<PAGE>
GOLDMAN SACHS
CALIFORNIA MUNICIPAL INCOME FUND
GOLDMAN SACHS
NEW YORK MUNICIPAL INCOME FUND
Financial Statements
April 3, 1995
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
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To the Shareholders and Trustees of Goldman Sachs California Municipal Income
Fund and Goldman Sachs New York Municipal Income Fund:
We have audited the accompanying statements of operations and changes in net
assets and the financial highlights of Goldman Sachs California Municipal Income
Fund and Goldman Sachs New York Municipal Income Fund (portfolios of Goldman
Sachs Trust, a Massachusetts business trust), for the periods presented. These
financial statements and the financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and the financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements and the
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and the financial highlights referred
to above present fairly, in all material respects, the financial position of the
Goldman Sachs California Municipal Income Fund and Goldman Sachs New York
Municipal Income Fund of the Goldman Sachs Trust for the periods presented, in
conformity with generally accepted accounting principles.
Arthur Andersen LLP
Boston, Massachusetts,
June 1, 1995
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STATEMENTS OF OPERATIONS
For the Period Ended April 3, 1995 /(a)/
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<TABLE>
<CAPTION>
GOLDMAN SACHS GOLDMAN SACHS
CALIFORNIA NEW YORK
MUNICIPAL INCOME MUNICIPAL INCOME
FUND FUND
---------------- ----------------
<S> <C> <C>
INVESTMENT INCOME:
Interest Income $147,077 $111,395
-------- --------
EXPENSES /(b)/:
Investment adviser fees -- --
Administration fees -- --
Distribution fees -- --
Professional fees 12,764 12,468
Transfer agent fees 11,060 8,974
Custodian fees 5,126 4,661
Printing fees 3,925 3,925
Amortization of deferred
organization expenses 47,199 48,765
Trustees' fees 113 113
Other 692 576
-------- --------
TOTAL EXPENSES 80,879 79,482
Less--Expenses reimbursable by GSAM (80,879) (79,482)
-------- --------
NET EXPENSES -- --
-------- --------
NET INVESTMENT INCOME 147,077 111,395
-------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized gain (loss) on
investment transactions (85,858) 63,921
Net change in unrealized gain on
investments 275,413 122,681
-------- --------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $336,632 $297,997
======== ========
</TABLE>
/(a)/ For the period from November 1, 1994 to April 3, 1995.
/(b)/ During the period from November 1, 1994 to April 3, 1995, the effect of
voluntary limitations of fees by the investment adviser, administrator, and
distributor amounted to $7,707, $2,890 and $9,634 and $5,948, $2,230 and
$7,435 for the Goldman Sachs California Municipal Income Fund and for the
Goldman Sachs New York Municipal Income Fund, respectively.
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The accompanying notes are an integral part of these financial statements.
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STATEMENTS OF CHANGES IN NET ASSETS
For the Period Ended April 3, 1995 /(a)/
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<TABLE>
<CAPTION>
GOLDMAN SACHS GOLDMAN SACHS
CALIFORNIA NEW YORK
MUNICIPAL MUNICIPAL
INCOME FUND INCOME FUND
------------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 147,077 $ 111,395
Net realized gain (loss)
on investment transactions (85,858) 63,921
Net change in unrealized
gain on investments 275,413 122,681
----------- -----------
Net increase in net assets
resulting from operations 336,632 297,997
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DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (154,595) (117,397)
Net realized gain on
investment transactions -- (8,311)
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Total distributions to
shareholders (154,595) (125,708)
----------- -----------
<CAPTION>
FROM SHARE TRANSACTIONS:
SHARES SHARES
-------- --------
<S> <C> <C> <C> <C>
Net proceeds from sales of
shares 35,592 440,956 156,438 2,166,489
Reinvestment of dividends 8,682 105,821 6,394 89,535
Cost of shares repurchased (669,211) (8,529,822) (465,536) (6,671,864)
-------- ----------- -------- -----------
Net decrease in net assets
resulting from share
transactions (624,937) (7,983,045) (302,704) (4,415,840)
----------- -----------
Total decrease (7,801,008) (4,243,551)
NET ASSETS:
Beginning of period 7,801,008 4,243,551
----------- -----------
End of period $ 0 $ 0
=========== ===========
</TABLE>
/(a)/ For the period from November 1, 1994 to April 3, 1995.
