-----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, SxsPPOlpDwtl3q8D7gXDJvfG70S1BXG0LE2iO7xZWuAqwJfbCdsEP8Xrt4zm8+wj lLdFdzjYv5WDgtnWpSQlnQ== 0000856517-99-000005.txt : 19990403 0000856517-99-000005.hdr.sgml : 19990403 ACCESSION NUMBER: 0000856517-99-000005 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990131 FILED AS OF DATE: 19990401 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MONEY MARKET OBLIGATIONS TRUST /NEW/ CENTRAL INDEX KEY: 0000856517 STANDARD INDUSTRIAL CLASSIFICATION: [] FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-05950 FILM NUMBER: 99585293 BUSINESS ADDRESS: STREET 1: FEDERATED INVESTORS TWR CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 4122882614 MAIL ADDRESS: STREET 1: FEDERATED INVESTORS TOWER CITY: PITTSBURG STATE: PA ZIP: 15222-3779 N-30D 1 SEMI-ANNUAL REPORT President's Message Dear Shareholder: I am pleased to present the Semi-Annual Report to Shareholders for Automated Cash Management Trust, a portfolio of Money Market Obligations Trust. This report covers the first half of the fund's fiscal year, which is the six-month period ended January 31, 1999. It begins with an investment review of the short-term market from the fund's portfolio manager. Following the investment review are the fund's portfolio of investments and financial statements. In Automated Cash Management Trust, your ready cash is at work pursuing daily income, along with a high level of liquidity and a stable net asset value of $1.00 per share. 1 At the end of the reporting period, the fund's $2.44 billion in net assets were invested in commercial paper (36.8%), variable rate instruments (23.3%), repurchase agreements (13.4%), certificates of deposit (11.0%), short-term notes (8.2%), time deposits (4.5%), and loan participation securities (2.8%). Over the six-month reporting period, dividends paid to shareholders of Institutional Service Shares and Cash II Shares each totaled $0.02 per share. On the last day of the reporting period, the 30-day net yields for Institutional Service Shares and Cash II Shares were 4.58% and 4.41%, respectively, while the 7-day net yields were 4.57% and 4.40%, respectively. 2 Thank you for participating in the daily earning power of Automated Cash Management Trust. As always, we welcome your questions, comments, or suggestions. Sincerely, [Graphic] J. Christopher Donahue President March 15, 1999 1 An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 2 Performance quoted represents past performance and is not indicative of future results. Yield will vary. Yields quoted for money market funds most closely reflect the fund's current earnings. Investment Review Automated Cash Management Trust invests in money market instruments maturing in thirteen months or less. The average maturity of these securities, computed on a dollar weighted basis, is restricted to 90 days or less. Portfolio securities must be rated in the highest short-term rating category by one or more of the nationally recognized statistical rating organizations or if unrated be of comparable quality to securities having such ratings. Typical security types include, but are not limited to: commercial paper, certificates of deposit, time deposits, variable rate instruments and repurchase agreements. Economic growth during the second half of 1998 resumed its above-average pace after a brief slowdown in the second quarter. Specifically, third quarter gross domestic product ("GDP") registered 3.90%, while fourth quarter GDP topped the year at 5.60%. Despite the high growth, inflation remained subdued by all measures. The consumer price index rose just 1.60% on an annualized basis for the six months ended January 31, 1999. For the same time period, the producer price index increased 1.70%, while the employment cost index grew 3.50%. Despite the higher number associated with wage and benefit increases, the uptick in productivity more than outweighed the higher cost base. This productivity/technology factor has been referred to by Federal Reserve Board ("Fed") Chairman Greenspan in many of his positive discussions on economic outlook. Thirty-day commercial paper started the reporting period at 5.56% on July 31, 1998, hovered in the 5.50% range until September 23, 1998, when expectations began to surface about the Fed lowering rates, and then increased as high as 5.51% during the month of December due to year-end spread pressures. Those pressures evaporated in January 1999 and the period ended with a 4.81% rate for 30-day commercial paper. The money market yield curve looked lower but similarly shaped during the reporting period. One- month and six-month commercial paper rates declined 75 basis points and 77 basis points, respectively, reflecting the accommodative Fed policy based on concern in the market about the lack of liquidity in the U.S. credit markets. The Fed responded to this by lowering the federal funds target rate three times during the period -25 basis points on September 29, 1998, 25 basis points on October 15, 1998, and 25 basis points on November 17, 1998, to end the reporting period with a 4.75% target rate. The Fed also lowered the discount rate twice by 25 basis points to 4.75% on October 15, 1998, and by 25 basis points on November 17, 1998, to 4.50%. The target average maturity range for Automated Cash Management Trust was lengthened from 40-50 days to 45-55 days on October 1, 1998, reflecting the Fed's concern about liquidity in the credit markets and the Fed easing scenario. In structuring the fund, there was continued emphasis placed on positioning 30-35% of the fund's assets in variable rate demand notes and accomplishing a modest barbell structure. During the six months ended January 31, 1999, the net assets of Automated Cash Management Trust increased from $2.438 to $2.444 billion. The effective average maturity of the Fund on January 31, 1999 was 54 days. Portfolio of Investments JANUARY 31, 1999 (UNAUDITED)
PRINCIPAL AMOUNT VALUE COMMERCIAL PAPER-36.8% 1 BANKING-7.1% $ 30,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian Imperial Bank of Commerce), 4.962% - 4.984%, 2/22/1999 - 3/30/1999 $ 29,865,883 35,000,000 Cregem North America, Inc., (Guaranteed by Credit Communal de Belgique, Brussles), 4.943% - 5.635%, 2/3/1999 - 2/23/1999 34,936,033 12,644,000 Fountain Square Commercial Funding Corp., (Fifth Third Bank, Cincinnati Support Agreement), 4.973% - 5.449%, 2/8/1999 - 6/14/1999 12,561,925 22,000,000 Lloyds Bank PLC, London, 5.060%, 2/25/1999 21,927,253 14,000,000 Societe Generale North America, Inc., (Guaranteed by Societe Generale, Paris), 5.122%, 4/5/1999 13,877,745 10,000,000 UBS Finance (Delaware), Inc., (UBS AG LOC), 4.953%, 3/29/1999 9,924,556 30,000,000 Westpac Banking Corp. Ltd., Sydney, 5.129%, 4/1/1999 29,754,167 20,000,000 Wood Street Funding Corp., 4.889% - 5.423%, 2/1/1999 - 2/19/1999 19,963,475 TOTAL 172,811,037 BROKERAGE-1.0% 24,000,000 Salomon Smith Barney Holdings, Inc., 5.145%, 3/8/1999 23,881,467 FINANCE-AUTOMOTIVE-3.3% 56,000,000 Chrysler Financial Co. LLC, 4.940%, 4/12/1999 55,468,622 25,000,000 Ford Motor Credit Corp., 5.138%, 2/5/1999 24,985,972 TOTAL 80,454,594 FINANCE-COMMERCIAL-13.5% 50,000,000 Asset Securitization Cooperative Corp., 5.156%, 4/16/1999 49,479,944 40,000,000 Beta Finance, Inc., 5.003% - 5.106%, 4/15/1999 - 5/28/1999 39,430,408 10,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 5.080%, 2/10/1999 9,987,500 70,000,000 General Electric Capital Corp., 5.058% - 5.650%, 2/4/1999 - 3/17/1999 69,832,754 36,000,000 Greenwich Funding Corp., 4.889% - 5.215%, 3/5/1999 - 4/6/1999 35,744,961 PRINCIPAL AMOUNT VALUE COMMERCIAL PAPER-continued 1 FINANCE-COMMERCIAL-CONTINUED $ 35,000,000 PREFCO-Preferred Receivables Funding Co., 5.164% - 5.274%, 2/26/1999 - 3/8/1999 $ 34,866,458 10,000,000 Receivables Capital Corp., 5.468%, 2/4/1999 9,995,500 82,000,000 Sheffield Receivables Corp., 4.902% - 5.499%, 2/22/1999 - 3/23/1999 81,506,925 TOTAL 330,844,450 FINANCE-RETAIL-7.6% 20,000,000 American Express Credit Corp., 5.023%, 4/12/1999 19,809,444 33,000,000 Associates Corp. of North America, 4.867% - 5.401%, 3/9/1999 - 4/19/1999 32,739,782 25,000,000 Associates First Capital B.V., (Guaranteed by Associates First Capital Corp.), 4.908%, 5/17/1999 24,647,813 45,000,000 Associates First Capital Corp., 4.949% - 5.094%, 4/19/1999 - 5/27/1999 44,451,929 50,000,000 Household Finance Corp., 4.852%, 2/1/1999 50,000,000 13,000,000 Island Finance, Puerto Rico, 5.200%, 2/16/1999 12,972,104 TOTAL 184,621,072 INSURANCE-2.8% 55,000,000 Aspen Funding Corp., 4.852% - 5.110%, 2/1/1999 - 2/22/1999 54,912,150 15,000,000 CXC, Inc., 5.161%, 5/17/1999 14,779,938 TOTAL 69,692,088 MACHINERY, EQUIPMENT, AUTO-1.0% 25,000,000 Eaton Corp., 5.026% - 5.649%, 5/11/1999 - 5/21/1999 24,626,486 TRANSPORTATION-AIR FREIGHT-0.5% 11,925,000 United Parcel Service, 4.983%, 6/4/1999 11,728,615 TOTAL COMMERCIAL PAPER 898,659,809 SHORT-TERM NOTES-8.2% BANKING-1.4% 25,000,000 Abbey National Treasury Services, PLC, 4.990%, 1/10/2000 24,993,202 10,000,000 SALTS III Cayman Island Corp., (Guaranteed by Bankers Trust International, PLC), 5.270%, 4/23/1999 10,000,000 TOTAL 34,993,202 FINANCE-AUTOMOTIVE-1.9% 1,833,747 Chase Manhattan Auto Owner Trust 1998-C, Class A-1, 5.588%, 7/9/1999 1,833,660 664,124 Compass Auto Receivables Trust 1998-A, Class A-1, 5.659%, 7/15/1999 664,124 10,337,371 Ford Credit Auto Owner Trust 1998-C, Class A-2, 5.670%, 6/15/1999 10,337,371 PRINCIPAL AMOUNT VALUE SHORT-TERM NOTES-continued FINANCE-AUTOMOTIVE-CONTINUED $ 9,000,000 Honda Auto Receivables 1999-1 Owner Trust, Class A-1, 4.974%, 2/15/2000 $ 9,000,000 10,579,010 MMCA Auto Owner Trust 1998-1, Class A-1, 5.621%, 8/16/1999 10,579,010 14,402,229 Premier Auto Trust 1998-5, Class A-1, 5.140%, 7/8/1999 14,399,481 TOTAL 46,813,646 FINANCE-COMMERCIAL-1.8% 5,000,000 2 Beta Finance, Inc., 5.020%, 1/20/2000 5,000,000 5,000,000 2 Beta Finance, Inc., 5.030%, 2/4/2000 5,000,000 20,000,000 2 Beta Finance, Inc., 5.045%, 1/20/2000 20,000,000 15,000,000 2 Beta Finance, Inc., 5.790%, 4/8/1999 14,999,729 TOTAL 44,999,729 FINANCE EQUIPMENT-0.5% 2,910,378 Case Equipment Receivables Trust 1998-B, Class A-1, 5.608%, 9/15/1999 2,910,378 8,044,196 Copelco Capital Funding Trust 1998-A, Class A-1, 5.680%, 8/15/1999 8,044,196 TOTAL 10,954,574 FINANCE-LEASING-1.4% 34,885,493 Green Tree Lease Finance 1998-1, LLC, Class A-1, 5.201%, 1/20/2000 34,885,493 FINANCE-RECREATION-0.4% 10,210,531 Greentree Recreational, Equipment & Consumer Trust 1998-C, Class A-1, 5.554%, 8/15/1999 10,210,531 INSURANCE-0.8% 19,000,000 WFS Financial 1998-C Owner Trust, Class A-1, (Guaranteed by FSA), 5.395%, 11/20/1999 19,000,000 TOTAL SHORT-TERM NOTES 201,857,175 CERTIFICATE OF DEPOSIT-11.0% BANKING-11.0% 30,000,000 Bank of Nova Scotia, Toronto, 5.870%, 4/29/1999 29,995,210 23,000,000 Bankers Trust Co., New York, 5.645% - 5.717%, 2/26/1999 - 5/21/1999 23,000,059 20,000,000 Barclays Bank of Canada, (Guaranteed by Barclays Bank PLC, London), 5.016%, 1/13/2000 19,994,516 55,000,000 Canadian Imperial Bank of Commerce, 5.030% - 5.800%, 4/1/1999 - 1/27/2000 54,986,226 10,000,000 Commerzbank AG, Frankfurt, 5.066%, 4/6/1999 10,000,173 PRINCIPAL AMOUNT VALUE CERTIFICATE OF DEPOSIT-continued BANKING-CONTINUED $ 55,000,000 KeyBank, N.A., 5.080%, 4/9/1999 $ 55,000,000 56,000,000 Societe Generale, Paris, 5.690% - 5.900%, 2/26/1999 - 4/28/1999 55,997,130 10,000,000 Svenska Handelsbanken, Stockholm, 5.800%, 4/6/1999 9,999,245 10,000,000 UBS AG, 4.939%, 1/13/2000 10,007,191 TOTAL CERTIFICATE OF DEPOSIT 268,979,750 LOAN PARTICIPATION-2.8% ELECTRICAL EQUIPMENT-0.5% 13,000,000 Mt. Vernon Phenol Plant Partnership, (Guaranteed by General Electric Co.), 5.370%, 5/17/1999 13,000,000 FINANCE - AUTOMOTIVE-1.0% 25,000,000 General Motors Acceptance Corp., Mortgage of PA, (Guaranteed by General Motors Acceptance Corp.), 5.120%, 2/1/1999 25,000,000 FINANCE - EQUIPMENT-1.3% 31,000,000 Pitney Bowes Credit Corp., 5.046%, 2/10/1999 30,961,056 TOTAL LOAN PARTICIPATION 68,961,056 VARIABLE RATE INSTRUMENTS-23.3% 3 BANKING-8.9% 48,000,000 Bankers Trust Co., New York, 4.880%, 2/2/1999 47,988,951 6,000,000 Beverly California Corp., (PNC Bank, N.A. LOC), 4.938%, 2/1/1999 6,000,000 3,900,000 Development Authority of Richmond County, GA, (PNC Bank, N.A. LOC), 4.938%, 2/1/1999 3,900,000 9,375,000 Hannah Boulevard LP, (Comerica Bank, Detroit, MI LOC), 4.910%, 2/4/1999 9,375,000 8,000,000 K-O-I Warehouse, Inc.; Hamlet Auto Parts, Inc.; Kentucky Motor Services, Inc.; Mad River Auto Parts, Inc.; Ezzel Parts Exchange, Inc., Series 1998, (Star Bank, N.A., Cincinnati LOC), 4.970%, 2/4/1999 8,000,000 60,000,000 2 Liquid Asset Backed Securities Trust, Series 1996-3, (Westdeutsche Landesbank Girozentrale Swap Agreement), 5.020%, 2/16/1999 60,000,000 18,766,923 2 Liquid Asset Backed Securities Trust, Series 1997-1, (Westdeutsche Landesbank Girozentrale Swap Agreement), 5.000%, 2/16/1999 18,766,923 2,000,000 Manatee County, FL, CFI Manufacturing, Inc. Project, Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 2,000,000 6,300,000 Massachusetts IFA, (Kendell Square), (PNC Bank, N.A. LOC), 4.830%, 2/4/1999 6,300,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued BANKING-CONTINUED $ 20,381,866 2 Rabobank Optional Redemption Trust, Series 1997-101, 5.005%, 4/17/1999 $ 20,381,866 4,000,000 Rollins College, Series 1998, (SunTrust Bank, LIQ), 4.950%, 2/3/1999 4,000,000 22,000,000 Societe Generale, Paris, 4.883%, 2/1/1999 21,992,417 2,666,000 Vista Funding Corp., Series 1996-A, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 2,666,000 5,250,000 Wendys of Las Vegas and San Antonio, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 5,250,000 TOTAL 216,621,157 ELECTRICAL EQUIPMENT-0.9% 2,450,569 Marta Leasing Ltd., (Guaranteed by General Electric Co.), 4.938%, 2/1/1999 2,450,569 20,181,046 Northwest Airlines, Inc., (Guaranteed by General Electric Co.), 4.938%, 2/1/1999 20,181,046 TOTAL 22,631,615 FINANCE-RETAIL-0.3% 7,000,000 2 Bishop's Gate Residential Mortgage Trust 1998-2, Class A-1, 5.747%, 2/10/1999 7,000,000 INSURANCE-13.2% 122,500,000 General American Life Insurance Co., 5.140%, 2/22/1999 122,500,000 30,000,000 Jackson National Life Insurance Co., 5.289%, 2/1/1999 30,000,000 36,361,251 2 Liquid Asset Backed Securities Trust, Series 1997-3, Senior Notes, (Guaranteed by AMBAC), 5.254%, 3/28/1999 36,361,251 25,000,000 Monumental Life Insurance Company, 5.250%, 2/1/1999 25,000,000 10,000,000 Security Life of Denver Insurance Co., 5.028%, 4/1/1999 10,000,000 25,000,000 SunAmerica Life Insurance Company, 5.137%, 2/1/1999 25,000,000 30,000,000 Transamerica Occidental Life Insurance Co., 5.209%, 2/1/1999 30,000,000 44,000,000 Travelers Insurance Company, 5.116%, 2/1/1999 44,000,000 TOTAL 322,861,251 TOTAL VARIABLE RATE INSTRUMENTS 569,114,023 TIME DEPOSIT-4.5% 1 BANKING-4.5% 35,000,000 Mellon Bank N.A., Pittsburgh, 4.813%, 2/1/1999 35,000,000 25,000,000 Royal Bank of Canada, Montreal, 4.813%, 2/1/1999 25,000,000 50,000,000 Toronto-Dominion Bank, 4.813%, 2/1/1999 50,000,000 TOTAL TIME DEPOSIT 110,000,000 PRINCIPAL AMOUNT VALUE REPURCHASE AGREEMENTS-13.4% 4 $ 120,000,000 Bear, Stearns and Co., 4.820%, dated 1/29/1999, due 2/1/1999 $ 120,000,000 40,000,000 HSBC Securities, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 40,000,000 50,000,000 Nationsbanc Montgomery Securities, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 50,000,000 30,000,000 Paribas Corp., 4.820%, dated 1/29/1999, due 2/1/1999 30,000,000 67,100,000 Societe Generale Securities Corp., 4.730%, dated 1/29/1999, due 2/1/1999 67,100,000 20,000,000 Toronto Dominion Securities (USA) Inc., 4.730%, dated 1/29/1999, due 2/1/1999 20,000,000 TOTAL REPURCHASE AGREEMENTS 327,100,000 TOTAL INVESTMENTS (AT AMORTIZED COST) 5 $ 2,444,671,813
1 Each issue shows the rate of discount at the time of purchase. 2 Denotes a restricted security which is subject to restrictions on resale under Federal Securities laws. At January 31, 1999, these securities amounted to $187,509,769 which represents 7.7% of net assets. 3 Variable rate securities with current rate and next demand date. 4 The repurchase agreements are fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investments in the repurchase agreements are through participation in joint accounts with other Federated funds. 5 Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($2,443,594,664) at January 31, 1999. The following acronyms are used throughout this portfolio: AMBAC -American Municipal Bond Assurance Corporation FSA -Financial Security Assurance IFA -Industrial Finance Authority LIQ -Liquidity Agreement LOC -Letter of Credit See Notes which are an integral part of the Financial Statements Statement of Assets and Liabilities JANUARY 31, 1999 (UNAUDITED) ASSETS: Investments in repurchase agreements $ 327,100,000 Investments in securities 2,117,571,813 Total investments, at amortized cost and value $ 2,444,671,813 Income receivable 12,260,258 Receivable for shares sold 102,408 Prepaid expenses 5,414 TOTAL ASSETS 2,457,039,893 LIABILITIES: Payable for investments purchased 5,000,000 Payable for shares redeemed 9,577 Income distribution payable 7,791,873 Payable to Bank 76,475 Accrued expenses 567,304 TOTAL LIABILITIES 13,445,229 Net assets for 2,443,594,664 shares outstanding $ 2,443,594,664 NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE: INSTITUTIONAL SERVICE SHARES: $1,738,925,846 / 1,738,925,846 shares outstanding $1.00 CASH II SHARES: $704,668,818 / 704,668,818 shares outstanding $1.00
See Notes which are an integral part of the Financial Statements Statement of Operations SIX MONTHS ENDED JANUARY 31, 1999 (UNAUDITED) INVESTMENT INCOME: Interest $ 67,344,380 EXPENSES: Investment advisory fee $ 6,172,339 Administrative personnel and services fee 930,789 Custodian fees 74,068 Transfer and dividend disbursing agent fees and expenses 430,829 Directors'/Trustees' fees 9,075 Auditing fees 6,554 Legal fees 6,653 Portfolio accounting fees 85,178 Distribution services fee-Cash II Shares 890,557 Shareholder services fee-Institutional Service Shares 2,195,613 Shareholder services fee-Cash II Shares 890,557 Share registration costs 50,915 Printing and postage 64,525 Insurance premiums 118,299 Miscellaneous 20,164 TOTAL EXPENSES 11,946,115 WAIVERS: Waiver of investment advisory fee $ (3,631,469) Waiver of distribution services fee-Cash II Shares (309,914) Waiver of shareholder services fee-Institutional Service Shares (61,477) TOTAL WAIVERS (4,002,860) Net expenses 7,943,255 Net investment income $ 59,401,125
See Notes which are an integral part of the Financial Statements Statement of Changes in Net Assets
SIX MONTHS ENDED (unaudited) YEAR ENDED JANUARY 31, JULY 31, 1999 1998 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 59,401,125 $ 116,261,385 DISTRIBUTIONS TO SHAREHOLDERS: Distributions from net investment income Institutional Service Shares (42,664,718) (79,466,314) Cash II Shares (16,736,407) (36,795,071) CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (59,401,125) (116,261,385) SHARE TRANSACTIONS: Proceeds from sale of shares 6,027,654,548 12,100,055,296 Net asset value of shares issued to shareholders in payment of distributions declared 38,524,305 83,205,547 Cost of shares redeemed (6,060,400,238) (11,849,693,675) CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 5,778,615 333,567,168 Change in net assets 5,778,615 333,567,168 NET ASSETS: Beginning of period 2,437,816,049 2,104,248,881 End of period $ 2,443,594,664 $ 2,437,816,049
See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Service Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS THREE ENDED MONTHS (unaudited) ENDED JANUARY 31, YEAR ENDED JULY 31, JULY 31, YEAR ENDED APRIL 30, 1999 1998 1997 1996 1995 1 1995 1994 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.05 0.05 0.05 0.01 0.05 0.03 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.05) (0.05) (0.05) (0.01) (0.05) (0.03) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.46% 5.25% 5.09% 5.20% 1.42% 4.82% 2.84% RATIOS TO AVERAGE NET ASSETS: Expenses 0.59% 3 0.59% 0.58% 0.57% 0.57% 3 0.57% 0.57% Net investment income 4.86% 3 5.13% 4.97% 5.08% 5.60% 3 4.71% 2.80% Expense waiver/reimbursement 4 0.30% 3 0.30% 0.33% 0.31% 0.40% 3 0.33% 0.07% SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $1,738,926 $1,734,061 $1,378,982 $1,274,419 $1,141,043 $983,099 $975,453
1 For the period from May 1, 1995 to July 31, 1995, the Fund was reorganized into Money Market Obligations Trust effective July 30, 1994. The Fund changed its fiscal year-end from April 30, to July 31, effective October 27, 1994. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Financial Highlights-Cash II Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED YEAR PERIOD (unaudited) ENDED ENDED JANUARY 31, JULY 31, JULY 31, 1999 1998 1997 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.05 0.04 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.05) (0.04) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.38% 5.07% 4.14% RATIOS TO AVERAGE NET ASSETS: Expenses 0.76% 3 0.76% 0.75% 3 Net investment income 4.70% 3 4.94% 4.84% 3 Expense waiver/reimbursement 4 0.38% 3 0.38% 0.41% 3 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $704,669 $703,755 $725,267
1 Reflects operations for the period from September 27, 1996 (date of initial public investment) to July 31, 1997. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Notes to Financial Statements JANUARY 31, 1999 (UNAUDITED) ORGANIZATION Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Automated Cash Management Trust (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is stability of principal and current income consistent with the stability of principal. The Fund offers two classes of shares: Institutional Service Shares and Cash II Shares. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATIONS The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act. REPURCHASE AGREEMENTS It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement transaction. The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Board of Trustees (the "Trustees"). Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex- dividend date. FEDERAL TAXES It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provisions for federal tax are necessary. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when- issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. RESTRICTED SECURITIES Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act. Additional information on each restricted security held at January 31, 1999 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST Beta Finance, Inc., 5.020% 1/13/1999 $ 5,000,000 Beta Finance, Inc., 5.030% 1/27/1999 5,000,000 Beta Finance, Inc., 5.045% 1/14/1999 20,000,000 Beta Finance, Inc., 5.790% 4/1/1998 14,998,500 Bishop's Gate Residential Mortgage Trust 1998-2, Class A-1, 5.747% 12/4/1998 7,000,000 Liquid Asset Backed Securities Trust, Series 1997-1, 5.000% 2/19/1997 18,766,923 Liquid Asset Backed Securities Trust, Series 1996-3, 5.020% 8/15/1996 60,000,000 Liquid Asset Backed Securities Trust, Series 1997-3, 5.254% 6/27/1997 36,361,251 Rabobank Optional Redemption Trust, Series 1997-101, 5.005% 4/17/1997 20,381,866
USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated. OTHER Investment transactions are accounted for on the trade date. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At January 31, 1999, capital paid-in aggregated $2,443,594,664. Transactions in shares were as follows:
SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SERVICE SHARES: Shares sold 4,141,542,931 7,692,911,743 Shares issued to shareholders in payment of distributions declared 22,237,048 48,454,343 Shares redeemed (4,158,915,237) (7,386,286,934) NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS 4,864,742 355,079,152 SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 CASH II SHARES: Shares sold 1,886,111,617 4,407,143,553 Shares issued to shareholders in payment of distributions declared 16,287,257 34,751,204 Shares redeemed (1,901,485,001) (4,463,406,741) NET CHANGE RESULTING FROM CASH II SHARE TRANSACTIONS 913,873 (21,511,984) NET CHANGE RESULTING FROM SHARE TRANSACTIONS 5,778,615 333,567,168
