- -----------------------------------------------------------------------------
GOVERNMENT
- -----------------------------------------------------------------------------
CASH
- -----------------------------------------------------------------------------
SERIES
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
ANNUAL REPORT
- -----------------------------------------------------------------------------
TO SHAREHOLDERS
- -----------------------------------------------------------------------------
MAY 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 147551492
2062301 (7/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders of Government Cash
Series, which covers the twelve-month period ended May 31, 1995. The report
contains commentary by the portfolio manager, followed by a complete list of the
fund's investments on the last day of the reporting period, and the financial
statements.
Government Cash Series continues to help your cash earn daily income, while
giving you the additional advantages of daily liquidity and stability of
principal.* The fund invests in some of the most stable investments available,
short-term U.S. government obligations and repurchase agreements backed by these
obligations. Because of their yield advantage, repurchase agreements continued
to account for 66% of the portfolio at the end of the reporting period.
Dividends paid to shareholders during the period totaled $17.8 million, or $0.04
per share. At the end of the reporting period, the fund's net assets stood at
$453 million.
As always, we thank you for using Government Cash Series as a convenient way to
pursue daily income. Please contact your investment representative if you have
any questions. We look forward to keeping you up to date on your investment.
Sincerely,
[LOGO]
Richard B. Fisher
President
July 15, 1995
* No money market mutual fund can guarantee that a stable net asset value will
be maintained. An investment in the fund is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Government Cash Series is invested in direct U.S. Treasury and U.S. government
agency obligations and in repurchase agreements which have these securities as
collateral. The fund continues to invest in issues of the Federal National
Mortgage Association, Student Loan Marketing Association, Federal Farm Credit
Bank System, Federal Home Loan Bank System, and Federal Home Loan Mortgage
Corp., and maintains a small U.S. Treasury position for liquidity purposes.
Recently, the fund has been managed within an average maturity target range of
35-45 days.
During the reporting period, the Federal Reserve Board (the "Fed") continued to
tighten monetary policy, raising the federal funds target rate on three separate
occasions, from 4.25% to the current target rate of 6%, for a total of 125 basis
points with the latest move being in early February, 1995. Economic reports
since early in 1995, however, have pointed to a slowing in the growth of the
economy, an indication that the tightenings in monetary policy by the Fed are
taking hold. As a result, market participants now expect the next move from the
Fed to be an easing in monetary policy rather than a tightening.
Short-term interest rates rose from May, 1994, through the end of December,
1994, following the Fed policy tightenings. Since the beginning of the year,
however, rates at the front end of the yield curve have declined as expectations
about the direction and magnitude of future policy adjustments from the Fed
changed. The yield on the three-month Treasury bill began the reporting period
at 4.1% and peaked at 6%, but then declined to 5.8% by the end of May, 1995. The
front end of the yield curve also flattened dramatically over the period, from a
spread of 110 basis points between the three-month Treasury bill and the
one-year Treasury bill to 0 basis points at the end of May, 1995.
As a yield advantage continued to exist for investments in repurchase agreements
versus direct investments in short-term Treasury and agency securities, a
substantial percentage of the fund's investments remained in repurchase
agreements. The fund continued to combine attractive yields from repurchase
agreements collateralized by U.S. government mortgage-backed securities with
short-term agency floating rate notes and Treasury and agency securities with
longer maturities of 6 to 12 months. This portfolio structure continues to
provide a competitive yield.
The average maturity of the fund was modestly extended over reporting period, as
sentiment about future moves from the Fed altered. Targeted within a 30 to 40
day range throughout most of 1994, the fund extended that range to 35 to 45 days
as yields fell in 1995. The fund maximizes performance through ongoing relative
value analysis.
GOVERNMENT CASH SERIES
PORTFOLIO OF INVESTMENTS
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
SHORT-TERM OBLIGATIONS--37.0%
- -------------------------------------------------------------------------------------------------
(A)FEDERAL FARM CREDIT BANK, DISCOUNT NOTES--1.1%
----------------------------------------------------------------------------------
$ 2,000,000 6.17%, 2/23/1996 $ 1,908,478
----------------------------------------------------------------------------------
3,000,000 7.90%, 3/1/1996 3,023,478
---------------------------------------------------------------------------------- --------------
Total 4,931,956
---------------------------------------------------------------------------------- --------------
(A)FEDERAL HOME LOAN BANK, BOND--2.1%
----------------------------------------------------------------------------------
4,000,000 6.05%, 6/13/1996 4,003,480
----------------------------------------------------------------------------------
3,500,000 6.05%, 6/5/1996 3,495,653
----------------------------------------------------------------------------------
2,000,000 6.85%, 2/28/1996 2,003,346
---------------------------------------------------------------------------------- --------------
Total 9,502,479
---------------------------------------------------------------------------------- --------------
(A)FEDERAL HOME LOAN BANK, DISCOUNT NOTES--5.6%
----------------------------------------------------------------------------------
3,000,000 5.30%, 6/12/1995 2,995,142
----------------------------------------------------------------------------------
2,000,000 5.935%, 1/5/1996 1,928,121
----------------------------------------------------------------------------------
3,000,000 5.96%, 1/16/1996 2,886,263
----------------------------------------------------------------------------------
3,000,000 6.06%, 12/21/1995 2,897,485
----------------------------------------------------------------------------------
3,000,000 6.06%, 12/26/1995 2,894,960
----------------------------------------------------------------------------------
7,000,000 6.37%, 6/5/1995 6,995,046
----------------------------------------------------------------------------------
2,000,000 6.57%, 11/22/1995 1,936,490
----------------------------------------------------------------------------------
3,000,000 6.60%, 6/13/1995 2,993,400
---------------------------------------------------------------------------------- --------------
Total 25,526,907
---------------------------------------------------------------------------------- --------------
(B)FEDERAL HOME LOAN BANK, FLOATING RATE NOTES--3.5%
----------------------------------------------------------------------------------
8,000,000 5.78%, 6/5/1995 7,999,921
----------------------------------------------------------------------------------
8,000,000 6.09%, 5/15/1996 7,997,429
---------------------------------------------------------------------------------- --------------
Total 15,997,350
---------------------------------------------------------------------------------- --------------
(A)FEDERAL HOME LOAN MORTGAGE ASSOCIATION, DISCOUNT NOTES--2.6%
----------------------------------------------------------------------------------
2,000,000 6.45%, 11/1/1995 1,945,175
----------------------------------------------------------------------------------
</TABLE>
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
SHORT-TERM OBLIGATIONS--CONTINUED
- -------------------------------------------------------------------------------------------------
(A)FEDERAL HOME LOAN MORTGAGE ASSOCIATION, DISCOUNT NOTES--
CONTINUED
----------------------------------------------------------------------------------
$ 9,000,000 6.02%, 8/10/1995 $ 8,998,274
----------------------------------------------------------------------------------
1,000,000 6.575%, 2/8/1996 953,975
---------------------------------------------------------------------------------- --------------
Total 11,897,424
---------------------------------------------------------------------------------- --------------
(A)FEDERAL NATIONAL MORTGAGE ASSOCIATION, DISCOUNT NOTES--12.2%
----------------------------------------------------------------------------------
4,500,000 5.63%, 4/12/1996 4,277,615
----------------------------------------------------------------------------------
8,000,000 5.865%, 9/14/1995 7,863,150
----------------------------------------------------------------------------------
7,000,000 5.87%, 9/25/1995 6,867,599
----------------------------------------------------------------------------------
8,000,000 5.90%, 9/11/1995 7,866,267
----------------------------------------------------------------------------------
6,000,000 5.92%, 10/26/1995 5,854,960
----------------------------------------------------------------------------------
5,000,000 5.95%, 10/23/1995 4,881,000
----------------------------------------------------------------------------------
4,000,000 5.97%, 9/11/1995 3,932,340
----------------------------------------------------------------------------------
4,000,000 6.06%, 12/29/1995 3,857,927
----------------------------------------------------------------------------------
5,000,000 6.27%, 6/20/1995 4,983,454
----------------------------------------------------------------------------------
1,000,000 6.39%, 7/27/1995 990,060
----------------------------------------------------------------------------------
4,000,000 6.61%, 7/24/1995 3,961,074
---------------------------------------------------------------------------------- --------------
Total 55,335,446
---------------------------------------------------------------------------------- --------------
(B)FEDERAL NATIONAL MORTGAGE ASSOCIATION, FLOATING RATE NOTES--5.0%
----------------------------------------------------------------------------------
5,500,000 5.80%, 6/1/1995 5,500,000
----------------------------------------------------------------------------------
10,500,000 5.92%, 2/16/1996 10,500,000
----------------------------------------------------------------------------------
6,500,000 6.07%, 8/30/1996 6,498,048
---------------------------------------------------------------------------------- --------------
Total 22,498,048
---------------------------------------------------------------------------------- --------------
(A)STUDENT LOAN MORTGAGE ASSOCIATION, DISCOUNT NOTE--0.4%
----------------------------------------------------------------------------------
2,000,000 6.943%, 2/21/1996 2,002,520
---------------------------------------------------------------------------------- --------------
(B)STUDENT LOAN MORTGAGE ASSOCIATION, FLOATING RATE NOTES--2.4%
----------------------------------------------------------------------------------
4,500,000 5.97%, 9/23/1996 4,500,000
----------------------------------------------------------------------------------
</TABLE>
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
SHORT-TERM OBLIGATIONS--CONTINUED
- -------------------------------------------------------------------------------------------------
(B)STUDENT LOAN MORTGAGE ASSOCIATION, FLOATING RATE NOTES--CONTINUED
----------------------------------------------------------------------------------
$ 6,150,000 6.22%, 1/23/1997 $ 6,169,685
---------------------------------------------------------------------------------- --------------
Total 10,669,685
---------------------------------------------------------------------------------- --------------
(A)UNITED STATES TREASURY BILLS--2.1%
----------------------------------------------------------------------------------
3,000,000 5.235%, 6/29/1995 2,987,785
----------------------------------------------------------------------------------
2,500,000 5.37%, 8/24/1995 2,468,675
----------------------------------------------------------------------------------
4,000,000 6.505%, 8/24/1995 3,939,286
---------------------------------------------------------------------------------- --------------
Total 9,395,746
---------------------------------------------------------------------------------- --------------
TOTAL SHORT-TERM OBLIGATIONS 167,757,561
---------------------------------------------------------------------------------- --------------
(C) REPURCHASE AGREEMENTS--66.0%
- -------------------------------------------------------------------------------------------------
20,000,000 BT Securities Corporation, 6.18%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
43,700,000 Barclays de Zoete Wedd Securities, Inc., 6.18%, dated 5/31/1995, due 6/1/1995 43,700,000
----------------------------------------------------------------------------------
15,000,000 Deutsche Bank Government Securities, Inc., 6.20%, dated
5/31/1995, due 6/1/1995 15,000,000
----------------------------------------------------------------------------------
60,000,000 Greenwich Capital Markets, Inc., 6.20%, dated 5/31/1995, due
6/1/1995 60,000,000
----------------------------------------------------------------------------------
20,000,000 HSBC Securities, Inc., 6.20%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 Harris, Nesbitt, Thomson Securities, Inc., 6.20%, dated 5/31/1995, due
6/1/1995 20,000,000
----------------------------------------------------------------------------------
15,000,000 J.P. Morgan & Co., Inc., 6.20%, dated 5/31/1995, due 6/1/1995 15,000,000
----------------------------------------------------------------------------------
10,000,000 (d)Merrill Lynch Government Securities, Inc., 6.06%, dated
4/28/1995, due 7/27/1995 10,000,000
----------------------------------------------------------------------------------
10,000,000 Merrill Lynch Government Securities, Inc., 6.18%, dated 5/31/1995, due 6/1/1995 10,000,000
----------------------------------------------------------------------------------
55,000,000 Morgan Stanley and Co., Inc., 6.18%, dated 5/31/1995, due 6/1/1995 55,000,000
----------------------------------------------------------------------------------
</TABLE>
GOVERNMENT CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
(C) REPURCHASE AGREEMENTS--CONTINUED
- -------------------------------------------------------------------------------------------------
$ 30,000,000 PaineWebber Group, Inc., 6.20%, dated 5/31/1995, due 6/1/1995 $ 30,000,000
---------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 298,700,000
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(E) $ 466,457,561
---------------------------------------------------------------------------------- --------------
</TABLE>
(a) Each issue shows the rate of discount at time of purchase.
(b) Denotes variable rate obligations for which current rate and next reset
date is shown.
(c) The repurchase agreements are fully collateralized by U.S. government
and/or agency obligations based on market prices at the date of the
portfolio. The investments in the repurchase agreements are through
participation in joint accounts with other Federated funds.
(d) Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(e) Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($453,095,757) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements.)
