<PAGE>
- --------------------------------------------------------------------------------
Letter to Shareholders
- --------------------------------------------------------------------------------
Dear Shareholders:
We welcome this opportunity to provide you with a summary of the trends and
key events that affected the economy and the Goldman Sachs Money Market Trust/
Financial Square Funds in 1995. It has been an eventful and positive year for
the Financial Square family. The Funds continued to outperform their respective
IBC/Donoghue averages during the period, and assets increased significantly to
more than $9.1 billion as of December 31, 1995.
1995 In Review:
The Fed Changed Direction as the Economy Slowed
As 1995 began, the economy still showed some residual strength, which
prompted the Federal Reserve to increase the Federal funds rate by 50 basis
points to 6.00% last February in what was to be the last of seven rate hikes in
its tightening cycle. Subsequently, after it became clear that the economy had
slowed significantly, with annualized real Gross Domestic Product (GDP) rising
only modestly by 1.7% and 0.7% in the first and second quarters, the Fed
reversed course and lowered rates by 25 basis points in July. Though real GDP
rebounded to 3.2% in the third quarter, some of the increase was attributed to
an acceleration in government spending in anticipation of the budget debate.
With inflation at bay, the Fed eased again in December, bringing the Federal
funds rate to 5.50% by year end.
<TABLE>
<CAPTION>
Historical Yield Curve (LIBOR)
Label A B
- -------------------------------------------------
<S> <C> <C> <C>
Label 12/31/95 12/31/94
- -------------------------------------------------
1. Overnight 5.88 5.64
- -------------------------------------------------
2. 1 5.75 6
- -------------------------------------------------
3. 2 5.69 6.25
- -------------------------------------------------
4. 3 5.63 6.5
- -------------------------------------------------
5. 4 5.63 6.69
- -------------------------------------------------
6. 5 5.56 6.81
- -------------------------------------------------
7. 6 5.56 7
- -------------------------------------------------
8. 9 5.44 7.38
- -------------------------------------------------
9. 12 5.44 7.75
- -------------------------------------------------
</TABLE>
Source: Goldman Sachs Fixed Income database, reflecting the London Interbank
Offered Rate (LIBOR).
Although the targeted Federal funds rate begun and ended the year at 5.50%, the
slope of the LIBOR yield curve shifted dramatically during 1995 as the expected
direction of interest rates changed from increasing to declining. By year end,
the curve was inverted and had shifted significantly downward.
Responsive and Agile Strategy Contributed to
Continued Strong Performance
Taxable Sector. Structuring money market portfolios successfully during 1995,
when the Fed shifted policy from tightening to easing, required strict attention
to risk management, as well as to a detailed analysis of market fundamentals and
technicals. Analyzing the implied forward rates and determining the extent to
which the market had priced in too much or too little easing, and then adjusting
the portfolio's weighted average maturities and structures, were equally
important to our strategy. We also kept a vigilant eye on fiscal policy, as the
"start-and-stop" nature of the balanced budget debate and the subsequent
government shutdowns had an impact on the market.
During the second quarter of 1995, we extended the weighted average
maturities of the Financial Square Funds, which caused them to be well
positioned for the Fed's rate decrease in July. Some signs of a modest
resurgence in growth became evident in late summer, and we correctly anticipated
that the Fed would remain on hold until a budget package was passed or growth
showed signs of slowing further. Between late November and mid-December, we
again extended the Funds' weighted average maturities, given our concern about
slowing growth. That extension proved to be the correct move when the Fed eased
for the second time in late December.
Tax-Exempt Sector. Discussions of a flat tax, decreasing short-term municipal
issuance and the change in direction of short-term interest rates made for an
interesting year in tax-exempt money market funds. During 1995, total assets in
tax-exempt money market funds increased by approximately 8%, while supply
decreased by 7.5%. Consequently, short-term tax-exempt securities traded at
approximately 69% of their Treasury counterparts, as compared with 71% in 1994,
which means that, on average, tax-exempts were more expensive in 1995 than in
1994. All of these factors increased the importance of active portfolio
management to achieve competitive performance.
- --------------------------------------------------------------------------------
1
<PAGE>
- --------------------------------------------------------------------------------
Letter to Shareholders (continued)
- --------------------------------------------------------------------------------
By varying the Financial Square Tax-Free Money Market Fund's exposure to
variable rate demand notes (VRDNs) and tax-exempt commercial paper as supply
technicals warranted, we were able to add incremental yield to the portfolio. In
addition, the Fund's performance benefited from extending and maintaining a
longer weighted average maturity for much of the year.
<TABLE>
<CAPTION>
Summary for Financial Square Funds Institutional Shares* as of
12/31/95
SEC 7-Day SEC 7-Day 30-Day Weighted
Financial Square Current Effective Average Average
Funds Yield Yield Yield Maturity
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Prime Obligations
Fund 5.65% 5.81% 5.66% 65 days
- --------------------------------------------------------------------------
Money Market Fund 5.70% 5.87% 5.73% 58 days
- --------------------------------------------------------------------------
Treasury Obligations
Fund 5.51% 5.66% 5.64% 35 days
- --------------------------------------------------------------------------
Government Fund 5.59% 5.75% 5.64% 36 days
- --------------------------------------------------------------------------
Tax-Free Money
Market Fund 4.31% 4.41% 3.92% 47 days
==========================================================================
</TABLE>
*Financial Square Funds offer three separate classes of shares (Institutional,
Administration and Service), each of which is subject to different fees and
expenses that affect performance and entitle shareholders to different services.
The Administration shares and the Service shares offer financial institutions
the opportunity to receive a fee for providing administrative support services.
The Administration shares pay an additional 0.25%, and the Service shares pay an
additional 0.50%. More complete information, including management fees and
expenses, is included in the Funds' prospectus, or can be obtained by calling
Goldman Sachs Institutional Funds at 1-800-621-2550.
Domestic Credit Stronger in 1995
Domestic credit quality strengthened in 1995, thanks to an improving economy,
lower interest rates and corporate productivity gains. Positive credit trends
were particularly notable in the capital-intensive industries. Retailers did not
fare as well as reluctant consumers worried about slower disposable income
growth, job reductions, a higher debt load and uncertainty about the health of
the economy. The rejuvenated U.S. banking industry continued its trend toward
regional and national banking, largely through mergers and acquisitions. This
equity-financed consolidation is positive for the creditworthiness and
efficiency of the U.S. banking system. Merger activity was also prominent in
other industries, supported by higher stock prices and lower interest rates. The
majority of companies used stock, rather than cash, to pay for their
acquisitions, keeping leverage down. Spin-offs and split-ups counterbalanced the
heavy merger activity as some organizations tried to focus more sharply on their
core businesses.
In the tax-exempt arena, the most notable phenomenon was the increase in
short-term paper that came to the market with credit enhancements (i.e., letters
of credit or insurance) as a result of lingering concerns surrounding the Orange
County, California bankruptcy. In addition, improved disclosure from municipal
issuers, spurred by heightened due diligence, made it easier to distinguish
between weak and strong credits.
A Mixed Credit Picture Abroad
Credit quality trends abroad were mixed, with weakness most notable in
financial institutions in France and Japan. In Europe, economic recovery slowed
significantly during 1995, causing the Bundesbank to lower short-term interest
rates by year end and other European countries to follow suit. Asset quality
problems persisted for Japanese financial institutions, with continued
uncertainty regarding the methods and timing of a resolution. Credit quality for
the nonfinancial sectors was much more balanced. The Japanese economy has
recently begun to show signs of resuscitation, spurred by the government's
stimulative fiscal policy, a weaker yen (which should help to revive exports),
and corporate cost-cutting and restructuring.
Our outlook for global credit quality for 1996 is cautiously optimistic,
although we remain concerned about consumer indebtedness and reluctance to spend
as well as the timing for recovery of the Japanese banking system.
The Goldman Sachs Credit Department, which includes 74 credit professionals
based in London, Tokyo,
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
Frankfurt and Toronto as well as New York, will continue to be vigilant in
monitoring these and other global developments. Consistent with the trends
outlined previously, new names added to the approved list for the Funds have
been primarily U.S. banks and industrial companies, in contrast to a short while
ago when foreign banks dominated our approved names.
Outlook and Strategies for 1996
Fourth-quarter 1995 GDP is estimated to be approximately 1.0%, reflecting the
longer-than-expected government shutdown and very weak Christmas sales. Economic
growth is expected to slow to an anemic 0.5% for the first quarter of 1996, and
therefore we believe the Fed is likely to lower short-term interest rates by
another 25 to 50 basis points by midyear before the economy begins to accelerate
again during the second half of the year.
As a result, the Financial Square Funds will continue to be managed with
longer average life targets and laddered structures to take advantage of our
near-term expectations of lower rates.
Extended Trading Hours Improve Service Further
During 1995, Goldman Sachs Asset Management extended the trading hours for
the Financial Square Tax-Free Money Market Fund. Purchases are now accepted
until 2:00 p.m. EST and redemptions may be made until 1:00 p.m. EST. In
addition, the Financial Square Government Fund now accepts redemptions, as well
as purchases, until 5:00 p.m. EST.
New Listings for Financial Square Funds
We are pleased to note that starting on February 1, 1996, Financial Square
Funds will be listed on Bloomberg and can be accessed by keying in "GSAM - GO".
In addition, the Funds are now also listed under "Financial Square" in
IBC/Donoghue's Money Fund Report(R) for your convenience.
Another Triple-A Rating
In 1995, the Financial Square Government Fund was rated AAA by Standard &
Poor's Rating Group. The Financial Square Treasury Obligations Fund is also
rated triple-A by both S&P and Moody's Investors Service, Inc.
In closing, we thank you for your support and for making 1995 a year of
record assets for the Financial Square Funds. As in the past, we will continue
to look for additional ways to improve our services, while seeking to provide
you with competitive performance. We welcome your suggestions and questions, and
look forward to another strong year in 1996.
/s/ Kaysie P. Uniacke
Kaysie P. Uniacke
Portfolio Manager
February 1, 1996
- --------------------------------------------------------------------------------
3
<PAGE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Financial Square Prime Obligations Fund
December 31, 1995
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial Paper and Corporate Obligations-55.5%
Bank Holding Companies
BankAmerica Corp.
$ 40,000,000 5.56% 04/30/96 $ 39,258,667
Bankers Trust New York Corp.
150,000,000 5.69 02/09/96 149,075,376
Chase Manhattan Corp.
25,000,000 5.57 03/12/96 24,725,368
Corestates Capital Corp.
15,000,000 5.50(a) 05/13/96 14,695,208
NationsBank Corp.
20,000,000 5.51 04/29/96 19,635,728
25,000,000 5.50 05/13/96 24,492,014
Norwest Corp.
75,000,000 5.75(a) 10/28/96 75,000,000
Business Credit Institutions
CIT Group Holdings, Inc.
50,000,000 5.70 02/12/96 49,667,500
General Electric Capital Corp.
45,000,000 5.57 04/15/96 44,268,937
50,000,000 5.60 04/22/96 49,128,889
Business Services
International Lease Finance Corp.
25,000,000 5.50 05/03/96 24,530,208
Drugs
Lilly (Eli) & Co.
15,000,000 5.57 04/16/96 14,753,992
Smithkline Beecham Corp.
15,000,000 5.81(a) 03/11/96 15,003,987
Farm Machinery
John Deere Capital Corp.
35,000,000 5.58 04/19/96 34,408,675
25,000,000 5.57 04/26/96 24,551,305
Food Products
CPC International Inc.
50,000,000 5.59 04/03/96 49,277,958
13,300,000 5.57 04/10/96 13,094,219
25,000,000 5.55 04/16/96 24,591,458
20,000,000 5.57 04/22/96 19,653,422
22,000,000 5.50 05/07/96 21,573,139
Life Insurance
Commonwealth Life Insurance Co.
20,000,000 6.03%(a) 09/06/96 $ 20,000,000
Pacific Mutual Life Insurance
Co.
25,000,000 5.92(a) 03/01/96 25,000,000
Motor Vehicles and Equipment
Ford Motor Credit Co.
75,000,000 5.51 05/03/96 73,588,062
Personal Credit Institutions
American Express Credit Corp.
75,000,000 5.60 04/19/96 73,728,333
Beneficial Corp.
25,000,000 5.89(a) 11/15/96 24,991,455
Transamerica Finance Corp.