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE Federated Management, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. ADMINISTRATIVE FEE Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on the level of average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc. for the period. The administrative fee received during the period of the Administrative Services Agreement shall be at least $125,000 per portfolio and $30,000 per each additional class of shares. DISTRIBUTION SERVICES FEE The Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b- 1 under the Act. Under the terms of the Plan, the Fund will compensate Federated Securities Corp. ("FSC"), the principal distributor, from the net assets of the Fund to finance activities intended to result in the sale of the Fund's Class II Shares. The Plan provides that the Fund may incur distribution expenses up to 0.25% of the average daily net assets of Cash II Shares, annually, to compensate FSC. FSC may voluntarily choose to waive any portion of its fee. FSC can modify or terminate this voluntary waiver at any time at its sole discretion. SHAREHOLDER SERVICES FEE Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion. TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders. PORTFOLIO ACCOUNTING FEES FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. GENERAL Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. YEAR 2000 Similar to other financial organizations, the Fund could be adversely affected if the computer systems used by the Fund's service providers do not properly process and calculate date-related information and data from and after January 1, 2000. The Fund's Adviser and administrator are taking measures that they believe are reasonably designed to address the Year 2000 issue with respect to computer systems that they use and to obtain reasonable assurances that comparable steps are being taken by each of the Fund's other service providers. At this time, however, there can be no assurance that these steps will be sufficient to avoid any adverse impact to the Fund. SUBSEQUENT EVENT Effective March 31, 1999, Federated Management, Adviser to the Fund, merged into Federated Investment Management Company (formerly, Federated Advisers). Trustees JOHN F. DONAHUE THOMAS G. BIGLEY JOHN T. CONROY, JR. WILLIAM J. COPELAND JOHN F. CUNNINGHAM J. CHRISTOPHER DONAHUE LAWRENCE D. ELLIS, M.D. PETER E. MADDEN CHARLES F. MANSFIELD, JR. JOHN E. MURRAY, JR., J.D., S.J.D. MARJORIE P. SMUTS JOHN S. WALSH Officers JOHN F. DONAHUE Chairman J. CHRISTOPHER DONAHUE President EDWARD C. GONZALES Executive Vice President JOHN W. MCGONIGLE Executive Vice President and Secretary RICHARD B. FISHER Vice President RICHARD J. THOMAS Treasurer ANTHONY R. BOSCH Assistant Secretary Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so. This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses, and other information. SEMI-ANNUAL REPORT [Graphic] Automated Cash Management Trust SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1999 [Graphic] Automated Cash Management Trust Federated Investors Funds 5800 Corporate Drive Pittsburgh, PA 15237-7000 1-800-341-7400 WWW.FEDERATEDINVESTORS.COM Federated Securities Corp., Distributor Cusip 60934N864 Cusip 60934N831 8112802(3/99) [Graphic] SEMI-ANNUAL REPORT President's Message Dear Shareholder: I am pleased to present the Semi-Annual Report to Shareholders for Government Obligations Fund, a portfolio of Money Market Obligations Trust. This report covers the first half of the fund's fiscal year, which is the six-month period ended January 31, 1999. It begins with an investment review of the short-term government market from the fund's portfolio manager. Following the investment review are the fund's portfolio of investments and financial statements. In Government Obligations Fund, your ready cash is at work pursuing daily income, along with the additional advantages of daily liquidity and stability of principal. 1 At the end of the reporting period, the fund's $5.8 billion in net assets were invested in short-term U.S. government obligations (74.3%) and repurchase agreements fully collateralized by U.S. government securities (26.6%). Over the six-month reporting period, dividends paid to shareholders of Institutional Shares and Institutional Service Shares totaled $0.03 per share and $0.02 per share, respectively. On the last day of the reporting period, the 30-day net yields for Institutional Shares and Institutional Service Shares were 4.83% and 4.58%, respectively, while the 7-day net yields were 4.82% and 4.57%, respectively. 2 Thank you for your confidence in the daily earning power of Government Obligations Fund. As always, your questions and comments are welcome. Sincerely, [Graphic] J. Christopher Donahue President March 15, 1999 1 An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 2 Performance quoted represents past performance and is not indicative of future results. Yield will vary. Yields quoted for money market funds most closely reflect the fund's current earnings. Investment Review Government Obligations Fund, which is rated AAAm 1 by Standard & Poor's ("S&P"), Aaa1 by Moody's Investors Service, Inc. ("Moody's"), and AAA1 by Fitch IBCA, Inc. ("Fitch"), is invested in direct U.S. Treasury and agency obligations and in repurchase agreements which have these securities as collateral. The fund continued to emphasize issues of the Federal National Mortgage Association, Student Loan Marketing Association, Federal Farm Credit Bank System, Federal Home Loan Bank System, and Federal Home Loan Mortgage Corp., and at times maintained a small Treasury position for liquidity purposes. There were two central themes in the short-term government markets over the reporting period ended January 31, 1999. First, the economy continued to advance at a robust pace of growth, with gross domestic product expanding in the third and fourth quarters of 1998 at 3.70% and 6.10%, respectively, and all indications that this same strength had spilled over into 1999. Although the manufacturing sector was soft, the housing and retail sectors continued to propel the economy forward. While this pace of growth is in excess of what has traditionally been viewed to be the non-inflationary potential of the economy, inflation nevertheless remained benign, perhaps reflecting advances in productivity that have enabled growth to be achieved without upward pressure on prices. Under normal circumstances, however, the growth trajectory of the economy would have been sufficient to make Federal Reserve Board ("Fed") officials concerned about the inflationary threat that could result from such above-trend growth. Circumstances were not normal, however, as economic crises in countries overseas and in Latin America were the second, and ultimately more dominant, theme over the reporting period. In August 1998, the economic troubles in Asia spread to encompass Russia and then Latin America. As fears that the United States could not continue to be immune from what had become a global economic crisis weighed heavily on the U.S. equity market, investors both domestic and abroad fled to the perceived safety of the U.S. Treasury market. Yields on U.S. Treasury-and to a lesser extent U.S. government agency-securities plummeted, as investors shunned credit- sensitive markets in favor of the safe haven of U.S. government securities, and a credit/liquidity crisis in the U.S. financial markets became evident. Faced with this scenario, the Fed voted to ease monetary policy by 25 basis points, bringing the federal funds target rate down to 5.25% in late September, in an attempt to calm investor fears. Market participants viewed this move to be too tentative, however, and it was not until the Fed took two additional easing steps in mid-October and November, bringing the federal funds target rate to 4.75%, that some semblance of calm returned to the markets. Credit spreads narrowed over this period, albeit not back to levels that pre-dated the crisis. 1 An AAAm rating is obtained after S&P evaluates a number of factors, including credit quality, market price exposure, and management. S&P monitors the portfolio weekly for developments that could cause changes in the ratings. Money market funds and bond funds rated Aaa by Moody's are judged to be of an investment quality similar to Aaa-rated fixed income obligations, that is, they are judged to be of the best quality. Fitch's money market fund ratings are an assessment of the safety of invested principal and the ability to maintain a stable market value of the fund's shares. Ratings are based on an evaluation of several factors, including credit quality, diversification, and maturity of assets in the portfolio, as well as managed strength and operational capabilities. Ratings are subject to change, and do not remove market risk. Movements in short-term government interest rates reflected the turbulent economic conditions early in the reporting period, and then the relative tranquillity of the markets once the Fed moves had their desired effect. The yield on the one-year Treasury bill began the period at 5.40%, but was driven sharply downward by the onslaught of investors-both domestic and abroad-seeking a safe haven from the world economic uncertainty and the instability of the U.S. equity market. The yield on this security reached a low of 3.85% by mid-October. As the additional easing steps by the Fed calmed investors, the yield on this security rose moderately to 4.60% by early November, and traded within a range of 4.40% to 4.60% for the remainder of the reporting period. The yield on the one-year agency discount note began the reporting period at close to 5.60%, and while the flight to quality to this market was less pronounced than to U.S. Treasuries, yields on these securities were also driven downward to a low of 4.40% by mid-October. The market retraced some of this drop back to 4.80% by mid-November and traded within a relatively narrow range for the rest of the reporting period. The fund's average maturity was targeted in a 40 to 50 day range for most of the reporting period, with the portfolio maximizing value through ongoing relative value analysis. Agency securities were the dominant investment, as the Treasury market remained expensive throughout the reporting period. Although expectations were for the federal funds target rate to be lowered early in the reporting period, repurchase agreements still remained an attractive investment as yields on fixed-rate securities were driven well below the federal funds target rate. We concentrated investments in term repurchase agreements with maturities out to 90 days in instances where that investment was expected to outyield overnight investments over time. Once liquidity conditions eased in mid-November, short-term U.S. government agency securities with maturities between one and three months offered a yield advantage relative to repurchase agreements, and we shifted portfolio assets into those investments. As a result, although the fund's average maturity was pretty comparable at the beginning and end of the reporting period, at just above 40 days, the portfolio composition of the fund was notably different. The fund's position in repurchase agreements dropped from 62% at the beginning of August 1998 to 26% by the end of January 1999, with most of those assets shifted into short-term agency securities. With the credit crisis now past, we would expect the Fed to keep monetary policy unchanged in upcoming months. Barring a sudden economic collapse in a major trading partner, the focus of the market is likely to return to the strength of the domestic economy and its implication for inflation. However, changing economic and market developments are continuously monitored to best serve our clients attracted to the short-term U.S. government market. Portfolio of Investments JANUARY 31, 1999 (UNAUDITED)
PRINCIPAL AMOUNT VALUE SHORT-TERM OBLIGATIONS-74.3% $ 29,000,000 Federal Farm Credit Bank Note-0.5% 5.500%, 4/1/1999 $ 28,993,573 14,000,000 1 Federal Farm Credit Bank, Floating Rate Note-0.2% 4.877%, 2/1/1999 13,997,605 161,975,000 Federal Home Loan Bank Notes-2.8% 4.790% - 5.705%, 3/26/1999 - 2/4/2000 161,918,846 567,000,000 1 Federal Home Loan Bank, Floating Rate Notes-9.8% 4.800% - 5.050%, 2/1/1999 - 3/1/1999 566,859,679 80,000,000 Federal Home Loan Mortgage Corp. Notes-1.4% 5.544% - 5.605%, 3/12/1999 - 8/13/1999 79,981,656 693,000,000 2 Federal Home Loan Mortgage Corp., Discount Notes-12.0% 4.650% - 5.090%, 2/1/1999 - 3/15/1999 690,569,380 341,000,000 1 Federal Home Loan Mortgage Corp., Floating Rate Notes-5.9% 4.747% - 5.202%, 2/17/1999 - 2/22/1999 340,881,622 195,000,000 Federal National Mortgage Association Notes-3.4% 4.780% - 5.650%, 2/19/1999 - 11/30/1999 194,940,312 1,341,100,000 2 Federal National Mortgage Association, Discount Notes-22.9% 4.400% - 5.160%, 2/9/1999 - 1/24/2000 1,323,917,044 240,000,000 1 Federal National Mortgage Association, Floating Rate Notes- 4.2% 4.790% - 5.021%, 2/2/1999 - 2/28/1999 239,947,346 514,073,000 1 Housing and Urban Development, Floating Rate Note-8.9% 5.276%, 2/1/1999 514,073,000 22,500,000 Student Loan Marketing Association Note-0.4% 5.580%, 3/11/1999 22,499,500 110,000,000 1 Student Loan Marketing Association, Floating Rate Notes-1.9% 5.062% - 5.162%, 2/2/1999 109,957,202 TOTAL SHORT-TERM OBLIGATIONS 4,288,536,765 REPURCHASE AGREEMENTS-26.6% 3 185,000,000 ABN AMRO, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 185,000,000 180,000,000 Bankers Trust Co., New York, 4.820%, dated 1/29/1999, due 2/1/1999 180,000,000 25,000,000 4 Bankers Trust Co., New York, 4.850%, dated 1/14/1999, due 2/16/1999 25,000,000 60,000,000 Bear, Stearns and Co., 4.820%, dated 1/29/1999, due 2/1/1999 60,000,000 22,650,000 Deutsche Morgan Grenfell, 4.740%, dated 1/29/1999, due 2/1/1999 22,650,000 145,000,000 Goldman Sachs Group, LP, 4.820%, dated 1/29/1999, due 2/1/1999 145,000,000 75,000,000 4 J.P. Morgan & Co., Inc., 4.830%, dated 1/19/1999, due 2/18/1999 75,000,000 255,000,000 Nationsbanc Montgomery Securities, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 255,000,000 50,000,000 Paribas Corp., 4.820%, dated 1/29/1999, due 2/1/1999 50,000,000 PRINCIPAL AMOUNT VALUE REPURCHASE AGREEMENTS-continued 3 $ 270,000,000 Prudential Securities, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 $ 270,000,000 150,000,000 Salomon Smith Barney, 4.820%, dated 1/29/1999, due 2/1/1999 150,000,000 50,000,000 Warburg Dillon Reed LLC, 4.690%, dated 1/29/1999, due 2/1/1999 50,000,000 70,000,000 4 Warburg Dillon Reed LLC, 5.050%, dated 11/27/1998, due 2/19/1999 70,000,000 TOTAL REPURCHASE AGREEMENTS 1,537,650,000 TOTAL INVESTMENTS (AT AMORTIZED COST) 5 $ 5,826,186,765
1 Floating rate note with current rate and next reset date shown. 2 Each issue shows the rate of discount at time of purchase. 3 The repurchase agreements are fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investments in the repurchase agreements are through participation in joint accounts with other Federated funds. 4 Although final maturity falls beyond seven days, a liquidity feature is included in each transaction to permit termination of the repurchase agreement within seven days. 5 Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($5,771,847,355) at January 31, 1999. See Notes which are an integral part of the Financial Statements Statement of Assets and Liabilities JANUARY 31, 1999 (UNAUDITED) ASSETS: Investments in repurchase agreements $ 1,537,650,000 Investments in securities 4,288,536,765 Total investments in securities, at amortized cost and value $ 5,826,186,765 Cash 6,426,164 Income receivable 23,937,474 TOTAL ASSETS 5,856,550,403 LIABILITIES: Payable for investments purchased 60,371,326 Income distribution payable 23,837,037 Accrued expenses 494,685 TOTAL LIABILITIES 84,703,048 Net assets for 5,771,847,355 shares outstanding $ 5,771,847,355 NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE: INSTITUTIONAL SHARES: $4,146,634,283 / 4,146,634,283 shares outstanding $1.00 INSTITUTIONAL SERVICE SHARES: $1,625,213,072 / 1,625,213,072 shares outstanding $1.00
See Notes which are an integral part of the Financial Statements Statement of Operations SIX MONTHS ENDED JANUARY 31, 1999 (UNAUDITED) INVESTMENT INCOME: Interest $ 171,201,347 EXPENSES: Investment advisory fee $ 6,488,242 Administrative personnel and services fee 2,446,067 Custodian fees 171,938 Transfer and dividend disbursing agent fees and expenses 165,450 Directors'/Trustees' fees 15,896 Auditing fees 6,609 Legal fees 10,860 Portfolio accounting fees 256,286 Shareholder services fee-Institutional Shares 5,943,428 Shareholder services fee-Institutional Service Shares 2,162,851 Share registration costs 32,833 Printing and postage 13,338 Insurance premiums 14,093 Miscellaneous 16,131 TOTAL EXPENSES 17,744,022 WAIVERS: Waiver of investment advisory fee $ (3,006,760) Waiver of shareholder services fee-Institutional Shares (5,943,428) TOTAL WAIVERS (8,950,188) Net expenses 8,793,834 Net investment income $ 162,407,513
See Notes which are an integral part of the Financial Statements Statement of Changes in Net Assets
SIX MONTHS ENDED YEAR (unaudited) ENDED JANUARY 31, JULY 31, 1999 1998 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 162,407,513 $ 252,269,299 DISTRIBUTIONS TO SHAREHOLDERS: Distributions from net investment income Institutional Shares (120,585,464) (185,207,877) Institutional Service Shares (41,822,049) (67,061,422) CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (162,407,513) (252,269,299) SHARE TRANSACTIONS: Proceeds from sale of shares 23,282,729,478 35,342,645,977 Net asset value of shares issued to shareholders in payment of distributions declared 40,977,213 76,651,916 Cost of shares redeemed (22,931,382,377) (34,270,035,225) CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 392,324,314 1,149,262,668 Change in net assets 392,324,314 1,149,262,668 NET ASSETS: Beginning of period 5,379,523,041 4,230,260,373 End of period $ 5,771,847,355 $ 5,379,523,041
See Notes which are an integral part of the Financial Statement Financial Highlights-Institutional Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1994 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.03 0.05 0.05 0.05 0.05 0.03 LESS DISTRIBUTIONS: Distributions from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.03) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 1 2.60% 5.59% 5.43% 5.55% 5.57% 3.41% RATIOS TO AVERAGE NET ASSETS: Expenses 0.20% 3 0.20% 0.20% 0.20% 0.20% 0.20% Net investment income 5.07% 3 5.45% 5.32% 5.41% 5.58% 3.38% Expense waiver/reimbursement 2 0.34% 3 0.35% 0.35% 0.36% 0.40% 0.15% SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $4,146,634 $3,707,106 $3,293,392 $2,182,999 $1,926,516 $763,879
1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 2 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. 3 Computed on an annualized basis. See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Service Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.05 0.05 0.05 0.05 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.05) (0.05) (0.05) (0.05) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.47% 5.33% 5.16% 5.29% 5.31% RATIOS TO AVERAGE NET ASSETS: Expenses 0.45% 4 0.45% 0.45% 0.45% 0.45% 4 Net investment income 4.83% 4 5.23% 5.06% 5.14% 5.63% 4 Expense waiver/reimbursement 3 0.09% 4 0.10% 0.10% 0.11% 0.15% 4 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $1,625,213 $1,672,417 $936,869 $702,274 $339,105
1 Reflects operations for the period from August 1, 1994 (date of initial public investment) to July 31, 1995. For the period from the effective date, July 5, 1994 to July 31, 1994, all net investment income was distributed to the Fund's Adviser. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. 4 Computed on an annualized basis. See Notes which are an integral part of the Financial Statements Notes to Financial Statements JANUARY 31, 1999 (UNAUDITED) ORGANIZATION Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Government Obligations Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income consistent with stability of principal. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATIONS The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act. REPURCHASE AGREEMENTS It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement transaction. The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Board of Trustees (the "Trustees"). Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex- dividend date. FEDERAL TAXES It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provisions for federal taxes are necessary. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when- issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated. OTHER Investment transactions are accounted for on the trade date. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At January 31, 1999, capital paid-in aggregated $5,771,847,355. Transactions in shares were as follows:
SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SHARES: Shares sold 16,994,756,609 24,848,661,392 Shares issued to shareholders in payment of distributions declared 25,976,214 49,306,799 Shares redeemed (16,581,204,113) (24,484,254,216) NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS 439,528,710 413,713,975 SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SERVICE SHARES: Shares sold 6,287,972,869 10,493,984,585 Shares issued to shareholders in payment of distributions declared 15,000,999 27,345,117 Shares redeemed (6,350,178,264) (9,785,781,009) NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS (47,204,396) 735,548,693 NET CHANGE RESULTING FROM SHARE TRANSACTIONS 392,324,314 1,149,262,668
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE Federated Management, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.20% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. ADMINISTRATIVE FEE Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on the level of average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc. for the period. The administrative fee received during the period of the Administrative Services Agreement shall be at least $125,000 per portfolio and $30,000 per each additional class of shares. SHAREHOLDER SERVICES FEE Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion. TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders. PORTFOLIO ACCOUNTING FEES FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. GENERAL Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. YEAR 2000 Similar to other financial organizations, the Fund could be adversely affected if the computer systems used by the Fund's service providers do not properly process and calculate date-related information and data from and after January 1, 2000. The Fund's Adviser and administrator are taking measures that they believe are reasonably designed to address the Year 2000 issue with respect to computer systems that they use and to obtain reasonable assurances that comparable steps are being taken by each of the Fund's other service providers. At this time, however, there can be no assurance that these steps will be sufficient to avoid any adverse impact to the Fund. SUBSEQUENT EVENT Effective March 31, 1999, Federated Management, Adviser to the Fund, merged into Federated Investment Management Company (formerly, Federated Advisers). Trustees JOHN F. DONAHUE THOMAS G. BIGLEY JOHN T. CONROY, JR. WILLIAM J. COPELAND JOHN F. CUNNINGHAM J. CHRISTOPHER DONAHUE LAWRENCE D. ELLIS, M.D. PETER E. MADDEN CHARLES F. MANSFIELD, JR. JOHN E. MURRAY, JR., J.D., S.J.D. MARJORIE P. SMUTS JOHN S. WALSH Officers JOHN F. DONAHUE Chairman J. CHRISTOPHER DONAHUE President EDWARD C. GONZALES Executive Vice President JOHN W. MCGONIGLE Executive Vice President and Secretary RICHARD B. FISHER Vice President RICHARD J. THOMAS Treasurer ANTHONY R. BOSCH Assistant Secretary Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so. This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses, and other information. Government Obligations Fund SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1999 [Graphic] Government Obligations Fund Federated Investors Funds 5800 Corporate Drive Pittsburgh, PA 15237-7000 1-800-341-7400 WWW.FEDERATEDINVESTORS.COM Federated Securities Corp., Distributor Cusip 60934N104 Cusip 60934N807 1022001 (3/99) SEMI-ANNUAL REPORT President's Message Dear Shareholder: I am pleased to present the Semi-Annual Report to Shareholders for Government Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust. This report covers the first half of the fund's fiscal year, which is the six-month period ended January 31, 1999. It begins with an investment review of the short-term government market from the fund's portfolio manager. Following the investment review are the fund's portfolio of investments and financial statements. Government Obligations Tax-Managed Fund helps tax-sensitive investors pursue daily dividends, a high level of liquidity, and a stable net asset value of $1.00 per share. 1 The fund's portfolio of U.S. government securities is managed so that dividends are exempt from state and local income taxes.2 Over the six-month reporting period, the fund paid double tax-free dividends totaling $0.03 per share to shareholders of Institutional Shares and $0.02 per share to shareholders of Institutional Service Shares. At the end of the reporting period, net assets reached $2.2 billion. Thank you for selecting this fund as a convenient way to help your ready cash earn daily, tax-free income. As always, we welcome your questions, comments, or suggestions. Sincerely, [Graphic] J. Christopher Donahue President March 15, 1999 1 An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 2 Income may be subject to the federal alternative minimum tax. Unless otherwise exempt, shareholders are required to pay federal income tax on dividends. Investment Review Government Obligations Tax-Managed Fund, which is rated AAAm 1 by Standard & Poor's ("S&P") and Aaa1 by Moody's Investors Service, Inc. ("Moody's"), is invested in U.S. Treasury and U.S. Government agency obligations only. The fund invests in issues of the Student Loan Marketing Association, Federal Farm Credit Bank System, Federal Home Loan Bank System, and Tennessee Valley Authority, and can maintain a small U.S. Treasury position for liquidity purposes. The fund does not invest in repurchase agreements, and is managed to provide distributions which may be exempt from state and local taxes. There were two central themes in the short-term government markets over the reporting period ended January 31, 1999. First, the economy continued to advance at a robust pace of growth, with gross domestic product expanding in the third and fourth quarters of 1998 at 3.70% and 6.10%, respectively, and all indications that this same strength had spilled over into 1999. Although the manufacturing sector was soft, the housing and retail sectors continued to propel the economy forward. While this pace of growth is in excess of what has traditionally been viewed to be the non-inflationary potential of the economy, inflation nevertheless remained benign, perhaps reflecting advances in productivity that have enabled growth to be achieved without upward pressure on prices. Under normal circumstances, however, the growth trajectory of the economy would have been sufficient to make Federal Reserve Board ("Fed") officials concerned about the inflationary threat that could result from such above-trend growth. Circumstances were not normal, however, as economic crises in countries overseas and in Latin America were the second, and ultimately more dominant, theme over the reporting period. In August 1998, the economic troubles in Asia spread to encompass Russia and then Latin America. As fears that the United States could not continue to be immune from what had become a global economic crisis weighed heavily on the U.S. equity market, investors both domestic and abroad fled to the perceived safety of the U.S. Treasury market. Yields on U.S. Treasury, and to a lesser extent U.S. government agency securities plummeted, as investors shunned credit- sensitive markets in favor of the safe haven of U.S. government securities, and a credit/liquidity crisis in the U.S. financial markets became evident. Faced with this scenario, the Fed voted to ease monetary policy by 25 basis points, bringing the federal funds target rate down to 5.25% in late September in an attempt to calm investor fears. Market participants viewed this move to be too tentative, however, and it was not until the Fed took two additional easing steps, in mid-October and November, bringing the federal funds target rate to 4.75%, that some semblance of calm returned to the markets. Credit spreads narrowed over this period, albeit not back to levels that pre-dated the crisis. 1 An AAAm rating is obtained after S&P evaluates a number of factors, including credit quality, market price exposure and management. S&P monitors the portfolio weekly for developments that could cause changes in the ratings. Money market funds and bond funds rated Aaa by Moody's are judged to be of an investment quality similiar to Aaa-rated fixed income obligations, that is, they are judged to be of the best quality. These ratings do not remove market risks and are subject to change. Movements in short-term government interest rates reflected the turbulent economic conditions early in the reporting period, and then the relative tranquillity of the markets once the Fed moves had their desired effect. The yield on the one-year Treasury bill began the period at 5.40%, but was driven sharply downward by the onslaught of investors-both domestic and abroad-seeking a safe haven from the world economic uncertainty and the instability of the U.S. equity market. The yield on this security reached a low of 3.85% by mid-October. As the additional easing steps by the Fed calmed investors, the yield on this security rose moderately to 4.60% by early November, and traded within a range of 4.40% to 4.60% for the remainder of the reporting period. The yield on the one-year agency discount note began the reporting period at close to 5.60%, and while the flight to quality to this market was less pronounced than to U.S. Treasuries, yields on these securities were also driven downward to a low of 4.40% by mid-October. The market retraced some of this drop back to 4.80% by mid-November and traded within a relatively narrow range for the rest of the reporting period. The fund's average maturity was targeted in a 40- to 50-day range for most of the reporting period, with the portfolio maximizing value through ongoing relative value analysis. Agency securities were the dominant investment, as the U.S. Treasury market remained expensive throughout the reporting period. Short-term agency securities with maturities between one and three months were the preferred investment to overnight agency discount notes, and the fund used a Student Loan Marketing Association agency floating rate masternote agreement to facilitate liquidity. The fund's structure remained barbelled, and combined short-term fixed and floating rate agency securities with purchases of longer securities with 6- to 12- month maturities. At the end of the reporting period, approximately 27% of the fund was in government agency floating rate notes. With the credit crisis now past, we would expect the Fed to keep monetary policy unchanged in upcoming months. Barring a sudden economic collapse in a major trading partner, the focus of the market is likely to return to the strength of the domestic economy and it's implication for inflation. However, changing economic and market developments are continuously monitored to best serve our clients attracted to the short-term U.S. Government market. Portfolio of Investments JANUARY 31, 1999 (UNAUDITED)
