) INVESTMENTS NOVEMBER 30, 1996 Showing Percentage of Total Value of Investments BANKERS' ACCEPTANCES - 0.0% DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) DOMESTIC BANKERS' ACCEPTANCES - 0.0% Chase Manhattan Bank 5/12/97 5.50% $ 7,188 $ 7,014 CERTIFICATES OF DEPOSIT - 31.0% DOMESTIC CERTIFICATES OF DEPOSIT - 2.0% Bank of New York, NY 1/29/97 5.31 (a) 59,000 59,000 Chase Manhattan Bank 1/8/97 5.85 180,000 180,000 Chase Manhattan Bank (USA) 3/10/97 5.77 50,000 50,000 Mellon Bank, N.A. 2/18/97 5.56 25,000 25,000 3/4/97 5.82 20,000 20,000 Morgan Guaranty Trust, NY 8/12/97 5.80 100,000 99,951 433,951 CHICAGO BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 1.2% ABN-AMRO Bank 12/2/96 5.51 100,000 100,000 2/3/97 5.55 50,000 50,000 2/4/97 5.55 100,000 100,000 250,000 PORTLAND BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 0.1% Bank of Nova Scotia 6/10/97 6.02 12,000 11,987 NEW YORK BRANCH, YANKEE DOLLAR, FOREIGN BANKS - 20.6% ABN-AMRO Bank 9/10/97 6.10 50,000 49,993 Australia & New Zealand Banking 2/20/97 5.42 25,000 25,009 Bank of Tokyo - Mitsubishi Ltd. 1/6/97 5.60 40,000 40,000 1/16/97 5.48 25,000 25,000 2/5/97 5.47 50,000 50,000 2/24/97 5.45 50,000 50,000 3/3/97 5.50 150,000 150,000 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 Banque Nationale de Paris 12/2/96 5.30% $ 100,200 $ 100,200 12/2/96 5.37 178,000 178,000 3/3/97 5.38 125,000 125,000 Bayerische Landesbank Girozentrale 1/22/97 5.53 (a) 125,000 125,000 Bayerische Vereinsbank A.G. 2/3/97 5.57 125,000 125,000 Caisse Nationale de Credit Agricole 2/6/97 5.54 100,000 100,000 2/18/97 5.41 70,000 70,000 3/24/97 5.62 100,000 100,000 Canadian Imperial Bank of Commerce 12/5/96 5.63 40,000 40,000 1/27/97 5.40 160,000 160,000 Credit Suisse 5/19/97 5.40 100,000 100,000 Deutsche Bank, Germany 12/11/96 5.30 200,000 200,000 12/19/96 5.30 300,000 300,000 12/23/96 5.52 40,000 40,000 9/10/97 6.10 15,000 14,999 Dresdner Bank, A.G,. Germany 5/15/97 5.41 50,000 49,997 Landesbank Hessen - Thuringen 7/18/97 5.50 50,000 50,122 9/5/97 6.20 150,000 150,011 National Bank of Canada 2/24/97 5.40 72,000 72,000 National Westminster Bank, PLC 2/18/97 5.42 90,000 90,000 2/24/97 5.42 40,000 40,000 5/1/97 5.42 55,000 55,004 Royal Bank of Canada 8/13/97 5.80 50,000 49,976 8/18/97 5.80 130,000 129,964 Sanwa Bank, Ltd. 12/4/96 5.35 40,000 40,000 12/9/96 5.35 33,000 33,000 12/23/96 5.37 42,000 42,000 1/13/97 5.50 80,000 80,000 1/17/97 5.52 32,000 32,000 2/28/97 5.50 48,000 48,000 Societe Generale, France 12/2/96 5.52 150,000 150,000 12/20/96 5.45 225,000 225,000 2/6/97 5.40 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 Societe Generale, France - continued 4/8/97 5.50% $ 25,000 $ 24,999 Sumitomo Bank, Ltd. 1/13/97 5.55 70,000 70,000 1/17/97 5.53 39,000 39,000 1/21/97 5.54 60,000 60,000 2/18/97 5.49 20,000 20,000 2/18/97 5.50 71,000 71,000 2/24/97 5.49 21,000 21,000 Swiss Bank Corp. 3/4/97 5.75 50,000 49,999 3/11/97 5.76 200,000 200,000 3/19/97 5.45 23,000 23,015 4/21/97 5.50 25,000 25,000 Westdeutsche Landesbank 3/10/97 5.40 40,000 40,000 4/7/97 5.50 100,000 100,000 4/9/97 5.45 63,000 63,000 4/21/97 5.50 43,000 43,000 Westpac Banking Corp. 3/3/97 5.80 26,000 26,000 4,431,288 LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - 7.1% ABN-AMRO Bank 4/9/97 5.50 20,000 20,001 Abbey National, Treasury Services 12/3/96 5.52 305,000 305,000 2/18/97 5.42 65,000 65,000 5/20/97 5.42 50,000 50,000 Bank of Nova Scotia 3/6/97 5.40 180,000 180,000 Bank of Scotland Treasury Services 2/20/97 5.55 20,000 20,000 3/17/97 5.75 40,000 40,000 Bank of Tokyo - Mitsubishi Ltd. 1/28/97 5.50 18,000 18,001 2/18/97 5.46 50,000 50,000 2/25/97 5.46 41,000 41,000 3/3/97 5.48 56,000 56,001 Banque Nationale de Paris 2/7/97 5.56 20,500 20,501 Bayerische Hypotheken-und Weschel 12/6/96 5.44 36,000 36,001 3/10/97 5.80 47,000 47,000 CERTIFICATES OF DEPOSIT - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) LONDON BRANCH, EURODOLLAR, FOREIGN BANKS - CONTINUED Bayerische Vereinsbank A.G. 3/10/97 5.80% $ 15,000 $ 15,000 Lloyds Bank, PLC 2/24/97 5.42 37,000 37,006 4/23/97 5.40 25,000 25,005 National Westminster Bank, PLC 5/1/97 5.42 25,000 25,003 Rabobank Nederland, N.V. 12/4/96 5.53 25,000 25,000 Sanwa Bank, Ltd. 1/24/97 5.49 20,000 20,001 1/24/97 5.52 25,000 25,000 1/27/97 5.51 15,000 15,000 1/29/97 5.51 40,000 40,001 1/31/97 5.49 55,000 55,002 1/31/97 5.51 40,000 40,001 Societe Generale, France 12/18/96 5.63 50,000 50,001 Sumitomo Bank, Ltd. 1/6/97 5.50 50,000 50,001 1/6/97 5.55 10,000 10,001 2/21/97 5.49 40,000 40,001 Toronto-Dominion Bank 4/30/97 5.49 100,000 100,000 1,520,528 TOTAL CERTIFICATES OF DEPOSIT 6,647,754 COMMERCIAL PAPER - 31.9% ABN-AMRO North America Finance, Inc. 3/10/97 5.57 50,000 49,258 AC Aquistion Holding Company 12/3/96 5.31 20,000 19,994 American Express Credit Corp. 12/4/96 5.30 75,000 74,967 American Home Products 2/7/97 5.39 20,000 19,799 Asset Securitization Coop. Corp. 12/12/96 5.32 20,000 19,968 12/17/96 5.32 26,000 25,939 Associates Corp. of North America 12/30/96 5.45 50,000 49,784 2/18/97 5.42 50,000 49,415 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) Associates Corp. of North America - continued 2/19/97 5.38% $ 50,000 $ 49,411 2/20/97 5.38 40,000 39,523 2/24/97 5.42 100,000 98,744 Bank of Scotland Treasury Services 3/13/97 5.67 50,000 49,219 Bayerische Vereinsbank A.G. 12/30/96 5.65 50,000 49,779 2/18/97 5.42 80,000 79,066 Bear Stearns Cos., Inc. 12/20/96 5.30 28,000 27,922 2/24/97 5.38 50,000 49,373 2/26/97 5.38 23,000 22,705 Bradford & Bingley Building Society 5/12/97 5.46 50,000 48,805 CIT Group Holdings, Inc. 12/2/96 5.40 50,000 49,993 12/4/96 5.40 35,000 34,984 Caisse d'Amortissement de la Dette Sociale 12/23/96 5.64 75,000 74,749 12/27/96 5.66 50,000 49,801 12/27/96 5.67 50,000 49,801 3/10/97 5.82 50,000 49,223 6/3/97 6.01 255,000 247,506 Caisse des Depots et Consignations 2/19/97 5.41 40,000 39,527 2/24/97 5.42 50,000 49,372 Cheltenham & Gloucester PLC 2/28/97 5.41 50,000 49,342 Chrysler Financial Corporation 12/2/96 5.45 18,000 17,997 12/3/96 5.38 20,000 19,994 12/4/96 5.39 40,000 39,982 12/12/96 5.39 20,000 19,967 1/23/97 5.50 40,000 39,679 1/24/97 5.50 40,000 39,673 1/27/97 5.51 40,000 39,655 Citibank Credit Card Master Trust I (Dakota Certificate Program) 1/23/97 5.43 20,000 19,842 2/6/97 5.41 25,000 24,752 2/19/97 5.41 10,000 9,881 2/20/97 5.42 34,000 33,591 2/21/97 5.40 17,000 16,794 Commonwealth Bank of Australia 2/3/97 5.74 50,000 49,504 CoreStates Capital Corp. (a) 12/2/96 5.38 15,000 15,000 12/4/96 5.36 15,000 15,000 12/6/96 5.40 15,000 15,000 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) CoreStates Capital Corp. (a) - continued 12/9/96 5.38% $ 15,000 $ 15,000 Dresdner