GOVERNMENT CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in repurchase agreements $ 298,700,000
- ---------------------------------------------------------------------------------
Investments in securities, at amortized cost and value 167,757,561
- --------------------------------------------------------------------------------- --------------
Total Investments, at amortized cost and value $ 466,457,561
- -------------------------------------------------------------------------------------------------
Income receivable 854,869
- ------------------------------------------------------------------------------------------------- --------------
Total assets 467,312,430
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased 7,499,132
- ---------------------------------------------------------------------------------
Payable for shares redeemed 299,597
- ---------------------------------------------------------------------------------
Income distribution payable 659,283
- ---------------------------------------------------------------------------------
Accrued expenses 112,348
- ---------------------------------------------------------------------------------
Payable to Bank 5,646,313
- --------------------------------------------------------------------------------- --------------
Total liabilities 14,216,673
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 453,095,757 shares outstanding $ 453,095,757
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($453,095,757 / 453,095,757 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 21,804,067
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee $ 2,041,481
- -------------------------------------------------------------------------------------
Administrative personnel and services fee 309,080
- -------------------------------------------------------------------------------------
Custodian fees 193,164
- -------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 181,995
- -------------------------------------------------------------------------------------
Directors'/Trustees' fees 5,534
- -------------------------------------------------------------------------------------
Auditing fees 13,196
- -------------------------------------------------------------------------------------
Legal fees 9,171
- -------------------------------------------------------------------------------------
Portfolio accounting fees 33,943
- -------------------------------------------------------------------------------------
Distribution services fee 408,296
- -------------------------------------------------------------------------------------
Shareholder services fee 1,020,741
- -------------------------------------------------------------------------------------
Share registration costs 52,609
- -------------------------------------------------------------------------------------
Printing and postage 20,493
- -------------------------------------------------------------------------------------
Insurance premiums 5,098
- -------------------------------------------------------------------------------------
Taxes 52,295
- -------------------------------------------------------------------------------------
Miscellaneous 10,610
- ------------------------------------------------------------------------------------- ------------
Total expenses 4,357,706
- -------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 311,977
- ------------------------------------------------------------------------------------- ------------
Net expenses 4,045,729
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 17,758,338
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1995 1994
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 17,758,338 $ 10,689,169
- ---------------------------------------------------------------------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------------
Distributions from net investment income (17,758,338) (10,689,169)
- ---------------------------------------------------------------------------- ----------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------------
Proceeds from sale of Shares 3,457,947,479 3,153,905,957
- ----------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of distributions
declared 13,027,588 7,564,032
- ----------------------------------------------------------------------------
Cost of Shares redeemed (3,419,213,014) (3,160,367,176)
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from share transactions 51,762,053 1,102,813
- ---------------------------------------------------------------------------- ----------------- -----------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period 401,333,704 400,230,891
- ---------------------------------------------------------------------------- ----------------- -----------------
End of period $ 453,095,757 $ 401,333,704
- ---------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Deloitte & Touche LLP, Independent Auditors,
on page 14.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991 1990(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -------------------------------------------
Net investment income 0.04 0.02 0.03 0.04 0.07 0.06
- ------------------------------------------- --------- --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
- -------------------------------------------
Distributions from net investment income (0.04) (0.02) (0.03) (0.04) (0.07) (0.06)
- ------------------------------------------- --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ------------------------------------------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 4.43% 2.45% 2.54% 4.33% 6.80% 6.53%
- -------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -------------------------------------------
Expenses 0.99% 0.99% 0.99% 0.98% 0.94% 0.73%(c)
- -------------------------------------------
Net investment income 4.35% 2.41% 2.53% 4.25% 6.48% 7.74%(c)
- -------------------------------------------
Expense waiver/
reimbursement (d) 0.08% 0.09% 0.06% 0.06% 0.13% 0.32%(c)
- -------------------------------------------
SUPPLEMENTAL DATA
- -------------------------------------------
Net assets, end of period (000 omitted) $453,096 $401,334 $400,231 $550,675 $631,718 $493,995
- -------------------------------------------
</TABLE>
(a) Reflects operations for the period from August 23, 1989, (date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
GOVERNMENT CASH SERIES
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, as amended (the "Act") as an open-end management investment
company. The Corporation consists of three diversified portfolios and one
non-diversified portfolio (Municipal Cash Series). The financial statements
included herein present only those of Government Cash Series (the "Fund"). The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed established by the Board of Directors. Risks may arise
from the potential inability of counterparties to honor the terms of the
repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At May 31, 1995, there were 12,500,000,000 shares of $0.001 par value capital
stock authorized. Capital paid-in aggregated $453,095,757. Transactions in
capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1995 1994
Shares sold 3,457,947,479 3,153,905,957
- ------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 13,027,588 7,564,032
- ------------------------------------------------------------------------------
Shares redeemed (3,419,213,014) (3,160,367,176)
- ------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from share transactions 51,762,053 1,102,813
- ------------------------------------------------------------------------------ ---------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive a portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the net assets of the Fund to finance activities
intended to result in the sale of the Fund's shares. The Plan provides that the
Fund may incur distribution expenses up to .35 of 1% of the average daily net
assets of the shares, annually, to reimburse FSC.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services, ("FSS") the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain the shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSE--Federated
Services Company, ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records.
The fee is based on the level of the Fund's average daily net assets for the
period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Directors of
CASH TRUST SERIES, INC. and
Shareholders of GOVERNMENT CASH SERIES:
We have audited the accompanying statement of assets and liabilities of
Government Cash Series (one of the portfolios comprising Cash Trust Series,
Inc.), including the portfolio of investments, as of May 31, 1995, the related
statement of operations for the year then ended, the statement of changes in net
assets for the years ended May 31, 1995 and 1994, and the financial highlights
for each of the years in the six-year period ended May 31, 1995. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1995 by correspondence with the custodian and brokers; where replies were
not received from brokers, we performed other auditing procedures. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights present
fairly, in all material respects, the financial position of Government Cash
Series as of May 31, 1995, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
July 14, 1995
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other governmental agency. Investment in mutual funds involves risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
- -----------------------------------------------------------------------------
MUNICIPAL
- -----------------------------------------------------------------------------
CASH
- -----------------------------------------------------------------------------
SERIES
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
ANNUAL REPORT
- -----------------------------------------------------------------------------
TO SHAREHOLDERS
- -----------------------------------------------------------------------------
MAY 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 147551303
0062903 (7/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders of Municipal Cash
Series, which covers the twelve-month period ended May 31, 1995. The report
contains commentary by the portfolio manager, followed by a complete list of the
fund's investments on the last day of the reporting period, and the financial
statements.
Municipal Cash Series continues to help your cash earn daily income, while
giving you the additional advantages of daily liquidity and stability of
principal.* The fund invests in high quality, short-term securities issued by
municipalities across our nation.
Tax-free dividends paid to shareholders during the period totaled $14.5 million,
or $0.03 per share. At the end of the reporting period, the fund's net assets
stood at $445.2 million.
As always, we thank you for using Municipal Cash Series as a convenient way to
pursue daily, tax-free income. Please contact your investment representative if
you have any questions. We look forward to keeping you up to date on your
investment.
Sincerely,
[LOGO]
Richard B. Fisher
President
July 15, 1995
* No money market mutual fund can guarantee that a stable net asset value will
be maintained. An investment in the fund is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Municipal Cash Series invests in high quality short-term tax-exempt debt
securities and seeks to maintain a constant net asset value of $1.00. For the
twelve-month period ended May 31, 1995, the fund paid shareholders a net
annualized return of 2.84%. This is equivalent to a taxable money market fund
return in the highest federal tax bracket of 39.6% of 4.70%.
Concerned by the strength in the economy and the potential for this growth to
create inflationary pressures, the Federal Reserve Board (the "Fed") continued
to tighten monetary policy through the fourth quarter of 1994 and into early
1995. The most recent move by the Fed on February 1, 1995, increased the federal
funds target rate by 50 basis points to 6.0%. Since February, 1995, however,
there has been an outpouring of sluggish economic data suggesting that the
1994-1995 tightening cycle by the Fed is starting to take hold. As a result,
market participants took these signs of slowing, coupled with a modest
acceleration in inflation, to mean that the Fed would not increase rates further
and perhaps move to cut borrowing costs if the downturn in economic growth
continues.
Money market rates were affected by the Fed's tightening early in the reporting
period, as well as the 180 degree change in market expectations in February,
1995, regarding future Fed rate moves. Municipal money market rates were also
influenced by seasonal supply and demand imbalances throughout the reporting
period. One-year treasury bills rose from 6.88% in November, 1994, to a period
high of 7.32%, before declining sharply to 5.80% to end the reporting period.
Short term municipal note rates declined as well, but to a lesser degree. Yield
levels on the Bond Buyer Note Index, a proxy for one-year municipal notes
offered in the marketplace, initially moved upward increasing from 4.60% in
December, 1994, to a high of 5.10% in early January, 1995, before steadily
falling to 3.90% at the end of the reporting period.
In this interest rate environment, the fund's average maturity was in a neutral
average maturity range of 45-55 days. Looking ahead to the second half of 1995,
the fund's management expects the economy to moderate. Short term interest rates
should trade in a fairly narrow range based on expectations of a steady monetary
policy. However, a cut in short-term rates cannot be ruled out. The Fed will
scrutinize upcoming economic data for signs that growth remains weak.
*Performance quoted represents past performance and is not indicative of future
results.
MUNICIPAL CASH SERIES
PORTFOLIO OF INVESTMENTS
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--99.1%
- --------------------------------------------------------------------------------------
ALABAMA--1.9%
------------------------------------------------------------------------
$ 485,000 Hoover, AL, IDA Weekly VRDNs (Bud's Best Cookies, Inc.)/ (SouthTrust
Bank of Alabama, Birmingham LOC)/(Subject to AMT) P-1 $ 485,000
------------------------------------------------------------------------
2,000,000 Mobile, AL, IDB, IDRB (Series 1989) Weekly VRDNs (Newark Group
Industries, Inc.)/(First Fidelity Bank, NA, New Jersey LOC) A-1 2,000,000
------------------------------------------------------------------------
285,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 285,000
------------------------------------------------------------------------
325,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 325,000
------------------------------------------------------------------------
345,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 345,000
------------------------------------------------------------------------
370,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 370,000
------------------------------------------------------------------------
395,000 Muscle Shoals, AL, IDB Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 395,000
------------------------------------------------------------------------
3,000,000 Phoenix City, AL, IDB, (Series 1988), 4.25% CP (Mead Coated Board)/(ABN
AMRO Bank N.V., Amsterdam LOC), Mandatory Tender 7/24/1995 P-1 3,000,000
------------------------------------------------------------------------
1,000,000 St. Clair County, AL, IDB, (Series 1993) Weekly VRDNs (Ebsco Industries,
Inc.)/(National Australia Bank Ltd., Melbourne LOC) A-1+ 1,000,000
------------------------------------------------------------------------ --------------
Total 8,205,000
------------------------------------------------------------------------ --------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
ARKANSAS--3.9%
------------------------------------------------------------------------
$ 3,000,000 Hope, AR , Solid Waste Disposal Revenue Bonds (Series 1994), 4.30% CP
(Temple-Inland Forest Products Corporation Project)/(Temple-Inland, Inc.
GTD), Mandatory Tender
8/24/1995 A-1 $ 3,000,000
------------------------------------------------------------------------
1,000,000 Sheridan, AR, IDA, (Series B) Weekly VRDNs (H.H. Robertson Co.)/(PNC
Bank, N.A. LOC) P-1 1,000,000
------------------------------------------------------------------------
7,500,000 Siloam Springs, AR, IDRB Weekly VRDNs (Series 1994)/ (Lazy Boy Chair
Co.)/(NBD Bank, N.A., Detroit, MI LOC) P-1 7,500,000
------------------------------------------------------------------------
6,000,000 Springdale, AR, IDA Weekly VRDNs (Newlywed Food)/ (Mellon Bank NA,
Pittsburgh LOC) VMIG1 6,000,000
------------------------------------------------------------------------ --------------
Total 17,500,000
------------------------------------------------------------------------ --------------
CALIFORNIA--5.6%
------------------------------------------------------------------------
10,000,000 California HFA, Home Mortgage Revenue Bonds (1995 Series E), 4.60% TOBs
(FGIC Insured), Mandatory Tender 2/1/1996 A-1+ 10,000,000
------------------------------------------------------------------------
2,885,000 Los Angeles County, CA, SFM Housing Authority, 4.00% TOBs (GNMA
Collateralized)/(Meridian Bank, Reading PA LIQ), Optional Tender
6/1/1995 NR(1) 2,885,000
------------------------------------------------------------------------
10,000,000 San Bernardino County, CA, 4.50% TRANs, 7/31/1995 SP-1+ 10,009,437
------------------------------------------------------------------------
1,760,000 San Francisco, CA, Redevelopment Finance Agency Weekly VRDNs (St.