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The accompanying notes are an integral part of these financial statements.
<PAGE>
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STATEMENTS OF CHANGES IN NET ASSETS
For the Periods Ended October 31, 1994 /(a)/
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<TABLE>
<CAPTION>
GOLDMAN SACHS GOLDMAN SACHS
CALIFORNIA NEW YORK
MUNICIPAL MUNICIPAL
INCOME FUND INCOME FUND
------------- -------------
<S> <C> <C>
FROM OPERATIONS:
Net investment income $ 364,417 $ 82,089
Net realized loss on
investment transactions (1,033,857) (55,610)
Net change in unrealized
loss on investments (275,413) (122,681)
----------- ----------
Net decrease in net assets
resulting from operations (944,853) (96,202)
----------- ----------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (364,417) (82,089)
----------- ----------
<CAPTION>
FROM SHARE TRANSACTIONS:
SHARES SHARES
--------- ------
<S> <C> <C> <C> <C>
Net proceeds from sales of
shares 1,150,438 15,908,607 305,581 4,465,133
Reinvestment of dividends 25,143 327,266 4,571 66,293
Cost of shares repurchased (550,644) (7,125,595) (7,448) (109,584)
--------- ----------- ------ ----------
Net increase in net assets
resulting from share
transactions 624,937 9,110,278 302,704 4,421,842
----------- ----------
Total increase 7,801,008 4,243,551
NET ASSETS:
Beginning of
period--Inception -- --
----------- ----------
End of period $ 7,801,008 $4,243,551
=========== ==========
Accumulated undistributed
net investment income $ 7,518 $ 6,002
=========== ==========
</TABLE>
/(a)/ For the period from February 15, 1994 and April 8, 1994 (commencement of
operations for the Goldman Sachs California Municipal Income Fund and the
Goldman Sachs New York Municipal Income Fund, respectively) to October 31,
1994.
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The accompanying notes are an integral part of these financial statements.
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FINANCIAL HIGHLIGHTS
GOLDMAN SACHS CALIFORNIA MUNICIPAL INCOME FUND
Selected Data for a Share Outstanding Throughout each Period
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<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
APRIL 3, 1995 /(a)/ OCTOBER 31, 1994 /(b)/
------------------- ----------------------
<S> <C> <C>
Net asset value, beginning of period $12.48 $14.33
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .32 .53
Net realized and unrealized gain (loss)
on investments /(c)/ .39 (1.85)
------ ------
Total income (loss) from investment
operations /(c)/ .71 (1.32)
------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.32) (.53)
------ ------
Net increase (decrease) in net asset
value .39 (1.85)
------ ------
Net asset value, end of period $12.87 $12.48
====== ======
Total return /(d)/ 5.72% (9.24)%
Ratio of net expenses to average net
assets 0.00%/(e)/ 0.00%/(e)/
Ratio of net investment income to
average net assets 5.95%/(e)/ 5.73%/(e)/
Portfolio turnover rate 36.19% 195.81%
Net assets at end of period $0 $7,801,008
Ratios assuming no waiver of fees or
expense limitation:
Ratio of expenses to average net
assets 4.09%/(e)/ 2.81%/(e)/
Ratio of net investment income to
average net assets 1.86%/(e)/ 2.92%/(e)/
====== ======
</TABLE>
/(a)/ For the period from November 1, 1994 to April 3, 1995.
/(b)/ For the period from February 15, 1994 (commencement of operations) to
October 31, 1994.
/(c)/ Includes the balancing effect of calculating per share amounts.
/(d)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charge. Total return would be reduced if a sales charge were taken
into account.
/(e)/ Annualized.
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The accompanying notes are an integral part of these financial statements.