PRINCIPAL AMOUNT VALUE GOVERNMENT AGENCIES-100.7% $ 73,000,000 Federal Farm Credit Bank Notes, 4.870% - 5.550%, 4/1/1999 - 6/1/1999 $ 73,032,756 196,540,000 1 Federal Farm Credit Bank, Discount Notes, 4.680% - 4.830%, 2/2/1999 - 8/27/1999 194,486,566 105,000,000 2 Federal Farm Credit Bank, Floating Rate Notes, 4.717% - 5.021%, 2/1/1999 - 3/1/1999 104,966,428 54,300,000 Federal Home Loan Bank Notes, 4.790% - 5.705%, 5/5/1999 - 2/4/2000 54,281,269 1,169,214,000 1 Federal Home Loan Bank, Discount Notes, 4.610% - 5.360%, 2/3/1999 - 7/7/1999 1,162,641,628 324,500,000 2 Federal Home Loan Bank, Floating Rate Notes, 4.740% - 5.230%, 2/1/1999 - 3/1/1999 324,403,902 43,000,000 Student Loan Marketing Association Notes, 5.400% - 5.890%, 2/10/1999 - 11/17/1999 43,113,226 149,000,000 2 Student Loan Marketing Association, Floating Rate Notes, 4.750% - 5.162%, 2/1/1999 - 2/2/1999 148,948,075 35,200,000 2 Student Loan Marketing Association, Floating Rate Master Note, 4.962%, 2/2/1999 35,200,000 91,485,000 1 Tennessee Valley Authority, Discount Notes, 4.680% - 4.740%, 2/18/1999 - 3/9/1999 91,167,741 TOTAL GOVERNMENT AGENCIES 2,232,241,591 TOTAL INVESTMENTS (AT AMORTIZED COST) 3 $ 2,232,241,591
1 The issue shows the discount rate at time of purchase. 2 Current rate and next reset date shown. 3 Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($2,216,038,064) at January 31, 1999. See Notes which are an integral part of the Financial Statements Statement of Assets and Liabilities JANUARY 31, 1999 (UNAUDITED)
ASSETS: Total investments in securities, at amortized cost and value $ 2,232,241,591 Income receivable 5,638,374 Deferred organizational costs 7,239 Other assets 28,175 TOTAL ASSETS 2,237,915,379 LIABILITIES: Payable for investments purchased $ 10,988,340 Income distribution payable 8,907,768 Payable to Bank 1,682,737 Accrued expenses 298,470 TOTAL LIABILITIES 21,877,315 Net assets for 2,216,038,064 shares outstanding $ 2,216,038,064 NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE: INSTITUTIONAL SHARES: $985,647,188 / 985,647,188 shares outstanding $1.00 INSTITUTIONAL SERVICE SHARES: $1,230,390,876 / 1,230,390,876 shares outstanding $1.00
See Notes which are an integral part of the Financial Statements Statement of Operations SIX MONTHS ENDED JANUARY 31, 1999 (UNAUDITED)
INVESTMENT INCOME: Interest $ 53,562,144 EXPENSES: Investment advisory fee $ 2,033,117 Administrative personnel and services fee 766,485 Custodian fees 43,712 Transfer and dividend disbursing agent fees and expenses 28,341 Directors'/Trustees' fees 6,245 Auditing fees 6,628 Legal fees 4,497 Portfolio accounting fees 108,772 Shareholder services fee-Institutional Shares 1,208,495 Shareholder services fee-Institutional Service Shares 1,332,901 Share registration costs 92,373 Printing and postage 15,704 Insurance premiums 4,214 Miscellaneous 12,971 TOTAL EXPENSES 5,664,455 WAIVERS: Waiver of investment advisory fee $ (1,045,213) Waiver of shareholder services fee-Institutional Shares (1,208,495) TOTAL WAIVERS (2,253,708) Net expenses 3,410,747 Net investment income $ 50,151,397
See Notes which are an integral part of the Financial Statements Statement of Changes in Net Assets
SIX MONTHS ENDED YEAR (unaudited) ENDED JANUARY 31, JULY 31, 1999 1998 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 50,151,397 $ 75,112,505 DISTRIBUTIONS TO SHAREHOLDERS: Distributions from net investment income Institutional Shares (24,434,763) (40,176,975) Institutional Service Shares (25,716,634) (34,935,530) CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (50,151,397) (75,112,505) SHARE TRANSACTIONS: Proceeds from sale of shares 4,639,805,339 6,514,205,911 Net asset value of shares issued to shareholders in payment of distributions declared 10,144,602 25,262,402 Cost of shares redeemed (4,217,831,459) (5,687,326,375) CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 432,118,482 852,141,938 Change in net assets 432,118,482 852,141,938 NET ASSETS: Beginning of period 1,783,919,582 931,777,644 End of period $ 2,216,038,064 $ 1,783,919,582
See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.03 0.05 0.05 0.05 0.01 LESS DISTRIBUTIONS: Distributions from net investment income (0.03) (0.05) (0.05) (0.05) (0.01) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.58% 5.49% 5.35% 5.50% 0.94% RATIOS TO AVERAGE NET ASSETS: Expenses 0.20% 3 0.20% 0.20% 0.17% 0.20% 3 Net investment income 5.06% 3 5.35% 5.26% 5.28% 5.78% 3 Expense waiver/reimbursement 4 0.35% 3 0.37% 0.38% 0.44% 0.65% 3 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $985,647 $953,268 $510,683 $199,243 $3,070
1 Reflects operations for the period from June 2, 1995 (date of initial public investment) to July 31, 1995. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Service Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.05 0.05 0.05 0.01 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.05) (0.05) (0.05) (0.01) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.45% 5.23% 5.09% 5.23% 0.95% RATIOS TO AVERAGE NET ASSETS: Expenses 0.45% 3 0.45% 0.45% 0.42% 0.45% 3 Net investment income 4.82% 3 5.11% 4.97% 5.00% 5.55% 3 Expense waiver/reimbursement 4 0.10% 3 0.12% 0.13% 0.19% 0.40% 3 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $1,230,391 $830,652 $421,095 $322,698 $76,165
1 Reflects operations for the period from May 30, 1995 (date of initial public investment) to July 31, 1995. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Notes to Financial Statements JANUARY 31, 1999 (UNAUDITED) ORGANIZATION Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Government Obligations Tax-Managed Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income consistent with stability of principal and liquidity. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATIONS The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act. INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex- dividend date. FEDERAL TAXES It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provisions for federal taxes are necessary. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when- issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. DEFERRED EXPENSES The cost incurred by the Fund with respect to registration of its shares in its first fiscal year, excluding the initial expense of registering its shares, have been deferred and are being amortized using the straight-line method over a period of five years from the Fund's commencement date. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated. OTHER Investment transactions are accounted for on the trade date. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At January 31, 1999, capital paid-in aggregated $2,216,038,064. Transactions in shares were as follows:
SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SHARES: Shares sold 1,369,188,045 2,745,127,545 Shares issued to shareholders in payment of distributions declared 5,122,588 17,109,018 Shares redeemed (1,341,931,507) (2,319,651,358) NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS 32,379,126 442,585,205 SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SERVICE SHARES: Shares sold 3,270,617,294 3,769,078,366 Shares issued to shareholders in payment of distributions declared 5,022,014 8,153,384 Shares redeemed (2,875,899,952) (3,367,675,017) NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS 399,739,356 409,556,733 NET CHANGE RESULTING FROM SHARE TRANSACTIONS 432,118,482 852,141,938
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE Federated Administrative Services, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.20% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. ADMINISTRATIVE FEE Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on the level of average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc. for the period. The administrative fee received during the period of the Administrative Services Agreement shall be at least $125,000 per portfolio and $30,000 per each additional class of shares. SHAREHOLDER SERVICES FEE Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion. TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders. PORTFOLIO ACCOUNTING FEES FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. ORGANIZATIONAL EXPENSES Organizational expenses of $26,061 were borne initially by the Adviser. The Fund has agreed to reimburse the Adviser for its expenses. These expenses have been deferred and are being amortized over the five-year period following the Fund's effective date. For the period ended January 31, 1999, the Fund amortized $7,239 of organizational expenses. GENERAL Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. YEAR 2000 Similar to other financial organizations, the Fund could be adversely affected if the computer systems used by the Fund's service providers do not properly process and calculate date-related information and data from and after January 1, 2000. The Fund's Adviser and administrator are taking measures that they believe are reasonably designed to address the Year 2000 issue with respect to computer systems that they use and to obtain reasonable assurances that comparable steps are being taken by each of the Fund's other service providers. At this time, however, there can be no assurance that these steps will be sufficient to avoid any adverse impact to the Fund. SUBSEQUENT EVENT Effective March 31, 1999, Federated Administrative Services, Adviser to the Fund, merged into Federated Investment Management Company (formerly, Federated Advisers). Trustees JOHN F. DONAHUE THOMAS G. BIGLEY JOHN T. CONROY, JR. WILLIAM J. COPELAND JOHN F. CUNNINGHAM J. CHRISTOPHER DONAHUE LAWRENCE D. ELLIS, M.D. PETER E. MADDEN CHARLES F. MANSFIELD, JR. JOHN E. MURRAY, JR., J.D., S.J.D. MARJORIE P. SMUTS JOHN S. WALSH Officers JOHN F. DONAHUE Chairman J. CHRISTOPHER DONAHUE President EDWARD C. GONZALES Executive Vice President JOHN W. MCGONIGLE Executive Vice President and Secretary RICHARD B. FISHER Vice President RICHARD J. THOMAS Treasurer ANTHONY R. BOSCH Assistant Secretary Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so. This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses, and other information. SEMI-ANNUAL REPORT [Graphic] Government Obligations Tax-Managed Fund SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1999 [Graphic] Government Obligations Tax-Managed Fund Federated Investors Funds 5800 Corporate Drive Pittsburgh, PA 15237-7000 1-800-341-7400 WWW.FEDERATEDINVESTORS.COM Federated Securities Corp., Distributor Cusip 60934N856 Cusip 60934N849 G01611-01 (3/99) [Graphic] SEMI-ANNUAL REPORT President's Message Dear Shareholder: I am pleased to present the Semi-Annual Report to Shareholders for Prime Obligations Fund, a portfolio of Money Market Obligations Trust. This report covers the first half of the fund's fiscal year, which is the six-month period ended January 31, 1999. It begins with an investment review of the short-term market from the fund's portfolio manager. Following the investment review are the fund's portfolio of investments and financial statements. In Prime Obligations Fund, your ready cash is at work pursuing daily income, along with the additional advantages of daily liquidity and stability of principal. 1 At the end of the reporting period, the fund's $9.2 billion in net assets were invested across a wide range of high-quality, short-term money market securities, including commercial paper (45.5%), variable rate instruments (19.9%), short-term notes (12.4%), repurchase agreements (10.2%), certificates of deposit (7.3%), and time deposits (7.2%). Over the six-month reporting period, dividends paid to shareholders of Institutional Shares and Institutional Service Shares totaled $0.03 and $0.02 per share, respectively. On the last day of the reporting period, the 30-day net yields for Institutional Shares and Institutional Service Shares were 4.93% and 4.68%, respectively, while the 7-day net yields were 4.94% and 4.69%, respectively. 2 Thank you for your confidence in the daily earning power of Prime Obligations Fund. Your questions and comments are always welcome. Sincerely, [Graphic] J. Christopher Donahue President March 15, 1999 1 An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 2 Performance quoted represents past performance and is not indicative of future results. Yield will vary. Yields quoted for money market funds most closely reflect the fund's current earnings. Investment Review Prime Obligations Fund invests in money market instruments maturing in 13 months or less. The average maturity of these securities, computed on a dollar-weighted basis, is restricted to 90 days or less. Portfolio securities must be rated in the highest short-term rating category by one or more of the nationally recognized statistical rating organizations or be of comparable quality to securities having such ratings. Typical security types include, but are not limited to: commercial paper, certificates of deposit, time deposits, variable rate instruments and repurchase agreements. Economic growth during the second half of 1998 resumed its above-average pace after a brief slowdown in the second quarter. Specifically, third quarter gross domestic product ("GDP") registered 3.90%, while fourth quarter GDP topped the year at 5.60%. Despite the high growth, inflation remained subdued by all measures. The consumer price index rose just 1.60% on an annualized basis for the six months ending January 31, 1999. For the same time period, the producer price index increased 1.70%, while the employment cost index grew 3.50%. Despite the higher number associated with wage and benefit increases, the uptick in productivity more than outweighed the higher cost base. This productivity/technology factor has been referred to by Federal Reserve Board ("Fed") Chairman Greenspan in many of his positive discussions on economic outlook. Thirty-day commercial paper started the period at 5.56% on July 31, 1998, hovered in the 5.50% range until September 23 when expectations began to surface about the Fed lowering rates, and then increased as high as 5.51% during the month of December due to year-end spread pressures. Those pressures evaporated in January 1999 and the reporting period ended with a 4.81% rate for 30-day commercial paper. The money market yield curve looked lower but similarly shaped during the reporting period. One-month and six-month commercial paper rates declined 75 basis points and 77 basis points, respectively, reflecting the accommodative Fed policy based on concern in the market about the lack of liquidity in the U.S. credit markets. The Fed responded to this by lowering the federal funds target rate three times during the period- 25 basis points on September 29, 1998, 25 basis points on October 15, 1998, and 25 basis points on November 17, 1998, to end the reporting period with a 4.75% target rate. The Fed also lowered the discount rate twice by 25 points to 4.75% on October 15, 1998, and by 25 basis points on November 17, 1998, to 4.50%. The target average maturity range for Prime Obligations Fund was lengthened from 40-50 days to 45-55 days on October 1, 1998, reflecting the Fed's concern about liquidity in the credit markets and the Fed easing scenario. In structuring the fund, there was continued emphasis placed on positioning 30-35% of the fund's assets in variable rate demand notes and accomplishing a modest barbell structure. During the six months ended January 31, 1999, the net assets of Prime Obligations Fund increased from $7.4 billion to $9.2 billion. The effective average maturity of the Fund on January 31, 1999, was 56 days. Portfolio of Investments January 31, 1999 (Unaudited)
PRINCIPAL AMOUNT VALUE CERTIFICATE OF DEPOSIT-7.3% BANKING-7.3% $ 86,000,000 Bankers Trust Co., New York, 5.645% - 5.800%, 2/26/1999 - 4/23/1999 $ 85,996,267 79,000,000 Barclays Bank of Canada, (Guaranteed by Barclays Bank PLC, London), 5.016% - 5.020%, 1/10/2000 - 1/13/2000 78,973,920 6,000,000 Canadian Imperial Bank of Commerce, 5.800%, 4/1/1999 5,999,443 15,000,000 Commerzbank AG, Frankfurt, 5.066%, 4/6/1999 15,000,260 43,000,000 KeyBank, N.A., 5.080%, 4/9/1999 43,000,000 150,000,000 Rabobank Nederland, Utrecht, 5.000%, 1/4/2000 150,000,000 111,000,000 Royal Bank of Canada, Montreal, 5.020%, 1/24/2000 110,958,197 126,500,000 Societe Generale, Paris, 5.800% - 5.900%, 4/6/1999 - 4/28/1999 126,474,843 15,000,000 Svenska Handelsbanken, Stockholm, 5.800%, 4/6/1999 14,998,867 25,000,000 Toronto-Dominion Bank, 5.020%, 1/10/2000 24,990,936 15,000,000 UBS AG, 4.939%, 1/13/2000 15,010,786 TOTAL CERTIFICATES OF DEPOSIT 671,403,519 COMMERCIAL PAPER-45.5% 1 BANKING-11.9% 24,000,000 Abbey National N.A. Corp., (Guaranteed by Abbey National Bank PLC, London), 5.003%, 5/4/1999 23,700,693 165,000,000 Aspen Funding Corp., (Insured by MBIA INS, Guaranteed by Deutsche Bank, AG), 4.852% - 5.634%, 2/1/1999 - 2/25/1999 164,700,367 2,970,000 BHS Long Term Care, (Lasalle National Bank, Chicago LOC), 5.397%, 3/8/1999 2,954,610 21,710,000 Benedictine Health System, (Lasalle National Bank, Chicago LOC), 5.118% - 5.330%, 3/8/1999 21,599,348 380,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by Canadian Imperial Bank of Commerce), 4.962% - 5.079%, 2/22/1999 - 4/14/1999 377,199,427 30,000,000 Commonwealth Bank of Australia, Sydney, 5.307%, 3/22/1999 29,788,892 131,500,000 Cregem North America, Inc., (Guaranteed by Credit Communal de Belgique, Brussles), 4.943% - 5.635%, 2/3/1999 - 3/29/1999 131,088,163 43,661,000 Fountain Square Commercial Funding Corp., (Fifth Third Bank, Cincinnati Support Agreement), 4.979% - 5.350%, 2/1/1999 - 7/19/1999 43,339,027 143,000,000 Societe Generale North America, Inc., (Guaranteed by Societe Generale, Paris), 5.122% - 5.123%, 4/5/1999 - 4/7/1999 141,732,124 25,000,000 SunTrust Banks, Inc., 5.276%, 3/5/1999 24,884,000 50,000,000 UBS Finance (Delaware), Inc., (UBS AG GTD), 5.035%, 4/16/1999 49,491,250 60,000,000 Westpac Capital Corp., (Guaranteed by Westpac Banking Corp. Ltd., Sydney), 5.029% - 5.032%, 4/12/1999 - 5/14/1999 59,275,442 PRINCIPAL AMOUNT VALUE COMMERCIAL PAPER-continued 1 BANKING-CONTINUED $ 22,668,000 Wood Street Funding Corp., (PNC Bank, N.A. Support Agreement), 4.906% - 5.326%, 2/26/1999 - 3/18/1999 $ 22,548,450 TOTAL 1,092,301,793 BROKERAGE-0.3% 30,000,000 Credit Suisse First Boston, Inc., 4.892%, 4/19/1999 29,690,075 ELECTRIC POWER-0.2% 14,325,000 Southern Electric Generating Co. (SEGCO), (Guaranteed by Alabama Power Co., Guaranteed by Georgia Power Co.), 5.018%, 3/9/1999 14,253,662 FINANCE-AUTOMOTIVE-2.1% 100,000,000 Chrysler Financial Co. LLC, 4.929%, 5/12/1999 98,652,778 100,000,000 General Motors Acceptance Corp., Mortgage of PA, (Guaranteed by General Motors Acceptance Corp.), 5.086%, 4/1/1999 99,176,567 TOTAL 197,829,345 FINANCE-COMMERCIAL-16.6% 77,500,000 Asset Securitization Cooperative Corp., 4.876% - 5.178%, 2/12/1999 - 3/26/1999 76,962,792 212,000,000 Beta Finance, Inc., 4.997% - 5.444%, 2/26/1999 - 5/28/1999 210,041,307 250,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 4.872% - 5.304%, 2/24/1999 - 4/12/1999 248,403,139 41,155,000 Falcon Asset Securitization Corp., 5.321%, 2/25/1999 41,010,958 217,000,000 General Electric Capital Corp., 4.886% - 5.650%, 2/4/1999 - 4/9/1999 216,108,900 253,719,000 Greenwich Funding Corp., 4.889% - 4.890%, 4/6/1999 - 4/15/1999 251,342,566 38,975,000 PREFCO-Preferred Receivables Funding Co., 5.274% - 5.405%, 2/9/1999 - 2/26/1999 38,870,257 45,366,000 Receivables Capital Corp., 5.450% - 5.468%, 2/4/1999 - 2/12/1999 45,303,692 396,000,000 Sheffield Receivables Corp., 4.910% - 5.499%, 2/19/1999 - 3/31/1999 394,409,419 TOTAL 1,522,453,030 FINANCE-RETAIL-7.5% 105,000,000 American Express Credit Corp., 4.888% - 5.023%, 4/12/1999 - 4/13/1999 103,999,729 139,000,000 Associates Corp. of North America, 4.867% - 5.401%, 3/9/1999 - 4/19/1999 138,073,175 205,500,000 Associates First Capital Corp., 4.852% - 5.073%, 2/1/1999 - 5/28/1999 204,048,621 75,000,000 Household Finance Corp., 4.852%, 2/1/1999 75,000,000 38,500,000 Island Finance, Puerto Rico, (Norwest Financial, Inc., Support Agreement) 5.219%, 2/25/1999 38,367,817 50,000,000 New Center Asset Trust, A1/P1 Series, 5.630%, 2/12/1999 49,916,278 75,000,000 Norwest Financial, Inc., 4.888%, 4/13/1999 74,285,563 TOTAL 683,691,183 PRINCIPAL AMOUNT VALUE COMMERCIAL PAPER-continued 1 INSURANCE-6.5% $ 265,000,000 CXC, Inc., 4.879% - 5.404%, 2/4/1999 - 5/17/1999 $ 263,185,360 339,000,000 Marsh & McLennan Cos., Inc., 5.112% - 5.650%, 2/22/1999 - 5/24/1999 335,340,818 TOTAL 598,526,178 OIL & OIL FINANCE-0.4% 40,000,000 Chevron Transport Corp., (Guaranteed by Chevron Corp.), 5.080% - 5.091%, 3/12/1999 - 4/9/1999 39,707,850 TOTAL COMMERCIAL PAPER 4,178,453,116 SHORT-TERM NOTES-12.4% BANKING-3.2% 195,000,000 Abbey National Treasury Services, PLC, 4.990%-5.500%, 1/10/2000 - 2/2/1999 194,962,094 60,000,000 SALTS III Cayman Island Corp., (Guaranteed by Bankers Trust International, PLC), 5.589%, 3/12/1999 60,000,000 36,000,000 SALTS III Cayman Island Corp., (Guaranteed by Bankers Trust International, PLC), 5.270%, 4/23/1999 36,000,000 TOTAL 290,962,094 BROKERAGE-2.0% 185,000,000 Goldman Sachs Group, LP, 5.020%, 3/1/1999 185,000,000 ELECTRICAL EQUIPMENT-0.5% 48,800,000 Mt. Vernon Phenol Plant Partnership, (Guaranteed by General Electric Co.), 5.370%, 5/17/1999 48,800,000 FINANCE-AUTOMOTIVE-1.6% 5,304,769 Chase Manhattan Auto Owner Trust 1998-C, Class A-1, 5.588%, 7/9/1999 5,304,516 4,538,178 Compass Auto Receivables Trust 1998-A, Class A-1, 5.659%, 7/15/1999 4,538,178 10,337,371 Ford Credit Auto Owner Trust 1998-C, Class A-2, 5.670%, 6/15/1999 10,337,371 68,975,764 General Motors Acceptance Corp., Mortgage of PA, (Guaranteed by General Motors Acceptance Corp.), 5.120%, 2/1/1999 68,975,764 21,581,181 MMCA Auto Owner Trust 1998-1, Class A-1, 5.621%, 8/16/1999 21,581,180 37,445,794 Premier Auto Trust 1998-5, Class A-1, 5.140%, 7/8/1999 37,438,650 TOTAL 148,175,659 FINANCE-COMMERCIAL-1.7% 50,000,000 2 Beta Finance, Inc., 5.130%, 10/25/1999 50,000,000 25,000,000 2 Beta Finance, Inc., 5.250%, 1/18/2000 25,023,178 20,000,000 2 Beta Finance, Inc., 5.690%, 3/2/1999 20,000,000 60,000,000 2 Beta Finance, Inc., 5.790%, 4/8/1999 59,998,915 TOTAL 155,022,093 PRINCIPAL AMOUNT VALUE SHORT-TERM NOTES-continued FINANCE-EQUIPMENT-2.0% $ 5,820,756 Case Equipment Receivables Trust 1998-B, Class A-1, 5.608%, 9/15/1999 $ 5,820,756 46,234,795 Newcourt Equipment Trust Securities 1998-2, Class A-1, 5.195%, 1/15/2000 46,234,795 127,000,000 Pitney Bowes Credit Corp., 5.046%, 2/10/1999 126,840,456 TOTAL 178,896,007 INSURANCE-1.4% 14,216,145 Americredit Automobile Receivables Trust 1998-C, Class A-1, (Insured by FSA), 5.380%, 9/12/1999 14,216,145 16,568,424 Americredit Automobile Receivables Trust 1998-D, Class A-1, (Insured by FSA), 5.199%, 11/12/1999 16,568,424 48,000,000 Marsh & McLennan Cos., Inc., 5.254%, 5/24/1999 48,000,000 49,000,000 WFS Financial, Series 1998-C Owner Trust, Class A-1, (Guaranteed by FSA), 5.395%, 11/20/1999 49,000,000 TOTAL 127,784,569 TOTAL SHORT-TERM NOTES 1,134,640,422 VARIABLE RATE INSTRUMENTS-19.9% 3 BANKING-12.4% 8,880,000 4 C's LLC, Series 1998, (KeyBank, N.A. LOC), 4.910%, 2/4/1999 8,880,000 5,645,000 Abbott Foods, Series 1996, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 5,645,000 10,200,000 Active Living of Glenview, LLC, Series 1998, (Firstar Bank, Milwaukee LOC), 5.000%, 2/3/1999 10,200,000 5,070,000 Alabama State IDA, Series 1994, Miltope Project, (Regions Bank, Alabama LOC), 4.970%, 2/4/1999 5,070,000 6,565,000 Alabama State IDA, (Wellborn Cabinet, Inc.), Tax Revenue Bonds, (Amsouth Bank N.A., Birmingham LOC), 5.000%, 2/4/1999 6,565,000 2,175,000 Alabama State IDA, Standard Furniture Project, Series 1995, (Amsouth Bank N.A., Birmingham LOC), 5.000%, 2/4/1999 2,175,000 5,630,000 Alexandria Executive Club LP, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 5,630,000 2,905,000 Allegheny County, PA IDA, Series 1999-B, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 2,905,000 11,615,000 American Xtal Technology, Inc., Xtal Project, Series 1998, (U.S. Bank, N.A., Minneapolis LOC), 4.920%, 2/4/1999 11,615,000 8,340,000 Arrow N.A., Inc., (Bank of America NT and SA, San Francisco LOC), 4.910%, 2/4/1999 8,340,000 7,000,000 Asset Holdings Corp. VII, (U.S. Bank, N.A., Minneapolis LOC), 4.910%, 2/4/1999 7,000,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued 3 BANKING-CONTINUED $ 3,500,000 Asset Holdings V, (Bayerische Hypotheken-und Vereinsbank AG LOC), 4.910%, 2/4/1999 $ 3,500,000 50,000 Associated Materials, Inc., (KeyBank, N.A. LOC), 4.930%, 2/5/1999 50,000 12,000,000 Association of American Medical Colleges, (Guaranteed by Chase Manhattan Bank N.A., New York), 4.970%, 2/3/1999 12,000,000 3,000,000 Auth Family, LLC, 1998 Issue, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 3,000,000 3,800,000 Balboa Investment Group V, Series 1997, (Amsouth Bank N.A., Birmingham LOC), 5.000%, 2/4/1999 3,800,000 20,000,000 Barclays Bank PLC, London, 5.120%, 2/17/1999 20,000,000 4,000,000 Bardstown City, KY, (RJ Tower Project), Series 1995, (Comerica, Inc. LOC), 5.000%, 2/4/1999 4,000,000 8,000,000 Bethesda Country Club, Inc., Series 1997, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 8,000,000 18,835,000 Beverly Hills Nursing Center, Inc., Medilodge Project, Series 1996, (KeyBank, N.A. LOC), 4.960%, 2/4/1999 18,835,000 1,592,790 Bowling Green Manor LP, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 1,592,790 9,055,000 Brentlinger Enterprises, (Huntington National Bank, Columbus, OH LOC), 4.960%, 2/4/1999 9,055,000 10,000,000 Capital One Funding Corp., Series 1998-C, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 10,000,000 5,332,000 Capital One Funding Corp., Series 1994-A, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 5,332,000 13,167,000 Capital One Funding Corp., Series 1994-C, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 13,167,000 8,493,000 Capital One Funding Corp., Series 1994-D, (Bank One, Kentucky LOC), 4.910%, 2/4/1999 8,493,000 365,000 Capital One Funding Corp., Series 1995-A, (Bank One, Indiana, N.A. LOC), 4.910%, 2/4/1999 365,000 9,555,000 Capital One Funding Corp., Series 1995-B, (Bank One, Kentucky LOC), 4.910%, 2/4/1999 9,555,000 20,680,000 Capital One Funding Corp., Series 