SEMI-ANNUAL REPORT
President's Message
Dear Shareholder:
I am pleased to present the Semi-Annual Report to shareholders for Government
Cash Series, a portfolio of Cash Trust Series, Inc., which covers the six-month
period ended November 30, 1999. The report begins with an investment review by
the fund's portfolio manager, which is followed by a complete listing of the
fund's investments and its financial statements.
During the reporting period, Government Cash Series paid a total of $0.02 in
dividends per share. In addition to income on their ready cash, shareholders
benefited from the fund's daily liquidity and stability of principal. 1
At the end of the reporting period, the fund's net assets totaled approximately
$610 million, with more than 67% of its assets invested in securities issued by
various U.S. government agencies including the Federal Farm Credit System,
Federal Home Loan Bank, Federal Home Loan Mortgage Corp., Federal National
Mortgage Association, and Student Loan Marketing Association. Additionally, 37%
of the fund's assets were invested in repurchase agreements backed by government
and/or agency securities, because repurchase agreements offered a yield
advantage over many direct government obligations.
Thank you for choosing Government Cash Series as a convenient way to help your
ready cash earn daily income through the relative safety of U.S. government
money market obligations. Please contact your investment representative if you
have any questions about the fund.
Sincerely,
[Graphic]
Richard B. Fisher
President
January 15, 2000
1 An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
money market funds seeks to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.
Investment Review
Government Cash Series is invested in direct U.S. Treasury and 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 may maintain a small Treasury position for liquidity purposes.
The Federal Reserve Board (the "Fed") tightened monetary policy on three
separate occasions over the semi-annual reporting period, bringing the Federal
funds target rate level 75 basis points higher to its present level of 5.50%.
The three 25 basis point policy adjustments completely removed the degree of
liquidity that the Fed had infused into the fixed income markets at the height
of the global economic crisis in the fourth quarter of 1998. Vigorous economic
growth, spurred onward by robust consumer spending, forced the Fed's hand in
spite of generally well-contained inflationary pressures.
Short-term interest rates rose steadily over the reporting period. By the time
of the first 25 basis point tightening at the end of June, the front end of the
yield curve had fully anticipated the action to be taken by the Fed; this was a
pattern that repeated itself for the subsequent moves in mid-August and
mid-November. Overall, the yield on the one year agency discount note, which
began the reporting period in June at 5.20%, rose to 5.95% by the end of
November. After the Fed's mid-November move, the market correctly interpreted
that the Fed would be on the sidelines for the remainder of the year in order to
avoid additional uncertainty of the century date change at the end of the year.
The fund maintained a 40 to 50-day average maturity target range over the
reporting period, moving within that range according to relative value
opportunities. The tendency of the market to anticipate the policy changes from
the Fed allowed us to continue to maintain our maturity stance in spite of the
expectation of rising interest rates. The fund's structure remained barbelled,
combining a significant portion in repurchase agreements, short term agency
paper and agency floating rate securities, with purchases of securities with 6
to 13 month maturities. We boosted our floating rate allocation from 16% to 23%
over the reporting period in order to increase the fund's responsiveness to
interest rates. Toward the end of the reporting period, with the Fed temporarily
on hold and expectations of lower short-term interest rates-particularly on
repurchase agreements-as a result of Y2K, we reduced our overnight repurchase
agreement position in favor of short-term agency securities, and, to a lesser
extent, longer- dated term repurchase agreements.
Looking forward, with the aftermath of Y2K being relatively minor and fourth
quarter Gross Domestic Product growth expected to have exceeded 5.0%, we expect
the Fed to resume its tightening trend in the first quarter of 2000.
Last Meeting of Shareholders
A Special Meeting of Shareholders of Government Cash Series, Municipal Cash
Series, Prime Cash Series and Treasury Cash Series (the "Funds"), portfolios of
Cash Trust Series, Inc. (the "Company"), was held on June 30, 1999. On April 15,
1999, the record date for shareholders voting at the meeting, there were
6,707,649,226 total outstanding shares. The following items were considered by
shareholders and the results of their voting were as follows:
AGENDA ITEM 1
Election of Directors: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
FOR TO VOTE
<S> <C> <C>
John F. Cunningham 3,398,127,366 55,199,222
Charles F. Mansfield, Jr. 3,397,749,699 55,531,889
John S. Walsh 3,158,305,184 55,607,234
</TABLE>
1 The following Directors continued their terms as Directors: John F.
Donahue, Thomas G. Bigley, John T. Conroy, Jr., Nicholas P. Constantakis,
J. Christopher Donahue, Lawrence D. Ellis, M.D., Peter E. Madden, John E.
Murray, Jr., J.D., S.J.D., and Marjorie P. Smuts.
AGENDA ITEM 2
To ratify the selection of Deloitte and Touche LLP as the Funds' independent
auditors.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
3,383,325,530 23,014,450 46,986,608
</TABLE>
The meeting was adjourned to September 10, 1999, where all items were approved
as follows:
AGENDA ITEM 3
To make changes to the Funds' fundamental investment policies:
(a) To amend the Funds' fundamental investment policies regarding
diversification (Government Cash Series and Treasury Cash Series only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
291,983,396 12,529,883 49,367,162
</TABLE>
TREASURY CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
499,890,115 9,509,001 164,628,606
</TABLE>
(b) To amend the Funds' fundamental investment policies regarding borrowing
money and issuing senior securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,746,900,274 122,202,243 583,296,862
</TABLE>
(c) To amend the Funds' fundamental investment policies regarding investments in
real estate (Government Cash Series, Municipal Cash Series and Prime Cash Series
only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
290,710,542 13,827,306 49,342,592
</TABLE>
MUNICIPAL CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
225,556,983 12,897,647 34,394,134
</TABLE>
PRIME CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
1,724,125,798 92,073,775
</TABLE>
(d) To amend the Funds' fundamental investment policies regarding
investments in commodities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,721,156,403 150,142,468 581,100,505
</TABLE>
(e) To amend the Funds' fundamental investment policies regarding
underwriting securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,751,300,353 119,291,072 581,807,953
</TABLE>
(f) To amend the Funds' fundamental investment policies regarding lending
by the funds.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,729,753,612 141,234,182 581,411,584
</TABLE>
(g) To amend the Funds' fundamental investment policies regarding concentration
of the Funds' investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,247,267,965 113,674,026 417,420,664
</TABLE>
(h) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding buying securities on margin.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,710,166,597 162,331,238 579,901,543
</TABLE>
(i) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding pledging assets.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,678,032,092 160,004,528 614,362,758
</TABLE>
(j) To make non-fundamental the Fund's fundamental investment policies on
investing in restricted securities (Treasury Cash Series only).