Francis Place)/(Mitsubishi Trust & Banking Corp., Tokyo LOC) VMIG2 1,760,000
------------------------------------------------------------------------ --------------
Total 24,654,437
------------------------------------------------------------------------ --------------
COLORADO--1.1%
------------------------------------------------------------------------
4,750,000 Adams County, CO, IDB, Weekly VRDNs (Series 1993)/(Bace Manufacturing,
Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 4,750,000
------------------------------------------------------------------------ --------------
DELAWARE--1.7%
------------------------------------------------------------------------
7,400,000 Sussex County, DE, IDA Weekly VRDNs (Perdue Farms)/ (Rabobank Nederland,
Utrecht LOC) P-1 7,400,000
------------------------------------------------------------------------ --------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
FLORIDA--0.1%
------------------------------------------------------------------------
$ 400,000 Hillsborough County, FL, IDA Weekly VRDNs (Series 1992)/ (SIFCO Turbine
Component Service)/(National City Bank, Cleveland, OH LOC) P-1 $ 400,000
------------------------------------------------------------------------
100,000 Jacksonville, FL Weekly VRDNs (Metal Sales)/(National City Bank,
Kentucky LOC) P-1 100,000
------------------------------------------------------------------------ --------------
Total 500,000
------------------------------------------------------------------------ --------------
GEORGIA--3.4%
------------------------------------------------------------------------
3,980,000 Brunswick, GA, Housing Authority, Weekly VRDNs (Series S93)/(Island
Square Apartments)/(Columbus Bank and Trust Co., GA LOC) A-1 3,980,000
------------------------------------------------------------------------
1,700,000 Columbus, GA, IDA, Weekly VRDNs (Series 90B)/(R. P. Real Estate,
Inc.)/(Columbus Bank and Trust Co., GA LOC) A-1 1,700,000
------------------------------------------------------------------------
6,210,000 Georgia State, HFA, (Series 1990C), 4.40% TOBs (First National Bank of
Chicago LIQ), Optional Tender
6/1/1995 NR(2) 6,210,000
------------------------------------------------------------------------
3,400,000 Gwinnett County, GA, IDA Daily VRDNs (Volvo Auto Receivables
1992-B)/(Union Bank of Switzerland, Zurich LOC) P-1 3,400,000
------------------------------------------------------------------------ --------------
Total 15,290,000
------------------------------------------------------------------------ --------------
ILLINOIS--1.5%
------------------------------------------------------------------------
3,700,000 Chicago, IL, Gas Supply, 4.95% TOBs (1993 Series B)/ (Peoples Gas Light
& Coke Company), Optional Tender
12/1/1995 VMIG1 3,700,000
------------------------------------------------------------------------
1,300,000 Illinois Development Finance Authority Weekly VRDNs (Technisand,
Inc.)/(National City Bank, Cleveland, OH LOC) P-1 1,300,000
------------------------------------------------------------------------
1,500,000 Sangamon, IL, IDR Weekly VRDNs (Series 1994)/(Contech Construction
Products, Inc.)/(Mellon Bank NA, Pittsburgh LOC) VMIG1 1,500,000
------------------------------------------------------------------------ --------------
Total 6,500,000
------------------------------------------------------------------------ --------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
INDIANA--6.5%
------------------------------------------------------------------------
$ 1,705,000 Avilla, IN, IDR Weekly VRDNs (Group Dekko International)/ (Bank One,
Indianapolis, IN LOC) P-1 $ 1,705,000
------------------------------------------------------------------------
2,420,000 Crown Point, IN, IDA Weekly VRDNs (D & M Manufacturing)/(National City
Bank, Kentucky LOC) P-1 2,420,000
------------------------------------------------------------------------
1,600,000 Franklin, IN, Adjustable Rate Economic Development Revenue Refunding
Bonds Weekly VRDNs (Series 1994)/ (Pedcor Investments L.P.)/(Federal
Home Loan Bank of Indianapolis LOC) VMIG1 1,600,000
------------------------------------------------------------------------
5,000,000 Greencastle, IN, IDA Weekly VRDNs (HA Parts Products)/ (Fuji Bank, Ltd.,
Tokyo LOC) VMIG1 5,000,000
------------------------------------------------------------------------
3,140,000 Huntingburg, IN, Adjustable Rate Economic Development Revenue Bonds
Weekly VRDNs (Series 1993)/(DMI Furniture, Inc.)/(Bank One,
Indianapolis, IN LOC) P-1 3,140,000
------------------------------------------------------------------------
2,940,000 Huntingburg, IN, Weekly VRDNs (Series 1994)/(DMI Furniture, Inc.)/(Bank
One, Indianapolis, IN LOC) P-1 2,940,000
------------------------------------------------------------------------
2,915,000 Indianapolis, IN, Weekly VRDNs (Series 1991)/(Cantor & Coleman II
Project)/(Bank One, Indianapolis, IN LOC) P-1 2,915,000
------------------------------------------------------------------------
2,270,000 Lebanon, IN, IDA Weekly VRDNs (Series 1991)/(White Castle System)/(Bank
One, Columbus, N.A. LOC) A-1+ 2,270,000
------------------------------------------------------------------------
3,300,000 Tippecanoe County, IN, EDR Weekly VRDNs (Lafayette Venetian Blind)/(PNC
Bank, Ohio, N.A. LOC) P-1 3,300,000
------------------------------------------------------------------------
3,780,000 Westfield, IN, IDR Weekly VRDNs (Series 1994)/(Standard Locknut &
Lockwasher, Inc.)/(Bank One, Indianapolis, IN LOC) P-1 3,780,000
------------------------------------------------------------------------ --------------
Total 29,070,000
------------------------------------------------------------------------ --------------
IOWA--1.1%
------------------------------------------------------------------------
2,800,000 Iowa Finance Authority Daily VRDNs (Cedar River Paper Co.)/(Swiss Bank
Corp., New York, NY LOC) A-1+ 2,800,000
------------------------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
IOWA--CONTINUED
------------------------------------------------------------------------
$ 2,330,000 Iowa Finance Authority, Variable Rate Demand IDRB Weekly VRDNs (V-T
Industries, Inc. Project)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ $ 2,330,000
------------------------------------------------------------------------ --------------
Total 5,130,000
------------------------------------------------------------------------ --------------
KANSAS--2.1%
------------------------------------------------------------------------
9,500,000 Hays, KS, Manufacturing Development Weekly VRDNs (Series 1988)/(Yuasa
Exide Battery Corp)/(Sakura Bank Ltd., Tokyo LOC) P-1 9,500,000
------------------------------------------------------------------------ --------------
KENTUCKY--6.3%
------------------------------------------------------------------------
1,180,000 Caldwell County, KY, Weekly VRDNs (Series 1990)/ (Thompson Steel
Pipe)/(Corestates Bank N.A., Philadelphia, PA LOC) A-1+ 1,180,000
------------------------------------------------------------------------
3,945,000 Glasgow, KY, Weekly VRDNs (Series 1994)/(Ply Tech Corp.)/ (Liberty
National Bank & Trust Co. LOC) P-1 3,945,000
------------------------------------------------------------------------
2,100,000 Jefferson County, KY Weekly VRDNs (Gateway Press, Inc.)/ (PNC Bank,
Kentucky LOC) P-1 2,100,000
------------------------------------------------------------------------
2,000,000 Jefferson County, KY, IDR Weekly VRDNs (O'Neal Steel, Inc.)/(SouthTrust
Bank of Alabama, Birmingham LOC) P-1 2,000,000
------------------------------------------------------------------------
2,380,000 Jefferson County, KY, IDR Weekly VRDNs (Series 1991)/ (Findley
Adhesives)/(Bank One, Columbus, N.A. LOC) P-1 2,380,000
------------------------------------------------------------------------
8,600,000 Kentucky Pollution Abatement & Water Resource Finance Authority Daily
VRDNs (Toyota Motor) P-1 8,600,000
------------------------------------------------------------------------
2,000,000 Kentucky Rural, EDA Weekly VRDNs (Series 1990)/ (Thompson Steel
Pipe)/(NBD Bank, N.A., Detroit, MI LOC) A-1+ 2,000,000
------------------------------------------------------------------------
6,000,000 Scottsville, KY, 4.45% TOBs (Sumitomo Electric Wiring Systems)/(Sumitomo
Bank Ltd., Osaka LOC), Optional Tender 11/1/1995 A-1 6,000,000
------------------------------------------------------------------------ --------------
Total 28,205,000
------------------------------------------------------------------------ --------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
LOUISIANA--1.3%
------------------------------------------------------------------------
$ 6,000,000 East Baton Rouge, LA, Mortgage Finance Authority, Single Family Mortgage
Revenue Bonds (Series 1994C), 5.00% TOBs (United States Treasury COL),
Mandatory Tender 6/15/1995 MIG1 $ 6,000,000
------------------------------------------------------------------------ --------------
MARYLAND--3.2%
------------------------------------------------------------------------
5,760,000 Anne Arundel County, MD, EDRB 4.25% CP (Series 1988)/ (Baltimore Gas &
Electric Co.), Mandatory Tender 7/20/1995 A-1 5,760,000
------------------------------------------------------------------------
1,000,000 Baltimore County, MD, Revenue Bonds (1994 Issue) Weekly VRDNs (Direct
Marketing Associates, Inc. Facility)/(First National Bank of Maryland,
Baltimore LOC) A-1 1,000,000
------------------------------------------------------------------------
3,645,000 Baltimore, MD, Weekly VRDNs (Series 1988)/(Cherill Associated
Facility)/(Nationsbank of Maryland, N.A. LOC) P-1 3,645,000
------------------------------------------------------------------------
4,000,000 Wicomico County, MD, EDRB Weekly VRDNs (Series 1994)/ (Field Container
Co. L.P.)/(Northern Trust Co., Chicago, IL LOC) A-1+ 4,000,000
------------------------------------------------------------------------ --------------
Total 14,405,000
------------------------------------------------------------------------ --------------
MASSACHUSETTS--4.0%
------------------------------------------------------------------------
8,000,000 Gloucester, MA, 4.33% BANs, 9/22/1995 NR(4) 8,000,693
------------------------------------------------------------------------
4,000,000 Springfield, MA , 4.75% BANs (Fleet National Bank, Providence, R.I.
Guaranty), 8/4/1995 P-1 4,003,039
------------------------------------------------------------------------
2,485,000 Taunton, MA, IDR Weekly VRDNs (CD Realty Trust 1X Project-1985)/(CD
Realty Trust 1x Project-1985 Issue)/(Fleet Bank of Maine, Portland LOC) A-1 2,485,000
------------------------------------------------------------------------
3,245,000 Worcester, MA, 5.00% BANs, 8/31/1995 NR(4) 3,249,657
------------------------------------------------------------------------ --------------
Total 17,738,389
------------------------------------------------------------------------ --------------
MICHIGAN--4.1%
------------------------------------------------------------------------
1,700,000 Bedford Township, MI, Economic Develpment Corp., EDRB Weekly VRDNs
(Series 1985)/(Form-Tech Steel Inc. Project)/ (Society National Bank,
Cleveland, OH LOC) P-1 1,700,000
------------------------------------------------------------------------
6,835,000 Michigan State, Strategic Fund Weekly VRDNs (Series 1991)/ (AGA Gas,
Inc.)/(Svenska Handelsbanken, Inc. LOC) P-1 6,835,000
------------------------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
MICHIGAN--CONTINUED
------------------------------------------------------------------------
$ 5,300,000 Michigan State, Strategic Fund Weekly VRDNs (Tesco Engineering)/(Bank of
Tokyo Ltd., Tokyo LOC) P-1 $ 5,300,000
------------------------------------------------------------------------
2,000,000 Michigan State, Strategic Fund Weekly VRDNs Variable Rate Demand Limited
Obligation Revenue Bonds (Series 1994)/ (Tesco Engineering)/(Bank of
Tokyo Ltd., Tokyo LOC) VMIG1 2,000,000
------------------------------------------------------------------------
1,075,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds Weekly VRDNs
(Series 1995)/(RSR Project)/(Old Kent Bank & Trust Co., Grand Rapids
LOC) P-1 1,075,000
------------------------------------------------------------------------
1,500,000 Michigan Strategic Fund, Obligation Revenue Bonds Weekly VRDNs (Series
1995)/(Rowe Thomas Company Project)/ (Comerica Bank, Detroit, MI LOC) P-1 1,500,000
------------------------------------------------------------------------ --------------
Total 18,410,000
------------------------------------------------------------------------ --------------
MINNESOTA--2.2%
------------------------------------------------------------------------
5,280,000 Byron, MN, IDB Weekly VRDNs (Schmidt Printing)/ (Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 5,280,000
------------------------------------------------------------------------
700,000 Minnesota State Higher Education Coordinating Board, (Series 1992A)
Weekly VRDNs (First Bank, N.A. Minneapolis LIQ) P-1 700,000
------------------------------------------------------------------------
925,000 Plymouth, MN Weekly VRDNs (Nuaire, Inc.)/(Norwest Bank Minnesota,
Minneapolis LOC) P-1 925,000
------------------------------------------------------------------------
3,025,000 St. Paul, MN, Port Authority Weekly VRDNs (H.M. Smyth Co.,
Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) A-1+ 3,025,000
------------------------------------------------------------------------ --------------
Total 9,930,000
------------------------------------------------------------------------ --------------
MISSISSIPPI--1.7%
------------------------------------------------------------------------
2,000,000 Mississippi Business Finance Corp. Weekly VRDNs (O'Neal Steel,
Inc.)/(SouthTrust Bank of Alabama, Birmingham LOC) P-1 2,000,000
------------------------------------------------------------------------
2,925,000 Mississippi Business Finance Corp., IDRB Weekly VRDNs (Series
1994)/(Flexsteel Industries, Inc.)/(Norwest Bank Minnesota, Minneapolis
LOC) A-1+ 2,925,000
------------------------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
MISSISSIPPI--CONTINUED
------------------------------------------------------------------------
$ 2,700,000 Olive Branch, MS, Weekly VRDNs (Series 1986)/(First Union National Bank,
Charlotte, N.C.)/(First Union National Bank, Charlotte, N.C. LOC) VMIG1 $ 2,700,000
------------------------------------------------------------------------ --------------
Total 7,625,000
------------------------------------------------------------------------ --------------
MISSOURI--0.3%
------------------------------------------------------------------------
1,125,000 Missouri Export & Infrastructure Board Weekly VRDNs (Ex-L-Tube,
Inc.)/(Norwest Bank Minnesota, Minneapolis LOC) P-1 1,125,000
------------------------------------------------------------------------ --------------
MONTANA--1.6%
------------------------------------------------------------------------
2,000,000 Forsyth, Rosebud County, MT, PCR Daily VRDNs (Pacificorp)/(Mitsubishi
Bank Ltd, Tokyo LOC) P-1 2,000,000
------------------------------------------------------------------------
5,075,000 Montana State Board of Housing, Single Family Mortgage 4.625% TOBs
(Series 1990-C)/(FHA Insured)/(Meridian Bank, Reading, PA LIQ), Optional
Tender 10/1/1995 NR(1) 5,075,000
------------------------------------------------------------------------ --------------
Total 7,075,000
------------------------------------------------------------------------ --------------
NEBRASKA--1.3%
------------------------------------------------------------------------
5,600,000 Douglas County, NE, Weekly VRDNs (Series 1991)/(Malhove, Inc.)/(Norwest
Bank Minnesota, Minneapolis LOC) A-1+ 5,600,000
------------------------------------------------------------------------ --------------
NEW HAMPSHIRE--6.4%
------------------------------------------------------------------------
4,350,000 New Hampshire Business Finance Authority PCR 4.15% CP (Series A)/(New
England Power Co.), Mandatory Tender
10/18/1995 A-1 4,350,000
------------------------------------------------------------------------
7,000,000 New Hampshire Business Finance Authority PCR 4.15% CP (Series A)/(New
England Power Co.), Mandatory Tender
10/19/1995 A-1 7,000,000
------------------------------------------------------------------------
2,400,000 New Hampshire Business Finance Authority, PCR 4.20% CP (Series A)/(New
England Power Co.), Mandatory Tender
10/18/1995 A-1 2,400,000
------------------------------------------------------------------------
8,000,000 New Hampshire Business Finance Authority, PCR 4.20% CP (Series A)/(New
England Power Co.), Mandatory Tender
7/25/1995 A-1 8,000,000
------------------------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
NEW HAMPSHIRE--CONTINUED
------------------------------------------------------------------------
$ 6,650,000 New Hampshire Business Finance Authority, PCR 4.35% (Series A)/(New
England Power Co.), Mandatory Tender
7/21/1995 A-1 $ 6,650,000
------------------------------------------------------------------------ --------------
Total 28,400,000
------------------------------------------------------------------------ --------------
NEW JERSEY--2.0%
------------------------------------------------------------------------
7,000,000 Hudson County, NJ, 4.55% BANs, 10/11/1995 NR(4) 7,003,630
------------------------------------------------------------------------
2,000,000 New Jersey HMFA 4.45% TOBs (Series 1989-D)/(MBIA Insured)/(Citibank, NA
LIQ), Optional Tender 10/1/1995 NR(1) 2,000,132
------------------------------------------------------------------------ --------------
Total 9,003,762
------------------------------------------------------------------------ --------------
NEW YORK--3.2%
------------------------------------------------------------------------
4,000,000 Central Islip, NY, Union Free School District, 4.50% TANs,
6/30/1995 NR 4,001,526
------------------------------------------------------------------------
6,300,000 Niagara County, NY, IDA, Solid Waste Disposal Facility Revenue Bonds
(Series 1994B), 4.50% CP (American Ref-Fuel Company)/(Air Products &
Chemicals, Inc. and Browning-Ferris Industries, Inc. GTDs), Mandatory
Tender 9/12/1995 A-1 6,300,000
------------------------------------------------------------------------
4,000,000 Plainview-Old Bethpage, NY, 4.50% TANs, 6/30/1995 NR 4,001,438
------------------------------------------------------------------------ --------------
Total 14,302,964
------------------------------------------------------------------------ --------------
NORTH CAROLINA--1.7%
------------------------------------------------------------------------
1,825,000 Guilford County, NC, Industrial Facilities & Pollution Control Financing
Authority Weekly VRDNs (Series 1989)/ (Culp, Inc.)/(Wachovia Bank of NC,
NA, Winston-Salem LOC) P-1 1,825,000
------------------------------------------------------------------------
5,600,000 Wilson County, NC, PCA Weekly VRDNs (Series 1994)/ (Granutec,
Inc.)/(Branch Banking & Trust Co, Wilson LOC) P-1 5,600,000
------------------------------------------------------------------------ --------------
Total 7,425,000
------------------------------------------------------------------------ --------------
NORTH DAKOTA--1.5%
------------------------------------------------------------------------
6,500,000 Fargo, ND, Variable Rate Demand IDRB Weekly VRDNs (Series
1994)/(Pan-O-Gold Baking Co. Project)/(Norwest Bank Minnesota,
Minneapolis LOC) A-1+ 6,500,000
------------------------------------------------------------------------ --------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
OHIO--1.4%
------------------------------------------------------------------------
$ 400,000 Defiance County, OH, IDR Weekly VRDNs (Dietrich Industries, Inc.)/(PNC
Bank, N.A. LOC) A-1 $ 400,000
------------------------------------------------------------------------
6,000,000 Ohio State Air Quality Development Authority, 4.25% TOBs (Series
C)/(Ohio Edison Co.)/(Barclays Bank PLC, London LOC), Optional Tender
9/1/1995 A-1+ 6,000,000
------------------------------------------------------------------------ --------------
Total 6,400,000
------------------------------------------------------------------------ --------------
OKLAHOMA--4.5%
------------------------------------------------------------------------
2,300,000 Adair County, OK, IDA Weekly VRDNs (Series B)/(Baldor Electric
Co.)/(Wachovia Bank of NC, NA, Winston-Salem LOC) P-1 2,300,000
------------------------------------------------------------------------
8,000,000 Broken Arrow, OK, EDA Weekly VRDNs (Blue Bell Creameries)/(Banque
Nationale de Paris LOC) VMIG1 8,000,000
------------------------------------------------------------------------
5,700,000 Oklahoma Development Finance Authority, 4.85% TOBs (Simmons Poultry
Farms)/(Bayerische Vereinsbank AG, Munich LOC), Optional Tender 8/1/1995 P-1 5,700,000
------------------------------------------------------------------------
4,000,000 Southeastern Oklahoma Industries Authority Weekly VRDNs (Weyerhaeuser
Co.) A-1 4,000,000
------------------------------------------------------------------------ --------------
Total 20,000,000
------------------------------------------------------------------------ --------------
PENNSYLVANIA--6.7%
------------------------------------------------------------------------
6,825,000 Carbon County, PA, IDA 4.20% CP Resource Recovery Bonds (Panther
Creek)/(National Westminster Bank, PLC, London LOC), Mandatory Tender
7/26/1995 A-1+ 6,825,000
------------------------------------------------------------------------
6,100,000 Pennsylvania EDA Weekly VRDNs (Series 1990B)/(Gutchess Hardwoods
Project)/(Fleet Bank of New York LOC) 6,100,000
------------------------------------------------------------------------
2,375,000 Pennsylvania EDA Weekly VRDNs (Stone and Lime Co.)/ (PNC Bank, N.A. LOC) P-1 2,375,000
------------------------------------------------------------------------
700,000 Pennsylvania EDA Weekly VRDNs (Tamaqua Cable Company)/(PNC Bank, N.A.