1995-F, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 20,680,000 8,600,000 Capital One Funding Corp., Series 1996-H, (Bank One, West Virginia, N.A. LOC), 4.910%, 2/4/1999 8,600,000 1,065,000 Carpenter, Thomas E., Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.960%, 2/4/1999 1,065,000 9,000,000 Carport, Inc., Series 1997, (Amsouth Bank N.A., Birmingham LOC), 5.000%, 2/4/1999 9,000,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued 3 BANKING-CONTINUED $ 3,760,000 Cleveland Sportsplex Ltd., (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 $ 3,760,000 5,570,000 Clinton County, NY IDA, Bombardier Project, Series 1998-B, (Marine Midland Bank N.A., Buffalo, NY LOC), 4.960%, 2/4/1999 5,570,000 8,300,000 Cloquet, MN, Series 1996-B Potlach Corp., (Credit Suisse First Boston LOC), 5.000%, 2/3/1999 8,300,000 1,022,337 Clyde Manor LP, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 1,022,337 505,000 Colorado Health Facilities Authority, Development Disabilities Center Project, Series 1998-F1, (Bank One, Colorado LOC), 5.010%, 2/4/1999 505,000 1,100,000 Colorado Health Facilities Authority, Development Disabilities Resource Center, Series 1998-C1, (Bank One, Colorado LOC), 4.910%, 2/4/1999 1,100,000 3,000,000 Colorado Health Facilities Authority, Goodwill Industries of Denver Project, Series 1998-G1, (Bank One, Colorado LOC), 4.910%, 2/4/1999 3,000,000 2,780,000 Columbia County, GA Development Authority, Series 1993, (SunTrust Banks, Inc. LOC), 4.950%, 2/3/1999 2,780,000 8,000,000 Commercial Contractors, Inc., Series 1998, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 8,000,000 7,500,000 Communications Corp. of America, Series 1998, (Wachovia Bank of NC, N.A., Winston-Salem LOC), 4.920%, 2/3/1999 7,500,000 4,800,000 Damascus Company Ltd., Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.960%, 2/4/1999 4,800,000 9,000,000 David Lipscomb University, Series 1998, (SunTrust Bank, Nashville LOC), 4.950%, 2/3/1999 9,000,000 8,510,000 Dewberry IV LP, Series 1997, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 8,510,000 5,490,000 Die-Matic Corp., (Huntington National Bank, Columbus, OH LOC), 4.960%, 2/4/1999 5,490,000 4,500,000 Double H Plastics, Inc., Series 1998, (First Union National Bank, Charlotte, N.C. LOC), 4.950%, 2/3/1999 4,500,000 2,915,000 Douglas County, GA Development Authority, Heritage Bag Project, Series 1998-B, (Wachovia Bank of NC, N.A., Winston- Salem LOC), 4.970%, 2/4/1999 2,915,000 3,700,000 Eastwinds Investment, Ltd., (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 3,700,000 5,000,000 Fannin County IDA, Series 1998, Georgia Crown Distributing Co. Project, (SunTrust Bank, Atlanta LOC), 4.950%, 2/3/1999 5,000,000 25,000,000 First Union National Bank, Charlotte, NC, 5.050%, 2/1/1999 25,000,000 4,690,000 Foothill Development Group, LLC, Series 1998, (U.S. Bank, N.A., Minneapolis LOC), 4.910%, 2/4/1999 4,690,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued 3 BANKING-CONTINUED $ 6,095,000 Fort Craig Limited Partnership, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 $ 6,095,000 1,375,000 Frederick County, MD, Thogar, LLC Facility, Series 1998-B, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 1,375,000 4,000,000 G.M.H. Enterprises, Inc., Series 1995, (National City Bank, Ohio LOC), 4.920%, 2/4/1999 4,000,000 15,000,000 Galasso Materials, LLC and Galasso Holdings, LLC, Series 1998, (KeyBank, N.A. LOC), 4.910%, 2/4/1999 15,000,000 2,720,000 Gerken Materials, Inc., Series 1995, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 2,720,000 3,620,000 Gerken Materials, Inc., Series 1997, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 3,620,000 13,330,000 Grand Aire Express, Inc., Series 1997, (National City Bank, Ohio LOC), 4.920%, 2/4/1999 13,330,000 1,150,000 Great Lakes Brewing Co., (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 1,150,000 2,190,000 Grote Family LP, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 2,190,000 7,600,000 Gwinnett County, GA, Newell Recycling of Atlanta Series 1998, (Bank One, Texas N.A. LOC), 4.910%, 2/4/1999 7,600,000 5,000,000 Hazlet Manor Associates, Series 1998, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 5,000,000 3,500,000 Henderson City, KY, Vincent Industrial Plastics, Inc., (SunTrust Bank, Nashville LOC), 4.950%, 2/4/1999 3,500,000 10,560,000 Hunt Club Apartments, Inc., (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 10,560,000 410,000 Illinois Development Finance Authority, Series 1996-B Nimlok Co., Project, (Bank One, Illinois, N.A. LOC), 5.060%, 2/4/1999 410,000 4,500,000 J.P. Plymouth Properties, LLC, Series 1999, (Michigan National Bank, Farmington Hills LOC), 5.200%, 2/3/1999 4,500,000 18,510,000 JFK Family Borrowing, LLP, Series 1997, (First National Bank of Maryland, Baltimore LOC), 4.950%, 2/2/1999 18,510,000 11,080,000 Kendall Health Care Properties, Series 1997, (SunTrust Bank, Miami LOC), 5.050%, 2/3/1999 11,080,000 5,500,000 Kendall Health Care Properties, Series 1998-A, (SunTrust Bank, Miami LOC), 5.050%, 2/3/1999 5,500,000 4,180,000 Kings Creek Country Club, Inc., Series 1997, (First Union National Bank, Charlotte, NC LOC), 5.000%, 2/3/1999 4,180,000 2,400,000 L.H. Kroh, Inc., Series 1998, (First Union National Bank, Charlotte, NC LOC), 5.000%, 2/3/1999 2,400,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued 3 BANKING-CONTINUED $ 157,000,000 2 Liquid Asset Backed Securities Trust, Series 1996-3, (Westdeutsche Landesbank Girozentrale Swap Agreement), 5.020%, 2/16/1999 $ 157,000,000 43,539,263 2 Liquid Asset Backed Securities Trust, Series 1997-1, (Westdeutsche Landesbank Girozentrale Swap Agreement), 5.000%, 2/16/1999 43,539,262 8,500,000 Mack Industries, Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 8,500,000 6,000,000 Maples Industries, Inc., (Regions Bank, Alabama LOC), 4.950%, 2/4/1999 6,000,000 23,000,000 Maryland EDC, Human Genome, Series 1997, (First National Bank of Maryland, Baltimore LOC), 4.950%, 2/2/1999 23,000,000 1,495,000 McClellan Management, Inc., Genoa Health Care Center Project, Series 1999, (Fifth Third Bank of Northwestern OH LOC), 4.970%, 2/4/1999 1,495,000 6,100,000 Medford Convalescent & Nursing Center, Series 1997, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 6,100,000 3,032,000 Midwest Funding Corp., Series 1991-A, Class A-1, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 3,032,000 3,238,000 Midwest Funding Corp., Series 1991-C, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 3,238,000 1,428,000 Midwest Funding Corp., Series 1992-B, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 1,428,000 2,261,000 Midwest Funding Corp., Series 1992-C, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 2,261,000 4,720,000 Miller, James & Deborah, Series 1997, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 4,720,000 10,900,000 Mississippi Business Finance Corp., Choctaw Foods, Inc., (Rabobank Nederland, Utrecht LOC), 4.950%, 2/3/1999 10,900,000 5,800,000 Mississippi Business Finance Corp., Metalloy Project, (Comerica Bank, Detroit, MI LOC), 4.810%, 2/4/1999 5,800,000 17,000,000 Mississippi Business Finance Corp., Series 1994, Georgia Gulf, (Wachovia Bank of NC, N.A., Winston-Salem LOC), 4.890%, 2/3/1999 17,000,000 2,000,000 Mississippi Business Finance Corp., Series 1995, Plantation Pointe, LP Project, (SunTrust Bank, Atlanta LOC), 4.970%, 2/4/1999 2,000,000 13,365,000 North Oaks Partnership, Series 1998, (Lasalle National Bank, Chicago LOC), 5.050%, 2/4/1999 13,365,000 2,175,000 Nova University, Inc. Lease Revenue Bonds, Series 1993, Miami Dolphins Training Facility, (SunTrust Bank, South Florida LOC), 4.950%, 2/3/1999 2,175,000 5,289,000 Oceana County Freezer Storage, Inc., Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 5,289,000 2,145,000 Orangeburg Convalescent Care Center, Inc., Series 1995-A, (PNC Bank, N.A. LOC), 4.938%, 2/1/1999 2,145,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued 3 BANKING-CONTINUED $ 1,920,000 Port Authority of Saint Paul, MN, Bix Fruit Co., Series 1998- B, (U.S. Bank, N.A., Minneapolis LOC), 5.190%, 2/4/1999 $ 1,920,000 3,350,000 Port Authority of Saint Paul, MN, National Checking Co. Project, Series 1998-B, (U.S. Bank, N.A., Minneapolis LOC), 5.090%, 2/4/1999 3,350,000 2,500,000 Poseyville, IN, North American Green, Inc., Series 1998-A, (Harris Trust & Savings Bank, Chicago LOC), 5.050%, 2/4/1999 2,500,000 1,500,000 Poseyville, IN, North American Green, Inc., Series 1998-B, (Harris Trust & Savings Bank, Chicago LOC), 5.050%, 2/4/1999 1,500,000 9,000,000 Primex Funding Corp., Series 1997-A, (Bank One, Indiana, N.A. LOC), 4.910%, 2/4/1999 9,000,000 48,209,093 2 Rabobank Optional Redemption Trust, Series 1997-101, 5.005%, 4/15/1999 48,209,093 2,800,000 Roby Company Ltd. Partnership, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 2,800,000 7,020,000 Roby Company Ltd. Partnership, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 7,020,000 9,000,000 Rollins College, Series 1998, 4.950%, 2/3/1999 9,000,000 11,850,000 Rooker, J.W., (Wachovia Bank of NC, N.A., Winston-Salem LOC), 4.920%, 2/3/1999 11,850,000 2,600,000 San Jose, CA Multifamily Housing Revenue Bonds, Carlton Plaza of San Jose, Series 1998 A-T, (Commerzbank AG, Frankfurt LOC), 4.910%, 2/4/1999 2,600,000 100,000 Scranton Times, LP, (PNC Bank, N.A. LOC), 4.938%, 2/1/1999 100,000 33,000,000 Societe Generale, Paris, 4.883%, 2/1/1999 32,988,625 900,000 Solon, OH, Custom Graphics, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 900,000 2,000,000 Souser Family Ltd. Partnership, Series 1998, (Dauphin Deposit Bank and Trust LOC), 5.000%, 2/3/1999 2,000,000 6,500,000 Special Care Facilities, Daphne AL, Presbyterian Retirement Corp., Series 1998-B, 4.960%, 2/4/1999 6,500,000 3,195,000 Spitzer Group, Series 1996-A, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 3,195,000 1,910,000 Spitzer Group, Series 1996-B, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 1,910,000 14,000,000 Spitzer Group, Series 1998-A, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 14,000,000 11,583,000 Spitzer Group, Series 1998-B, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 11,583,000 6,540,000 Springfield Limited, Series A, (UBS AG LOC), 4.910%, 2/4/1999 6,540,000 2,750,000 Stratford Properties, LP, Series 1998, (First National Bank of Maryland, Baltimore LOC), 5.000%, 2/2/1999 2,750,000 4,715,000 TNT Co., Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.960%, 2/4/1999 4,715,000 46,815,000 Terry Griffin Gate Partners, Ltd., Series 1995, (Bank One, Kentucky LOC), 4.910%, 2/3/1999 46,815,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued 3 BANKING-CONTINUED $ 5,545,000 Van Dyne Crotty Co., Series 1996, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 $ 5,545,000 5,000,000 Van Dyne Crotty Co., Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 5,000,000 3,135,000 Van Wyk Enterprises, Inc., Series 1998-A, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 3,135,000 2,165,000 Van Wyk Enterprises, Inc., Series 1998-B, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 2,165,000 425,000 Van Wyk Enterprises, Inc., Series 1998-C, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 425,000 3,575,000 Van Wyk Enterprises, Inc., Series 1998-D, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 3,575,000 645,000 Van Wyk Enterprises, Inc., Series 1998-E, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 645,000 815,000 Van Wyk Enterprises, Inc., Series 1998-F, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 815,000 1,000,000 Van Wyk, Bruce M., Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 1,000,000 2,569,000 Vista Funding Corp., (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 2,569,000 3,891,000 Vista Funding Corp., Series 1994-A, (Fifth Third Bank of Northwestern, OH LOC), 4.910%, 2/4/1999 3,891,000 1,350,000 Vista Funding Corp., Series 1995-B, (Fifth Third Bank of Northwestern, OH LOC), 4.910%, 2/4/1999 1,350,000 9,430,000 Vista Funding Corp., Series 1995-D, (Fifth Third Bank of Northwestern, OH LOC), 4.910%, 2/4/1999 9,430,000 5,912,000 Vista Funding Corp., Series 1995-E, (Bank One, Ohio, N.A. LOC), 4.910%, 2/4/1999 5,912,000 7,311,000 Vista Funding Corp., Series 1998-B, (Fifth Third Bank of Northwestern, OH LOC), 4.910%, 2/4/1999 7,311,000 4,530,000 Vulcan, Inc., (Amsouth Bank N.A., Birmingham LOC), 5.000%, 2/4/1999 4,530,000 971,431 Wauseon Manor II LP, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 971,431 2,840,000 Wexner Heritage House, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 2,840,000 11,965,000 Whetstone Care Center, LLC, Series 1998, (Fifth Third Bank, Cincinnati LOC), 4.990%, 2/4/1999 11,965,000 3,000,000 White Bear Lake, MN, City of, Series 1993, (Norwest Bank, Minnesota, N.A. LOC), 5.220%, 2/4/1999 3,000,000 16,500,000 William Hill Manor, Inc., Series 1998, (First National Bank of Maryland, Baltimore LOC), 4.950%, 2/2/1999 16,500,000 PRINCIPAL AMOUNT VALUE VARIABLE RATE INSTRUMENTS-continued 3 BANKING-CONTINUED $ 9,750,000 Willow Hill Industries, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 $ 9,750,000 3,425,000 Wood County, OH, IMCO Carbide Tool, Inc. Series 1998, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 3,425,000 2,250,000 YMCA of Central, OH, (Huntington National Bank, Columbus, OH LOC), 4.910%, 2/4/1999 2,250,000 TOTAL 1,142,709,538 ELECTRICAL EQUIPMENT-0.5% 48,363,557 Northwest Airlines, Inc., (Guaranteed by General Electric Co.), 4.938%, 2/1/1999 48,363,557 FINANCE-RETAIL-0.3% 27,300,000 2 Bishop's Gate Residential Mortgage Trust, Series 1998-2, Class A-1, 5.747%, 2/10/1999 27,300,000 INSURANCE-6.7% 15,000,000 Allstate Life Insurance Co., 5.136%, 1/30/1999 15,000,000 50,000,000 First Allmerica Financial Life Insurance Co., 5.090%, 4/16/1999 50,000,000 86,000,000 Jackson National Life Insurance Co., 5.040%, 2/22/1999 86,000,000 58,600,000 Jackson National Life Insurance Co., 5.186%, 1/30/1999 58,600,000 14,000,000 Jackson National Life Insurance Co., 5.310%, 1/30/1999 14,000,000 62,333,573 2 Liquid Asset Backed Securities Trust, Series 1997-3, Senior Notes, (Guaranteed by AMBAC), 5.254%, 3/28/1999 62,333,573 35,000,000 Monumental Life Insurance Company, 5.170%, 2/1/1999 35,000,000 32,000,000 Monumental Life Insurance Company, 5.250%, 2/1/1999 32,000,000 75,000,000 Principal Life Insurance Company, 5.410%, 1/30/1999 75,000,000 15,000,000 Security Life of Denver Insurance Co., 5.028%, 1/30/1999 15,000,000 25,000,000 Security Life of Denver Insurance Co., 5.311%, 1/30/1999 25,000,000 10,000,000 SunAmerica Life Insurance Company, 5.137%, 2/1/1999 10,000,000 70,000,000 Transamerica Life Insurance and Annuity Co., 5.136%, 1/30/1999 70,000,000 20,000,000 Transamerica Occidental Life Insurance Co., 5.525%, 3/6/1999 20,000,000 44,000,000 Travelers Insurance Company, 5.116%, 1/30/1999 44,000,000 TOTAL 611,933,573 TOTAL VARIABLE RATE INSTRUMENTS 1,830,306,668 PRINCIPAL AMOUNT VALUE TIME DEPOSIT-7.2% BANKING-7.2% $ 150,000,000 Chase Manhattan Bank (USA) N.A., Wilmington, 4.813%, 2/1/1999 $ 150,000,000 260,000,000 Deutsche Bank, AG, 4.750% - 4.813%, 2/1/1999 260,000,000 150,000,000 Dresdner Bank AG, Frankfurt, 4.750%, 2/1/1999 150,000,000 72,000,000 Mellon Bank N.A., Pittsburgh, 4.813%, 2/1/1999 72,000,000 25,000,000 Westdeutsche Landesbank Girozentrale, 4.813%, 2/1/1999 25,000,000 TOTAL TIME DEPOSITS 657,000,000 REPURCHASE AGREEMENTS-10.2% 4 116,160,000 Bankers Trust Co., New York, 4.820%, dated 1/29/1999, due 2/1/1999 116,160,000 308,212,000 Bear, Stearns and Co., 4.820%, dated 1/29/1999, due 2/1/1999 308,212,000 57,995,000 HSBC Securities, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 57,995,000 100,395,000 Nationsbanc Montgomery Securities, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 100,395,000 59,895,000 Prudential Securities, Inc., 4.820%, dated 1/29/1999, due 2/1/1999 59,895,000 88,095,000 Societe Generale Securities Corp., 4.730%, dated 1/29/1999, due 2/1/1999 88,095,000 149,895,000 Toronto Dominion Securities (USA) Inc., 4.730%, dated 1/29/1999, due 2/1/1999 149,895,000 50,000,000 Warburg Dillon Reed LLC, 4.690%, dated 1/29/1999, due 2/1/1999 50,000,000 TOTAL REPURCHASE AGREEMENTS 930,647,000 TOTAL INVESTMENTS (AT AMORTIZED COST) 5 $ 9,402,450,725
1 Each issue shows the rate of discount at the time of purchase for discount issues, or the coupon for interest bearing issues. 2 Denotes a restricted security which is subject to restrictions on resale under Federal Securities laws. At January 31, 1999, these securities amounted to $493,404,021 which represents 5.4% of net assets. 3 Current rate and next reset date shown. 4 The repurchase agreements are fully collateralized by U.S. government and/or agency obligations based on market prices at the date of the portfolio. The investments in the repurchase agreements are through participation in joint accounts with other Federated funds. 5 Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($9,176,246,798) at January 31, 1999. The following acronyms are used throughout this portfolio: AMBAC -American Municipal Bond Assurance Corporation EDC -Economic Development Commission FSA -Financial Security Assurance GTD -Guaranteed IDA -Industrial Development Authority LOC -Letter of Credit MBIA -Municipal Bond Investors Assurance SA -Support Agreement See Notes which are an integral part of the Financial Statements Statement of Assets and Liabilities January 31, 1999 (Unaudited) ASSETS: Investments in repurchase agreements $ 930,647,000 Investments in securities 8,471,803,725 Total investments, at amortized cost and value $ 9,402,450,725 Income receivable 38,226,867 Receivable for shares sold 142,079 Prepaid expenses 43,604 TOTAL ASSETS 9,440,863,275 LIABILITIES: Payable for investments purchased 10,126,663 Payable for shares redeemed 11,273 Income distribution payable 38,441,017 Payable to Bank 215,025,203 Accrued expenses 1,012,321 TOTAL LIABILITIES 264,616,477 Net assets for 9,176,246,798 shares outstanding $ 9,176,246,798 NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE INSTITUTIONAL SHARES: $5,458,771,224 / 5,458,771,224 shares outstanding $1.00 INSTITUTIONAL SERVICE SHARES: $3,717,475,574 / 3,717,475,574 shares outstanding $1.00
See Notes which are an integral part of the Financial Statements Statement of Operations Six Months Ended January 31, 1999 (Unaudited) INVESTMENT INCOME: Interest $ 240,027,467 EXPENSES: Investment advisory fee $ 8,906,595 Administrative personnel and services fee 3,357,787 Custodian fees 222,665 Transfer and dividend disbursing agent fees and expenses 178,132 Directors'/Trustees' fees 25,215 Auditing fees 6,664 Legal fees 11,936 Portfolio accounting fees 316,185 Shareholder services fee-Institutional Shares 6,352,125 Shareholder services fee-Institutional Service Shares 4,784,434 Share registration costs 261,872 Printing and postage 49,076 Insurance premiums 334,652 Miscellaneous 22,349 TOTAL EXPENSES 24,829,687 WAIVERS: Waiver of investment advisory fee $ (4,590,588) Waiver of shareholder services fee-Institutional Shares (6,352,125) TOTAL WAIVERS (10,942,713) Net expenses 13,886,974 Net investment income $ 226,140,493
See Notes which are an integral part of the Financial Statements Statement of Changes in Net Assets
SIX MONTHS ENDED (unaudited) YEAR ENDED JANUARY 31, JULY 31, 1999 1998 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 226,140,493 $ 385,514,759 DISTRIBUTIONS TO SHAREHOLDERS: Distributions from net investment income Institutional Shares (131,144,743) (219,104,923) Institutional Service Shares (94,995,750) (166,409,836) CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (226,140,493) (385,514,759) SHARE TRANSACTIONS: Proceeds from sale of shares 59,934,410,893 81,194,972,477 Net asset value of shares issued to shareholders in payment of distributions declared 49,510,001 107,652,252 Cost of shares redeemed (58,256,235,523) (79,679,142,681) CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 1,727,685,371 1,623,482,048 Change in net assets 1,727,685,371 1,623,482,048 NET ASSETS: Beginning of period 7,448,561,427 5,825,079,379 End of period $ 9,176,246,798 $ 7,448,561,427
See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Shares (For a Share Outstanding throughout each Period)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1994 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.03 0.05 0.05 0.05 0.06 0.03 LESS DISTRIBUTIONS: Distributions from net investment income (0.03) (0.05) (0.05) (0.05) (0.06) (0.03) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 1 2.65% 5.64% 5.45% 5.58% 5.65% 3.47% RATIOS TO AVERAGE NET ASSETS: Expenses 0.20% 2 0.20% 0.20% 0.20% 0.20% 0.20% Net investment income 5.16% 2 5.51% 5.35% 5.43% 5.60% 3.47% Expense waiver/reimbursement 3 0.35% 2 0.35% 0.36% 0.36% 0.38% 0.14% SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $5,458,771 $3,980,339 $3,588,082 $3,032,602 $2,457,797 $1,250,979
1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 2 Computed on an annualized basis. 3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Service Shares (For a Share Outstanding throughout each Period)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1994 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.05 0.05 0.05 0.05 0.003 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.05) (0.05) (0.05) (0.05) (0.003) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.52% 5.37% 5.19% 5.32% 5.38% 0.30% RATIOS TO AVERAGE NET ASSETS: Expenses 0.45% 3 0.45% 0.45% 0.45% 0.45% 0.34% 3 Net investment income 4.96% 3 5.24% 5.11% 5.13% 5.66% 4.68% 3 Expense waiver/reimbursement 4 0.10% 3 0.10% 0.11% 0.11% 0.13% 0.14% 3 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $3,717,476 $3,468,222 $2,236,997 $1,297,019 $500,954 $9,387
1 Reflects operations for the period from July 5, 1994 (date of initial public offering) to July 31, 1994. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Notes to Financial Statements JANUARY 31, 1999 (UNAUDITED) ORGANIZATION Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Prime Obligations Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide current income consistent with stability of principal. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATIONS The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act. REPURCHASE AGREEMENTS It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement transaction. The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Board of Trustees (the "Trustees"). Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex-dividend date. FEDERAL TAXES It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provisions for federal tax are necessary. At July 31, 1998, the Fund, for federal tax purposes, had a capital loss carryforward of $3,342, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire as follows: EXPIRATION YEAR EXPIRATION AMOUNT 2006 $3,342 Additionally, net capital losses of $9,477 attributable to security transactions incurred after October 31, 1997, are treated as arising on the first day of the Fund's next taxable year. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when- issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. RESTRICTED SECURITIES Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration. In some cases, the restricted securities may be resold without registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Trustees. The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act. Additional information on each restricted security held at January 31, 1999 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST Beta Finance, Inc., 5.130% 10/16/1998 $50,000,000 Beta Finance, Inc., 5.250% 1/14/1999 25,024,301 Beta Finance, Inc., 5.690% 2/24/1998 20,000,000 Beta Finance, Inc., 5.790% 4/1/1998 59,994,000 Bishop's Gate Residential Mortgage Trust 1998-2, Class A-1 12/4/1998 27,300,000 Liquid Asset Backed Securities Trust, Series 1996-3 8/15/1996 157,000,000 Liquid Asset Backed Securities Trust, Series 1997-1 2/19/1997 43,539,262 Liquid Asset Backed Securities Trust, Series 1997-3 6/27/1997 62,333,573 Rabobank Optional Redemption Trust, Series 1997-101 4/17/1997 - 4/17/1999 48,209,093
USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated. OTHER Investment transactions are accounted for on the trade date. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At January 31, 1999, capital paid-in aggregated $9,176,246,798. Transactions in shares were as follows:
SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SHARES: Shares sold 46,288,195,081 55,022,265,485 Shares issued to shareholders in payment of distributions declared 30,708,848 69,275,080 Shares redeemed (44,840,471,892) (54,699,283,688) NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS 1,478,432,037 392,256,877 SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SERVICE SHARES: Shares sold 13,646,215,812 26,172,706,992 Shares issued to shareholders in payment of distributions declared 18,801,153 38,377,172 Shares redeemed (13,415,763,631) (24,979,858,993) NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS 249,253,334 1,231,225,171 NET CHANGE RESULTING FROM SHARE TRANSACTIONS 1,727,685,371 1,623,482,048