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,003,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 4
To eliminate the Funds' fundamental investment policies on selling securities
short.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,033,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 5
To approve amendments to the Company's Articles of Incorporation to permit the
Board of Directors to liquidate assets of a series of a class without seeking
shareholder approval to the extent permitted under Maryland law.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,730,900,116 142,981,330 578,517,932
</TABLE>
Portfolio of Investments
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
GOVERNMENT AGENCIES-67.5%
$ 4,000,000 1 Federal Farm Credit System
Notes, 5.400%, 7/3/2000 $ 3,996,448
82,000,000 1 Federal Home Loan Bank
System Discount Notes,
5.370% - 5.615%,
1/21/2000 - 3/1/2000 81,207,611
25,000,000 2 Federal Home Loan Bank
System Floating Rate
Notes, 5.227% - 5.838%,
12/1/1999 - 10/25/2000 25,037,550
42,050,000 Federal Home Loan Bank
System Notes, 4.790% -
6.125%, 2/4/2000 -
10/27/2000 41,989,560
59,468,000 1 Federal Home Loan Mortgage
Corp. Discount Notes,
5.110% - 5.590%,
1/10/2000 - 8/4/2000 58,880,443
23,500,000 2 Federal Home Loan Mortgage
Corp. Floating Rate Notes,
5.277% - 5.422%,
12/18/1999 - 12/22/1999 23,493,261
60,000,000 1 Federal National Mortgage
Association Discount
Notes, 4.610% - 5.632%,
1/24/2000 - 6/22/2000 59,251,162
47,000,000 2 Federal National Mortgage
Association Floating Rate
Notes, 5.240% - 5.856%,
12/15/1999 - 2/10/2000 46,991,836
15,500,000 Federal National Mortgage
Association Notes, 4.820%
- 5.180%,
1/28/2000 - 5/5/2000 15,484,833
53,000,000 2 Student Loan Marketing
Association Floating Rate
Notes, 5.720% - 6.131%,
12/15/1999 - 1/4/2000 52,982,311
2,300,000 Student Loan Marketing
Association Notes, 6.045%,
11/3/2000 2,298,747
TOTAL GOVERNMENT AGENCIES 411,613,762
REPURCHASE AGREEMENTS-
37.0% 3
25,000,000 Bank of America, 5.780%,
dated 11/30/1999, due
12/1/1999 25,000,000
5,000,000 Bear, Stearns and Co.,
5.740%, dated 11/30/1999,
due 12/1/1999 5,000,000
7,900,000 Deutsche Bank Government
Securities, Inc., 5.680%,
dated 11/30/1999,
due 12/1/1999 7,900,000
10,000,000 4 Goldman Sachs Group, LP,
5.650%, dated 9/20/1999,
due 1/19/2000 10,000,000
18,000,000 4 Goldman Sachs Group, LP,
5.650%, dated 9/22/1999,
due 1/21/2000 18,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
REPURCHASE AGREEMENTS-
continued 3
$ 110,000,000 PaineWebber Group, Inc.,
5.740%, dated 11/30/1999,
due 12/1/1999 $ 110,000,000
25,000,000 Paribas Corp., 5.780%,
dated 11/30/1999, due
12/1/1999 25,000,000
25,000,000 Toronto Dominion
Securities (USA), Inc.,
5.780%, dated 11/30/1999,
due 12/1/1999 25,000,000
TOTAL REPURCHASE
AGREEMENTS 225,900,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 5 $ 637,513,762
</TABLE>
1 The issue shows the rate of discount at time of purchase.
2 Denotes variable rate securities which show current rate and next demand date.
3 The repurchase agreements are fully collateralized by U.S. Treasury and/or
government agency obligations based on market prices at the date of the
portfolio. The investments in the repurchase agreements are through
participation in joint accounts with other Federated funds.
4 Although final maturity falls beyond seven days, a liquidity feature is
included in each transaction to permit termination of the repurchase agreement
within seven days.
5 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($609,978,239) at November 30, 1999.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase
agreements $ 225,900,000
Investments in securities 411,613,762
Total investments in
securities, at amortized
cost and value $ 637,513,762
Cash 115,522
Income receivable 1,778,777
TOTAL ASSETS 639,408,061
LIABILITIES:
Payable for investments
purchased 27,799,924
Income distribution
payable 1,426,160
Accrued expenses 203,738
TOTAL LIABILITIES 29,429,822
Net assets for 609,978,239
shares outstanding $ 609,978,239
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$609,978,239 / 609,978,239
shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 16,735,021
EXPENSES:
Investment advisory fee $ 1,600,389
Administrative personnel
and services fee 241,339
Custodian fees 26,859
Transfer and dividend
disbursing agent fees and
expenses 368,487
Directors'/Trustees' fees 3,781
Auditing fees 6,590
Legal fees 2,355
Portfolio accounting fees 52,479
Distribution services fee 320,078
Shareholder services fee 800,195
Share registration costs 19,823
Printing and postage 44,389
Insurance premiums 1,808
Taxes 21,437
Miscellaneous 4,486
TOTAL EXPENSES 3,514,495
WAIVERS:
Waiver of investment
advisory fee (299,805)
Net expenses 3,214,690
Net investment income $ 13,520,331
</TABLE>
See Notes which are an integral part of the Financial Statement
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited) YEAR ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 13,520,331 $ 25,912,190
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (13,520,331) (25,912,190)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 1,444,093,845 2,533,228,808
Net asset value of shares
issued to shareholders in
payment of
distributions declared 10,920,927 22,385,677
Cost of shares redeemed (1,494,117,035) (2,463,717,526)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS (39,102,263) 91,896,959
Change in net assets (39,102,263) 91,896,959
NET ASSETS:
Beginning of period 649,080,502 557,183,543
End of period $ 609,978,239 $ 649,080,502
</TABLE>
See Notes which are an integral part of the Financial Statements
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
(unaudited)
ENDED
NOVEMBER 30,
YEAR ENDED MAY 31,
1999 1999
1998 1997 1996 1995
<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 0.02 0.04
0.05 0.04 0.05 0.04
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.04)
(0.05) (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 1 2.14% 4.30%
4.73% 4.54% 4.85% 4.43%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.00% 2 1.00%
1.00% 0.99% 0.99% 0.99%
Net investment income 4.22% 2 4.22%
4.62% 4.45% 4.75% 4.35%
Expense waiver/reimbursement 3 0.09% 2 0.12%
0.09% 0.10% 0.30% 0.08%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $609,978 $649,081
