<PAGE>
EVERGREEN
MONEY MARKET FUNDS
(Photos of money, a building, coins and an eagle appear here)
(Photo of trees and river)
1996 ANNUAL REPORT
(Evergreen tree logo)
Evergreen(SM)
Funds
<PAGE>
EVERGREEN MONEY MARKET FUNDS
TABLE OF CONTENTS
<TABLE>
<C> <S> <C>
(Photo of money) A Review of the Past Year and Prospects for the Future.................... 1
MONEY MARKET A Report From Your Portfolio Manager...................................... 3
FUND Statement of Investments.................................................. 4
Statement of Assets and Liabilities....................................... 9
Statement of Operations................................................... 10
Statement of Changes in Net Assets........................................ 11
Financial Highlights...................................................... 12
(Photo of building) PENNSYLVANIA A Report From Your Portfolio Manager...................................... 14
TAX-FREE MONEY Statement of Investments.................................................. 15
MARKET FUND Statement of Assets and Liabilities....................................... 18
Statement of Operations................................................... 19
Statement of Changes in Net Assets........................................ 20
Financial Highlights...................................................... 21
(Photo of coins) TAX EXEMPT A Report From Your Portfolio Manager...................................... 22
MONEY MARKET FUND Statement of Investments.................................................. 23
Statement of Assets and Liabilities....................................... 35
Statement of Operations................................................... 36
Statement of Changes in Net Assets........................................ 37
Financial Highlights...................................................... 38
(Photo of an eagle) TREASURY A Report From Your Portfolio Manager...................................... 39
MONEY MARKET FUND Statement of Investments.................................................. 40
Statement of Assets and Liabilities....................................... 41
Statement of Operations................................................... 42
Statement of Changes in Net Assets........................................ 43
Financial Highlights...................................................... 44
Combined Notes to Financial Statements.................................... 46
Report of Independent Accountants -- Price Waterhouse LLP................. 53
Independent Auditors' Report -- KPMG Peat Marwick LLP..................... 54
Trustees and Officers...................................... Inside Back Cover
</TABLE>
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1995, Evergreen Asset Management Corp.
<PAGE>
EVERGREEN MONEY MARKET FUNDS
A REVIEW OF THE PAST YEAR
AND PROSPECTS FOR THE FUTURE
BY STEPHEN A. LIEBER
The continued expansion of the United States (Photo of Stephen A.
economy and the persistence of inflation at 3% or Lieber)
less, has evidently sent mixed signals to the
investment markets. The
equity market this year has gone from new high to new high. The willingness of
American savers to put money into the hands of equity mutual funds to buy stocks
in the United States and abroad is unprecedented. Even foreign investors, who
have long been skeptical of the rising prices of U.S. equities and the recent
relatively higher valuations than in many other industrial countries, have begun
to move heavily into U.S. equities. Only the bond market has suffered negative
trends this year. But, it showed no further losses when measured from the end of
the second calendar quarter to the end of the third.
In contrast, it yielded modest gains early in the third quarter. Evidence of
slowed final demand in many sectors of the economy has begun to reduce the fears
of many investors over inflationary pressures. While confidence increases that
both producer and consumer price indexes will remain in a narrow range, around
3%, apprehensions of possibly renewed inflation are now focused on the trend of
hourly wages. Hourly wages have moved up slightly in the last two months.
The apparent consensus among business economists currently is to expect a 2%
growth rate for the U.S. economy in the second half of 1996, with a similar
level to continue into 1997. These views are, in part, based on historical
trends, in which the late cycle characteristics of the U.S. economy typically
show economic deceleration. Such a deceleration is not widely feared, in view of
the fact that real income growth is likely to be sustained by a 2% to 2 1/2%
employment growth, plus a 3% to 3 1/2% earnings growth, before a 3% inflation.
The appearance of such decelerating trends and their continuation would likely
bring bond yields down, as the inflation premium would be removed from bond
market expectations. Many who dissent from the consensus view that the economy
will slow, argue that the European economies and Japan's economy are likely to
revive in 1997, which will create more export demand for U.S. products and,
therefore, increase our growth rate. More pessimistic observers of the American
economy believe that the American consumer has overspent, as evidenced by the
rising rate of credit card delinquencies, and by the "wealth effect" of a stock
market achieving record highs.
For the bond market, we expect that fairly stable, rather than rising,
inflation, and a somewhat declining overall business rate of growth, together
with a narrow range currency market, should enable a gradual decline in interest
rates.
Tax-exempt fixed income investment in 1996 has had comparatively better
returns than taxable bond investment. Much of this difference is due to the fact
that the flat tax, or sharply
1
<PAGE>
EVERGREEN MONEY MARKET FUNDS
A REVIEW OF THE PAST YEAR AND
PROSPECTS FOR THE FUTURE -- (CONTINUED)
reduced income tax, advocacies of presidential candidates earlier in the year,
were eliminated as concerns for tax-exempt investors. Therefore, tax-exempt
bonds have risen to a normal level of relationship to taxable bonds. Further
improving valuations has been the lack of major concerns over credit quality
issues. Orange County California's default has fallen into memory and its credit
is in the process of restoration. Other credit problems regarding certain public
power facilities and the rental of municipal buildings have also been overcome.
Correspondingly, the supply of new tax-exempt issues declined, especially as
interest rate increases cut down the number of new issues replacing refunded
bonds. The credit quality overall has been enhanced by further record gains for
the use of bond insurance, while the insurers themselves have had their credit
quality improved by record accumulations of earnings. In summary, the tax-exempt
securities market toward the end of 1996 appears to be in a healthy condition.
2
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
A REPORT FROM YOUR
PORTFOLIO MANAGER
ETHEL SUTTON
With the unemployment rate down to 5.1% in August, its lowest (Photo of
level in seven years, economists are asking whether unemployment Ethel
can decline further without sparking inflation in the broad Sutton)
wholesale and retail price indexes. While the Federal Reserve
adopted a monetary policy directive with a bias toward higher
interest rates at its July meeting, reflecting concern over the
economy's robust rate of growth during the second quarter, it
held rates steady at both its August and September meetings.
The two key questions that the Federal Reserve will need to
address this fall are how quickly the economy slows and whether
the good news on the inflation front will
continue. If the Federal Reserve does decide to implement its
tightening bias and raise the overnight funds rate by 25 basis points, we think
it unlikely that the Fed would do so before the November elections to avoid the
appearance of politicizing the nation's monetary policy.
After dropping sharply in the wake of the Federal Reserve's interest rate cut
in January, which was viewed as anti-recession insurance, money market yields
started trending upward again in April in response to evidence of unexpectedly
higher second quarter growth. While the quarter ended on a softer note, there
was spotty evidence over the summer that the economy might be continuing to pick
up, and this perception pushed rates higher over the period.
The ambiguity of the economic data suggested to us, however, that the Fed
would be willing to hold rates steady until third quarter Gross Domestic Product
(GDP) figures were released the last week in October. Consequently, we have been
comfortable with maturities that are appreciably longer than the average for
first tier money market funds reported by IBC's Money Fund Report. The Fund's
weighted average maturity at its fiscal year-end on August 31, 1996, was 71
days, as compared with 55 days for the 268 first tier money market funds in the
IBC Average at that time. We shall continue to monitor economic data,
particularly as it relates to inflation, and lengthen or shorten maturities
accordingly.
The total net assets for Evergreen Money Market Fund at its fiscal year-end
on August 31, 1996, were $2.4 billion. The Fund's seven-day current and
effective yields at that time are illustrated in the table below.
<TABLE>
<CAPTION>
7-DAY CURRENT YIELD 7-DAY EFFECTIVE YIELD
<S> <C> <C>
Class Y Shares 5.12% 5.25%
Class A Shares 4.83% 4.95%
Class B Shares 4.12% 4.20%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS
*SOURCE; IBC FINANCIAL DATA, INC., AN INDEPENDENT MONEY MARKET MUTUAL FUNDS
PERFORMANCE MONITOR.
DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED TO VOLUNTARILY WAIVE A
PORTION OF ITS ADVISORY FEE. HAD FEE NOT BEEN WAIVED, YIELDS WOULD HAVE BEEN
LOWER. FEE WAIVER MAY BE REVISED AT ANY TIME.
THE FUND MAY INCUR 12B-1 EXPENSES, UP TO AN ANNUAL MAXIMUM OF .35 OF 1% OF ITS
AVERAGE DAILY NET ASSETS OF ITS CLASS A SHARES. FOR THE FORSEEABLE FUTURE,
HOWEVER, MANAGEMENT INTENDS TO LIMIT SUCH PAYMENTS TO .30 OF 1% OF THE FUNDS
DAILY NET ASSETS OF ITS CLASS A SHARES.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1 PER SHARE. YIELDS FLUCTUATE.
3
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
BANKERS' ACCEPTANCES* -- 3.0%
$28,400 Bank of Tokyo-Mitsubishi Ltd.,
5.53%, 11/25/96.................... $ 28,029,183
CoreStates Bank,
2,000 5.57%, 12/23/96.................... 1,965,033
2,544 5.57%, 12/26/96.................... 2,498,390
8,700 Dai-Ichi Kangyo Bank Ltd.,
5.52%, 10/22/96.................... 8,631,966
14,000 Fuji Bank Ltd.,
5.50%, 9/26/96..................... 13,946,528
6,000 Republic National Bank of
New York,
5.39%, 1/27/97..................... 5,867,047
Sumitomo Bank Ltd.,
3,000 5.50%, 9/20/96..................... 2,991,291
5,350 5.53%, 11/7/96..................... 5,294,938
5,000 5.61%, 11/25/96.................... 4,933,771
TOTAL BANKERS' ACCEPTANCES
(COST $74,158,147)............ 74,158,147
CERTIFICATES OF DEPOSIT -- 10.7%
25,000 Australia & New Zealand Banking
Group Ltd.
5.51%, 12/31/96.................... 25,000,812
25,000 Bayerische Vereinsbank AG,
5.53%, 1/22/97..................... 25,000,000
Canadian Imperial Bank of Commerce,
20,000 5.50%, 1/9/97...................... 20,000,000
25,000 5.70%, 3/21/97..................... 25,000,000
25,000 5.77%, 5/2/97...................... 25,000,000
50,000 Deutsche Bank AG,
5.70%, 5/1/97...................... 50,000,000
Societe Generale,
20,000 5.50%, 1/9/97...................... 20,000,000
20,000 5.21%, 2/24/97..................... 20,000,000
25,000 5.70%, 3/14/97..................... 25,000,000
25,000 5.75%, 4/1/97...................... 25,000,000
TOTAL CERTIFICATES OF DEPOSIT
(COST $260,000,812)........... 260,000,812
COMMERCIAL PAPER* -- 82.6%
BANK HOLDING COMPANIES -- 11.3%
5,000 B.B.V. Finance (DE), Inc.,
5.44%, 2/18/97..................... 4,871,556
Banca CRT Financial Corp.,
11,000 5.40%, 9/17/96..................... 10,973,600
9,700 5.48%, 9/26/96..................... 9,663,086
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
COMMERCIAL PAPER* -- CONTINUED
BANK HOLDING COMPANIES -- CONTINUED
$10,000 BankAmerica Corp.,
5.50%, 1/13/97..................... $ 9,795,278
Bankers Trust New York Corp.,
25,000 5.53%, 12/19/96.................... 24,581,410
25,000 5.59%, 12/30/96.................... 24,534,166
11,700 BIL North America, Inc.,
5.45%, 10/16/96.................... 11,620,294
BTM Capital Corp.,
19,697 5.53%, 10/15/96.................... 19,563,870
10,000 5.40%, 11/26/96.................... 9,871,000
33,000 Chase Manhattan Corp.,
5.66%, 1/6/97...................... 32,341,082
24,000 HSBC Americas, Inc.,
5.38%, 12/4/96..................... 23,662,853
4,200 IMI Funding Corp. (USA),
5.52%, 11/4/96..................... 4,158,784
6,000 Korea Development Bank,
5.30%, 9/12/96..................... 5,990,283
7,186 MPS U.S. Commercial Paper Corp.,
5.45%, 9/19/96..................... 7,166,418
Royal Bank Canada New York Branch,
20,000 5.54%, 12/31/96.................... 19,627,589
14,750 5.41%, 1/17/97..................... 14,444,110
11,000 Sumitomo Bank Capital
Markets, Inc.,
5.38%, 11/15/96.................... 10,876,708
25,000 Svenska Handelsbanken, Inc.,
5.42%, 9/9/96...................... 24,969,889
Unifunding, Inc.,
2,000 5.30%, 10/8/96..................... 1,989,106
5,000 5.45%, 2/11/97..................... 4,876,618
275,577,700
BUILDING & CONSTRUCTION -- .1%
1,600 Guardian Industries Corp.,
5.31%, 10/21/96.................... 1,588,200
CHEMICALS -- 4.7%
Akzo Nobel, Inc.,
15,000 5.30%, 11/19/96.................... 14,825,542
10,700 5.49%, 11/19/96.................... 10,571,092
9,000 5.55%, 11/19/96.................... 8,890,387
</TABLE>
4
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
COMMERCIAL PAPER* -- CONTINUED
CHEMICALS -- CONTINUED
<C> <S> <C>
$13,500 Burmah Castrol Finance PLC,
5.40%, 1/21/97..................... $ 13,212,450
14,000 Cosmair, Inc.,
5.35%, 10/4/96..................... 13,931,342
Hercules, Inc.,
13,300 5.32%, 10/4/96..................... 13,235,140
11,600 5.34%, 12/2/96..................... 11,441,699
WMX Technologies, Inc.,
19,700 5.43%, 1/22/97..................... 19,275,087
10,000 5.77%, 3/25/97..................... 9,671,431
115,054,170
CONTAINERS & PACKAGES -- .5%
12,000 Sonoco Products Co.,
5.42%, 9/10/96..................... 11,983,740
DIVERSIFIED -- 10.7%
1,200 American Home Products Corp.,
5.35%, 10/1/96..................... 1,194,650
5,981 Arena Funding Corp.,
(LOC: Bank of Tokyo-Mitsubishi
Ltd.)
5.40%, 10/15/96.................... 5,941,525
16,600 B.I. Funding, Inc.,
5.38%, 9/27/96..................... 16,535,500
Daewoo International
(America) Corp.,
(LOC: Korea Development Bank)
20,000 5.38%, 11/22/96.................... 19,754,911
30,000 5.66%, 12/13/96.................... 29,514,183
3,000 Eaton Corp.,
5.53%, 1/8/97...................... 2,940,553
Finova Capital Corp.,
29,625 5.40%, 9/10/96..................... 29,585,006
27,800 5.51%, 10/3/96..................... 27,663,842
15,200 5.41%, 10/31/96.................... 15,062,947
20,000 5.40%, 11/14/96.................... 19,778,000
20,000 5.38%, 11/20/96.................... 19,760,889
20,000 Mitsui & Co. (USA), Inc.,
5.50%, 11/13/96.................... 19,776,945
7,700 Newell Co.,
5.32%, 9/9/96...................... 7,690,897
6,200 Progress Funding Corp.
(LOC: Fuji Bank Ltd.)
5.50%, 11/6/96..................... 6,137,483
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
DIVERSIFIED -- CONTINUED
REXAM PLC,
$16,500 5.40%, 9/5/96...................... $ 16,490,100
10,000 5.42%, 10/23/96.................... 9,921,711
12,500 Rubbermaid, Inc.,
5.29%, 9/12/96..................... 12,479,795
260,228,937
ELECTRICAL POWER -- 4.9%
Electricite de France,
25,000 5.44%, 12/23/96.................... 24,573,111
16,000 5.55%, 12/27/96.................... 15,711,400
FP Funding Corp.,
(LOC: Sumitomo Bank Ltd.)
11,566 5.41%, 9/24/96..................... 11,526,023
23,404 5.41%, 9/25/96..................... 23,319,590
20,000 5.52%, 10/21/96.................... 19,846,667
21,500 IES Utilities, Inc.,
5.31%, 9/24/96..................... 21,427,061
3,200 Pacificorp,
5.26%, 10/3/96..................... 3,185,038
119,588,890
ELECTRONICS -- 2.7%
8,000 Hitachi Credit America Corp.,
5.32%, 11/21/96.................... 7,904,240
5,000 Orix America, Inc.,
5.52%, 9/3/96...................... 4,998,467
10,000 Seiko Corp. of America,
(LOC: Dai-Ichi Kangyo Bank Ltd.)
5.40%, 10/24/96.................... 9,920,500
Sharp Electronics Corp.,
8,300 5.31%, 12/20/96.................... 8,165,332
12,330 5.35%, 12/20/96.................... 12,128,439
23,000 Toshiba America, Inc.,
5.42%, 9/3/96...................... 22,993,074
66,110,052
FINANCE -- 21.3%
Aristar, Inc.,
7,000 5.38%, 9/24/96..................... 6,975,939
6,400 5.38%, 9/25/96..................... 6,377,045
34,665 5.35%, 11/15/96.................... 34,278,630
18,965 5.35%, 11/21/96.................... 18,736,709
Astro Capital Corp.,
24,589 5.45%, 10/1/96..................... 24,477,325
9,268 5.50%, 10/11/96.................... 9,211,362
</TABLE>
5
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
COMMERCIAL PAPER* -- CONTINUED
FINANCE -- CONTINUED
<C> <S> <C>
$ 3,400 Avco Financial Services, Inc.,
5.42%, 10/21/96.................... $ 3,374,406
Dynamic Funding Corp.,
(LOC: Fuji Bank Ltd.)
1,416 5.40%, 9/5/96...................... 1,415,150
10,944 5.60%, 10/31/96.................... 10,841,856
29,363 5.45%, 11/15/96.................... 29,029,608
26,000 Eiger Capital Corp.,
(LOC: Union Bank of
Switzerland)
5.28%, 9/11/96..................... 25,961,867
20,000 Heller International Corp.,
(LOC: Fuji Bank Ltd.)
5.50%, 10/18/96.................... 19,856,389
Island Finance Puerto
Rico, Inc.,
(LOC: Norwest Corp.)
17,600 5.42%, 9/12/96..................... 17,570,853
20,000 5.31%, 10/15/96.................... 19,870,200
Jet Funding Corp.,
10,377 5.42%, 9/3/96...................... 10,373,875
16,650 5.45%, 9/30/96..................... 16,576,902
18,640 5.52%, 9/30/96..................... 18,557,114
26,528 Premium Funding, Inc.,
(LOC: Citibank)
5.33%, 10/15/96.................... 26,355,185
Receivables Capital Corp.,
8,473 5.41%, 9/25/96..................... 8,442,441
22,977 5.37%, 9/30/96..................... 22,877,605
Sanwa Business Credit Corp.,
(LOC: Sanwa Bank Ltd.)
20,000 5.40%, 9/20/96..................... 19,943,000
20,000 5.37%, 10/2/96..................... 19,907,517
30,000 5.38%, 10/7/96..................... 29,838,600
20,000 5.34%, 10/23/96.................... 19,845,733
Stanford University,
3,500 5.42%, 10/21/96.................... 3,473,653
5,000 5.50%, 11/21/96.................... 4,938,125
3,785 5.46%, 12/2/96..................... 3,732,186
20,000 Stellar Capital Corp.,
(LOC: Bank of Tokyo-
Mitsubishi Ltd.)
5.40%, 10/24/96.................... 19,841,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
FINANCE -- CONTINUED
$ 7,121 Strategic Asset Funding Corp.,
(LOC: Sanwa Bank Ltd.)
5.53%, 9/30/96..................... $ 7,089,278
7,000 Transamerica Corp.,
5.29%, 9/12/96..................... 6,988,685
4,400 Transamerica Finance Corp.,
5.29%, 10/1/96..................... 4,380,603
Tri-Lateral Capital
(USA), Inc.,
(LOC: Industrial Bank of
Japan Ltd.)
30,300 5.50%, 9/19/96..................... 30,216,675
10,649 5.43%, 11/19/96.................... 10,522,108
6,538 Working Capital Management
Co. L.P.,
(LOC: Industrial Bank of
Japan Ltd.)