U.S. Finance Inc. 12/9/96 5.30 100,000 99,883 Dupont (E.I) de Nemours & Co. 12/19/96 5.62 50,000 49,864 Eiger Capital Corp. 12/5/96 5.31 50,000 49,971 12/16/96 5.33 15,000 14,967 12/18/96 5.33 10,000 9,975 12/20/96 5.33 50,000 49,860 Electricite de France 3/7/97 5.76 25,000 24,627 Enterprise Funding Corp. 12/4/96 5.31 20,000 19,991 12/5/96 5.30 25,000 24,985 12/10/96 5.31 19,014 18,989 12/10/96 5.33 15,000 14,980 12/12/96 5.31 5,000 4,992 12/13/96 5.32 30,905 30,850 12/17/96 5.34 22,000 21,948 12/18/96 5.33 55,000 54,862 Ford Motor Credit Corp. 12/9/96 5.30 180,000 179,790 3/17/97 5.66 100,000 98,381 GTE Corp. 12/2/96 6.10 33,000 32,994 12/3/96 5.35 10,000 9,997 12/18/96 5.37 40,000 39,899 Generale Bank 2/5/97 5.57 100,000 99,006 4/25/97 5.50 50,000 48,923 General Electric Capital Corp. 12/2/96 5.93 70,000 69,988 1/29/97 5.76 100,000 99,083 2/18/97 5.42 50,000 49,416 2/19/97 5.42 70,000 69,172 3/5/97 5.76 75,000 73,903 3/12/97 5.76 115,000 113,193 3/17/97 5.38 200,000 196,885 3/18/97 5.39 50,000 49,214 3/25/97 5.61 150,000 147,407 4/28/97 5.49 100,000 97,805 General Electric Capital Services Inc. 2/18/97 5.42 50,000 49,416 General Electric Co. 12/30/96 5.49 52,000 51,773 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) General Motors Acceptance Corp. 12/4/96 5.70% $ 55,000 $ 54,975 12/6/96 5.36 30,000 29,978 12/23/96 5.33 50,000 49,838 2/20/97 5.70 40,000 39,501 2/24/97 5.71 40,000 39,476 2/25/97 5.71 80,000 78,939 3/3/97 5.45 180,000 177,530 3/31/97 5.70 95,000 93,246 4/14/97 5.63 80,000 78,370 4/15/97 5.63 40,000 39,179 5/7/97 5.51 100,000 97,662 Goldman Sachs Group, L.P. (The) 4/29/97 5.50 100,000 97,786 5/12/97 5.45 135,000 131,780 Government of Canada 12/20/96 5.43 28,750 28,669 IBM Credit Corp. 3/3/97 5.39 24,000 23,675 3/10/97 5.38 40,000 39,417 Matterhorn Capital Corp. 12/18/96 5.33 50,000 49,875 Merrill Lynch & Co., Inc. 2/4/97 5.43 71,000 70,315 3/11/97 5.76 55,000 54,144 3/12/97 5.68 25,000 24,612 Morgan Stanley Group, Inc. 2/3/97 5.77 95,000 94,054 2/4/97 5.40 50,000 49,520 2/10/97 5.40 131,000 129,626 National Australia Funding, Inc. 3/13/97 5.60 90,000 88,618 National Bank of Canada 2/27/97 5.44 10,000 9,869 Nationwide Building Society 2/10/97 5.43 15,000 14,842 2/24/97 5.45 23,000 22,709 2/25/97 5.45 20,000 19,744 New Center Asset Trust 12/2/96 5.63 25,000 24,996 2/11/97 5.40 100,000 98,936 2/19/97 5.63 21,000 20,744 2/20/97 5.63 22,000 21,729 3/11/97 5.79 20,000 19,688 3/17/97 5.39 55,000 54,142 Norddeutsche Landesbank 3/14/97 5.60 80,000 78,750 COMMERCIAL PAPER - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) PHH Corp. 1/31/97 5.43% $ 10,000 $ 9,909 2/6/97 5.43 15,000 14,850 2/7/97 5.43 21,000 20,787 2/12/97 5.44 7,000 6,924 Preferred Receivables Funding Corp. 1/16/97 5.39 40,000 39,727 1/24/97 5.40 20,000 19,840 1/27/97 5.40 18,000 17,848 Royal Bank of Canada 12/31/96 5.63 35,000 34,841 SBC Finance (DE), Inc. 3/11/97 5.76 150,000 147,667 Sears Roebuck Acceptance Corp. 12/17/96 5.35 40,000 39,905 2/13/97 5.40 15,000 14,836 Sherwood Medical Company 12/9/96 5.30 32,207 32,169 Smith Barney, Inc. 12/13/96 5.31 38,000 37,933 Swiss Bank Corp. 12/27/96 5.65 82,900 82,571 Textron, Inc. 12/3/96 5.40 3,000 2,999 12/5/96 5.41 5,000 4,997 12/9/96 5.40 7,000 6,992 12/11/96 5.40 5,000 4,993 12/11/96 5.43 10,000 9,985 12/12/96 5.41 5,000 4,992 12/20/96 5.45 10,000 9,971 Toronto Dominion Holdings USA, Inc. 2/3/97 5.75 100,000 99,008 3/5/97 5.80 30,000 29,558 Unifunding, Inc. 12/6/96 5.33 25,000 24,982 1/21/97 5.41 25,000 24,811 2/11/97 5.40 40,000 39,574 TOTAL COMMERCIAL PAPER 6,845,872 FEDERAL AGENCIES - 15.1% FEDERAL HOME LOAN BANK - AGENCY COUPONS (A)- 1.3% 12/13/96 5.51 100,000 99,998 FEDERAL AGENCIES - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) FEDERAL HOME LOAN BANK - AGENCY COUPONS (A)- CONTINUED 12/20/96 5.51% $ 100,000 $ 99,997 3/4/97 5.31 85,000 84,926 284,921 FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 0.5% 3/3/97 5.31 65,000 64,133 3/5/97 5.31 30,855 30,434 94,567 FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS (A) - 10.0% 12/2/96 5.32 250,000 249,893 12/2/96 5.34 125,000 125,626 12/2/96 5.42 360,000 359,757 12/2/96 5.48 240,000 240,000 12/3/96 5.52 82,000 81,938 12/15/96 5.32 250,000 249,901 12/20/96 5.51 300,000 299,988 12/20/96 5.54 60,000 59,981 12/29/96 5.31 125,000 124,948 1/17/97 5.42 149,000 148,985 2/1/97 5.40 210,000 209,911 2,150,928 FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 3.3% 3/17/97 5.65 48,360 47,577 3/18/97 5.65 130,295 128,165 4/7/97 5.40 95,000 93,239 4/30/97 5.34 62,285 60,933 4/30/97 5.40 40,000 39,123 5/2/97 5.34 150,000 146,705 5/5/97 5.35 69,675 68,112 5/7/97 5.35 34,950 34,156 5/9/97 5.34 96,175 93,962 711,972 TOTAL FEDERAL AGENCIES 3,242,388 BANK NOTES - 4.0% Bank of America NW, NA 12/4/96 5.37 35,000 35,000 Boatmen's First National Bank of Kansas City 12/3/96 5.56 (a) 25,000 24,998 BANK NOTES - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) Fifth Third Bank - Cincinnati 2/24/97 5.80% $ 42,000 $ 41,973 First Bank NA - Minnesota 12/18/96 5.35 (a) 30,000 30,000 First National Bank of Boston 2/3/97 5.41 75,000 75,000 First Union National Bank of North Carolina, NA 12/27/96 5.56 (a) 100,000 99,997 Key Bank of New York 12/2/96 5.44 (a) 104,000 103,953 KeyBank National Association 12/2/96 5.43 (a) 50,000 49,980 12/2/96 5.58 (a) 90,000 89,957 LaSalle National Bank 3/24/97 5.61 30,000 30,000 9/8/97 6.12 25,000 25,000 9/10/97 6.15 25,000 25,000 PNC Bank 12/9/96 5.38 (a) 105,000 104,964 12/20/96 5.38 (a) 108,000 107,997 SouthTrust Bank of Alabama 12/9/96 5.36 (a) 25,000 25,000 TOTAL BANK NOTES 868,819 MASTER NOTES (A) - 2.5% Goldman Sachs Group, L.P. (The) (c) 2/8/97 5.50 100,000 100,000 J.P. Morgan Securities 12/6/96 5.38 303,000 303,000 Norwest Corp. 12/2/96 5.43 126,000 126,000 TOTAL MASTER NOTES 529,000 MEDIUM-TERM NOTES (A) - 5.4% Bank of Scotland Treasury Services 2/7/97 5.48 250,000 250,000 Beneficial Corp. 12/2/96 5.35 33,000 33,000 12/5/96 5.57 50,000 50,022 12/5/96 5.64 40,000 39,995 1/19/97 5.50 27,000 26,998 MEDIUM-TERM NOTES (A) - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) CIT Group Holdings, Inc. 12/2/96 5.46% $ 50,000 $ 49,980 Commonwealth Life Insurance Co. (c) 12/2/96 5.58 50,000 50,000 General Motors Acceptance Corp. 2/1/97 5.50 100,000 100,000 2/13/97 5.53 40,000 39,998 Merrill Lynch & Co., Inc. 12/18/96 5.38 83,000 82,988 Morgan Stanley Group, Inc. 12/2/96 5.46 95,000 95,000 Norwest Corp. 4/22/97 5.55 118,000 118,000 PHH Corp. 12/13/96 5.38 95,000 94,999 Pacific Mutual Life Insurance Co. (c) 12/9/96 5.72 44,000 44,000 Transamerica Life Insurance and Annuity Co. (c) 12/2/96 5.41 20,000 20,000 12/15/96 5.59 65,000 65,000 TOTAL MEDIUM-TERM NOTES 