$557,184 $530,367 $448,129 $453,096
</TABLE>
1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
2 Computed on an annualized basis.
3 This voluntary expense decrease is reflected on both the expense and the net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
NOVEMBER 30, 1999 (UNAUDITED)
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 four portfolios subject to
approval. The financial statements included herein are 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. The
investment objective of the Fund is current income consistent with stability of
principal and liquidity.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of their financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors (the "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. The Fund, along with
other affiliated investment companies may utilize a joint trading account for
the purpose of entering into one or more repurchase agreements.
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. Non-cash dividends included in dividend income, if any, are recorded at
fair value.
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 their 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 Funds
record when-issued securities on the trade date and maintain security positions
such that sufficient liquid assets will be available to make payment for the
securities purchased. Securities purchased on a when- issued or delayed delivery
basis are marked to market daily and begin earning interest on the settlement
date. Losses may occur on these transactions due to changes in market conditions
or the failure of counterparties to perform under the contract.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on a trade date basis.
CAPITAL STOCK
At November 30, 1999, there were 12,500,000,000 ($0.001 per value per share)
authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
Shares sold 1,444,093,845 2,533,228,808
Shares issued to
shareholders in payment of
distributions declared 10,920,927 22,385,677
Shares redeemed (1,494,117,035) (2,463,717,526)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (39,102,263) 91,896,959
</TABLE>
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment adviser fee equal to
0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Funds with administrative personnel and services. The
fee paid to FServ is based on a scale that ranges from 0.15% to 0.075% the level
of the average aggregate daily net assets of all funds advised by subsidiaries
of Federated Investors, Inc., subject to a $125,000 minimum per portfolio and
$30,000 per each additional class.
DISTRIBUTION SERVICES FEE
The Fund have adopted a Distribution Plan (the "Plan") pursuant to Rule 12b-1
under the Act. Under the terms of the Plan, the Funds 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 0.35% of
the average daily net assets of the Fund shares, annually, to reimburse FSC.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Funds will pay FSSC up to 0.25% of average daily
net assets of the Fund shares for the period. The fee paid to FSSC is used to
finance certain services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its
subsidiary FSSC, serves as
transfer and dividend disbursing agent for the Fund. The fee paid to FSSC is
based on the size, type, and number of accounts and transactions made by
shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of each 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.
Directors
JOHN F. DONAHUE
THOMAS G. BIGLEY
JOHN T. CONROY, JR.
NICHOLAS P. CONSTANTAKIS
JOHN F. CUNNINGHAM
J. CHRISTOPHER DONAHUE
LAWRENCE D. ELLIS, M.D.
PETER E. MADDEN
CHARLES F. MANSFIELD, JR.
JOHN E. MURRAY, JR., J.D., S.J.D.
MARJORIE P. SMUTS
JOHN S. WALSH
Officers
JOHN F. DONAHUE
Chairman
RICHARD B. FISHER
President
WILLIAM D. DAWSON III
Chief Investment Officer
J. CHRISTOPHER DONAHUE
Executive Vice President
EDWARD C. GONZALES
Executive Vice President
JOHN W. MCGONIGLE
Executive Vice President and Secretary
RICHARD J. THOMAS
Treasurer
LESLIE K. ROSS
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
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.
[Graphic]
Federated
World-Class Investment Manager
SEMI-ANNUAL REPORT
Government Cash Series
SEMI-ANNUAL REPORT TO SHAREHOLDERS
NOVEMBER 30, 1999
[Graphic]
Federated
Government Cash Series
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Cusip 147551204
0122604 (1/00)
[Graphic]
SEMI-ANNUAL REPORT
President's Message
Dear Shareholder:
I am pleased to present the Semi-Annual Report to shareholders for Municipal
Cash Series, a portfolio of Cash Trust Series, Inc., which covers the six-month
reporting period ended November 30, 1999. The report begins with an investment
review by the fund's portfolio manager, which is followed by a complete listing
of the fund's tax-free securities issued by municipalities nationwide, and its
financial statements.
During the reporting period, Municipal Cash Series paid a total of $0.01 in
tax-free dividends per share. 1 In addition to tax-free income, shareholders
benefited from the fund's daily liquidity and stability of principal.2 By the
end of the reporting period, shareholders had invested nearly $415 million in
the fund's diversified portfolio of tax-free securities issued by municipalities
nationwide.
Thank you for choosing Municipal Cash Series as a convenient way to help your
ready cash earn daily, tax-free income through the relative safety of high
quality municipal obligations. Please contact your investment representative if
you have any questions about the fund.
Sincerely,
[Graphic]
Richard B. Fisher
President
January 15, 2000
1 Income may be subject to the federal alternative minimum tax and state
and local taxes.
2 An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
money market funds seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.
Investment Review
An interview with the Fund's portfolio manager, Mary Jo Ochson, CFA,
Senior Vice President, Federated Investment Management Company
WHAT ARE YOUR COMMENTS ON THE ECONOMY AND THE INTEREST RATE ENVIRONMENT DURING
THE REPORTING PERIOD?