LOC) P-1 700,000
------------------------------------------------------------------------
3,425,000 Pennsylvania EDA Weekly VRDNs (Walnut And Craig)/ (PNC Bank, N.A. LOC) P-1 3,425,000
------------------------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
PENNSYLVANIA--CONTINUED
------------------------------------------------------------------------
$ 5,000,000 Philadelphia, PA, IDA, 4.00% TOBs (Suite Hotel)/(First National Bank of
Boston, MA LOC), Mandatory Tender
6/1/1995 P-1 $ 5,000,000
------------------------------------------------------------------------
5,500,000 Philadelphia, PA, IDA, 4.25% TOBs (Suite Hotel)/(First National Bank of
Boston, MA LOC), Mandatory Tender
6/1/1996 P-1 5,500,000
------------------------------------------------------------------------ --------------
Total 29,925,000
------------------------------------------------------------------------ --------------
RHODE ISLAND--2.0%
------------------------------------------------------------------------
5,750,000 Rhode Island Housing & Mortgage Finance Corp, Homeownership Opportunity
Bonds 4.40% TOBs (Series
17-C), 4.40% TOBs (Bayerische Landesbank Girozentrale
LOC), Mandatory Tender 2/1/1996 A-1+ 5,750,000
------------------------------------------------------------------------
2,950,000 Rhode Island Public Transit Authority, 5.25% RANs (Series 1994),
7/6/1995 MIG2 2,951,762
------------------------------------------------------------------------ --------------
Total 8,701,762
------------------------------------------------------------------------ --------------
SOUTH CAROLINA--0.4%
------------------------------------------------------------------------
1,990,000 Dorchester County, SC, IDB Weekly VRDNs (LG Industries of South
Carolina)/(Meridian Bank, Reading, PA LOC) P-1 1,990,000
------------------------------------------------------------------------ --------------
TENNESSEE--2.3%
------------------------------------------------------------------------
2,310,000 Cocke County, TN, IDB Weekly VRDNs (Series 1988)/(GLI, Inc.)/(Sanwa Bank
Ltd, Osaka LOC) P-1 2,310,000
------------------------------------------------------------------------
8,000,000 Roane, TN, IDB Solid Waste Disposal Revenue Bonds 4.85% TOBs (Series
1990A)/(Horsehead Resource Development, Inc.)/(Long Term Credit Bank of
Japan Ltd, Tokyo LOC), Mandatory Tender 11/1/1995 A-2 8,000,000
------------------------------------------------------------------------ --------------
Total 10,310,000
------------------------------------------------------------------------ --------------
TEXAS--1.9%
------------------------------------------------------------------------
3,300,000 San Antonio, TX, IDA Weekly VRDNs (Colin Medical Instruments
Corp.)/(Sanwa Bank Ltd, Osaka LOC) A-1+ 3,300,000
------------------------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
TEXAS--CONTINUED
------------------------------------------------------------------------
$ 5,000,000 San Antonio, TX, Special Facilities Airport Revenue Bonds Weekly VRDNs
(Series 1995)/(Cessna Aircraft Company Project)/(Nationsbank of Texas,
N.A. LOC) A-1 $ 5,000,000
------------------------------------------------------------------------ --------------
Total 8,300,000
------------------------------------------------------------------------ --------------
VIRGINIA--6.7%
------------------------------------------------------------------------
800,000 Alexandria, VA, Redevelopment and Housing Authority Weekly VRDNs
(Crystal City Apartments)/(Safeco Insurance Co. of America
INS)/(Sumitomo Bank Ltd., Osaka LIQ) A-1 800,000
------------------------------------------------------------------------
1,900,000 Chesapeake, VA, IDA, Weekly VRDNs (Series 1986)/(Volvo Auto Receivables
1992-B)/(Union Bank of Switzerland, Zurich LOC) P-1 1,900,000
------------------------------------------------------------------------
1,600,000 Franklin County, VA, IDA Weekly VRDNs (American Graphics)/(Nationsbank
of Virginia, N.A. LOC) 1,600,000
------------------------------------------------------------------------
3,000,000 Halifax County, VA, IDA, MMMs, PRC, 4.25% CP (Virginia Electric Power
Co.), Mandatory Tender 7/19/1995 A-1 3,000,000
------------------------------------------------------------------------
3,830,000 Henrico County, VA, IDA, Industrial Development Revenue Bonds Weekly
VRDNs (Series 1994)/(Gravure Packaging Project)/(First Union National
Bank, Charlotte, N.C. LOC) P-1 3,830,000
------------------------------------------------------------------------
2,400,000 Richmond, VA, Redevelopment & Housing Authority, Weekly VRDNs (Series
B-1)/(Richmond, VA Red Tabacco Row)/(Bayerische Landesbank Girozentrale
LOC) VMIG1 2,400,000
------------------------------------------------------------------------
1,500,000 Richmond, VA, Redevelopment & Housing Authority, Weekly VRDNs (Series
B-3)/(Richmond, VA Red Tabacco Row)/(Bayerische Landesbank Girozentrale
LOC) VMIG1 1,500,000
------------------------------------------------------------------------
3,160,000 Richmond, VA, Redevelopment & Housing Authority, Weekly VRDNs (Series
B-5)/(Richmond, VA Red Tabacco Row)/(Bayerische Landesbank Girozentrale
LOC) VMIG1 3,160,000
------------------------------------------------------------------------
3,555,000 Richmond, VA, Redevelopment & Housing Authority, Weekly VRDNs (Series
B-8)/(Richmond, VA Red Tabacco Row)/(Bayerische Landesbank Girozentrale
LOC) VMIG1 3,555,000
------------------------------------------------------------------------
</TABLE>
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL CREDIT
AMOUNT RATING* VALUE
<C> <S> <C> <C>
- ------------ ------------------------------------------------------------------------ --------- --------------
SHORT-TERM MUNICIPAL SECURITIES--CONTINUED
- --------------------------------------------------------------------------------------
VIRGINIA--CONTINUED
------------------------------------------------------------------------
$ 6,000,000 Richmond, VA, Redevelopment & Housing Authority, Weekly VRDNs (Series
B-9)/(Richmond, VA Red Tabacco Row)/(Bayerische Landesbank Girozentrale
LOC) VMIG1 $ 6,000,000
------------------------------------------------------------------------
2,230,000 Virginia Beach, VA, Development Authority, Weekly VRDNs (Series
1993)/(Ocean Ranch Motel Corp.)/(Nationsbank of Virginia, N.A. LOC) A-1 2,230,000
------------------------------------------------------------------------ --------------
Total 29,975,000
------------------------------------------------------------------------ --------------
WISCONSIN--3.5%
------------------------------------------------------------------------
2,780,000 Marshfield, WI, IDR Weekly VRDNs (Series 1993)/(Building Systems,
Inc.)/(Bank One, Milwaukee, WI N.A. LOC) P-1 2,780,000
------------------------------------------------------------------------
1,200,000 Shell Lake, WI Weekly VRDNs (Doboy Packaging)/(Union Bank of
Switzerland, Zurich LOC) P-1 1,200,000
------------------------------------------------------------------------
2,200,000 Waukesha, WI, Adjustable Rate IDRB Weekly VRDNs (Series 1995)/(Weldall
Manufacturing Inc. Project)/(Bank One, Milwaukee, WI N.A. LOC) P-1 2,200,000
------------------------------------------------------------------------
9,210,000 Wisconsin Housing & Economic Development Authority, 4.625% TOBs (Series
B)(FSA Insured)/(Meridian Bank, Reading, PA LIQ), Optional Tender
6/1/1995 NR(1) 9,210,000
------------------------------------------------------------------------ --------------
Total 15,390,000
------------------------------------------------------------------------ --------------
TOTAL INVESTMENTS (AT AMORTIZED COST)(A) $ 441,236,314
------------------------------------------------------------------------ --------------
</TABLE>
* See Notes to Portfolio of Investments on page 17. Current credit ratings are
unaudited.
Note: The categories of investments are shown as a percentage of net assets
($445,163,800) at May 31, 1995.
(a) Also represents cost for federal tax purposes.
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
The following abbreviation(s) are used throughout this portfolio:
AMT--Alternative Minimum Tax
BANs--Bond Anticipation Notes
COL--Collateralized
CP--Commercial Paper
EDA--Economic Development Authority
EDR--Economic Development Revenue
EDRB--Economic Development Revenue Bonds
FGIC--Financial Guaranty Insurance Company
FHA--Federal Housing Administration
FSA--Financial Security Assurance
GNMA--Government National Mortgage Association
GTD--Guaranty
HFA--Housing Finance Authority
IDA--Industrial Development Authority
IDB--Industrial Development Bond
IDR--Industrial Development Revenue
IDRB--Industrial Development Revenue Bonds
LIQ--Liquidity Agreement
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance
MMMs--Money Market Municipals
PCA--Pollution Control Authority
PCR--Pollution Control Revenue
RANs--Revenue Anticipation Notes
SFM--Single Family Mortgage
TANs--Tax Anticipation Notes
TOBs--Tender Option Bonds
TRANs--Tax and Revenue Anticipation Notes
VRDNs--Variable Rate Demand Notes
(See Notes which are an integral part of the Financial Statements.)
MUNICIPAL CASH SERIES
NOTES TO PORTFOLIO OF INVESTMENTS
(UNAUDITED)
- --------------------------------------------------------------------------------
STANDARD AND POOR'S CORPORATION MUNICIPAL BOND RATINGS
AAA Debt rated "AAA" has the highest rating assigned by Standard & Poor's
Corporation. Capacity to pay interest and repay principal is extremely
strong.
AA Debt rated "AA" has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
A Debt rated "A" has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than debt in higher rated
categories.
BBB Debt rated "BBB" is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal
for debt in this category than in higher rated categories.
NR NR indicates that no public rating has been requested, that there is
insufficient information on which to base a rating, or that S&P does not
rate a particular type of obligation as a matter of policy.
Plus (+) or minus (-): The ratings from AA to "BBB" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.
MOODY'S INVESTORS SERVICE, INC. MUNICIPAL BOND RATINGS
Aaa Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as
"gilt edged." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such
issues.
Aa Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the AAA group they comprise what are generallv known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in AAA securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in AAA securities.
A Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be
present which suggest a susceptibility to impairment sometime in the future.
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
Baa Bonds which are rated Baa are considered medium grade obligations, (i.e.
they are neither highly protected nor poorly secured.) Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well.
NR Not rated by Moody's.
Moody's applies numerical modifiers, 1, 2 and 3 in each generic rating
classification from AA through BAA in its corporate or municipal bond rating
system. The modifier 1 indicates that the security ranks in the higher end of
its generic rating category; the modifier 2 indicates a mid-range ranking;
and the modifier 3 indicates that the issue ranks in the lower end of its
generic rating category; and the modifier 4 indicates that the issue ranks in
the lowest end of its generic rating category.