1,159,980 SHORT-TERM NOTES (A) - 4.0% CSA Funding - B 12/6/96 5.46 22,000 22,000 CSA Funding - C 12/6/96 5.46 6,000 6,000 Capital One Funding Corp. (1996-D) 12/6/96 5.41 25,318 25,318 Capital One Funding Corp. (1996-F) 12/6/96 5.41 43,664 43,664 Capital One Funding Corp. (1996-G) 12/6/96 5.41 10,000 10,000 Capital One Funding Corp. (1996-H) 12/6/96 5.41 20,000 20,000 Liquid Asset Backed Securities Trust (1996-1) (b) 12/15/96 5.40 91,000 91,000 Liquid Asset Backed Securities Trust (1996-2) (b) 12/2/96 5.41 134,000 134,000 SMM Trust (1995-P) (b) 12/15/96 5.68 89,250 89,250 SHORT-TERM NOTES (A) - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) SMM Trust (1996-B) (b) 12/4/96 5.43% $ 63,000 $ 63,000 SMM Trust (1996-I) (b) 12/30/96 5.43 102,000 102,000 SMM Trust (1996-V) (b) 12/26/96 5.71 255,000 255,000 TOTAL SHORT-TERM NOTES 861,232 TIME DEPOSITS - 1.2% Bank of Tokyo - Mitsubishi Ltd. 12/2/96 5.38 120,000 120,000 12/4/96 5.38 25,000 25,000 12/12/96 5.36 60,000 60,000 Berliner Handels U Frankfurter 12/3/96 5.75 40,000 40,000 TOTAL TIME DEPOSITS 245,000 MUNICIPAL SECURITIES - 0.1% New York Gen. Oblig. 12/17/96 5.48 21,970 21,970 University of California Regents Series B 12/10/96 5.35 11,000 10,985 TOTAL MUNICIPAL SECURITIES 32,955 REPURCHASE AGREEMENTS - 4.8% MATURITY AMOUNT (000S) In a joint trading account (U.S. Government Obligations): dated 11/19/96 due 12/2/96 At 5.32% $ 250,480 250,000 dated 11/29/96 due 12/2/96 At 5.78% 410,440 410,242 dated 10/2/96 due 12/3/96 (d) At 5.40% 100,930 100,000 REPURCHASE AGREEMENTS - CONTINUED MATURITY AMOUNT VALUE (NOTE 1) (000S) (000S) In a joint trading account (U.S. Government Obligations): - continued dated 11/5/96 due 12/4/96 At 5.31% $ 175,749 $ 175,000 dated 11/5/96 due 12/4/96 At 5.34% 100,430 100,000 TOTAL REPURCHASE AGREEMENTS 1,035,242 TOTAL INVESTMENTS - 100% $ 21,475,256 Total Cost for Income Tax Purposes $ 21,475,256 LEGEND (1.) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. The due dates on these types of securities reflects the next interest rate reset date or, when applicable, the final maturity date. (2.) 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 $734,250,000 or 3.5% of net assets. (3.) Restricted security; subject to resale restrictions. (4.) Payable on seven-day demand. INCOME TAX INFORMATION At November 30, 1996, the fund had a capital loss carryforward of approximately $2,304,000 of which $510,000, $1,634,000 and $160,000 will expire on November 30, 2001, 2002 and 2004 , respectively. A total of 2.57% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax. The fund will notify shareholders in January 1997 of the applicable percentage for use in preparing 1996 income tax returns. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1996 ASSETS Investment in securities, at value (including repurchase $ 21,475,256 agreements of $1,035,242) - See accompanying schedule Interest receivable 119,054 TOTAL ASSETS 21,594,310 LIABILITIES Payable for investments purchased $ 330,927 Share transactions in process 11,775 Accrued management fee 3,580 Other payables and accrued expenses 7,430 TOTAL LIABILITIES 353,712 NET ASSETS $ 21,240,598 Net Assets consist of: Paid in capital $ 21,241,673 Accumulated net realized gain (loss) on investments (1,075) NET ASSETS, for 21,241,673 shares outstanding $ 21,240,598 NET ASSET VALUE, offering price and redemption price per $1.00 share ($21,240,598 (divided by) 21,241,673 shares)
STATEMENT OF OPERATIONS AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996 INTEREST INCOME $ 1,073,243 EXPENSES Management fee $ 40,411 Transfer agent fees 54,104 Accounting fees and expenses 804 Non-interested trustees' compensation 105 Custodian fees and expenses 312 Registration fees 1,847 Audit 211 Legal 109 Miscellaneous 157 Total expenses before reductions 98,060 Expense reductions (354) 97,706 NET INTEREST INCOME 975,537 NET REALIZED GAIN (LOSS) ON INVESTMENTS (160) NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 975,377 STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED NOVEMBER 30, NOVEMBER 30, 1996 1995 INCREASE (DECREASE) IN NET ASSETS Operations $ 975,537 $ 916,152 Net interest income Net realized gain (loss) (160) 686 NET INCREASE (DECREASE) IN NET ASSETS RESULTING 975,377 916,838 FROM OPERATIONS Distributions to shareholders from net interest income (975,537) (916,152) Share transactions at net asset value of $1.00 per share 36,638,550 31,772,441 Proceeds from sales of shares Reinvestment of distributions from net interest income 948,155 891,871 Cost of shares redeemed (34,777,730) (28,761,771) NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 2,808,975 3,902,541 RESULTING FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) IN NET ASSETS 2,808,815 3,903,227 NET ASSETS Beginning of period 18,431,783 14,528,556 End of period $ 21,240,598 $ 18,431,783
FINANCIAL HIGHLIGHTS
YEAR ENDED NOVEMBER 30, 1996 1995 1994 1993 1992 SELECTED PER-SHARE DATA Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period Income from Investment .051 .055 .037 .029 .038 Operations Net interest income Less Distributions From net interest (.051) (.055) (.037) (.029) (.038) income Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 end of period TOTAL RETURN 5.18% 5.67% 3.74% 2.97% 3.90% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $ 21,241 $ 18,432 $ 14,529 $ 10,314 $ 10,040 (in millions) Ratio of expenses to .51% .55% .52% .48% .48% average net assets Ratio of net interest 5.06% 5.50% 3.76% 2.92% 3.86% income to average net assets
NOTES TO FINANCIAL STATEMENTS For the period ended November 30, 1996 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 financial statements have been prepared in conformity with generally accepted accounting principles which permit management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 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 substantially 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 discount, is accrued as earned. EXPENSES. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned between the funds in the trust. 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. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency Securities are transferred to an account of the fund, or to the Joint Trading Account, at a bank custodian. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. REVERSE REPURCHASE AGREEMENTS. At all times that a reverse repurchase agreement is outstanding, the fund identifies cash and liquid securities as segregated in its custodian records with a value at least equal to its obligation under the agreement. 