The improvements in international economies particularly in Asia, as well as
calm foreign markets laid the foundation for the Federal Reserve Board (the
"Fed") to focus on the U.S. economy as a better determinate of the inflation
picture. During the course of the reporting period, the Fed became increasingly
concerned with inflationary pressures from tighter labor markets as well as
rising equity wealth. For the most part, inflationary forces remained tame this
year with increases in some commodity prices, namely, oil. Nevertheless, the
Fed, citing tighter labor markets, shrinking gains in productivity, and growth
in demand, began a series of three rate increases. The first came in late June
and the second in August both 25 basis point moves. At its November meeting and
for the third time during 1999, the Fed voted to raise the federal funds target
rate by a quarter point.
In addition to economic fundamentals, short-term municipal securities were
influenced by technical factors over this reporting period, notably July coupon
payments and corporate tax payments. Variable rate demand notes ("VRDNs"), which
comprise more than 60% of the fund's assets, started the reporting period in the
3.00% range, but moved sharply higher in mid June to the 3.60% level as supply
and demand imbalances occurred due to corporate tax payments. Yields then
declined in July, as coupon payments looked to reinvest. The same technical
pattern repeated in September. Yields began September in the 3.10% range and
moved 60 basis points higher by mid September to the 3.70% level due to the mid
September tax payments. Over the reporting period, VRDN yields averaged roughly
72% of taxable rates. This was attractive by recent historical values in large
part due to the strong technical periods of June and September.
WHAT WERE YOUR STRATEGIES FOR THE FUND DURING THE REPORTING PERIOD?
The fund's average maturity at the beginning of the period was approximately 50
days. The fund remained in a 40 to 50-day average maturity range over the
reporting period, and moved within that range according to relative value
opportunities. We continued to emphasize a barbelled structure for the
portfolio, combining a significant position in 7-day VRDNs with purchases of
longer-term securities with maturities between 6 and 12 months. Once an average
maturity range was targeted, the portfolio attempted to maximize performance
through ongoing relative value analysis. Relative value analysis includes the
comparison of the richness or cheapness of municipal securities to one another
as well as municipal securities to taxable instruments, such as Treasury
securities. This portfolio structure continued to provide a competitive yield
over time.
WHAT IS YOUR OUTLOOK GOING FORWARD?
The Fed, concerned by persistent above-trend growth in an environment where
labor markets are tight and productivity gains are narrowing, will likely
tighten monetary policy in the first quarter of 2000. In the near term, the
short-term municipal market will likely reflect technical as well as fundamental
factors. These supply/demand imbalances could very well present attractive
investment opportunities for the fund. We will continue to watch, with great
interest, market developments in order to best serve our municipal clients.
Last Meeting of Shareholders
A Special Meeting of Shareholders of Government Cash Series, Municipal Cash
Series, Prime Cash Series and Treasury Cash Series (the "Funds"), portfolios of
Cash Trust Series, Inc. (the "Company"), was held on June 30, 1999. On April 15,
1999, the record date for shareholders voting at the meeting, there were
6,707,649,226 total outstanding shares. The following items were considered by
shareholders and the results of their voting were as follows:
AGENDA ITEM 1
Election of Directors: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
FOR TO VOTE
<S> <C> <C>
John F. Cunningham 3,398,127,366 55,199,222
Charles F. Mansfield, Jr. 3,397,749,699 55,531,889
John S. Walsh 3,158,305,184 55,607,234
</TABLE>
1 The following Directors continued their terms as Directors: John F.
Donahue, Thomas G. Bigley, John T. Conroy, Jr., Nicholas P. Constantakis,
J. Christopher Donahue, Lawrence D. Ellis, M.D., Peter E. Madden, John E.
Murray, Jr., J.D., S.J.D., and Marjorie P. Smuts.
AGENDA ITEM 2
To ratify the selection of Deloitte and Touche LLP as the Funds' independent
auditors.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
3,383,325,530 23,014,450 46,986,608
</TABLE>
The meeting was adjourned to September 10, 1999, where all items were approved
as follows:
AGENDA ITEM 3
To make changes to the Funds' fundamental investment policies:
(a) To amend the Funds' fundamental investment policies regarding
diversification (Government Cash Series and Treasury Cash Series only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
291,983,396 12,529,883 49,367,162
</TABLE>
TREASURY CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
499,890,115 9,509,001 164,628,606
</TABLE>
(b) To amend the Funds' fundamental investment policies regarding borrowing
money and issuing senior securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,746,900,274 122,202,243 583,296,862
</TABLE>
(c) To amend the Funds' fundamental investment policies regarding investments in
real estate (Government Cash Series, Municipal Cash Series and Prime Cash Series
only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
290,710,542 13,827,306 49,342,592
</TABLE>
MUNICIPAL CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
225,556,983 12,897,647 34,394,134
</TABLE>
PRIME CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
1,724,125,798 92,073,775
</TABLE>
(d) To amend the Funds' fundamental investment policies regarding
investments in commodities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,721,156,403 150,142,468 581,100,505
</TABLE>
(e) To amend the Funds' fundamental investment policies regarding
underwriting securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,751,300,353 119,291,072 581,807,953
</TABLE>
(f) To amend the Funds' fundamental investment policies regarding lending
by the funds.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,729,753,612 141,234,182 581,411,584
</TABLE>
(g) To amend the Funds' fundamental investment policies regarding concentration
of the Funds' investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,247,267,965 113,674,026 417,420,664
</TABLE>
(h) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding buying securities on margin.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,710,166,597 162,331,238 579,901,543
</TABLE>
(i) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding pledging assets.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,678,032,092 160,004,528 614,362,758
</TABLE>
(j) To make non-fundamental the Fund's fundamental investment policies on
investing in restricted securities (Treasury Cash Series only).