STANDARD & POOR'S CORPORATION MUNICIPAL NOTE RATINGS
SP-1 Very strong or strong capacity to pay principal and interest. Those issues
determined to possess overwhelming safety characteristics will be given a
plus (+) designation.
SP-2 Satisfactory capacity to pay principal and interest.
MOODY'S INVESTORS SERVICE, INC. SHORT-TERM LOAN RATINGS
MIG1/VMIG1 This designation denotes best quality. There is a present strong
protection by established cash flows, superior liquidity support or
demonstrated broadbased access to the market for refinancing.
MIG2/VMIG2 This designation denotes high quality. Margins of protection are
ample although not so large as in the preceding group.
FITCH INVESTOR'S SERVICE, INC. SHORT-TERM DEBT RATINGS
F-1 VERY STRONG CREDIT QUALITY. Issues assigned this rating reflect an assurance
for timely payment only slightly less in degree than issues rated F-1+.
F-2 GOOD CREDIT QUALITY. Issuers carrying this rating have a satisfactory degree
of assurance for timely payment, but the margin of safety is not as great as
the F-1+ and F-1 categories.
STANDARD AND POOR'S CORPORATION COMMERCIAL PAPER RATINGS
A-1 This highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus (+) sign designation.
A-2 Capacity for timely payment on issues with this designation is satisfactory.
However, the relative degree of safety is not as high as for issues
designated A-1.
MUNICIPAL CASH SERIES
- --------------------------------------------------------------------------------
MOODY'S INVESTORS SERVICE, INC. COMMERCIAL PAPER RATINGS
PRIME-1 Issuers rated PRIME-1 (or related supporting institutions) have a
superior capacity for repayment of short-term promissory obligations.
PRIME-1 repayment capacity will normally be evidenced by the following
characteristics:
Leading market positions in well established industries.
High rates of return on funds employed.
Conservative capitalization structure with moderate reliance on debt
and ample asset protection.
Broad margins in earning coverage of fixed financial charges and high
internal cash generation.
Well-established access to a range of financial markets and assured
sources of alternate liquidity.
PRIME-2 Issuers rated PRIME-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will
normally be evidenced by many of the characteristics cited above but to
a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while
still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained.
MUNICIPAL CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- -------------------------------------------------------------------------------------------------
Investments in securities, at amortized cost and value $ 441,236,314
- -------------------------------------------------------------------------------------------------
Cash 2,527,405
- -------------------------------------------------------------------------------------------------
Income receivable 4,100,927
- -------------------------------------------------------------------------------------------------
Receivable for investments sold 3,588,712
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 151,327
- ------------------------------------------------------------------------------------------------- --------------
Total assets 451,604,685
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for investments purchased $ 5,500,000
- -----------------------------------------------------------------------------------
Payable for shares redeemed 384,634
- -----------------------------------------------------------------------------------
Income distribution payable 336,685
- -----------------------------------------------------------------------------------
Accrued expenses 219,566
- ----------------------------------------------------------------------------------- ------------
Total liabilities 6,440,885
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 445,163,800 shares outstanding $ 445,163,800
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($445,163,800 / 445,163,800 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 19,662,320
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee $ 2,619,462
- -------------------------------------------------------------------------------------
Administrative personnel and services fee 396,587
- -------------------------------------------------------------------------------------
Custodian fees 132,236
- -------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 249,302
- -------------------------------------------------------------------------------------
Directors'/Trustees' fees 6,672
- -------------------------------------------------------------------------------------
Auditing fees 13,050
- -------------------------------------------------------------------------------------
Legal fees 12,902
- -------------------------------------------------------------------------------------
Portfolio accounting fees 43,940
- -------------------------------------------------------------------------------------
Distribution services fee 523,892
- -------------------------------------------------------------------------------------
Shareholder services fee 1,309,731
- -------------------------------------------------------------------------------------
Share registration costs 36,449
- -------------------------------------------------------------------------------------
Printing and postage 31,885
- -------------------------------------------------------------------------------------
Insurance premiums 12,877
- -------------------------------------------------------------------------------------
Taxes 59,809
- -------------------------------------------------------------------------------------
Miscellaneous 6,142
- ------------------------------------------------------------------------------------- ------------
Total expenses 5,454,936
- -------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 264,144
- ------------------------------------------------------------------------------------- ------------
Net expenses 5,190,792
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 14,471,528
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1995 1994
INCREASE (DECREASE) IN NET ASSETS:
- ----------------------------------------------------------------------------
OPERATIONS--
- ----------------------------------------------------------------------------
Net investment income $ 14,471,528 $ 9,901,308
- ---------------------------------------------------------------------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- ----------------------------------------------------------------------------
Distributions from net investment income (14,471,528) (9,901,308)
- ---------------------------------------------------------------------------- ----------------- -----------------
SHARE TRANSACTIONS--
- ----------------------------------------------------------------------------
Proceeds from sale of Shares 2,187,590,706 2,785,140,041
- ----------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of distributions
declared 12,592,729 8,586,674
- ----------------------------------------------------------------------------
Cost of Shares redeemed (2,329,820,910) (2,675,130,210)
- ---------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from share transactions (129,637,475) 118,596,505
- ---------------------------------------------------------------------------- ----------------- -----------------
NET ASSETS:
- ----------------------------------------------------------------------------
Beginning of period 574,801,275 456,204,770
- ---------------------------------------------------------------------------- ----------------- -----------------
End of period $ 445,163,800 $ 574,801,275
- ---------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Deloitte & Touche LLP, Independent Auditors,
on page 27.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991 1990(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- -----------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- -----------------------------------------------
Net investment income 0.03 0.02 0.03 0.04 0.05 0.04
- ----------------------------------------------- --------- --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
- -----------------------------------------------
Distributions from net investment income (0.03) (0.02) (0.03) (0.04) (0.05) (0.04)
- ----------------------------------------------- --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ----------------------------------------------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 2.84% 1.83% 2.11% 3.53% 5.24% 4.68%
- -----------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- -----------------------------------------------
Expenses 0.99% 0.99% 0.99% 0.98% 0.94% 0.73%(c)
- -----------------------------------------------
Net investment income 2.76% 1.81% 2.10% 3.42% 5.02% 5.76%(c)
- -----------------------------------------------
Expense waiver/reimbursement (d) 0.05% 0.06% 0.03% 0.03% 0.17% 0.45%(c)
- -----------------------------------------------
SUPPLEMENTAL DATA
- -----------------------------------------------
Net assets, end of period
(000 omitted) $445,164 $574,801 $456,205 $516,814 $403,151 $195,897
- -----------------------------------------------
</TABLE>
(a) Reflects operations for the period from August 25, 1989 (date of initial
public investment) to May 30, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
MUNICIPAL CASH SERIES
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Corporation consists of three diversified portfolios and
one non-diversified portfolio (Municipal Cash Series). The financial statements
included herein present only those of Municipal Cash Series (the "Fund"). The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At May 31, 1995, there were 12,500,000,000 shares of $0.001 par value capital
stock authorized. Capital paid-in aggregated $445,163,800. Transactions in
capital stock were as follows:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1995 1994
Shares sold 2,187,590,706 2,785,140,041
- ------------------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 12,592,729 8,586,674
- ------------------------------------------------------------------------------
Shares redeemed (2,329,820,910) (2,675,130,210)
- ------------------------------------------------------------------------------ ---------------- ----------------
Net change resulting from capital stock transactions (129,637,475) 118,596,505
- ------------------------------------------------------------------------------ ---------------- ----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive a portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp., ("FSC") the principal distributor, from
the net assets of the Fund to finance activities intended to result in the sale
of the Fund's shares. The Plan provides that the Fund may incur distribution
expenses up to .35 of 1% of the average daily net assets, annually, to reimburse
FSC.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services, ("FSS") the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to obtain
certain services for shareholders and to maintain the shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company, ("FServ") serves as transfer and dividend disbursing agent for
the Fund. This fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records.
The fee is based on the level of the Fund's average daily net assets for the
period plus, out-of-pocket expenses.
INTERFUND TRANSACTIONS--During the fiscal year ended May 31, 1995, the Fund
engaged in purchase and sale transactions at current market value with funds
that have a common investment adviser
(or affiliated investment advisers), common Directors/Trustees, and/or common
Officers. These transactions were made at current market value pursuant to Rule
17a-7 under the Act amounting to $571,905,000 and $723,270,000, respectively.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Directors of
CASH TRUST SERIES, INC. and Shareholders of
MUNICIPAL CASH SERIES:
We have audited the accompanying statement of assets and liabilities of
Municipal Cash Series (one of the portfolios comprising Cash Trust Series,
Inc.), including the portfolio of investments, as of May 31, 1995, the related
statement of operations for the year then ended, the statement of changes in net
assets for the years ended May 31, 1995 and 1994, and the financial highlights
for each of the years in the six-year period ended May 31, 1995. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of May
31, 1995, by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Municipal Cash
Series as of May 31, 1995, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
July 14, 1995
TRUSTEES OFFICERS
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other governmental agency. Investment in mutual funds involves risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded
or accompanied by the fund's prospectus which contains facts concerning its
objective and policies, management fees, expenses and other information.
- ----------------------------------------------------------------------------
PRIME
- ----------------------------------------------------------------------------
CASH
- ----------------------------------------------------------------------------
PRIME
- ----------------------------------------------------------------------------
SERIES
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
ANNUAL REPORT
TO SHAREHOLDERS
MAY 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
--------------------------
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 147551105
0062904 (7/95)
PRESIDENT'S MESSAGE
- -------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders of Prime Cash
Series, which covers the twelve-month period ended May 31, 1995. The report
contains commentary by the portfolio manager, followed by a complete list of
the fund's investments on the last day of the reporting period, and the
financial statement.
Prime Cash Series continues to help your cash earn daily income, while giving
you the additional advantages of daily liquidity and stability of principal.*
The fund invests in high quality, short-term securities. At the end of the
reporting period, the portfolio was invested primarily in commercial paper and
variable rate obligations. It also held positions in repurchase agreements, as
well as a certificate of deposit and short-term notes.
Dividends paid to shareholders during the reporting period totaled $40.5
million, or $0.05 per share. At the end of the reporting period, the fund's
net assets reached the $1 billion mark.
As always, we thank you for using Prime Cash Series as a convenient way to
pursue daily income. Please contact your investment representative if you have
any questions. We look forward to keeping you up to date on your investment.
Sincerely,
[LOGO]
Richard B. Fisher President
July 15, 1995
* No money market mutual fund can guarantee that a stable net asset value will
be maintained. An investment in the fund is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
- -------------------------------------------------------------------------------
Prime Cash Series invests exclusively in money market instruments maturing in
thirteen months or less. The average maturity of these securities, computed on
a dollar-weighted basis, is restricted to 90 days or less. Portfolio
securities must be rated in one of the two highest short-term rating
categories by one or more of the nationally recognized statistical rating
organizations or be of comparable quality to securities having such ratings.
Typical security types include, but are not limited to, commercial paper,
certificates of deposit, time deposits, variable rate instruments, and
repurchase agreements.
During the reporting period, the Federal Reserve Board (the "Fed") has been in
a restrictive interest rate stance. The Fed tightened monetary policy by
increasing the federal funds target rate from 4.25 percent to 6.00 percent
over the period.
The target average maturity range for Prime Cash Series was in the 30-40 day
range until the end of April, 1995. At that time, the target range was
extended to 35-45 days. This reflects management's bias toward an "on hold"
Fed, given the current pace of economic slowdown. During the past several
months, both the consumer and manufacturing sectors of the economy have
decelerated in reaction to last year's aggressive rate hikes. Consequently,
the money market yield curve has flattened dramatically. Being on the shorter
end of the average maturity spectrum has proven to be helpful over the
reporting period. The Fed has raised short-term rates three times since May
31, 1994. In structuring the fund, there is continued emphasis placed on
positioning 25-30 percent of the fund's assets in variable rate demand notes
and accomplishing a modest barbell structure.
During the twelve months ended May 31, 1995, the net assets of Prime Cash
Series increased from $791.1 to $1,027.1 million while the 7-day net yield
increased from 3.18 percent to 5.28 percent.* The effective average maturity
of the fund on May 31, 1995, was 42 days.
* Performance quoted represents past performance and is not indicative of
future results. Yield will vary.