5.55%, 9/9/96...................... 6,529,937
518,407,561
FOOD & BEVERAGE -- .4%
10,000 COFCO Capital Corp.,
(LOC: Credit Suisse)
5.40%, 9/13/96..................... 9,982,000
INSURANCE -- 1.4%
15,000 Aetna Life & Casualty Co.,
5.50%, 10/15/96.................... 14,899,167
Allianz of America
Finance Corp.,
5,000 5.42%, 9/11/96..................... 4,992,472
15,100 5.34%, 11/26/96.................... 14,907,374
34,799,013
LEASING -- 1.1%
14,700 Amada Leasing Corp.,
(LOC: Dai Ichi Kangyo Bank Ltd.)
5.34%, 9/13/96..................... 14,673,834
Fleet Funding Corp.,
4,100 5.30%, 9/10/96..................... 4,094,567
7,878 5.30%, 9/17/96..................... 7,859,443
26,627,844
MACHINERY, EQUIPMENT &
AUTOS -- 11.0%
American Honda Finance Corp.,
13,840 5.40%, 9/16/96..................... 13,808,860
</TABLE>
6
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
COMMERCIAL PAPER* -- CONTINUED
MACHINERY, EQUIPMENT &
AUTOS -- CONTINUED
<C> <S> <C>
$20,000 5.53%, 10/1/96..................... $ 19,907,833
BTR Dunlop Finance, Inc.,
7,200 5.44%, 9/9/96...................... 7,191,296
25,000 5.36%, 9/20/96..................... 24,929,278
30,000 5.42%, 9/25/96..................... 29,891,600
Daimler-Benz North America Corp.,
11,400 5.49%, 11/7/96..................... 11,283,520
18,000 5.45%, 1/6/97...................... 17,653,925
General Motors
Acceptance Corp.,
25,000 5.47%, 2/10/97..................... 24,384,625
25,000 5.45%, 2/14/97..................... 24,371,736
25,000 5.50%, 5/16/97..................... 24,018,403
16,000 Mitsubishi Motors Credit
of America, Inc.,
(LOC: Norinchukin Bank)
5.37%, 10/3/96..................... 15,923,627
Whirlpool Corp.,
17,000 5.33%, 9/3/96...................... 16,994,966
7,200 5.43%, 9/27/96..................... 7,171,764
Whirlpool Financial Corp.,
8,400 5.40%, 9/23/96..................... 8,372,280
16,300 5.46%, 9/23/96..................... 16,245,612
5,000 5.34%, 9/26/96..................... 4,981,459
267,130,784
OIL -- .4%
9,200 Tonen Energy
International Corp.,
(LOC: Industrial Bank of
Japan Ltd.)
5.43%, 9/16/96..................... 9,179,185
PHARMACEUTICALS & HEALTH
CARE -- 4.4%
A.H. Robins Co., Inc.,
26,768 5.39%, 9/27/96..................... 26,663,798
19,000 5.305%, 10/23/96................... 18,854,407
20,000 Holy Cross Health System Corp.,
5.34%, 11/25/96.................... 19,747,833
Massachusetts College of Pharmacy
and Allied Health Services,
8,951 5.35%, 11/8/96..................... 8,860,545
10,470 5.33%, 11/21/96.................... 10,344,439
4,100 5.35%, 11/21/96.................... 4,050,646
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
PHARMACEUTICALS & HEALTH
CARE -- CONTINUED
$ 9,500 5.40%, 12/5/96..................... $ 9,364,625
10,000 Metrocrest Hospital Authority,
(LOC: Bank of New York)
5.3932%, 9/3/96.................... 9,997,004
107,883,297
REAL ESTATE -- 1.8%
11,100 Embarcadero Center
Associates (Five),
(LOC: Dai-Ichi Kangyo
Bank Ltd.)
5.42%, 10/2/96..................... 11,048,194
10,000 Embarcadero Center
Venture (One),
(LOC: Dai-Ichi Kangyo
Bank Ltd.)
5.38%, 9/4/96...................... 9,995,517
24,000 SRD Finance, Inc.,
(LOC: Bank of Tokyo-
Mitsuibishi Ltd.)
5.37%, 9/26/96..................... 23,910,500
44,954,211
RETAIL -- 2.4%
Avon Capital Corp.,
8,000 5.53%, 9/9/96...................... 7,990,169
9,000 5.44%, 9/26/96..................... 8,966,000
8,250 5.44%, 9/27/96..................... 8,217,587
12,000 5.50%, 10/10/96.................... 11,928,500
11,000 5.50%, 10/22/96.................... 10,914,291
10,000 Southland Corp.,
5.42%, 9/25/96..................... 9,963,867
57,980,414
TELECOMMUNICATIONS -- 2.4%
50,000 GTE Corp.,
5.40%, 9/12/96..................... 49,917,500
10,000 U.S. West Capital
Funding, Inc.,
5.50%, 10/16/96.................... 9,931,250
59,848,750
TRANSPORTATION -- 1.1%
26,000 BMW U.S. Capital Corp.,
5.31%, 10/24/96.................... 25,796,745
TOTAL COMMERCIAL PAPER
(COST $2,012,721,493)......... 2,012,721,493
</TABLE>
7
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
CORPORATE NOTES -- 3.9%
Federal Home Loan Bank,
$ 4,000 5.35%, 3/14/97..................... $ 4,000,000
25,000 6.105%, 6/20/97.................... 25,000,000
25,000 Federal National Mortgage
Association,
5.245%, 4/11/97, (VR).............. 24,993,413
25,000 Merrill Lynch & Co., Inc.,
5.38%, 9/16/96, (VR)............... 25,000,000
15,000 PNC Bank NA Pittsburgh Pa.,
5.29%, 10/4/96, (VR)............... 14,999,248
TOTAL CORPORATE NOTES
(COST $93,992,661)............ 93,992,661
TAXABLE MUNICIPALS -- .7%
6,100 Brittany Acres,
5.875%, 4/1/97..................... 6,100,000
10,000 Oakland Alameda County,
(LOC: Canadian Imperial Bank of
Commerce)
5.42%, 9/30/96..................... 10,000,000
TOTAL TAXABLE MUNICIPALS
(COST $16,100,000)............ 16,100,000
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000) VALUE
<C> <S> <C> <C>
MUTUAL FUND SHARES -- .0%+
947 Lehman Prime Value Money
Market Fund Series A
(at net asset value)
(COST $947,166)............ $ 947,166
TOTAL INVESTMENTS --
(COST $2,457,920,279)...... 100.9% 2,457,920,279
OTHER ASSETS AND
LIABILITIES -- NET.... (.9) (21,250,912)
NET ASSETS --............ 100.0% $2,436,669,367
</TABLE>
LOC -- Letter of Credit
VR -- Variable-rate issue. Rate shown is the rate in effect at August 31, 1996.
* -- These securities held by the Fund at August 31, 1996 are traded on a
discount basis; the interest rate shown is the discount rate to be earned
at the time of purchase by the Fund.
+ -- Less than one-tenth of one percent
See accompanying notes to financial statements.
8
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (amortized cost $2,457,920,279)........................................................ $2,457,920,279
Cash........................................................................................................ 2,266,305
Interest receivable......................................................................................... 7,428,535
Receivable for Fund shares sold............................................................................. 4,027,732
Other assets................................................................................................ 95,519
Total assets.......................................................................................... 2,471,738,370
LIABILITIES:
Payable for investment securities purchased................................................................. 25,000,812
Dividend payable............................................................................................ 6,420,957
Payable for Fund shares repurchased......................................................................... 1,054,860
Accrued expenses............................................................................................ 982,896
Distribution fee payable.................................................................................... 885,236
Accrued advisory fee........................................................................................ 724,242
Total liabilities..................................................................................... 35,069,003
NET ASSETS..................................................................................................... $2,436,669,367
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................. $2,437,220,220
Accumulated net realized loss on investment transactions.................................................... (550,853)
Net assets............................................................................................ $2,436,669,367
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($1,755,266,532(division sign)1,755,274,268 shares of beneficial interest outstanding).....................$1.00
Class B Shares ($10,218,109(division sign)10,218,090 shares of beneficial interest outstanding)...........................$1.00
Class Y Shares ($671,184,726(division sign)671,723,771 shares of beneficial interest outstanding).........................$1.00
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
<TABLE>
<CAPTION>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
<S> <C> <C>
INVESTMENT INCOME:
Interest....................................................................................... $97,756,500
EXPENSES:
Advisory fee................................................................................... $8,346,173
Distribution fee -- Class A Shares............................................................. 3,910,297
Distribution fee -- Class B Shares............................................................. 68,566
Shareholder services fee -- Class B Shares..................................................... 22,855
Transfer agent fee............................................................................. 632,040
Registration and filing fees................................................................... 513,593
Custodian fee.................................................................................. 397,865
Reports and notices to shareholders............................................................ 232,570
Professional fees.............................................................................. 45,588
Insurance...................................................................................... 25,263
Trustees' fees and expenses.................................................................... 24,855
Miscellaneous.................................................................................. 14,367
14,234,032
Less advisory fee waiver....................................................................... (2,427,423)
Net expenses............................................................................. 11,806,609
Net investment income............................................................................. 85,949,891
Net realized loss on investment transactions...................................................... (26,141)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................................. $85,923,750
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
EVERGREEN MONEY MARKET FUND
(Photo of money)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................................ $ 85,949,891 $ 19,245,941
Net realized gain (loss) on investment transactions.................................. (26,141) 19,987
Net increase in net assets resulting from operations.............................. 85,923,750 19,265,928
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares....................................................................... (63,327,347) (4,909,735)
Class B Shares....................................................................... (382,116) (56,561)
Class Y Shares....................................................................... (22,240,428) (14,279,645)
Total distributions to shareholders............................................... (85,949,891) (19,245,941)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold............................................................ 6,275,701,649 1,749,914,977
Proceeds from shares issued from acquisition
of FFB Cash Management Fund....................................................... 592,358,361 --
Proceeds from shares issued from acquisition
of FFB Lexicon Cash Management Fund............................................... 95,834,929 --
Proceeds from shares issued from acquisition of
First Union Money Market Portfolio................................................ -- 642,287,528
Proceeds from reinvestment of distributions.......................................... 28,242,023 14,341,469
Payments for shares redeemed......................................................... (5,531,191,681) (1,703,929,225)
Net increase resulting from Fund share transactions............................... 1,460,945,281 702,614,749
Net increase in net assets........................................................ 1,460,919,140 702,634,736
NET ASSETS:
Beginning of year.................................................................... 975,750,227 273,115,491
End of year.......................................................................... $2,436,669,367 $ 975,750,227
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS A AND B SHARES
(Photo of money)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
JANUARY 4, JANUARY 26,
1995* 1995*
YEAR ENDED THROUGH YEAR ENDED THROUGH
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period............................ $1.00 $1.00 $1.00 $1.00
Net investment income........................................... .05 .03 .04 .03
Less distributions to shareholders from net investment income... (.05) (.03) (.04) (.03)
Net asset value, end of period.................................. $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+................................................... 5.0% 3.5% 4.3% 2.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)....................... $1,755,267 $685,155 $10,218 $7,927
Ratios to average net assets:
Expenses**................................................... .75% .81%++ 1.45% 1.51%++
Net investment income**...................................... 4.86% 5.26%++ 4.18% 4.54%++
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value for the periods indicated and
is not annualized. Contingent deferred sales charge is not reflected.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
JANUARY 4, JANUARY 26,
1995* 1995*
YEAR ENDED THROUGH YEAR ENDED THROUGH
AUGUST 31, AUGUST 31, AUGUST 31, AUGUST 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Expenses........................................................ .89% 1.02%++ 1.59% 2.39%++
Net investment income........................................... 4.72% 5.05%++ 4.04% 3.66%++
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
EVERGREEN MONEY MARKET FUND -- CLASS Y SHARES
(Photo of money)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
TEN MONTHS
YEAR ENDED AUGUST ENDED YEAR ENDED OCTOBER
31, AUGUST 31, 31,
1996 1995 1994# 1993 1992
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period...................... $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income..................................... .05 .05 .03 .03 .04
Less distributions to shareholders from net investment
income................................................. (.05) (.05) (.03) (.03) (.04)
Net asset value, end of period............................ $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+............................................. 5.3% 5.4% 2.9% 3.2% 4.2%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period
(000's omitted)........................................ $671,185 $282,668 $273,115 $299,418 $357,917
Ratios to average net assets:
Expenses**............................................. .45% .53% .32%* .39% .36%
Net investment income**................................ 5.16% 5.26% 3.46%* 3.19% 4.18%
</TABLE>
# The Fund changed its fiscal year end from October 31 to August 31.
+ Total return is calculated for the periods indicated and is not annualized.
* Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
TEN MONTHS
YEAR ENDED AUGUST ENDED YEAR ENDED OCTOBER
31, AUGUST 31, 31,
1996 1995 1994# 1993 1992
<S> <C> <C> <C> <C> <C>
Expenses.................................................. .59% .73% .71%* .71% .72%
Net investment income..................................... 5.02% 5.06% 3.07%* 2.87% 3.82%
</TABLE>
See accompanying notes to financial statements.
13
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
A REPORT FROM YOUR
PORTFOLIO MANAGER
RICHARD K. MARRONE
We are pleased to bring you the 1996 Annual Report for (Photo of
Evergreen Pennsylvania Tax-Free Money Market Fund. The Fund's Richard K.
fiscal year-end was changed from February 28, to August 31, to Marrone)
coincide with Evergreen's other money market funds.
In the first half of 1996, a continued stream of strong
economic data re-ignited fears about future inflation and caused
a reversal in fortunes in the bond market from the positive
returns experienced in 1995. The underpinnings of economic
growth in 1996 have been in the strength of the housing market,
consumer spending, and job creation. With second quarter Gross
Domestic Product (GDP) coming in at 4.8%, there were concerns in
the market about inflation rearing its ugly head.
Although the Federal Reserve Board did not raise rates at the
September 24 Federal Open Market
Committee meeting, many investors remain prepared for Fed
tightening any time. With elections approaching, the Fed seems in no hurry to
change course, believing that, despite the upticks in economic reports,
underlying inflation is still in check and the economy is not yet overheating.
The market has taken some of the onus from the Fed by pricing a 25 to 50 basis
point rate increase into the yield curve in response to the economic data.
The beginning of the second quarter saw money market funds feeling the crunch
of April 15 income tax payments, as monies flowed out and cash was in scant
supply. Variable rate demand notes saw a spike in rates to 4.11%, the first
reset over 4.00% for 1996. These higher rates did attract some crossover
corporate buyers. In May, short-term rates remained in a tight range due to lack
of supply. Money market funds saw inflows after the May 1 coupon payment, and
cash flowed back into the short-term arena to escape the volatility in other
markets, especially equity markets. Market rates reacted to technical factors
since the Fed remained in a holding pattern on policy moves. Rates increased
about 10 basis points as new notes deals hit the market in the last week of May,
signaling the beginning of the one-year note season.
Variable rates fell 100 basis points in the first week of July as cash poured
in from the July 1 bond redemptions. Once the influx was absorbed, the market
readied itself for the $2.9 billion Texas Tax Revenue Anticipation Notes (TRANs)
sale on August 27, one of the last large note deals of the year. (A $1.0 billion
New York City Revenue Anticipation Notes (RANs) deal is due in October.) During
this period, notes traded at 68% of taxables, with yields of 3.85%, up from 63%
of taxables and yields of 3.30% at the beginning of the Fund's fiscal year.
The Fund experienced large outflows in March and April for tax payments
causing the Fund's net assets to drop from $88 million at the end of February to
$71 million at the end of August. The Fund's weighted average maturity ranged
from 43 to 58 days during that time. At fiscal year-end, it stood at 47 days. At
August 31, the Fund held 11% of net assets in cash, 54% in variable demand
notes, and the remainder in fixed rate securities. Since we believe Fed pressure
to raise rates seems likely before year-end, we plan to keep the Fund's weighted
average maturity short to capture expected increased yields. Purchases are
currently concentrated in fixed rate securities in the 3- to 6-month maturity
range. There has been very little Pennsylvania supply in the market, though the
Fund was able to participate in the Philadelphia TRANs 4.50% due 6/30/97 that
priced to yield 3.95%. It was one of the few liquid deals available in
Pennsylvania, but our participation was limited due to diversification
requirements. It is more difficult in a state specific fund to make timely
changes in average maturity and asset allocation due to lack of supply and
liquidity.
Evergreen Pennsylvania Tax-Free Money Market Fund's seven-day current,
effective and tax-equivalent yields are illustrated in the table below.
<TABLE>
<CAPTION>
7-DAY CURRENT YIELD 7-DAY EFFECTIVE YIELD TAX-EQUIVALENT YIELD*
<S> <C> <C> <C>
Class Y Shares 3.15% 3.20% 5.14%
Class A Shares 3.07% 3.12% 5.02%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS
*TAX-EQUIVALENT YIELD ASSUMES A 36% FEDERAL TAX BRACKET, AND 2.8% PENNSYLVANIA
STATE TAX BRACKET. TAX-EQUIVALENT YIELD WOULD BE LOWER FOR INVESTORS IN LOWER
TAX BRACKETS AND HIGHER FOR INVESTORS IN HIGHER TAX BRACKETS. YIELDS FLUCTUATE.
DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED TO VOLUNTARILY WAIVE A
PORTION OF ITS ADVISORY FEE, AND ABSORBED A PORTION OF THE FUND'S 12B-1
EXPENSES ON ITS CLASS A SHARES. HAD FEE NOT BEEN WAIVED OR EXPENSE ABSORBED,
YIELDS WOULD HAVE BEEN LOWER. FEE WAIVER AND EXPENSE ABSORPTION MAY BE REVISED
AT ANY TIME.
THE FUND MAY INCUR 12B-1 EXPENSES, UP TO AN ANNUAL MAXIMUM OF .35 OF 1% OF ITS
AVERAGE DAILY NET ASSETS OF ITS CLASS A SHARES. FOR THE FORSEEABLE FUTURE,
HOWEVER, MANAGEMENT INTENDS TO LIMIT SUCH PAYMENTS TO .30 OF 1% OF THE FUNDS
DAILY NET ASSETS OF ITS CLASS A SHARES.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1 PER SHARE.
14
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- 100.2%
PENNSYLVANIA -- 99.0%
$ 1,000 Allegheny Cnty. Hosp. Dev. Auth.
RB (Allegheny Gen. Hosp.),
Ser. 1995B, 3.40% -- VRDN
(LOC: Morgan Gty. Tr. Co. of NY)...... $ 1,000,000
Allegheny Cnty. Hosp. Dev. Auth.
RB (Allegheny Health Ed. & Resh.
Corp.), ACES, 3.40% -- VRDN
(LOC: PNC Bk., Pittsburgh)
1,200 Ser. A.............................. 1,200,000
1,100 Ser. C.............................. 1,100,000
1,000 Allegheny Cnty. Hosp. Dev. Auth.
RB (Presbyterian Univ. Hosp.),
Ser. 1988B3, 3.50% -- VRDN
(LOC: PNC Bk., Pittsburgh)............ 1,000,000
Allegheny Cnty. IDA Envir. RRB
(US Steel Corp.) -- TECP (LOC:
The Long-Term Cr. Bk. of Japan)
2,000 Ser. 1985, 3.55%, 10/8/96........... 2,000,000
1,500 Ser. 1985, 3.55%, 11/6/96........... 1,500,000
1,000 Ser. 1986, 3.50%, 10/3/96........... 1,000,000
500 Beaver Cnty. IDA-PCRR
(Duquesne Light Co.) -- TECP
3.45%, 9/6/96 (LOC: Swiss Bk.)........ 500,000
300 Beaver Cnty. IDA-PCRR
(Duquesne Light Co., Beaver Vly.),
Ser. A, 3.45% -- VRDN
(LOC: Barclays Bk. PLC)............... 300,000
2,000 Beaver Cnty. IDA-PCRR
(The Toledo Edison Co.