15,000,000 5.55 02/20/96 14,884,375
20,000,000 5.55 04/11/96 19,688,583
Receivable/Asset Financings
Dakota Certificates of Standard Credit Card Master Trust
40,000,000 5.72 02/09/96 39,752,133
30,051,000 5.70 02/16/96 29,832,129
25,000,000 5.70 02/20/96 24,802,083
10,000,000 5.67 02/27/96 9,910,225
Falcon Asset Securitization
Corp.
15,425,000 5.60 04/26/96 15,146,664
New Center Asset Trust
150,000,000 5.60 03/15/96 148,273,333
Savings and Loans
World Savings And Loan
Association
38,000,000 5.81(a) 03/14/96 37,999,243
20,000,000 5.94(a) 12/13/96 20,012,934
Security and Commodity
Brokers, Dealers and Services
Bear Stearns Companies, Inc.
150,000,000 5.64 03/01/96 148,590,000
Cargill Financial Services Corp.
25,000,000 5.59 04/16/96 24,588,514
25,000,000 5.60 04/16/96 24,587,777
50,000,000 5.57 04/17/96 49,171,493
20,000,000 5.58 04/19/96 19,662,100
15,000,000 5.60 04/23/96 14,736,333
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Financial Square Prime Obligations Fund (continued)
December 31, 1995
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial Paper and Corporate Obligations
(continued)
Security and Commodity Brokers, Dealers and
Services (continued)
JP Morgan Securities, Inc.
$ 40,000,000 5.94%(b) 06/28/96 $ 40,000,000
Merrill Lynch & Co., Inc.
60,000,000 5.55 04/30/96 58,890,000
Specialty Cleaners
Colgate Palmolive
20,000,000 5.58 04/15/96 19,674,500
40,000,000 5.59 04/17/96 39,335,411
33,000,000 5.50 05/01/96 32,389,958
20,000,000 5.50 05/08/96 19,608,889
Telecommunications
AT&T Corp.
80,000,000 5.52 03/01/96 79,264,000
70,000,000 5.54 03/28/96 69,062,816
- --------------------------------------------------------------------------------
Total Commercial Paper and Corporate
Obligations $1,948,557,393
- --------------------------------------------------------------------------------
Bank Notes--37.9%
American Express Centurion Bank
$20,000,000 5.94/(a)/ 04/17/96 20,000,539
15,000,000 5.75/(a)/ 04/24/96 15,000,000
Boatmen's First National Bank, Kansas City
40,000,000 5.73/(a)/ 02/14/96 39,999,518
Boatmen's First National Bank, Southern Missouri
25,000,000 5.92/(a)/ 06/12/96 25,001,191
Colorado National Bank
25,000,000 5.91/(a)/ 06/03/96 25,000,000
FCC National Bank
75,000,000 5.74 03/11/96 75,000,000
25,000,000 5.67 03/18/96 25,000,000
50,000,000 5.73 04/23/96 50,000,000
First Bank FSB
30,000,000 5.91/(a)/ 05/15/96 29,999,690
First Bank N. A., Minneapolis
75,000,000 5.91/(a)/ 06/03/96 75,000,000
First National Bank of Maryland
25,000,000 5.75 05/01/96 25,000,000
50,000,000 5.92/(a)/ 10/02/96 49,988,730
50,000,000 5.92/(a)/ 11/01/96 49,987,500
First of America Bank N.A., Illinois
25,000,000 5.78 03/12/96 25,000,000
First of America Bank N.A., Michigan
23,500,000 6.10 02/12/96 23,506,184
23,500,000 6.26 03/08/96 23,516,370
First Union National Bank of North Carolina
135,000,000 5.76 02/02/96 135,000,000
Household Bank FSB
75,000,000 5.74 03/04/96 75,000,000
75,000,000 5.86/(a)/ 11/06/96 74,963,060
Huntington National Bank
19,125,000 5.69/(a)/ 01/12/96 19,124,719
M&I Madison Bank
25,000,000 5.81/(a)/ 07/29/96 25,008,782
10,500,000 6.00/(a)/ 09/09/96 10,504,414
NationsBank of Texas, N.A.
50,000,000 5.65 05/03/96 50,000,000
NBD Bank NA Detroit
35,000,000 5.65 05/03/96 34,999,484
Old Kent Bank & Trust Co.
30,000,000 5.94/(a)/ 01/17/96 29,999,737
PNC Bank, N.A.
30,000,000 5.89/(a)/ 08/16/96 29,995,137
75,000,000 5.89/(a)/ 09/13/96 74,984,796
Seattle First National Bank
50,000,000 5.83/(a)/ 11/08/96 49,962,089
Southtrust Bank of Alabama, N.A.
40,000,000 5.75/(a)/ 03/25/96 40,000,000
50,000,000 5.73/(a)/ 08/26/96 50,000,000
30,000,000 5.92/(a)/ 10/02/96 29,990,984
25,000,000 5.69/(a)/ 10/04/96 24,992,554
- --------------------------------------------------------------------------------
Total Bank Notes $1,331,525,478
- --------------------------------------------------------------------------------
Bankers' Acceptances--0.6%
Corestates Bank, N.A.
$10,000,000 5.58% 04/23/96 $ 9,824,850
NationsBank of Georgia, N.A.
10,000,000 5.58 04/23/96 9,824,850
- --------------------------------------------------------------------------------
Total Bankers' Acceptances $ 19,649,700
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
- --------------------------------------------------------------------------------
Financial Square Prime Obligations Fund (continued)
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Other-1.4%
Morgan Guaranty Trust of New York/SMM
Trust 1995-K
$50,000,000 5.96%/(a)/ 06/14/96 $ 50,000,000
- --------------------------------------------------------------------------------
Total Other $ 50,000,000
- --------------------------------------------------------------------------------
Certificates of Deposit-2.6%
Natwest Bank, Delaware
$50,000,000 5.70% 03/12/96 $ 50,000,000
Natwest Bank, U.S.A.
40,000,000 5.75 03/11/96 40,000,000
- --------------------------------------------------------------------------------
Total Certificates of Deposit $ 90,000,000
- --------------------------------------------------------------------------------
Repurchase Agreement-2.2%
Joint Repurchase Agreement Account
$76,300,000 5.94% 01/02/96 $ 76,300,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement $ 76,300,000
- --------------------------------------------------------------------------------
Total Investments $3,516,032,571/(c)/
- --------------------------------------------------------------------------------
</TABLE>
/(a)/Variable rate security-base Index is one of the following:
U.S. Treasury Bill
One or three month LIBOR
One month commercial paper
Federal Funds
Prime lending rate
/(b)/Variable rate master note-base Index is LIBOR.
/(c)/The amount stated also represents aggregate cost for federal income tax
purposes.
The percentages shown for each investment category reflects the value of
investments in that category as a percentage of total net assets.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial
statements.
6
<PAGE>
Statement of Investments
- --------------------------------------------------------------------------------
Financial Square Money Market Fund
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial Paper and Corporate Obligations-38.6%
Beverages
Grand Metropolitan Investment Corp.
$ 25,000,000 6.18%/(a)/ 07/22/96 $ 25,057,512
Mortgage Brokers
Nationwide Building Society
24,400,000 5.66 03/14/96 24,119,956
50,000,000 5.57 05/03/96 49,048,458
Business Credit Institutions
General Electric Capital Corp.
25,000,000 5.57 04/15/96 24,593,854
Electric Companies
Enel Commercial Paper, Inc.
25,000,000 5.64 04/25/96 24,549,583
10,000,000 5.52 05/09/96 9,802,200
Financial Services
Whirlpool Financial Corp.
25,000,000 5.68 03/01/96 24,763,333
Foreign Banks
BBL North America Inc.
25,000,000 5.63 04/18/96 24,578,125
BBV Finance, Delaware
18,000,000 5.59 01/19/96 17,949,690
Generale Bank, Inc.
15,000,000 5.61 04/24/96 14,733,525
Internationale Nederlanden Funding Corp.
50,000,000 5.58 04/12/96 49,209,500
Royal Bank of Canada
30,000,000 5.59 04/22/96 29,478,267
Svenska Handelsbanken, Inc.
20,000,000 5.60 04/17/96 19,667,111
Swedbank, Inc.
50,000,000 5.62 01/17/96 49,875,111
Toronto Dominion Holdings, U.S.A.
50,000,000 5.60 04/22/96 49,128,889
Life Insurance
Sunamerica Life Insurance Co.
50,000,000 5.87/(a)/ 11/03/96 50,000,000
Motor Vehicles and Equipment
American Honda Finance Corp.
25,000,000 5.98/(a)/ 05/03/96 24,995,942
General Motor Acceptance Corp.
14,086,800 6.19%/(a)/ 01/12/96 14,087,607
35,000,000 5.63 04/26/96 34,365,061
Personal Credit Institutions
Beneficial Corp.
25,000,000 5.89/(a)/ 11/15/96 24,991,455
Receivable/Asset Financings
Emprise One Corp.
50,000,000 5.80/(a)/ 12/23/96 50,000,000
New Center Asset Trust
25,000,000 5.60 03/15/96 24,712,222
Savings and Loans
World Savings and Loan Association
30,000,000 5.81/(a)/ 03/14/96 29,999,403
Security and Commodity Brokers, Dealers and Services
JP Morgan Securities, Inc.
40,000,000 5.94/(b)/ 06/28/96 40,000,000
Merrill Lynch & Co., Inc.
50,000,000 5.55 04/30/96 49,075,000
Telecommunications
AT&T Corp.
75,000,000 5.52 03/01/96 74,310,000
- --------------------------------------------------------------------------------
Total Commercial Paper and Corporate
Obligations $ 853,091,804
- --------------------------------------------------------------------------------
Bank Notes-17.4%
American Express Centurion Bank
$ 10,000,000 5.94%/(a)/ 04/17/96 $ 10,000,269
10,000,000 5.75/(a)/ 04/24/96 10,000,000
25,000,000 5.75/(a)/ 04/26/96 25,000,000
Boatmen's First National Bank, Kansas City
25,000,000 5.73/(a)/ 02/14/96 24,999,698
20,000,000 5.92/(a)/ 06/12/96 20,000,953
Colorado National Bank
50,000,000 5.91/(a)/ 06/03/96 50,000,000
First Bank N. A., Minneapolis
25,000,000 5.91/(a)/ 06/03/96 25,000,000
First National Bank of Boston
30,000,000 5.73/(a)/ 04/08/96 29,999,199
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an Integral part of these financial statements.
7
<PAGE>
Statement of Investments
- --------------------------------------------------------------------------------
Financial Square Money Market Fund (continued)
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Bank Notes (continued)
First National Bank of Boston (continued)
$ 45,000,000 5.75%/(a)/ 06/05/96 $ 45,000,000
Old Kent Bank & Trust Co.
20,000,000 5.94/(a)/ 01/17/96 19,999,825
PNC Bank, N.A.