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE Federated Management, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.20% of the Fund's average daily net assets. The Adviser may voluntary choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. ADMINISTRATIVE FEE Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on the level of average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors Inc. for the period. The administrative fee received during the period of the Administrative Services Agreement shall be at least $125,000 per portfolio and $30,000 per each additional class of shares. SHAREHOLDER SERVICES FEE Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion. TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders. PORTFOLIO ACCOUNTING FEES FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. GENERAL Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. YEAR 2000 Similar to other financial organizations, the Fund could be adversely affected if the computer systems used by the Fund's service providers do not properly process and calculate date-related information and data from and after January 1, 2000. The Fund's Adviser and administrator are taking measures that they believe are reasonably designed to address the Year 2000 issue with respect to computer systems that they use and to obtain reasonable assurances that comparable steps are being taken by each of the Fund's other service providers. At this time, however, there can be no assurance that these steps will be sufficient to avoid any adverse impact to the Fund. SUBSEQUENT EVENT Effective March 31, 1999, Federated Management, Adviser to the Fund, merged into Federated Investment Management Company (formerly, Federated Advisers). Directors JOHN F. DONAHUE THOMAS G. BIGLEY JOHN T. CONROY, JR. WILLIAM J. COPELAND JOHN F. CUNNINGHAM J. CHRISTOPHER DONAHUE LAWRENCE D. ELLIS, M.D. PETER E. MADDEN CHARLES F. MANSFIELD, JR. JOHN E. MURRAY, JR., J.D., S.J.D. MARJORIE P. SMUTS JOHN S. WALSH Officers JOHN F. DONAHUE Chairman J. CHRISTOPHER DONAHUE President EDWARD C. GONZALES Executive Vice President JOHN W. MCGONIGLE Executive Vice President and Secretary RICHARD B. FISHER Vice President RICHARD J. THOMAS Treasurer ANTHONY R. BOSCH Assistant Secretary Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so. This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses, and other information. SEMI-ANNUAL REPORT [Graphic] Prime Obligations Fund SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1999 [Graphic] Prime Obligations Fund Federated Investors Funds 5800 Corporate Drive Pittsburgh, PA 15237-7000 1-800-341-7400 WWW.FEDERATEDINVESTORS.COM Federated Securities Corp., Distributor Cusip 60934N203 Cusip 60934N708 1022002 (3/99) [Graphic] SEMI-ANNUAL REPORT President's Message Dear Shareholder: I am pleased to present the Semi-Annual Report to Shareholders for Tax-Free Obligations Fund, a portfolio of Money Market Obligations Trust. This report covers the first half of the fund's fiscal year, which is the six-month period ended January 31, 1999. It begins with an investment review of the short-term tax-free market from the fund's portfolio manager. Following the investment review are the fund's portfolio of municipal bond investments and financial statements. In Tax-Free Obligations Fund, your cash is at work pursuing daily income, free of federal income tax 1-along with the additional advantages of daily liquidity and stability of principal2-by investing in short-term securities issued by municipalities across the United States. Over the six-month reporting period, tax-free dividends paid to shareholders of Institutional Shares and Institutional Service Shares each totaled $0.02 per share. The 30-day net yield for Institutional Shares on the last day of the reporting period was 3.02%. 3 This is equivalent to taxable yields of 4.37%, 4.71%, and 5.00% for investors in the 31%, 36%, and 39.6% federal tax brackets, respectively. The 30-day net yield for Institutional Service Shares on the last day of the reporting period was 2.77%. 3 This is equivalent to taxable yields of 4.01%, 4.32%, and 4.58% for investors in the 31%, 36%, and 39.6% federal tax brackets, respectively. The 7-day net yields on the last day of the reporting period for Institutional Shares and Institutional Service Shares were 2.81% and 2.56%, respectively. 3 At the end of the period, net assets surpassed the $3.6 billion mark. Thank you for your confidence in the daily earning power of Tax-Free Obligations Fund. Your questions and comments are always welcome. Sincerely, [Graphic] J. Christopher Donahue President March 15, 1999 1 Income may be subject to the federal alternative minimum tax. 2 An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 3 Performance quoted represents past performance and is not indicative of future results. Yield will vary. Yields quoted for money market funds most closely reflect the fund's current earnings. Investment Review Tax-Free Obligations Fund invests in high-quality, short-term, tax-exempt debt securities and seeks to maintain a stable net asset value of $1.00. The Fund is rated AAA 1 by Fitch IBCA, Inc. ("Fitch"). For the six-month reporting period, the Fund's net assets increased from $3.22 billion to $3.67 billion. As of January 31, 1999, the average maturity of the Fund was 42 days. There were two central themes in the short-term money markets over the reporting period ended January 31, 1999. First, the economy continued to grow at a robust pace, with gross domestic product expanding in the third and fourth quarters of 1998 at 3.70% and 6.10%, respectively, and all indications that this same strength had spilled over into 1999. Although the manufacturing sector was soft, the housing and retail sectors continued to propel the economy forward. While this growth rate is in excess of what has traditionally been viewed to be the non-inflationary potential of the economy, inflation nevertheless remained benign, perhaps reflecting advances in productivity that have enabled growth to be achieved without upward pressure on prices. Under normal circumstances, however, the growth trajectory of the economy would have been sufficient to make Federal Reserve Board ("Fed") officials concerned about the inflationary threat that could result from such above-trend growth. Circumstances were not normal, however, as economic crises in countries overseas and in Latin America were the second, and ultimately more dominant, theme over the reporting period. In August 1998, the economic troubles in Asia spread to encompass Russia and then Latin America. As fears that the United States could not continue to be immune from what had become a global economic crisis weighed heavily on the U.S. equity market, investors both domestic and abroad fled to the perceived safety of the U.S. Treasury market. Yields on U.S. Treasury securities were driven sharply downward, as investors shunned credit-sensitive markets in favor of the safe haven of U.S. Treasuries, and a credit/liquidity crisis in the U.S. financial markets became evident. Faced with this scenario, the Fed voted to ease monetary policy by 25 basis points, bringing the federal funds target rate down to 5.25%, in late September in an attempt to calm investor fears. Market participants viewed this move to be too tentative, however, and it was not until the Fed took two additional easing steps in mid-October and November, bringing the federal funds target rate to 4.75%, that some semblance of calm returned to the markets. Credit spreads narrowed over this period, albeit not back to levels that pre-dated the crisis. 1 Fitch's money market fund ratings are an assessment of the safety of invested principal and the ability to maintain a stable market value of the fund's shares. Ratings are based on an evaluation of several factors, including credit quality, diversification, and maturity of assets in the portfolio, as well as management strength and operational capabilities. This rating, however, is subject to change and does not remove market risks. Movements in short-term interest rates reflected the turbulent economic conditions early in the reporting period, followed by the relative tranquillity of the markets once the Fed moves had their desired effect. The yield on the one-year Treasury bill began the reporting period at 5.40%, but was driven downward by the onslaught of investors-both domestic and abroad-seeking a safe haven from the world economic uncertainty and the instability of the U.S. equity market. The yield on this security reached a low of 3.85% by mid-October. As the additional easing steps by the Fed calmed investors, the yield on this security rose moderately to 4.60% by early November. Although the Fed took one additional easing step in mid- November, the yield on this security traded within a relatively narrow range of 4.40% to 4.60% for the remainder of the reporting period. In addition to economic fundamentals, short-term municipal securities were strongly influenced by technical factors over this period, notably at the end of the summer note issuance season and at year-end cash flows. Variable rate demand notes (VRDNs), which comprise more than 50% of the fund's net assets, started the period in the 3.60% range, but moved sharply higher in September to above 4.00% as supply and demand imbalances occurred. Yields then declined in October before rising to the 4.00% range in the last months of the year due to traditional year-end selling pressures. In early January 1999, as participants looked to reinvest large coupon payments and heavy cash inflows, VRDNs yields fell sharply and ended the reporting period at rich levels below 3.00%. Over the six-month reporting period, VRDN yields averaged roughly 67% of taxable rates making them attractive for investors at the 35% or higher federal tax brackets. Municipal one-year, fixed-rate note prices rallied along with treasuries but suffered from a lack of supply as yields fell over the reporting period from 3.60% to 2.90%. In this environment, VRDNs were the preferred investment, outperforming newly issued fixed-rate notes on an income basis over most of the reporting period. The average maturity of the fund moved lower over the reporting period, reflecting this relative value decision and municipal supply/demand factors. Overall, the average maturity target range for the fund was 40 to 55 days over the reporting period. The fund's structure remained barbelled, with a significant position in seven-day VRDNs combined with purchases of municipal notes with 6- to 12- month maturities. As the U.S. economy continues to chug along seemingly unaffected by the countries around it, we would expect monetary policy to remain unchanged in upcoming months, barring an economic collapse in one of our major trading counterparts. However, changing economic and market developments are continuously monitored to best serve our clients attracted to the short-term, tax-exempt market. Portfolio of Investments JANUARY 31, 1999 (UNAUDITED)
PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-99.1% 1 ALABAMA-2.7% $ 3,770,000 Alabama HFA, 1995 Series E Weekly VRDNs (Royal Gardens Apartments Project)/(SouthTrust Bank of Alabama, Birmingham LOC) $ 3,770,000 2,570,000 Alabama State Docks Department, 5.25% Bonds (MBIA INS), 10/1/1999 2,604,920 7,215,000 Anniston, AL, IDB, (Series 1989-A) Weekly VRDNs (Union Foundry Co.)/(Amsouth Bank N.A., Birmingham LOC) 7,215,000 4,440,000 Birmingham, AL IDA, Revenue Refunding Bonds Weekly VRDNs (S.P. Hotel Company)/(Amsouth Bank N.A., Birmingham LOC) 4,440,000 3,500,000 Birmingham, AL Medical Clinic Board, Medical Clinic Revenue Bonds (Series 1996) Weekly VRDNs (St. Martin's In The Pines)/(Regions Bank, Alabama LOC) 3,500,000 2,995,000 Birmingham, AL Special Care Facilities Financing Authority, Capital Improvement Revenue Bonds (Series 1995) Weekly VRDNs (Methodist Home for the Aging (AL))/(SouthTrust Bank of Alabama, Birmingham LOC) 2,995,000 3,000,000 Columbia, AL IDB, CDC Municipal Products, Inc. (Series 1997I) Weekly VRDNs (Alabama Power Co.)/(AMBAC INS)/(CDC Municipal Products, Inc. LIQ) 3,000,000 3,000,000 Decatur, AL IDB, Revenue Refunding Bonds (Series 1993) Weekly VRDNs (Allied-Signal, Inc.) 3,000,000 3,300,000 Homewood, AL IDA Weekly VRDNs (Mountain Brook Inn (Homewood AL))/(SouthTrust Bank of Alabama, Birmingham LOC) 3,300,000 4,000,000 Hoover, AL Board of Education, Warrant Anticipation Notes (Series 1998-A), 3.80% BANs, 2/1/1999 4,000,000 30,000,000 Jefferson County, AL, (Series A), 3.45% Warrants (Bayerische Landesbank Girozentrale LOC), 10/1/1999 30,000,000 1,000,000 Jefferson County, AL, GO Warrants (Series 1996) Weekly VRDNs (Bayerische Landesbank Girozentrale LOC) 1,000,000 1,965,000 Madison, AL IDA, (Series A) Weekly VRDNs (Executive Inn)/(Amsouth Bank N.A., Birmingham LOC) 1,965,000 6,570,000 Marshall County, AL, Special Obligation School Refunding Warrant (Series 1994) Weekly VRDNs (Marshall County, AL Board of Education)/(Regions Bank, Alabama LOC) 6,570,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 ALABAMA-CONTINUED $ 2,500,000 Mobile, AL IDA Weekly VRDNs (McRae's Industries, Inc.)/(Nationsbank, N.A., Charlotte LOC) $ 2,500,000 500,000 Mobile, AL IDB, PCR (Series 1993A) Weekly VRDNs (Alabama Power Co.)/(Alabama Power Co. GTD) 500,000 1,000,000 Mobile, AL IDB, Pollution Control Refunding Revenue Bonds, (Series 1992) Weekly VRDNs (Air Products & Chemicals, Inc.)/(Air Products & Chemicals, Inc. GTD) 1,000,000 400,000 Montgomery, AL IDB, (Series 1988A) Weekly VRDNs (Smith Industries)/(SunTrust Bank, Atlanta LOC) 400,000 11,000,000 Montgomery, AL IDB, Pollution Control & Solid Disposal Revenue, 2.80% CP (General Electric Co.), Mandatory Tender 2/4/1999 11,000,000 580,000 Tuscaloosa, AL IDB, Revenue Refunding Bonds (Series 1994) Weekly VRDNs (Harco, Inc.)/(Amsouth Bank N.A., Birmingham LOC) 580,000 4,695,000 Vincent, AL IDB Weekly VRDNs (Headquarters Partnership Project)/(National Australia Bank, Ltd., Melbourne LOC) 4,695,000 TOTAL 98,034,920 ALASKA-1.0% 14,300,000 Alaska International Airports System, (Series 1998A), 4.36% BANs, 4/1/1999 14,307,925 7,730,000 Alaska State Housing Finance Corp., PT-37 Daily VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 7,730,000 4,185,000 Alaska State Housing Finance Corp., General Mortgage Revenue Bonds (Series F) Weekly VRDNs (Bank of America NT and SA, San Francisco LIQ) 4,185,000 7,205,000 2 Alaska State Housing Finance Corp., PT-202, 3.70% TOBs (Bayerische Hypotheken-und Vereinsbank AG LIQ), Optional Tender 5/20/1999 7,205,000 2,600,000 Valdez, AK Marine Terminal, Revenue Bonds Daily VRDNs (Exxon Pipeline Co. Project) 2,600,000 TOTAL 36,027,925 ARIZONA-1.5% 1,000,000 Apache County, AZ IDA, 1983 (Series A) Weekly VRDNs (Tucson Electric Power Co.)/(Toronto-Dominion Bank LOC) 1,000,000 15,000,000 Arizona Agricultural Improvement & Power District, 3.20% CP (Salt River Project, AZ Agricultural Improvement & Power District), Mandatory Tender 2/18/1999 15,000,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 ARIZONA-CONTINUED $ 3,100,000 Arizona Health Facilities Authority Weekly VRDNs (University Physicians, Inc.)/(Bank One, Arizona N.A. LOC) $ 3,100,000 5,800,000 Arizona Health Facilities Authority, Pooled Loan Program Revenue Bonds (Series 1985B) Weekly VRDNs (FGIC INS)/(Chase Manhattan Bank N.A., New York and Chemical Bank, New York LIQs) 5,800,000 5,000,000 Chandler, AZ IDA Weekly VRDNs (SMP II Limited Partnership)/(Bank One, Arizona N.A. LOC) 5,000,000 3,570,000 Gila County, AZ IDA Weekly VRDNs (Cobre Valley Hospital)/(Bank One, Arizona N.A. LOC) 3,570,000 4,680,000 Glendale, AZ IDA, Variable Rate Senior Living Facilities Revenue Bonds Weekly VRDNs (Friendship Retirement Corporation)/(Norwest Bank Minnesota, N.A. LOC) 4,680,000 1,500,000 Maricopa County, AZ Pollution Control Corp., (Series 1984) Weekly VRDNs (El Paso Electric Co.)/(Barclays Bank PLC, London LOC) 1,500,000 1,200,000 Phoenix, AZ IDA, (Series 1984) Weekly VRDNs (Del Mar Terrace Apartments)/(Bank of America NT and SA, San Francisco LOC) 1,200,000 1,700,000 Pima County, AZ IDA Weekly VRDNs (Tucson Electric Power Co.)/(Toronto-Dominion Bank LOC) 1,700,000 3,650,000 Pinal County, AZ IDA, PCR Bonds Daily VRDNs (Magma Copper Co.)/(National Westminster Bank, PLC, London LOC) 3,650,000 1,000,000 Scottsdale, AZ IDA Weekly VRDNs (Scottsdale (Memorial Hospitals))/(AMBAC INS)/(Credit Local de France LIQ) 1,000,000 8,060,000 Tolleson, AZ Municipal Finance Corporation, Revenue Refunding Bonds (Series 1998) Weekly VRDNs (Citizens Utilities Co.) 8,060,000 TOTAL 55,260,000 ARKANSAS-0.0% 1,000,000 Sheridan, AR IDA, (Series A) Weekly VRDNs (H.H. Robertson Co.)/(PNC Bank, N.A. LOC) 1,000,000 CALIFORNIA-7.4% 6,000,000 Acalanes, CA Union High School District, 3.90% TRANs, 6/30/1999 6,004,716 11,000,000 California Community College Financing Authority, Trust Receipts (Series 1998 FR/RI-A24) Weekly VRDNs (FSA INS)/(Bank of New York, New York LIQ) 11,000,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 CALIFORNIA-CONTINUED $ 82,175,000 California Public Capital Improvements Financing Authority, Trust Receipts (Series 1996 FR-3) Weekly VRDNs (MBIA INS)/(Bank of New York, New York LIQ) $ 82,175,000 14,000,000 California State, Floater Certificates (Series 1998-55) Weekly VRDNs (FGIC INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) 14,000,000 26,000,000 California Statewide Communities Development Authority, Trust Receipts (Series FR/RI-A23) Weekly VRDNs (FSA INS)/ (Bank of New York, New York LIQ) 26,000,000 25,000,000 Los Angeles County, CA, (Series A), 4.50% TRANs, 6/30/1999 25,081,582 59,800,000 Los Angeles, CA Unified School District, Trust Receipts (Series FR/RI-A26) Weekly VRDNs (Bank of New York, New York LIQ) 59,800,000 9,600,000 Northern California Transmission Agency, Trust Receipts (Series 1998 FR/RI-16) Weekly VRDNs (California-Oregon Transmission Project)/(MBIA INS)/(Bank of New York, New York LIQ) 9,600,000 1,000,000 San Diego, CA Area Local Governments, Trust Receipts (Series FR/RI-A25) Weekly VRDNs (Bank of New York, New York LIQ) 1,000,000 10,000,000 San Francisco, CA City & County Airport Commission, Floater Certificates (Series 1998-31) Weekly VRDNs (FGIC INS)/ (Bank of America NT and SA, San Francisco LIQ) 10,000,000 7,500,000 San Mateo, CA Union High School District, 3.90% TRANs, 6/30/1999 7,505,895 4,000,000 Santa Barbara County, CA Schools Financing Authority, 4.50% TRANs, 6/30/1999 4,013,066 9,575,000 Stanislaus County, CA Office of Education, 4.50% TRANs, 7/30/1999 9,613,422 5,000,000 Sunnyvale, CA Elementary School District, 3.90% TRANs, 6/30/1999 5,003,930 TOTAL 270,797,611 COLORADO-1.1% 3,900,000 Colorado Health Facilities Authority, (Series 1998c-1) Weekly VRDNs (Developmental Disabilities Center)/(Bank One, Colorado LOC) 3,900,000 2,475,000 Denver (City & County), CO, 3.60% TOBs (Blake Street Compendium)/(Norwest Bank Minnesota, N.A. LOC), Mandatory Tender 12/15/1999 2,475,000 14,660,000 Denver (City & County), CO, Merlot (Series 1997E) Weekly VRDNs (Department of Aviation Airport System)/(MBIA INS)/ (First Union National Bank, Charlotte, N.C. LIQ) 14,660,000 19,000,000 Denver (City & County), CO, Trust Reciepts, Series 1998 (Series FR/RI-13) Weekly VRDNs (MBIA INS)/(Bank of New York, New York LIQ) 19,000,000 TOTAL 40,035,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 CONNECTICUT-0.5% $ 8,000,000 Connecticut State HEFA, (Series B) Weekly VRDNs (Edgehill)/(Paribas, Paris LOC) $ 8,000,000 4,000,000 2 Connecticut State HFA, Variable Rate Certificates (Series 1998S), 3.50% TOBs (Bank of America NT and SA, San Francisco LIQ), Optional Tender 8/20/1999 4,000,000 6,530,000 Connecticut State Transportation Infrastructure Authority Weekly VRDNs (Commerzbank AG, Frankfurt LOC) 6,530,000 TOTAL 18,530,000 DISTRICT OF COLUMBIA-1.5% 2,070,000 District of Columbia Housing Finance Agency, Multifamily Housing, 3.85% TOBs (Chastleton Project)/(Nationsbank, N.A., Charlotte LOC), Optional Tender 7/1/1999 2,070,000 8,430,000 District of Columbia, (Series A) Weekly VRDNs (American University)/(National Westminster Bank, PLC, London LOC) 8,430,000 3,575,000 District of Columbia, Revenue Bonds (Series 1997B) Weekly VRDNs (Association of American Medical Colleges)/(AMBAC INS)/(Chase Manhattan Bank N.A., New York LIQ) 3,575,000 39,850,000 District of Columbia, Trust Receipts (Series 1998 FR/RI-A14) Weekly VRDNs (MBIA INS)/(National Westminster Bank, PLC, London LIQ) 39,850,000 TOTAL 53,925,000 FLORIDA-8.8% 15,000,000 ABN AMRO MuniTOPS Certificates Trust (Florida Non-AMT) Series 1998-8 Weekly VRDNs (Dade County, FL Water & Sewer System)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) 15,000,000 3,000,000 ABN AMRO MuniTOPS Certificates Trust (Florida Non-AMT) Series 1998-9 Weekly VRDNs (Florida State Board of Education Capital Outlay)/(FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) 3,000,000 6,600,000 Broward County, FL HFA, (Series 1997) Weekly VRDNs (Jacaranda Village Apartments)/(Marine Midland Bank N.A., Buffalo, NY LOC) 6,600,000 20,000,000 Collier County, FL School District, 4.00% RANs, 4/30/1999 20,010,202 3,600,000 Dade County, FL IDA, (Series 1985C) Weekly VRDNs (Dolphins Stadium)/(Societe Generale, Paris LOC) 3,600,000 5,100,000 Dade County, FL IDA, (Series 1985D) Weekly VRDNs (Dolphins Stadium)/(Societe Generale, Paris LOC) 5,100,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 FLORIDA-CONTINUED $ 9,580,000 Eustis Health Facilities Authority, FL, Health Facilities Revenue Bonds, (Series 1992) Weekly VRDNs (Florida Hospital/Waterman, Inc. Project)/(SunTrust Bank, Central Florida LOC) $ 9,580,000 7,000,000 Florida HFA, Multifamily Housing Revenue Bonds (1985 Series SS) Weekly VRDNs (Woodlands Apartments)/(Northern Trust Co., Chicago, IL LOC) 7,000,000 5,120,000 Florida State Board of Education Administration, (CR55), (Series 1989A), 3.45% TOBs (Citibank N.A., New York LIQ), Optional Tender 3/1/1999 5,120,000 34,275,000 Florida State Board of Education Capital Outlay, (Series 1998-32) Weekly VRDNs (Florida State)/(Bank of America NT and SA, San Francisco LIQ) 34,275,000 20,450,000 Florida State Department of Environmental Protection, Trust Receipts FR/RI-A18 (Series 1998) Weekly VRDNs (FGIC INS)/(National Westminster Bank, PLC, London LIQ) 20,450,000 5,400,000 Gulf Breeze, FL, Floating Rate Demand Revenue Bonds (Series 1985 B) Weekly VRDNs (FGIC INS)/(Credit Local de France LIQ) 5,400,000 17,195,000 Gulf Breeze, FL, Variable Rate Demand Revenue Bonds (Series 1995A) Weekly VRDNs (Florida Municipal Bond Fund)/(Nationsbank, N.A., Charlotte LOC) 17,195,000 2,650,000 Halifax Hospital Medical Center, FL, 4.00% TANs (Nationsbank, N.A., Charlotte LOC), 4/15/1999 2,651,786 46,200,000 Highlands County, FL Health Facilities, (Series 1996A Accounts Receivable) Weekly VRDNs (Adventist Health System)/(CAPMAC Holdings, Inc. INS)/(First National Bank of Chicago LIQ) 46,200,000 29,800,000 Highlands County, FL Health Facilities, Variable Rate Demand Revenue Bonds (Series 1996A) Weekly VRDNs (Adventist Health System)/(SunTrust Bank, Central Florida LOC) 29,800,000 7,000,000 Indian River County, FL Hospital District, (Series 1985) Weekly VRDNs (KBC Bank N.V., Brussels LOC) 7,000,000 7,570,000 Jacksonville Transportation Authority, PA-146 Weekly VRDNs (Florida State)/(Merrill Lynch Capital Services, Inc. LIQ) 7,570,000 9,000,000 Jacksonville, FL Electric Authority, Class A Certificates (Series 1997-2) Weekly VRDNs (Bank of New York, New York LIQ) 9,000,000 10,800,000 Jacksonville, FL, 2.80% CP (Bayerische Landesbank Girozentrale, Credit Suisse First Boston, Morgan Guaranty Trust Co., New York and SunTrust Bank, Miami LOCs), Mandatory Tender 2/1/1999 10,800,000 2,580,000 Lee County, FL IDA, (Series 1985) Weekly VRDNs (Christian & Missionary Alliance Foundation)/(Paribas, Paris LOC) 2,580,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 FLORIDA-CONTINUED $ 80,000 Manatee County, FL HFA Weekly VRDNs (Carriage Club)/(Mellon Bank N.A., Pittsburgh LOC) $ 80,000 6,025,000 Manatee County, FL HFA, Weekly Adjustable/Fixed Rate Multifamily Housing Revenue Refunding Bonds (1990 Series A) Weekly VRDNs (Harbour Pointe)/(Marine Midland Bank N.A., Buffalo, NY LOC) 6,025,000 4,700,000 Miami, FL Health Facilities Authority, Health Facilities Revenue Bonds (Series 1992) Weekly VRDNs (Miami Jewish Home and Hospital for the Aged, Inc.)/(SunTrust Bank, Miami LOC) 4,700,000 5,000,000 Orange County, FL Educational Facilities Authority, (Series 1998) Weekly VRDNs (Rollins College)/(Nationsbank, N.A., Charlotte LOC) 5,000,000 5,525,000 Polk County, FL IDA, PCR Refunding Bonds Weekly VRDNs (IMC Fertilizer, Inc. Project)/(Rabobank Nederland, Utrecht LOC) 5,525,000 3,975,000 Putnam County, FL Development Authority, PCR Bonds (Pooled Series 1984S) Weekly VRDNs (Seminole Electric Cooperative, Inc. (FL))/(National Rural Utilities Cooperative Finance Corp. LOC) 3,975,000 8,150,000 Putnam County, FL Development Authority, PCR Bonds (Series 1984H) Weekly VRDNs (Seminole Electric Cooperative, Inc. (FL))/(National Rural Utilities Cooperative Finance Corp. LOC) 8,150,000 7,245,000 St. Lucie County, FL, IDR Bonds (Series 1985) Weekly VRDNs (Savannahs Hospital)/(Nationsbank, N.A., Charlotte LOC) 7,245,000 7,000,000 Tampa, FL, Occupational License Tax Bonds (Series 1996A) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) 7,000,000 5,835,000 Volusia County, FL HFA Weekly VRDNs (Fisherman's Landing)/(Mellon Bank N.A., Pittsburgh LOC) 5,835,000 TOTAL 321,466,988 GEORGIA-2.1% 7,500,000 Atlanta, GA, Urban Residential Finance Authority, Multifamily Rental Housing Revenue Refunding Bonds (Series 1988A) Weekly VRDNs (West Paces Club Towers Project)/(Societe Generale, Paris LOC) 7,500,000 8,000,000 2 Bibb County, GA, PT-199, 3.70% TOBs (Georgia State GTD)/(Bayerische Hypotheken-und Vereinsbank AG LIQ), Optional Tender 5/20/1999 8,000,000 14,600,000 Burke County, GA Development Authority, (8th Series) Daily VRDNs (Georgia Power Co.) 14,600,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 GEORGIA-CONTINUED $ 16,000,000 Burke County, GA Development Authority, PCRB's (Series 1998A), 3.05% CP (Oglethorpe Power Corp. Vogtle Project)/(AMBAC INS)/(Rabobank Nederland, Utrecht LIQ), Mandatory Tender 2/17/1999 $ 16,000,000 2,000,000 Clayton County, GA Housing Authority, Revenue Refunding Bonds (Series 1992) Weekly VRDNs (Oxford Townhomes Project)/(Amsouth Bank N.A., Birmingham LOC) 2,000,000 10,000,000 Clayton County, GA, (Series 1998), 4.25% Bonds, 8/1/1999 10,024,004 1,400,000 De Kalb County, GA Development Authority, (Series 1992) Weekly VRDNs (American Cancer Society, GA)/(SunTrust Bank, Atlanta LOC) 1,400,000 12,145,000 Georgia State, (Series 1995C) PA-249 Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 12,145,000 6,000,000 Rockdale County, GA Hospital Authority, Revenue Anticipation Certificates (Series 1994) Weekly VRDNs (Rockdale Hospital)/(SunTrust Bank, Atlanta LOC) 6,000,000 TOTAL 77,669,004 IDAHO-0.3% 10,000,000 Idaho Health Facilities Authority, (Series 1995), 3.25% CP (Holy Cross Health System Corp.)/(Morgan Guaranty Trust Co., New York LIQ), Mandatory Tender 2/18/1999 10,000,000 ILLINOIS-7.0% 20,000,000 ABN AMRO MuniTOPS Certificates Trust (Multistate Non-AMT) Series 1998-14 Weekly VRDNs (Cook County, IL)/(FGIC INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) 20,000,000 12,500,000 Chicago, IL Board of Education, Merlots (Series 1997E) Weekly VRDNs (AMBAC INS)/(First Union National Bank, Charlotte, NC LIQ) 12,500,000 20,000,000 Chicago, IL Board of Education, Variable Rate Certificates (Series 1996BB) Weekly VRDNs (MBIA INS)/(Bank of America NT and SA, San Francisco LIQ) 20,000,000 10,000,000 Chicago, IL Public Building Commission, (Series 1997) Lehman TR/FR-15 Weekly VRDNs (Chicago, IL Board of Education)/(MBIA INS)/(Bank of New York, New York LIQ) 10,000,000 3,400,000 Chicago, IL Water Revenue Bonds, Refunding Bonds, 5.00% Bonds (AMBAC INS), 11/1/1999 3,445,846 2,760,000 Chicago, IL Weekly VRDNs (Canadian Imperial Bank of Commerce LOC) 2,760,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 ILLINOIS-CONTINUED $ 9,400,000 Chicago, IL, Floater Certificates (Series 1998-92) Weekly VRDNs (FGIC INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) $ 9,400,000 20,000,000 Chicago, IL, MERLOTs (Series 1997 V) Weekly VRDNs (Chicago, IL Water Revenue Bonds)/(FGIC INS)/(First Union National Bank, Charlotte, NC LIQ) 20,000,000 20,000,000 2 Chicago, IL, Variable Rate Certificates (Series 1998M), 3.70% TOBs (FGIC INS)/(Bank of America NT and SA, San Francisco LIQ), Optional Tender 8/4/1999 20,000,000 9,905,000 Chicago, IL, Water Revenue Bonds (PT-129) Weekly VRDNs (FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ) 9,905,000 9,940,000 2 Cook County, IL, (Series 1998a) PT-1111, 3.175% TOBs (FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ), Mandatory Tender 5/13/1999 9,940,000 350,000 Darien, IL IDA, (Series 1989C) Weekly VRDNs (KinderCare Learning Centers, Inc.)/(Toronto-Dominion Bank LOC) 350,000 3,800,000 Galesburg, IL, (Series 1996) Weekly VRDNs (Knox College Project)/(Lasalle National Bank, Chicago LOC) 3,800,000 170,000 Hopedale Village, IL, (Series 1998) Weekly VRDNs (Hopedale Medical Foundation)/(Bank One, Illinois, N.A. LOC) 170,000 3,000,000 Illinois Development Finance Authority Weekly VRDNs (Newlywed Food)/(Mellon Bank N.A., Pittsburgh LOC) 3,000,000 2,600,000 Illinois Development Finance Authority, (Series 1997) Weekly VRDNs (Ada S. McKinley Community Services, Inc.)