3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly fee that is calculated by multiplying the sum of two components, a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund and adding an income-based fee. The group fee rate is the weighted average of a series of rates and is based on the monthly average net assets of all the mutual funds advised by FMR. The rates ranged from .1100% to .3700% for the period. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above rates, as they resulted in the same or a lower management fee. The annual individual fund fee rate is 0.03%. The income-based fee is only added when the fund's gross 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 .24% (annualized) of average net assets. For the period, the management fee was equivalent to an annual rate of .21% of the fund's 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. TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .28% of average net assets. ACCOUNTING FEES. 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. 4. EXPENSE REDUCTIONS. The fund has entered into arrangements with its custodian and transfer agent whereby interest earned on uninvested cash balances was used to offset a portion of the fund's expenses. During the period, the fund's custodian and transfer agent fees were reduced by $16,000 and $338,000, respectively, under these arrangements. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and the 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 November 30, 1996, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. 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 November 30, 1996 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 November 30, 1996, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with generally accepted accounting principles. /s/COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. Dallas, Texas December 23, 1996 MANAGING YOUR INVESTMENTS Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day. BY PHONE Fidelity TouchTone Xpressprovides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security. SM (PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS 1-800-544-5555 PRESS For mutual fund and brokerage trading. 1 For quotes.* 2 For account balances and holdings. 3 To review orders and mutual fund activity. 4 To change your PIN. 5 To speak to a Fidelity representative. * 0 BY PC Fidelity's Web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services. (PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE WWW.FIDELITY.COM If you are not currently on the Internet, call Fidelity at 1-800-544-7272 for significant savings on Web access from internetMCI. SM (PHONE_GRAPHIC)(PHONE_GRAPHIC) FIDELITY ON-LINE XPRESS+ TM Fidelity On-line Xpress+ software for Windows combines comprehensive portfolio management capabilities, securities trading and access to research and analysis tools . . . all on your desktop. Call Fidelity at 1-800-544-7272 or visit our Web site for more information on how to manage your investments via your PC. * 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. TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 851 East 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 950 Northgate Drive San Rafael, CA 1400 Civic Drive Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. Federal Highway Boca Raton, FL 90 Alhambra Plaza Coral Gables, FL 4090 N. Ocean Boulevard Ft. Lauderdale, FL 4001 Tamiami Trail, North Naples, FL 1907 West State Road 434 Orlando, FL 2401 PGA Boulevard Palm Beach Gardens, FL 8065 Beneva Road Sarasota, FL 2000 66th Street, North St. Petersburg, FL GEORGIA 3525 Piedmont Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA HAWAII 700 Bishop Street Honolulu, HI ILLINOIS 215 East Erie Street Chicago, IL One North Franklin Chicago, IL 1415 West 22nd Street Oak Brook, IL 1700 East Golf Road Schaumburg, IL 3232 Lake Avenue Wilmette, IL LOUISIANA 201 St. Charles Avenue New Orleans, LA MAINE 3 Canal Plaza Portland, ME MARYLAND 7401 Wisconsin Avenue Bethesda, MD 1 West Pennsylvania Ave. Towson, MD MASSACHUSETTS 470 Boylston Street Boston, MA 21 Congress Street Boston, MA 25 State Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 416 Belmont Street Worcester, MA MICHIGAN 280 North Woodward Ave. Birmingham, MI 29155 Northwestern Hwy. Southfield, MI MINNESOTA 7600 France Avenue South Edina, MN MISSOURI 700 West 47th Street Kansas City, MO 8885 Ladue Road Ladue, MO 200 North Broadway St. Louis, MO NEW JERSEY 56 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 1271 Avenue of the Americas New York, NY 71 Broadway New York, NY 350 Park Avenue New York, NY 10 Bank Street White Plains, NY NORTH CAROLINA 4611 Sharon Road Charlotte, NC 2200 West Main Street Durham, NC OHIO 600 Vine Street Cincinnati, OH 28699 Chagrin Boulevard Woodmere Village, OH 1903 East Ninth Street Cleveland, 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 2701 Drexel Drive Houston, TX 1010 Lamar Street Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX UTAH 215 South State 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 511 Pine Street Seattle, WA WASHINGTON, DC 1775 K Street, N.W. Washington, DC WISCONSIN 595 North Barker Road Brookfield, WI INVESTMENT ADVISER (registered trademark) Fidelity Management & Research Company Boston, MA INVESTMENT SUB-ADVISER FMR Texas Inc. Irving, TX OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President Sarah H. Zenoble, Vice President Robert Litterst, Vice President Arthur S. Loring, Secretary Kenneth A. Rathgeber, Treasurer Thomas D. Maher, Assistant Vice President John H. Costello, Assistant Treasurer Leonard M. Rush, Assistant Treasurer Thomas J. Simpson, Assistant Treasurer 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* ADVISORY BOARD William O. McCoy 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 Exchanges/Redemption 1-800-544-7777 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) TouchTone Xpress 1-800-544-5555 SM * INDEPENDENT TRUSTEES AUTOMATED LINE FOR QUICKEST SERVICE FIDELITY (registered trademark) U.S. GOVERNMENT RESERVES ANNUAL REPORT NOVEMBER 30, 1996 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. 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 values. FINANCIAL STATEMENTS 12 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 16 Notes to the financial statements. REPORT OF INDEPENDENT 20 The auditor's opinion. ACCOUNTANTS To reduce expenses and demonstrate respect for our environment, we have initiated a project through which we will begin eliminating duplicate copies of most financial reports and prospectuses to most households, even if they have more than one account in the fund. If additional copies of financial reports, prospectuses or historical account information are needed, please call 1-800-544-6666. 