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,003,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 4
To eliminate the Funds' fundamental investment policies on selling securities
short.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,033,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 5
To approve amendments to the Company's Articles of Incorporation to permit the
Board of Directors to liquidate assets of a series of a class without seeking
shareholder approval to the extent permitted under Maryland law.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,730,900,116 142,981,330 578,517,932
</TABLE>
Portfolio of Investments
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
99.6% 1
ALABAMA--0.6%
$ 1,865,000 Alabama State IDA, Revenue
Bonds Weekly VRDNs
(Southern Bag
Corporation, Ltd.)/(SouthT
rust Bank of Alabama,
Birmingham LOC) $ 1,865,000
220,000 Hoover, AL IDB Weekly VRDNs
(Bud's Best Cookies,
Inc.)/(SouthTrust
Bank of Alabama,
Birmingham LOC) 220,000
395,000 Muscle Shoals, AL, IDB
Weekly VRDNs (Whitesell
Manufacturing)/(SouthTrust
Bank of Alabama,
Birmingham LOC) 395,000
TOTAL 2,480,000
ARIZONA--3.9%
750,000 Apache County, AZ IDA,
(Series 1983A) Weekly
VRDNs (Tucson Electric
Power Co.)/(Toronto-
Dominion Bank LOC) 750,000
500,000 Coconino County, AZ
Pollution Control Corp.,
(Series 1998) Daily VRDNs
(Arizona Public Service
Co.)/(KBC Bank NV LOC) 500,000
150,000 Eloy, AZ IDA, (Series 1996)
Weekly VRDNs (The Marley
Cooling Tower
Co.)/(First Union National
Bank, Charlotte, NC LOC) 150,000
500,000 Glendale, AZ IDA, Variable
Rate Senior Living
Facilities Revenue Bonds
Weekly VRDNs (Friendship
Retirement Corp.)/(Norwest
Bank Minnesota, N.A. LOC) 500,000
500,000 Maricopa County, AZ
Pollution Control Corp.,
(Series 1994F) Daily VRDNs
(Arizona Public Service
Co.)/(Bank of America,
N.A. LOC) 500,000
1,210,000 Maricopa County, AZ, IDA,
(Series 1999) Weekly VRDNs
(Redman Homes, Inc.)/(PNC
Bank, N.A. LOC) 1,210,000
500,000 Maricopa County, AZ, IDA,
3.85% CP (Citizens
Utilities Co.), Mandatory
Tender 12/17/1999 500,000
2,000,000 Maricopa County, AZ, IDA,
Las Villas Del Sol (Series
1999A), 5.115% TOBs
(Bayerische Landesbank
Girozentrale) 11/1/2000 2,000,000
700,000 Mesa, AZ Municipal
Development Corp., (Series
1985), 3.60% CP
(Westdeutsche Landesbank
Girozentrale LOC),
Mandatory Tender 2/10/2000 700,000
4,300,000 Phoenix, AZ IDA, (Series
1997) Weekly VRDNs
(Interface Data
Systems, Inc.)/(Bank One,
Arizona N.A. LOC) 4,300,000
1,000,000 Phoenix, AZ IDA, (Series
1998) Weekly VRDNs (ABPAC,
Inc.)/(Bank One,
Arizona N.A. LOC) 1,000,000
1,980,000 Phoenix, AZ IDA, PT-1082
Weekly VRDNs (GNMA
COL)/(Merrill Lynch
Capital Services, Inc.
LIQ) 1,980,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
ARIZONA--CONTINUED
$ 250,000 Pima County, AZ IDA Weekly
VRDNs (Tucson Electric
Power Co.)/(Toronto-
Dominion Bank LOC) $ 250,000
1,110,000 Scottsdale, AZ IDA,
(Series B) Weekly VRDNs
(Scottsdale
(Memorial Hospitals))/(AMB
AC INS)/(Credit Local de
France LIQ) 1,110,000
250,000 Yavapai, AZ IDA, (Series
1997B) Weekly VRDNs
(Yavapai Regional
Medical Center)/(FSA
INS)/(Credit Local de
France LIQ) 250,000
650,000 Yuma County, AZ Airport
Authority, Inc., (Series
1997A) Weekly VRDNs
(Bank One, Arizona N.A.
LOC) 650,000
TOTAL 16,350,000
ARKANSAS--4.3%
8,000,000 Crossett, AR, (Series
1997) Weekly VRDNs (Bemis
Co., Inc.) 8,000,000
4,000,000 Hope, AR, Solid Waste
Disposal Revenue Bonds
(Series 1994), 4.75% CP
(Temple-Inland Forest
Products Corp.)/(Temple-
Inland, Inc. GTD),
Mandatory Tender 2/11/2000 4,000,000
1,000,000 Sheridan, AR IDA, (Series
B) Weekly VRDNs (H.H.
Robertson Co.)/(PNC Bank,
N.A. LOC) 1,000,000
5,000,000 Springdale, AR, IDA Weekly
VRDNs (Newlywed
Food)/(Mellon Bank N.A.,
Pittsburgh LOC) 5,000,000
TOTAL 18,000,000
COLORADO--2.6%
3,750,000 Adams County, CO IDB,
(Series 1993) Weekly VRDNs
(Bace
Manufacturing, Inc.)/(Citi
bank N.A., New York LOC) 3,750,000
6,930,000 El Paso County, CO,
Flatiron Certificates
(Series 1999-1) Weekly
VRDNs (GNMA COL)/(Bank of
New York, New York LIQ) 6,930,000
TOTAL 10,680,000
CONNECTICUT--0.7%
3,000,000 Bridgeport, CT, 3.95%
BANs, 1/18/2000 3,000,000
GEORGIA--0.5%
2,000,000 Clayton County, GA
Development Authority,
(Series 1994) Weekly VRDNs
(Lear Seating
Corp.)/(Chase Manhattan
Bank N.A., New York LOC) 2,000,000
HAWAII--1.5%
6,170,000 2 Hawaii State Airport System, (2nd Series of 1998) PT-238,
3.30% TOBs (MBIA INS)/(Credit Suisse First Boston LIQ),
Mandatory Tender 2/17/2000 6,170,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
ILLINOIS--10.2%
$ 2,000,000 Chicago, IL O'Hare
International Airport,
International Terminal
(Series A), 7.25% Bonds
(MBIA INS), 1/1/2000 $ 2,006,642
9,595,000 2 Chicago, IL Single Family
Mortgage, PT-290, 3.90%
TOBs (GNMA
COL)/(Landesbank Hessen-
Thueringen, Frankfurt
LIQ), Optional Tender
10/5/2000 9,595,000
6,850,000 Chicago, IL, Gas Supply
Revenue Bonds (1993 Series
B), 3.20% TOBs (Peoples Gas
Light & Coke Co.), Optional
Tender 12/1/1999 6,850,000
6,900,000 Illinois Development
Finance Authority, (Series 1997) Weekly VRDNs (Tempco Electric
Heater Corp.)/(Bank One, N.A.