/(Harris Trust & Savings Bank, Chicago LOC) 2,600,000 4,000,000 Illinois Development Finance Authority, Cultural Facilities Revenue Bonds Weekly VRDNs (Burpee Museum of Natural History)/(American National Bank, Chicago LOC) 4,000,000 2,500,000 Illinois Educational Facilities Authority, Revenue Bonds (Series 1995) Weekly VRDNs (Ravinia Festival Association (IL))/(NBD Bank, Michigan LOC) 2,500,000 21,100,000 Illinois Health Facilities Authority Weekly VRDNs (OSF Health Care Systems) 21,100,000 15,000,000 Illinois Health Facilities Authority, (Series 1998), 3.70% TOBs (Evanston Northwestern Healthcare Corp.), Mandatory Tender 6/1/1999 15,000,000 35,000,000 Illinois Health Facilities Authority, Revenue Bonds (Series 1985B) Weekly VRDNs (OSF Health Care Systems)/(Bank of America, IL and Rabobank Nederland, Utrecht LIQs) 35,000,000 1,000,000 Illinois Health Facilities Authority, Revolving Fund Pooled Financing Program (Series 1985F) Weekly VRDNs (NBD Bank, Michigan LOC) 1,000,000 31,725,000 Metropolitan Pier & Exposition Authority, IL, PT-1079 Weekly VRDNs (McCormick Place)/(FGIC INS)/(Merrill Lynch Capital Services, Inc. LIQ) 31,725,000 TOTAL 258,195,846 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 INDIANA-1.3% $ 665,000 Dale, IN IDA Weekly VRDNs (Spencer Industries)/(National City Bank, Kentucky LOC) $ 665,000 1,355,000 Indiana Health Facilities Finance Authority Rehabilitation Center Weekly VRDNs (Crossroads Rehabilitation Center)/(Bank One, Indiana, N.A. LOC) 1,355,000 19,000,000 Indianapolis, IN Local Public Improvement Bond Bank, (Series 1998G), 3.50% BANs, 8/15/1999 19,049,698 4,485,000 Indianapolis, IN, Variable Rate Demand Economic Development Revenue Bonds, (Series 1995) Weekly VRDNs (Pleasant Run Children's Homes, Inc.)/(Fifth Third Bank, Cincinnati LOC) 4,485,000 4,900,000 Lafayette School Corp., IN, (1999 First Series), 3.40% TAWs, 12/31/1999 4,908,636 2,035,000 St. Joseph County, IN, Multi-Mode Variable Rate Economic Development Revenue Bonds (Series 1998) Weekly VRDNs (South Bend Heritage Foundation, Inc.)/(KeyBank, N.A. LOC) 2,035,000 14,750,000 Washington Township, IN Metropolitan School District, Temporary Loan Warrants, 3.35% TANs, 6/30/1999 14,763,295 TOTAL 47,261,629 IOWA-0.9% 32,000,000 Iowa School Corporations, (1998-99 Series A), 4.50% Warrants (FSA INS), 6/25/1999 32,103,522 KENTUCKY-2.0% 1,110,000 Boone County, KY, Revenue Refunding Bonds Weekly VRDNs (Spring Meadow Associates)/(Huntington National Bank, Columbus, OH LOC) 1,110,000 5,800,000 Carrollton & Henderson KY, Public Energy Authority, (Series A), 4.50% Bonds (FSA INS), 1/1/2000 5,869,670 7,500,000 Jefferson County, KY, Adjustable Rate Industrial Building Revenue Refunding Bonds (Series 1997) Weekly VRDNs (Kosmos Cement Co. Partnership)/(Societe Generale, Paris LOC) 7,500,000 25,000,000 Kentucky Asset/Liability Commission, Series A, 4.50% TRANs, 6/25/1999 25,136,458 35,000,000 Owensboro, KY, (Series 1996) Weekly VRDNs (Owensboro Mercy Health System, Inc. Project)/(Bank of America, IL LOC) 35,000,000 TOTAL 74,616,128 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 LOUISIANA-0.1% $ 800,000 Calcasieu Parish, LA, IDB, PCR Bonds Weekly VRDNs (Citgo Petroleum Corp.)/(Westdeutsche Landesbank Girozentrale and Westdeutsche Landesbank Girozentrale LOCs) $ 800,000 5,000,000 New Orleans, LA, Class A Certificates (Series 1998-1) Weekly VRDNs (AMBAC INS)/(Bank of New York, New York LIQ) 5,000,000 TOTAL 5,800,000 MARYLAND-3.3% 800,000 Baltimore County, MD, (Series 1992) Weekly VRDNs (Sheppard & Enoch Pratt Hospital Facility)/(Societe Generale, Paris LOC) 800,000 1,000,000 Baltimore, MD PCR Weekly VRDNs (SCM Plants, Inc.)/(Barclays Bank PLC, London LOC) 1,000,000 2,000,000 Baltimore, MD, Variable Rate Demand/Fixed Rate Refunding Bond (1988 Issue) Weekly VRDNs (University West LP)/(First National Bank of Maryland, Baltimore LOC) 2,000,000 2,150,000 Harford County, MD, (Series 1988) Weekly VRDNs (1001 Partnership Facility)/(First National Bank of Maryland, Baltimore LOC) 2,150,000 5,580,000 Howard County, MD, (Series 1995) Weekly VRDNs (Bluffs at Clarys Forest Apartments)/(First National Bank of Maryland, Baltimore LOC) 5,580,000 200,000 Maryland EDC, Pooled Financing Revenue Bonds, (Series 1995) Weekly VRDNs (Maryland Municipal Bond Fund)/(Nationsbank, N.A., Charlotte LOC) 200,000 2,835,000 Maryland EDC, Variable Rate Demand/Fixed Rate Refunding Revenue Bonds (1997 Issue) Weekly VRDNs (Jenkins Memorial Nursing Home, Inc. Facility)/(First National Bank of Maryland, Baltimore LOC) 2,835,000 6,960,000 Maryland Health & Higher Educational Facilities Authority, (Series 1998A) Weekly VRDNs (Charlestown Community)/(First Union National Bank, Charlotte, NC LOC) 6,960,000 12,800,000 Maryland Health & Higher Educational Facilities Authority, Revenue Bonds (Series 1994) Weekly VRDNs (University Physicians, Inc.)/(First National Bank of Maryland, Baltimore LOC) 12,800,000 7,200,000 Maryland State Community Development Administration, (PA- 170) Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 7,200,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 MARYLAND-CONTINUED $ 23,820,000 2 Maryland State Community Development Administration, (Series 1997), PT-123, 3.10% TOBs (Commerzbank AG, Frankfurt LIQ), Mandatory Tender 10/7/1999 $ 23,820,000 19,655,000 Maryland State, (Series 1998) PA-256 Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 19,655,000 18,590,000 Maryland State, Floater Certificate Series 1998-64 Weekly VRDNs (Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) 18,590,000 1,819,000 Montgomery County, MD Housing Opportunities Commission, Variable Rate Housing Revenue Bonds (Series 1998 Issue I) Weekly VRDNs (Byron House, Inc. Facility)/(First National Bank of Maryland, Baltimore LOC) 1,819,000 3,000,000 Montgomery County, MD, EDR Weekly VRDNs (Howard Hughes Medical Center) 3,000,000 12,000,000 Westminster, MD, (Series 1997) Weekly VRDNs (Western Maryland College, Inc. Facilities)/(First National Bank of Maryland, Baltimore LOC) 12,000,000 TOTAL 120,409,000 MASSACHUSETTS-2.7% 16,166,000 ABN AMRO MuniTOPS Certificates Trust (Massachusetts Non-AMT) Series 1998-12 Weekly VRDNs (Massachusetts Water Resources Authority)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) 16,166,000 25,555,916 Clipper Tax-Exempt Trust, (Series A) Weekly VRDNs (Massachusetts State Lottery Commission)/(AMBAC INS)/(State Street Bank and Trust Co. LIQ) 25,555,916 4,100,000 Commonwealth of Massachusetts, (1997 Series B) Weekly VRDNs (Landesbank Hessen-Thueringen, Frankfurt LIQ) 4,100,000 10,000,000 Framingham, MA, 4.00% BANs, 2/5/1999 10,000,368 20,000,000 Holden, MA, 3.75% BANs, 10/1/1999 20,064,180 9,590,000 Massachusetts Turnpike Authority, Refunded-Guaranteed BANs (Series A), 5.00% Bonds (United States Treasury PRF), 6/1/1999 9,626,558 14,321,000 Massachusetts Turnpike Authority, Variable Rate Certificates (Series 1997N) Weekly VRDNs (MBIA INS)/(Bank of America NT and SA, San Francisco LIQ) 14,321,000 TOTAL 99,834,022 MICHIGAN-4.2% 10,500,000 ABN AMRO MuniTOPS Certificates Trust (Michigan Non-AMT) Series 1998-11 Weekly VRDNs (DeWitt, MI Public Schools)/(FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) 10,500,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 MICHIGAN-CONTINUED $ 12,704,000 ABN AMRO MuniTOPS Certificates Trust (Michigan Non-AMT) Series 1998-13 Weekly VRDNs (Michigan State Trunk Line)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) $ 12,704,000 4,000,000 Battle Creek, MI Economic Development Corporation, Limited Obligation Economic Development Revenue Refunding Bonds (Series 1992) Weekly VRDNs (Michigan Carton & Paperboard Co.)/(American National Bank, Chicago LOC) 4,000,000 2,100,000 Bruce Township, MI Hospital Finance Authority, Tender Securities (ARTS) Weekly VRDNs (Sisters of Charity Health Care System)/(MBIA INS)/(Morgan Guaranty Trust Co., New York LIQ) 2,100,000 800,000 Detroit, MI Water Supply System, Water Supply System Revenue and Revenue Refunding Bonds (Series 1993) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) 800,000 1,800,000 Garden City, MI HFA, Hospital Revenue Bonds (Series 1996A) Weekly VRDNs (Garden City Hospital, Osteopathic)/(National City Bank, Michigan/Illinois LOC) 1,800,000 1,100,000 Grand Rapids, MI EDR, Floating/Fixed Rate Demand Bonds (Series 1983-B) Weekly VRDNs (Amway Grand Plaza Hotel Facilities)/(Old Kent Bank & Trust Co., Grand Rapids LOC) 1,100,000 2,000,000 Grand Rapids, MI Economic Development Corp., Economic Development Revenue Refunding Bonds (Series 1991-A) Weekly VRDNs (Amway Hotel Corp.)/(Michigan National Bank, Farmington Hills LOC) 2,000,000 1,000,000 Grand Rapids, MI Water Supply System, Series 1993 Weekly VRDNs (FGIC INS)/(Societe Generale, Paris LIQ) 1,000,000 13,825,000 Grand Traverse County, MI Hospital Finance Authority, Revenue & Refunding Bonds (PT-234) Weekly VRDNs (Munson Healthcare)/(AMBAC INS)/(Credit Suisse First Boston LIQ) 13,825,000 1,455,000 Ingham County, MI Economic Development Corp., Adjustable Demand Limited Obligation Revenue Bonds (Series 1995) Weekly VRDNs (Martin Luther Memorial Home, Inc.)/(Bank One, Indiana, N.A. LOC) 1,455,000 3,500,000 Kalamazoo, MI Economic Development Corp., 1995 Limited Obligation Revenue Refunding Bonds Weekly VRDNs (Wyndham Project, MI)/(National City Bank, Michigan/Illinois LOC) 3,500,000 925,000 Michigan Higher Education Facilities Authority, Variable Rate Demand Limited Obligation Revenue Bonds (Series 1997) Weekly VRDNs (Davenport College of Business)/(Old Kent Bank & Trust Co., Grand Rapids LOC) 925,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 MICHIGAN-CONTINUED $ 14,465,000 Michigan State Building Authority, (Series 1), 3.30% CP (Canadian Imperial Bank of Commerce LOC), Mandatory Tender 2/9/1999 $ 14,465,000 1,700,000 Michigan State Hospital Finance Authority, (Series A) Weekly VRDNs (National City Bank, Michigan/Illinois LOC) 1,700,000 4,000,000 Michigan State Hospital Finance Authority, (Series A) Weekly VRDNs (OSF Health Care Systems) 4,000,000 19,650,000 Michigan State Hospital Finance Authority, MERLOTs (Series 1997A) Weekly VRDNs (Detroit Medical Center Obligated Group)/(AMBAC INS)/(First Union National Bank, Charlotte, NC LIQ) 19,650,000 2,900,000 Michigan State Housing Development Authority, (Series 1991) Weekly VRDNs (Regency Square Apartments)/(National Australia Bank, Ltd., Melbourne LOC) 2,900,000 15,000,000 Michigan State Housing Development Authority, MERLOTs (Series G) Weekly VRDNs (MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) 15,436,957 8,000,000 Michigan Strategic Fund, Limited Obligation PCR Bonds (Series 1993) Weekly VRDNs (Allied-Signal, Inc.) 8,000,000 335,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1991) Weekly VRDNs (Martin Luther Memorial Home, Inc.)/(Bank One, Indiana, N.A., National Australia Bank, Ltd., Melbourne and National Australia Bank, Ltd., Melbourne LOCs) 335,000 1,200,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Series 1995) Weekly VRDNs (Wellness Plan Project)/(NBD Bank, Michigan LOC) 1,200,000 5,995,000 Michigan Strategic Fund, PA-334 (Collateralized Series 1998AA) Weekly VRDNs (Detroit Edison Co.)/(MBIA INS)/(Merrill Lynch Capital Services, Inc. LIQ) 5,995,000 2,500,000 Michigan Strategic Fund, PT-244 Weekly VRDNs (Detroit Edison Co.)/(FGIC INS)/(Banque Nationale de Paris LIQ) 2,500,000 2,000,000 Michigan Strategic Fund, Variable Rate Demand Limited Obligation Revenue Bonds (Series 1997B) Weekly VRDNs (NSF International)/(National City Bank, Michigan/Illinois LOC) 2,000,000 2,205,000 Oakland County, MI EDC, (Series 1998) Weekly VRDNs (Fox Manor, Inc.)/(Allied Irish Banks PLC LOC) 2,205,000 7,285,000 Oakland County, MI EDC, (Series 1998) Weekly VRDNs (Lourdes Assisted Living, Inc.)/(Allied Irish Banks PLC LOC) 7,285,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 MICHIGAN-CONTINUED $ 2,695,000 Ottawa County, MI Economic Development Corp., Limited Obligation Revenue Bonds (Series 1995B) Weekly VRDNs (Sunset Manor, Inc. Project)/(Old Kent Bank & Trust Co., Grand Rapids LOC) $ 2,695,000 9,000,000 Wayne Westland Community Schools, MI, Floater Certificates Series 1998-67 Weekly VRDNs (FGIC INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) 9,000,000 TOTAL 155,075,957 MINNESOTA-2.8% 10,000,000 Becker, MN, PCR (Series 1993-B), 3.05% CP (Northern States Power Co.), Mandatory Tender 3/11/1999 10,000,000 3,300,000 DDSB Municipal Securities Trusts, Series 1994O Weekly VRDNs (Richfield, MN ISD 280)/(U.S. Bank, N.A., Minneapolis LIQ) 3,300,000 6,390,000 DDSB Municipal Securities Trusts, Series 1994T Weekly VRDNs (Osseo, MN ISD 279)/(U.S. Bank, N.A., Minneapolis LIQ) 6,390,000 11,000,000 DDSB Municipal Securities Trusts, Series 1994V Weekly VRDNs (St. Louis Park Healthsystem, MN)/(Norwest Bank Minnesota, N.A. LIQ) 11,000,000 7,000,000 East Grand Forks, MN ISD 595, 3.90% Bonds (Minnesota State GTD), 6/30/1999 7,004,111 4,250,000 MN Municipal Securities Trust, Series 1996F, Floating Rate Certificates Weekly VRDNs (Lakeville, MN ISD 194)/(Minnesota State GTD)/(Norwest Bank Minnesota, N.A. LIQ) 4,250,000 11,735,000 Minneapolis CDA, Revenue Refunding Bonds (Series 1995) Weekly VRDNs (Walker Methodist Health Center, Inc. Project)/(U.S. Bank, N.A., Minneapolis LOC) 11,735,000 5,500,000 Minneapolis, MN, (Series 1993) Weekly VRDNs (Market Square Real Estate, Inc.)/(Norwest Bank Minnesota, N.A. LOC) 5,500,000 2,500,000 Minneapolis, MN, Housing Development Revenue Refunding Bonds (Series 1988) Weekly VRDNs (Symphony Place)/(Citibank N.A., New York LOC) 2,500,000 6,000,000 Minneapolis, MN, Variable Rate Housing Revenue Bonds Weekly VRDNs (One Ten Grant Project)/(U.S. Bank, N.A., Minneapolis LOC) 6,000,000 1,000,000 Norman County, MN ISD No. 2854, 4.00% Bonds (Minnesota State GTD), 7/1/1999 1,000,820 15,000,000 Oak Park Heights, MN, Elderly Housing Revenue Bonds (Series 1998B), 4.2625% TOBs (Bayerische Landesbank Girozentrale), Mandatory Tender 12/1/1999 15,000,000 10,000,000 Rochester, MN Health Care Facility Authority Weekly VRDNs (Mayo Foundation)/(Rabobank Nederland, Utrecht LIQ) 10,000,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 MINNESOTA-CONTINUED $ 4,000,000 Rochester, MN Health Care Facility Authority Weekly VRDNs (Mayo Foundation)/(Rabobank Nederland, Utrecht LIQ) $ 4,000,000 6,000,000 Rosemount, MN, PCR (Series 1984) Weekly VRDNs (Koch Refining Co.)/(Koch Industries, Inc. GTD) 6,000,000 100,000 St. Paul, MN Port Authority, (Series 1991) Weekly VRDNs (West Gate Office)/(U.S. Bank, N.A., Minneapolis LOC) 100,000 TOTAL 103,779,931 MISSISSIPPI-0.1% 1,425,000 Hinds County, MS, (Series 1991) Weekly VRDNs (North State St. Project)/(Amsouth Bank N.A., Birmingham LOC) 1,425,000 2,465,000 Mississippi State, Series E, 5.00% Bonds, 9/1/1999 2,490,810 TOTAL 3,915,810 MISSOURI-0.6% 17,000,000 Missouri State HEFA, (Series K), 4.25% TRANs (St. Louis, MO School District), 9/13/1999 17,060,147 4,200,000 Poplar Bluff, MO IDA, (Series 1987) Weekly VRDNs (Gates Rubber Co.)/(NBD Bank, Michigan LOC) 4,200,000 455,000 Springfield, MO Public Building Corp., Leasehold Revenue Refunding and Improvement Bonds (Series 1998), 3.70% Bonds (Springfield-Branson Regional Airport)/(AMBAC INS), 3/1/1999 455,000 TOTAL 21,715,147 MULTI STATE-2.3% 11,858,161 ABN AMRO Chicago Corp. 1997-1 LeaseTOPS Trust Weekly VRDNs (Lasalle National Bank, Chicago LIQ)/(Lasalle National Bank, Chicago LOC) 11,858,161 34,864,000 Clipper Tax-Exempt Trust (Non-AMT Multistate), (Series A) Weekly VRDNs (MBIA INS)/(State Street Bank and Trust Co. LIQ) 34,864,000 19,081,010 Equity Trust II, (1996 Series) Weekly VRDNs (Republic National Bank of New York LOC) 19,081,010 19,246,530 PBCC LeaseTOPS Trust (Multistate Non-AMT) Series 1998-2 Weekly VRDNs (AMBAC INS)/(Pitney Bowes Credit Corp. LIQ) 19,246,530 TOTAL 85,049,701 NEVADA-0.2% 7,500,000 ABN AMRO MuniTOPS Certificates Trust (Multistate Non-AMT) Series 1998-1 Weekly VRDNs (Nevada State)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) 7,500,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 NEW JERSEY-2.8% $ 764,500 Clark Township, NJ, 3.95% BANs, 3/25/1999 $ 764,710 2,000,000 Clark Township, NJ, 3.95% TANs, 3/25/1999 2,000,549 8,000,000 Essex County, NJ Improvement Authority, Project Revenue Bonds (Series 1995) Weekly VRDNs (Essex County, NJ)/(AMBAC INS)/(Morgan Guaranty Trust Co., New York LIQ) 8,000,000 9,800,000 New Jersey EDA Weekly VRDNs (Center-For-Aging-Applewood Estates)/(Fleet National Bank, Springfield, MA LOC) 9,800,000 23,230,000 New Jersey State Transportation Trust Fund Agency, Floater Certificates (Series 1998-54) Weekly VRDNs (FSA INS)/ (Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) 23,230,000 13,675,000 New Jersey State, (Series 1998) FR/RI-A34 Trust Receipts Weekly VRDNs (National Westminster Bank, PLC, London LIQ) 13,675,000 12,295,000 New Jersey State, (Series D) PA-262 Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 12,295,000 13,000,000 New Jersey State, PA-265 Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 13,000,000 15,300,000 New Jersey State, Trust Receipts (Series 1998 FR/RI-A8) Weekly VRDNs (Bayerische Hypotheken-und Vereinsbank AG LIQ) 15,300,000 3,500,000 Springfield Township, NJ, 3.80% BANs, 3/5/1999 3,500,443 TOTAL 101,565,702 NEW YORK-8.5% 5,560,000 Albion, NY Central School District, 3.80% BANs, 6/24/1999 5,563,149 7,000,000 Buffalo, NY, 3.75% RANs (Landesbank Hessen-Thueringen, Frankfurt LOC), 7/27/1999 7,024,953 10,000,000 Long Island Power Authority, (PA-420) Weekly VRDNs (MBIA INS)/(Merrill Lynch Capital Services, Inc. LIQ) 10,000,000 1,430,000 Metropolitan Transportation Authority, New York, Trust Receipts (Series 1997 FR/RI-9) Weekly VRDNs (FGIC INS)/(Bank of New York, New York LIQ) 1,430,000 13,674,000 New York City Municipal Water Finance Authority, Floater Certificates (Series 1998-5) Weekly VRDNs (Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ)/(United States Treasury PRF) 13,674,000 53,290,000 New York City Municipal Water Finance Authority, Trust Receipts (Series 1997 FR/RI-6) Weekly VRDNs (MBIA INS)/(Bank of New York, New York LIQ) 53,290,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 NEW YORK-CONTINUED $ 7,000,000 New York City Municipal Water Finance Authority, Trust Receipts, Series 1998 FR/RI-10 Weekly VRDNs (FSA INS)/(Bank of New York, New York LIQ) $ 7,000,000 16,960,000 New York City Municipal Water Finance Authority, Trust Receipts, Series 1998 FR/RI-11 Weekly VRDNs (FSA INS)/(Bank of New York, New York LIQ) 16,960,000 15,000,000 New York City, NY Health and Hospitals Corp., Health System Bonds, (Series 1997A) Weekly VRDNs (Morgan Guaranty Trust Co., New York LOC) 15,000,000 10,000,000 New York City, NY Transitional Finance Authority, PT-1047 Weekly VRDNs (Bank of America NT and SA, San Francisco LIQ) 10,000,000 54,000,000 2 New York City, NY, Trust Receipts (Series 1998 FR/RI A-79), 2.90% TOBs (National Westminster Bank, PLC, London LIQ), Optional Tender 3/12/1999 54,000,000 11,780,000 2 New York State Dormitory Authority, PT-192, 3.75% TOBs (Cornell University)/(Banco Santander SA LIQ), Optional Tender 5/13/1999 11,780,000 7,310,000 New York State Energy Research & Development Authority, Trust Receipts, Series 1998 FR/RI-9 Weekly VRDNs (Brooklyn Union Gas Co.)/(MBIA INS)/(Bank of New York, New York LIQ) 7,310,000 9,000,000 New York State Local Government Assistance Corp., (Series E) Weekly VRDNs (Canadian Imperial Bank of Commerce LOC) 9,000,000 7,200,000 New York State Medical Care Facilities Finance Agency, (Series 1992 B PT-100) Daily VRDNs (FHA INS)/(Credit Suisse First Boston LIQ) 7,200,000 4,995,000 2 New York State Mortgage Agency, PT-164, 3.675% TOBs (Banque Nationale de Paris LIQ), Optional Tender 3/18/1999 4,995,000 30,000,000 Rochester, NY, 3.10% BANs, 10/28/1999 30,042,789 5,000,000 Triborough Bridge & Tunnel Authority, NY, Trust Receipts (Series 1998 FR/RI-A1) Weekly VRDNs (Bayerische Hypotheken- und Vereinsbank AG LIQ) 5,000,000 16,100,000 VRDC/IVRC Trust, (Series 1992A) Weekly VRDNs (New York City Municipal Water Finance Authority)/(MBIA INS)/(Hong Kong & Shanghai Banking Corp. LIQ) 16,100,000 5,000,000 VRDC/IVRC Trust, (Series 1993B) Weekly VRDNs (Metropolitan Transportation Authority, New York)/(AMBAC INS)/(Hong Kong & Shanghai Banking Corp. LIQ) 5,000,000 20,100,000 VRDC/IVRC Trust, (Series 1993G) Weekly VRDNs (St. Lukes Roosevelt Hospital Center)/(FHA INS)/(Hong Kong & Shanghai Banking Corp. LIQ) 20,100,000 TOTAL 310,469,891 NORTH CAROLINA-1.2% 9,000,000 Clipper, NC Tax-Exempt Trust Weekly VRDNs (North Carolina State)/(State Street Bank and Trust Co. LIQ) 9,000,000 15,000,000 Martin County, NC IFA, (Series 1993) Weekly VRDNs (Weyerhaeuser Co.) 15,000,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 NORTH CAROLINA-CONTINUED $ 1,000,000 North Carolina Medical Care Commission, Revenue Bonds (Series 1993) Weekly VRDNs (Moses H. Cone Memorial) $ 1,000,000 18,345,000 North Carolina State, (Series 1998A) PA-342 Weekly VRDNs (Merrill Lynch Capital Services, Inc. LIQ) 18,345,000 TOTAL 43,345,000 OHIO-7.0% 8,338,000 ABN AMRO MuniTOPS Certificates Trust (Ohio Non-AMT) Series 1998-18, (Series 1998-18) Weekly VRDNs (Cleveland, OH Waterworks)/(FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) 8,338,000 2,425,000 Ashland County, OH Health Care Weekly VRDNs (Brethren Care, Inc.)/(National City Bank, Ohio LOC) 2,425,000 28,560,000 Banc One Capital Higher Education Tax-Exempt Income Trust, (Series 2 Certificates of Ownership) Weekly VRDNs (Bank One, Kentucky LOC) 28,560,000 7,790,000 Clark County, OH, (Series 1998 Health Facilities) Weekly VRDNs (Ohio Masonic Home)/(Allied Irish Banks PLC LOC) 7,790,000 2,740,000 Clark County, OH, (Series 1998) Weekly VRDNs (Ohio Masonic Home)/(Allied Irish Banks PLC LOC) 2,740,000 5,750,000 Clark County, OH, Multifamily Housing Revenue Bonds (Series 1997) Weekly VRDNs (Ohio Masonic Home)/(Huntington National Bank, Columbus, OH LOC) 5,750,000 5,000,000 Cuyahoga County, OH Hospital Authority, (Series 1998B) Weekly VRDNs (Cleveland Clinic)/(Chase Manhattan Bank N.A., New York LIQ) 5,000,000 2,000,000 Cuyahoga County, OH Hospital Authority, (Series C) Weekly VRDNs (Cleveland Clinic)/(Bank of America NT and SA, San Francisco LIQ) 2,000,000 8,500,000 Dublin, OH, Industrial Development Refunding Revenue Bonds (Series 1997) Weekly VRDNs (Witco Corp.)/(Fleet National Bank, Springfield, MA LOC) 8,500,000 7,185,000 Franklin County, OH Hospital Facility Authority, (Series 1992) Weekly VRDNs (Wesley Glenn, Inc.)/(Fifth Third Bank, Cincinnati LOC) 7,185,000 10,000,000 Franklin County, OH Hospital Facility Authority, (Series 1998B) Weekly VRDNs (Doctors OhioHealth Corp.)/(National City Bank, Ohio LOC) 10,000,000 1,350,000 Franklin County, OH, Health Care Facilities Revenue Bonds (Series 1994) Weekly VRDNs (Wesley Glenn, Inc.)/(Fifth Third Bank of Northwestern OH LOC) 1,350,000 8,910,000 Greene County, OH, Various Purpose Limited Tax General Obligation Certificates of Indebtedness (Series 1998 C), 3.75% BANs, 3/25/1999 8,911,833 1,500,000 Hamilton County, OH Health System Weekly VRDNs (West Park Community)/(Fifth Third Bank, Cincinnati LOC) 1,500,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 OHIO-CONTINUED $ 12,000,000 Hamilton County, OH Hospital Facilities Authority, (Series 1997A) Weekly VRDNs (Health Alliance of Greater Cincinnati)/ (MBIA INS)/(Credit Suisse First Boston LIQ) $ 12,000,000 7,500,000 Henry County, OH, Series 1996 Automatic Feed Project Weekly VRDNs (Huntington National Bank, Columbus, OH LOC) 7,500,000 215,000 Lucas County, OH, Hospital Improvement Revenue Weekly VRDNs (Sunshine Children's Home)/(National City Bank, Ohio LOC) 215,000 6,410,000 Mahoning County, OH, Housing Revenue Bonds (Series 1995) Weekly VRDNs (Copeland Oaks Project)/(Bank One, Ohio, N.A. LOC) 6,410,000 505,000 Marion County, OH Hospital Authority, (Series 1991) Weekly VRDNs (Marion County, OH Pooled Hospital Program)/(Bank One, Ohio, N.A. LOC) 505,000 7,400,000 Medina County, OH, (Series 1997) Weekly VRDNs (Plaza 71 Associates Ltd.)/(Westdeutsche Landesbank Girozentrale LOC) 7,400,000 3,280,000 Mentor, OH, Adjustable Rate IDRB's (Series 1997) Weekly VRDNs (Risch Investments/Roll Kraft, Inc.)/(Bank One, Ohio, N.A. LOC) 3,280,000 9,700,000 Montgomery County, OH Health Facilities Authority, (Series 1998B), 2.85% CP (Miami (OH) Valley Hospital), Mandatory Tender 2/9/1999 9,700,000 11,000,000 Montgomery County, OH Health Facilities Authority, (Series 1998B), 3.20% CP (Miami (OH) Valley Hospital), Mandatory Tender 2/9/1999 11,000,000 650,000 Montgomery County, OH IDA Weekly VRDNs (Center-Plex Venture)/(KeyBank, N.A. LOC) 650,000 4,615,000 Montgomery County, OH, Variable Rate Limited Obligation Revenue Bonds (Series 1996) Weekly VRDNs (Society of St. Vincent De Paul)/(National City Bank, Ohio LOC) 4,615,000 3,455,000 Montgomery, OH IDA Weekly VRDNs (Bethesda Two Limited Partnership)/(Huntington National Bank, Columbus, OH LOC) 3,455,000 8,380,000 New Albany, OH Community Authority, Adjustable Rate Multi- Purpose Infrastructure Improvement Bonds, (Series A) Weekly VRDNs (Huntington National Bank, Columbus, OH LOC) 8,380,000 1,000,000 Ohio State Air Quality Development Authority Weekly VRDNs (Timken Co.)/(Credit Suisse First Boston LOC) 1,000,000 3,800,000 Ohio State Air Quality Development Authority, (Series 1988A) Weekly VRDNs (PPG Industries, Inc.) 3,800,000 10,000,000 Ohio State Water Development Authority, PCR Refunding Bonds Weekly VRDNs (General Motors Corp.) 10,000,000 10,000,000 Ohio State Water Development Authority, Pollution Control Revenue Refunding Bonds (Series 1997) Weekly VRDNs (Philip Morris Cos., Inc.) 10,000,000 1,500,000 Ohio State, Adjustable Rate Weekly VRDNs (General Motors Corp.) 1,500,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 OHIO-CONTINUED $ 4,840,000 Ohio Water Development Authority, PA-201 Weekly VRDNs (AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ) $ 4,840,000 16,500,000 Ottawa County, OH, 4.00% BANs, 8/6/1999 16,525,897 6,400,000 Rickenbacker, OH Port Authority, (Series 1992) Weekly VRDNs (Rickenbacker Holdings, Inc.)/(Bank One, Ohio, N.A. LOC) 6,400,000 4,175,000 Ross County, OH, Hospital Facilities Revenue Bonds (Series 1995) Weekly VRDNs (Medical Center Hospital Project)/(Fifth Third Bank, Cincinnati LOC) 4,175,000 5,200,000 Scioto County, OH Hospital Authority Weekly VRDNs (AMBAC INS)/(First National Bank of Chicago LIQ) 5,200,000 8,295,000 Summit County, OH, (Series A), 4.50% BANs, 6/3/1999 8,315,018 3,200,000 Toledo, OH, Adjustable Rate City Services Special Assessment Notes (Services 1997) Weekly VRDNs (Canadian Imperial Bank of Commerce LOC) 3,200,000 900,000 Twinsburg, OH IDA Weekly VRDNs (Carl J Massara Project)/(KeyBank, N.A. LOC) 900,000 4,500,000 University of Cincinnati, OH, (Series AK), 3.26% BANs, 12/21/1999 4,508,865 3,000,000 Walnut Hills, OH High School Alumni Foundation, (Series 1998) Weekly VRDNs (Fifth Third Bank, Cincinnati LOC) 3,000,000 TOTAL 258,524,613 OKLAHOMA-2.6% 17,000,000 Oklahoma State Industrial Authority, Flexible Rate Hospital Revenue Bonds (Series 1990B) Weekly VRDNs (Baptist Medical Center, OK)/(Morgan Guaranty Trust Co., New York LIQ) 17,000,000 61,000,000 Oklahoma State Industrial Authority, Health System Revenue Bonds (Series 1995A) Weekly VRDNs (Baptist Medical Center, OK)/(Morgan Guaranty Trust Co., New York LIQ) 61,000,000 18,640,000 Tulsa, OK International Airport, Variable Rate Certificates (Series 1997B-2) Weekly VRDNs (MBIA INS)/(Bank of America NT and SA, San Francisco LIQ) 18,640,000 TOTAL 96,640,000 OREGON-0.6% 10,910,000 Clackamas County, OR HFA, (Series 1984), 4.00% TOBs (Kaiser Permanente), Optional Tender 4/1/1999 10,910,000 10,000,000 Multnomah County, OR School District, (Series 1998), 4.25% TRANs, 6/30/1999 10,023,619 TOTAL 20,933,619 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 PENNSYLVANIA-10.9% $ 20,525,000 2 ABN AMRO MuniTOPS Certificates Trust (Pennsylvania Non-AMT) Series 1998-28, 3.17% TOBs (Temple University)/(MBIA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ), Optional Tender 8/4/1999 $ 20,525,000 5,000,000 Allegheny County, PA IDA, Variable Rate Demand Revenue Bonds (Series 1997-B) Weekly VRDNs (Jewish Community Center)/ (National City, Pennsylvania LOC) 5,000,000 4,250,000 Beaver County, PA IDA, PCR Refunding Bonds (1992 Series-E), 3.05% CP (Toledo Edison Co.)