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. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. PRESIDENT'S MESSAGE (PHOTO_OF_EDWARD_C_JOHNSON_3D)DEAR SHAREHOLDER: Although stocks have managed to post solid returns throughout 1996, signs of strength in the economy have led to inflation fears, causing some uncertainty in bond markets so far this year. In 1995, both stock and bond markets posted strong results, while the year before, stocks posted below-average returns and bonds had one of the worst years in history. These market ups and downs are a normal part of investing, and there are some basic principles that can help investors in every type of market. First, take a long-term approach when investing. If you can afford to leave your money invested through the inevitable ups and downs of financial markets, you will greatly reduce your vulnerability to any single decline. Over time, for example, stock prices have gone up - and have significantly outperformed other types of investments and stayed ahead of inflation. Second, you can further manage risk by diversifying your investments. A stock mutual fund is already diversified, because it invests in many different companies. You can increase your diversification by investing in a number of different stock funds, or in different investment categories, such as bonds. You should also keep money you'll need in the near future in a more stable investment. Finally, it makes good sense to follow a regular investment plan, investing a set amount of money at the same time each month or quarter. That way, you can avoid getting caught up in the excitement of a rapidly-rising market - and won't end up buying all your shares at market highs. This strategy won't assure a profit or protect you from a loss in a declining market, but it should help you lower the average cost of your purchases. For this to be effective, you must continue to buy shares in both up and down markets. If you have questions, please call us at 1-800-544-8888. We would be happy to send you a Fidelity FundMatch kit, which can help you determine the mix of investments that is right for you. You might also find it convenient to set up a regular investment plan using the Fidelity Automatic Account Builder.SM We look forward to hearing from you. Best regards, Edward C. Johnson 3d 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 NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity U.S. Government Reserves 5.12% 22.25% 71.78% Government Money Market Funds Average 4.79% 21.05% 69.46% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, 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, the value of your investment would be $1,050. To measure how the fund's performance stacked up against its peers, you can compare it to the government money market funds average, which reflects the performance of 228 money market funds with similar objectives tracked by IBC Financial Data, Inc. over the past 12 months. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED NOVEMBER 30, 1996 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity U.S. Government Reserves 5.12% 4.10% 5.56% Government Money Market Funds Average 4.79% 3.89% 5.41% AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return and show you what would have happened if the fund had performed at a constant rate each year. YIELDS 11/28/95 2/27/96 5/28/96 9/3/96 12/3/96 Fidelity U.S. Government 5.45% 4.81% 4.92% 4.97% 4.98% Reserves Government Money 5.09% 4.59% 4.57% 4.66% 4.73% Market Funds Average 11/29/95 2/28/96 5/29/96 8/28/96 12/4/96 2.86% 2.76% 2.66% 2.68% 2.63% MMDA Row: 1, Col: 1, Value: 5.45 Row: 1, Col: 2, Value: 5.09 Row: 1, Col: 3, Value: 2.86 Row: 2, Col: 1, Value: 4.81 Row: 2, Col: 2, Value: 4.59 Row: 2, Col: 3, Value: 2.76 Row: 3, Col: 1, Value: 4.92 Row: 3, Col: 2, Value: 4.57 Row: 3, Col: 3, Value: 2.66 Row: 4, Col: 1, Value: 4.970000000000001 Row: 4, Col: 2, Value: 4.659999999999999 Row: 4, Col: 3, Value: 2.68 Row: 5, Col: 1, Value: 4.98 Row: 5, Col: 2, Value: 4.73 Row: 5, Col: 3, Value: 2.63 6% - 5% - 4% - 3% - 2% - 1% - 0% Fidelity U.S. Government Reserves Government Money Market Funds Average MMDA 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. You can compare these yields to the government money market funds average and the bank money market deposit account (MMDA) average . Figures for the government money market funds average are from IBC Financial Data, Inc. The MMDA average is supplied by BANK RATE MONITOR(Trademark). 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 market 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 Leland Barron, Portfolio Manager of Fidelity U.S. Government Reserves. Q. LELAND, CAN YOU GIVE US AN IDEA OF WHAT THE INVESTMENT ENVIRONMENT WAS LIKE OVER THE PAST YEAR? A. At the beginning of the period, most market participants were expecting interest rates to fall well into 1996 because the economy was growing slowly and inflationary pressures were under control. That sentiment was reinforced by the Federal Reserve Board, which twice lowered the interest rate banks charge each other for overnight loans - known as the federal funds rate - in late 1995 and early 1996. However, signs soon emerged indicating that the economy was growing rapidly, as evidenced by a healthy increase in the gross domestic product (GDP). This backdrop led much of the market to anticipate that the Fed would increase the federal funds rate in order to slow the economy and prevent inflationary pressures from building. For several months, the market traded within a narrow range, selling off when strong employment numbers were reported, then bouncing back when other statistics such as retail sales showed some weakness. Over the past few months, the market broke out of this range as further data reinforced the belief that the economy was indeed slowing from the robust pace of the second quarter of 1996. Given this slowdown and continued modest inflation, expectations of a Fed tightening have been almost completely removed from the current level of short-term rates. Q. WHAT STRATEGY DID YOU PURSUE IN THIS ENVIRONMENT? A. Early in the period, I kept the average maturity a bit lower - in the high 30-day and mid 40-day range - than I ordinarily would in a declining interest rate climate, because I felt the market's expectations were running too far ahead of the Fed's actions. When expectations shifted, I maintained the maturity at the same level to keep the fund flexible and to keep pace with rising rates. In July, I let the fund's average maturity decline into the 30-day range because I felt the chances were good