25,000,000 5.93/(a)/ 03/14/96 25,000,000
30,000,000 5.89/(a)/ 08/16/96 29,995,137
25,000,000 5.89/(a)/ 09/13/96 24,994,932
20,000,000 5.65/(a)/ 09/30/96 19,988,150
Seattle First National Bank
25,000,000 5.83/(a)/ 11/08/96 24,981,045
- --------------------------------------------------------------------------------
Total Bank Notes $ 384,959,208
- --------------------------------------------------------------------------------
Certificates of Deposit - Foreign Eurodollar-9.7%
Dai Ichi Kangyo Bank, London
$ 40,000,000 5.97% 03/04/96 $ 40,000,690
Deutsche Bank, London
80,000,000 5.73 04/23/96 80,002,440
Dresdner Bank, London
10,000,000 5.74 04/22/96 10,000,302
Generale Bank, London
10,000,000 5.76 04/23/96 10,000,458
Mitsubishi Bank Ltd., London
45,000,000 5.86 01/31/96 45,000,728
30,000,000 6.04 04/12/96 30,000,825
- --------------------------------------------------------------------------------
Total Certificates of Deposit - Foreign
Eurodollar $ 215,005,443
- --------------------------------------------------------------------------------
Certificates of Deposit - Yankeedollar-12.7%
Dai Ichi Kangyo Bank, New York
$ 35,000,000 6.23% 02/05/96 $ 35,002,874
Fuji Bank, New York
50,000,000 6.16 02/06/96 50,000,933
Industrial Bank of Japan Ltd., New York
15,000,000 6.17 02/05/96 15,000,469
75,000,000 6.03 02/23/96 75,010,150
Mitsubishi Bank Ltd., New York
15,000,000 5.71 06/14/96 15,000,668
Sanwa Bank Ltd., New York
50,000,000 5.98 02/29/96 50,004,451
15,000,000 6.17 04/03/96 15,004,921
25,000,000 5.71 06/14/96 25,001,114
- --------------------------------------------------------------------------------
Total Certificates of Deposit - Yankeedollar $ 280,025,580
- --------------------------------------------------------------------------------
Other-22%
Morgan Guaranty Trust of New York/SMM Trust 1995-K
$ 50,000,000 5.96%/(a)/ 06/14/96 $ 50,000,000
- --------------------------------------------------------------------------------
Total Other $ 50,000,000
- --------------------------------------------------------------------------------
Sovereign Credit-1O.3%
Canadian Wheat Board
$ 45,000,000 5.57% 04/19/96 $ 44,241,088
Kingdom of Sweden
50,000,000 5.59 02/09/96 49,697,208
50,000,000 5.59 04/22/96 49,130,444
Province of Quebec
45,500,000 5.52 O5/01/96 44,655,823
20,000,000 5.50 05/14/96 19,590,556
20,000,000 5.50 05/15/96 19,587,500
- --------------------------------------------------------------------------------
Total Sovereign Credit $ 226,902,619
- --------------------------------------------------------------------------------
Repurchase Agreement-9.3%
Joint Repurchase Agreement Account
$205,000,000 5.94% 01/02/96 $ 205,000,000
- --------------------------------------------------------------------------------
Total Repurchase Agreement $ 205,000,000
- --------------------------------------------------------------------------------
Total Investments $2,214,984,654/(c)/
================================================================================
</TABLE>
/(a)/Variable rate security-base Index is one of the following:
U.S. Treasury Bill
One or three month LIBOR
One month commercial paper
Federal Funds
Prime lending rate
/(b)/Variable rate master note-base Index is LIBOR.
/(c)/The amount stated also represents aggregate cost for federal income tax
purposes.
The percentages shown for each investment category reflect the value of
investments in that category as a percentage of total net assets.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
8
<PAGE>
Statement of Investments
- --------------------------------------------------------------------------------
Financial Square Treasury Obligations Fund
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Obligations-17.5%
United States Treasury Bills
$100,000,000 5.28% 05/23/96 $ 97,902,667
50,000,000 5.32 05/30/96 48,891,667
165,000,000 5.23 07/25/96 160,062,008
United States Treasury Notes
45,000,000 6.13 07/31/96 45,135,893
- --------------------------------------------------------------------------------
Total U.S. Treasury Obligations $ 351,992,235
- --------------------------------------------------------------------------------
Repurchase Agreements-82.8%
Bankers Trust Securities, Inc., dated 12/29/95, repurchase price $75,048,333
(U.S. Treasury Note: $76,474,013, 6.125%, 05/15/98)
$ 75,000,000 5.80% 01/02/96 $ 75,000,000
Chase Manhattan Securities, dated 12/29/95, repurchase price
$75,048,333 U.S. Treasury Notes: $75,759,083, 5.625%-8.50%,
11/15/96-08/15/02; U.S. Treasury Bond: $742,164,
13.375%,08/15/01)
75,000,000 5.80 01/02/96 75,000,000
CS First Boston Corp., dated 12/29/95, repurchase price $75,048,333
(U.S. Treasury Bill: $75,180,300, 05/02/96)
75,000,000 5.80 01/02/96 75,000,000
Daiwa Securities, dated 12/29/95, repurchase price $75,049,167 (U.S. Treasury
Notes: $16,801,879, 5.625%-6.875%, 09/30/96-11/30/97; U.S. Treasury Bills:
$59,699,050, 01/25/96-09/19/96)
75,000,000 5.90 01/02/96 75,000,000
Goldman, Sachs & Co., dated 12/29/95, repurchase price $75,048,750 (U.S.
Treasury Note: $76,500,972, 5.88%, 08/15/98)
75,000,000 5.85 01/02/96 75,000,000
JP Morgan Securities, Inc., dated 12/29/95, repurchase price
$75,050,000 (U.S. Treasury: $76,555,971, 7.50%-7.75%, 10/31/99-11/30/99)
75,000,000 6.00 01/02/96 75,000,000
Merrill Lynch Government Securities, Inc., dated 12/29/95, repurchase Price
$75,047,917 (U.S. Treasury Stripped Securities: $76,500,159, 02/15/96-11/15/00)
75,000,000 5.75 01/02/96 75,000,000
Nomura Securities, dated 12/29/95, repurchase price $75,050,000 (U.S. Treasury
Notes: $76,531,287, 6.25%-8.50%, 08/31/96-05/15/97)
75,000,000 6.00 01/02/96 75,000,000
Sanwa Securities, dated 12/29/95, repurchase price $75,048,750 (U.S. Treasury
Notes: $28,722,942, 5.125%-7.50%, 03/31/96-09/30/00; U.S. Treasury Bill:
$47,775,291, 11/14/96)
$ 75,000,000 5.85% 01/02/96 $ 75,000,000
UBS Securities, Inc., dated 12/29/95, repurchase price $75,048,750 (U.S.
Treasury Note: $76,464,302, 7.75%, 11/30/99)
75,000,000 5.85 01/02/96 75,000,000
Joint Repurchase Agreement Account
915,000,000 5.94 01/02/96 915,000,000
- --------------------------------------------------------------------------------
Total Repurchase Agreements $1,665,000,000
================================================================================
Total Investments $2,016,99,235(a)
================================================================================
</TABLE>
/(a)/The amount stated also represents aggregate cost for federal income tax
purposes.
The percentages shown for each investment category reflect the value of
investments in that category as a percentage of total net assets.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
9
<PAGE>
Statement of Investments
- --------------------------------------------------------------------------------
Financial Square Government Fund
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Government Agency Obligations-47.5%
Federal Farm Credit Bank
$ 5,000,000 5.48% 02/09/96 $ 4,970,317
Federal Home Loan Bank
20,000,000 5.51 02/01/96 19,905,106
Federal Home Loan Mortgage Corp.
28,000,000 5.75/(a)/ 06/03/96 27,974,825
Federal National Mortgage Association
19,000,000 5.61 01/18/96 18,949,666
47,000,000 5.50 02/09/96 46,719,958
25,000,000 5.47 04/30/96 24,544,167
35,000,000 5.65/(a)/ 06/20/96 34,990,434
50,000,000 5.79/(a)/ 08/16/96 49,980,107
25,000,000 5.48/(a)/ 09/03/96 24,993,223
25,000,000 5.64 10/02/96 24,990,409
10,000,000 5.68 10/07/96 9,999,072
50,000,000 5.90/(a)/ 11/15/96 49,968,730
50,000,000 5.76/(a)/ 12/16/96 49,958,195
Tennessee Valley Authority
11,305,000 7.63 09/16/96 11,454,089
- --------------------------------------------------------------------------------
Total U.S. Government Agency Obligations $399,398,298
- --------------------------------------------------------------------------------
U.S. Treasury Obligations-1.2%
United States Treasury Notes
$ 10,000,000 6.00% 07/01/96 $ 10,015,909
- --------------------------------------------------------------------------------
Total U.S. Treasury Obligations $ 10,015,909
- --------------------------------------------------------------------------------
Repurchase Agreements-51.5%
C.S. First Boston Corporation, dated 12/05/95, repurchase price $30,420,525
(FNMA: $31,686,063, 7.31%, 01/01/35)
$ 30,000,000 5.67% 03/04/96 $ 30,000,000
Daiwa Securities, dated 12/29/95, repurchase price $30,019,667 (U.S. Treasury
Notes: $26,810,371, 4.38%-9.00%, 11/15/96-09/30/98; U.S. Treasury Bill:
$3,190,014, 06/27/96)
30,000,000 5.90 01/02/96 30,000,000
Lehman Government Securities Inc., dated 12/12/95, repurchase price $30,419,042
(FNMA: $17,247,208, 7.00%-9.00%, 07/01/08-06/01/25; FHLMC: $13,802,908, 6.00%,
05/01/09)
30,000,000 5.65 03/11/96 30,000,000
Nomura Securities International Inc., dated 12/29/95, repurchase price
$100,071,111 (FHLMC: $49,299,417, 6.50%-8.00%, 07/01/08-10/01/25; FNMA:
$53,927,805, 6.50%-8.00%, 01/01/09-09/01/24)
100,000,000 6.40 01/02/96 100,000,000
Salomon Brothers, Inc., dated 12/29/95, repurchase price $30,019,833 (Federal
Home Loan Bank: $31,258,524, 6.30%, 08/24/05)
30,000,000 5.95 01/02/96 30,000,000
Smith Barney Inc., dated 12/28/95, repurchase price $25,076,000 (FHLMC:
$13,342,601, 7.50%, 01/01/26; FNMA: $12,512,763, 6.50%-8.00%, 01/01/26)
25,000,000 5.76 01/16/96 25,000,000
Joint Repurchase Agreement Account
188,200,000 5.94 01/02/96 188,200,000
- --------------------------------------------------------------------------------
Total Repurchase Agreements $433,200,000
- --------------------------------------------------------------------------------
Total Investments $842,614,207/(b)/
================================================================================
</TABLE>
/(a)/Variable rate security-base Index is one of the following:
Federal Funds
Prime lending rate
One month LIBOR
/(b)/The amount stated also represents aggregate cost for federal income tax
purposes.
The percentages shown for each investment category reflect the value of
investments in that category as a percentage of total net assets.
- --------------------------------------------------------------------------------
The accompanying notes are an Integral part of these financial statements.