PRIME CASH SERIES
PORTFOLIO OF INVESTMENTS
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------------- ------------
<S> <C> <C>
CERTIFICATE OF DEPOSIT--0.5%
---------------------------------------------------------------
BANKING--0.5%
---------------------------------------------------
$ 5,000,000 MBNA America Bank, NA, 6.120%, 8/23/1995 $ 5,000,000
---------------------------------------------------
*COMMERCIAL PAPER--60.6%
---------------------------------------------------------------
BANKING--12.6%
---------------------------------------------------
12,000,000 Abbey National N.A. Corp. (Guaranteed by Abbey
National Bank PLC, London), 6.144%, 6/20/1995 11,961,683
---------------------------------------------------
13,000,000 Barclays Bank of Canada, (Guaranteed by Barclays
Bank PLC, London), 6.179%, 6/15/1995 12,969,313
---------------------------------------------------
40,000,000 Canadian Imperial Holdings, Inc., (Guaranteed by
Canadian Imperial Bank of Commerce, Toronto),
5.978%-6.453%, 8/14/1995-8/23/1995 39,477,847
---------------------------------------------------
7,500,000 Commerzbank U.S. Finance, Inc., (Guaranteed by
Commerzbank AG, Frankfurt), 6.708%, 7/3/1995 7,456,667
---------------------------------------------------
13,000,000 Credit Agricole U.S.A., Inc., (Guaranteed by Caisse
Nationale De Credit Agricole Paris), 6.369%,
9/29/1995 12,732,633
---------------------------------------------------
2,000,000 Dresdner US Finance, 6.254%, 11/2/1995 1,948,153
---------------------------------------------------
5,000,000 PEMEX Capital, Inc. (LOC: Swiss Bank), (Swiss Bank
Corp., Basle LOC), 6.113%, 7/20/1995 4,959,031
---------------------------------------------------
10,000,000 PNC Funding Corp., (Guaranteed by PNC Financial
Corp.), 6.047%, 8/24/1995 9,861,167
---------------------------------------------------
18,400,000 Svenska Handelsbanken, Inc., (Guaranteed by Svenska
Handelsbanken, Stockholm), 6.263%-6.270%,
10/16/1995 17,974,265
---------------------------------------------------
10,000,000 Toronto Dominion Holdings (USA), Inc., (Guaranteed 9,873,164
by Toronto-Dominion Bank), 6.027%, 8/17/1995 ------------
---------------------------------------------------
Total 129,213,923
--------------------------------------------------- ------------
CHEMICALS--0.5%
---------------------------------------------------
5,000,000 Air Products & Chemicals, Inc., 6.051%, 8/25/1995 4,929,757
--------------------------------------------------- ------------
DIVERSIFIED--3.8%
---------------------------------------------------
22,000,000 Rockwell International Corp., 6.163%-6.455%,
6/1/1995-9/6/1995 21,831,597
---------------------------------------------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------------- ------------
<S> <C> <C>
*COMMERCIAL PAPER--CONTINUED
---------------------------------------------------------------
DIVERSIFIED--CONTINUED
---------------------------------------------------
$17,000,000 Rockwell International Corp., 6.818%-6.871%, $ 16,976,514
6/5/1995-6/15/1995 ------------
---------------------------------------------------
Total 38,808,111
--------------------------------------------------- ------------
ELECTRICAL EQUIPMENT--0.5%
---------------------------------------------------
5,000,000 Whirlpool Corp., 6.112%, 8/1/1995 4,948,997
--------------------------------------------------- ------------
FINANCE-COMMERCIAL--18.7%
---------------------------------------------------
7,000,000 Alpha Finance Corp., Ltd., 6.720%, 7/25/1995 6,931,750
---------------------------------------------------
10,000,000 Asset Securitization Cooperative Corp., 6.211%,
6/21/1995 9,966,111
---------------------------------------------------
24,500,000 Beta Finance, Inc., 5.993%-6.154%, 6/22/1995-
8/29/1995 24,281,944
---------------------------------------------------
21,000,000 CIESCO, Inc., 6.026%-6.149%, 7/10/1995-8/17/1995 20,788,342
---------------------------------------------------
27,000,000 CIT Group Holdings, Inc., 6.099%-6.270%, 6/27/1995-
11/6/1995 26,635,207
---------------------------------------------------
2,000,000 Corporate Asset Funding Co., Inc. (CAFCO), 6.338%,
9/22/1995 1,961,454
---------------------------------------------------
28,000,000 General Electric Capital Corp., 6.321%-6.513%,
6/5/1995-10/16/1995 27,559,706
---------------------------------------------------
49,000,000 PREFCO-Preferred Receivables Funding Co., 6.094%-
6.194%,
6/7/1995-11/14/1995 48,663,418
---------------------------------------------------
5,000,000 Sheffield Receivables Corp., 6.101%, 8/10/1995 4,941,667
---------------------------------------------------
20,680,000 Whirlpool Financial Corp., 6.145%-6.150%, 20,502,984
7/20/1995-7/24/1995 ------------
---------------------------------------------------
Total 192,232,583
--------------------------------------------------- ------------
FINANCE-RETAIL--15.7%
---------------------------------------------------
12,000,000 Associates Corp. of North America, 6.126%, 6/1/1995 12,000,000
---------------------------------------------------
43,100,000 Budget Funding Corp., 6.036%-6.205%, 6/5/1995-
8/3/1995 42,953,636
---------------------------------------------------
21,300,000 Ford Credit Receivables Funding, Inc., 5.974%-
6.179%,
6/2/1995-8/25/1995 21,150,250
---------------------------------------------------
46,486,000 McKenna Triangle National Corp., 6.037%-6.720%,
6/6/1995-10/2/1995 46,101,889
---------------------------------------------------
38,250,000 New Center Asset Trust, A1+/P1 Series, 6.342%-
6.736%,
7/14/1995-9/15/1995 37,788,764
---------------------------------------------------
2,000,000 New Center Asset Trust, A1/P1 Series, 6.384%, 1,961,141
9/22/1995 ------------
---------------------------------------------------
Total 161,955,680
--------------------------------------------------- ------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
------------ ------------------------------------------------ --------------
<C> <S> <C>
*COMMERCIAL PAPER--CONTINUED
-------------------------------------------------------------
INSURANCE--3.5%
------------------------------------------------
$ 20,000,000 CXC, Inc., 6.151%-6.667%, 6/23/1995-8/3/1995 $ 19,871,238
------------------------------------------------
15,968,000 Prospect Street Senior Portfolio, L.P.,
(Guaranteed by Financial Security Assurance, 15,848,741
Inc.), 6.127%-6.876%, 6/8/1995-10/25/1995 --------------
------------------------------------------------
Total 35,719,979
------------------------------------------------ --------------
MACHINERY, EQUIPMENT, AUTO--1.0%
------------------------------------------------
10,000,000 Eaton Corp., 6.110%, 8/4/1995 9,893,156
------------------------------------------------ --------------
PHARMACEUTICALS AND HEALTH CARE--4.3%
------------------------------------------------
22,000,000 American Home (Foods), Subsidiary, (Guaranteed
by American Home Products Corp.), 6.181%-6.942%,
6/19/1995-7/18/1995 21,860,468
------------------------------------------------
15,000,000 American Home Products Corp., 6.111%-6.770%,
6/12/1995-7/24/1995 14,901,381
------------------------------------------------
8,000,000 Schering Corp., (Guaranteed by Schering Plough 7,901,389
Corp.), 6.455%, 8/11/1995 --------------
------------------------------------------------
Total 44,663,238
------------------------------------------------ --------------
TOTAL COMMERCIAL PAPER 622,365,424
------------------------------------------------ --------------
SHORT-TERM NOTES--1.4%
-------------------------------------------------------------
BANKING--1.0%
------------------------------------------------
10,110,190 Banc One Corp., 6.363%, 4/15/1996 10,110,190
------------------------------------------------ --------------
LEASING--0.4%
------------------------------------------------
3,923,701 Copelco Capital Funding Corp. II Series 1994-A, 3,923,701
6.030%, 10/20/1995 --------------
------------------------------------------------
TOTAL CORPORATE BONDS 14,033,891
------------------------------------------------ --------------
**VARIABLE RATE OBLIGATIONS--32.6%
-------------------------------------------------------------
BANKING--24.2%
------------------------------------------------
2,050,000 Athens-Clarke County, GA, IDA Series 1995-
Barrett Project, (Columbus Bank and Trust Co.,
GA LOC), 6.322%, 6/1/1995 2,050,000
------------------------------------------------
1,175,000 Avalon Hotel Associates, (Meridian Bank,
Reading, PA LOC), 6.257%, 6/1/1995 1,175,000
------------------------------------------------
10,000,000 Azdel, Inc., (PNC Bank, Kentucky LOC), 6.099%,
6/5/1995 10,000,000
------------------------------------------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
---------- --------------------------------------------------- -------------
<C> <S> <C>
**VARIABLE RATE OBLIGATIONS--CONTINUED
--------------------------------------------------------------
BANKING--CONTINUED
---------------------------------------------------
$8,450,000 College-Kent L.P., (Society National Bank,
Cleveland, OH LOC), 6.227%, 6/2/1995 $ 8,450,000
---------------------------------------------------
14,000,000 Congregate Care Corp., (Union Bank LOC), 6.312%,
6/7/1995 14,000,000
---------------------------------------------------
6,300,000 Dewberry III, L.P., (First National Bank of
Maryland, Baltimore LOC), 6.230%, 6/1/1995 6,300,000
---------------------------------------------------
7,900,000 Euclid Superior Parking, (Society National Bank,
Cleveland, OH LOC), 6.227%, 6/2/1995 7,900,000
---------------------------------------------------
11,860,000 HJH Associates of Alabama, Hilton Hotel,
Huntsville, (South Trust Bank of Alabama,
Birmingham LOC), 6.141%, 6/1/1995 11,860,000
---------------------------------------------------
3,150,000 I.D.B. City of Pelham Series 1994-B, (Columbus Bank
and Trust Co., GA LOC), 6.322%, 6/1/1995 3,150,000
---------------------------------------------------
7,465,000 I.D.B. City of Pelham, (Columbus Bank and Trust
Co., GA LOC), 6.322%, 6/1/1995 7,465,000
---------------------------------------------------
3,895,000 I.D.B. Sylacauga, AL, (South Trust Bank of Alabama,
Birmingham LOC), 6.162%, 6/7/1995 3,895,000
---------------------------------------------------
13,000,000 Kentucky Rural Economic Development Authority
(PCI), (PNC Bank, N.A. LOC), 6.199%, 6/5/1995 13,000,000
---------------------------------------------------
4,670,000 M.I.D.F.A.--Genetic Therapy, Inc., (First National
Bank of Maryland, Baltimore LOC), 6.180%, 6/5/1995 4,670,000
---------------------------------------------------
6,200,000 M.I.D.F.A.--Kelly Springfield Tire, (First National
Bank of Maryland, Baltimore LOC), 6.280%, 6/5/1995 6,200,000
---------------------------------------------------
3,500,000 M.I.D.F.A.--Series 1994 Human Genome, (First
National Bank of
Maryland, Baltimore LOC), 6.180%, 6/5/1995 3,500,000
---------------------------------------------------
8,000,000 National Funding Corp., 1994-A, (American National
Bank, Chicago LOC), 6.060%, 6/1/1995 8,000,000
---------------------------------------------------
730,000 New Jersey Economic Development Authority, Series
1992 K-3, (Banque Nationale de Paris LOC), 6.430%,
6/5/1995 730,000
---------------------------------------------------
4,105,000 New Jersey Economic Development Authority, Series
1992-H, (Banque Nationale de Paris LOC) 6.305%,
6/5/1995 4,105,000
---------------------------------------------------
</TABLE>
PRIME CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- --------------------------------------------------- ------------
<S> <C> <C>
**VARIABLE RATE OBLIGATIONS--CONTINUED
---------------------------------------------------------------
BANKING--CONTINUED
---------------------------------------------------
$ 2,225,000 Nichols Research Corp., State Industrial
Development Authority Alabama, (South Trust Bank of
Alabama, Birmingham LOC), 6.152%, 6/2/1995 $ 2,225,000
---------------------------------------------------
35,000,000 PHH/CFC Leasing, Inc., (Societe Generale, Paris
LOC), 6.110%, 6/7/1995 35,000,000
---------------------------------------------------
6,300,000 Pennsylvania Economic Development Finance
Authority, Series 1993-C, (Barclays Bank PLC,
London LOC), 6.172%, 6/1/1995 6,300,000
---------------------------------------------------
20,000,000 (b)SMM Trust, Series 1994-B, (Guaranteed by Morgan
Guaranty Trust Co., New York), 6.205%, 8/11/1995 19,997,773
---------------------------------------------------
30,000,000 (b)SMM Trust, Series 1995-I, (Guaranteed by Morgan
Guaranty Trust Co., New York), 6.083%, 6/1/1995 29,991,339
---------------------------------------------------
6,400,000 Southeast Regional Holdings, LLC Series 1995-A,
(Columbus Bank and Trust Co., GA LOC), 6.322%,
6/1/1995 6,400,000
---------------------------------------------------
3,760,000 Toledo Medical Building I L.P., (Huntington
National Bank, Columbus, OH LOC), 7.020%, 11/1/1995 3,760,000
---------------------------------------------------
19,875,000 Union Development Co., (Bank of America NT and SA,
San Francisco LOC), 6.141%, 6/1/1995 19,875,000
---------------------------------------------------
6,850,000 Van Dyne Crotty Co., (Huntington National Bank,
Columbus, OH LOC), 6.120%, 6/1/1995 6,850,000
---------------------------------------------------
2,113,000 Vista Funding Corp., 1995-A, (Star Bank, NA, 2,113,000
Cincinnati LOC), 6.247%, 6/1/1995 ------------
---------------------------------------------------
Total 248,962,112
--------------------------------------------------- ------------
FINANCE-AUTOMOTIVE--0.8%
---------------------------------------------------
8,500,000 State Industrial Development Authority (Alabama)
Tax Revenue Bonds, Series 1994 (GMC Project), 8,500,000
(General Motors Corp. LOC), 6.372%, 6/1/1995 ------------
---------------------------------------------------
FINANCE-RETAIL--4.2%
---------------------------------------------------
20,000,000 (b)AFS Insurance Premium Receivables Trust Series
1994-A, 6.618%, 6/15/1995 20,000,000
---------------------------------------------------
</TABLE>
PRIME CASH SERIES
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
----------- ------------------------------------------------- --------------
<C> <S> <C>
**VARIABLE RATE OBLIGATIONS--CONTINUED
-------------------------------------------------------------
FINANCE-RETAIL--CONTINUED
-------------------------------------------------
$23,000,000 Carco Auto Loan Master Trust, Series 1993-2, $ 23,000,000
Class A1, 6.135%, 6/15/1995 --------------
-------------------------------------------------
Total 43,000,000
------------------------------------------------- --------------
INSURANCE--3.4%
-------------------------------------------------
22,500,000 Sun Life Insurance Co. of America, 6.213%,
6/1/1995-6/7/1995 22,500,000
-------------------------------------------------
12,500,000 (b)Sun Life Insurance Co. of America, 6.483%, 12,500,000
6/7/1995 --------------
-------------------------------------------------
Total 35,000,000
------------------------------------------------- --------------
TOTAL VARIABLE RATE OBLIGATIONS 335,462,112
------------------------------------------------- --------------
***REPURCHAGE AGREEMENTS--5.1%
-------------------------------------------------------------
26,300,000 Chemical Securities, Inc., 6.125%, dated
5/31/1995, due 6/1/1995 26,300,000
-------------------------------------------------
15,000,000 PaineWebber, Inc., 6.18%, dated 5/31/1995, due
6/1/1995 15,000,000
-------------------------------------------------
700,000 Swiss Bank Corp., New York, 6.15%, dated
5/31/1995, due 6/1/1995 700,000
-------------------------------------------------
10,000,000 S.G. Warburg & Co., Inc, 6.125%, dated 5/31/1995, 10,000,000
due 6/1/1995 --------------
-------------------------------------------------
TOTAL REPURCHASE AGREEMENTS 52,000,000
------------------------------------------------- --------------
TOTAL INVESTMENTS, AT AMORTIZED COST (A) $1,028,861,427
------------------------------------------------- --------------
</TABLE>
The following abbreviations are used throughout this portfolio:
CFC--Cooperative Finance Corporation LOC--Letter of Credit
IDA--Industrial Development AuthorityMIDFA--Mayland Industrial Development
IDB--Industrial Development Board Financing Authority
PLC--Public Limited Company
* Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
** Current rate and next reset date shown.
*** Repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in repurchase agreements are through participation in joint
accounts with other Federated funds.
(a) Also represents cost for federal tax purposes.