that the Fed would raise short-term rates. When the Fed's August meeting passed and it appeared there would be no action on interest rates, I increased the fund's average maturity to the mid-40s, and it stood at 40 days at the end of the period. Q. HOW HAS THE FUND PERFORMED? A. Better than most of its competitors. On November 30, 1996, the fund's seven-day yield was 4.93%, compared to 5.44% a year ago. The fund's total return for the 12 months was 5.12%. That beat the average total return during the same period of 4.79% for the government money market funds average, according to IBC Financial Data, Inc. Q. WHAT'S YOUR OUTLOOK? A. I think it's likely we'll see no change in Fed policy over the next few months. One of the reasons is that the increase in GDP for the third quarter was to a large degree due to a higher level of inventory accumulation. The key from here is whether the economy rekindles due to a pick-up in retail sales, helping to work off those inventories. I believe the economy will continue along at a good pace - not at one so strong that the Fed feels it has to increase short-term rates, but also not one weak enough to create concerns about a recession. This backdrop should create a stable fed funds rate environment, and a trading range within the short end of the market similar to what we saw in April, May and June. As a result, I'll probably keep the fund flexible, with an average maturity in the mid-40s. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND FACTS GOAL: income and a stable $1 share price by investing in high quality short-term money market securities issued by the U.S. government or government agencies START DATE: November 3, 1981 SIZE: as of November 30, 1996, more than $1 billion MANAGER: Leland Barron, since 1991; manager, Spartan U.S. Government Money Market Fund and Spartan U.S. Treasury Money Market Fund, since 1991; joined Fidelity in 1981 (checkmark) WORDS TO KNOW BANKERS' ACCEPTANCE (BA): A short-term note whose payment is guaranteed by a bank. CERTIFICATE OF DEPOSIT (CD): An interest-bearing deposit with a specific maturity. Large denomination CDs, like those the fund buys, have negotiable interest rates and can be sold in the secondary market. COMMERCIAL PAPER: A short-term note from a bank or corporation. FEDERAL FUNDS RATE: The interest rate banks charge each other for overnight loans. MATURITY: The time remaining before an issuer is scheduled to repay the principal amount on a debt security. When the fund's average maturity, weighted by dollar amount, is short, the fund manager is expecting rates to rise. When the average maturity is neutral, the manager wants the flexibility to respond to rising rates, while still capturing a portion of the higher yields available from issues with longer maturities. When the average maturity is long, the manager is expecting interest rates to fall. TIME DEPOSIT (TD): An interest-bearing deposit with a specific maturity. Large denomination TDs, like those the fund buys, differ from CDs in that they can't be sold in the secondary market. INVESTMENT CHANGES MATURITY DIVERSIFICATION DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS 11/30/96 5/31/96 11/30/95 0 - 30 65 30 58 31 - 90 20 17 28 91 - 180 10 18 11 181 - 397 5 35 3 WEIGHTED AVERAGE MATURITY 11/30/96 5/31/96 11/30/95 Fidelity U.S. Government Reserves 40 days 42 days 46 days Government Money Market Funds Average * 48 days 49 days 47 days ASSET ALLOCATION (% OF FUND'S INVESTMENTS) AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996 Row: 1, Col: 1, Value: 60.0 Row: 1, Col: 2, Value: 9.0 Row: 1, Col: 3, Value: 31.0 Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 1, Value: 64.0 Row: 1, Col: 2, Value: 7.0 Row: 1, Col: 3, Value: 26.0 Row: 1, Col: 4, Value: 3.0 Federal agency issues 60% U.S. Treasury obligations 9% Repurchase agreements 31% Other 0% Federal agency issues 66% U.S. Treasury obligations 7% Repurchase agreements 26% Other 1% * SOURCE: IBC'S MONEY FUND REPORT(registered trademark) INVESTMENTS NOVEMBER 30, 1996 Showing Percentage of Total Value of Investments FEDERAL AGENCIES - 59.6% DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) FEDERAL FARM CREDIT BANK - AGENCY COUPONS (A) - 2.7% 12/2/96 5.59% $ 33,000 $ 32,992 FEDERAL HOME LOAN BANK - AGENCY COUPONS (A) - 6.5% 12/28/96 5.30 24,000 23,986 12/2/96 5.78 15,000 14,998 12/4/96 5.29 42,000 41,973 80,957 FEDERAL HOME LOAN BANK - DISCOUNT NOTES - 2.0% 1/29/97 5.64 25,000 24,775 FEDERAL HOME LOAN MORTGAGE CORP. - DISCOUNT NOTES - 8.7% 1/3/97 5.30 11,000 10,947 1/3/97 5.31 39,000 38,813 2/5/97 5.30 11,000 10,895 2/13/97 5.30 14,554 14,398 2/14/97 5.30 9,000 8,902 2/18/97 5.30 14,000 13,839 3/7/97 5.31 11,000 10,847 108,641 FEDERAL NATIONAL MORTGAGE ASSOC. - AGENCY COUPONS (A) - 27.0% 12/2/96 5.34 33,000 33,165 12/2/96 5.35 58,000 57,985 12/2/96 5.36 49,000 48,990 12/2/96 5.42 45,000 44,970 12/2/96 5.48 15,000 15,000 12/2/96 5.85 40,000 40,000 12/3/96 5.52 15,000 14,989 12/4/96 5.29 28,000 27,977 12/20/96 5.54 15,000 14,995 2/1/97 5.40 28,000 27,988 2/21/97 5.40 9,000 8,998 335,057 FEDERAL NATIONAL MORTGAGE ASSOC. - DISCOUNT NOTES - 8.8% 12/27/96 5.48 10,000 9,961 1/22/97 5.30 26,000 25,804 2/4/97 5.45 38,000 37,636 4/21/97 5.40 9,000 8,815 4/28/97 5.69 6,000 5,865 4/30/97 5.40 22,000 21,518 109,599 FEDERAL AGENCIES - CONTINUED DUE ANNUALIZED YIELD AT PRINCIPAL AMOUNT VALUE (NOTE 1) DATE TIME OF PURCHASE (000S) (000S) STUDENT LOAN MARKETING ASSOC. - AGENCY COUPONS (A) - 3.9% 12/3/96 5.26% $ 18,000 $ 18,007 12/3/96 5.40 30,000 30,000 48,007 TOTAL FEDERAL AGENCIES 740,028 U.S. TREASURY OBLIGATIONS - 9.5% U.S. TREASURY BILLS 4/3/97 5.54 32,000 31,425 4/3/97 5.55 26,000 25,533 8/21/97 5.63 6,500 6,247 8/21/97 5.66 6,500 6,246 8/21/97 5.67 24,000 23,060 9/18/97 5.68 9,000 8,609 9/18/97 5.70 5,000 4,782 9/18/97 5.71 12,000 11,476 TOTAL U.S. TREASURY OBLIGATIONS 117,378 MEDIUM-TERM NOTES (A)(B) - 0.3% EXPORT-IMPORT BANK, U.S. (AS GUARANTOR FOR K.A. LEASING, LTD.) 12/15/96 5.44 4,135 4,135 REPURCHASE AGREEMENTS - 30.6% MATURITY AMOUNT (000S) In a joint trading account (Notes 2 and 3) (U.S. Government Obligations): dated 9/16/96 due 12/2/96 (c) At 5.40% $ 30,347 30,000 dated 11/25/96 due 12/2/96 At 5.37% 52,054 52,000 dated 11/29/96 due 12/2/96 At 5.78% 229,595 229,484 REPURCHASE AGREEMENTS - CONTINUED MATURITY AMOUNT VALUE (NOTE 1) (000S) (000S) In a joint trading account (Notes 2 and 3) (U.S. Government Obligations): - continued dated 11/5/96 due 12/4/96 At 5.34% $ 31,133 $ 31,000 dated 11/21/96 due 1/21/97 (c) At 5.37% 37,337 37,000 TOTAL REPURCHASE AGREEMENTS 379,484 TOTAL INVESTMENTS - 100% $ 1,241,025 Total cost for Income Tax Purposes $ 1,241,025 LEGEND (1.) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. The due date on these types of securities reflects the next interest rate reset date or, when applicable, the final maturity date. (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) Export-Import Bank U.S. (as Guarantor for K.A. Leasing, Ltd.) 7/29/94 $ 4,135 (3.) Payable on seven-day demand. INCOME TAX INFORMATION At November 30, 1996, the fund had a capital loss carryforward of approximately $85,000 of which $19,000 and $66,000 will expire on November 30, 2001 and 2003, respectively. A total of 25.52% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax. The fund will notify shareholders in January 1997 of the applicable percentage for use in preparing 1996 income tax returns. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) NOVEMBER 30, 1996 ASSETS Investment in securities, at value (including $ 1,241,025 repurchase agreements of $379,484) - See accompanying schedule Interest receivable 4,152 TOTAL ASSETS 1,245,177 LIABILITIES Share transactions in process $ 1,763 Distributions payable 159 Accrued management fee 207 Other payables and accrued expenses 341 TOTAL LIABILITIES 2,470 NET ASSETS $ 1,242,707 Net Assets consist of: Paid in capital $ 1,242,732 Accumulated net realized gain (loss) on investments (25) NET ASSETS, for 1,243,168 shares outstanding $ 1,242,707 NET ASSET VALUE, offering price and redemption price per $1.00 share ($1,242,707 (divided by) 1,243,168 shares)
STATEMENT OF OPERATIONS AMOUNTS IN THOUSANDS YEAR ENDED NOVEMBER 30, 1996 INTEREST INCOME $ 65,705 EXPENSES Management fee $ 2,461 Transfer agent fees 3,201 Accounting fees and expenses 140 Non-interested trustees' compensation 8 Custodian fees and expenses 17 Registration fees 187 Audit 36 Legal 7 Miscellaneous 8 Total expenses before reductions 6,065 Expense reductions (82) 5,983 NET INTEREST INCOME 59,722 NET REALIZED GAIN (LOSS) ON INVESTMENTS 12 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 59,734 STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED NOVEMBER 30, NOVEMBER 30, 1996 1995 INCREASE (DECREASE) IN NET ASSETS Operations $ 59,722 $ 62,412 Net interest income Net realized gain (loss) 12 (66) NET INCREASE (DECREASE) IN NET ASSETS RESULTING 59,734 62,346 FROM OPERATIONS Distributions to shareholders from net interest income (59,722) (62,412) Share transactions at net asset value of $1.00 per share 1,718,909 1,491,809 Proceeds from sales of shares Reinvestment of distributions from net interest income 56,628 59,448 Cost of shares redeemed (1,720,835) (1,492,867) NET INCREASE (DECREASE) IN NET ASSETS AND SHARES 54,702 58,390 RESULTING FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) IN NET ASSETS 54,714 58,324 NET ASSETS Beginning of period 1,187,993 1,129,669 End of period $ 1,242,707 $ 1,187,993
FINANCIAL HIGHLIGHTS
YEARS ENDED TWO MONTHS YEARS ENDED SEPTEMBER 30, NOVEMBER 30, ENDED NOVEMBER 30, 1996 1995 1994 1994 1993 1992 SELECTED PER-SHARE DATA Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period Income from .050 .055 .008 .033 .025 .039 Investment Operations Net interest income Less Distributions From net interest (.050) (.055) (.008) (.033) (.025) (.039) income Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 end of period TOTAL RETURN B 5.12% 5.60% .78% 3.32% 2.57% 3.95% RATIOS AND SUPPLEMENTAL DATA Net assets, end of $ 1,243 $ 1,188 $ 1,130 $ 1,060 $ 1,043 $ 1,292 period (in millions) Ratio of expenses to .51% .55% .36% A .51% .73% .73% average net assets , C Ratio of expenses to .50% .55% .36% A .51% .73% .73% average net assets D after expense reductions Ratio of net interest 5.02% 5.43% 4.77% A 3.27% 2.57% 3.88% income to average net assets
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C FMR AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO WOULD HAVE BEEN HIGHER. D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF NOTES TO THE FINANCIAL STATEMENTS). NOTES TO FINANCIAL STATEMENTS For the period ended November 30, 1996 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity U.S. Government 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 financial statements have been prepared in conformity with generally accepted accounting principles which permit management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. As permitted under Rule 2a-7 of the 1940 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 substantially 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 discount, is accrued as earned. EXPENSES. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned between the funds in the trust. 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. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency Securities are transferred to an account of the fund, or to the Joint Trading Account, at a bank custodian. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. 2. OPERATING POLICIES - CONTINUED REVERSE REPURCHASE AGREEMENTS. At all times that a reverse repurchase agreement is outstanding, the fund identifies cash and liquid securities as segregated in its custodian records with a value at least equal to its obligation under the agreement. RESTRICTED SECURITIES. The fund is permitted to invest in securities that are subject to legal or contractual restrictions on resale. These securities generally 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 $4,135,000 or 0.3% of net assets 3. JOINT TRADING ACCOUNT. At the end of the period, the fund had 20% or more of its total investments in repurchase agreements through a joint trading account. These repurchase agreements were with entities whose creditworthiness has been reviewed and found satisfactory by FMR. The maturity values of the joint trading account investments were $30,347,000 at 5.40%, $52,054,000 at 5.37%, $229,595,000 at 5.78%, $31,133,000 at 5.34% and $37,337,000 at 5.37%. The investments in repurchase agreements through the joint trading account are summarized as follows: SUMMARY OF JOINT TRADING Dated September 16, 1996, due December 2, 1996 5.40% Number of dealers or banks 1 Maximum amount with one dealer or bank 100% Aggregate principal amount of agreements $200,000,000 Aggregate maturity amount of agreements $202,310,000 Aggregate market value of transferred assets $206,740,821 Coupon rates of transferred assets 9.00% to 9.50% Maturity dates of transferred assets 4/15/16 to 11/15/22 3. JOINT TRADING ACCOUNT - CONTINUED SUMMARY OF JOINT TRADING - CONTINUED Dated November 25, 1996, due December 2, 1996 5.37% Number of dealers or banks 1 Maximum amount with one dealer or bank 100% Aggregate principal amount of agreements $200,000,000 Aggregate maturity amount of agreements $200,208,833 