LOC) 6,900,000
2,700,000 Illinois Development
Finance Authority,
Adjustable Rate IDRB
(Series 1996A)
Weekly VRDNs (Nimlok
Co.)/(Bank One, Illinois,
N.A. LOC) 2,700,000
4,450,000 2 Illinois Housing
Development Authority, PT-
7, 3.375% TOBs (AMBAC
INS)/(Merrill Lynch
Capital Services, Inc.
LIQ), Optional Tender
5/11/2000 4,450,000
6,185,000 2 Illinois Housing
Development Authority, PT-
82, 3.90% TOBs (Rebobank
Nederland, Utrecht LIQ),
Optional Tender 10/5/2000 6,185,000
3,595,000 Morton, IL, IDRB (Series
1996) Weekly VRDNs (Morton
Welding Co, Inc.
Project)/(Bank One,
Illinois, N.A. LOC) 3,595,000
TOTAL 42,281,642
INDIANA--10.2%
1,390,000 Carmel, IN, (Series 1996-
A) Weekly VRDNs (Telamon
Corp.)/(Huntington
National Bank, Columbus,
OH LOC) 1,390,000
1,500,000 Carmel, IN, (Series 1999)
Weekly VRDNs (Telamon
Corp.)/(Huntington
National Bank, Columbus,
OH LOC) 1,500,000
1,570,000 Crown Point, IN, IDA Weekly
VRDNs (D & M
Manufacturing)/(National
City Bank, Kentucky LOC) 1,570,000
2,020,000 Huntingburg, IN, (Series
1994) Weekly VRDNs (DMI
Furniture, Inc.)/(Bank
One, Indiana, N.A. LOC) 2,020,000
2,230,000 Huntingburg, IN, EDRB
(Series 1993) Weekly VRDNs
(DMI Furniture,
Inc.)/(Bank One, Indiana,
N.A. LOC) 2,230,000
1,610,000 Indiana Development
Finance Authority, (Series
1996) Weekly VRDNs
(Meridian Group LLC
Project)/(Bank One,
Indiana, N.A. LOC) 1,610,000
700,000 Indiana EDC, (Series 1989)
Weekly VRDNs (O'Neal
Steel, Inc.)/ (SouthTrust
Bank of Alabama,
Birmingham LOC) 700,000
6,500,000 Jeffersonville, IN,
(Series 1997A) Weekly
VRDNs (Wayne Steel,
Inc.)/(Bank One, Ohio,
N.A. LOC) 6,500,000
1,505,000 Lebanon, IN IDA, (Series
1991) Weekly VRDNs (White
Castle
System)/(Bank One, Ohio,
N.A. LOC) 1,505,000
5,130,000 North Manchester, IN,
(Series 1997) Weekly VRDNs
(Eften, Inc.)/(Comerica
Bank LOC) 5,130,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
INDIANA--CONTINUED
$ 10,000,000 Portage, IN, (Series 1998-
A) Weekly VRDNs (American
Iron Oxide
Co. Project)/(Bank of
Tokyo-Mitsubishi Ltd. LOC) $ 10,000,000
2,300,000 Tippecanoe County, IN
Economic Development
Revenue Weekly VRDNs
(Lafayette Venetian
Blind)/(PNC Bank, N.A.
LOC) 2,300,000
1,000,000 Wayne Township, IN Metro
School District, Warrants
3.55% TANs, 12/31/1999 1,000,199
2,840,000 Westfield, IN IDR, (Series
1994) Weekly VRDNs
(Standard Locknut &
Lockwasher, Inc.)/(Bank
One, Indiana, N.A. LOC) 2,840,000
2,065,000 Winamac, IN, (Series 1997)
Weekly VRDNs (Pulaski
Health
Foundation, Inc.)/(KeyBank
, N.A. LOC) 2,065,000
TOTAL 42,360,199
IOWA--0.4%
1,750,000 Iowa Finance Authority,
IDRB Weekly VRDNs (V-T
Industries, Inc.
Project)/(Norwest Bank
Minnesota, N.A. LOC) 1,750,000
KENTUCKY--5.6%
2,600,000 Clark County, KY, IDR
(Series 1990) Weekly VRDNs
(Walle Corp.)/(UBS AG LOC) 2,600,000
1,700,000 Henderson County, KY,
(Series 1996A) Weekly
VRDNs (Gibbs Die Casting
Corp.)/(Fifth Third Bank,
Cincinnati LOC) 1,700,000
680,000 Jefferson County, KY, IDR
(Series 1991) Weekly VRDNs
(Findley Adhesives)/(Bank
One, Ohio, N.A. LOC) 680,000
2,000,000 Jefferson County, KY, IDR
Weekly VRDNs (O'Neal
Steel, Inc.)/(SouthTrust
Bank of Alabama,
Birmingham LOC) 2,000,000
2,000,000 Kenton County, KY, (Series
1999) Weekly VRDNs
(Packaging Un-limited of
Northern Kentucky,
Inc.)/(National City Bank,
Kentucky LOC) 2,000,000
2,000,000 Kentucky Housing Corp.,
(Series C), 3.20% TOBs
12/31/1999 2,000,000
6,000,000 2 Kentucky Housing Corp.,
Variable Rate Certificates
(Series 1998 O), 3.78% TOBs
(Bank of America, N.A.