10
<PAGE>
Statement of Investments
- --------------------------------------------------------------------------------
Financial Square Tax-Free Money Market Fund
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alabama-8.0%
IDB of the Town of Columbia, Al PCRB Series 1995 B
VRDN (Alabama Power Company) (A-1/MIG1)
$17,700,000 6.00% 01/01/96 $ 17,700,000
Jefferson County, AL MF Hsg. for Hickory Knolls
Project VRDN (Amsouth Bank LOC) (P-1)
9,200,000 5.20 01/07/96 9,200,000
Parrish, AL IDA PCRB for Alabama Power VRDN (A-1/MIG1)
12,000,000 6.00 01/01/96 12,000,000
- --------------------------------------------------------------------------------
$ 38,900,000
- --------------------------------------------------------------------------------
Arizona-0.3%
City of Phoenix IDA MF Hsg. for Del Mar Terrace
Apartments VRDN (Bank of America LOC) (MIG-1)
$ 1,300,000 5.15% 01/07/96 $ 1,300,000
- --------------------------------------------------------------------------------
Arkansas-0.9%
Crossett, AR PCRB for Georgia Pacific Corp. VRDN (Trust
Company Bank LOC)(Aa3)
$ 4,500,000 5.15% 01/07/96 $ 4,500,000
- --------------------------------------------------------------------------------
California-10.0%
California School Cash Reserve Program Authority TRANS
Series A(SP-1+/MIG-1)
$ 2,000,000 4.75% 07/03/96 $ 2,009,685
California School Cash Reserve Program Authority TRANS
Series B (MBIA)(SP-1+/(MIG1)
6,000,000 4.50 12/20/96 6,039,105
City of Fremont MF Hsg. VRDN Series 1985 D-Creekside
Village Apartment Project (Fuji Bank LOC)(MIG1)
1,300,000 5.55 01/07/96 1,300,000
Los Angeles County, CA TRANS (Bank of America/Credit
Suisse/Morgan Guaranty Trust Co./Swiss Bank Corp./UBS/
Westdeutsche Landesbank Girozentrale LOC)(SP-1/MIG-1)
15,000,000 4.50 07/01/96 15,042,709
Los Angeles Housing Authority MF Hsg. VRDN for Canyon Country
Villas (Industrial Bank of Japan LOC) (A-1 /MIG-1)
3,000,000 5.35 01/07/96 3,000,000
State of California RAWS Series C (Bank of America /Banque
Nationale de Paris/Bank of Nova Scotia/Chemical/CIBC/
Citibank/Morgan Guaranty Trust Co./Credit Suisse/
National Westminster Bank/Societe General/Swiss Bank
Corp./Sumitomo Bank Ltd./Toronto Dominion Bank/
Westdeutsche Landesbank Girozentrale LOC) (A-1/MIG1)
21,550,000 5.75 04/25/96 21,646,920
- --------------------------------------------------------------------------------
$ 49,038,419
- --------------------------------------------------------------------------------
District of Columbia-1.3%
District of Columbia VRDN ACES-Series 1988 B-E
Georgetown University(A-1+/MIG1)
$ 6,100,000 5.65% 01/07/96 $ 6,100,000
- --------------------------------------------------------------------------------
Florida-5.1%
Dade County, FL Water & Sewer Series 1994 VRDN (FGIC)
(A-1+/MIG-1)
$ 700,000 4.90% 01/07/96 $ 700,000
Florida Local Government Finance Commission Pooled CP Note
Series A (First Union National Bank of Florida LOC)(A-1+/P-1)
15,000,000 3.65 02/13/96 15,000,000
Putnam County Development Authority for Seminole Electric H-1 VRDN
(CFC)(A-1/MIG1)
9,300,000 4.65 01/07/96 9,300,000
- --------------------------------------------------------------------------------
$ 25,000,000
- --------------------------------------------------------------------------------
Georgia-8.8%
Albany Dougherty, GA PCRB for Philip Morris Company
VRDN(A-1/P-1)
$ 1,600,000 5.15% 01/07/96 $ 1,600,000
Burke County, GA PCRB for Georgia Power Co. VRDN
(A-1/MIG1)
4,900,000 5.50 01/01/96 4,900,000
17,300,000 6.00 01/01/96 17,300,000
Municipal Electric Authority of Georgia 1994 Series E
(A-1/MIG1)
5,450,000 5.15 01/03/96 5,450,000
Municipal Electric Authority of Georgia Short Term BANS
CP(A-1+/P-1)
3,685,000 3.80 01/10/96 3,685,000
7,500,000 4.00 01/18/96 7,500,000
Municipal Electric Authority of Georgia Subordinate General
Resolution Series C (A-1+/P1)
2,600,000 4.90 03/04/96 2,602,207
- --------------------------------------------------------------------------------
$ 43,037,207
- --------------------------------------------------------------------------------
Hawaii-0.8%
Hawaii Housing Finance and Development Authority VRDN (Federal Home Loan
Bank LOC)(A-1+)
$ 4,000,000 5.15% 01/07/96 $ 4,000,000
- -------------------------------------------------------------------------------
Illinois-10.0%
Illinois Health Facilities Authority Series 1993 Resurrection
Healthcare System VRDN (First National Bank of Chicago LOC)(MIG1)
$ 9,000,000 5.60% 01/07/96 $ 9,000,000
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
11
<PAGE>
Statement of Investments
- --------------------------------------------------------------------------------
Financial Square Tax-Free Money Market Fund (continued)
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Illinois (continued)
Illinois Health Facilities Authority VRDN
Series 1985 C and D-
Revolving Fund Pooled Finance Program
(First National
Bank of Chicago LOC)(A-1/MIG-1) (b)
$ 9,700,000 5.20% 01/07/96 $ 9,700,000
Illinois Health Facility Authority VRDN Series 1985 for
Healthcorp Affiliates Project (Fuji Bank LOC)(MIG1)
8,200,000 6.25 01/07/96 8,200,000
Illinois State RANS(SP-1+/MIG-1)
14,000,000 4.50 06/10/96 14,050,909
Sauget Village of IL PCRB VRDN Series 1993(P-1)
7,900,000 5.10 01/07/96 7,900,000
- --------------------------------------------------------------------------------
$ 48,850,909
- --------------------------------------------------------------------------------
Indiana--3.5%
Indiana Hospital Equipment Financing Authority VRDN
Series 1985 A (MBIA)(A-1/MIG-1)
$ 4,525,000 5.60% 01/07/96 $ 4,525,000
Warrick County PCRB Series 1992 VRDN Aluminum Company
of America(A-1)
12,475,000 5.10 01/07/96 12,475,000
- --------------------------------------------------------------------------------
$ 17,000,000
- --------------------------------------------------------------------------------
Iowa--2.5%
Louisa County, IA PCRB for Midwest Power Systems VRDN(A-1/MIG1)
$ 5,000,000 5.25% 01/07/96 $ 5,000,000
Muscatine County, IA for Monsanto Corp.(P-1)
7,200,000 5.15 01/07/96 7,200,000
- --------------------------------------------------------------------------------
$ 12,200,000
- --------------------------------------------------------------------------------
Kentucky--0.6%
City of Calvert, KY Air Products and Chemicals Inc. Project
VRDN (A-1) (a)
$ 3,000,000 5.15% 01/07/96 $ 3,000,000
- --------------------------------------------------------------------------------
Louisiana--1.8%
Ascension Parish, LA PCRB Series 1993 for Shell Oil Co.(A-1+)
$ 4,700,000 6.00% 01/01/96 $ 4,700,000
Louisiana State Adj. Ref. Series A Tender GO Refunding Bonds
(Credit Local de France LOC)(A-1/MIG-1)
1,000,000 3.70 03/07/96 1,000,000
Plaquemines Port, Harbor and Terminal District Series A-D
(Teco Energy)(A-1+/P-1)
2,000,000 3.80 02/08/96 2,000,000
1,000,000 3.75 03/11/96 1,000,000
- --------------------------------------------------------------------------------
$ 8,700,000
- --------------------------------------------------------------------------------
Maryland--1.1%
Anne Arundel Baltimore Gas & Electric Co. Series 1985(A-1/MIG-1)
$ 5,380,000 3.80% 03/08/96 $ 5,380,000
- --------------------------------------------------------------------------------
Michigan--0.3%
Michigan Job Development Authority for Mazda Motor
Manufacturing VRDN (Sumitomo Bank Ltd LOC)(MIG-1)
$ 1,400,000 5.25% 01/07/96 $ 1,400,000
- --------------------------------------------------------------------------------
Minnesota--2.0%
Minnesota State Higher Education Facility for Carleton College
Series 3-12 VRDN(MIG-1)
$ 6,000,000 5.00% 01/07/96 $ 6,000,000
Port Authority of the City of St. Paul Minnesota, VRDN IDA
for Weyerhaeuser Project(A-1)
4,000,000 5.60 01/07/96 4,000,000
- --------------------------------------------------------------------------------
$ 10,000,000
- --------------------------------------------------------------------------------
Mississippi--0.2%
Grenada County, MS Refunding RB VRDN for Georgia Pacific
Corporation Project (Sumitomo Bank Ltd. LOC)(A-1)
$ 1,000,000 5.15% 01/07/96 $ 1,000,000
- --------------------------------------------------------------------------------
Missouri--0.6%
Missouri Health and Higher Educational Facility Authority
VRDN Washington University Facility(A-1+/MIG-1)
$ 1,500,000 5.00% 01/07/96 $ 1,500,000
Monsanto Corporation State Environmental Improvement and
Energy Resources Authority, Missouri (Monsanto)(P-1)
1,500,000 5.05 01/07/96 1,500,000
- --------------------------------------------------------------------------------
$ 3,000,000
- --------------------------------------------------------------------------------
Montana--2.8%
City of Forsyth, Rosebud County PCRB Series 1988 for Pacificorp
(Industrial Bank of Japan LOC)(A-1/P-1)
$ 10,000,000 4.00% 01/12/96 $ 10,000,000
Montana State Board of Investments VRDN Payroll Tax Bonds(A/MIG1)
3,800,000 5.25 01/07/96 3,800,000
- --------------------------------------------------------------------------------
$ 13,800,000
- --------------------------------------------------------------------------------
New Hampshire--2.0%
New Hampshire Business Finance Authority PCRB 1990 Series B
for New England Power(A-1/MIG-1)
$ 10,000,000 3.65% 02/29/96 $ 10,000,000
- --------------------------------------------------------------------------------
New York--11.2%
Greatneck North Water Authority, NY Water System RB Series A
VRDN (FGIC)(A-1+/MIG-1)
$ 600,000 4.90% 01/07/96 $ 600,000
- --------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
12
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL SQUARE TAX-FREE MONEY MARKET FUND (continued)
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
New York (continued)
New York City GO Bonds Series A(SP-1+/MIG-1)
$ 8,200,000 4.50% 02/15/96 $ 8,208,698
New York City GO Bonds VRDN (Union Bank of Switzerland
LOC)(A-1+/MIG-1)
4,000,000 5.00 01/01/96 4,000,000
New York City RANS(SP1+/MIG1)
29,990,000 4.50 04/11/96 30,041,979
New York City TANS Series A(SP-1+/MIG-1)
5,000,000 4.50 02/15/96 5,003,848
New York State Energy Research and Development Authority
for Long Island Lighting Co. (Deutsche Bank LOC)(MIG-1)
6,000,000 4.70 03/01/96 6,010,242
New York State PCR for Rockland County VRDN (AMBAC)
(A-1+/MIG1)
700,000 4.90 01/07/96 700,000
- --------------------------------------------------------------------------------
$ 54,564,767
- --------------------------------------------------------------------------------
North Carolina--8.0%
North Carolina Eastern Municipal Power Agency TECP (Morgan Guaranty Trust
Co./United Bank of Switzerland LOC)(A-1+)
$ 2,650,000 3.70% 03/11/96 $ 2,650,000
Rockingham County, NC IDA PCRB for Philip Morris
Company VRDN(A-1/P-1)
7,700,000 5.15 01/07/96 7,700,000
Wake County, NC PCRB for Carolina Power & Light
(Fuji Bank LOC)(A-1/P-1)
3,800,000 3.90 01/22/96 3,800,000
15,070,000 4.00 01/25/96 15,070,000
10,000,000 3.75 03/11/96 10,000,000
- --------------------------------------------------------------------------------
$ 39,220,000
- --------------------------------------------------------------------------------
Ohio--0.8%
City of Columbus, OH Electric System Series 1984 VRDN (Dai Ichi
Kangyo Bank Ltd. NY LOC)(MIG1)
$ 4,000,000 3.90% 01/01/96 $ 4,000,000
- --------------------------------------------------------------------------------
Oregon--2.6%
Portland, OR for Columbia Grain Inc. Project VRDN (Fuji Bank/
Bank of Tokyo LOC)(MIG1)
$ 9,450,000 5.25% 01/07/96 $ 9,450,000
State of Oregon Veterans Welfare Bonds, Series 73 H VRDN
(Bank of Tokyo LOC)(A-1+/MIG-1)
3,400,000 5.25 01/07/96 3,400,000
- --------------------------------------------------------------------------------
$ 12,850,000
- --------------------------------------------------------------------------------
Pennsylvania --3.0%
Allegheny County, PA IDA PCR Series 1985 for U.S. Steel Corp.