Aggregate market value of transferred assets $207,016,853 Coupon rates of transferred assets 6.00% to 10.00% Maturity dates of transferred assets 9/1/00 to 10/1/26 Dated November 29, 1996, due December 2, 1996 5.78% Number of dealers or banks 6 Maximum amount with one dealer or bank 27.8% Aggregate principal amount of agreements $2,520,000,000 Aggregate maturity amount of agreements $2,521,214,283 Aggregate market value of transferred assets $2,600,029,527 Coupon rates of transferred assets 4.50% to 12.50% Maturity dates of transferred assets 6/1/98 to 12/15/43 Dated November 5, 1996, due December 4, 1996 5.34% Number of dealers or banks 1 Maximum amount with one dealer or bank 100% Aggregate principal amount of agreements $475,000,000 Aggregate maturity amount of agreements $477,043,292 Aggregate market value of transferred assets $490,992,834 Coupon rates of transferred assets 6.00% to 10.00% Maturity dates of transferred assets 4/15/07 to 11/15/26 Dated November 21, 1996, due January 21, 1997 5.37% Number of dealers or banks 1 Maximum amount with one dealer or bank 100% Aggregate principal amount of agreements $250,000,000 Aggregate maturity amount of agreements $252,274,792 Aggregate market value of transferred assets $257,500,000 Coupon rates of transferred assets 5.25% to 9.00% Maturity dates of transferred assets 2/1/11 to 5/1/34 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly fee that is calculated by multiplying the sum of two components, a group fee rate plus a fixed individual fund fee rate, applied to the average net assets of the fund and adding an income-based fee. The group fee rate is the weighted average of a series of rates and is based on the monthly average net assets of all the mutual funds advised by FMR. The rates ranged from .1100% to .3700% for the period. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above rates, as they resulted in the same or a lower management fee. The individual fund fee rate is .03%. The income-based fee is added only when the fund's gross 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 .21% 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. TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .27% of average net assets. ACCOUNTING FEES. 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. 5. EXPENSE REDUCTIONS. The fund has entered into an arrangement with its transfer agent whereby interest earned on uninvested cash balances was used to offset a portion of the fund's expenses. During the period, the fund's transfer agent fees were reduced by $82,000 under this arrangement. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees of Fidelity Phillips Street Trust and the Shareholders of Fidelity U.S. Government Reserves: In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity U. S. Government Reserves at November 30, 1996, the results of its operations for the year then ended, the changes in its net assets for the two years then ended, and the financial highlights for the periods indicated, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Trust's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities owned at November 30, 1996 by correspondence with the custodian, provide a reasonable basis for the opinion expressed above. /s/PRICE WATERHOUSE LLP PRICE WATERHOUSE LLP Dallas, Texas December 30, 1996 MANAGING YOUR INVESTMENTS Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day. BY PHONE Fidelity TouchTone Xpressprovides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security. SM (PHONE_GRAPHIC)(PHONE_GRAPHIC)TOUCHTONE XPRESS 1-800-544-5555 PRESS For mutual fund and brokerage trading. 1 For quotes.* 2 For account balances and holdings. 3 To review orders and mutual fund activity. 4 To change your PIN. 5 To speak to a Fidelity representative. * 0 BY PC Fidelity's Web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services. (PHONE_GRAPHIC)(PHONE_GRAPHIC)FIDELITY'S WEB SITE WWW.FIDELITY.COM If you are not currently on the Internet, call Fidelity at 1-800-544-7272 for significant savings on Web access from internetMCI. SM (PHONE_GRAPHIC)(PHONE_GRAPHIC) FIDELITY ON-LINE XPRESS+ TM Fidelity On-line Xpress+ software for Windows combines comprehensive portfolio management capabilities, securities trading and access to research and analysis tools . . . all on your desktop. Call Fidelity at 1-800-544-7272 or visit our Web site for more information on how to manage your investments via your PC. * 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. TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 851 East 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 950 Northgate Drive San Rafael, CA 1400 Civic Drive Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. Federal Highway Boca Raton, FL 90 Alhambra Plaza Coral Gables, FL 4090 N. Ocean Boulevard Ft. 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Southfield, MI MINNESOTA 7600 France Avenue South Edina, MN MISSOURI 700 West 47th Street Kansas City, MO 8885 Ladue Road Ladue, MO 200 North Broadway St. Louis, MO NEW JERSEY 56 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 1271 Avenue of the Americas New York, NY 71 Broadway New York, NY 350 Park Avenue New York, NY 10 Bank Street White Plains, NY NORTH CAROLINA 4611 Sharon Road Charlotte, NC 2200 West Main Street Durham, NC OHIO 600 Vine Street Cincinnati, OH 28699 Chagrin Boulevard Woodmere Village, OH 1903 East Ninth Street Cleveland, 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 2701 Drexel Drive Houston, TX 1010 Lamar Street Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX UTAH 215 South State 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 511 Pine Street Seattle, WA WASHINGTON, DC 1775 K Street, N.W. Washington, DC WISCONSIN 595 North Barker Road Brookfield, WI INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA (registered trademark) INVESTMENT SUB-ADVISER FMR Texas Inc. Irving, TX OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President Sarah H. Zenoble, Vice President Leland Barron, Vice President Arthur S. Loring, Secretary Kenneth A. Rathgeber, Treasurer Thomas D. Maher, Assistant Vice President John H. Costello, Assistant Treasurer Leonard M. Rush, Assistant Treasurer Thomas J. Simpson, Assistant Treasurer 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* ADVISORY BOARD William O. McCoy GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN 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 Exchanges/Redemptions 1-800-544-7777 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) TouchTone Xpress 1-800-544-5555 SM * INDEPENDENT TRUSTEES AUTOMATED LINE FOR QUICKEST SERVICE -----END PRIVACY-ENHANCED MESSAGE-----