(b) Denotes a restricted security which is subject to resale under Federal
Securities laws. This security has been determined to be liquid under
criteria established by the Board of Directors.
Note: The categories of investments are shown as a percentage of net assets
($1,027,083,278) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ----------------------------------------
Investments in securities, at amortized
cost and value $1,028,861,427
- ----------------------------------------
Cash 1,543,033
- ----------------------------------------
Income receivable 1,867,138
- ----------------------------------------
Receivable for shares sold 76,783
- ---------------------------------------- --------------
Total assets 1,032,348,381
- ----------------------------------------
LIABILITIES:
- ----------------------------------------
Payable for shares redeemed $3,105,971
- ----------------------------
Income distribution payable 1,525,685
- ----------------------------
Accrued expenses 633,447
- ---------------------------- -----------
Total liabilities 5,265,103
- ---------------------------------------- --------------
NET ASSETS for 1,027,083,278 shares out- $1,027,083,278
standing --------------
- ----------------------------------------
NET ASSET VALUE, Offering Price and
Redemption Proceeds Per Share:
($1,027,083,278 / 1,027,083,278 shares $1.00
outstanding) --------------
- ----------------------------------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ------------------------------------------------------------------
Interest $49,216,813
- ------------------------------------------------------------------
EXPENSES:
- ------------------------------------------------------------------
Investment advisory fee $ 4,431,610
- -----------------------------------------------------
Administrative personnel and services fee 670,946
- -----------------------------------------------------
Custodian fees 206,390
- -----------------------------------------------------
Transfer agent and dividend disbursing agent fees and
expenses 1,596,192
- -----------------------------------------------------
Directors'/Trustees' fees 10,783
- -----------------------------------------------------
Auditing fees 13,196
- -----------------------------------------------------
Legal fees 198,051
- -----------------------------------------------------
Portfolio accounting fees 59,695
- -----------------------------------------------------
Distribution services fee 833,391
- -----------------------------------------------------
Shareholder services fee 2,215,805
- -----------------------------------------------------
Share registration costs 114,074
- -----------------------------------------------------
Printing and postage 49,926
- -----------------------------------------------------
Insurance premiums 15,426
- -----------------------------------------------------
Taxes 99,187
- -----------------------------------------------------
Miscellaneous 19,073
- ----------------------------------------------------- -----------
Total expenses 10,533,745
- -----------------------------------------------------
Deduct--Waiver of investment advisory fee 1,803,372
- ----------------------------------------------------- -----------
Net expenses 8,730,373
- ------------------------------------------------------------------ -----------
Net investment income $40,486,440
- ------------------------------------------------------------------ -----------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
--------------------------------
1995 1994
--------------- ---------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------
OPERATIONS--
- -------------------------------------------
Net investment income $ 40,486,440 $ 19,909,172
- ------------------------------------------- --------------- ---------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------
Distributions from net investment income (40,486,440) (19,909,172)
- ------------------------------------------- --------------- ---------------
SHARE TRANSACTIONS--
- -------------------------------------------
Proceeds from sale of Shares 4,556,300,176 4,172,769,883
- -------------------------------------------
Net asset value of Shares issued to
shareholders in payment of distributions
declared 37,549,911 18,573,064
- -------------------------------------------
Cost of Shares redeemed (4,357,913,880) (4,197,027,389)
- ------------------------------------------- --------------- ---------------
Change in net assets resulting from share 235,936,207 (5,684,442)
transactions --------------- ---------------
- -------------------------------------------
NET ASSETS:
- -------------------------------------------
Beginning of period 791,147,071 796,831,513
- ------------------------------------------- --------------- ---------------
End of period $ 1,027,083,278 $ 791,147,071
- ------------------------------------------- --------------- ---------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Deloitte & Touche LLP, Independent Auditors,
on page 16.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
-------------------------------------------------------
1995 1994 1993 1992 1991 1990(A)
- ----------------------- ---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE,
BEGINNING OF PERIOD $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
- -----------------------
INCOME FROM INVESTMENT
OPERATIONS
- -----------------------
Net investment income 0.05 0.02 0.03 0.04 0.07 0.06
- ----------------------- ----- ----- ----- ----- ----- -----
LESS DISTRIBUTIONS
- -----------------------
Distributions from net
investment income (0.05) (0.02) (0.03) (0.04) (0.07) (0.06)
- ----------------------- ----- ----- ----- ----- ----- -----
NET ASSET VALUE, END OF $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
PERIOD ----- ----- ----- ----- ----- -----
- -----------------------
TOTAL RETURN (B) 4.60% 2.48% 2.61% 4.37% 6.99% 6.56%
- -----------------------
RATIOS TO AVERAGE NET
ASSETS
- -----------------------
Expenses 0.99% 0.99% 0.99% 0.98% 0.94% 0.73%(c)
- -----------------------
Net investment income 4.57% 2.45% 2.58% 4.21% 6.50% 7.82%(c)
- -----------------------
Expense
waiver/reimbursement
(d) 0.20% 0.18% 0.15% 0.22% 0.44% 0.46%(c)
- -----------------------
SUPPLEMENTAL DATA
- -----------------------
<CAPTION>
Net assets, end of pe-
riod (000 omitted)
- ----------------------- $1,027,083 $791,147 $796,832 $750,016 $562,465 $189,254
</TABLE>
(a) Reflects operations for the period from August 18, 1989 (date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
PRIME CASH SERIES
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
- -------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Corporation consists of three diversified portfolios
and one non-diversified portfolio (Municipal Cash Series). The financial
statements included herein present only those of Prime Cash Series (the
"Fund"). The financial statements of the other portfolios are presented
separately. The assets of each portfolio are segregated and a shareholder's
interest is limited to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's collateral to ensure that the value of collateral at least
equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors. Risks may
arise from the potential inability of counterparties to honor the terms of
the repurchase agreement. Accordingly, the Fund could receive less than the
repurchase price on the sale of collateral securities.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
PRIME CASH SERIES
- -------------------------------------------------------------------------------
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in when-
issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when-issued or delayed
delivery basis are marked to market daily and begin earning interest on the
settlement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At May 31, 1995, there were 12,500,000,000 shares of $0.001 par value capital
stock authorized. Capital paid-in aggregated $1,027,083,278. Transactions in
capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
------------------------------
1995 1994
-------------- --------------
- ----------------------------------------------------------------------------
<S> <C> <C>
Shares sold 4,556,300,176 4,172,769,883
- -------------------------------------------
Shares issued to shareholders in payment of
distributions declared 37,549,911 18,573,064
- -------------------------------------------
Shares redeemed (4,357,913,880) (4,197,027,389)
- ------------------------------------------- -------------- --------------
Net change resulting from capital stock 235,936,207 (5,684,442)
transactions -------------- --------------
- -------------------------------------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser
(the "Adviser"), receives for its services an annual investment advisory fee
equal to .50 of 1% of the Fund's average daily net assets. The Adviser may
voluntarily choose to waive any portion of its fee. The Adviser can modify or
terminate this voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors
for the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the
Fund will reimburse Federated Securities Corp. ("FSC"), the principal
distributor, from the daily net assets of the Fund to finance activities
intended to result in the sale of the Fund's shares. The Plan provides that
the Fund may incur distribution expenses up to .35 of 1% of the average daily
net assets of the shares, annually, to reimburse FSC.
PRIME CASH SERIES
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of the Fund for the period. This fee is to
obtain certain personal services for shareholders and to maintain the
shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records.
The fee is based on the level of the Fund's average daily net assets for the
period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
INDEPENDENT AUDITOR'S REPORT
- -------------------------------------------------------------------------------
To the Board of Directors of CASH TRUST SERIES, INC. and Shareholders of PRIME
CASH SERIES
We have audited the accompanying statement of assets and liabilities of Prime
Cash Series (one of the portfolios comprising Cash Trust Series, Inc.),
including the portfolio of investments, as of May 31, 1995, the related
statement of operations for the year then ended, the statement of changes in
net assets for the years ended May 31, 1995 and 1994 and the financial
highlights for each of the years in the six-year period ended May 31, 1995.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of the
securities owned as of May 31, 1995 by correspondence with the custodian and
brokers; where replies were not received from brokers, we performed other
auditing procedures. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prime Cash Series
as of May 31, 1995, the results of its operations, the changes in its net
assets, and its financial highlights for the respective stated periods in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
July 14, 1995
DIRECTORS OFFICERS
- --------------------------------------------------------------------------------
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis, M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts Charles H. Field
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not
guaranteed by any bank, and are not insured or guaranteed by
the U.S. government, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other
governmental agency. Investment in mutual funds involves risk,
including possible loss of principal. Although money market
funds seek to maintain a stable net asset value of $1.00 per
share, there is no assurance that they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
- -----------------------------------------------------------------------------
TREASURY
- -----------------------------------------------------------------------------
CASH
- -----------------------------------------------------------------------------
SERIES
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
ANNUAL REPORT
- -----------------------------------------------------------------------------
TO SHAREHOLDERS
- -----------------------------------------------------------------------------
MAY 31, 1995
[LOGO] FEDERATED SECURITIES CORP.
Distributor
A subsidiary of FEDERATED INVESTORS
FEDERATED INVESTORS TOWER
PITTSBURGH, PA 15222-3779
Cusip 147551492
2062301 (7/95)
PRESIDENT'S MESSAGE
- --------------------------------------------------------------------------------
Dear Shareholder:
I am pleased to present the Annual Report to Shareholders of Treasury Cash
Series, which covers the twelve-month period ended May 31, 1995. The report
contains commentary by the portfolio manager, followed by a complete list of the
fund's investments on the last day of the reporting period, and the financial
statements.
Treasury Cash Series continues to help your cash earn daily income, while giving
you the additional advantages of daily liquidity and stability of principal.*
The fund invests in some of the most stable investments available, short-term
U.S. Treasury obligations and repurchase agreements backed by these obligations.
Because of their yield advantage, repurchase agreements continued to account for
80.1% of the portfolio at the end of the reporting period.
Dividends paid to shareholders during the reporting period totaled $18.4
million, or $0.04 per share. At the end of the reporting period, the fund's net
assets stood at $424 million.
As always, we thank you for using Treasury Cash Series as a convenient way to
pursue daily income. Please contact your investment representative if you have
any questions. We look forward to keeping you up to date on your investment.
Sincerely,
[LOGO]
Richard B. Fisher
President
July 15, 1995
* No money market mutual fund can guarantee that a stable net asset value will
be maintained. An investment in the fund is neither insured nor guaranteed by
the U.S. government.
INVESTMENT REVIEW
- --------------------------------------------------------------------------------
Treasury Cash Series, which is rated AAAm by Standard & Poor's Ratings Group*
and Aaa by Moody's Investors Service, Inc.*, is invested in direct obligations
of the U.S. Treasury, either in the form of notes and bills or as collateral for
repurchase agreements. Recently, the fund has been managed within an average
maturity target range of 35-45 days.
During the reporting period, the Federal Reserve Board (the "Fed") continued to
tighten monetary policy, raising the federal funds target rate on three separate
occasions, for a total of 125 basis points from 4.25% to the current target rate
of 6%, with the latest move being in early February, 1995. Economic reports
since early in 1995, however, have pointed to a slowing in the growth of the
economy, an indication that the tightenings in monetary policy by the Fed are
taking hold. As a result, market participants now expect the next move from the
Fed to be an easing in monetary policy rather than a tightening.
Short-term interest rates rose from May, 1994, through the end of December,
1994, following the Fed policy tightenings. Since the beginning of the year,
however, rates at the front end of the yield curve have declined as expectations
about the direction and magnitude of future policy adjustments from the Fed
changed. The yield on the three-month Treasury bill began the reporting period
at 4.1% and peaked at 6%, but then declined to 5.8% by the end of May, 1995. The
front end of the yield curve also flattened dramatically over the reporting
period, from a spread of 110 basis points between the three-month Treasury bill
and the one-year Treasury bill to 0 basis points at the end of May, 1995.
Over the reporting period, a yield advantage continued to exist for investments
in repurchase agreements versus direct investments in short-term Treasury
securities. The barbell structure of the fund was maintained over the period,
combining a significant position in overnight repurchase agreements with
Treasury securities with longer maturities of six to twelve months.
The average maturity of the fund was modestly extended over reporting period, as
sentiment about future moves from the Fed altered. Targeted within a 30 to 40
day range throughout most of 1994, the fund extended that range to 35 to 45 days
as yields fell in 1995. The fund maximizes performance through ongoing relative
value analysis.
*Ratings are subject to change.
TREASURY CASH SERIES
PORTFOLIO OF INVESTMENTS
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
SHORT-TERM U.S. TREASURY OBLIGATIONS--20.6%
- -------------------------------------------------------------------------------------------------
(B)U.S. TREASURY BILLS--14.5%
----------------------------------------------------------------------------------
$ 63,000,000 5.295%-6.505%, 7/27/1995--4/4/1996 $ 61,303,849
----------------------------------------------------------------------------------
U.S. TREASURY NOTES--6.1%
----------------------------------------------------------------------------------
26,000,000 3.875%-8.50%, 7/31/1995--3/31/1996 26,008,702
---------------------------------------------------------------------------------- --------------
TOTAL SHORT-TERM U.S. TREASURY OBLIGATIONS 87,312,551
---------------------------------------------------------------------------------- --------------
*REPURCHASE AGREEMENTS--80.1%
- -------------------------------------------------------------------------------------------------
20,000,000 BOT Securities, Inc., 6.15%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 Bear, Stearns & Co., Inc., 6.125%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 BT Securities Inc., 6.18%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
31,800,000 BZW Securities, Inc., 6.18%, dated 5/31/1995, due 6/1/1995 31,800,000
----------------------------------------------------------------------------------
20,000,000 Chase Government Securities, Inc., 6.14%, dated 5/31/1995, due
6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 Daiwa Securities America, Inc., 6.125%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 Deutsche Bank Government Securities, 6.18%, dated 5/31/1995, due
6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 Donaldson, Lufkin & Jenrette Securities Corp., 6.15%, dated
5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 First Chicago Capital Markets, Inc., 6.125%, dated 5/31/1995, due
6/1/1995 20,000,000
----------------------------------------------------------------------------------
15,000,000 Harris, Nesbitt, Thomson Securities, Inc., 6.18%, dated 5/31/1995, due 6/1/1995 15,000,000
----------------------------------------------------------------------------------
20,000,000 HSBC Securities, Inc., 6.18%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
15,000,000 J.P. Morgan Securities, Inc., 6.17%, dated 5/31/1995, due 6/1/1995 15,000,000
----------------------------------------------------------------------------------
20,000,000 National Westminster Bank USA, 6.15%, dated 5/31/1995, due
6/1/1995 20,000,000
----------------------------------------------------------------------------------
20,000,000 NationsBank of North Carolina, 6.13%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
</TABLE>
TREASURY CASH SERIES
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
- ------------- ---------------------------------------------------------------------------------- --------------
*REPURCHASE AGREEMENTS--CONTINUED
- -------------------------------------------------------------------------------------------------
$ 20,000,000 Nikko Securities Co. International Inc., 6.15%, dated 5/31/1995, due
6/1/1995 $ 20,000,000
----------------------------------------------------------------------------------
20,000,000 SBC Capital Markets, 6.15%, dated 5/31/1995, due 6/1/1995 20,000,000
----------------------------------------------------------------------------------
10,000,000 **Merrill Lynch Government Securities, 6.05%, dated 4/11/1995, due
6/23/1995 10,000,000
----------------------------------------------------------------------------------
8,000,000 **Merrill Lynch Government Securities, 6.00%, dated 5/2/1995, due
6/30/1995 8,000,000
---------------------------------------------------------------------------------- --------------
TOTAL REPURCHASE AGREEMENTS 339,800,000
---------------------------------------------------------------------------------- --------------
TOTAL INVESTMENTS AT AMORTIZED COST (A) $ 427,112,551
---------------------------------------------------------------------------------- --------------
</TABLE>
* Repurchase Agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices as of the date of the portfolio.