(Norinchukin Bank LOC)(A-1+/P-1)
$ 1,000,000 3.80% 01/23/96 $ 1,000,000
13,600,000 4.05 01/30/96 13,600,000
- --------------------------------------------------------------------------------
$ 14,600,000
- --------------------------------------------------------------------------------
South Carolina--1.2%
York County Floating/Fixed Rate PCRB Pooled Series 1984-North
Carolina Electric Membership Corp. VRDN (CFC)(A-1+/MIG-1)
$ 5,900,000 4.65% 01/07/96 $ 5,900,000
- --------------------------------------------------------------------------------
Tennessee--0.5%
IDB Blount County, TN PCRB for Aluminum Company Project
VRDN(A-1)
$ 2,450,000 5.10% 01/07/96 $ 2,450,000
- --------------------------------------------------------------------------------
Texas--3.6%
San Antonio, TX Water System CP Notes Series 1992(A-1+/P-1)
$ 3,500,000 3.80% 01/25/96 $ 3,500,000
State of Texas TRANS CP Notes(A-1+/P-1)
6,000,000 3.65 08/20/96 6,000,000
State of Texas TRANS Series
A(SP1+/MIG1)
8,000,000 4.75 08/30/96 8,049,364
- --------------------------------------------------------------------------------
$ 17,549,364
- --------------------------------------------------------------------------------
Virginia--4.3%
IDA of Louisa PCRB Series 1984-Virginia Electric & Power
Company Project(A-1/P-1)
$ 4,000,000 3.75% 01/23/96 $ 4,000,000
2,000,000 3.85 01/26/96 2,000,000
3,500,000 3.75 01/29/96 3,500,000
3,910,000 3.75 02/22/96 3,910,000
2,500,000 3.75 02/27/96 2,500,000
3,700,000 3.80 02/29/96 3,700,000
IDA of Louisa PCRB Series 1987-Virginia Electric & Power
Company Project(A-1/P-1)
1,300,000 3.80 03/08/96 1,300,000
- --------------------------------------------------------------------------------
$ 20,910,000
- --------------------------------------------------------------------------------
Washington--2.3%
Pierce County, WA Economic Development Corp. for Sea Land
Project (Deutsche Bank LOC)(P-1)
$ 4,340,000 3.90% 11/01/96 $ 4,340,000
Washington Healthcare Facilities for Fred Hutchinson Cancer
Research Center VRDN (Morgan Guaranty Trust Co. LOC)(MIG-1)
2,595,000 6.00 01/01/96 2,595,000
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
13
<PAGE>
Statement of Investments
Financial Square Tax-Free Money Market Fund (continued)
December 31, 1995
<TABLE>
- --------------------------------------------------------------------------------
Principal Interest Maturity Amortized
Amount Rate Date Cost
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Washington (continued)
Washington Public Power Supply System Electric RB VRDN
(Industrial Bank of Japan LOC)(A-1/MIG-1)
$4,300,000 5.35% 01/07/96 $ 4,300,000
- --------------------------------------------------------------------------------
$ 11,235,000
- --------------------------------------------------------------------------------
Wisconsin--1.2%
Milwaukee, WI IDRB Multi-Modal Series 1994 for Pharmacia
Biotech Inc. (P-1)
$ 6,000,000 5.30% 01/07/96 $ 6,000,000
- --------------------------------------------------------------------------------
Total Investments $495,485,666/(b)/
================================================================================
</TABLE>
/(a)/ When-issued security.
/(b)/ The amount stated also represents aggregate cost for federal
income tax purposes.
/(c)/ A portion of this security is being segregated for a when-issued
security.
Interest rates represent either the stated coupon rate, annualized yield on
date of purchase for discounted notes, or, for floating rate securities, the
current reset rate, which is based upon current interest rate indices.
Maturity dates represent either the stated date on the security, the next
interest reset date for floating rate securities, or the prerefunded date for
those types of securities.
The percentages shown for each investment category reflect the value of
investments in that category as a percentage of total net assets.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Investment Abbreviations:
ACES - Adjustable Convertible Extendible Securities
AMBAC - Insured by American Municipal Bond Assurance Corp.
BANS - Bond Anticipation Notes
CFC - Unconditionally guaranteed by CFC, Cooperative Finance Corp.
CP - Commercial Paper
FGIC - Insured by Financial Guaranty Insurance Co.
GO - General Obligation
IDA - Industrial Development Authority
IDB - Industrial Development Bond
IDRB - Industrial Development Revenue Bond
LOC - Letter of Credit
MBIA - Insured by Municipal Bond Investors Assurance
MF Hsg. - Multi-Family Housing
PCRB - Pollution Control Revenue Bond
RANS - Revenue Anticipation Notes
RAWS - Revenue Anticipation Warrants
RB - Revenue Bond
TANS - Tax Anticipation Notes
TECP - Tax-Exempt Commercial Paper
TRANS - Tax Revenue Anticipation Notes
VRDN - Variable Rate Demand Note
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements
14
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Statements of Assets and Liabilities
December 31, 1995
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Prime Treasury Tax-Free
Obligations Money Market Obligations Government Money Market
Fund Fund Fund Fund Fund
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets:
Investments in securities, at value based on
amortized cost $3,516,032,571 $2,214,984,654 $2,016,992,235 $842,614,207 $495,485,666
Interest receivable 12,233,857 8,834,865 1,972,651 2,418,424 3,596,525
Cash -- -- 57,440 12,245 1,240,479
Deferred organization expenses, net -- 30,539 -- -- 55,288
Other assets 267,605 237,770 137,226 69,932 7,394
- ---------------------------------------------------------------------------------------------------------------------------------
Total assets 3,528,534,033 2,224,087,828 2,019,159,552 845,114,808 500,385,352
- ---------------------------------------------------------------------------------------------------------------------------------
Liabilities:
Payable for investment securities purchased -- -- -- -- 9,450,844
Dividends payable 18,756,247 11,920,285 8,684,329 4,103,220 1,660,266
Due to bank 188,639 831,506 -- --
Accrued expenses and other liabilities 625,669 507,642 457,200 233,408 108,326
- ---------------------------------------------------------------------------------------------------------------------------------
Total liabilities 19,570,555 13,259,433 9,141,529 4,336,628 11,219,436
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets:
Paid in capital 3,508,929,339 2,210,828,395 2,010,013,221 840,778,180 489,172,780
Accumulated undistributed net realized gain
(loss) on investments 34,139 -- 4,802 -- (6,864)
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets $3,508,963,478 $2,210,828,395 $2,010,018,023 $840,778,180 $489,165,916
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, offering and redemption price per
share (net assets/shares outstanding) $1.00 $1.00 $1.00 $1.00 $1.00
- ---------------------------------------------------------------------------------------------------------------------------------
Shares Outstanding:
FST shares 3,295,754,553 2,069,197,101 1,587,700,297 743,885,207 448,374,479
FST Administration shares 147,895,914 137,412,396 283,193,438 82,384,825 20,938,507
FST Service shares 65,278,872 4,218,898 139,119,486 14,508,148 19,859,794
- ---------------------------------------------------------------------------------------------------------------------------------
Total shares of beneficial interest
outstanding, $0.01 par value (unlimited
number of shares authorized) 3,508,929,339 2,210,828,395 2,010,013,221 840,778,180 489,172,780
--------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
15
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Statements of Operations
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
Prime Treasury Tax-Free
Obligations Money Market Obligations Government Money Market
Fund Fund Fund Fund Fund
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment income:
Interest income $255,432,495 $140,722,215 $83,406,052 $39,399,088 $14,217,700
- -------------------------------------------------------------------------------------------------------------------
Expenses:
Investment adviser fees 3,173,924 1,747,326 1,059,477 493,804 270,151
Account administration fees 5,501,468 3,028,701 1,836,426 855,927 468,262
Custodian fees 447,105 334,209 148,199 114,525 37,743
Registration fees 151,016 221,794 168,347 106,936 48,923
Trustee fees 58,993 13,692 9,382 4,320 2,475
Amortization of deferred organization expenses 1,850 9,048 3,171 -- 15,595
Other 146,379 72,977 92,135 36,621 11,682
- -------------------------------------------------------------------------------------------------------------------
Total expenses 9,480,735 5,427,747 3,317,137 1,612,133 854,831
Less--Expenses reimbursable and fees waived
by GSAM (1,863,318) (1,960,234) (774,395) (427,008) (362,376)
- -------------------------------------------------------------------------------------------------------------------
Net expenses 7,617,417 3,467,513 2,542,742 1,185,125 492,455
Administration share fees 318,346 283,241 457,071 131,629 32,166
Service share fees 299,892 8,447 584,861 39,940 70,179
- -------------------------------------------------------------------------------------------------------------------
Net expenses and share fees 8,235,655 3,759,201 3,584,674 1,356,694 594,800
- -------------------------------------------------------------------------------------------------------------------
Net investment income 247,196,840 136,963,014 79,821,378 38,042,394 13,622,900
- -------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investment
transactions 95,511 7,374 781,869 65,308 (6,864)
- -------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting from
operations $247,292,351 $136,970,388 $80,603,247 $38,107,702 $13,616,036
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
16
<PAGE>
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Year Ended December 31, 1995
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Prime Treasury
Obligations Money Market Obligations
Fund Fund Fund
==================================================
<S> <C> <C> <C>
From Operations:
Net investment income $ 247,196,840 $ 136,963,014 $ 79,821,378
Net realized gain (loss) on investment
transactions 95,511 7,374 781,869
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 247,292,351 136,970,388 80,603,247
- -------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
FST shares (236,894,656) (130,522,374) (63,729,881)
FST Administration shares (7,108,569) (6,351,769) (9,995,927)
FST Service shares (3,193,615) (88,871) (6,095,570)
Net realized gain on investment transactions
FST shares (55,079) (9,474) (612,499)
FST Administration shares (4,463) (504) (99,062)
FST Service shares (1,830) -- (62,143)
- -------------------------------------------------------------------------------------------------------
Total distributions to shareholders (247,258,212) (136,972,992) (80,595,082)
- -------------------------------------------------------------------------------------------------------
From share transactions (at $1.00 per share):
Proceeds from sales of shares 35,913,627,249 33,159,975,346 12,055,344,504
Reinvestment of dividends and
distributions 88,104,801 69,894 471 14,492,584
Cost of shares repurchased (35,375,137,049) (31,948,570,256) (11,181,309,002)
- -------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from share transactions 626,595,001 1,281,299,561 888,528,086
- -------------------------------------------------------------------------------------------------------
Total increase 626,629,140 1,281,296,957 888,536,251
Net Assets:
Beginning of year 2,882,334,338 929,531,438 1,121,481,772
- -------------------------------------------------------------------------------------------------------
End of year $ 3,508,963,478 $ 2,210,828,395 $ 2,010,018,023
=======================================================================================================
Summary of Share Transactions (at $1.00 per share):
FST Shares:
Shares sold 34,469,057,699 31,539,337,948 8,859,672,375
Reinvestment of dividends and
distributions 85,898,572 66,409,325 11,189,134
Shares repurchased (34,034,050,903) (30,399,518,678) (8,241,356,158)
- -------------------------------------------------------------------------------------------------------
520,905,368 1,206,228,595 629,505,351
- -------------------------------------------------------------------------------------------------------
FST Administration shares:
Shares sold 721,501,944 1,608,362,145 1,309,118,844
Reinvestment of dividends and
distributions 761,953 3,443,404 845,389
Shares repurchased (640,480,667) (1,540,953,451) (1,108,896,222)
- -------------------------------------------------------------------------------------------------------
81,783,230 70,852,068 201,068,011
- -------------------------------------------------------------------------------------------------------
FST Service shares:
Shares sold 723,067,606 12,275,253 1,886,553,285
Reinvestment of dividends and
distributions 1,444,276 41,742 2,458,061
Shares repurchased (700,605,479) (8,098,097) (1,831,056,622)
- -------------------------------------------------------------------------------------------------------
23,906,403 4,218,898 57,954,724
- -------------------------------------------------------------------------------------------------------
Net increase in shares 626,595,001 1,281,299,561 888,528,086
=======================================================================================================
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Tax-Free
Government Money Market
Fund Fund
================================
<S> <C> <C>
From Operations:
Net investment income $ 38,042,394 $ 13,622,900
Net realized gain (loss) on investment
transactions 65,308 (6,864)
- -------------------------------------------------------------------------------------
Net increase in net assets resulti
from operations 38,107,702 13,616,036
- -------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
FST shares (34,713,840) (12,702,550)
FST Administration shares (2,917,098) (455,025)
FST Service shares (411,456) (465,325)
Net realized gain on investment transactions
FST shares (59,324) --
FST Administration shares (5,878) --
FST Service shares (106) --
- -------------------------------------------------------------------------------------
Total distributions to shareholder (38,107,702) (13,622,900)
- -------------------------------------------------------------------------------------
From share transactions (at $1.00 per share):
Proceeds from sales of shares 8,904,113,596 3,459,116,162
Reinvestment of dividends and
distributions 15,345,902 3,954,598
Cost of shares repurchased (8,391,284,391) (3,161,776,879)
- -------------------------------------------------------------------------------------
Net increase in net assets result
from share transactions 528,175,107 301,293,881
- -------------------------------------------------------------------------------------
Total increase 528,175,107 301,287,017
Net Assets:
Beginning of year 312,603,073 187,878,899
- -------------------------------------------------------------------------------------
End of year 840,778,180 $ 489,165,916
=====================================================================================
Summary of Share Transactions (at $1.00 per share):
FST Shares:
Shares sold 8,279,786,329 3,135,487,639
Reinvestment of dividends and
distributions 14,336,357 3,262,842
Shares repurchased (7,808,586,957) (2,873,945,734)
- -------------------------------------------------------------------------------------