Mansfield), Ser. 1992E -- TECP,
3.65%, 12/10/96
(LOC: Toronto Dominion Bk.)........... 2,000,000
1,000 Bedford Cnty. IDA-RB
(Sepa Inc. Facility), 3.90% -- VRDN
(LOC: Banque Paribas)................. 1,000,000
200 Bethlehem Authority RB
(Northampton and Lehigh Cnty),
Ser. A, 4.20%, 11/15/96 (MBIA)........ 200,210
240 Big Spring School Dist.
Cumberland Cnty. GO Bds.,
Ser 1992, 4.35%, 3/1/97 (FGIC)........ 240,515
250 Brandywine Heights Area Dist.
GO Bds., 4.40%, 4/1/97 (MBIA)......... 250,300
100 Bucks Cnty. IDA-RRB
(SHV Real Estate, Inc.),
Ser. 1984, 3.30% -- VRDN
(LOC: ABN-AMRO Bk.)................... 100,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
$1,000 Bucks Cnty. IDA Environmental
Impt,. RB (USX Corp.),
3.55% -- ARB, 10/1/96
(LOC: Wachovia Bk. N.C.).............. $ 1,000,000
250 City of Meadville
GO Bds., Ser 1995B, 3.70%,
10/1/96 (AMBAC)....................... 250,000
3,500 City of Philadelphia TRANS
Ser. 1996-1997 A, 4.50%, 6/30/97...... 3,517,036
500 Claysburg-Kimmel School Dist.
Bedford and Blair Cnty. GO Bds.,
Ser. 1989 Prerefunded @ 100
7.00%, 1/15/97........................ 505,613
250 Cnty. of Chester GO Bds.,
Ser. 1993A, 3.75%, 12/15/96........... 250,000
1,000 Cnty. of Chester Hlth. & Ed. Fac.
Auth. RB (Barclays Friends),
Ser. A, 3.50% -- VRDN
(LOC: Bk. of Ireland)................. 1,000,000
1,000 Cnty. of Delaware GO Bds.,
Ser. 1992, 4.45%, 11/15/96............ 1,001,636
500 Cnty. of Montgomery GO Bds.,
Ser. 1992, Prerefunded @ 100
4.10%, 10/15/96....................... 500,380
1,185 Colonial School Dist. GO
Bds., 5.00%, 9/1/96 (MBIA)............ 1,185,000
1,000 Dauphin County GO Bds.,
Prerefunded @ 100
7.70%, 10/15/96....................... 1,004,644
2000 Delaware Cnty. IDA -- PCRR
(BP Oil Inc.), 3.75% -- VRDN
(LOC: Morgan Gty. Tr. Co. of NY)...... 2,000,000
Delaware Cnty. IDA-PCRR
(Philadelphia Electric Co.), TECP
(SPA: FGIC Secs. Purch.),
1,000 3.60%, 9/9/96....................... 1,000,000
3,000 3.45%, 10/7/96...................... 3,000,000
500 Delaware Cnty. IDA -- RRB
(Res. Recovery) Ser. 1993G,
4.25%, 12/1/96
(LOC: Gen. Elec. Capital Corp.)....... 501,152
Delaware Cnty. IDA Solid
Waste RB (Scott Paper Co.),
1984, 3.45% -- VRDN,
700 Ser. C.............................. 700,000
400 Ser. D.............................. 400,000
</TABLE>
15
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
PENNSYLVANIA -- CONTINUED
$1,000 Delaware Vly. Regl. Fin. Auth.
Local Govt. RB. Ser. 1985A,
3.50% -- VRDN
(LOC: Midland Bk. PLC)................ $ 1,000,000
250 Delaware Vly. Regl. Fin. Auth.
Local Govt. RB Ser. 1986A,
3.80%, 4/15/97 (AMBAC)................ 250,000
500 Downingtown School Dist.
GO Bds., Ser. 1986A,
4.00%, 3/1/97......................... 500,712
Emmaus Gen. Auth. Local
Govt. RB (Bd. Pool Pgm.),
Ser. 1989, 3.60% -- VRDN
(LOC: Midland Bk. PLC)
4,300 Subsrs. B-12........................ 4,300,000
2,000 Subsrs. C-8......................... 2,000,000
1,400 Subsrs. D-11........................ 1,400,000
425 Subsrs. E-9......................... 425,000
2,000 Subsrs. F-5......................... 2,000,000
400 Emmaus Gen. Auth. Local
Govt. RB (Bd. Pool Pgm.),
Ser. 1989, Subser. E-8,
3.55% -- VRDN (LOC: Canadian
Imperial Bk. of Commerce)............. 400,000
300 Geisinger Auth. Health Sys. RB
(Montour Cnty.) 7.10%, 7/1/97......... 307,252
Health Care Facs. Auth. of Sayre
RB (VHA of PA, Inc., Capital
Asset Fin. Prog.), 3.35% -- VRDN
(SPA: Mellon Bk. PLC)
400 Ser. A.............................. 400,000
400 Ser. M.............................. 400,000
475 Lancaster Higher Ed.
Auth College RB
(Franklin & Marshall College),
Ser. 1995, 3.70% -- VRDN.............. 475,000
520 Lehigh Cnty. Auth. Wtr. RB
Ser. 1984, 3.35% -- VRDN
(SPA: ABN-AMRO Bk.)................... 520,000
200 Lehigh Cnty. IDA -- PCR
(Allegheny Elec. Coop., Inc.)
Ser. 1985A, 3.30% -- VRDN
(LOC: Rabobank Nederland)............. 200,000
1,335 Lycoming Cnty. Auth. Hosp. RB
(Williamsport Hosp. Obligated Group),
Ser. 1995, 3.90%, 11/15/96
(Connie Lee Insurance Co.)............ 1,335,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
$ 1,000 Montgomery Cnty. IDA -- PCRR
(PECO Energy Co.), Ser. 1994A,
TECP, 3.50%, 11/7/96
(LOC: Deutsche Bk. AG, NY)............ $ 1,000,000
2,000 New Castle Area Hosp. Auth.
RB (Jameson Mem. Hosp.),
3.50% -- VRDN
(SPA: PNC Bk.)........................ 2,000,000
100 New Castle Area School
Dist. GO Bds., Ser. 1993,
4.00%, 9/1/96
(Asset Gty. Insurance Co.)............ 100,000
1,000 Northeastern Hosp. & Ed. Auth. Rev.
(Health Care Rev. Wyoming Vly.),
Ser. A, 3.45% -- VRDN
(LOC: Industrial Bk. of
Japan Ltd., NY)....................... 1,000,000
930 Northern Tioga School Dist.
GO Bds., Ser. 1996,
3.50%, 9/1/96 (AMBAC)................. 930,000
565 Pennsylvania Higher Ed. Facs.
Auth. RB (LaSalle Univ.), Ser. 1996,
4.00%, 5/1/97 (MBIA).................. 566,084
500 Pennsylvania Higher Ed. Facs.
Auth. RB (The Univ. of Pennsylvania
Health Svs.) Ser. 1994B,
ACES, 3.45% -- VRDN................... 500,000
2,000 Pennsylvania Higher Ed. Facs.
Auth. RB (The Univ. of Pennsylvania
Health Svs.), 3.45% -- VRDN
(SPA: Credit Suisse, NY).............. 2,000,000
2,000 Pennsylvania Higher Ed. Facs.
Auth. RB (Allegheny College)
3.50% -- VRDN
(LOC: Mellon Bk. PLC)................. 2,000,000
251 Pennsylvania State GO Bds.
Second Ser. A,
6.00%, 11/1/96, (MBIA)................ 250,981
2,200 Pennsylvania Tpk. Commn. Tpk.
Rev. Ser. A, Prerefunded @102,
7.875%, 12/1/96....................... 2,268,501
1,000 Pennsylvania Tpk. Comm.
RB, Ser. O 1992,
4.25%,12/1/96 (FGIC).................. 1,001,566
700 Philadelphia Municipal Auth.
Municipal Svs. Building Lease
Rental Bds. Ser. 1990,
6.80%, 3/15/97 (FSA).................. 711,112
</TABLE>
16
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
<C> <S> <C>
PENNSYLVANIA -- CONTINUED
$4,200 Schuykill Cnty. IDA Res. Recovery
RB (Gilberton Pwr.), 3.50% -- VRDN
(LOC: Mellon Bk. PLC)................. $ 4,200,000
1,900 Schuykill Cnty. IDA Res. Recovery
RB (Northeastern Pwr. Co.),
Ser. 1985, 3.85% -- VRDN
(LOC: Sumitomo Bk., Ltd.)............. 1,900,000
290 Township of Lower Merion
GO Bds., Ser. 1996B,
3.20%, 12/1/96........................ 290,000
1,700 Washington Cnty. Auth. Lease RB
(Higher Ed. Pooled Equip. Leasing
Prob.), Ser. 1985A, 3.55% -- VRDN
(LOC: Sanwa Bk., Ltd.)................ 1,700,000
250 Westmoreland Cnty. GO
Bds., Ser. A, 3.65%, 10/15/96......... 250,000
69,787,694
PUERTO RICO -- 1.2%
876 Puerto Rico Indl., Med. &
Environmental Pollution
Control Facs. Fin. Auth. RB
(Merck & Co., Inc.), Ser. 1983A,
4.00% -- ARB, 12/1/96................. 875,826
TOTAL SHORT-TERM MUNICIPAL SECURITIES
(COST $70,663,520).................... $70,663,520
</TABLE>
<TABLE>
<CAPTION>
SHARES
(000)
<S> <C> <C>
MUTUAL FUND SHARES -- .9%
616 Pennsylvania Municipal Cash Trust
Institutional Service Shares
(at net asset value)
(COST $616,000)....................... 616,000
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(COST $71,279,520)............. 101.1 % 71,279,520
OTHER ASSETS AND
LIABILITIES -- NET............. (1.1) (764,102)
NET ASSETS..................... 100.0 % $70,515,418
</TABLE>
Summary of Abbreviations:
ACES -- Adjustable Convertible Extendable Securities
AMBAC -- American Municipal Bond Assurance Corp.
ARB -- Adjustable Rate Bonds
FGIC -- Financial Guaranty Insurance Co.
FSA -- Financial Security Assurance Inc.
GO -- General Obligations
IDA -- Industrial Development Authority
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance Corp.
PCR -- Pollution Control Revenue
PCRR -- Pollution Control Revenue Refunding Bonds
RB -- Revenue Bonds
RRB -- Refunding Revenue Bonds
SPA -- Standby Purchase Agreement
TECP -- Tax Exempt Commercial Paper
TRANS -- Tax Revenue Anticipation Notes
VRDN -- Variable Rate Demand Notes
Adjustable Rate Bonds are putable back to the issuer or other parties not
affiliated with the issuer at par on the interest reset dates. Interest rates
are determined and set by the issuer quarterly, semi-annually or annually
depending upon the terms of the security. Interest rates presented for these
securities are those in effect at August 31, 1996. These securities represent 3%
of total investments at August 31, 1996.
Variable Rate Demand Notes are payable on demand on no more than seven calendar
days notice given by the Fund to the issuer or other parties not affiliated with
the issuer. Interest rates are determined and reset by the issuer daily, weekly
or monthly depending upon the terms of the security. Interest rates presented
for these securities are those in effect at August 31, 1996. These securities
represent 54% of total investments at August 31, 1996.
Certain obligations held in the portfolio have credit enhancements or liquidity
features that may, under certain circumstances, provide for repayment of
principal and interest on the obligation upon demand date, interest date reset
date or final maturity. These enhancements include: letters of credit; liquidity
guarantees; standby bond purchase agreements; tender option purchase agreements;
and third party insurance (I.E. AMBAC, FGIC and MBIA)
Adjustable rate bonds and variable rate demand notes held in the portfolio may
be considered derivative securities. Management has determined that these
securities comply with the standards imposed by the Securities and Exchange
Commission under Rule 2a-7 which were designed to minimize both credit and
market risk.
See accompanying notes to financial statements.
17
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (amortized cost $71,279,520).............................................................. $71,279,520
Cash........................................................................................................... 385
Interest receivable............................................................................................ 442,565
Receivable for Fund shares sold................................................................................ 1,200
Total assets............................................................................................. 71,723,670
LIABILITIES:
Payable for investment securities purchased.................................................................... 1,000,000
Dividend payable............................................................................................... 114,151
Accrued expenses............................................................................................... 73,851
Accrued advisory fee........................................................................................... 14,700
Payable for Fund shares repurchased............................................................................ 5,550
Total liabilities........................................................................................ 1,208,252
NET ASSETS........................................................................................................ $70,515,418
NET ASSETS CONSIST OF:
Paid-in capital................................................................................................ $70,521,835
Undistributed net investment income............................................................................ 3,800
Accumulated net realized loss on investment transactions....................................................... (10,217)
Net assets............................................................................................... $70,515,418
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($22,196,093(division sign)22,196,184 shares of beneficial interest outstanding).............................$1.00
Class Y Shares ($48,319,325(division sign)48,325,651 shares of beneficial interest outstanding).............................$1.00
</TABLE>
See accompanying notes to financial statements.
18
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1996*
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................................................ $1,280,733
EXPENSES:
Advisory fee.................................................................................... $ 148,591
Administration fee.............................................................................. 18,066
Distribution fee -- Class A Shares.............................................................. 24,476
Professional fees............................................................................... 20,458
Transfer agent fee.............................................................................. 19,393
Custodian fee................................................................................... 17,900
Reports and notices to shareholders............................................................. 11,720
Insurance....................................................................................... 4,398
Registration and filing fees.................................................................... 3,160
Trustees' fees and expenses..................................................................... 311
Miscellaneous................................................................................... 889
269,362
Less fee waivers................................................................................ (79,856)
Net expenses.............................................................................. 189,506
Net investment income.............................................................................. 1,091,227
Net realized loss on investments................................................................... (378)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................... $1,090,849
</TABLE>
* The Fund changed its fiscal year end from February 28 to August 31, resulting
in a six-month period.
See accompanying notes to financial statements.
19
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 29,
1996 1996
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income.................................................................... $ 1,091,227 $ 2,665,986
Net realized loss on investment transactions............................................. (378) (189)
Net increase in net assets resulting from operations.................................. 1,090,849 2,665,797
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares........................................................................... (242,309) (9,466)
Class Y Shares........................................................................... (848,918) (2,656,520)
Total distributions to shareholders................................................... (1,091,227) (2,665,986)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold................................................................ 61,460,030 179,632,522
Proceeds from reinvestment of distributions.............................................. 621,908 1,766,790
Payments for shares redeemed............................................................. (79,296,671) (137,207,686)
Net increase (decrease) resulting from Fund share transactions........................ (17,214,733) 44,191,626
Net increase (decrease) in net assets................................................. (17,215,111) 44,191,437
NET ASSETS:
Beginning of period...................................................................... 87,730,529 43,539,092
End of period (including undistributed net investment income of $3,800 at August 31, 1996
and February 29, 1996, respectively)................................................... $ 70,515,418 $ 87,730,529
</TABLE>
See accompanying notes to financial statements.
20
<PAGE>
EVERGREEN PENNSYLVANIA TAX-FREE
MONEY MARKET FUND
(Photo of building)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
MARCH 1, AUGUST 22, MARCH 1,
1996 1995* 1996
THROUGH THROUGH THROUGH YEAR ENDED
AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, FEBRUARY 28,
1996# 1996 1996# 1996 1995
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.............. $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income............................. .01 .02 .01 .03 .03
Less distributions to shareholders from net
investment income............................... (.01) (.02) (.01) (.03) (.03)
Net asset value, end of period.................... $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+..................................... 1.5% 1.7% 1.5% 3.5% 2.8%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)......... $22,196 $4,333 $48,319 $83,398 $43,539
Ratios to average net assets:
Expenses**...................................... .55%++ .47%++ .50%++ .37% .33%
Net investment income**......................... 2.97%++ 3.14%++ 2.92%++ 3.42% 3.09%
<CAPTION>
FEBRUARY 28, FEBRUARY 28,
1994 1993
<S> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.............. $1.00 $1.00
Net investment income............................. .02 .03
Less distributions to shareholders from net
investment income............................... (.02) (.03)
Net asset value, end of period.................... $1.00 $1.00
TOTAL RETURN+..................................... 2.1% 2.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)......... $14,383 $15,999
Ratios to average net assets:
Expenses**...................................... .47% .35%
Net investment income**......................... 2.10% 2.62%
</TABLE>
# The Fund changed its fiscal year end from February 28 to August 31.
+ Total return is calculated for the periods indicated and is not annualized.
++ Annualized.
* Commencement of class operations
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the adviser, the annualized ratios of
expenses and net investment income to average net assets would have been the
following:
<TABLE>
<CAPTION>
CLASS A SHARES CLASS Y SHARES
MARCH 1, AUGUST 22, MARCH 1,
1996 1995* 1996
THROUGH THROUGH THROUGH YEAR ENDED
AUGUST 31, FEBRUARY 29, AUGUST 31, FEBRUARY 29, FEBRUARY 28,
1996# 1996 1996# 1996 1995
<S> <C> <C> <C> <C> <C>
Expenses.......................................... .96%++ 1.08%++ .66%++ .73% 1.05%
Net investment income............................. 2.56%++ 2.53%++ 2.76%++ 3.06% 2.37%
<CAPTION>
FEBRUARY 28, FEBRUARY 28,
1994 1993
<S> <C> <C>
Expenses.......................................... 1.26% 1.07%
Net investment income............................. 1.31% 1.90%
</TABLE>
See accompanying notes to financial statements.
21
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
A REPORT FROM YOUR
PORTFOLIO MANAGER
STEVEN C. SHACHAT
We are pleased to bring you the 1996 Annual Report for (Photo of
Evergreen Tax Exempt Money Market Fund. This report covers the Steven C.
fiscal year ended August 31, 1996. Shachat)
The markets both elated and frustrated investors during the
last six months of our fiscal year. At the start of 1996, bond
prices drifted lower in reaction to mixed economic signals
despite the fact that the U.S. economy seemed to be following a
slow growth pattern; one generally beneficial for bonds.
Beginning in March, statistics indicating strong job growth and
consumer's continued willingness to spend to their debt limits
and beyond, propelled the bond market on a state of heightened
alert for a resurgence of inflation and a new round of interest
rate increases by the Federal Reserve. Throughout the last half
of the Fund's fiscal year, however, inflation remained
restrained and the Fed chose not to raise or lower interest
rates.
As a consequence of this uncertainty over the economy's
direction, yields for both municipal and treasury bonds rose during the second
half of the Fund's fiscal year, and prices declined. Long-term government bond
yields have gyrated wildly in response to the shifting tone of incoming
statistics but in the end, they've remained in a fairly narrow 6 3/4% to 7 1/4%
range. Municipals, aided by a declining supply of tax-free bonds and steady
demand from retail buyers, outperformed treasuries.
The short-term municipal market is influenced by any Federal Reserve Board
decision to alter interest rates; however, market technicals (i.e.
supply/demand) were the overriding factor affecting the yields that prevailed
throughout this period. One example of these seasonal adjustments occurred in
late June and early July as demand exceeded supply, and short-term yields
dropped accordingly. Apart from seasonal considerations, monthly technicals can
occur also, which result in temporary drops in yield. Available supply
evaporates quickly as interest payments and proceeds of bond maturities flow
into money market funds the first days of each month. Primarily for those
reasons, municipal money market yields tend to seesaw during these time periods.
In yet another example of seasonal influences, the coming weeks may provide a
window of buying opportunity, as year-end technicals are expected to soften
short-term rates temporarily.
Evergreen Tax Exempt Money Market Fund maintained a weighted average maturity
in the 20-day range, a posture we believed was appropriate in view of a rather
flat yield curve during most of this period. We structured the Fund's
investments to maintain share price stability while at the same time allowing
flexibility to take advantage of the imminent supply of tax-free issues over the
summer. The commercial paper and one-year note markets provided the primary
means for us to extend the Fund's maturity, while working to maintain a
competitive yield. However, our success in achieving the desired average
maturity was limited due to a scarcity of attractively priced issues from which
to choose. As a result, the current weighted average maturity of the Fund's
portfolio still leaves room to extend should a change in market or supply
conditions warrant.
The economy is at a crossroads where growth is concerned. Going forward, we
anticipate continued market volatility until the future of economic growth is
made more clear. We shall continue to search for attractive value by weighing
the maturity characteristics, credit quality, and income potential of each bond
we consider for purchase.
At its fiscal year-end on August 31, 1996, Evergreen Tax Exempt Money Market
Fund's total net assets were $1.3 billion. The Fund's seven-day current,
effective and tax-equivalent yields at that time are illustrated in the table
below.