LIQ), Optional Tender
8/3/2000 6,000,000
6,370,000 2 Louisville & Jefferson County, KY Regional Airport Authority,
(Series C) PT-211, 3.45% TOBs (MBIA INS)/(Bayerische
Hypotheken-und Vereinsbank AG LIQ), Optional Tender
6/1/2000 6,370,000
TOTAL 23,350,000
MARYLAND--2.5%
1,850,000 Cecil County, MD, County
Commissioners EDRB (Series
1988S) Weekly VRDNs
(Williams Mobile Offices,
Inc.)/(Allfirst LOC) 1,850,000
2,090,000 Maryland Economic
Development Corp., (Series
1998A) Weekly VRDNs
(Catterton Printing
Company
Facility)/(Allfirst LOC) 2,090,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
MARYLAND--CONTINUED
$ 1,255,000 Maryland Economic
Development Corp., (Series
1998B) Weekly VRDNs
(Catterton Printing
Company
Facility)/(Allfirst LOC) $ 1,255,000
985,000 Maryland State Community
Development
Administration, (Series
1990A) Weekly VRDNs
(College
Estates)/(Allfirst LOC) 985,000
800,000 Maryland State Community
Development
Administration, (Series
1990B) Weekly VRDNs
(Cherry Hill Apartment
Ltd.)/(Bank of America,
N.A. LOC) 800,000
3,260,000 Wicomico County, MD, EDRB
(Series 1994) Weekly VRDNs
(Field Container Co.
L.P.)/(Northern Trust Co.,
Chicago, IL LOC) 3,260,000
TOTAL 10,240,000
MINNESOTA--4.2%
2,500,000 Brooklyn Park, MN EDA,
(Series 1999) Weekly VRDNs
(Midwest Finishing,
Inc.)/(Norwest Bank
Minnesota, N.A. LOC) 2,500,000
5,680,000 2 Dakota County, Washington
County & Anoka City, MN
Housing & Redevelopment
Authority, MERLOTs (Series
H), 3.80% TOBs (United
States Treasury
COL)/(First Union National
Bank, Charlotte, NC LIQ),
Optional Tender 12/1/1999 5,680,000
2,820,000 Lino Lakes, MN, (Series
1998) Weekly VRDNs (Molin
Concrete Products
Co.)/(Norwest Bank
Minnesota, N.A. LOC) 2,820,000
700,000 Minnesota State Higher
Education Coordinating
Board, (Series 1992A)
Weekly VRDNs (U.S. Bank,
N.A., Minneapolis LIQ) 700,000
730,000 Plymouth, MN Weekly VRDNs
(Nuaire, Inc.)/(Norwest
Bank Minnesota, N.A. LOC) 730,000
950,000 Plymouth, MN, (Series
1998) Weekly VRDNs
(Nuaire, Inc.)/(Norwest
Bank Minnesota, N.A. LOC) 950,000
1,890,000 Red Wing, MN Port
Authority, (Series 1998) Weekly VRDNs (Food Service
Specialties)/(Norw est Bank Minnesota, N.A.
LOC) 1,890,000
1,955,000 White Bear, MN Weekly VRDNs
(Thermoform Plastic,
Inc.)/(Norwest
Bank Minnesota, N.A. LOC) 1,955,000
TOTAL 17,225,000
MISSISSIPPI--0.8%
1,700,000 Mississippi Business
Finance Corp., (Series D)
Weekly VRDNs (O'Neal
Steel, Inc.)/(SouthTrust
Bank of Alabama,
Birmingham LOC) 1,700,000
1,625,000 Mississippi Business
Finance Corp., IDRB
(Series 1994) Weekly VRDNs
(Flexsteel Industries,
Inc.)/(Norwest Bank
Minnesota, N.A. LOC) 1,625,000
TOTAL 3,325,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
MISSOURI--3.5%
$ 2,550,000 Missouri Development
Finance Board, IDRBs
(Series 1996) Weekly VRDNs
(LaGrange Foundry Inc.
Project)/(Harris Trust &
Savings Bank, Chicago LOC) $ 2,550,000
450,000 Missouri Export &
Infrastructure Board
Weekly VRDNs (Ex-L-Tube,
Inc.)/(Norwest Bank
Minnesota, N.A. LOC) 450,000
3,950,000 Moberly, MO IDA, (Series
1996) Weekly VRDNs
(Everlast Fitness
Manufacturing
Corp.)/(Chase Manhattan
Bank N.A., New York LOC) 3,950,000
7,000,000 Perry County, MO, (Series
1996) Weekly VRDNs (TG
(U.S.A), Inc.)/(Bank of
Tokyo-Mitsubishi Ltd. LOC) 7,000,000
500,000 Springfield, MO, 5.50%
Bonds, 3/1/2000 501,087
TOTAL 14,451,087
MONTANA--0.5%
1,880,000 2 Montana State Board of
Housing, MERLOTS (Series
F), 3.65% TOBs (First Union
National Bank, Charlotte,
NC LIQ) 3/31/2000 1,880,000
MULTI STATE--3.3%
3,900,000 Charter Mac Floater
Certificates Trust I,
(Third Tranche) Weekly
VRDNs (MBIA
INS)/(Bayerische
Landesbank Girozentrale,
Commerzbank AG, Frankfurt
and Credit Communal de
Belgique, Brussles LIQs) 3,900,000
9,775,000 Clipper Tax-Exempt Trust
(AMT MultiState), (Series B) Weekly VRDNs (State Street Bank
and Trust Co.
LIQ) 9,775,000
TOTAL 13,675,000
NEBRASKA--0.6%
2,400,000 Douglas County, NE,
(Series 1991) Weekly VRDNs
(Malhove, Inc.)/(Norwest
Bank Minnesota, N.A. LOC) 2,400,000
NEW HAMPSHIRE--0.5%
2,110,000 New Hampshire State IDA,
(Series 1991), 4.75% TOBs
(International Paper Co.),
Optional Tender 10/15/2000 2,110,000
NEW JERSEY--0.8%
3,500,000 2 New Jersey Housing &
Mortgage Financing
Authority, (PT-285), 3.80%
TOBs (MBIA
INS)/(Landesbank Hessen-
Thueringen, Frankfurt
LIQ), Optional Tender
8/10/2000 3,500,000
NEW MEXICO--1.6%
6,485,000 Albuquerque, NM, (Series
1999) Weekly VRDNs (El
Encanto, Inc.