/(Toronto-Dominion Bank LOC), Mandatory Tender 5/19/1999 4,250,000 5,000,000 Clinton County, PA, IDA Weekly VRDNs (Armstrong World Industries, Inc.)/(Mellon Bank N.A., Pittsburgh LOC) 5,000,000 50,410,000 Commonwealth of Pennsylvania, Floater Certificate 1998-53 Weekly VRDNs (FGIC INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) 50,410,000 7,650,000 Commonwealth of Pennsylvania, PA-274 (1st Series of 1997) Weekly VRDNs (AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ) 7,650,000 5,975,000 Commonwealth of Pennsylvania, Trust Receipts (Series 1998 FR/RI-A9) Weekly VRDNs (MBIA INS)/(Bayerische Hypotheken-und Vereinsbank AG LIQ) 5,975,000 5,000,000 Cumberland County, PA Municipal Authority, (Series 1994), 3.75% TOBs (United Methodist Homes for the Aging)/(PNC Bank, N.A. LOC), Optional Tender 6/1/1999 5,000,000 4,000,000 Dallastown Area School District, PA, G.O. Bonds (Series 1998) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) 4,000,000 34,595,000 Dauphin County, PA General Authority, (Education and Health Loan Program, Series 1997) Weekly VRDNs (AMBAC INS)/(Chase Manhattan Bank N.A., New York LIQ) 34,595,000 24,000,000 Dauphin County, PA General Authority, (Series A of 1997) Weekly VRDNs (Allhealth Pooled Financing Program)/(FSA INS)/(Credit Suisse First Boston LIQ) 24,000,000 3,900,000 Delaware County Authority, PA, Hospital Revenue Bonds (Series of 1996) Weekly VRDNs (Crozer-Chester Medical Center)/(KBC Bank N.V., Brussels LOC) 3,900,000 18,500,000 Doylestown Hospital Authority, PA, Doylestown Hospital Revenue Bonds Weekly VRDNs (AMBAC INS)/(PNC Bank, N.A. LIQ) 18,500,000 3,900,000 East Hempfield Township, PA IDA, (Series 1985) Weekly VRDNs (Yellow Freight System)/(Wachovia Bank of NC, N.A., Winston- Salem LOC) 3,900,000 3,500,000 East Hempfield Township, PA IDA, (Series of 1997) Weekly VRDNs (Mennonite Home)/(Dauphin Deposit Bank and Trust LOC) 3,500,000 8,460,000 Easton Area School District, PA, (Series 1997) Weekly VRDNs (FGIC INS)/(FGIC Securities Purchase, Inc. LIQ) 8,460,000 7,000,000 Erie County, PA Hospital Authority Weekly VRDNs (St. Vincent Health System)/(Mellon Bank N.A., Pittsburgh LOC) 7,000,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 PENNSYLVANIA-CONTINUED $ 22,940,000 Lancaster County, PA Hospital Authority, Health Center Revenue Bonds (Series 1996) Weekly VRDNs (Masonic Homes) $ 22,940,000 6,540,000 Montgomery County, PA IDA, Commercial Development Revenue Bonds (Series 1992) Weekly VRDNs (Hickory Pointe Project)/ (First Union National Bank, Charlotte, NC LOC) 6,540,000 4,800,000 North Lebanon Township, PA, Municipal Authority Mortgage Bonds Weekly VRDNs (Grace Community, Inc.)/(First Union National Bank, Charlotte, N.C. LOC) 4,800,000 6,000,000 North Penn Health, Hospital and Education Authority, PA, Hospital Revenue Bonds (Series 1998) Weekly VRDNs (North Penn Hospital, PA)/(First Union National Bank, Charlotte, NC LOC) 6,000,000 2,500,000 Northampton County, PA Higher Education Authority, PA-176 Weekly VRDNs (MBIA INS)/(Merrill Lynch Capital Services, Inc. LIQ) 2,500,000 16,745,000 Pennsylvania Housing Finance Authority, PT-119A (Series 1997-56C) Weekly VRDNs (Credit Suisse First Boston LIQ) 16,745,000 4,995,000 Pennsylvania State Turnpike Commission, PA-404 Weekly VRDNs (AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ) 4,995,000 6,000,000 Pennsylvania State University, PT-242 Weekly VRDNs (Bayerische Hypotheken-und Vereinsbank AG LIQ) 6,000,000 20,000,000 Philadelphia, PA Gas Works, (Series C), 3.05% CP (Canadian Imperial Bank of Commerce LOC), Mandatory Tender 2/17/1999 20,000,000 8,135,000 Philadelphia, PA Gas Works, PT-1045 Weekly VRDNs (FSA INS)/(Bank of America NT and SA, San Francisco LIQ) 8,135,000 6,870,000 Philadelphia, PA IDA, (Series 93) Weekly VRDNs (Sackett Development)/(Mellon Bank N.A., Pittsburgh LOC) 6,870,000 3,250,000 Philadelphia, PA IDA, Variable Rate Revenue Bonds (Series 1998) Weekly VRDNs (Philadelphia Academy of Music)/(First 1999) Union National Bank, Charlotte, NC LOC) 3,250,000 2,000,000 Philadelphia, PA Redevelopment Authority, Multi-Family Revenue Bonds (Series 1985) Weekly VRDNs (Franklin Town Towers)/(Marine Midland Bank N.A., Buffalo, NY LOC) 2,000,000 22,000,000 Philadelphia, PA School District, (Series B), 4.25% TRANs (PNC Bank, N.A. LOC), 6/30/1999 22,053,730 23,475,000 Philadelphia, PA Water & Wastewater System, (Series 1997A) PT-1033 Weekly VRDNs (AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ) 23,475,000 18,000,000 Philadelphia, PA, 4.25% TRANs, 6/30/1999 18,043,546 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 PENNSYLVANIA-CONTINUED $ 4,540,000 Pittsburgh, PA, (Series 1997C) PT-1108 Weekly VRDNs (AMBAC INS)/(Merrill Lynch Capital Services, Inc. LIQ) $ 4,540,000 6,205,000 Pittsburgh, PA, SG-71 Weekly VRDNs (FGIC INS)/(Societe Generale, Paris LIQ) 6,205,000 4,025,000 Washington County, PA Authority Weekly VRDNs (Eye & Ear Hospital)/(PNC Bank, N.A. LOC) 4,025,000 TOTAL 400,782,276 PUERTO RICO-0.1% 2,760,000 Commonwealth of Puerto Rico, Floater Certificates (Series 1998-87) Weekly VRDNs (MBIA INS)/(Morgan Stanley, Dean Witter Municipal Funding, Inc. LIQ) 2,760,000 SOUTH CAROLINA-0.4% 2,000,000 Dorchester County, SC School District No. 002, 3.75% TANs, 3/15/1999 2,000,916 8,000,000 Oconee County, SC School District, 4.00% TANs, 2/16/1999 8,001,606 3,250,000 Piedmont Municipal Power Agency, SC, (Series 1998 A-71) Daily VRDNs (MBIA INS)/(Bank of New York, New York LIQ) 3,250,000 TOTAL 13,252,522 TENNESSEE-1.8% 25,000,000 Chattanooga, TN HEFA Weekly VRDNs (Mccallie School)/(SunTrust Bank, Atlanta LOC) 25,000,000 2,000,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Nationsbank, N.A., Charlotte LOC) 2,000,000 7,100,000 Chattanooga, TN HEFA Weekly VRDNs (Sisken Hospital)/(Nationsbank, N.A., Charlotte LOC) 7,100,000 2,000,000 Chattanooga, TN IDB, (Series 1997) Weekly VRDNs (YMCA Projects)/(SunTrust Bank, Nashville LOC) 2,000,000 3,100,000 Maury County, TN HEFA, (Series 1996E) Weekly VRDNs (Southern Healthcare Systems, Inc.)/(Bank One, Texas N.A. LOC) 3,100,000 3,775,000 Memphis, TN Center City Revenue Finance Corp., (Series 1996A) Weekly VRDNs (South Bluffs)/(National Bank of Commerce, Memphis, TN LOC) 3,775,000 2,700,000 Memphis, TN, General Improvement Refunding Bonds, (Series 1995A) Weekly VRDNs (Westdeutsche Landesbank Girozentrale LOC) 2,700,000 1,700,000 Metropolitan Government Nashville & Davidson County, TN HEFA, (Series 1996) Weekly VRDNs (Dede Wallace Center Project)/(SunTrust Bank, Nashville LOC) 1,700,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 TENNESSEE-CONTINUED $ 4,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA, Educational Facilities Revenue Bonds (Series 1997) Weekly VRDNs (Belmont University Project)/(SunTrust Bank, Nashville LOC) $ 4,000,000 3,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA, Revenue Bonds (Series 1985A), 3.10% TOBs (Vanderbilt University), Optional Tender 1/15/2000 3,000,000 3,000,000 Metropolitan Government Nashville & Davidson County, TN HEFA, Revenue Bonds (Series 1985A), 3.10% TOBs (Vanderbilt University), Optional Tender 1/15/2000 3,000,000 3,000,000 Metropolitan Government Nashville & Davidson County, TN IDB, Variable Rate Demand Multifamily Housing Revenue Refunding Bonds (Series 1995) Weekly VRDNs (Hickory Trace Apartments)/(National City Bank, Kentucky LOC) 3,000,000 1,000,000 Montgomery Co, TN Public Building Authority, Pooled Financing Revenue Bonds (Series 1996) Weekly VRDNs (Montgomery County Loan)/(Nationsbank, N.A., Charlotte LOC) 1,000,000 2,500,000 Sevier County, TN Public Building Authority, Local Government Public Improvement Bonds, (Series II-G-3) Weekly VRDNs (Maryville, TN)/(AMBAC INS)/(KBC Bank N.V., Brussels LIQ) 2,500,000 1,825,000 Washington County, TN IDB, Revenue Refunding Bonds (Series 1996) Weekly VRDNs (Springbrook Properties Project)/(SunTrust Bank, Nashville LOC) 1,825,000 TOTAL 65,700,000 TEXAS-4.4% 15,000,000 2 ABN AMRO MuniTOPS Certificates Trust (Multi-State Non-AMT) Series 1998-26, 3.35% TOBs (Grapevine-Colleyville, TX ISD)/(Texas Permanent School Fund Guarantee Program GTD)/(ABN AMRO Bank N.V., Amsterdam LIQ), Optional Tender 11/17/1999 15,000,000 12,996,000 2 ABN AMRO MuniTOPS Certificates Trust (Multistate Non-AMT) Series 1998-19, 3.10% TOBs (Dallas, TX Waterworks & Sewer System)/(FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ), Optional Tender 6/9/1999 12,996,000 8,950,000 Aldine, TX Independent School District, (Series 1997) SGB-29 Weekly VRDNs (Texas Permanent School Fund Guarantee Program GTD)/(Societe Generale, Paris LIQ) 8,950,000 11,000,000 Board of Regents of The University of Texas, (Series A), 2.85% CP, Mandatory Tender 4/7/1999 11,000,000 3,330,000 Dallas, TX, (Series C), 3.70% TOBs, Optional Tender 6/15/1999 3,330,000 400,000 Grapevine, TX, IDC, SimuFlite Training International Project (Series 1993) Weekly VRDNs (Southern Air Transport, Inc.)/(Bank of Montreal LOC) 400,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 TEXAS-CONTINUED $ 4,400,000 Harris County, TX HFDC, (Series 1994) Daily VRDNs (Methodist Hospital, Harris County, TX) $ 4,400,000 7,450,000 Harris County, TX HFDC, (Series 1997A) Daily VRDNs (St. Luke's Episcopal Hospital)/(Morgan Guaranty Trust Co., New York, Nationsbank, N.A., Charlotte and Toronto-Dominion Bank LIQs) 7,450,000 7,900,000 Harris County, TX HFDC, Trust Receipts (Series 1997) Weekly VRDNs (Hermann Hospital)/(MBIA INS)/(Bank of New York, New York LIQ) 7,900,000 6,000,000 Harris County, TX HFDC, Unit Priced Demand Adjustable Revenue Bonds (Series 1997B) Daily VRDNs (St. Luke's Episcopal Hospital)/(Morgan Guaranty Trust Co., New York, Nationsbank, N.A., Charlotte and Toronto-Dominion Bank LIQs) 6,000,000 19,140,000 Hurst-Euless-Bedford, TX Independent School District, PT- 1050 Weekly VRDNs (Texas Permanent School Fund Guarantee Program GTD)/(Bank of America NT and SA, San Francisco LIQ) 19,140,000 1,620,000 North Richland Hills, TX IDC Weekly VRDNs (Tecnol, Inc.)/(Nationsbank, N.A., Charlotte LOC) 1,620,000 17,500,000 Plano ISD, TX, Variable Rate Unlimited Tax School Building Bonds, (Series 1997), 3.65% TOBs (Texas Permanent School Fund Guarantee Program GTD)/(UBS AG LIQ), Mandatory Tender 3/3/1999 17,500,000 9,890,000 2 San Antonio, TX Electric & Gas, PT-1110,% TOBs (Merrill Lynch Capital Services, Inc. LIQ), Mandatory Tender 5/13/1999 9,890,000 4,625,000 Texas Pooled Tax Exempt Trust, Certificates of Participation (Series 1996) Weekly VRDNs (Bank One, Texas N.A. LOC) 4,625,000 32,485,000 Texas State, PT-1081 Weekly VRDNs (AMBAC INS)/(Bank of America NT and SA, San Francisco LIQ) 32,485,000 TOTAL 162,686,000 UTAH-0.1% 150,000 Emery County, UT, PCR Refunding Bonds (Series 1994) Daily VRDNs (Pacificorp)/(AMBAC INS)/(Bank of Nova Scotia, Toronto LIQ) 150,000 5,000,000 2 Intermountain Power Agency, UT, Trust Receipts (Series A63), 3.50% TOBs (MBIA INS)/(Bank of New York, New York LIQ), Optional Tender 2/1/1999 5,000,000 TOTAL 5,150,000 VERMONT-0.0% 800,000 Vermont Educational and Health Buildings Financing Agency, (Series 1995A) Weekly VRDNs (KeyBank, N.A. LOC) 800,000 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 VIRGINIA-1.2% $ 21,410,000 ABN AMRO MuniTOPS Certificates Trust (Virginia Non-AMT) Series 1998-21 Weekly VRDNs (Norfolk, VA Water Revenue)/(FSA INS)/(ABN AMRO Bank N.V., Amsterdam LIQ) $ 21,410,000 1,900,000 Arlington County, VA Weekly VRDNs (Ballston Public Parking)/(Citibank N.A., New York LOC) 1,900,000 3,500,000 Fairfax County, VA EDA, (Series 1995) Weekly VRDNs (American Society of Civil Engineers Foundation, Inc. Project)/(Mellon Bank NA, Pittsburgh LOC) 3,500,000 8,000,000 Fairfax County, VA IDA, 1998 Trust Receipts FR/RI-A35 Weekly VRDNs (Fairfax Hospital System)/(National Westminster Bank, PLC, London LIQ)/(United States Treasury PRF) 8,000,000 9,600,000 York County, VA IDA, (Series 1985), 3.15% CP (Virginia Electric Power Co.), Mandatory Tender 2/11/1999 9,600,000 TOTAL 44,410,000 WASHINGTON-0.2% 4,000,000 ABN AMRO MuniTOPS Certificates Trust (Multistate Non-AMT) Series 1998-16 Weekly VRDNs (Port of Seattle, WA)/(MBIA INS)/(ABN AMRO, Inc. LIQ) 4,000,000 2,200,000 Port of Seattle, WA, IDR Bonds (Series 1985) Weekly VRDNs (Douglas Management Co. Project)/(Mellon Bank N.A., Pittsburgh LOC) 2,200,000 TOTAL 6,200,000 WEST VIRGINIA-0.6% 7,870,000 Cabell County Commission, WV, Life Care Facilities Multi- Option Revenue Bonds (Series 1995) Weekly VRDNs (Foster Foundation)/(Huntington National Bank, Columbus, OH LOC) 7,870,000 14,500,000 Marshall County, WV, PCR (Series 1992) Weekly VRDNs (PPG Industries, Inc.) 14,500,000 TOTAL 22,370,000 WISCONSIN-2.1% 10,975,000 Appleton, WI Area School District, 3.15% TRANs, 9/27/1999 10,975,685 4,800,000 Chippewa Falls WI, USD, 3.27% TRANs, 9/30/1999 4,803,068 14,150,000 Eau Claire, WI Area School Disrict, 3.07% TRANs, 9/27/1999 14,158,920 3,800,000 Greenfield, WI School District, 3.50% TRANs, 9/30/1999 3,800,703 3,250,000 Hancock, WI, Industrial Development Revenue Refunding Bonds (Series 1996) Weekly VRDNs (Ore-Ida Foods, Inc.)/(Heinz (H.J.) Co. GTD) 3,250,000 2,500,000 Hortonville, WI School District, 3.50% TRANs, 10/21/1999 2,502,602 PRINCIPAL AMOUNT VALUE SHORT-TERM MUNICIPALS-continued 1 WISCONSIN-CONTINUED $ 3,500,000 Menomonee Falls, WI School District, 3.27% TRANs, 8/25/1999 $ 3,500,363 4,800,000 Mequon-Thiensville, WI School District, 3.65% TRANs, 9/23/1999 4,805,932 3,000,000 Oregon, WI School District, 3.60% TRANs, 9/14/1999 3,001,066 3,100,000 Pulaskii, WI Community School District, 3.60% TRANs, 8/31/1999 3,100,335 2,045,000 Wisconsin Health and Educational Facilities Authority Weekly VRDNs (St. Luke's Medical Center)/(First National Bank of Chicago and Sumitomo Bank Ltd., Osaka LOCs) 2,045,000 21,590,000 Wisconsin Health and Educational Facilities Authority, MERLOTs (Series 1997 B) Weekly VRDNs (Sinai Samaritan Medical Center, Inc.)/(MBIA INS)/(First Union National Bank, Charlotte, NC LIQ) 21,590,000 TOTAL 77,533,674 WYOMING-0.2% 4,470,000 Douglas, WY, IDR Bonds, 3.45% TOBs (Safeway, Inc.)/(Bankers Trust Co., New York LOC), Mandatory Tender 2/1/1999 4,470,000 1,125,000 Natrona County, WY, Hospital Revenue, 5.0375% TOBs (Grainger (W.W.), Inc.), Optional Tender 6/1/1999 1,125,000 TOTAL 5,595,000 TOTAL INVESTMENTS (AT AMORTIZED COST) 3 $ 3,636,721,438
1 The Fund may only invest in securities rated in one of the two highest short-term rating categories by nationally recognized statistical rating organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's two highest rating categories are determined without regard for sub-categories and gradations. For example, securities rated SP-1+, SP-1, or SP-2 by Standard & Poor's, MIG-1 or MIG-2 by Moody's Investors Service, Inc., or F-1+, F-1, or F-2 by Fitch IBCA, Inc. are all considered rated in one of the two highest short-term rating categories. Securities rated in the highest short-term rating category (and unrated securities of comparable quality) are identified as First Tier securities. Securities in the second highest short-term rating category (and unrated securities of comparable quality) are identified as Second Tier securities. The Fund follows applicable regulations in determining whether a security is rated and whether a security is rated by multiple NRSROs in different rating categories should be identified as a First or Second Tier security. At January 31, 1999, the portfolio securities were rated as follows: Tier Rating Based on Total Market Value (Unaudited) FIRST TIER SECOND TIER 100.00% 0.00% 2 Denotes a restricted security which is subject to restrictions on resale under Federal Securities laws. At January 31, 1999, these securities amounted to $207,151,000 which represents 5.6% of net assets. 3 Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($3,670,275,279) at January 31, 1999. The following acronyms are used throughout this portfolio: AMBAC -American Municipal Bond Assurance Corporation AMT -Alternative Minimum Tax BANs -Bond Anticipation Notes CAPMAC -Capital Municipal Assurance Corporation CDA -Community Development Administration CP -Commercial Paper EDA - -Economic Development Authority EDC -Economic Development Commission EDR - -Economic Development Revenue FGIC -Financial Guaranty Insurance Company FHA - -Federal Housing Administration FSA -Financial Security Assurance GO -General Obligation GTD -Guaranty HEFA -Health and Education Facilities Authority HFA - -Housing Finance Authority HFDC -Health Facility Development Corporation IDA - -Industrial Development Authority IDB -Industrial Development Bond IDC - -Industrial Development Corporation IDR -Industrial Development Revenue IDRB - -Industrial Development Revenue Bond IFA -Industrial Finance Authority INS - -Insured ISD -Independent School District LIQ -Liquidity Agreement LOC -Letter of Credit MBIA -Municipal Bond Investors Assurance MERLOTS -Municipal Exempt Receipts - Liquidity Optional Tender Series PCR - -Pollution Control Revenue PRF -Prerefunded RAN -Revenue Anticipation Note SA - -Support Agreement TAN -Tax Anticipation Note TAW -Tax Anticipation Warrant TOB - -Tender Option Bond TRAN -Tax and Revenue Anticipation Note UT -Unlimited Tax VRDN -Variable Rate Demand Note See Notes which are an integral part of the Financial Statements Statement of Assets and Liabilities JANUARY 31, 1999 (UNAUDITED) ASSETS: Total investments in securities, at amortized cost and value $ 3,636,721,438 Cash 16,458,778 Income receivable 28,950,106 Prepaid expenses 110,018 TOTAL ASSETS 3,682,240,340 LIABILITIES: Payable for investments purchased $ 2,248,098 Payable for shares redeemed 200,000 Income distribution payable 9,180,445 Accrued expenses 336,518 TOTAL LIABILITIES 11,965,061 Net assets for 3,670,246,586 shares outstanding $ 3,670,275,279 NET ASSETS CONSIST OF: Paid in capital $ 3,670,246,586 Accumulated net investment loss (6,573) Accumulated net realized gain on investments 35,266 TOTAL NET ASSETS $ 3,670,275,279 NET ASSET VALUE, OFFERING PRICE, AND REDEMPTION PROCEEDS PER SHARE: INSTITUTIONAL SHARES: $2,597,241,293 / 2,597,230,858 shares outstanding $1.00 INSTITUTIONAL SERVICE SHARES: $1,073,033,986 / 1,073,015,728 shares outstanding $1.00
See Notes which are an integral part of the Financial Statements Statement of Operations SIX MONTHS ENDED JANUARY 31, 1999 (UNAUDITED) INVESTMENT INCOME: Interest $ 57,614,562 EXPENSES: Investment advisory fee $ 3,379,512 Administrative personnel and services fee 1,274,076 Custodian fees 23,952 Transfer and dividend disbursing agent fees and expenses 43,452 Directors'/Trustees' fees 9,642 Auditing fees 6,992 Legal fees 17,886 Portfolio accounting fees 136,391 Shareholder services fee-Institutional Shares 2,933,588 Shareholder services fee-Institutional Service Shares 1,290,802 Share registration costs 167,880 Printing and postage 24,764 Insurance premiums 119,158 Miscellaneous 7,726 TOTAL EXPENSES 9,435,821 WAIVERS: Waiver of investment advisory fee $ (1,757,546) Waiver of shareholder services fee-Institutional Shares (2,933,588) TOTAL WAIVERS (4,691,134) Net expenses 4,744,687 Net investment income 52,869,875 Net realized loss on investments (4,616) Change in net assets resulting from operations $ 52,865,259
See Notes which are an integral part of the Financial Statements Statement of Changes in Net Assets
SIX MONTHS ENDED YEAR (unaudited) ENDED JANUARY 31, JULY 31, 1999 1998 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 52,869,875 $ 87,408,505 Net realized gain (loss) on investments (4,616) 131,365 CHANGE IN NET ASSETS RESULTING FROM OPERATIONS 52,865,259 87,539,870 DISTRIBUTIONS TO SHAREHOLDERS: Distributions from net investment income Institutional Shares (37,575,104) (63,605,236) Institutional Service Shares (15,294,771) (23,803,270) CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (52,869,875) (87,408,506) SHARE TRANSACTIONS: Proceeds from sale of shares 9,420,100,498 16,237,569,274 Net asset value of shares issued to shareholders in payment of distributions declared 5,605,848 12,646,067 Cost of shares redeemed (8,975,712,635) (15,092,223,527) CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 449,993,711 1,157,991,814 Change in net assets 449,989,095 1,158,123,178 NET ASSETS: Beginning of period 3,220,286,184 2,062,163,006 End of period $ 3,670,275,279 $ 3,220,286,184
See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1994 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.03 0.03 0.03 0.04 0.02 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.04) (0.02) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 1 1.63% 3.50% 3.49% 3.55% 3.64% 2.45% RATIOS TO AVERAGE NET ASSETS: Expenses 0.20% 2 0.20% 0.20% 0.20% 0.20% 0.20% Net investment income 3.20% 2 3.45% 3.43% 3.46% 3.62% 2.41% Expense waiver/reimbursement 3 0.35% 2 0.35% 0.35% 0.36% 0.39% 0.15% SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $2,597,241 $2,279,770 $1,474,180 $1,514,979 $1,295,458 $789,755
1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 2 Computed on an annualized basis. 3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Service Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1994 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.03 0.03 0.03 0.03 0.002 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.03) (0.03) (0.03) (0.03) (0.002) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 1.50% 3.25% 3.24% 3.29% 3.39% 0.18% RATIOS TO AVERAGE NET ASSETS: Expenses 0.45% 3 0.45% 0.45% 0.45% 0.45% 0.39% 3 Net investment income 2.96% 3 3.20% 3.19% 3.22% 3.48% 3.04% 3 Expense waiver/reimbursement 4 0.10% 3 0.10% 0.10% 0.11% 0.14% 0.15% 3 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $1,073,034 $940,516 $587,983 $406,408 $252,016 $25,148
1 Reflects operations for the period from July 5, 1994 (date of initial public investment) to July 31, 1994. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Notes to Financial Statements JANUARY 31, 1999 (UNAUDITED) ORGANIZATION Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Tax-Free Obligations Fund (the "Fund"). The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is to provide dividend income exempt from federal regular income tax consistent with stability of principal. The Fund offers two classes of shares: Institutional Shares and Institutional Service Shares. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATIONS The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act. INVESTMENT INCOME, EXPENSES, AND DISTRIBUTIONS Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex-dividend date. FEDERAL TAXES It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provisions for federal tax are necessary. At July 31, 1998, the Fund, for federal tax purposes, had a capital loss carryforward of $17,686, which will reduce the Fund's taxable income arising from future net realized gain on investments, if any, to the extent permitted by the Code, and thus will reduce the amount of the distributions to shareholders which would otherwise be necessary to relieve the Fund of any liability for federal tax. Pursuant to the Code, such capital loss carryforward will expire in 2005. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when- issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. RESTRICTED SECURITIES Restricted securities are securities that may only be resold upon registration under federal securities laws or in transactions exempt from such registration. Many restricted securities may be resold in the secondary market in transactions exempt from registration upon exercise of a demand feature. Such restricted securities may be determined to be liquid under criteria established by the Board of Trustees ("Trustees"). The Fund will not incur any registration costs upon such resales. Restricted securities are valued at amortized cost in accordance with Rule 2a-7 under the Act. Additional information on each restricted security held at January 31, 1999 is as follows:
SECURITY ACQUISITION DATE ACQUISITION COST ABN AMRO MuniTOPS Certificates Trust, Series 1998-19 12/9/1998 $12,996,000 ABN AMRO MuniTOPS Certificates Trust, Series 1998-26 12/31/1998 15,000,000 ABN AMRO MuniTOPS Certificates Trust, Series 1998-28 12/16/1998 20,525,000 Alaska State Housing Finance Corp., PT-202 6/26/1998 7,210,843 Bibb County, GA, PT-199 6/19/1999 8,000,811 Chicago, IL, Variable Rate Certificates, Series 1998-M 8/5/1998 20,000,000 Connecticut State HFA, Variable Rate Certificates, Series 1998-S 9/17/1998 4,000,000 Cook County, IL, Series 1998-A, PT-1111 12/11/1998 9,940,865 Intermountain Power Agency, UT, Trust Receipts, Series A-63 10/1/1998 5,000,486 Maryland State Community Development, Series 1997, PT-123 12/10/1998 23,986,740 New York City, Trust Receipts, Series 1998 FR/RI A-79 1/5/1999 54,261,715 New York State Dormitory Authority, PT-192 6/5/1998 11,781,210 New York State Mortgage Agency, PT-164 3/25/1998 4,995,503 San Antonio, TX Electric & Gas, PT-1110 12/11/1998 9,890,854
USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses, and revenues reported in the financial statements. Actual results could differ from those estimated. OTHER Investment transactions are accounted for on the trade date. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. At January 31, 1999, capital paid-in aggregated $3,670,246,586. Transactions in shares were as follows:
SIX MONTHS ENDED YEAR ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SHARES: Shares sold 7,396,158,979 12,763,472,990 Shares issued to shareholders in payment of distributions declared 4,212,217 8,791,413 Shares redeemed (7,082,897,210) (11,966,763,689) NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS 317,473,986 805,500,714 SIX MONTHS ENDED YEAR ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SERVICE SHARES: Shares sold 2,023,941,519 3,474,096,284 Shares issued to shareholders in payment of distributions declared 1,393,631 3,854,654 Shares redeemed (1,892,815,425) (3,125,459,838) NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS 132,519,725 352,491,100 NET CHANGE RESULTING FROM SHARE TRANSACTIONS 449,993,711 1,157,991,814
INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE Federated Management, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.20% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. ADMINISTRATIVE FEE Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on the level of average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc. for the period. The administrative fee received during the period of the Administrative Services Agreement shall be at least $125,000 per portfolio and $30,000 per each additional class of shares. SHAREHOLDER SERVICES FEE Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion. TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders. PORTFOLIO ACCOUNTING FEES FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. INTERFUND TRANSACTIONS During the period ended January 31, 1999, the Fund engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions were made at current market value pursuant to Rule 17a-7 under the Act amounting to $2,579,378,000 and $2,278,030,000, respectively. GENERAL Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. YEAR 2000 Similar to other financial organizations, the Fund could be adversely affected if the computer systems used by the Fund's service providers do not properly process and calculate date-related information and data from and after January 1, 2000. The Fund's Adviser and administrator are taking measures that they believe are reasonably designed to address the Year 2000 issue with respect to computer systems that they use and to obtain reasonable assurances that comparable steps are being taken by each of the Fund's other service providers. At this time, however, there can be no assurance that these steps will be sufficient to avoid any adverse impact to the Fund. SUBSEQUENT EVENT Effective March 31, 1999, Federated Management, Adviser to the Fund, merged into Federated Investment Management Company (formerly, Federated Advisers). Trustees JOHN F. DONAHUE THOMAS G. BIGLEY JOHN T. CONROY, JR. WILLIAM J. COPELAND JOHN F. CUNNINGHAM J. CHRISTOPHER DONAHUE LAWRENCE D. ELLIS, M.D. PETER E. MADDEN CHARLES F. MANSFIELD, JR. JOHN E. MURRAY, JR., J.D., S.J.D. MARJORIE P. SMUTS JOHN S. WALSH Officers JOHN F. DONAHUE Chairman J. CHRISTOPHER DONAHUE President EDWARD C. GONZALES Executive Vice President JOHN W. MCGONIGLE Executive Vice President and Secretary RICHARD B. FISHER Vice President RICHARD J. THOMAS Treasurer ANTHONY R. BOSCH Assistant Secretary Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so. This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses, and other information. Tax-Free Obligations Fund SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1999 [Graphic] Tax-Free Obligations Fund Federated Investors Funds 5800 Corporate Drive Pittsburgh, PA 15237-7000 1-800-341-7400 WWW.FEDERATEDINVESTORS.COM Federated Securities Corp., Distributor Cusip 60934N401 Cusip 60934N880 0022807 (3/99) [Graphic] SEMI-ANNUAL REPORT President's Message Dear Shareholder: I am pleased to present the Semi-Annual Report to Shareholders for Treasury Obligations Fund, a portfolio of Money Market Obligations Trust. This report covers the first half of the fund's fiscal year, which is the six-month period ended January 31, 1999. It begins with an investment review of the short-term Treasury market from the fund's portfolio manager. Following the investment review are the fund's portfolio of investments and financial statements. In Treasury Obligations Fund, your ready cash is at work pursuing daily income-along with the additional advantages of daily liquidity and stability of principal 1-by investing exclusively in short-term U.S. Treasury obligations and in repurchase agreements collateralized by these obligations. At the end of the reporting period, the fund's net assets totaled $11.8 billion. Over the six-month reporting period, dividends paid to shareholders of Institutional Shares, Institutional Service Shares and Institutional Capital Shares totaled $0.03, $0.02, and $0.02 per share, respectively. On the last day of the reporting period, the 30-day net yields for Institutional Shares, Institutional Service Shares, and Institutional Capital Shares were 4.65%, 4.40%, and 4.55%, respectively, while the 7-day net yields were 4.70%, 4.45%, and 4.60%, respectively. 2 Thank you for your confidence in the daily earning power of Treasury Obligations Fund. As always, your questions and comments are welcome. Sincerely, [Graphic] J. Christopher Donahue President March 15, 1999 1 An investment in the fund is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. 2 Performance quoted represents past performance and is not indicative of future results. Yield will vary. Yields quoted for money market funds most closely reflect the fund's current earnings. Investment Review Treasury Obligations Fund, which is rated AAAm 1 by Standard & Poor's ("S&P") and Aaa1 by Moody's Investors Service, Inc. ("Moody's") is invested in direct obligations of the U.S. Treasury either in the form of notes and bills or as collateral for repurchase agreements. There were two central themes in the short-term government markets over the reporting period ended January 31, 1999. First, the economy continued to advance at a robust pace of growth, with gross domestic product expanding in the third and fourth quarters of 1998 at 3.70% and 6.10%, respectively, and all indications that this same strength had spilled over into 1999. Although the manufacturing sector was soft, the housing and retail sectors continued to propel the economy forward. While this pace of growth is in excess of what has traditionally been viewed to be the non-inflationary potential of the economy, inflation nevertheless remained benign, perhaps reflecting advances in productivity that have enabled growth to be achieved without upward pressure on prices. Under normal circumstances, however, the growth trajectory of the economy would have been sufficient to make Federal Reserve Board ("Fed") officials concerned about the inflationary threat that could result from such above-trend growth. Circumstances were not normal, however, as economic crises in countries overseas and in Latin America were the second, and ultimately more dominant, theme over the reporting period. In August 1998, the economic troubles in Asia spread to encompass Russia and then Latin America. As fears that the United States could not continue to be immune from what had become a global economic crisis weighed heavily on the U.S. equity market, investors both domestic and abroad fled to the perceived safety of the U.S. Treasury market. Yields on U.S. Treasury securities were driven sharply downward, as investors shunned credit-sensitive markets in favor of the safe haven of U.S. Treasuries, and a credit/liquidity crisis in the U.S. financial markets became evident. Faced with this scenario, the Fed voted to ease monetary policy by 25 basis points, bringing the federal funds target rate down to 5.25% in late September in an attempt to calm investor fears. Market participants viewed this move to be too tentative, however, and it was not until the Fed took two additional easing steps in mid-October and November, bringing the federal funds target rate to 4.75%, that some semblance of calm returned to the markets. Credit spreads narrowed over this period, albeit not back to levels that pre-dated the crisis. One additional factor that influenced movements in rates on U.S. Treasury securities over this period-and in fact exacerbated the sharp decline in rates on these instruments in October-was the reduced supply of U.S. Treasury securities as a result of the vastly improved budget situation. With projections for the 1999 fiscal year for the U.S. Government for a surplus in the neighborhood of $100 billion, the paydown of debt by the Treasury over this period kept the market well-bid. 1 An AAAm rating is obtained after S&P evaluates a number of factors, including credit quality, market price exposure, and management. S&P monitors the portfolio weekly for developments that could cause changes in the ratings. Money market funds and bond funds rated Aaa by Moody's are judged to be of an investment quality similar to Aaa-rated fixed-income obligations, that is, they are judged to be of the best quality. These ratings do not remove market risks and are subject to change. Movements in short-term interest rates reflected the turbulent economic conditions early in the reporting period, and then the relative tranquillity of the markets once the Fed moves had their desired effect. The yield on the one-year Treasury bill began the reporting period at 5.40%, but was driven downward by the onslaught of investors-both domestic and abroad-seeking a safe haven from the world economic uncertainty and the instability of the U.S. equity market. The yield on this security reached a low of 3.85% by mid-October. As the additional easing steps by the Fed calmed investors, the yield on this security rose moderately to 4.60% by early November. Although the Fed took one additional easing step in mid- November, the yield on this security traded within a relatively narrow range of 4.40% to 4.60% for the remainder of the reporting period. With the flight to quality to U.S. Treasury securities driving yields on these securities down to extreme levels, repurchase agreements remained a preferred investment in spite of the easing steps eventually taken by the Fed. The average maturity for the fund drifted lower as yields dropped below 4%-well below any expectation for the federal funds target rate. The average maturity for the fund then extended out again as yields on short-term Treasuries returned to relative value. Overall, the average maturity target range for the fund was 35 to 45 days over the reporting period. The fund's structure remained barbelled, with a significant position in repurchase agreements combined with purchases of securities with 6- to 12-month maturities. As the U.S. economy continues to chug along seemingly unaffected by the countries around it, we would expect monetary policy to remain unchanged in upcoming months, barring an economic collapse in one of our major trading counterparts. However, changing economic and market developments are continuously monitored to best serve our clients attracted to the short-term U.S. Treasury market. Portfolio of Investments JANUARY 31, 1999 (UNAUDITED)
PRINCIPAL AMOUNT VALUE SHORT-TERM U.S. TREASURY NOTES-17.3% $ 2,024,250,000 5.625% - 7.750%, 4/30/1999-12/30/1999 $ 2,036,711,049 REPURCHASE AGREEMENTS-83.2% 1 225,000,000 ABN AMRO, Chicago Corp., 4.740%, dated 1/29/1999, due 2/1/1999 225,000,000 582,000,000 Barclays Capital, Inc., 4.740%, dated 1/29/1999, due 2/1/1999 582,000,000 366,000,000 Bear, Stearns and Co., 4.760%, dated 1/29/1999, due 2/1/1999 366,000,000 266,000,000 CIBC Wood Gundy Securities Corp., 4.720%, dated 1/29/1999, due 2/1/1999 266,000,000 100,000,000 CIBC Wood Gundy Securities Corp., 4.740%, dated 1/29/1999, due 2/1/1999 100,000,000 400,000,000 2 Credit Suisse First Boston, Inc., 4.740%, dated 11/18/1998, due 2/17/1999 400,000,000 251,000,000 Credit Suisse First Boston, Inc., 4.750%, dated 1/29/1999, due 2/1/1999 251,000,000 157,485,000 Deutsche Morgan Grenfell, 4.740%, dated 1/29/1999, due 2/1/1999 157,485,000 576,000,000 Donaldson, Lufkin and Jenrette Securities Corp., 4.730%, dated 1/29/1999, due 2/1/1999 576,000,000 96,000,000 First Chicago Capital Markets, Inc., 4.720%, dated 1/29/1999, due 2/1/1999 96,000,000 466,000,000 First Union Capital Markets, 4.730%, dated 1/29/1999, due 2/1/1999 466,000,000 113,000,000 2 Goldman Sachs & Co., 4.680%, dated 1/29/1999, due 3/31/1999 113,000,000 376,000,000 2 Goldman Sachs & Co., 4.880%, dated 12/1/1998, due 2/3/1999 376,000,000 266,000,000 Greenwich Capital Markets, Inc., 4.740%, dated 1/29/1999, due 2/1/1999 266,000,000 133,000,000 2 Lehman Government Securities, Inc., 4.700%, dated 1/21/1999, due 3/1/1999 133,000,000 300,000,000 Morgan Stanley Group, Inc., 4.600%, dated 1/29/1999, due 2/1/1999 300,000,000 166,000,000 Paribas Corp., 4.750%, dated 1/29/1999, due 2/1/1999 166,000,000 566,000,000 Salomon Smith Barney, Inc., 4.750%, dated 1/29/1999, due 2/1/1999 566,000,000 96,000,000 Scotia Capital Markets, Inc., 4.720%, dated 1/29/1999, due 2/1/1999 96,000,000 416,000,000 Societe Generale Securities Corp., 4.730%, dated 1/29/1999, due 2/1/1999 416,000,000 487,950,000 Societe Generale, New York, 4.730%, dated 1/29/1999, due 2/1/1999 487,950,000 100,000,000 State Street Bank and Trust Co., 4.720%, dated 1/29/1999, due 2/1/1999 100,000,000 576,000,000 Toronto Dominion Securities (USA) Inc., 4.730%, dated 1/29/1999, due 2/1/1999 576,000,000 PRINCIPAL AMOUNT VALUE REPURCHASE AGREEMENTS-continued 1 $ 1,475,000,000 Warburg Dillon Reed LLC, 4.740%, dated 1/29/1999, due 2/1/1999 $ 1,475,000,000 167,000,000 2 Warburg Dillon Reed LLC, 4.740%, dated 11/20/1998, due 2/18/1999 167,000,000 1,066,000,000 Westdeutsche Landesbank Girozentrale, 4.730%, dated 1/29/1999, due 2/1/1999 1,066,000,000 TOTAL REPURCHASE AGREEMENTS 9,789,435,000 TOTAL INVESTMENTS (AT AMORTIZED COST) 3 $ 11,826,146,049
1 The repurchase agreements are fully collateralized by U.S. Treasury obligations based on market prices at the date of the portfolio. The investments in the repurchase agreements are through participation in joint accounts with other Federated funds. 2 Although final maturity falls beyond seven days, a liquidity feature is included in each transaction to permit termination of the repurchase agreement within seven days. 3 Also represents cost for federal tax purposes. Note: The categories of investments are shown as a percentage of net assets ($11,765,329,941) at January 31, 1999. See Notes which are an integral part of the Financial Statements Statement of Assets and Liabilities JANUARY 31, 1999 (UNAUDITED)
ASSETS: Investments in repurchase agreements $ 9,789,435,000 Investments in securities 2,036,711,049 Total investments, at amortized cost and value $ 11,826,146,049 Cash 12,741 Receivable for investments sold 51,290,264 Income receivable 46,686,960 TOTAL ASSETS 11,924,136,014 LIABILITIES: Payable for investments purchased 112,345,856 Income distribution payable 44,878,118 Accrued expenses 1,582,099 TOTAL LIABILITIES 158,806,073 Net assets for 11,765,329,941 shares outstanding $ 11,765,329,941 NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PROCEEDS PER SHARE: INSTITUTIONAL SHARES: $6,016,384,966 / 6,016,384,966 shares outstanding $1.00 INSTITUTIONAL SERVICE SHARES: $5,291,179,205 / 5,291,179,205 shares outstanding $1.00 INSTITUTIONAL CAPITAL SHARES: $457,765,770 / 457,765,770 shares outstanding $1.00
See Notes which are an integral part of the Financial Statements Statement of Operations SIX MONTHS ENDED JANUARY 31, 1999 (UNAUDITED)
INVESTMENT INCOME: Interest $ 289,219,123 EXPENSES: Investment advisory fee $ 11,174,696 Administrative personnel and services fee 4,212,860 Custodian fees 257,018 Transfer and dividend disbursing agent fees and expenses 122,156 Directors'/Trustees' fees 32,781 Auditing fees 6,826 Legal fees 20,669 Portfolio accounting fees 385,527 Shareholder services fee-Institutional Shares 7,190,366 Shareholder services fee-Institutional Service Shares 6,433,184 Shareholder services fee-Institutional Capital Shares 344,820 Share registration costs 240,965 Printing and postage 13,610 Insurance premiums 25,392 Miscellaneous 17,644 TOTAL EXPENSES 30,478,514 WAIVERS: Waiver of investment advisory fee $ (5,090,371) Waiver of shareholder services fee-Institutional Shares (7,190,366) Waiver of shareholder services fee-Institutional Capital Shares (206,892) TOTAL WAIVERS (12,487,629) Net expenses 17,990,885 Net investment income $ 271,228,238
See Notes which are an integral part of the Financial Statements Statement of Changes in Net Assets
SIX MONTHS ENDED YEAR (unaudited) ENDED JANUARY 31, JULY 31, 1999 1998 INCREASE (DECREASE) IN NET ASSETS OPERATIONS: Net investment income $ 271,228,238 $ 510,741,482 DISTRIBUTIONS TO SHAREHOLDERS: Distributions from net investment income Institutional Shares (142,975,779) (283,582,801) Institutional Service Shares (121,707,266) (224,897,953) Institutional Capital Shares (6,545,193) (2,260,728) CHANGE IN NET ASSETS RESULTING FROM DISTRIBUTIONS TO SHAREHOLDERS (271,228,238) (510,741,482) SHARE TRANSACTIONS: Proceeds from sale of shares 34,599,647,835 62,011,458,681 Net asset value of shares issued to shareholders in payment of distributions declared 53,497,940 122,517,950 Cost of shares redeemed (33,254,817,723) (59,678,173,575) CHANGE IN NET ASSETS RESULTING FROM SHARE TRANSACTIONS 1,398,328,052 2,455,803,056 Change in net assets 1,398,328,052 2,455,803,056 NET ASSETS: Beginning of period 10,367,001,889 7,911,198,833 End of period $ 11,765,329,941 $ 10,367,001,889
See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1994 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.03 0.05 0.05 0.05 0.05 0.03 LESS DISTRIBUTIONS: Distributions from net investment income (0.03) (0.05) (0.05) (0.05) (0.05) (0.03) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 1 2.53% 5.54% 5.36% 5.53% 5.50% 3.35% RATIOS TO AVERAGE NET ASSETS: Expenses 0.20% 2 0.20% 0.20% 0.20% 0.20% 0.20% Net investment income 4.97% 2 5.40% 5.24% 5.37% 5.42% 3.29% Expense waiver/ reimbursement 3 0.34% 2 0.35% 0.35% 0.36% 0.36% 0.10% SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $6,016,385 $5,289,871 $4,814,583 $4,649,870 $3,441,068 $2,582,975
1 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 2 Computed on an annualized basis. 3 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Service Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1996 1995 1994 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.05 0.05 0.05 0.05 0.00 3 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.05) (0.05) (0.05) (0.05) (0.003) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.40% 5.28% 5.10% 5.26% 5.23% 0.29% RATIOS TO AVERAGE NET ASSETS: Expenses 0.45% 3 0.45% 0.45% 0.45% 0.45% 0.39% 3 Net investment income 4.73% 3 5.15% 5.03% 5.12% 5.53% 4.26% 3 Expense waiver/ reimbursement 4 0.09% 3 0.10% 0.10% 0.11% 0.11% 0.10% 3 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $5,291,179 $5,045,428 $3,054,110 $1,516,839 $543,855 $8,887
1 Reflects operations for the period from July 5, 1994 (date of initial public investment) to July 31, 1994. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Financial Highlights-Institutional Capital Shares (FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
SIX MONTHS ENDED (unaudited) JANUARY 31, YEAR ENDED JULY 31, 1999 1998 1997 1 NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.02 0.05 0.02 LESS DISTRIBUTIONS: Distributions from net investment income (0.02) (0.05) (0.02) NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 TOTAL RETURN 2 2.48% 5.43% 1.58% RATIOS TO AVERAGE NET ASSETS: Expenses 0.31% 3 0.30% 0.30% 3 Net investment income 4.75% 3 5.30% 5.42% 3 Expense waiver/reimbursement 4 0.24% 3 0.25% 0.25% 3 SUPPLEMENTAL DATA: Net assets, end of period (000 omitted) $457,766 $31,703 $42,505
1 Reflects operations for the period from April 14, 1997 (date of initial public investment) to July 31, 1997. 2 Based on net asset value, which does not reflect the sales charge or contingent deferred sales charge, if applicable. 3 Computed on an annualized basis. 4 This voluntary expense decrease is reflected in both the expense and net investment income ratios shown above. See Notes which are an integral part of the Financial Statements Notes to Financial Statements JANUARY 31, 1999 (UNAUDITED) ORGANIZATION Money Market Obligations Trust (the "Trust") is registered under the Investment Company Act of 1940, as amended (the "Act") as an open-end, management investment company. The Trust consists of six portfolios. The financial statements included herein are only those of Treasury Obligations Fund (the "Fund"), a diversified portfolio. The financial statements of the other portfolios are presented separately. The assets of each portfolio are segregated and a shareholder's interest is limited to the portfolio in which shares are held. The investment objective of the Fund is current income consistent with stability of principal. The Fund offers three classes of shares: Institutional Shares, Institutional Service Shares and Institutional Capital Shares. SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. These policies are in conformity with generally accepted accounting principles. INVESTMENT VALUATIONS The Fund uses the amortized cost method to value its portfolio securities in accordance with Rule 2a-7 under the Act. REPURCHASE AGREEMENTS It is the policy of the Fund to require the custodian bank to take possession, to have legally segregated in the Federal Reserve Book Entry System, or to have segregated within the custodian bank's vault, all securities held as collateral under repurchase agreement transactions. Additionally, procedures have been established by the Fund to monitor, on a daily basis, the market value of each repurchase agreement's collateral to ensure that the value of collateral at least equals the repurchase price to be paid under the repurchase agreement transaction. The Fund will only enter into repurchase agreements with banks and other recognized financial institutions, such as broker/dealers, which are deemed by the Fund's adviser to be creditworthy pursuant to the guidelines and/or standards reviewed or established by the Board of Trustees (the "Trustees"). Risks may arise from the potential inability of counterparties to honor the terms of the repurchase agreement. Accordingly, the Fund could receive less than the repurchase price on the sale of collateral securities. INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS Interest income and expenses are accrued daily. Bond premium and discount, if applicable, are amortized as required by the Internal Revenue Code, as amended (the "Code"). Distributions to shareholders are recorded on the ex- dividend date. FEDERAL TAXES It is the Fund's policy to comply with the provisions of the Code applicable to regulated investment companies and to distribute to shareholders each year substantially all of its income. Accordingly, no provisions for federal tax are necessary. WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS The Fund may engage in when-issued or delayed delivery transactions. The Fund records when-issued securities on the trade date and maintains security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when- issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated. OTHER Investment transactions are accounted for on the trade date. SHARES OF BENEFICIAL INTEREST The Declaration of Trust permits the Trustees to issue an unlimited number of full and fractional shares of beneficial interest (without par value) for each class of shares. Transactions in shares were as follows:
SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SHARES: Shares sold 16,740,259,301 29,392,382,133 Shares issued to shareholders in payment of distributions declared 21,187,465 45,925,317 Shares redeemed (16,034,932,744) (28,963,019,841) NET CHANGE RESULTING FROM INSTITUTIONAL SHARE TRANSACTIONS 726,514,022 475,287,609 SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL SERVICE SHARES: Shares sold 15,922,739,800 31,821,116,897 Shares issued to shareholders in payment of distributions declared 30,994,863 74,615,681 Shares redeemed (15,707,983,585) (29,904,414,631) NET CHANGE RESULTING FROM INSTITUTIONAL SERVICE SHARE TRANSACTIONS 245,751,078 1,991,317,947 SIX MONTHS YEAR ENDED ENDED JANUARY 31, JULY 31, 1999 1998 INSTITUTIONAL CAPITAL SHARES: Shares sold 1,936,648,734 797,959,651 Shares issued to shareholders in payment of distributions declared 1,315,612 1,976,952 Shares redeemed (1,511,901,394) (810,739,103) NET CHANGE RESULTING FROM INSTITUTIONAL CAPITAL SHARE TRANSACTIONS 426,062,952 (10,802,500) NET CHANGE RESULTING FROM SHARE TRANSACTIONS 1,398,328,052 2,455,803,056
At January 31, 1999, capital paid-in aggregated $11,765,329,941. INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY FEE Federated Management, the Fund's investment adviser (the "Adviser"), receives for its services an annual investment advisory fee equal to 0.20% of the Fund's average daily net assets. The Adviser may voluntarily choose to waive any portion of its fee. The Adviser can modify or terminate this voluntary waiver at any time at its sole discretion. ADMINISTRATIVE FEE Federated Services Company ("FServ"), under the Administrative Services Agreement, provides the Fund with administrative personnel and services. The fee paid to FServ is based on the level of average aggregate daily net assets of all funds advised by subsidiaries of Federated Investors, Inc. for the period. The administrative fee received during the period of the Administrative Services Agreement shall be at least $125,000 per portfolio and $30,000 per each additional class of shares. SHAREHOLDER SERVICES FEE Under the terms of a Shareholder Services Agreement with Federated Shareholder Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily net assets of the Fund for the period. The fee paid to FSSC is used to finance certain services for shareholders and to maintain shareholder accounts. FSSC may voluntarily choose to waive any portion of its fee. FSSC can modify or terminate this voluntary waiver at any time at its sole discretion. TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is based on the size, type, and number of accounts and transactions made by shareholders. PORTFOLIO ACCOUNTING FEES FServ maintains the Fund's accounting records for which it receives a fee. The fee is based on the level of the Fund's average daily net assets for the period, plus out-of-pocket expenses. GENERAL Certain of the Officers and Trustees of the Trust are Officers and Directors or Trustees of the above companies. YEAR 2000 Similar to other financial organizations, the Fund could be adversely affected if the computer systems used by the Fund's service providers do not properly process and calculate date-related information and data from and after January 1, 2000. The Fund's Adviser and administrator are taking measures that they believe are reasonably designed to address the Year 2000 issue with respect to computer systems that they use and to obtain reasonable assurances that comparable steps are being taken by each of the Fund's other service providers. At this time, however, there can be no assurance that these steps will be sufficient to avoid any adverse impact to the Fund. SUBSEQUENT EVENT Effective March 31, 1999, Federated Management, Adviser to the Fund, merged into Federated Investment Management Company (formerly, Federated Advisers). Trustees JOHN F. DONAHUE THOMAS G. BIGLEY JOHN T. CONROY, JR. WILLIAM J. COPELAND JOHN F. CUNNINGHAM J. CHRISTOPHER DONAHUE LAWRENCE D. ELLIS, M.D. PETER E. MADDEN CHARLES F. MANSFIELD, JR. JOHN E. MURRAY, JR., J.D., S.J.D. MARJORIE P. SMUTS JOHN S. WALSH Officers JOHN F. DONAHUE Chairman J. CHRISTOPHER DONAHUE President EDWARD C. GONZALES Executive Vice President JOHN W. MCGONIGLE Executive Vice President and Secretary RICHARD B. FISHER Vice President RICHARD J. THOMAS Treasurer ANTHONY R. BOSCH Assistant Secretary Mutual funds are not bank deposits or obligations, are not guaranteed by any bank, and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board, or any other government agency. Investment in mutual funds involves investment risk, including the possible loss of principal. Although money market funds seek to maintain a stable net asset value of $1.00 per share, there is no assurance that they will be able to do so. This report is authorized for distribution to prospective investors only when preceded or accompanied by the fund's prospectus which contains facts concerning its objective and policies, management fees, expenses, and other information. SEMI-ANNUAL REPORT [Graphic] Treasury Obligations Fund SEMI-ANNUAL REPORT TO SHAREHOLDERS JANUARY 31, 1999 [Graphic] Treasury Obligations Fund Federated Investors Funds 5800 Corporate Drive Pittsburgh, PA 15237-7000 1-800-341-7400 WWW.FEDERATEDINVESTORS.COM Federated Securities Corp., Distributor Cusip 60934N500 Cusip 60934N872 Cusip 60934N823 1022004 (3/99) -----END PRIVACY-ENHANCED MESSAGE-----