The investments in repurchase agreements are through participation in joint
accounts with other Federated funds.
** Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase
agreement within seven days if the creditworthiness of the issuer is
downgraded.
(a) Also represents cost for federal tax purposes.
(b) Each issue shows rate of discount at time of purchase.
Note: The categories of investments are shown as a percentage of net assets
($424,091,230) at May 31, 1995.
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
ASSETS:
- ---------------------------------------------------------------------------------
Investments in repurchase agreements $ 339,800,000
- ---------------------------------------------------------------------------------
Investments in securities 87,312,551
- --------------------------------------------------------------------------------- --------------
Total Investments in securities, at amortized cost and value $ 427,112,551
- -------------------------------------------------------------------------------------------------
Income receivable 449,638
- -------------------------------------------------------------------------------------------------
Receivable for shares sold 225
- ------------------------------------------------------------------------------------------------- --------------
Total assets 427,562,414
- -------------------------------------------------------------------------------------------------
LIABILITIES:
- -------------------------------------------------------------------------------------------------
Payable for shares redeemed 433,887
- ---------------------------------------------------------------------------------
Income distribution payable 762,729
- ---------------------------------------------------------------------------------
Accrued expenses 222,677
- ---------------------------------------------------------------------------------
Payable to Bank 2,051,891
- --------------------------------------------------------------------------------- --------------
Total liabilities 3,471,184
- ------------------------------------------------------------------------------------------------- --------------
NET ASSETS for 424,091,230 shares outstanding $ 424,091,230
- ------------------------------------------------------------------------------------------------- --------------
NET ASSET VALUE, Offering Price and Redemption Proceeds Per Share:
($424,091,230 / 424,091,230 shares outstanding) $1.00
- ------------------------------------------------------------------------------------------------- --------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
STATEMENT OF OPERATIONS
YEAR ENDED MAY 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
- ---------------------------------------------------------------------------------------------------
Interest $ 22,741,065
- ---------------------------------------------------------------------------------------------------
EXPENSES:
- ---------------------------------------------------------------------------------------------------
Investment advisory fee $ 2,165,237
- -------------------------------------------------------------------------------------
Administrative personnel and services fee 327,818
- -------------------------------------------------------------------------------------
Custodian fees 168,253
- -------------------------------------------------------------------------------------
Transfer agent and dividend disbursing agent fees and expenses 228,041
- -------------------------------------------------------------------------------------
Directors'/Trustees' fees 7,543
- -------------------------------------------------------------------------------------
Auditing fees 13,196
- -------------------------------------------------------------------------------------
Legal fees 7,587
- -------------------------------------------------------------------------------------
Portfolio accounting fees 35,169
- -------------------------------------------------------------------------------------
Distribution services fee 433,048
- -------------------------------------------------------------------------------------
Shareholder services fee 1,082,621
- -------------------------------------------------------------------------------------
Share registration costs 80,824
- -------------------------------------------------------------------------------------
Printing and postage 19,076
- -------------------------------------------------------------------------------------
Insurance premiums 10,226
- -------------------------------------------------------------------------------------
Taxes 49,853
- -------------------------------------------------------------------------------------
Miscellaneous 13,765
- ------------------------------------------------------------------------------------- ------------
Total expenses 4,642,257
- -------------------------------------------------------------------------------------
Deduct--Waiver of investment advisory fee 351,246
- ------------------------------------------------------------------------------------- ------------
Net expenses 4,291,011
- --------------------------------------------------------------------------------------------------- -------------
Net investment income $ 18,450,054
- --------------------------------------------------------------------------------------------------- -------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1995 1994
INCREASE (DECREASE) IN NET ASSETS:
- -------------------------------------------------------------------------
OPERATIONS--
- -------------------------------------------------------------------------
Net investment income $ 18,450,054 $ 11,269,877
- ------------------------------------------------------------------------- ----------------- -----------------
DISTRIBUTIONS TO SHAREHOLDERS--
- -------------------------------------------------------------------------
Distributions from net investment income (18,450,054) (11,269,877)
- ------------------------------------------------------------------------- ----------------- -----------------
SHARE TRANSACTIONS--
- -------------------------------------------------------------------------
Proceeds from sale of Shares 2,391,925,952 2,488,576,649
- -------------------------------------------------------------------------
Net asset value of Shares issued to shareholders in payment of
distributions declared 14,469,163 9,258,121
- -------------------------------------------------------------------------
Cost of Shares redeemed (2,409,309,269) (2,603,163,599)
- ------------------------------------------------------------------------- ----------------- -----------------
Change in net assets resulting from share transactions (2,914,154) (105,328,829)
- ------------------------------------------------------------------------- ----------------- -----------------
NET ASSETS:
- -------------------------------------------------------------------------
Beginning of period 427,005,384 532,334,213
- ------------------------------------------------------------------------- ----------------- -----------------
End of period $ 424,091,230 $ 427,005,384
- ------------------------------------------------------------------------- ----------------- -----------------
</TABLE>
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
Reference is made to the Report of Deloitte & Touche LLP, Independent Auditors,
on page 12.
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991 1990(A)
NET ASSET VALUE, BEGINNING OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- ---------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------------------------------
Net investment income 0.04 0.02 0.02 0.04 0.07 0.02
- --------------------------------------------------------- --------- --------- --------- --------- --------- -----------
LESS DISTRIBUTIONS
- ---------------------------------------------------------
Distributions from net investment income (0.04) (0.02) (0.02) (0.04) (0.07) (0.02)
- --------------------------------------------------------- --------- --------- --------- --------- --------- -----------
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
- --------------------------------------------------------- --------- --------- --------- --------- --------- -----------
TOTAL RETURN (B) 4.34% 2.37% 2.47% 4.24% 6.83% 2.42%
- ---------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS
- ---------------------------------------------------------
Expenses 0.99% 0.99% 0.99% 0.98% 0.88% 0.60%(c)
- ---------------------------------------------------------
Net investment income 4.26% 2.33% 2.46% 4.18% 6.39% 7.75%(c)
- ---------------------------------------------------------
Expense waiver/reimbursement (d) 0.08% 0.10% 0.04% 0.04% 0.22% 0.44%(c)
- ---------------------------------------------------------
SUPPLEMENTAL DATA
- ---------------------------------------------------------
Net assets, end of period (000 omitted) $424,091 $427,005 $532,334 $638,761 $713,430 $127,800
- ---------------------------------------------------------
</TABLE>
(a) Reflects operations for the period from February 7, 1990 (date of initial
public investment) to May 31, 1990.
(b) Based on net asset value, which does not reflect the sales load or
contingent deferred sales charge, if applicable.
(c) Computed on an annualized basis.
(d) This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
(See Notes which are an integral part of the Financial Statements)
TREASURY CASH SERIES
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1995
- --------------------------------------------------------------------------------
(1) ORGANIZATION
Cash Trust Series, Inc. (the "Corporation") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as an open-end management
investment company. The Corporation consists of three diversified portfolios and
one non-diversified portfolio (Municipal Cash Series). The financial statements
included herein present only those of Treasury Cash Series (the "Fund"). The
financial statements of the other portfolios are presented separately. The
assets of each portfolio are segregated and a shareholder's interest is limited
to the portfolio in which shares are held.
(2) SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS--The Fund's use of the amortized cost method to value
its portfolio securities is in accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS--It is the policy of the Fund to require the
custodian bank to take possession, to have legally segregated in the
Federal Reserve Book Entry System, or to have segregated within the
custodian bank's vault, all securities held as collateral under repurchase
agreement transactions. Additionally, procedures have been established by
the Fund to monitor, on a daily basis, the market value of each repurchase
agreement's underlying collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed
by the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS--Interest income and expenses
are accrued daily. Bond premium and discount, if applicable, are amortized
as required by the Internal Revenue Code, as amended (the "Code").
Distributions to shareholders are recorded on the ex-dividend date.
FEDERAL TAXES--It is the Fund's policy to comply with the provisions of the
Code applicable to regulated investment companies and to distribute to
shareholders each year substantially all of its income. Accordingly, no
provisions for federal tax are necessary.
WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS--The Fund may engage in
when-issued or delayed delivery transactions. The Fund records when-issued
securities on the trade date and maintains security positions such that
sufficient liquid assets will be available to make payment
for the securities purchased. Securities purchased on a when-issued or
delayed delivery basis are marked to market daily and begin earning
interest on the settlement date.
OTHER--Investment transactions are accounted for on the trade date.
(3) CAPITAL STOCK
At May 31, 1995, there were 12,500,000,000 shares of $0.001 par value capital
stock authorized. Capital paid-in aggregated $424,091,230. Transactions in
capital stock were as follows:
<TABLE>
<CAPTION>
YEAR ENDED MAY 31,
<S> <C> <C>
1995 1994
Shares sold 2,391,925,952 2,488,576,649
- ----------------------------------------------------------------------
Shares issued to shareholders in payment of distributions declared 14,469,163 9,258,121
- ----------------------------------------------------------------------
Shares redeemed (2,409,309,269) (2,603,163,599)
- ---------------------------------------------------------------------- ------------------- -----------------
Net change resulting from capital stock transactions (2,914,154) (105,328,829)
- ---------------------------------------------------------------------- ------------------- -----------------
</TABLE>
(4) INVESTMENT ADVISORY FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISORY FEE--Federated Advisers, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
.50 of 1% of the Fund's average daily net assets. The Adviser may voluntarily
choose to waive a portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE--Federated Administrative Services ("FAS"), under the
Administrative Services Agreement, provides the Fund with administrative
personnel and services. The FAS fee is based on the level of average aggregate
daily net assets of all funds advised by subsidiaries of Federated Investors for
the period. The administrative fee received during the period of the
Administrative Services Agreement shall be at least $125,000 per portfolio and
$30,000 per each additional class of shares.
DISTRIBUTION SERVICES FEE--The Fund has adopted a Distribution Plan (the "Plan")
pursuant to Rule 12b-1 under the Act. Under the terms of the Plan, the Fund will
reimburse Federated Securities Corp. ("FSC"), the principal distributor, from
the daily net assets of the Fund to finance activities intended to result in the
sale of the Fund's shares. The Plan provides that the Fund may incur
distribution expenses up to .35 of 1% of the average daily net assets of the
shares, annually, to reimburse FSC.
SHAREHOLDER SERVICES FEE--Under the terms of a Shareholder Services Agreement
with Federated Shareholder Services ("FSS"), the Fund will pay FSS up to .25 of
1% of average daily net assets of
the Fund for the period. This fee is to obtain certain services for shareholders
and to maintain shareholder accounts.
TRANSFER AGENT AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES--Federated
Services Company ("FServ") serves as transfer and dividend disbursing agent for
the Fund. The fee is based on the size, type, and number of accounts and
transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES--FServ also maintains the Fund's accounting records.
The fee is based on the level of the Fund's average daily net assets for the
period, plus out-of-pocket expenses.
GENERAL--Certain of the Officers and Directors of the Corporation are Officers
and Directors or Trustees of the above companies.
INDEPENDENT AUDITORS' REPORT
- --------------------------------------------------------------------------------
To the Board of Directors of
CASH TRUST SERIES, INC. and Shareholders of
TREASURY CASH SERIES:
We have audited the accompanying statement of assets and liabilities of Treasury
Cash Series (one of the portfolios comprising Cash Trust Series, Inc.),
including the portfolio of investments, as of May 31, 1995, the related
statement of operations for the year then ended, the statement of changes in net
assets for the years ended May 31, 1995 and 1994, and the financial highlights
for each of the years in the six-year period ended May 31, 1995. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
May 31, 1995 by correspondence with the custodian and brokers; where replies
were not received from brokers, we performed other auditing procedures. 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, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Treasury Cash Series
as of May 31, 1995, the results of its operations, the changes in its net assets
and its financial highlights for the respective stated periods in conformity
with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Pittsburgh, Pennsylvania
July 14, 1995
TRUSTEES OFFICERS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
John F. Donahue John F. Donahue
Thomas G. Bigley Chairman
John T. Conroy, Jr. Richard B. Fisher
William J. Copeland President
J. Christopher Donahue J. Christopher Donahue
James E. Dowd Executive Vice President
Lawrence D. Ellis M.D. Edward C. Gonzales
Edward L. Flaherty, Jr. Executive Vice President
Peter E. Madden John W. McGonigle
Gregor F. Meyer Executive Vice President and Secretary
John E. Murray, Jr. David M. Taylor
Wesley W. Posvar Treasurer
Marjorie P. Smuts Charles H. Field
Assistant Secretary
</TABLE>
Mutual funds are not bank deposits or obligations, are not guaranteed
by any bank, and are not insured or guaranteed by the U.S. government,
the Federal Deposit Insurance Corporation, the Federal Reserve Board,
or any other governmental agency. Investment in mutual funds involves risk,
including possible loss of principal. Although money market funds seek to
maintain a stable net asset value of $1.00 per share, there is no assurance that
they will be able to do so.
This report is authorized for distribution to prospective investors only when
preceded or accompanied by the fund's prospectus which contains facts
concerning its objective and policies, management fees, expenses and other
information.