<TABLE>
<CAPTION>
7-DAY CURRENT YIELD 7-DAY EFFECTIVE YIELD TAX-EQUIVALENT YIELD*
<S> <C> <C> <C>
Class Y Shares 3.33% 3.38% 5.29%
Class A Shares 3.03% 3.08% 4.81%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS
*TAX-EQUIVALENT YIELD ASSUMES A 36% FEDERAL TAX BRACKET. TAX-EQUIVALENT YIELD
WOULD BE LOWER FOR INVESTORS IN LOWER TAX BRACKETS AND HIGHER FOR INVESTORS IN
HIGHER TAX BRACKETS. YIELDS FLUCTUATE.
DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED TO VOLUNTARILY WAIVE A
PORTION OF ITS ADVISORY FEE. HAD FEE NOT BEEN WAIVED, YIELDS WOULD HAVE BEEN
LOWER. FEE WAIVER MAY BE REVISED AT ANY TIME.
THE FUND'S INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES. SOME INCOME MAY BE
SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX FOR CERTAIN INVESTORS.
THE FUND MAY INCUR 12B-1 EXPENSES, UP TO AN ANNUAL MAXIMUM OF .35 OF 1% OF ITS
AVERAGE DAILY NET ASSETS OF ITS CLASS A SHARES. FOR THE FORSEEABLE FUTURE,
HOWEVER, MANAGEMENT INTENDS TO LIMIT SUCH PAYMENTS TO .30 OF 1% OF THE FUNDS
DAILY NET ASSETS OF ITS CLASS A SHARES.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1 PER SHARE.
22
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SHORT-TERM MUNICIPAL SECURITIES -- 100.7%
ALABAMA -- 3.4%
$ 3,170 Alabama Hsg. Fin. Auth. MHRB
(Westshore Landing Apts.), Ser.
1995H, 3.70% -- VRDN (LOC:
Southtrust Bk. of Alabama, N.A.)... $ 3,170,000
2,420 Alabama IDA-IDRB (Air-Dro
Cylinders, Inc.), 3.89% -- VRDN
(LOC: Southtrust Bk. of Alabama,
N.A.).............................. 2,420,000
3,700 Alabama IDA-IDRB (Automation
Technologies Ind. Inc.), 3.80% --
VRDN (LOC: Columbus Bk. & Tr.
Co.)............................... 3,700,000
5,775 City of Northport Multifamily Hsg.
Ref. Rev. Wt. (Northbrook I), Ser.
1993A, 3.60% -- VRDN (LOC:
Southtrust Bk. of Alabama, N.A.)... 5,775,000
2,265 City of Northport Multifamily Hsg.
RRB Wt. (River Run Apt.) Ser.
1995A, 3.70% -- VRDN (LOC: Amsouth
Bk., N.A.)......................... 2,265,000
Coml. Dev. Auth. of the City
of Birmingham RB,
3.80% -- VRDN
(LOC: Amsouth Bk., N.A.)
1,185 (Avondale Comm. Park, Phase
II).............................. 1,185,000
685 (Southside Business Ctr.)........ 685,000
7,115 Ed. Bldg. Auth. of the City of
Homewood RB (Samford Univ.), Ser.
1990, 3.60% -- VRDN (LOC: Amsouth
Bk., N.A.)......................... 7,115,000
3,235 IDB of Mobile Cnty. RB (Sherman
Intl. Corp.), Ser. 1994A,
3.80% -- VRDN (LOC: Columbus Bk. &
Tr. Co.)........................... 3,235,000
2,475 IDB of the City of Foley RB
(Vulcan, Inc.), 3.60% -- VRDN (LOC:
Amsouth Bk., N.A.)................. 2,475,000
1,100 IDB of the City of Livingston IDRB
(Toin Corp. U.S.A.), Ser. 1987,
4.15% -- VRDN (LOC: Indl. Bk. of
Japan, Ltd., NY)................... 1,100,000
2,000 IDB of the City of Montgomery RB
(Feldmeier/Alabama Equip., Inc.),
Ser. 1996, 3.75% -- VRDN (LOC:
Southtrust Bk. of Alabama, N.A.)... 2,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
ALABAMA -- CONTINUED
$ 2,300 IDB of the City of Pell IDRB (Reh
Kinder/Gorbel), 3.85% -- VRDN (LOC:
Key Bk. of NY)..................... $ 2,300,000
3,000 IDB of the City of Prattville IDRB
(Kuhnash Ppty./Arkay Plastics),
3.80% -- VRDN
(LOC: PNC Bk.)..................... 3,000,000
3,390 Public Park & Rec. Brd. of the City
of Birmingham RRB (Y.M.C.A.), Ser.
1996,
3.55% -- VRDN
(LOC: Amsouth Bk., N.A.)........... 3,390,000
43,815,000
ARIZONA -- 4.2%
6,900 IDA of the City of Glendale, RB
(Thunderbird Gardens), 4.00% --
VRDN (LOC: Sumitomo Trust & Bk. Co.
Ltd., NY)*......................... 6,900,000
9,000 IDA of the City of Phoenix, RB
(Amer. West Airlines, Inc.), Ser.
1986, 3.85% -- VRDN (LOC: Indl. Bk.
of Japan, Ltd.).................... 9,000,000
200 IDA of the Cnty. of Maricopa
(McLane Co., Inc.), Ser. 1984,
3.90% -- VRDN
(LOC: Vly. Natl. Bk.).............. 200,000
Maricopa Cnty. PCRB
3.60% -- VRDN
(El Paso Electric Co. Palo Verde),
24,800 Ser. 1985A
(LOC: Westpac Bkg. Co.).......... 24,800,000
12,235 Ser. 1994A
(LOC: Citibank, N.A.)............ 12,235,000
53,135,000
ARKANSAS -- .1%
City of Jonesboro Residential
Housing & Health Care Fac. Brd.
Hosp. RRB (St. Bernards Regnl.
Medical Ctr.), 4.10%, 7/1/97
(Ins. by AMBAC)
425 Ser. 1996A....................... 425,000
605 Ser. 1996B....................... 605,000
1,030,000
CALIFORNIA -- 8.2%
4,800 Agoura Hills MHRB (Oakridge Apts.),
3.65% -- VRDN (Surety Bond: Contl.
Cas. Corp.)........................ 4,800,000
</TABLE>
23
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
CALIFORNIA -- CONTINUED
<C> <S> <C>
$ 6,000 California Higher Ed. Loan Auth.
Inc. Ser. A-1, 3.95%, 7/1/97 (Gtd.
by Sallie Mae)..................... $ 6,000,000
1,400 City of Barstow MHRB (Mercury Svgs.
& Ln. Assn./Rimrock Vlg. Apts.),
Ser. 1988A, 3.85% -- VRDN (LOC:
Mercury Svgs. & Ln., Coll: U.S.
Treas. Bills)...................... 1,400,000
3,355 City of Hanford Sewer Sys. RRB Ser.
1996A, 3.85% -- VRDN (LOC: Union
Bk. of California)................. 3,355,000
102 Cnty of Orange Irvine Coast Assmt.
Dist. No. 88-1 Ltd. Oblig. Impt.
Bds., 3.65% -- VRDN (LOC:
Kreditbank, NV).................... 102,000
5,500 Cnty. of San Bernardino MHRB
(Rolling Ridge), 4.25% -- VRDN
(LOC: Mercury Svgs. & Ln.)......... 5,500,000
1,900 Glenn Cnty. IDA RB (Land O'Lakes,
Inc.), Ser. 1995, 4.10% -- VRDN
(LOC: Sanwa Bk., Ltd.)............. 1,900,000
4,250 Hsg. Auth. of the City of Paramount
MHRB (Century Place Apt.), Ser.
1989A, 4.22% -- VRDN (LOC: Heller
Finl. Inc.)**...................... 4,250,000
5,000 Hsg. Auth. of the City of Santa Ana
MHRB (Villa Verde Apt.), Ser.
1985B, 3.90% -- VRDN (LOC: Mercury
Svgs. & Ln., Coll: U.S. Treas.
Bills)............................. 5,000,000
2,600 IDA of the City of Simi Vly. IDRB
(Wambold Furniture), Ser. 1984,
3.85% -- VRDN (LOC: Wells Fargo
Bk., N.A.)......................... 2,600,000
8,500 Lancaster Redev. Agy. MHRB (Far
West Svgs. & Ln. Assn./20th St.
Apts.), Ser. 1985R, 3.90% -- VRDN
(LOC: Far West Svgs. & Ln. Assn.,
Coll: U.S. Treas. Bills)........... 8,500,000
4,200 North Cnty. School Fin. Auth. 1996
TRANS (Orange Cnty.), 4.75%,
7/1/97............................. 4,220,068
1,100 Orange Cnty. Mun. Wtr. Dist. 3.70%,
9/12/96 -- TECP
(LOC: Union Bk. of Switzerland).... 1,100,000
23,538 Pitney Bowes Cr. Corp. Leasetops
Trs. (Bart Telesystem Lease),
3.90% -- VRDN (LOC: ABN-Amro Bk.,
N.V.)**............................ 23,538,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
CALIFORNIA -- CONTINUED
$ 3,600 Regional Airports Impt. Corp. Fac.
Sublease RB, Issue 1985 Lax Two
Corp. (Los Angeles Intl. Arpt.),
3.70% -- VRDN
(LOC: Societe Generale, NY)........ $ 3,600,000
15,375 San Bernadino Cnty. COP Ser. 1995,
3.75% -- VRDN
(Ins. by MBIA)**................... 15,375,000
4,000 Santa Paula Pub. Fin. Auth. RB
(Wtr. Sys. Acquisition), Ser. 1996,
3.85% -- VRDN (LOC: Bk. of
California & Sumitomo Bk.)......... 4,000,000
4,500 South Coast Local Ed. Agy. Pooled
TRANS Prog., Ser. 1996A, 4.75%,
6/30/97............................ 4,524,297
5,000 Stanislaus Cnty. Office of Ed. 1996
TRANS, 4.50%, 6/30/97.............. 5,019,871
104,784,236
COLORADO -- 1.5%
5,000 Adams Cnty. IDRB (Yellow Fght.
Sys., Inc.), Ser. 1983,
3.80% -- VRDN (LOC: Union
Bk. of Switzerland)................ 5,000,000
5,000 Arapahoe Cnty. MHRB Ref. (Stratford
Sta.), Ser. 1994, 4.15% -- VRDN
(LOC: Heller Finl., Inc.).......... 5,000,000
550 Boulder Cnty. Dev. RB (The
Geological Society of Amer., Inc.),
Ser. 1992 -- ARB, 4.25%, 12/1/96
(LOC: Banc One Boulder)............ 550,000
5,500 Colorado Hsg. Fin. Auth. RB MERLOTS
Ser. C, 4.125% -- ARB, 2/1/97 (LIQ:
Meridian Bk.)**.................... 5,500,000
2,680 Parkview Met. Dist. Arapahoe Cnty.
GO Bds., Ser. 1993, 3.75% -- VRDN
(LOC: Cent. Bk./Bk. Western,
N.A.).............................. 2,680,000
18,730,000
DELAWARE -- .8%
3,000 Delaware EDA-IDRB (Arlon, Inc.),
Ser. 1989, 4.00% -- VRDN (LOC: Bk.
of Amer., IL)...................... 3,000,000
4,060 Delaware Hsg. Auth. RB MERLOTS,
Ser. G, 4.125% -- ARB, 12/1/96
(Ins. by FGIC)**................... 4,060,000
</TABLE>
24
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
DELAWARE -- CONTINUED
<C> <S> <C>
$ 2,480 New Castle Cnty., EDRB
(Toys R Us), 3.55% -- VRDN
(LOC: Bankers Tr. Co., NY)......... $ 2,480,000
9,540,000
DISTRICT OF COLUMBIA -- 1.7%
1,600 Dist. of Columbia GO Gen. Fd.
Recovery Bd., Ser. B, 3.95% -- VRDN
(LOC: Union Bk. of Switzerland).... 1,600,000
5,120 Dist. of Columbia GO RB (Puttable
Floating Opt. Tax-Exmp. Rcpt., Ser.
PA-64), Ser. 1993C, 3.90% -- VRDN
(LIQ: Merrill Lynch Cap. Svs.,
Inc.)**............................ 5,120,000
Dist. of Columbia GO RFB,
3.95% -- VRDN
1,200 Ser. 1992A-1
(LOC: Natl. Westminster Bk.)..... 1,200,000
5,100 Ser. 1992A-2
(LOC: Bk. of Nova Scotia)........ 5,100,000
3,700 Ser. 1992A-4
(LOC: Toronto Dominion Bk.)...... 3,700,000
4,700 Ser. 1992A-5
(LOC: Bk. of Nova Scotia)........ 4,700,000
21,420,000
FLORIDA -- 2.4%
5,155 Florida Hsg. Fin. Auth. Long Option
Mode Ser. 2-CR-25C 3.80% -- ARB,
12/15/96
(Ins. by FGIC)..................... 5,155,000
5,100 Jacksonville Elec. Auth. St. Johns
River Pwr. Park Sys. RB Issue One,
Ser. 3, 3.65%, 10/7/96 -- TECP
(LOC: Morgan Gty., NY)............. 5,100,000
10,900 Orange Cnty., Hlth. Fac. Auth. RRB
(Pooled Hosp. Ln. Prg.), ACES Ser.
1985, 3.70% -- VRDN (LIQ: Banque
Paribas & Ins. by MBIA)............ 10,900,000
2,800 Orange Cnty. Hsg. Fin. Auth. MHRB
Ser. E, (Oakwood), 4.20% -- ARB,
10/1/96
(LOC: Fleet Bk. N.A.).............. 2,800,000
1,005 Palm Beach Cnty. Hsg. RB (Meridian
Hsg.), Ser. 1985, 4.2925% -- VRDN
(LOC: Bk. of California, N.A.)..... 1,005,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
FLORIDA -- CONTINUED
$ 5,875 Palm Beach Cnty. School Brd. (MSTR
Ser. 1996B), 4.00% -- VRDN (LIQ:
Norwest Bk., MN & Ins. by
AMBAC)**........................... $ 5,875,000
30,835,000
GEORGIA -- 2.6%
1,000 Albany Dougherty Cnty. Hosp. RB
Ser. 1984A, 3.90% -- VRDN (Gtd. by
Merck & Co.)....................... 1,000,000
5,000 Albany Dougherty Payroll,
3.90% -- VRDN
(Gtd. by Merck & Co.).............. 5,000,000
2,550 Clayton Cnty. Hsg. Auth. RB (Oxford
Townhomes),
3.60% -- VRDN
(LOC: Amsouth Bk., N.A.)........... 2,550,000
1,800 Dev. Auth. of Burke Cnty. PCRB
(Georgia Pwr. Co. Plant Vogtle),
Second Ser. 1995,
3.75% -- VRDN
(Gtd. by Georgia Pwr. Co.)......... 1,800,000
6,000 Dev. Auth. of Polk Cnty. RB (Kimoto
Tech. Inc.), Ser. 1985,
3.90% -- VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 6,000,000
10,600 Hsg. Auth. of Cobb Cnty., MHRB Ref.
(Terrell Mill II Assoc., Ltd.),
Ser. 1993, 3.70% -- VRDN (LOC:
Mellon Bk., N.A.).................. 10,600,000
2,200 Hsg. Auth. of Columbus MHRB Ref.
(Quail Ridge), Ser. 1988,
3.90% -- VRDN
(LOC: Columbus Bk. & Tr. Co.)...... 2,200,000
1,000 Hsg. Auth. of Marietta MHRB (Falls
at Bells Ferry), 3.55% -- ARB,
1/15/97 (LOC: Guardian Svgs. & Ln.,
Houston)........................... 1,000,000
3,375 Jackson Cnty., IDA RB (Buhler
Quality Yarns Corp.), Ser. 1996,
3.61% -- VRDN (LOC: Union Bk. of
Switzerland)**..................... 3,375,000
33,525,000
ILLINOIS -- 12.1%
9,740 City of Aurora MHRB
(Fox Vly Vlg. Apts.), Ser. 1993,
4.00% -- VRDN
(LOC: Sumitomo Bk., Ltd.).......... 9,740,000
</TABLE>
25
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
ILLINOIS -- CONTINUED
<C> <S> <C>
$ 4,200 City of Chicago, Cook Cnty. IDRB
(Fed. Marine Term.), 3.80% -- VRDN
(LOC: Royal Bk. of Canada)......... $ 4,200,000
1,000 City of Chicago, Cook Cnty. RB (CSX
Beckett Aviation), Ser. 1984,
3.72% -- VRDN
(LOC: Barclay's Bk. PLC)........... 1,000,000
2,900 City of Chicago GO Bds. (MSTR
SAK-13), Ser. 1995A-2, 3.60% --
VRDN (LIQ: Societe Generale & Ins.
by AMBAC)**........................ 2,900,000
6,680 City of Chicago (MSTR 1995 SGA-8)
GO Bds., Ser. 1993B, 3.60 -- VRDN
(LIQ: Societe Generale & Ins. by
AMBAC)**........................... 6,680,000
2,640 City of Jacksonville Indl. RB (AGI,
Inc.), Ser. 1995, 3.80% -- VRDN
(LOC: Bk. of Amer., IL)............ 2,640,000
15,000 City of Oakbrook Terrace
Multifamily Hsg. Mtg. RB
(Renaissance), Ser. 1985A Subser.
III, 4.45% -- ARB, 11/1/96 (LOC:
Bayerische Landesbank,
Girozentrale)...................... 15,000,000
4,000 City of Peoria Solid Waste Disposal
RB (PMP Fermentation Products,
Inc.), Ser. 1996, 3.90% -- VRDN
(LOC: Sanwa Bk., Ltd.)............. 4,000,000
5,900 City of West Chicago IDRB (Acme
Printing Inc.), Ser. 1989
3.925% -- VRDN
(LOC: Bk. of Tokyo, Ltd.).......... 5,900,000
1,000 Cnty. of Dupage MHRB (Myerstown,
L.L.C.), Ser. 1996B, 3.95% -- VRDN
(LOC: First of Amer. Bk., N.A.,
IL)................................ 1,000,000
3,400 Illinois Dev. Fin. Auth. EDRB (MTI
Corp.), 4.15% -- VRDN (LOC: Indl.
Bk. of Japan, Ltd.)................ 3,400,000
Illinois Dev. Fin. Auth. IDRB --
VRDN (LOC: Amer. Natl. Bk. & Tr.,
Chicago)
2,500 (Icon Metalcraft, Inc.), Ser.
1995, 3.65%...................... 2,500,000
3,040 (Uhlich Children's Home),
3.85%**.......................... 3,040,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
ILLINOIS -- CONTINUED
$10,000 Illinois Dev. Fin. Auth. MHRB
(Garden Glen Apts.),
3.75% -- VRDN
(Surety Bond: Contl. Cas. Corp.)... $ 10,000,000
6,800 Illinois Dev. Fin. Auth. RB (Gen.
Accident Ins. Co.), Ser. 1985 --
ARB (Gtd. by Gen. Accident Ins. Co.
of Amer.) 3.25%, 9/1/96............ 6,800,000
6,000 Illinois Health. Fac. Auth. RB
(Central DuPage Hosp. Assn.), Ser.
1990, 3.85% -- VRDN (LOC: Robobank
Nederland)......................... 6,000,000
8,145 Illinois Hsg. Dev. Auth. RB
(Illinois Ctr. Apts.),
3.70% -- VRDN
(Gtd. by Met. Life Ins. Co.)....... 8,145,000
11,162 LaSalle Natl. Bk. Leasetops Trs.
Ser. 1995A, 3.90% -- VRDN (LOC:
LaSalle Natl. Bk.)**............... 11,162,512
3,000 Vlg. of Carol Stream IDRB (MI
Enterprises, Inc.), 3.65% -- VRDN
(LOC: Amer. Natl. Bk. & Tr.,
Chicago)........................... 3,000,000
16,640 Vlg. of Hazel Crest Retirement Ctr.
RB (Waterford Estates), Ser. 1992A
, 4.00% -- VRDN
(LOC: Sumitomo Bk.)................ 16,640,000
2,345 Vlg. of Lombard IDRB (Chicago Roll
Co., Inc.), Ser. 1995,
3.90% -- VRDN (LOC: Amer. Natl. Bk.