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FINANCIAL HIGHLIGHTS
GOLDMAN SACHS NEW YORK MUNICIPAL INCOME FUND
Selected Data for a Share Outstanding Throughout each Period
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<TABLE>
<CAPTION>
FOR THE PERIOD FOR THE PERIOD
ENDED ENDED
APRIL 3, 1995 /(a)/ OCTOBER 31, 1994 /(b)/
------------------- ----------------------
<S> <C> <C>
Net asset value, beginning of period $14.02 $14.33
------ ------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .35 .45
Net realized and unrealized gain (loss)
on investments /(c)/ .53 (.31)
------ ------
Total income from investment operations
/(c)/ .88 .14
------ ------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income (.35) (.45)
------ ------
Net increase (decrease) in net asset
value .53 (.31)
------ ------
Net asset value, end of period $14.55 $14.02
====== ======
Total return /(d)/ 6.36% 0.91%
Ratio of net expenses to average net
assets 0.00%/(e)/ 0.00%/(e)/
Ratio of net investment income to
average net assets 5.84%/(e)/ 5.50%/(e)/
Portfolio turnover rate 27.75% 69.29 %
Net assets at end of period $0 $4,243,551
Ratios assuming no waiver of fees or
expense limitation:
Ratio of expenses to average net
assets 4.98%/(e)/ 7.83%/(e)/
Ratio of net investment income
(loss) to average net assets .86%/(e)/ (2.33)%/(e)/
====== ======
</TABLE>
/(a)/ For the period from November 1, 1994 to April 3, 1995.
/(b)/ For the period from April 8, 1994 (commencement of operations) to October
31, 1994.
/(c)/ Includes the balancing effect of calculating per share amounts.
/(d)/ Assumes investment at the net asset value at the beginning of the period,
reinvestment of all dividends and distributions, a complete redemption of
the investment at the net asset value at the end of the period and no
sales charge. Total return would be reduced if a sales charge were taken
into account.
/(e)/ Annualized.
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The accompanying notes are an integral part of these financial statements.
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NOTES TO FINANCIAL STATEMENTS
April 3, 1995
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1. ORGANIZATION
Goldman Sachs California Municipal Income Fund (the "California Fund") and
Goldman Sachs New York Municipal Income Fund (the "New York Fund"), collectively
the "Funds" and individually a "Fund" are separate non-diversified portfolios of
Goldman Sachs Trust (the "Trust"), a Massachusetts business trust. The trust is
registered under the Investment Company Act of 1940 (as amended) as an open-end,
management investment company. The Funds ceased operations on April 3, 1995 and
all remaining shareholders were redeemed.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Funds which are in conformity with those generally accepted in the investment
company industry:
A. Investment Valuation
- ------------------------
Investments in portfolio securities for which market quotations are readily
available are valued on the basis of quotations provided by dealers in such
securities or furnished by a pricing service. Portfolio securities for which
quotations are not readily available are valued at fair value using methods
determined in good faith under procedures established by the Trust's Board of
Trustees and may include yield equivalents or a pricing matrix. Short-term debt
obligations maturing in sixty days or less are valued at amortized cost.
B. Security Transactions and Investment Income
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Security transactions are recorded on the trade date. Realized gains and losses
on sales of portfolio securities are calculated on the identified cost basis.
Interest income is recorded on the basis of interest accrued. Market premiums
resulting form the purchase of long-term debt securities are amortized to
interest income over the life of the security with a corresponding decrease in
the cost basis of that security.
C. Federal Taxes
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It is each Fund's policy to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute each year
substantially all investment company tax-exempt and taxable income to their
shareholders. Accordingly, no federal tax provisions are required.
D. Deferred Organization Expenses
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Organization-related costs were fully amortized as of April 3, 1995.
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NOTES TO FINANCIAL STATEMENTS (continued)
April 3, 1995
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E. Expenses
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Expenses incurred by the Trust that do not specifically relate to an individual
portfolio of the Trust are allocated to the portfolios based on each portfolio's
relative average net assets for the period.