485,535,729 264,804,747
- -------------------------------------------------------------------------------------
FST Administration shares:
Shares sold 331,435,289 110,334,205
Reinvestment of dividends and
distributions 785,525 320,945
Shares repurchased (304,089,584) (91,758,941)
- -------------------------------------------------------------------------------------
28,131,230 18,896,209
- -------------------------------------------------------------------------------------
FST Service shares:
Shares sold 292,891,978 213,294,318
Reinvestment of dividends and
distributions 224,020 370,811
Shares repurchased (278,607,850) (196,072,204)
- -------------------------------------------------------------------------------------
14,508,148 17,592,925
- -------------------------------------------------------------------------------------
Net increase in shares 528,175,107 301,293,881
=====================================================================================
</TABLE>
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
17
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
For the Periods Ended December 31, 1994
<TABLE>
<CAPTION>
Prime Money Market Treasury Government
Obligations Fund/(a)/ Fund/(b)/ Obligations Fund/(a)/ Fund/(a)/
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
From operations:
Net investment income $ 93,745,718 $ 31,366,990 $ 30,473,221 $ 7,980,145
Net realized gain (loss) on investment
transactions 4,990 5,671 (79,393) 3,678
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from operations 93,750,708 31,372,661 30,393,828 7,983,823
- ------------------------------------------------------------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
FST shares (90,514,074) (29,849,508) (27,649,397) (6,434,384)
FST Administration shares (2,319,934) (1,517,482) (1,338,481) (1,545,761)
FST Service shares (919,709) -- (1,485,343) --
Net realized gain on investment transactions
FST shares (82,819) (3,002) (6,131) (3,010)
FST Administration shares (13,759) (65) (161) (668)
FST Service shares (814) -- -- --
- ------------------------------------------------------------------------------------------------------------------------
Total distributions to shareholders (93,851,109) (31,370,057) (30,479,513) (7,983,823)
- ------------------------------------------------------------------------------------------------------------------------
From share transactions (at $1.00 per share):
Proceeds from sale of shares 22,898,595,340 12,775,307,681 4,616,966,952 2,128,561,581
Reinvestment of dividends and
distributions 23,668,421 9,676,488 2,940,080 2,146,045
Cost of shares repurchased (21,920,493,388) (11,855,455,335) (4,370,900,948) (1,876,927,328)
- ------------------------------------------------------------------------------------------------------------------------
Net increase in net assets resulting
from share transactions 1,001,770,373 929,528,834 249,006,084 253,780,298
- -------------------------------------------------------------------------------------------------------------------------
Total increase 1,001,669,972 929,531,438 248,920,399 253,780,298
Net Assets:
Beginning of period 1,880,664,366 -- 872,561,373 58,822,775
- ------------------------------------------------------------------------------------------------------------------------
End of period $ 2,882,334,338 $ 929,531,438 $ 1,121,481,772 $ 312,603,073
- ------------------------------------------------------------------------------------------------------------------------
Summary of share transactions: (at $1.00 per share):
FST shares:
Shares sold 22,560,410,624 12,311,243,995 4,110,849,675 1,927,187,116
Reinvestment of dividends and
distributions 23,317,361 8,626,882 2,581,039 1,684,083
Shares repurchased (21,640,191,346) (11,456,902,371) (3,967,576,749) (1,715,218,895)
- ------------------------------------------------------------------------------------------------------------------------
943,536,639 862,968,506 145,853,965 213,652,304
- ------------------------------------------------------------------------------------------------------------------------
FST Administration shares:
Shares sold 212,782,227 464,063,686 194,485,191 201,374,465
Reinvestment of dividends and
distributions 117,315 1,049,606 299,486 461,962
Shares repurchased (182,036,935) (398,552,964) (137,143,496) (161,708,433)
- ------------------------------------------------------------------------------------------------------------------------
30,862,607 66,560,328 57,641,181 40,127,994
- ------------------------------------------------------------------------------------------------------------------------
FST Service shares:
Shares sold 125,402,489 -- 311,632,086 --
Reinvestment of dividends and
distributions 233,745 -- 59,555 --
Shares repurchased (98,265,107) -- (266,180,703) --
- ------------------------------------------------------------------------------------------------------------------------
27,371,127 -- 45,510,938 --
- ------------------------------------------------------------------------------------------------------------------------
Net increase in shares 1,001,770,373 929,528,834 249,006,084 253,780,298
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------
Tax-Free Money
Market Fund/(b)/
----------------
<S> <C>
Net investment income $ 2,421,177
Net realized gain (loss) on invesment
transactions --
- -------------------------------------------------------------------
Net increase in net assets resulting
from operations 2,421,177
- -------------------------------------------------------------------
Distributions to shareholders from:
Net investment income
FST shares (2,389,827)
FST Administration shares (23,394)
FST Service shares (7,956)
Net realized gain on investment transactions
FST shares --
FST Administration shares --
FST Service shares --
- -------------------------------------------------------------------
Total distributions to shareholders (2,421,177)
- -------------------------------------------------------------------
From share transactions (at $1.00 per share):
Proceeds from sale of shares 742,552,184
Reinvestment of dividends and
distributions 395,745
Cost of shares repurchased (555,069,030)
- -------------------------------------------------------------------
Net increase in net assets resulting
from share transactions 187,878,899
- -------------------------------------------------------------------
Total increase 187,878,899
Net Assets:
Beginning of period --
- -------------------------------------------------------------------
End of period $ 187,878,899
- -------------------------------------------------------------------
Summary of share transactions: (a $1.00 per share):
FST shares:
Shares sold 732,710,640
Reinvestment of dividends and
distributions 380,335
Shares repurchased (549,521,243)
- -------------------------------------------------------------------
183,569,732
- -------------------------------------------------------------------
FST Administration shares:
Shares sold 6,207,387
Reinvestment of dividends and
distributions 11,734
Shares repurchased (4,176,823)
- -------------------------------------------------------------------
2,042,298
- -------------------------------------------------------------------
FST Service shares:
Shares sold 3,634,157
Reinvestment of dividends and
distributions 3,676
Shares repurchased (1,370,964)
- -------------------------------------------------------------------
2,266,869
- -------------------------------------------------------------------
Net increase in shares 187,878,899
- -------------------------------------------------------------------
</TABLE>
/(a)/The information presented above reflects eleven months of operations due to
a change in fiscal year end. This change was caused by the reorganization
of the funds as a series of Goldman Sachs Money Market Trust.
/(b)/The Money Market and Tax-Free Money Market Funds commenced operations on
May 18, 1994 and July 19, 1994, respectively.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
- --------------------------------------------------------------------------------
Notes to Financial Statements
December 31, 1995
- --------------------------------------------------------------------------------
1. Organization
Goldman Sachs Money Market Trust (the "Trust"), a business trust organized under
the laws of the Commonwealth of Massachusetts on December 6, 1978, includes the
Financial Square Funds, collectively "the Funds" or individually a "Fund". The
Trust is registered under the Investment Company Act of 1940, as amended, as an
open-end management investment company. Financial Square consists of six
diversified funds: Prime Obligations, Money Market, Treasury Obligations,
Government, Tax-Free Money Market and Municipal Money Market (inactive). The
Financial Square Funds offer three classes of shares: FST shares, FST
Administration shares and FST Service shares. The investment objective of the
Funds is to maximize current income to the extent consistent with the
preservation of capital and maintenance of liquidity.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently
followed by the Financial Square Funds which are in conformity with those
generally accepted in the investment company industry. The preparation of these
financial statements, in accordance with generally accepted accounting
principles, incorporates estimates made by management in determining the
reported amounts of assets, liabilities, revenues and expenses of the Funds.
A. Investment Valuation--
- -------------------------
Each Fund uses the amortized-cost method for valuing portfolio securities which
approximates market value. Under this method, all investments purchased at a
discount or premium are valued by amortizing the difference between the original
purchase price and maturity value of the issue over the period to maturity.
B. Interest Income--
- --------------------
Interest income is determined on the basis of interest accrued, premium
amortized and discount earned.
C. Federal Taxes--
- ------------------
It is each Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute each year
substantially all investment company taxable and tax-exempt income to
shareholders. Accordingly, no federal tax provisions are required.
The characterization of distributions to shareholders for financial reporting
purposes is determined in accordance with federal income tax rules. Therefore,
the source of the Funds' distributions may be shown in the accompanying
financial statements as either from or in excess of net investment income or net
realized gain on investment transactions, or from paid-in capital, depending on
the type of book/tax differences that may exist.
At December 31, 1995, the Tax-Free Money Market Fund had approximately $6,900
of capital loss carryforward for U.S. Federal tax purposes. This capital loss
carryforward expires in the year 2003.
D. Deferred Organization Expenses--
- -----------------------------------
Organization-related costs are being amortized on a straight-line basis over a
period of five years.
E. Expenses--
- -------------
Expenses incurred by the Funds that do not specifically relate to an individual
fund are allocated to the Funds based on each Fund's relative average net assets
of the Trust for the period.
Shareholders of FST Administration and FST Service shares bear all expenses
and fees paid to service organizations for their services with respect to such
shares as well as other expenses (subject to expense limitations) that are
directly attributable to such shares.
3. Agreements
Goldman Sachs Asset Management ("GSAM"), a separate operating division of
Goldman, Sachs & Co. ("Goldman Sachs"), serves as investment adviser pursuant to
an Investment Advisory Agreement. Under the Investment Advisory Agreement, GSAM,
subject to general supervision of the Trust's Board of Trustees, manages the
- --------------------------------------------------------------------------------
19
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Notes to Financial Statements (continued)
December 31, 1995
- --------------------------------------------------------------------------------
portfolios of the Funds. As compensation for the services rendered under the
Investment Advisory Agreement and the assumption of the expenses related
thereto, GSAM is entitled to a fee, computed daily and payable monthly, at an
annual rate equal to .075% of each Fund's average daily net assets. During the
year ended December 31, 1995, GSAM voluntarily agreed to waive a portion of the
advisory fees amounting to approximately $1,481,000, $1,536,000, $494,000,
$230,000 and $245,000 for the Prime Obligations, Money Market, Treasury
Obligations, Government and Tax-Free Money Market Funds, respectively. At
December 31, 1995, the advisory fees due GSAM were approximately $134,000,
$21,000, $62,000, $29,000 and $4,000 for the Prime Obligations, Money Market,
Treasury Obligations, Government and Tax-Free Money Market Funds, respectively.
These amounts are included in "Accrued expenses and other liabilities" in the
accompanying Statements of Assets and Liabilities.
Until further notice, GSAM has voluntarily agreed to limit certain of each of
the Fund's expenses (excluding advisory fees, account administration fees,
service organization fees, taxes, interest, brokerage commissions and
extraordinary expenses) to the extent that such expenses exceed .01% per annum
of that Fund's average daily net assets. At December 31, 1995, the amounts due
from GSAM were approximately $107,000, $96,000, $67,000 and $7,000 for the Money
Market, Treasury Obligations, Government and Tax-Free Money Market Funds,
respectively; such amounts are included in "Other assets" in the accompanying
Statements of Assets and Liabilities.
GSAM also serves as administrator pursuant to an Administration Agreement.
Under the Administration Agreement, GSAM administers each Fund's business
affairs, including providing facilities. As compensation for the services
rendered under the Administration Agreement, GSAM is entitled to a fee, computed
daily and payable monthly, at an annual rate equal to .13% of each Fund's
average daily net assets. During the year ended December 31, 1995, GSAM
voluntarily agreed to waive a portion of the account administration fees
incurred by the Money Market and Tax-Free Money Market Funds amounting to
approximately $4,000 and $34,000, respectively. At December 31, 1995, the
account administration fees due GSAM were approximately $434,000, $275,000,
$203,000, $95,000 and $56,000 for the Prime Obligations, Money Market, Treasury
Obligations, Government and Tax-Free Money Market Funds, respectively. These
amounts are included in "Accrued expenses and other liabilities" in the
accompanying Statements of Assets and Liabilities.
Goldman Sachs serves as the Distributor of shares of the Funds pursuant to a
Distribution Agreement and receives no fee. Goldman Sachs also serves as
transfer agent.
4. Administration and Service Plans
The Funds have adopted Administration and Service Plans. These plans allow for
Administration shares and Service shares, respectively, to compensate service
organizations for providing varying levels of account administration and
shareholder liaison services to their customers who are beneficial owners of
such shares. The Administration and Service Plans provide for compensation to
the service organizations in an amount up to .25% and .50% (on an annualized
basis), respectively, of the average daily net asset value of the respective
shares.