& Tr., Co. of Chicago)............. 2,345,000
1,200 Vlg. of Palatine IDRB (Lightner
Land Holdings LLC), Ser. 1995,
3.85% -- VRDN
(LOC: Bk. One, Chicago, N.A.)...... 1,200,000
10,000 Vlg. of Schaumburg MHRB (Treehouse
II Apt.), Ser. 1989, 4.00% -- VRDN
(LOC: Sumitomo Bk.)................ 10,000,000
2,000 Vlg. of Skokie EDRB (Skokie Fashion
Square Assn.), Ser. 1984,
3.775% -- VRDN
(LOC: LaSalle Ntl. Bk.)............ 2,000,000
15,210 Vlg. of Vernon Hills MHRB (Hawthorn
Lakes), Ser. 1991, 4.35% -- VRDN
(LIQ: Fuji Bk., Ltd. & Ins. by
FSA)............................... 15,210,000
154,502,512
</TABLE>
26
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
<C> <S> <C>
INDIANA -- 4.9%
$17,800 City of Fort Wayne PCRB (Gen. Mtrs.
Corp.), 3.70% -- VRDN (Gtd. by Gen.
Mtrs. Corp.)....................... $ 17,800,000
7,000 City of Gary EDRB (Miller
Partnership, L.P.), Ser. 1995A,
3.75% -- ARB
(LOC: Royal Bk. of Scotland)....... 7,000,000
2,000 City of New Albany EDRB (Bert R.
Huncilman & Son Inc.), Ser. 1996A,
3.80% -- VRDN
(LOC: PNC Bk.)..................... 2,000,000
2,000 City of New Albany EDRB (Gordon L.
& Jeffery Huncilman -- Partner.),
Ser. 1996B, 3.80% -- VRDN
(LOC: PNC Bk.)..................... 2,000,000
2,000 City of South Bend MHRB (Maple Lane
Assn.), Ser. 1987, 4.00% -- VRDN
(LOC: Society Bk. of Cleveland).... 2,000,000
1,080 Decatur Indl. EDA-RB (Silberline
Mfg. Co. Inc.), 4.125%, 12/01/96
(LOC: Corestates Capital Mkt.,
Inc.).............................. 1,080,000
25,000 Indiana Bd. Bk. (Reassessment
Assist. Prog. Nts.), Ser. 1996B,
4.50%, 1/30/97..................... 25,060,261
3,150 Indianapolis EDA-EDRB
(Sutton Pl. Apt.), Ser. A,
4.30% -- ARB, 10/1/96
(GIC: Berkshire Hathaway).......... 3,150,000
2,435 Indianapolis Airport Auth. RB (MSTR
Ser. SGA-31), 3.60% -- VRDN (LIQ:
Societe Generale & Ins. by
FGIC)**............................ 2,435,000
62,525,261
IOWA -- .8%
5,680 Iowa Finance Auth. IDRB (McWane,
Inc.), Ser. 1992, 3.75% -- VRDN
(LOC: Amsouth Bk., N.A.)........... 5,680,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
IOWA -- CONTINUED
$ 5,000 City of Council Bluffs RB Catholic
Hlth. Corp. (Mercy Hosp., Council
Bluffs), Ser. 1985, 3.75% -- ARB,
10/1/96
(LOC: Fuji Bk., Ltd., LA).......... $ 5,000,000
10,680,000
KANSAS -- .6%
2,250 Burlington PCRB 3.70%,
9/24/96 -- TECP (Gtd. by Natl.
Rural Utility Fin. Corp.).......... 2,250,000
1,000 City of Fredonia RB (Systech Envir.
Corp.), Ser. 1989, 3.80% -- VRDN
(LOC: Banque Natl. de Paris, NY)... 1,000,000
City of Salina RB (Salina Central
Mall L.P.), Ser. 1984,
3.65% -- VRDN,
(LOC: Boatmen's Bancshares, Inc.)
1,105 Dillard's........................ 1,105,000
1,200 Penney's......................... 1,200,000
1,800 City of Praire Vlg. MHRB (J.C.
Nichol's Co.), Ser. 1985,
4.00% -- VRDN
(Gtd. by Bankers Life Ins. Co.).... 1,800,000
7,355,000
KENTUCKY -- 1.5%
2,000 Cnty. of Jefferson Indl. Bldg. RB
(Thomas Dev.), Ser. 1995,
3.70% -- ARB
(LOC: PNC Bk.)..................... 2,000,000
10,300 Cnty. of Ohio PCRB (Big Rivers
Elec. Corp.), Ser. 1985, 3.80% --
VRDN
(LOC: Chemical Bk.)................ 10,300,000
904 Jefferson Cnty. IDRB (Belknap
Inc.), 3.60% -- VRDN
(LOC: Chemical Bk.)................ 904,000
6,100 Pendleton Cnty. RB (Kentucky Assn.
of Cnty. Leasing Tr. Prog.), Ser.
1989, 3.70% -- ARB, 10/9/96 (LOC:
PNC Bk.)........................... 6,100,000
19,304,000
</TABLE>
27
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
LOUISIANA -- .4%
$ 5,000 Indl. Dist. No. 3 of the Parish of
West Baton Rouge (Dow Chemical
Co.), Ser. 1994B, 3.85% -- VRDN
(Gtd. by Dow Chemical Co.)......... $ 5,000,000
MARYLAND -- 1.0%
3,355 Community Dev. Admin. State of
Maryland Dept. of Hsg. & Comm. Dev.
(Single Family Prog.),
Ser. 1987 Fourth,
3.60% -- ARB, 10/1/96
(LOC: First Natl. Bk. of Boston)... 3,355,000
9,400 Mayor & City Council of Baltimore
RRB (MSTR SGA-20), (Wastewater),
3.60% -- VRDN (LIQ: Societe
Generale & Ins. by MBIA)**......... 9,400,000
12,755,000
MASSACHUSETTS -- .2%
360 City of Lowell Indl. RB (Oak Realty
Tr.) Ser. 1985,
4.2925% -- VRDN
(LOC: First Natl. Bk. of Boston)... 360,000
500 Massachusetts Indl. Finl. Agy.
(Copley Pharmac),
4.5425% -- VRDN
(LOC: First Natl. Bk. of Boston)... 500,000
855 Massachusetts Indl. Finl. Auth.
IDRB (Leavy Realty & Jencoat
Metal), Ser. 1994,
4.2925% -- VRDN
(LOC: First Natl. Bk. of Boston)... 855,000
700 Massachusetts Indl. Finl. Auth.
Indl. RB (Portland Causeway Rlty.),
Ser. 1988, 4.2925% -- VRDN (LOC:
Citibank, N.A.).................... 700,000
2,415,000
MICHIGAN -- 1.3%
2,000 Economic Dev. Corp. of the Twp. of
Van Buren Economic RB
(Daikin Clutch USA, Inc.),
Ser. 1987, 3.90% -- VRDN
(LOC: Sanwa Bk., Ltd.)............. 2,000,000
5,000 Sault. Ste. Marie Tribe Bldg. Auth.
RB Ser. 1996A, 4.46% -- ARB,
12/2/96 (LOC: First of Amer. Bk.,
N.A.).............................. 5,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
MICHIGAN -- CONTINUED
$10,000 School Dist.of the City of Detroit
Wayne Cnty. GO Bds., (State School
Aid Nts.), Ser. 1996, 4.50%,
5/1/97............................. $ 10,035,317
17,035,317
MINNESOTA -- 2.7%
14,905 City of Eden Prairie MHRB (Park at
City West Apt.), Ser. 1990,
4.00% -- VRDN
(LOC: Sumitomo Bk.)................ 14,905,000
2,300 City of Robbinsdale IDRB (Unicare
Homes, Inc.), Ser. 1984,
3.80% -- VRDN
(LOC: Banque Paribas).............. 2,300,000
1,700 Eagle Tax-Exmp. Tr. Cl. A-COP
(Minnesota Hsg. Fin. Agy.),
Ser. D, 3.61% -- VRDN
(LOC: Citibank, N.A.)**............ 1,700,000
5,750 Hennepin Cnty. GO Bds.
Ser. 1996C, 3.75% -- VRDN.......... 5,750,000
4,220 Minneapolis GO (Sports Arena),
(MSTR Ser. 1996A), 3.75% -- VRDN
(LIQ: Norwest Bk., MN)**........... 4,220,000
845 Minneapolis/Saint Paul Housing Fin.
Brd. RB (Minneapolis/Saint Paul
Fam. Hsg. Prog., Phase VI), 4.00%,
2/1/97 (Coll: GNMA)................ 845,000
2,550 Minnesota Agric. & EDRB
(Como Partnership), Ser. 1996,
3.85% -- VRDN
(LOC: First Bk. Natl. Assn.)....... 2,550,000
1,000 Minnesota Insured (MSTR Ser.
1996B), 3.75% -- VRDN (LIQ: Norwest
Bk., MN & Ins. by MBIA)............ 1,000,000
750 Southern Minnesota Mun. Pwr. Agy.
Supply Sys., (MSTR Ser. 1996I),
3.75% -- VRDN
(LIQ: Norwest Bk., MN & Ins. by
FGIC)**............................ 750,000
1,000 Spring Lake Park I.S.D. No. 16
(MSTR Ser. 1996G), 3.75% -- VRDN
(LIQ: Norwest Bk., MN & Ins. by
MBIA)**............................ 1,000,000
35,020,000
</TABLE>
28
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
<C> <S> <C>
MISSISSIPPI -- .2%
$ 3,000 Lee Cnty. IDRB (Hunter Douglas
Inc.), Ser. 1985, 3.75% -- VRDN
(LOC: Bk. of Amer. Natl. Tr. & Svg.
Assn.)............................. $ 3,000,000
MISSOURI -- 2.4%
3,000 Boatmens St. Louis Grantor Tr.
(Cert. Partn.), Ser. 1996A-1,
3.70% -- VRDN (LOC: Boatmens Natl.
Bk., St. Louis).................... 3,000,000
8,375 City of St. Louis TRANS
4.75%, 6/30/97..................... 8,425,585
7,700 Health & Ed. Fac. Auth. of the
State of Missouri RB (Washington
University), Ser. 1989A, 3.80% VRDN
(LOC: Morgan Gty., NY)............. 7,700,000
IDA of the City of Kansas MHRB Ser.
1988A, 4.20%, 10/1/96 (LOC: Home
Svgs. Assn. of Kansas City)
2,950 (Twin Oaks I Apt.)............... 2,950,000
2,950 (Twin Oaks II Apt.).............. 2,950,000
4,415 Missouri Dev. Fin. Brd. IDRB (Cook
Composites & Polymers Co.), Ser.
1994, 3.85% -- VRDN (LOC: Societe
Generale).......................... 4,415,000
825 School District of North Kansas GO
School Bldg. Bds. (Missouri Direct
Deposit Prog.), Ser. 1996 7.00%,
3/1/97............................. 836,966
30,277,551
MONTANA -- .1%
760 Butte Silver Bow City & Cnty.
(Copper City Assn.), Ser. 1988,
4.25% -- VRDN
(LOC: Bank of America)............. 760,000
NEBRASKA -- .7%
4,200 Lancaster Cnty. IDRB (AS Mid-Amer.,
Inc.), Ser. 1994, 4.25% --
VRDN (LOC: Heller Finl., Inc.)..... 4,200,000
4,300 Nebraska Investment Fin. Auth. MHRB
(Briarhurst/Candle Tree Apts.) Ser.
1985, 3.65% -- ARB, 10/1/96 (LOC:
Citibank, N.A.).................... 4,300,000
8,500,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
NEVADA -- .4%
$ 4,450 Nevada Housing Division RB (Oakmont
at Reno), 3.90% -- VRDN (LOC:
Banque Paribas).................... $ 4,450,000
NEW HAMPSHIRE -- .1%
1,500 New Hampshire Hsg. Fin. Auth. MHRB
(Nashua-Oxford),
Ser. 1990, 3.80% -- VRDN
(Surety Bond: Contl. Cas. Corp.)... 1,500,000
NEW JERSEY -- .4%
4,750 New Jersey EDA (Center for Aging,
Inc. Applewood), 3.95% -- VRDN
(LOC: Banque Paribas).............. 4,750,000
NEW MEXICO -- 2.8%
31,300 City of Farmington PCRB (El Paso
Elec. Co. Four Corners), Ser.
1994A, 3.60% -- VRDN
(LOC: Citibank, N.A.).............. 31,300,000
4,855 Cnty. of Sandoval MHRB (Arrowhead
Ridge Apt.) Ser. 1996, 4.65%,
7/1/97 (LIQ: FGIC)................. 4,855,000
36,155,000
NEW YORK -- 2.5%
Battery Park City Auth. Hsg. RB
(Marina Towers Tender Corp.),
3.95% -- VRDN
(LOC: Sumitomo Bk.)
8,560 Ser. A........................... 8,560,000
7,765 Ser. B........................... 7,765,000
1,000 Nassau Cnty. Indl. Dev. Agy. IDRB
(Crand Plumbing, Inc.),
3.75% -- VRDN (LOC: Amer. Natl. Bk.
& Tr. of Chicago).................. 1,000,000
New York City GO Subser. H3, 3.90%,
TECP (LIQ: Banque
Paribas & Ins. by FSA)
2,000 9/9/96........................... 2,000,000
11,900 10/1/96.......................... 11,900,000
31,225,000
NORTH CAROLINA -- 2.2%
3,600 Cabarrus Cnty. Indl. Fac. PCRB
(Oiles Amer. Corp.), Ser. 1989,
4.20% -- VRDN (LOC: Industral Bk.
of Japan, Ltd., NY)................ 3,600,000
</TABLE>
29
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
NORTH CAROLINA -- CONTINUED
<C> <S> <C>
$ 7,700 Columbus Cnty. Indl. Fac. &
Pollution Ctl. Fin. Auth. Solid
Waste Disposal RB (Fed. Paper Brd.
Co., Inc.), Ser. 1992,
3.90% -- VRDN
(LOC: Dai-Ichi Kangyo Bk., Ltd.)... $ 7,700,000
3,000 Guilford Cnty. Indl. Fac. &
Pollution Control Fing. Auth. RB
Sewage Disp. (High Pt. Chem.),
3.90% -- VRDN
(LOC: Sumitomo Bk.)................ 3,000,000
10,300 Lenoir Cnty. Indl. Fac. PCRB
(Carolina Energy, Ltd.
Partnership), Ser. 1995,
3.75% -- VRDN
(LOC: Bank of Tokyo, Ltd. NY)...... 10,300,000
870 NCNB Pooled Tax-Exmp.Tr. COP Ser.
1990A, 4.125% -- VRDN (LOC:
NationsBank of NC)**............... 870,000
3,000 Richmond Cnty. Indl. Fac. PCRB
(Bibb Co.), 4.21% -- VRDN (LOC:
Citibank, NY)...................... 3,000,000
28,470,000
OHIO -- 2.9%
5,000 City of Dayton Ohio Spec. Fac. RB
(Emery Air Fght. Corp.),
Ser. 1993E, 3.80% -- VRDN
(LOC: Mellon Bk., N.A.)............ 5,000,000
16,250 Cleveland City School Dist. TRANS
Ser. 1996, 5.85%, 12/31/96 (LOC:
Banque Paribas).................... 16,344,729
4,800 Cnty. of Stark IDRB (Crane
Plumbing, Inc.), Ser. 1984,
3.80% -- VRDN (LOC: Amer. Natl. Bk.
& Tr. Co. of Chicago).............. 4,800,000
4,200 Cnty. of Summit IDA-IDRB (Shin-Etsu
Silicones of Amer. Inc.) Ser. 1994,
3.90% -- VRDN (LOC: Bk. of Tokyo,
Ltd. & Mitsubishi Bk., Ltd.)....... 4,200,000
4,250 Dayton Ohio Airport Impt. Nts.
4.50%, 3/25/97..................... 4,261,617
3,000 Ohio Hsg. Fin. Agy. MHRB (10
Wilmington Place), Ser. 1991B,
4.35% -- VRDN (LIQ: Fuji Bk., Ltd.
& Ins. by FSA)..................... 3,000,000
37,606,346
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
OREGON -- 1.4%
Oregon EDRB Series CLVI,
4.00% -- VRDN
(LOC: Bk. of California, N.A.)
$ 1,960 (Pacific Coast Seafoods Co.)..... $ 1,960,000
1,210 (Pacific Oyster Co.)............. 1,210,000
2,050 Oregon EDRB (Stagg Foods, Inc.),
Ser. 75, 3.80% -- VRDN
(LOC: Bk. of Amer.)................ 2,050,000
5,050 Oregon Health Hsg. Ed. & Culture
Fac. Auth. RB (Evangelical
Lutheran), Ser A, 3.60% -- VRDN
(LOC: First Natl. Bk. N.A.)........ 5,050,000
7,000 Oregon State Brd. of Higher Ed.
(MSTR SGA-29), Ser. 1996,
3.60% -- VRDN
(LIQ: Societe Generale)**.......... 7,000,000
17,270,000
PENNSYLVANIA -- 6.9%
1,430 Chester Cnty. IDA Coml. Dev. RB
(Plaza Assn.), Ser. A,
3.70% -- VRDN
(LOC: First Fed. Svgs. & Ln.)...... 1,430,000
3,000 Chester Cnty. IDA Mfg. Fac. RB
(Devault Packing Co., Inc.),
Ser. 1995, 3.95% -- VRDN
(LOC: Meridian Bk.)................ 3,000,000
25,000 City of Philadelphia GO Bds.,
Ser. 1990, 3.65%, 9/12/96
(LOC: Fuji Bk., Ltd., NY).......... 25,000,000
500 Elk Cnty. IDA-IDRB Ref. (Stackpole
Corp.), Ser. 1989, 4.2925% -- VRDN
(LOC: First Natl. Bk. of Boston)... 500,000
855 Fayette Cnty. Hosp. Auth. RB
(Uniontown Hosp.), Ser. 1996,
4.25%, 6/15/97
(Ins. by Connie Lee)............... 855,912
650 Lawrence Cnty. IDA-PCRB (Calgon
Carbon), Ser. 1983A, 3.90% -- VRDN
(Gtd. by Merck & Co.).............. 650,000
25,000 Montgomery Cnty. Higher Ed. & Hlth.
Auth. RB (Pennsylvania Higher Ed. &
Hlth. Ln. Prog.), Ser. 1996A,
3.65% -- VRDN (LOC: Dauphin Deposit
Bk. & Tr. Co.)..................... 25,000,000
</TABLE>
30
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
PENNSYLVANIA -- CONTINUED
<C> <S> <C>
$ 1,500 Montgomery Cnty. IDA-RB (Laneko
Engineering Co.),
Ser. 1995 3.95% -- VRDN
(LOC: Meridian Bk.)................ $ 1,500,000
3,000 Moon IDRB (One Thorn Run Ctr.) Ser.
1995A, 3.85% -- VRDN (LOC: Natl.
City Bk.).......................... 3,000,000
2,500 Northeastern PA Hosp. Auth. (Hosp.
Central Svs, Capital Asset Fin.
Prog.), Ser. B,
3.70% -- VRDN
(LIQ: PNC Bk. & Ins. by MBIA)...... 2,500,000
1,300 Pennsylvania Economic Dev. Fin.
Auth. RB (C.F. Martin & Co., Inc.),
Ser. H, 3.95% -- VRDN (LOC:
Meridian Bk.)**.................... 1,300,000
8,760 Pennsylvania Hsg. Fin. Agy. Single
Family Mtg. RB Ser. O,
4.125% -- ARB...................... 8,760,000
9,400 School Dist. of Philadelphia TRANS,
Ser. 1996,
4.50%, 6/30/97..................... 9,437,443
2,010 West Cornwall Twp. Mun. Auth. RB
(Lebanon Vly. Brethren Home), Ser.
1995, 3.75% -- VRDN (LOC: Meridian
Bk.)............................... 2,010,000
3,040 Westmoreland Cnty. IDA-IDRB (White
Consolidated Ind., Inc.),
4.125% -- ARB, 12/1/96
(LOC: Chemical Bk.)................ 3,041,829
87,985,184
RHODE ISLAND -- .2%
3,000 Rhode Island Solid Waste Mgmt.
Corp. Landfill Lease Nts. Ser.