3. AGREEMENTS
Goldman Sachs Asset Management ("GSAM"), a separate operating division of
Goldman Sachs serves as each Fund's investment adviser pursuant to Investment
Advisory Agreements. Under the Investment Advisory Agreements, GSAM, subject to
general supervision of the Trust's Board of Trustees manages each Fund's
portfolio. As compensation for the services rendered under the Investment
Advisory Agreements and the assumption of the expenses related thereto, GSAM is
entitled to a fee, computed daily and payable monthly, at an annual rate equal
to .40% of each Fund's average daily net assets. For the period from November
1, 1994 to April 3, 1995, GSAM voluntarily agreed not to impose its investment
advisory fee amounting to $7,707 for the California Fund and $5,948 for the New
York Fund.
GSAM serves as each Fund's administrator pursuant to Administration Agreements.
Under the Administration Agreements, GSAM administers each Fund's business
affairs including providing facilities. As compensation for the services
rendered under the Administration Agreements, GSAM is entitled to a fee,
computed daily and payable monthly, at an annual rate equal to .15% of each
Fund's average daily net assets. For the period from November 1, 1994 to April
3, 1995, GSAM voluntarily agreed not to impose its administration fee amounting
to $2,890 and $2,230 for the California Fund and for the New York Fund,
respectively.
GSAM has voluntarily agreed to limit certain of each Fund's expenses (excluding
advisory, administration and distribution fees and taxes, interest, brokerage,
litigation, indemnification and other extraordinary expenses) to the extent such
expenses exceed .05% per annum of each corresponding Fund's average daily net
assets. For the period from November 1, 1994 to April 3, 1995, GSAM voluntarily
agreed to reimburse and/or assume directly all such expenses.
Goldman Sachs serves as Distributor of Shares of the Funds pursuant to
Distribution Agreements. Goldman Sachs may receive a portion of the sales load
imposed on the sale of Fund shares and has advised the California Fund and New
York Fund that is retained approximately $1,700 and $500, respectively, during
the period ended April 3, 1995.
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NOTES TO FINANCIAL STATEMENTS (continued)
April 3, 1995
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3. AGREEMENTS (continued)
Each Fund has adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1.
Under the Plan, Goldman Sachs is entitled to receive a quarterly distribution
fee equal to, on an annual basis, .50% of each Fund's average daily net assets.
For the period from November 1, 1994 to April 3, 1995, Goldman Sachs voluntarily
agreed not to impose its distribution fee amounting to $9,634 for the California
Fund and $7,435 for the New York Fund. Goldman Sachs also serves as the
Transfer Agent of the Funds for a fee.
4. INVESTMENT TRANSACTIONS
Purchases and proceeds of sales or maturities of long-term securities for the
period from November 1, 1994 to April 3, 1995, were as follows:
<TABLE>
<CAPTION>
California New York
Fund Fund
----------- ----------
<S> <C> <C>
Purchase of long-term securities $1,409,948 $1,044,537
Sales or maturities of long-term $7,793,724 $5,457,568
securities
</TABLE>
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This Report is authorized for distribution to investors only when preceded or
accompanied by a Goldman Sachs California Municipal Income Fund and Goldman
Sachs New York Municipal Income Fund Prospectus which contains facts concerning
the Fund's objectives and policies, management, expenses and other information.
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Goldman Sachs
1 New York Plaza
New York, NY 10004
TRUSTEES
Paul C. Nagel, Jr., Chairman
Ashok N. Bakhru
Marcia L. Beck
David B. Ford
Alan A. Shuch
Jackson W. Smart, Jr.
William H. Springer
Richard P. Strubel
OFFICERS
Marcia L. Beck, President
John W. Mosior, Vice President
Nancy L. Mucker, Vice President
Pauline Taylor, Vice President
Scott M. Gilman, Treasurer
Michael J. Richman, Secretary
Howard B. Surloff, Assistant Secretary
GOLDMAN SACHS
Investment Adviser, Administrator,
Distributor and Transfer Agent