5. Line of Credit Facility
The Funds participate in a $100,000,000 uncommitted, unsecured revolving line of
credit facility to be used solely for temporary or emergency purposes. Under the
most restrictive arrangement, each Fund must own securities having a market
value in excess of 300% of the total bank borrowings. The interest rate on the
borrowings is based on the Federal Funds rate. During fiscal year 1995, the
Funds did not have any borrowings under this facility.
6. Repurchase Agreements
During the term of a repurchase agreement, the value of the underlying
securities, including accrued interest, is required to equal or exceed the value
of the repurchase agreement. The underlying securities for all repurchase
agreements are held in safekeeping in the customer-only account of State Street
Bank & Trust Co., the Funds' custodian, or at subcustodians. GSAM monitors the
market value of the underlying securities by pricing them daily.
- --------------------------------------------------------------------------------
20
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
7. Joint Repurchase Agreement Accounts
The Funds, together with other registered investment companies having advisory
agreements with GSAM, transfer uninvested cash balances into joint accounts, the
daily aggregate balances of which are invested in one or more repurchase
agreements. The underlying securities for the repurchase agreements are U.S.
Treasury obligations.
At December 31, 1995, the Prime Obligations, Money Market, Treasury
Obligations and Government Funds had, respectively, a 3.3%, 8.8%, 39.1% and 8.0%
undivided interest in the repurchase agreements in the following joint account,
which equaled $76,300,000, $205,000,000, $915,000,000 and $188,200,000 in
principal amount, respectively. At December 31, 1995, the repurchase agreements
in this joint account, along with the corresponding underlying securities
(including the type of security, market value, interest rate and maturity date),
were as follows:
<TABLE>
<CAPTION>
Principal Interest Maturity Amortized
Amount Rate Date Cost
======================================================================
<S> <C> <C> <C>
Repurchase Agreements
Bear Steams Companies, inc., dated 12/29/95, repurchase price
$500,325,000 (U.S.Treasury Bills: $511,267,175, 05/15/98-08/15/02)
$500,000,000 5.85% 01/02/96 $ 500,000,000
Morgan Stanley & Co., dated 12/29/95, repurchase price $500,348,333
(U.S.Treasury Bills: $510,213,707, 06/20/96-12/12/96)
500,000,000 6.27 01/02/96 500,000,000
Smith Barney, Inc., dated 12/29/95, repurchase price $100,062,222
(U.S. Treasury Stripped Securities: $102,000,086, 08/15/96-08/15/05)
100,000,000 5.60 01/02/96 100,000,000
Smith Barney, Inc., dated 12/29/95, repurchase price $500,325,556
(U.S. Treasury Notes: $452,845,339, 5.50%-8.88%, 11/30/96-09/30/00;
U.S. Treasury Stripped Securities: $57,154,783, 05/15/97-05/15/05)
500,000,000 5.86 01/02/96 500,000,000
Swiss Bank Corp., dated 12/29/95, repurchase price $740,483,445
(U.S. Treasury Notes: $651,461,859, 4.38%-8.88%, 08/31/96-11/15/01;
U.S. Treasury Stripped Securities: $82,825,172, 02/15/02-08/15/02;
U.S. Treasury Bills: $20,818,558, 02/29/96-11/14/96)
740,000,000 5.88 01/02/96 740,000,000
- ----------------------------------------------------------------------
Total Joint Repurchase Agreement Amount $2,340,000,000
======================================================================
</TABLE>
8. Other Matters
Pursuant to an SEC exemptive order, each taxable Fund may enter into certain
principal transactions, including repurchase agreements, with Goldman, Sachs &
Co., or its affiliate, Goldman Sachs Money Markets L.P. subject to certain
limitations as follows: 25% of eligible security transactions, as defined, and
10% of repurchase agreement transactions.
Effective December 28, 1994, the Funds were reorganized and became a series of
the Trust. Prior to the reorganization, each Fund was a series of Financial
Square Trust ("FST"), which was also a Massachusetts business trust. Except for
the fact that the Funds are now a series of the Trust, all shares of each
individual Fund represent the same interest in each Fund's assets, are of the
same class, are subject to the same terms and conditions, fees and expenses and
confer the same rights as when they were a series of FST.
- -------------------------------------------------------------------------------
21
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Financial Highlights
Selected Data for a Share Outstanding Throughout Each Period
Prime Obligations Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment operations
=====================================
Net realized Total Net Ratio of
Net asset gain income asset net
value at Net on from Distributions value at expenses
beginning investment investment investment to end of Total to average
of period income transactions operations shareholders period return/(a)/ net assets
=====================================================================================================
For the Year Ended
December 31,
=====================
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1995-FST shares.......... $1.00 $0.0586 $ -- $ 0.0586 $(0.0586) $1.00 6.02% 0.18%
1995-FST Administration
shares.................. 1.00 0.0559 -- 0.0559 (0.0559) 1.00 5.75 0.43
1995-FST Service shares.. 1.00 0.0533 -- 0.0533 (0.0533) 1.00 5.49 0.68
For the Period Ended
December 31,
====================
1994-FST shares /(c)/.... 1.00 0.0401 -- 0.0401 (0.0401) 1.00 4.38/(b)/ 0.18/(b)/
1994-FST Administration
shares /(c)/............ 1.00 0.0383 -- 0.0383 (0.0383) 1.00 4.12/(b)/ 0.43/(b)/
1994-FST Service shares/(c)/ 1.00 0.0364 -- 0.0364 (0.0364) 1.00 3.86/(b)/ 0.68/(b)/
For the Years Ended
January 31,
===================
1994-FST shares.......... 1.00 0.0311 0.0002 0.0313 (0.0313) 1.00 3.18 0.17
1994-FST Administration
shares.................. 1.00 0.0286 0.0002 0.0288 (0.0288) 1.00 2.92 0.42
1994-FST Service shares.. 1.00 0.0261 0.0002 0.0263 (0.0263) 1.00 2.66 0.67
1993-FST shares.......... 1.00 0.0360 0.0007 0.0367 (0.0367) 1.00 3.75 0.18
1993-FST Administration
shares /(d)/............ 1.00 0.0068 0.0001 0.0069 (0.0069) 1.00 3.02/(b)/ 0.44/(b)/
1993-FST Service shares.. 1.00 0.0301 0.0007 0.0308 (0.0308) 1.00 3.23 0.68
1992-FST shares.......... 1.00 0.0572 0.0002 0.0574 (0.0574) 1.00 5.99 0.18
1992-FST Service shares/(d)/ 1.00 0.0027 -- 0.0027 (0.0027) 1.00 4.10/(b)/ 0.66/(b)/
For the Period March 8,
1990 /(e)/ through
January 31,
======================
1991-FST shares........ 1.00 0.0727 -- 0.0727 (0.0727) 1.00 8.27/(b)/ 0.18/(b)/
Ratios assuming no waiver
of fees and no expenses
limitations
==============================
Ratio of
net Net Ratio of net
investment assets Ratio of investment
income to at end expenses to income to
average net of period average net average
assets (in 000s) assets net assets
===========================================================
For the Year Ended
December 31,
====================
<S> <C> <C> <C> <C>
1995-FST shares.......... 5.86% $3,295,791 0.22% 5.82%
1995-FST Administration
shares.................. 5.59 147,894 0.47 5.55
1995-FST Service shares.. 5.33 65,278 0.72 5.29
For the Period Ended
December 31,
====================
1994-FST shares /(c)/.... 4.38/(b)/ 2,774,849 0.24/(b)/ 4.32/(b)/
1994-FST Administration
shares /(c)/............ 4.18/(b)/ 66,113 0.49/(b)/ 4.12/(b)/
1994-FST Service shares/(c)/ 3.98/(b)/ 41,372 0.74/(b)/ 3.92/(b)/
For the Years Ended
January 31,
===================
1994-FST shares.......... 3.11 1,831,413 0.25 3.03
1994-FST Administration
shares.................. 2.86 35,250 0.50 2.78
1994-FST Service shares.. 2.61 14,001 0.75 2.53
1993-FST shares.......... 3.60 813,126 0.25 3.53
1993-FST Administration
shares /(d)/............ 2.96/(b)/ 1,124 0.52/(b)/ 2.88/(b)/
1993-FST Service shares.. 3.01 336 0.75 2.94
1992-FST shares.......... 5.72 917,073 0.27 5.63
1992-FST Service shares/(d)/ 4.10/(b)/ 118 0.74/(b)/ 4.02/(b)/
For the Period March 8,
1990 /(e)/ through
January 31,
======================
1991-FST shares........ 8.04/(b)/ 578,495 0.28/(b)/ 7.94/(b)/
</TABLE>
=================
/(a)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
/(b)/ Annualized
/(c)/ The information presented reflects eleven months of operations due to a
change in fiscal year end. This change was caused by the reorganization of
the funds as a series of Goldman Sachs Money Market Trust.
/(d)/ FST Administration and FST Service share activity commenced during
November of 1992 and January of 1992, respectively.
/(e)/ Commencement of operations.
- -------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Financial Highlights (continued)
Selected Data for a Share Outstanding Throughout Each Period
Money Market Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment operations
---------------------------------
Net Total
Net asset realized income Net asset Ratio of net
value at Net gain on from Distributions value at expenses to
beginning investment investment investment to end of Total average net
of period income transactions operations shareholders period return/(a)/ assets
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For the Year Ended
December 31,
- ------------------
1995-FST shares......... $1.00 $0.0589 -- $0.0589 $(0.0589) $1.00 6.07% 0.15%
1995-FST Administration
shares................. 1.00 0.0561 -- 0.0561 (0.0561) 1.00 5.80 0.40
1995-FST Service
shares/(c)/............ 1.00 0.0231 -- 0.0231 (0.0231) 1.00 5.41/(b)/ 0.65/(b)/
For the Period Ended
December 31,
- --------------------
1994-FST shares/(c)/.... 1.00 0.0305 -- 0.0305 (0.0305) 1.00 4.91/(b)/ 0.11/(b)/
1994-FST Administration
shares/(c)/............ 1.00 0.0298 -- 0.0298 (0.0298) 1.00 4.65/(b)/ 0.36/(b)/
<CAPTION>
Ratios assuming no waiver
of fees and no expense
limitations
------------------------
Ratio
Ratio of net Net of net
investment assets Ratio of investment
income to at end expenses to income
average of period average net to average
net assets (in 000s) assets net assets
-------------------------------------------------------------
<S> <C> <C> <C> <C>
For the Year Ended
December 31,
- ------------------
1995-FST shares......... 5.89% $2,069,197 0.23% 5.81%
1995-FST Administration
shares................. 5.61 137,412 0.48 5.53
1995-FST Service
shares/(c)/............ 4.93/b/ 4,219 0.73/(b)/ 4.85/(b)/
For the Period Ended
December 31,
- --------------------
1994-FST shares/(c)/.... 4.88/(b)/ 862,971 0.25/(b)/ 4.74/(b)/
1994-FST Administration
shares/(c)/............ 4.82/(b)/ 66,560 0.50/(b)/ 4.68/(b)/
- --------------
</TABLE>
/(a)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
/(b)/ Annualized.