1995A, 4.50%, 8/1/97............... 3,009,223
SOUTH CAROLINA -- .9%
3,500 Darlington Cnty. IDA-IDRB (Hobart
Corp.), 3.90% -- VRDN (LOC: Fuji
Bk., Ltd.)......................... 3,500,000
4,000 South Carolina Jobs EDA-EDRB (B.F.
Shaw, Inc.), Ser. 1995,
3.95% -- VRDN (LOC: Mercantile Bk.
of St. Louis N.A.)................. 4,000,000
2,700 South Carolina Jobs EDA-EDRB
(Roller Bearing Co.), Ser. 1994A,
4.36% -- VRDN
(LOC: Cr. Coml. de France)**....... 2,700,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
SOUTH CAROLINA -- CONTINUED
South Carolina Jobs EDA-EDRB Ser.
1989B, 3.80% -- VRDN (LOC: Cr.
Coml. de France)
$ 800 Ser. A (Tuttle Co., Inc.)........ $ 800,000
650 Ser. B (Ridge Pallets)........... 650,000
11,650,000
SOUTH DAKOTA -- .7%
5,385 City of Rapid EDRB (Civic Center
Assoc.), 3.81% -- VRDN (LOC:
Bayerische Vereinsbank AG)......... 5,385,000
3,500 South Dakota Hsg. Dev. Auth. RB
(Homeownership Mtg. Bd.), Ser.
1995E, 4.05% -- ARB, 10/24/96...... 3,500,000
8,885,000
TENNESSEE -- 3.2%
1,000 IDB of Blount Cnty. IDRB (Advanced
Crystal, Inc.),
Ser. 1988, 4.15% -- VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 1,000,000
5,000 IDB of the City of Morristown
IDRB (Camvac Intl., Inc.),
Ser. 1983, 3.775% -- VRDN
(LOC: ABN Amro Bk.)................ 5,000,000
3,700 IDB of Rutherford Cnty. IDRB
Ref. (Outboard Marine Corp.),
Ser. 1987, 3.80% -- VRDN
(LOC: First Chicago NBD Corp.)..... 3,700,000
3,200 IDB of the City of Chattanooga
RRB (Radisson Read House),
Ser. 1995, 4.25% -- VRDN
(LOC: Heller Finl., Inc.).......... 3,200,000
IDB of the Met. Govt. of Nashville
& Davidson Cnty. RB, 4.00% -- VRDN
Ser. 1989
(LOC: Sumitomo Bk.)
8,995 (Beechwood)...................... 8,995,000
4,680 (Belle Vly.)..................... 4,680,000
6,710 (Graybrook Apts.)................ 6,710,000
4,285 Smyrna Hsg. Assn. MHRB (Imperial
Gardens Apts.),
Ser. 1989, 4.00% -- VRDN
(LOC: Sumitomo Bk.)................ 4,285,000
</TABLE>
31
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
TENNESSEE -- CONTINUED
<C> <S> <C>
$ 3,405 Shelby Cnty. Hlth. Edl.& Hsg. Fac.
Brd. (Methodist Hlth. Sys.), Ser.
C, 4.05% -- ARB (LIQ: Sanwa Bk.,
Ltd. & Ins. by MBIA)............... $ 3,405,000
40,975,000
TEXAS -- 8.4%
1,000 Bexar Cnty. Hsg. Fin. Corp. Gtd.
Mtg. Multifamily RFB Ser. 1988A,
(Creightons Mill Dev.),
3.65% -- VRDN (Surety Bond: New
England Mutual).................... 1,000,000
3,000 Board of Reg. of the Texas A&M
Univ. Sys. Rev. Fin. Bds., Ser.
1996, 3.60% -- VRDN
(LIQ: Societe Generale)**.......... 3,000,000
7,040 Brazos River Harbor IDA-PCRB 3.70%,
9/25/96 -- TECP
(Gtd. by Dow Chemical)............. 7,040,000
4,250 City of Dallas Indl. Dev. Corp.
IDRB (Crane Plumbing), Ser. 1985,
3.75% -- VRDN
(LOC: Amer. Natl. Bk. & Tr.
Co. of Chicago).................... 4,250,000
6,600 Dallas Fort Worth Regl. Arpt. RB
(MSTR Ser. SGB5), 3.60% -- VRDN
(LIQ: Societe Generale & Ins. by
FGIC)**............................ 6,600,000
5,010 Dallas Fort Worth Regl. Airport RRB
Ser. B, 5.00%, 11/1/96............. 5,019,780
8,230 Denton Utility System RRB (MSTR
Ser. SGA-32), 3.60% -- VRDN (LIQ:
Societe Generale & Ins. by
MBIA)**............................ 8,230,000
6,225 Galveston Hsg. Fin. Corp. MHRB Ref.
(Vlg. by the Sea Apt.), Ser. 1993,
3.95% -- VRDN
(LOC: Sumitomo Bk.)................ 6,225,000
12,000 Harris Cnty. Health Fac. Hosp.
(Methodist Hosp.), Ser. 1994,
3.75% -- VRDN
(LOC: Morgan Guaranty, NY)......... 12,000,000
1,000 Harris Cnty. Hsg. Fin. Corp, MHRB
(Arbor II Ltd.), 3.95% -- ARB,
10/1/96 (LOC: Guardian Svgs. & Ln.,
Houston)........................... 1,000,000
5,000 Harris Cnty. Toll Road Unlimited
Tax and Sub Lien RB, Ser. 1994A,
3.61% -- VRDN
(LOC: Citibank, N.A.).............. 5,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
TEXAS -- CONTINUED
$ 4,400 Houston, Wtr. and Swr. Sys. (MSTR
SGA-22),
3.60% -- VRDN (LIQ: Societe
Generale & Ins. by MBIA)**......... $ 4,400,000
15,000 Houston, Wtr. and Swr. Sys. RB
Fltg. SG-77, 3.70% -- VRDN (LIQ:
Societe Generale & Ins. by
MBIA)**............................ 15,000,000
9,205 NCNB Pooled Tax Empt.-Tr. COP Ser.
1990B, 4.125% -- VRDN (LOC:
NationsBank of Texas)**............ 9,205,000
4,000 Port of Corpus Christi Auth. Nueces
Cnty. RRB (Union Pacific Corp.),
Ser. 1989, 4.05%, 11/25/96 -- TECP
(Gtd. by Union Pacific Corp.)...... 4,000,000
2,470 Robertson Cnty. IDRB
(Crane Plumbing), Ser. 1990,
3.75% -- VRDN (LOC: Amer
Natl. Bk. & Tr. Co. of Chicago).... 2,470,000
4,380 Tarrant Cnty. Hsg. Fin. Corp. MHRB
Ref. (Lincoln Meadows), Ser.
1988 -- ARB, 4.30%,12/1/96 (Surety
Bond: Contl. Cas. Corp.)........... 4,380,000
2,500 Texas Wtr. Dev. Brd. State
Revolving Fd. Senior Lien RB
Ser. 1996A, 3.60% -- VRDN
(LIQ: Societe Generale)**.......... 2,500,000
6,000 Tyler Health Fac. Dev. Corp. RB
(East Texas Med. Ctr. Regl. Hlth.),
Ser. 1993C, 4.00%, 9/24/96 -- TECP
(LOC: Banque Paribas).............. 6,000,000
107,319,780
UTAH -- 3.4%
3,900 Hsg. Auth. of Provo City
Multifamily Rent Hsg. Rent Hsg. RRB
(Branbury Park), Ser. 1987A,
3.60% -- VRDN
(LOC: Dai-Ichi Kangyo Bk., Ltd.)... 3,900,000
2,800 Summit Cnty. IDRB (Hornes' Kimball
Junction L.P.), Ser. 1985,
3.90% -- VRDN
(LOC: West One Tr.)................ 2,800,000
</TABLE>
32
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED
UTAH -- CONTINUED
<C> <S> <C>
Tooele Cnty. Hazardous Waste
Treatment RB -- TECP (Union Pacific
Corp.), Ser. A (Gtd. by Union
Pacific Corp.)
$10,000 4.15%, 9/12/96................... $ 10,000,000
15,000 4.125%, 10/17/96................. 15,000,000
7,000 4.125%, 10/24/96................. 7,000,000
4,725 Utah Cnty. IDRB (McWane Inc.),
3.75% -- VRDN
(LOC: Amsouth Bk., N.A.)........... 4,724,991
43,424,991
VIRGINIA -- .9%
1,200 Henrico Cnty. IDA RB (San-J),
3.95% -- VRDN
(LOC: Tokai Bk., Ltd).............. 1,200,000
9,800 Richmond Cnty. Indl. Fac. PCRB
(Cogentrix of Richmond),
4.40% -- VRDN
(LOC: Banque Paribas).............. 9,800,000
1,000 Rockingham Cnty. Indl. Dev.
PCRB (Merck & Co., Inc.),
Ser. 1983A, 3.65% -- VRDN
(Gtd. by Merck & Co.).............. 1,000,000
12,000,000
WASHINGTON -- 4.6%
8,370 City of Kent Ltd. Tax GO Bds. Ser.
1996A, 3.60% -- VRDN (LIQ: Societe
Generale)**........................ 8,370,000
2,200 Klickitat Cnty. Pub. Corp. RB
(Mercer Ranches), Ser. 1996
3.75% -- VRDN (LOC: U.S. Bk. of
Washington, N.A.).................. 2,200,000
Pilchuck Dev. Pub. Corp. IDRB
(Hillsdale Assn.),
4.05% -- VRDN
(LOC: Bk. of California, N.A.)
1,455 (Canyon Park Assn.).............. 1,455,000
1,047 (Hillsdale Assn.)................ 1,047,000
1,312 (Omni Assn.)..................... 1,312,000
8,450 Pilchuck Dev. Pub. Corp. IDRB
(Romac Industries, Inc.), Ser. 1995
3.90% -- VRDN
(LOC: Bk. of California, N.A.)..... 8,450,000
3,000 Port Pasco EDRB (Douglas Fruit
Co.), 3.75% -- VRDN
(LOC: U.S. Bk. of Washington)...... 3,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
WASHINGTON -- CONTINUED
$ 1,090 Washington Cmnty. Econ. Brd.
Redevelopment Bd.,
3.90% -- VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... $ 1,090,000
3,185 Washington Cmnty. Econ. Brd.
Revitalization Bd.,
3.90% -- VRDN
(LOC: Indl. Bk. of Japan, Ltd.).... 3,185,000
15,020 Washington GO Bds. Ser. 1995A,
3.61% -- VRDN
(LIQ: Citibank, N.A.).............. 15,020,000
6,555 Washington Hsg. Fin. Comm. (Emerald
Heights), Ser. 1990, 4.25% -- VRDN
(LOC: Banque Paribas).............. 6,555,000
6,410 Washington Pub. Pwr. Sup. Sys.
Nuclear No. 2 RB (CR-145),
Ser. 1990, 3.61% -- VRDN
(LOC: Citibank, N.A.).............. 6,410,000
1,000 Washington Pub. Pwr. Sup. Sys.
Nuclear RRB No. 1
7.10%, 7/1/97...................... 1,025,011
59,119,011
WEST VIRGINIA -- .1%
1,000 Marshall Cnty. PCRB (Allied Signal
Co.), 3.65% -- VRDN (Gtd. by Allied
Signal, Co.)....................... 1,000,000
WISCONSIN -- .2%
3,000 City of Whitewater IDRB
(Maclean-Fogg Co.), Ser. 1989,
3.80% -- VRDN
(LOC: Bk. of Amer. Illinois)....... 3,000,000
OTHER -- 4.7%
50 Puttable Floating Opt. Tax-Empt.
PPT4, 3.70% -- VRDN
(LIQ: Merrill Lynch)**............. 50,000
54,490 Puttable Floating Opt. Tax-Empt.
(IBM Grantor Trust), Ser. 1996C
3.85% -- VRDN
(LIQ: Credit Suisse)**............. 54,490,000
5,920 Puttable Floating Opt. Tax-Empt.
(KOCH Fin. Corp.), 3.95% -- VRDN
(LIQ: Credit Suisse)**............. 5,920,000
60,460,000
</TABLE>
<TABLE>
<C> <S> <C> <C>
TOTAL INVESTMENTS
(COST $1,286,198,412)....... 100.7% 1,286,198,412
OTHER ASSETS AND
LIABILITIES -- NET........ (.7) (8,849,189)
NET ASSETS.................. 100.0% $1,277,349,223
</TABLE>
33
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1996
Summary of Abbreviations:
ACES -- Adjustable Convertible Extendable Securities
AMBAC -- American Municipal Bond Assurance Corp.
ARB -- Adjustable Rate Bonds
COP -- Certificates of Participation
EDA -- Economic Development Authority
EDRB -- Economic Development Revenue Bond
FGIC -- Financial Guaranty Insurance Co.
FSA -- Financial Security Assurance Inc.
GNMA -- Governmental National Mortgage Association
GO -- General Obligations
IDA -- Industrial Development Authority
IDB -- Industrial Development Bond
IDRB -- Industrial Development Revenue Bond
LIQ -- Liquidity Provider
LOC -- Letter of Credit
MBIA -- Municipal Bond Investors Assurance
MERLOTS -- Municipal Exempt Receipts Liquidity Option
Tenders
MHRB -- Multifamily Housing Revenue Bond
MSTR -- Municipal Securities Trust Receipt
PCRB -- Pollution Control Revenue Bond
RB -- Revenue Bonds
RFB -- Refunding Bonds
RRB -- Refunding Revenue Bonds
TECP -- Tax Exempt Commercial Paper
TRANS -- Tax Revenue Anticipation Notes
VRDN -- Variable Rate Demand Notes
Adjustable Rate Bonds are putable back to the issuer or other
parties not affiliated with the issuer at par on the interest reset
dates. Interest rates are determined and set by the issuer
quarterly, semi-annually or annually depending upon the terms of the
security. Interest rates presented for these securities are those in
effect at August 31, 1996. These securities represent 10% of
total investments at August 31, 1996.
Variable Rate Demand Notes are payable on demand on no more
than seven calendar days notice given by the Fund to the issuer or
other parties not affiliated with the issuer. Interest rates are
determined and reset by the issuer daily, weekly or monthly
depending upon the terms of the security. Interest rates
presented for these securities are those in effect at August 31, 1996.
These securities represent 76% of total investments at August
31, 1996.
Certain obligations held in the portfolio have credit
enhancements or liquidity features that may, under certain
circumstances, provide for repayment of principal and interest on the
obligation upon demand date, interest rate reset date or final
maturity. These enhancements include: letters of credit; liquidity
guarantees; standby bond purchase agreements; tender option
purchase agreements; and third party insurance (i.e. AMBAC,
FGIC and MBIA). Adjustable rate bonds and variable rate
demand notes held in the portfolio may be considered derivative
securities within the standards imposed by the Securities and
Exchange Commission under Rule 2a-7 which were designed to
minimize both credit and market risk.
* Security of which $200,000 was purchased on a delayed
settlement basis and an additional $200,000 was segregated as
collateral for the delayed settlement purchase.
** Rule 144A security which are restricted in resale to qualified
institutions and are considered liquid.
See accompanying notes to financial statements.
34
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments at value (identified cost $1,286,198,412)....................................................... $1,286,198,412
Interest receivable......................................................................................... 6,664,474
Receivable for Fund shares sold............................................................................. 1,113,117
Other assets................................................................................................ 41,698
Total assets.......................................................................................... 1,294,017,701
LIABILITIES:
Due to custodian bank....................................................................................... 6,042,257
Payable for investment securities purchased................................................................. 4,580,086
Payable for Fund shares repurchased......................................................................... 2,873,540
Dividends payable........................................................................................... 1,846,107
Accrued expenses............................................................................................ 519,220
Accrued advisory fee........................................................................................ 455,408
Distribution fee payable.................................................................................... 351,860
Total liabilities..................................................................................... 16,668,478
NET ASSETS..................................................................................................... $1,277,349,223
NET ASSETS CONSISTS OF:
Paid-in capital............................................................................................. $1,277,607,103
Accumulated net realized loss on investment transactions.................................................... (257,880)
Net assets............................................................................................ $1,277,349,223
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($660,515,996(division sign)660,634,719 shares of beneficial interest outstanding)......................... $1.00
Class Y Shares ($616,833,227(division sign)616,933,587 shares of beneficial interest outstanding)......................... $1.00
</TABLE>
See accompanying notes to financial statements.
35
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest...................................................................................... $43,981,149
EXPENSES:
Advisory fee.................................................................................. $ 5,540,924
Distribution fee -- Class A Shares............................................................ 1,898,665
Registration and filing fees.................................................................. 359,766
Transfer agent fee............................................................................ 295,626
Custodian fee................................................................................. 270,970
Reports and notices to shareholders........................................................... 118,264
Professional fees............................................................................. 34,283
Insurance..................................................................................... 21,691
Trustees' fees and expenses................................................................... 17,641
Miscellaneous................................................................................. 28,431
8,586,261
Less advisory fee waiver...................................................................... (1,243,131)
Net expenses............................................................................... 7,343,130
Net investment income............................................................................ 36,638,019
Net realized loss on investments................................................................. (6,227)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................. $36,631,792
</TABLE>
See accompanying notes to financial statements.
36
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income................................................................... $ 36,638,019 $ 16,223,403
Net realized loss on investments........................................................ (6,227) (374,299)
Net increase in net assets resulting from operations................................. 36,631,792 15,849,104
DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME:
Class A Shares.......................................................................... (19,837,670) (2,645,739)
Class Y Shares.......................................................................... (16,800,349) (13,577,664)
Total distributions to shareholders.................................................. (36,638,019) (16,223,403)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold............................................................... 2,572,408,736 523,419,419
Proceeds from shares issued from acquisition of FFB Tax-Free Money Market Fund.......... 103,129,021 --
Proceeds from shares issued from acquisition of First Union Tax-Free Money Market
Portfolio............................................................................. -- 604,010,226
Proceeds from reinvestment of distributions............................................. 16,202,992 13,277,476
Payments for shares redeemed............................................................ (2,390,799,129) (566,638,173)
Net increase resulting from Fund share transactions.................................. 300,941,620 574,068,948
CAPITAL CONTRIBUTION (NOTE 4).............................................................. -- 300,000
Net increase in net assets........................................................... 300,935,393 573,994,649
NET ASSETS:
Beginning of year....................................................................... 976,413,830 402,419,181
End of year............................................................................. $1,277,349,223 $976,413,830
</TABLE>
See accompanying notes to financial statements.
37
<PAGE>
EVERGREEN TAX EXEMPT MONEY MARKET FUND
(Photo of coins)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
CLASS A SHARES
JANUARY 5,
1995* CLASS Y SHARES
YEAR ENDED THROUGH
AUGUST 31, AUGUST 31, YEAR ENDED AUGUST 31,
1996 1995 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period.................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income................................... .03 .02 .03 .04 .02 .03
Less distributions to shareholders from net
investment income..................................... (.03) (.02) (.03) (.04) (.02) (.03)
Net asset value, end of period.......................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+........................................... 3.2% 2.2% 3.5% 3.6% 2.5% 2.6%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............... $660,516 $ 554,924 $ 616,833 $421,490 $402,419 $401,376
Ratios to average net assets:
Expenses**............................................ .79% .78%++ .49% .50% .34% .34%
Net investment income**............................... 3.14% 3.28%++ 3.44% 3.53% 2.47% 2.58%
<CAPTION>
1992
<S> <C>
PER SHARE DATA:
Net asset value, beginning of period.................... $1.00
Net investment income................................... .04
Less distributions to shareholders from net
investment income..................................... (.04)
Net asset value, end of period.......................... $1.00
TOTAL RETURN+........................................... 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (000's omitted)............... $416,924
Ratios to average net assets:
Expenses**............................................ .32%
Net investment income**............................... 3.72%
</TABLE>
* Commencement of class operations.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursement. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
CLASS A SHARES
JANUARY 5,
1995* CLASS Y SHARES
YEAR ENDED THROUGH
AUGUST 31, AUGUST 31, YEAR ENDED AUGUST 31,
1996 1995 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Expenses................................................ .90% .90%++ .60% .63% .64% .63%
Net investment income................................... 3.03% 3.16%++ 3.33% 3.40% 2.17% 2.29%
<CAPTION>
1992
<S> <C>
Expenses................................................ .63%
Net investment income................................... 3.41%
</TABLE>
See accompanying notes to financial statements.
38
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of an eagle)
A REPORT FROM YOUR
PORTFOLIO MANAGER
KELLIE ALLEN
In the last half of 1995, we saw very mixed economic data, but (Photo of
as the year came to a close, economic reports grew progressively Kellie
weaker, clearly showing signs that the Federal Reserve would Allen)
need to lower the Fed Funds rate in order to help boost the
slowing economy. In December and again in February, short-term
rates were indeed lowered by 25 basis points each time, ending
February at 5.25%. In anticipation of short-term rates dropping,
we extended the average maturity of the Fund. This allowed us to
lock in higher yielding securities for longer time periods.
In the first half of 1996, a continued stream of strong
economic data re-ignited fears about
future inflation and caused a reversal in fortunes in the bond
market from the positive returns experienced in 1995. The underpinnings of
economic growth in 1996 have been in the strength of the housing market,
consumer spending, and job creation. With second quarter Gross Domestic Product
(GDP) coming in at 4.8%, there were concerns in the market about inflation
rearing its ugly head.
So far this year, monthly job growth has averaged 230,000 versus about 185,000
for last year. This would lead the markets to believe that inflation is not far
behind and the Fed should start raising interest rates to head it off. (The
primary means by which the Federal Reserve attempts to control the economy is by
raising or lowering short-term interest rates, i.e. the Fed Funds rate. For
example, if the economy is growing too fast the Federal Reserve can raise the
Fed Funds rate and, in essence, try to put the brakes on the economy.)
The Fed has not made a move since January because inflation has not shown
itself even with the economy moving along at a fairly strong pace. Lack of
inflation cannot go on forever with this pace of economic activity. In our view,
it is not a question of whether short-term rates will move higher over the next
several months but when it will happen. It is questionable, however, whether the
Federal Reserve will raise rates before the November election. All eyes will be
on the November Federal Open Market Committee (FOMC) meeting to see if they will
finally make their move.
We use a barbell approach in the Fund's portfolio maturities as opposed to a
laddered approach, in order to take advantage of higher yields out on the curve.
This helps us to remain competitive while still maintaining the shorter average
maturities that AAA rated money funds are limited to in order to maintain their
rating.
In the last six months, the yield curve from overnight to one year has
continued to steepen. We have taken advantage of this by extending our
maturities further out on the curve and keeping our Repurchase Agreement versus
Treasury position in the 65%/35% range. We ended the fiscal year with an average
maturity of 52 days. In anticipation of the Federal Reserve raising interest
rates, we will shorten our average maturity slightly, making our maturity target
45 to 50 days.
At its ficsal year-end on August 31, 1996, Evergreen Treasury Money Market
Fund's total net assets were $3.4 billion. The Fund's seven-day current and
effective yields at that time are illustrated in the table below.
<TABLE>
<CAPTION>
7-DAY CURRENT YIELD 7-DAY EFFECTIVE YIELD
<S> <C> <C>
Class Y Shares 4.96% 5.08%
Class A Shares 4.66% 4.77%
</TABLE>
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.
DURING THE PERIOD UNDER REVIEW, THE ADVISER CONTINUED TO VOLUNTARILY WAIVE A
PORTION OF ITS ADVISORY FEE. HAD FEE NOT BEEN WAIVED, YIELDS WOULD HAVE BEEN
LOWER. FEE WAIVER MAY BE REVISED AT ANY TIME.
THE FUND MAY INCUR 12B-1 EXPENSES, UP TO AN ANNUAL MAXIMUM OF .35 OF 1% OF ITS
AVERAGE DAILY NET ASSETS OF ITS CLASS A SHARES. FOR THE FORSEEABLE FUTURE,
HOWEVER, MANAGEMENT INTENDS TO LIMIT SUCH PAYMENTS TO .30 OF 1% OF THE FUNDS
DAILY NET ASSETS OF ITS CLASS A SHARES.
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U. S.
GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN
A STABLE NET ASSET VALUE OF $1 PER SHARE. YIELDS FLUCTUATE.
39
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of an eagle)
STATEMENT OF INVESTMENTS
AUGUST 31, 1996
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
U.S. TREASURY BILLS -- 4.4%
$150,000 5.25%, 9/17/96
(COST $149,694,041)................ $ 149,694,041
U.S. TREASURY NOTES -- 35.0%
20,000 6.50%, 9/30/96..................... 20,010,343
30,000 8.00%, 10/15/96.................... 30,078,470
150,000 6.875%, 10/31/96................... 150,415,920
125,000 7.25%, 11/15/96.................... 125,455,094
200,000 7.50%, 12/31/96.................... 201,332,352
50,000 8.00%, 1/15/97..................... 50,429,269
250,000 7.50%, 1/31/97..................... 252,264,102
125,000 6.875%, 2/28/97.................... 125,946,960
100,000 6.50% to 6.875%, 4/30/97........... 100,848,499
70,000 8.50%, 5/15/97..................... 71,246,809
50,000 6.00%, 8/31/97..................... 50,003,906
TOTAL U.S. TREASURY NOTES
(COST $1,178,031,724).............. 1,178,031,724
REPURCHASE AGREEMENTS* -- 65.2%
150,000 Daiwa Securities Co., Ltd., 5.24%,
dated 8/30/96, due 9/3/96 (1)...... 150,000,000
150,000 Dean Witter Reynolds, Inc., 5.24%,
dated 8/26/96, due 9/3/96 (2)...... 150,000,000
170,000 Donaldson, Lufkin & Jenrette
Securities Corp., 5.23%,
dated 8/30/96, due 9/3/96 (3)...... 170,000,000
100,000 Dresdner Bank AG, 5.25%,
dated 8/26/96, due 9/3/96 (4)...... 100,000,000
75,000 Dresdner Bank AG, 5.25%,
dated 8/30/96, due 9/3/96 (5)...... 75,000,000
150,000 First Boston Corp., 5.25%,
dated 8/30/96, due 9/3/96 (6)...... 150,000,000
200,000 Goldman, Sachs Group L.P.,
5.24%, dated 8/30/96,
due 9/3/96 (7)..................... 200,000,000
<CAPTION>
PRINCIPAL
AMOUNT
(000) VALUE
<C> <S> <C>
REPURCHASE AGREEMENTS* -- CONTINUED
$150,000 HSBC Securities, Inc., 5.24%,
dated 8/30/96, due 9/3/96 (8)...... $ 150,000,000
150,000 Merrill Lynch, Pierce, Fenner &
Smith, 5.20%, dated 8/30/96,
due 9/3/96 (9)..................... 150,000,000
200,000 Morgan Guaranty Trust Co. of New
York, 5.25%, dated 8/30/96,
due 9/3/96 (10).................... 200,000,000
150,000 Morgan Stanley Co., 5.23%,
dated 8/30/96, due 9/3/96 (11)..... 150,000,000
50,000 NationsBank, 5.23%,
dated 8/30/96, due 9/3/96 (12)..... 50,000,000
200,000 Nikko Securities Co. International,
Inc., 5.22%, dated 8/26/96,
due 9/3/96 (13).................... 200,000,000
150,000 State Street Bank & Trust Co.,
5.21%, dated 8/30/96,
due 9/3/96 (14).................... 150,000,000
150,000 Union Bank Switzerland, 5.24%,
dated 8/30/96, due 9/3/96 (15)..... 150,000,000
TOTAL REPURCHASE AGREEMENTS
(COST $2,195,000,000).............. 2,195,000,000
<CAPTION>
SHARES
(000)
<C> <S> <C>
MUTUAL FUND SHARES -- 1.1%
36,386 Fidelity U.S. Treasury, Inc.,
Portfolio (at net asset value)
(COST $36,386,133)................ 36,386,133
TOTAL INVESTMENTS
(COST $3,559,111,898)..... 105.7% 3,559,111,898
OTHER ASSETS AND
LIABILITIES -- NET........ (5.7) (191,448,210)
NET ASSETS................ 100.0% $3,367,663,688
</TABLE>
See accompanying notes to financial statements.
*Collateralized by:
(1) $139,858,000 U.S. Treasury Notes, 6.00% to 8.875%, 8/31/97 to 2/15/99;
value including accrued interest -- $147,118,513 and $5,472,000 U.S.
Treasury Bonds, 7.875%, 11/15/07; value including accrued
interest -- $5,882,008.
(2) $134,065,401 U.S. Treasury Strips, 2/15/97 to 2/15/26;
value -- $133,534,995; $14,637,000 U.S. Treasury Notes, 5.125% to 7.25%,
8/31/96 to 7/15/06; value including accrued interest -- $14,904,368;
$2,495,000 U.S. Treasury Bonds, 8.75% to 11.25%, 2/15/15 to 5/15/20; value
including accrued interest -- $3,142,556 and $1,420,000 U.S. Treasury
Bills, 9/5/96; value -- $1,418,811.
(3) $191,154,000 U.S. Treasury Strips, 11/15/97 to 2/15/25;
value -- $70,652,564 and $101,611,000 U.S. Treasury Notes, 5.50% to 8.75%,
11/15/98 to 9/30/00; value including interest -- $102,748,325.
(4) $59,390,000 U.S. Treasury Notes, 6.25% to 7.75%, 1/31/00 to 8/31/00; value
including accrued interest -- $60,853,502 and $42,605,000 U.S. Treasury
Bonds, 6.75%, 8/15/26; value including accrued interest -- $41,151,377.
(5) $56,857,000 U.S. Treasury Notes, 5.00% to 9.25%, 12/31/97 to 10/31/99;
value including accrued interest -- $56,991,500 and $103,700,000 U.S.
Treasury Strips, 8/15/19; value $19,509,081.
(6) $151,706,000 U.S. Treasury Notes, 5.625% to 6.375%, 3/31/98 to 3/31/01;
value including accrued interest -- $153,439,998.
(7) $206,574,000 U.S. Treasury Notes, 5.50%, 4/15/00; value including accrued
interest -- $204,000,177.
(8) $150,104,000 U.S. Treasury Notes, 5.00% to 9.00%, 12/31/97 to 5/31/98;
value including accrued interest -- $153,001,642.
(9) $152,111,000 U.S. Treasury Notes, 5.25% to 7.75%, 11/30/00 to 3/31/01;
value including accrued interest -- $153,001,585.
(10) $209,500,000 U.S. Treasury Bills, 2/27/97; value -- $204,002,720.
(11) $150,305,000 U.S. Treasury Notes, 7.25%, 8/15/04; value including accrued
interest -- $154,759,313.
(12) $51,100,000 U.S. Treasury Notes, 5.25%, 12/31/97; value including accrued
interest -- $51,017,729.
(13) $202,483,000 U.S. Treasury Notes, 5.125% to 8.25%, 2/15/98 to 7/15/06;
value including accrued interest -- $205,988,770.
(14) $153,880,000 U.S. Treasury Bonds, 7.125%, 2/15/23; value -- $156,154,225.
(15) $361,936,000 U.S. Treasury Strips, 5/15/05 to 8/15/10;
value -- $153,001,660.
40
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of an eagle)
STATEMENT OF ASSETS AND LIABILITIES
AUGUST 31, 1996
<TABLE>
<CAPTION>
<S> <C>
ASSETS:
Investments in repurchase agreements........................................................................ $2,195,000,000
Investments in securities................................................................................... 1,364,111,898
Investments at value (identified cost $3,559,111,898).................................................... 3,559,111,898
Interest receivable......................................................................................... 21,792,711
Receivable for Fund shares sold............................................................................. 1,662,207
Prepaid expenses............................................................................................ 43,829
Total assets.......................................................................................... 3,582,610,645
LIABILITIES:
Payable for investments purchased........................................................................... 199,722,810
Dividends payable........................................................................................... 11,292,281
Distribution fee payable.................................................................................... 1,403,451
Accrued expenses............................................................................................ 1,266,972
Accrued advisory fee........................................................................................ 905,039
Payable for Fund shares repurchased......................................................................... 246,346
Administration fee payable.................................................................................. 110,058
Total liabilities..................................................................................... 214,946,957
NET ASSETS..................................................................................................... $3,367,663,688
NET ASSETS CONSIST OF:
Paid-in capital............................................................................................. $3,367,614,048
Accumulated net realized gain on investment transactions.................................................... 49,640
Net assets............................................................................................ $3,367,663,688
CALCULATION OF NET ASSET VALUE PER SHARE:
Class A Shares ($2,607,700,900(division sign)2,607,674,461 shares of beneficial interest
outstanding)............................................................................................. $ 1.00
Class Y Shares ($759,962,788(division sign)759,956,138 shares of beneficial interest outstanding)......................... $1.00
</TABLE>
See accompanying notes to financial statements.
41
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of an eagle)
STATEMENT OF OPERATIONS
YEAR ENDED AUGUST 31, 1996
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................................................... $138,252,376
EXPENSES:
Advisory fee................................................................................ $ 8,857,503
Administrative personnel and services fees.................................................. 1,255,724
Distribution fee -- Class A Shares.......................................................... 6,381,827
Registration and filing fees................................................................ 762,020
Custodian fee............................................................................... 600,746
Reports and notices to shareholders......................................................... 170,245
Transfer agent fee.......................................................................... 149,948
Professional fees........................................................................... 95,656
Trustees' fees and expenses................................................................. 56,840
Insurance................................................................................... 27,186
Miscellaneous............................................................................... 36,366
18,394,061
Less advisory fee waiver.................................................................... (2,109,068)
Net expenses............................................................................. 16,284,993
Net investment income.......................................................................... 121,967,383
Net realized gain on investments............................................................... 161,674
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................................... $122,129,057
</TABLE>
See accompanying notes to financial statements.
42
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
(Photo of an eagle)
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1996 1995
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income............................................................... $ 121,967,383 $ 43,113,269
Net realized gain (loss) on investment transactions................................. 161,674 (7,403)
Net increase in net assets resulting from operations............................. 122,129,057 43,105,866
DISTRIBUTIONS TO SHAREHOLDERS FROM:
NET INVESTMENT INCOME:
Class A Shares...................................................................... (101,441,299) (33,495,553)
Class Y Shares...................................................................... (20,526,084) (9,617,716)
Total distributions to shareholders from net investment income................... (121,967,383) (43,113,269)
IN EXCESS OF NET INVESTMENT INCOME:
Class A Shares...................................................................... -- (67,232)
Class Y Shares...................................................................... -- (15,822)
Total distributions to shareholders in excess of net
investment income............................................................. -- (83,054)
Total distributions to shareholders........................................... (121,967,383) (43,196,323)
FUND SHARE TRANSACTIONS:
Proceeds from shares sold........................................................... 6,442,829,718 2,358,670,175
Proceeds from shares issued from acquisition
of FFB U.S. Treasury Fund........................................................ 1,070,672,333 --
Proceeds from shares issued from acquisition
of FFB U.S. Government Fund...................................................... 327,532,054 --
Proceeds from shares issued from acquisition
of FFB 100% U.S. Treasury Fund................................................... 28,227,573 --
Proceeds from reinvestment of distributions......................................... 17,972,077 5,178,570
Payments for shares redeemed........................................................ (5,974,992,600) (1,826,468,286)
Net increase resulting from Fund share transactions.............................. 1,912,241,155 537,380,459
Net increase in net assets....................................................... 1,912,402,829 537,290,002
NET ASSETS:
Beginning of period................................................................. 1,455,260,859 917,970,857
End of period....................................................................... $ 3,367,663,688 $ 1,455,260,859
</TABLE>
See accompanying notes to financial statements.
43
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
CLASS A SHARES
(Photo of an eagle)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EIGHT
MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31, YEAR ENDED DECEMBER 31,
1996 1995# 1994 1993 1992
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period....................................... $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income...................................................... .05 .03 .04 .03 .03
Less distributions to shareholders from net investment income.............. (.05) (.03) (.04) (.03) (.03)
Net asset value, end of period............................................. $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+.............................................................. 5.0% 3.6% 3.8% 2.7% 3.4%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions).................................... $2,608 $1,178 $755 $261 $209
Ratios to average net assets:
Expenses**............................................................... .69% .63%++ .50% .48% .48%
Net investment income**.................................................. 4.76% 5.30%++ 3.91% 2.70% 3.22%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
EIGHT
MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31, YEAR ENDED DECEMBER 31,
1996 1995# 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Expenses................................................................... .77% .79%++ .78% .82% .82%
Net investment income...................................................... 4.68% 5.14%++ 3.63% 2.36% 2.88%
</TABLE>
See accompanying notes to financial statements.
44
<PAGE>
EVERGREEN TREASURY MONEY MARKET FUND
CLASS Y SHARES
(Photo of an eagle)
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
EIGHT
MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31, YEAR ENDED DECEMBER 31,
1996 1995# 1994 1993 1992
<S> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period...................................... $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income..................................................... .05 .04 .04 .03 .04
Less distributions to shareholders from net investment income............. (.05) (.04) (.04) (.03) (.04)
Net asset value, end of period............................................ $1.00 $1.00 $1.00 $1.00 $1.00
TOTAL RETURN+............................................................. 5.3% 3.8% 4.1% 3.0% 3.7%
RATIOS & SUPPLEMENTAL DATA:
Net assets, end of period (in millions)................................... $760 $277 $163 $366 $286
Ratios to average net assets:
Expenses**.............................................................. .39% .33%++ .20% .18% .17%
Net investment income**................................................. 5.12% 5.60%++ 3.78% 3.00% 3.61%
</TABLE>
# The Fund changed its fiscal year end from December 31 to August 31.
+ Total return is calculated on net asset value per share for the periods
indicated and is not annualized.
++ Annualized.
** Net of expense waivers and reimbursements. If the Fund had borne all expenses
that were reimbursed or waived by the investment adviser, the annualized
ratios of expenses and net investment income to average net assets would have
been the following:
<TABLE>
<CAPTION>
EIGHT
MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31, YEAR ENDED DECEMBER 31,
1996 1995# 1994 1993 1992
<S> <C> <C> <C> <C> <C>
Expenses.................................................................. .47% .49%++ .48% .52% .52%
Net investment income..................................................... 5.04% 5.44%++ 3.50% 2.66% 3.26%
</TABLE>
See accompanying notes to financial statements.
45
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION AND NATURE OF OPERATIONS
The Evergreen Money Market Funds (the "Funds") are separate series of
open-end management companies registered under the Investment Company Act of
1940, as amended (the "Act"). The Evergreen Money Market Funds consist of
Evergreen Money Market Fund ("Money Market"), Evergreen Pennsylvania Tax-Free
Money Market Fund ("Pennsylvania"), Evergreen Tax Exempt Money Market Fund ("Tax
Exempt") and Evergreen Treasury Money Market Fund ("Treasury"), known
collectively as the Funds. Money Market is the sole series of Evergreen Money
Market Trust, Pennsylvania is a series of Evergreen Tax-Free Trust, Tax Exempt
is a series of Evergreen Municipal Trust and Treasury is a series of Evergreen
Investment Trust.
The investment objective of Money Market and Pennsylvania is to achieve as
high a level of current income as is consistent with preserving capital and
providing liquidity. The investment objective of Tax Exempt is to achieve as
high a level of current income exempt from Federal income tax, as is consistent
with preserving capital and providing liquidity. Treasury's investment objective
is to maintain stability of principal while earning current income.
NOTE 2 -- ACQUISITION INFORMATION
Effective January 1, 1996, First Union Corporation, the corporate parent of
First Union National Bank of North Carolina ("First Union"), the Funds' current
investment advisor, consummated a merger with First Fidelity Bancorporation.
Effective on the close of business January 19, 1996, the Funds noted below
acquired substantially all of the net assets of the following management
investment companies previously advised by a subsidiary of First Fidelity
Bancorporation through non-taxable exchanges. The net assets acquired, valued at
$1 per share, and class of shares exchanged are as follows:
<TABLE>
<CAPTION>
CLASS OF SHARES NET ASSETS
ACQUIRED FUND ACQUIRING FUND EXCHANGED ACQUIRED
<S> <C> <C> <C>
FFB Cash Management Fund Money Market Class A $ 592,358,361
FFB Lexicon Cash Management Fund Money Market Class Y 95,834,929
FFB Tax-Free Money Market Fund Tax Exempt Class A 103,129,021
FFB U.S. Treasury Fund Treasury Class A 1,070,672,333
FFB U.S. Government Fund Treasury Class A 327,532,054
FFB 100% U.S. Treasury Fund Treasury Class A 28,227,573
</TABLE>
The aggregate net assets of Money Market, Tax Exempt and Treasury
immediately after the acquisitions were $1,865,328,722, $1,141,961,188 and
$3,053,739,559, respectively.