/(c)/ FST, FST Administration and FST Service share activity commenced on May
18, 1994, May 20, 1994 and July 14, 1995, respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
23
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Financial Highlights (continued)
Selected Data for a Share Outstanding Throughout Each Period
Treasury Obligations Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment operations
---------------------------------------
Net realized Total Net asset
Net asset gain (loss) income value Ratio of net
value at Net on from Distributions at expenses to
beginning investment investment investment to end of Total average
of period income transactions operations shareholders period return/(a)/ net assets
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For the Year Ended
December 31,
- ------------------
1995-FST shares. ....... $1.00 $0.0573 $ 0.0005 $0.0578 $(0.0578) $1.00 5.96% 0.18%
1995-FST Administration
shares................. 1.00 0.0547 0.0005 0.0552 (0.0552) 1.00 5.69 0.43
1995-FST Service shares. 1.00 0.0521 0.0005 0.0526 (0.0526) 1.00 5.43 0.68
For the Period Ended
December 31,
- --------------------
1994-FST shares/(c)/... 1.00 0.0379 (0.0001) 0.0378 (0.0378) 1.00 4.23/(b)/ 0.18/(b)/
1994-FST Administration
shares/(c)/............ 1.00 0.0388 (0.0001) 0.0387 (0.0387) 1.00 3.97/(b)/ 0.43/(b)/
1994-FST Service
shares/(c)/............. 1.00 0.0349 (0.0001) 0.0348 (0.0348) 1.00 3.71/(b)/ 0.68/(b)/
For the Years Ended
January 31,
- -------------------
1994-FST shares......... 1.00 0.0301 0.0007 0.0308 (0.0307) 1.00 3.11 0.17
1994-FST Administration
shares................. 1.00 0.0276 0.0006 0.0282 (0.0281) 1.00 2.85 0.42
1994-FST Service shares. 1.00 0.0251 0.0008 0.0259 (0.0256) 1.00 2.60 0.67
1993-FST shares......... 1.00 0.0342 0.0012 0.0354 (0.0355) 1.00 3.69 0.18
1993-FST Administration
shares/(d)/........... 1.00 0.0009 -- 0.0009 (0.0009) 1.00 2.83/(b)/ 0.43/(b)/
1993-FST Service shares. 1.00 0.0296 0.0016 0.0312 (0.0309) 1.00 3.17 0.68
1992-FST shares......... 1.00 0.0549 0.0015 0.0564 (0.0561) 1.00 5.84 0.18
1992-FST Service
shares/(d)/ 1.00 0.0113 0.0006 0.0119 (0.0116) 1.00 4.47/(b)/ 0.68/(b)/
For the Period April 24, 1990/(e)/
through January 31,
- --------------------------------------------
1991-FST shares......... 1.00 0.0600 0.0006 0.0606 (0.0605) 1.00 8.06/(b)/ 0.21/(b)/
</TABLE>
<TABLE>
<CAPTION>
Ratios assuming no waiver
of fees and no expense
limitations
---------------------------
Ratio Ratio
of net Net Ratio of of net
investment assets expenses investment
income to at end to income to
average of period average average
net assets (in 000s) net assets net assets
----------------------------------------------------------
<S> <C> <C> <C> <C>
For the Year Ended
December 31,
- ------------------
1995-FST shares......... 5.73% $1,587,715 0.23% 5.68%
1995-FST Administration
shares................. 5.47 283,186 0.48 5.42
1995-FST Service shares. 5.21 139,117 0.73 5.16
For the Period Ended
December 31,
- --------------------
1994-FST shares/(c)/.... 4.13/(b)/ 958,196 0.25/(b)/ 4.06/(b)/
1994-FST Administration
shares/(c)/............ 4.24/(b)/ 82,124 0.50/(b)/ 4.17/(b)/
1994-FST Service
shares/(c)/............. 3.82/(b)/ 81,162 0.75/(b)/ 3.75/(b)/
For the Years Ended
January 31,
- -------------------
1994-FST shares......... 3.01 812,420 0.24 2.94
1994-FST Administration
shares................. 2.76 24,485 0.49 2.69
1994-FST Service shares. 2.51 35,656 0.74 2.44
1993-FST shares......... 3.42 776,181 0.26 3.34
1993-FST Administration
shares/(d)/........... 2.83/(b)/ 1 0.51/(b)/ 2.75/(b)/
1993-FST Service shares. 2.96 5,155 0.76 2.88
1992-FST shares......... 5.49 413,171 0.28 5.39
1992-FST Service
shares/(d)/............. 3.77/(b)/ 3,634 0.78/(b)/ 3.67/(b)/
<CAPTION>
For the Period April 24,1990/(e)/ through
January 31,
- --------------------------------------------
1991-FST shares......... 7.74/(b)/ 229,988 0.34/(b)/ 7.61/(b)/
</TABLE>
- ----------------
/(a)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
/(b)/ Annualized
/(c)/ The information presented reflects eleven months of operations due to a
change in fiscal year end. This change was caused by the reorganization
of the funds as a series of Goldman Sachs Money Market Trust.
/(d)/ FST Administration and FST Sevice share activity commenced during January
of 1993 and October of 1991, respectively.
/(e)/ Commencement of operations.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Financial Highlights (continued)
Selected Data for a Share Outstanding Throughout Each Period
Government Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment operations
---------------------------------
Net asset Net realized Total Net asset
value at Net gain income from Distributions value at
beginning investment on investment investment to end Total
of period income transactions operations shareholders of period return/(a)/
-------------------------------------------------------------------------------------------
For the Year Ended December 31,
- -------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1995-FST shares........................ $1.00 $0.0581 $0.0001 $0.0582 $(0.0582) $1.00 6.00%
1995-FST Administration shares......... 1.00 0.0554 0.0001 0.0555 (0.0555) 1.00 5.74
1995-FST Service shares/(c)/........... 1.00 0.0320 -- 0.0320 (0.0320) 1.00 5.40/(b)/
<CAPTION>
For the Period Ended December 31,
- ---------------------------------
1994-FST shares/(d)/................... 1.00 0.0424 -- 0.0424 (0.0424) 1.00 4.36/(b)/
1994-FST Administration shares/(d)/.... 1.00 0.0426 -- 0.0426 (0.0426) 1.00 4.10/(b)/
<CAPTION>
For the Period Ended January 31,
- --------------------------------
1993-FST shares/(c)/................... 1.00 0.0256 0.0001 0.0257 (0.0257) 1.00 3.14/(b)/
1993-FST Administration shares/(c)/.... 1.00 0.0120 0.0001 0.0121 (0.0121) 1.00 2.87/(b)/
<CAPTION>
Ratios assuming no
waiver of fees and no
expense limitations
---------------------
Ratio of net Net Ratio of net
Ratio of net investment assets at Ratio of investment
expenses to income to end expenses to income to
average net average net of period average net average net
assets assets (in 000s) assets assets
--------------------------------------------------------------------
For the Year Ended December 31,
- -------------------------------
<S> <C> <C> <C> <C> <C>
1995-FST shares........................ 0.18% 5.81% $743,884 0.24% 5.75%
1995-FST Administration shares......... 0.43 5.54 82,386 0.49 5.48
1995-FST Service shares/(c)/........... 0.68/(b)/ 5.08/(b)/ 14,508 0.74/(b)/ 5.02/(b)/
<CAPTION>
For the Period Ended December 31,
- ---------------------------------
1994-FST shares/(d)/................... 0.15/(b)/ 4.64/(b)/ 258,350 0.25/(b)/ 4.54/(b)/
1994-FST Administration shares/(d)/.... 0.40/(b)/ 4.67/(b)/ 54,253 0.50/(b)/ 4.57/(b)/
<CAPTION>
For the Period Ended January 31,
- --------------------------------
1993-FST shares/(c)/................... 0.08/(b)/ 3.10/(b)/ 44,697 0.59/(b)/ 2.59/(b)/
1993-FST Administration shares/(c)/.... 0.35/(b)/ 2.85/(b)/ 14,126 0.76/(b)/ 2.44/(b)/
</TABLE>
- -------------
/(a)/Assumes investment at the net asset value at the beginning of the period,
reinvestment of all distributions and a complete redemption of the
investment at the net asset value at the end of the period.
/(b)/Annualized.
/(c)/FST share, FST Administration share and FST Service share activity
commenced on April 6, 1993, September 1, 1993 and May 16, 1995,
respectively.
/(d)/The information presented reflects eleven months of operations due to a
change in fiscal year end. This change was caused by the reorganization of
the funds as a series of Goldman Sachs Money Market Trust.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
25
<PAGE>
Goldman Sachs Money Market Trust--Financial Square Funds
- --------------------------------------------------------------------------------
Financial Highlights (continued)
Selected Data for a Share Outstanding Throughout Each Period
Tax-Free Money Market Fund
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Income from investment operations
---------------------------------
Net asset Net realized Total Net asset
value at Net gain income from Distributions value at
beginning investment on investment investment to end Total
of period income transactions operations shareholders of period return/(a)/
-------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
For the Year Ended December 31,
- -------------------------------
1995-FST shares $1.00 $0.0381 -- $0.0381 $(0.0381) $1.00 3.89%
1995-FST Administration shares 1.00 0.0354 -- 0.0354 (0.0354) 1.00 3.63
1995-FST Service shares 1.00 0.0332 -- 0.0332 (0.0332) 1.00 3.38
For the Period Ended December 31,
- ---------------------------------
1994-FST shares/(c)/ 1.00 0.0156 -- 0.0156 (0.0156) 1.00 3.41/(b)/
1994-FST Administration shares/(c)/ 1.00 0.0136 -- 0.0136 (0.0136) 1.00 3.19/(b)/
1994-FST Service shares/(c)/ 1.00 0.0091 -- 0.0091 (0.0091) 1.00 3.11/(b)/
<CAPTION>
Ratios assuming no
waiver of fees and no
expense limitations
---------------------
Ratio of net Net Ratio of net
Ratio of net investment assets at Ratio of investment
expenses to income to end expenses to income to
average net average net of period average net average net
assets assets (in 000s) assets assets
--------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
For the Year Ended December 31,
- -------------------------------
1995-FST shares 0.14% 3.81% $448,367 0.24% 3.71%
1995-FST Administration shares 0.39 3.54 20,939 0.49 3.44
1995-FST Service shares 0.64 3.32 19,860 0.74 3.22
For the Period Ended December 31,
- ---------------------------------
1994-FST shares/(c)/ 0.07/(b)/ 3.42/(b)/ 183,570 0.31/(b)/ 3.18/(b)/
1994-FST Administration shares/(c)/ 0.32/(b)/ 3.25/(b)/ 2,042 0.56/(b)/ 3.01/(b)/
1994-FST Service shares/(c)/ 0.57/(b)/ 3.32/(b)/ 2,267 0.81/(b)/ 3.08/(b)/
</TABLE>
- ---------------
(a)/Assumes investment at the net asset value at The beginning of the period,
reinvestment of all distributions and a complete redemption of The
investment at The net asset value at the end of the period.
(b)/Annualized.
(a)/FST share, FST Administration share and FST Service share activity commenced
on July 19, 1994, August 1, 1994 and September 23, 1994, respectively.
- --------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26
<PAGE>
- --------------------------------------------------------------------------------
Report of Independent Public Accountants
- --------------------------------------------------------------------------------
To the Shareholders and Board of Trustees of the Goldman Sachs Money Market
Trust--Financial Square Funds:
We have audited the accompanying statements of assets and liabilities of the
Goldman Sachs Money Market Trust--Financial Square Funds (a Massachusetts
business trust comprising the Prime Obligations, Money Market, Treasury
Obligations, Government and Tax-Free Money Market Funds), including the
statements of investments, as of December 31, 1995, and the related statements
of operations, the statements of changes in net assets and the financial
highlights for each of the periods presented. These financial statements and the
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and the
financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and the financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995 by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of
each of the respective portfolios constituting Goldman Sachs Money Market
Trust--Financial Square Funds as of December 31, 1995, the results of their
operations and the changes in their net assets and the financial highlights for
the periods presented, in conformity with generally accepted accounting
principles.
ARTHUR ANDERSEN LLP
Boston, Massachusetts
February 9, 1996
- --------------------------------------------------------------------------------
27
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[This page intentionally left blank]
- --------------------------------------------------------------------------------
28
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[This page intentionally left blank]
- --------------------------------------------------------------------------------
29
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
This Annual Report is authorized for distribution to prospective investors only
when preceded or accompanied by a Goldman Sachs Money Market Trust--Financial
Square Funds Prospectus which contains facts concerning each Fund's objectives
and policies, management, expenses and other information.
- --------------------------------------------------------------------------------
30
<PAGE>
Goldman Sachs
1 New York Plaza
New York, NY 10004
Trustees
Paul C. Nagel, Jr., Chairman
Ashok N. Bakhru
Marcia L. Beck
David B. Ford
Alan A. Shuch
Jackson W. Smart, Jr.
William H. Springer
Richard P. Strubel
Officers
Marcia L. Beck, President
John W. Mosior, Vice President
Nancy L. Mucker, Vice President
Pauline Taylor, Vice President
Scott M. Gilman, Treasurer
Michael J. Richman, Secretary
Howard B. Surloff, Assistant Secretary
Goldman Sachs
Investment Adviser, Administrator,
Distributor and Transfer Agent
FST/ANN/1295
========================================
Goldman Sachs
Money Market Trust
Financial Square Funds
- ----------------------------------------
Annual Report
December 31, 1995
Prime Obligations Fund
Money Market Fund
Treasury Obligations Fund
Government Fund
Tax-Free Money Market Fund
========================================