Also, effective January 19, 1996, the FFB Pennsylvania Tax-Free Money
Market Fund was renamed Evergreen Pennsylvania Tax-Free Money Market Fund.
Shares of the FFB Pennsylvania Tax-Free Money Market Fund's class previously
known as the institutional class and service class were redesignated
Pennsylvania's Class Y Shares and Class A Shares, respectively. Pennsylvania
subsequently changed its fiscal year end to August 31.
Effective July 7, 1995, Money Market acquired substantially all of First
Union Money Market Portfolio's net assets, valued at $1.00 per share through a
non-taxable exchange for 642,283,253 shares of Money Market. The aggregate net
assets of Money Market immediately after the acquisition were $884,502,198.
In addition, effective July 7, 1995, Tax Exempt acquired substantially all
of First Union Tax-Free Money Market Portfolio's net assets, valued at $1.00 per
share through a non-taxable exchange for 604,175,076 shares of Tax Exempt. The
aggregate net assets of Tax Exempt immediately after the acquisition were
$952,382,736.
46
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements. These policies are
in conformity with generally accepted accounting principles.
SECURITY VALUATIONS -- Portfolio securities are valued at amortized cost
which approximates market value. The amortized cost method involves valuing a
security at cost on the date of purchase and thereafter assuming a straight-line
amortization of any discount or premium to maturity.
SECURITY TRANSACTIONS -- Security transactions are accounted for on the
date purchased or sold. Net realized gains or losses are determined on the
identified cost basis.
INVESTMENT INCOME AND EXPENSES -- Interest income and expenses are accrued
daily. Premiums and discounts paid on securities are amortized or accreted into
interest income.
REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase
agreements are held by the Federal Reserve Bank and are designated as being held
on each Fund's behalf by its custodian under a book-entry system. Each Fund
monitors the adequacy of the collateral on a daily basis, and can require the
seller to provide additional collateral in the event the market value of the
securities pledged falls below the carrying value of the repurchase agreement,
including accrued interest. Each Fund will only enter into repurchase agreements
with banks and other financial institutions which are deemed by the investment
adviser to be creditworthy pursuant to guidelines established by each Funds'
Trustees.
WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds record
when-issued or delayed delivery transactions on the trade date and maintain
security positions such that sufficient liquid assets will be available to make
payment for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis begin earning interest on the settlement date.
DIVIDENDS TO SHAREHOLDERS -- Dividends from net investment income are
declared daily and paid monthly. Dividends from net realized capital gains on
investments, if any, will be distributed at least annually. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from the amounts available for distribution under
generally accepted accounting principles. To the extent these differences are
permanent in nature, such amounts are reclassified within the components of net
assets.
INCOME TAXES -- It is each Fund's policy to meet the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable and other net income to its
shareholders. Accordingly, no provisions for Federal income or excise taxes are
necessary. To the extent that realized capital gains can be offset by capital
loss carryforwards, it is each Fund's policy not to distribute such gains.
At August 31, 1996, the Funds had capital loss carryforwards in the
following amounts:
<TABLE>
<CAPTION>
EXPIRATION
2001 2002 2003 2004
<S> <C> <C> <C> <C>
Money Market.................. -- -- $516,766 --
Pennsylvania.................. $ 3,800 -- 6,039 $ 378
Tax Exempt.................... 177,088 $266 15,847 64,670
</TABLE>
Capital losses incurred after October 31 within the Fund's fiscal year are
deemed to arise on the first business day of the following fiscal year for tax
purposes. Money Market and Tax Exempt have incurred and will elect to defer
$34,087 and $9, respectively, of such capital losses.
ALLOCATION OF EXPENSES -- Expenses specifically identifiable to a class of
shares are charged to that class. Expenses common to a Trust as a whole are
allocated to the funds in that Trust. Net investment income (other than class
specific expenses) and
47
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES -- continued
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
USE OF ESTIMATES -- The preparation of financial statements in accordance
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures.
Actual results could differ from those estimates.
NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY AGREEMENTS -- First Union is entitled to an annual fee
of .35 of 1% of Treasury's average daily net assets pursuant to the fund's
investment advisory agreement. For the year ended August 31, 1996, First Union
voluntarily waived $2,109,068 of its advisory fee.
For Pennsylvania, First Union is entitled to an annual advisory fee based
on the Fund's net assets in accordance with the following schedule:
<TABLE>
<CAPTION>
ADVISORY FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.40% on the first $500 million
0.36% on the next $500 million
0.32% on the next $500 million
0.28% in excess of $1.5 billion
</TABLE>
For the six months ended August 31, 1996, First Union voluntarily waived
$59,186 of its advisory fee. First Union can modify or terminate voluntary fee
waivers at any time.
Pursuant to an agreement with Money Market's and Tax Exempt's investment
adviser, Evergreen Asset Management Corp. ("Evergreen Asset"), a wholly owned
subsidiary of First Union, Evergreen Asset is entitled to an annual fee based on
Money Market's and Tax Exempt's average daily net assets in accordance with the
following schedule:
<TABLE>
<CAPTION>
ADVISORY FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.50% on the first $1 billion
0.45% in excess of $1 billion
</TABLE>
Evergreen Asset has agreed to reimburse Money Market and Tax Exempt to the
extent that either Fund's operating expenses (including the investment advisory
fee but excluding interest, taxes, brokerage commissions, 12b-1 distribution and
shareholder services fees and extraordinary expenses) exceeds 1.00% of its
average daily net assets for any fiscal year. For the year ended August 31,
1996, the expenses of Money Market and Tax Exempt did not exceed this limit. For
the year ended August 31, 1996, Evergreen Asset voluntarily waived $2,427,423
and $1,243,131 of its advisory fee for Money Market and Tax Exempt,
respectively. Evergreen Asset can modify or terminate these voluntary waivers at
any time.
Lieber & Company, an affiliate of First Union is the investment sub-adviser
to Money Market and Tax Exempt. Lieber & Company is reimbursed by Evergreen
Asset at no additional expense to the Funds.
During the year ended August 31, 1995, Tax Exempt entered into stand-by
purchase agreements ("agreements") with First Union with regards to securities
issued by Orange County, California. The agreements enabled the securities to be
valued at par, which was $300,000 in excess of the securities fair market value
on the date of the issuance. The increase in the value is deemed to be a
voluntary contribution of capital to offset the loss in value. The agreements
were exercised during the year ended August 31, 1995, and accordingly, the
securities were sold to First Union at par.
48
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH
AFFILIATES -- continued
ADMINISTRATION AGREEMENT -- Evergreen Asset furnishes Money Market and Tax
Exempt with administrative services as part of their advisory agreements and
accordingly, these Funds do not pay a separate administration fee. Furman Selz
LLC ("Furman Selz") is each of the Fund's sub-administrator. As
sub-administrator, Furman Selz provides the officers of the Funds. For Money
Market and Tax Exempt, Furman Selz' fee is paid by Evergreen Asset and is not a
fund expense. Evergreen Asset is also Pennsylvania's and Treasury's
administrator and Furman Selz is the sub-administrator. Evergreen Asset's and
Furman Selz' fees for Pennsylvania and Treasury are based on the average daily
net assets of all the funds administered by Evergreen Asset for which First
Union or Evergreen Asset is also investment adviser. These are calculated at the
following annual rates:
<TABLE>
<CAPTION>
ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.050% on the first $7 billion
0.035% on the next $3 billion
0.030% on the next $5 billion
0.020% on the next $10 billion
0.015% on the next $5 billion
0.010% in excess of $30 billion
<CAPTION>
SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS
<S> <C>
0.0100% on the first $7 billion
0.0075% on the next $3 billion
0.0050% on the next $15 billion
0.0040% in excess of $25 billion
</TABLE>
At August 31, 1996, assets for which Evergreen Asset was the administrator
for which either Evergreen Asset or First Union was investment adviser totaled
approximately $15.7 billion.
PLANS OF DISTRIBUTION -- The Funds have adopted for their Class A Shares
and Class B Shares (Money Market only) Distribution Plans (the "Plans") pursuant
to Rule 12b-1 under the Act (See Note 5). Under the terms of the Plans, the
Funds may incur distribution-related and shareholder servicing expenses which
may not exceed .75 of 1% for Class A Shares for Money Market and Tax Exempt and
.35 of 1% for Class A Shares for Pennsylvania and Treasury. The payments for
Class A Shares for Money Market, Tax Exempt and Treasury were voluntarily
limited to .30 of 1% and for Pennsylvania were limited to .05 of 1% of average
daily net assets. Money Market may incur distribution-related and shareholder
servicing expenses, which may not exceed an annual fee of 1% for its Class B
Shares.
In connection with their Plans, the Funds have entered into distribution
agreements with Evergreen Funds Distributor, Inc. ("EFD"), a subsidiary of
Furman Selz whereby each Fund will compensate EFD for its services at a rate
which may not exceed .30 of 1% of its Class A average daily net assets and 1% of
its Class B average daily net assets (Money Market only). A portion of Money
Market's Class B Plan, up to .25 of 1% of average daily net assets may
constitute a shareholder service fee. EFD has entered into a Shareholder
Services Agreement with First Union Brokerage Services ("FUBS"), an affiliate of
First Union, whereby EFD will compensate FUBS for certain services provided to
shareholders and/or maintenance of shareholder accounts relating to Money
Market's Class B shares.
NOTE 5 -- SHARES OF BENEFICIAL INTEREST
Money Market and Tax Exempt have an unlimited number of $0.0001 par value
shares of beneficial interest authorized. Pennsylvania and Treasury have an
unlimited number of $.001 par value shares of beneficial interest authorized.
The shares are divided into classes which are designated Class Y, Class A and
Class B Shares (Money Market only). Class Y shares are
49
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
available only to investment advisory clients of First Union and its affiliates,
certain institutional investors or Class Y shareholders of record of certain
other funds managed by First Union and its affiliates as of December 30, 1994.
The classes have identical voting, dividend, liquidation and other rights,
except that Class A and Class B shares bear distribution expenses (see Note 4)
and have exclusive voting rights with respect to their distribution plans.
Transactions in shares of beneficial interest (valued at $1.00 per share)
were as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
MONEY MARKET 1996 1995*
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 3,360,065,151 263,807,185
Shares issued from acquisition of FFB Cash Management Fund................................... 592,362,245 --
Shares issued from acquisition of First Union Money Market Portfolio......................... -- 577,090,623
Shares issued from reinvestment of distributions............................................. 13,630,468 1,073,970
Shares redeemed.............................................................................. (2,895,924,591) (156,830,783)
Net increase................................................................................. 1,070,133,273 685,140,995
CLASS B
Shares sold.................................................................................. 13,107,126 1,222,632
Shares issued from acquisition of First Union Money Market Portfolio......................... -- 8,848,122
Shares issued from reinvestment of distributions............................................. 307,330 41,082
Shares redeemed.............................................................................. (11,123,113) (2,185,089)
Net increase................................................................................. 2,291,343 7,926,747
CLASS Y
Shares sold.................................................................................. 2,902,529,372 1,484,885,160
Shares issued from acquisition of FFB Lexicon Cash Management Fund........................... 95,834,876 --
Shares issued from acquisition of First Union Money Market Portfolio......................... -- 56,344,508
Shares issued from reinvestment of distributions............................................. 14,304,225 13,226,417
Shares redeemed.............................................................................. (2,624,143,977) (1,544,913,353)
Net increase................................................................................. 388,524,496 9,542,732
Total net increase resulting from Fund share transactions.................................... 1,460,949,112 702,610,474
</TABLE>
* The Fund share activity for Class A reflects the period from January 4, 1995
(commencement of class operations) through August 31, 1995. The Fund share
activity for Class B reflects the period from January 26, 1995 (commencement
of class operations) through August 31, 1995.
50
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
AUGUST 31, FEBRUARY 29,
PENNSYLVANIA 1996 1996*
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 40,205,338 4,636,845
Shares issued from reinvestment of distributions............................................. 35,417 3,934
Shares redeemed.............................................................................. (22,377,383) (307,967)
Net increase................................................................................. 17,863,372 4,332,812
CLASS Y
Shares sold.................................................................................. 21,254,692 174,995,677
Shares issued from reinvestment of distributions............................................. 586,491 1,762,856
Shares redeemed.............................................................................. (56,919,288) (136,899,719)
Net increase (decrease)...................................................................... (35,078,105) 39,858,814
Total net increase (decrease) resulting from Fund share transactions......................... (17,214,733) 44,191,626
</TABLE>
* The Fund share activity for Class A reflects the period from August 22, 1995
(commencement of class operations) through February 29, 1996.
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
TAX-EXEMPT 1996 1995*
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 1,329,098,871 126,822,267
Shares issued from acquisition of FFB Tax-Free Money Market Fund............................. 103,102,728 --
Shares issued from acquisition of First Union Tax-Free Money Market Portfolio................ -- 529,834,393
Shares issued from reinvestment of distributions............................................. 3,435,421 499,871
Shares redeemed.............................................................................. (1,330,067,450) (102,091,382)
Net increase................................................................................. 105,569,570 555,065,149
CLASS Y
Shares sold.................................................................................. 1,243,309,865 396,597,152
Shares issued from acquisition of First Union Tax-Free Money Market Portfolio................ -- 74,340,683
Shares issued from reinvestment of distributions............................................. 12,767,571 12,777,605
Shares redeemed.............................................................................. (1,060,731,679) (464,546,791)
Net increase................................................................................. 195,345,757 19,168,649
Total net increase resulting from Fund share transactions.................................... 300,915,327 574,233,798
</TABLE>
* The Fund share activity for Class A reflects the period from January 5, 1995
(commencement of class operations) through August 31, 1995.
51
<PAGE>
COMBINED NOTES TO FINANCIAL STATEMENTS
NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
<TABLE>
<CAPTION>
EIGHT MONTHS
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
TREASURY 1996 1995
<S> <C> <C>
CLASS A
Shares sold.................................................................................. 4,828,856,886 1,854,109,537
Shares issued from acquisition of FFB U.S. Treasury Fund..................................... 1,070,688,429 --
Shares issued from acquisition of FFB U.S. Government Fund................................... 327,554,031 --
Shares issued from acquisition of FFB 100% U.S. Treasury Fund................................ 28,227,628 --
Shares issued from reinvestment of distributions............................................. 16,836,594 5,178,018
Shares redeemed.............................................................................. (4,842,442,130) (1,436,384,809)
Net increase................................................................................. 1,429,721,438 422,902,746
CLASS Y
Shares sold.................................................................................. 1,613,972,832 504,560,638
Shares issued from reinvestment of distributions............................................. 1,135,483 552
Shares redeemed.............................................................................. (1,132,550,470) (390,083,477)
Net increase................................................................................. 482,557,845 114,477,713
Total net increase resulting from Fund share transactions.................................... 1,912,279,283 537,380,459
</TABLE>
NOTE 6 -- CONCENTRATION OF CREDIT RISK
Each Fund maintains a diversified portfolio of money market instruments
which are deemed, under Rule 2a-7 of the Act, to have a maturity of 397 days or
less and whose ratings are determined to be of eligible quality under Securities
and Exchange Commission rules. The ability of the issuers of the securities held
by the Funds to meet their obligations may be affected by economic developments
in a specific industry, state, region or country. Certain instruments may be
entitled to the benefit of standby letters of credit or other guarantees of
banks or other financial institutions.
NOTE 7 -- LINE OF CREDIT
Effective July 3, 1996, a financing agreement was put in place with all the
Evergreen Funds and their custodian, State Street Bank and Trust Company (the
"Bank"). Under the agreement, the Bank is providing an unsecured, uncommitted
line of credit facility, in the aggregate amount of $50 million, to be accessed
by the Funds for temporary or emergency purposes only and is subject to each
participating Fund's borrowing restrictions. Borrowings under this facility bear
interest at .75% per annum above the Bank's cost of funds as set periodically by
the Bank. During the year ended August 31, 1996, the Funds had no borrowings
outstanding under this agreement.
52
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE TRUSTEES AND SHAREHOLDERS OF
EVERGREEN MONEY MARKET FUND AND
EVERGREEN TAX EXEMPT MONEY MARKET FUND
In our opinion, the accompanying Statements of Assets and Liabilities,
including the Statements of Investments, and the related Statements of
Operations and of Changes in Net Assets and the Financial Highlights present
fairly, in all material respects, the financial position of Evergreen Money
Market Fund and Evergreen Tax Exempt Money Market Fund (one of the Evergreen
Municipal Trust Portfolios), (the "Funds"), at August 31, 1996, the results of
each of their operations for the year then ended, the changes in each of their
net assets for each of the two years in the period then ended, and the financial
highlights for the periods indicated, in conformity with generally accepted
accounting principles. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Funds' management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
financial statements in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at August 31, 1996 by correspondence with the
custodian and brokers, provide a reasonable basis for the opinion expressed
above.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
October 18, 1996
53
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE TRUSTEES AND SHAREHOLDERS OF
EVERGREEN PENNSYLVANIA TAX-FREE MONEY MARKET FUND AND
EVERGREEN TREASURY MONEY MARKET FUND
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, for Evergreen Pennsylvania Tax-Free
Money Market Fund and Evergreen Treasury Money Market Fund as of August 31,
1996, and the related statements of operations, changes in net assets and the
financial highlights for each of the periods listed below:
Evergreen Pennsylvania Tax-Free Money Market Fund -- statement of
operations for the six-month period ended August 31, 1996, statements of
changes in net assets for the six-month period ended August 31, 1996 and
the year ended February 29, 1996 and the financial highlights for each of
the years or periods from March 1, 1993 through August 31, 1996.
Evergreen Treasury Money Market Fund -- statement of operations for
the year ended August 31, 1996, statements of changes in net assets for the
year ended August 31, 1996 and the eight month period ended August 31, 1995
and the financial highlights for each of the years or periods from January
1, 1992 through August 31, 1996.
These financial statements and financial highlights are the responsibility
of the Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights of Evergreen Pennsylvania Tax-Free Money Market Fund for the year
ended February 28, 1993 were audited by other auditors whose reports expressed
unqualified opinions on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of August 31, 1996 by correspondence with the custodian and
brokers. An audit also includes assessing the overall accounting principles used
and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Evergreen Pennsylvania Tax-Free Money Market Fund and Evergreen Treasury Money
Market Fund as of August 31, 1996, and the results of their operations, changes
in their net assets and their financial highlights for each of the periods
listed in the third preceding paragraph, in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
Pittsburgh, Pennsylvania
October 16, 1996
FEDERAL INCOME TAX STATUS OF DIVIDENDS (UNAUDITED)
100% of the dividends distributed by Pennsylvania Tax-Free Money
Market Fund and Tax Exempt Money Market Fund for the period
ended August 31, 1996 are exempt from federal income tax, other
than alternative minimum tax.
54
<PAGE>
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55
<PAGE>
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56
<PAGE>
TRUSTEES AND OFFICERS
TRUSTEES:
Laurence B. Ashkin*
Foster Bam*
James S. Howell, Chairman
Robert J. Jeffries*+
Gerald M. McDonnell
Thomas L. McVerry
William W. Pettit
Russell A. Salton, III M.D.
Michael S. Scofield
OFFICERS:
John J. Pileggi
President and Treasurer
Joan V. Fiore
Secretary
Sheryl Hirschfeld
Assistant Secretary
Donald E. Brostrom
Assistant Treasurer
Stephen W. St. Clair
Assistant Treasurer
* Not a Trustee for Evergreen Treasury Money Market Fund.
+ Trustee Emeritus
<PAGE>
This brochure must be preceeded or accompanied by a prospectus of an Evergreen
fund contained herein. The prospectus contains more complete information,
including fees and expenses, and should be read carefully before investing
or sending money.
NOT May lose value
FDIC No bank guarantee
INSURED
Evergreen Funds Distributor, Inc.
Evergreen(SM) is a Service Mark of Evergreen Asset Management Corp.
Copyright 1996, Evergree Asset Management Corp.
44944 539583
10/96