Project)/(Norwest Bank
Minnesota, N.A. LOC) 6,485,000
NORTH DAKOTA--1.5%
1,000,000 Fargo, ND, Variable Rate
Demand IDRBs (Series 1997)
Weekly VRDNs (Owen
Industries, Inc.)/(Mellon
Bank N.A., Pittsburgh LOC) 1,000,000
5,000,000 Grand Forks, ND, Variable
Rate Demand IDRBs (Series
1999) Weekly VRDNs
(LM Glasfiber North
Dakota, Inc.)/(Norwest
Bank Minnesota, N.A. LOC) 5,000,000
TOTAL 6,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
OHIO--4.8%
$ 2,000,000 Banc One Capital Higher
Education Tax-Exempt
Income Trust, (Series 2
Certificates of Ownership)
Weekly VRDNs (Bank One,
Kentucky LOC) $ 2,000,000
1,100,000 Cuyahoga County, OH IDA
Weekly VRDNs (Cleveland
Gear Co.)/
(KeyBank, N.A. LOC) 1,100,000
5,000,000 Cuyahoga County, OH,
(Series 1999) Weekly VRDNs
(National Terminal
Apartments)/(Fleet
National Bank,
Springfield, MA LOC) 5,000,000
2,000,000 Dover, OH, 3.60% BANs,
5/25/2000 2,002,789
4,995,000 2 Ohio HFA, Variable Rate
Certificates (Series
1998Q), 3.68% TOBs
(GNMA COL)/(Bank of
America, N.A. LIQ),
Optional Tender 7/20/2000 4,995,000
3,190,000 Ohio State Public
Facilities Commission,
(Series II-C), 5.10% Bonds
(MBIA INS), 12/1/1999 3,190,000
665,000 Summit County, OH IDR,
3.80% TOBs (S.D. Meyers,
Inc.)/(Bank One, Ohio,
N.A. LOC), Optional Tender
2/15/2000 665,000
925,000 Wood County, OH, Series
1998 Weekly VRDNs (IMCO
Carbide Tool,
Inc.)/(Huntington National
Bank, Columbus, OH LOC) 925,000
TOTAL 19,877,789
OKLAHOMA--2.0%
2,300,000 Adair County, OK IDA,
(Series B) Weekly VRDNs
(Baldor Electric
Co.)/(Wachovia Bank of NC,
N.A. LOC) 2,300,000
1,925,000 Oklahoma County, OK
Finance Authority, (Series
1996) Weekly VRDNs
(Avalon Project)/(Bank
One, Texas N.A. LOC) 1,925,000
3,900,000 Oklahoma Development
Finance Authority, 3.65%
TOBs (Simmons Poultry
Farms)/(Rabobank
Nederland, Utrecht LOC),
Optional Tender 2/1/2000 3,900,000
TOTAL 8,125,000
PENNSYLVANIA--1.1%
4,700,000 Carbon County, PA IDA,
Solid Waste Disposal
Revenue Bonds, 3.50% RANs
(Horsehead Resource
Development, Inc.)/(Chase
Manhattan Bank N.A., New
York LOC), 12/3/1999 4,700,000
SOUTH CAROLINA--1.3%
3,700,000 South Carolina Job
Development Authority,
(Series 1996) Weekly VRDNs
(PVC Container Corp.
Project)/(Fleet Bank N.A.
LOC) 3,700,000
1,685,000 South Carolina Job
Development Authority,
EDRB (Series 1994) Weekly
VRDNs (Carolina Cotton
Works, Inc.
Project)/(Branch Banking &
Trust Co, Wilson LOC) 1,685,000
TOTAL 5,385,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
SOUTH DAKOTA--2.8%
$ 4,145,000 South Dakota Housing
Development Authority,
(Series 1999-H), 3.85%
BANs, 9/28/2000 $ 4,145,000
5,250,000 South Dakota Housing
Development Authority,
(Series I), 3.20% BANs,
12/2/1999 5,250,000
2,395,000 South Dakota Housing
Development Authority,
Homeownership Mortgage
Bonds (1997 Series E)
Weekly VRDNs 2,395,000
TOTAL 11,790,000
TENNESSEE--4.6%
1,700,000 Chattanooga, TN IDB,
(Series 1997) Weekly VRDNs
(YMCA)/(SunTrust Bank,
Nashville LOC) 1,700,000
5,000,000 Cocke County, TN IDB,
(Series 1996) Weekly VRDNs
(Newport Precision,
Inc.)/(Bank of Tokyo-
Mitsubishi Ltd. LOC) 5,000,000
840,000 Dickson County, TN IDB,
(Series 1996) Weekly VRDNs
(Tennessee Bun
Company, LLC Project)/(PNC
Bank, N.A. LOC) 840,000
830,000 Hawkins County, TN IDB,
(Series 1995) Weekly VRDNs
(Sekisui Ta
Industries, Inc.)/(Bank of
Tokyo-Mitsubishi Ltd. LOC) 830,000
750,000 Hendersonville, TN IDB,
(Series 1996) Weekly VRDNs
(Betty Machine Co.
Project)/(First Union
National Bank, Charlotte,
NC LOC) 750,000
700,000 Jackson, TN IDB, (Series
1999) Weekly VRDNs
(Bobrick Washroom
Equipment)/(First American
National Bank, Nashville,
TN LOC) 700,000
1,000,000 Jackson, TN IDB, Solid
Waste Facility Bonds
(Series 1995) Weekly VRDNs
(Florida Steel
Corp.)/(Bank of America,
N.A. LOC) 1,000,000
1,500,000 Sevier County, TN Public
Building Authority, Local
Government Improvement
Bonds, (Series II-G-2)
Weekly VRDNs (Knoxville,
TN)/(AMBAC INS)/(KBC Bank
NV LIQ) 1,500,000
5,995,000 Tennessee Housing
Development Agency,
(Series 1997K) Weekly
VRDNs (Bank of America,
N.A. LIQ) 5,995,000
750,000 Union City, TN IDB, (Series
1995) Weekly VRDNs (Kohler
Co.)/(Wachovia Bank of NC,
N.A. LOC) 750,000
TOTAL 19,065,000
TEXAS--10.6%
7,400,000 ABIA Development
Corporation, TX, Airport
Facilities Revenue Bonds
PT-117 Weekly VRDNs
(Austin Airport)/(Asset
Guaranty INS)/(Merrill
Lynch Capital Services,
Inc. LIQ) 7,400,000
4,000,000 Angelina and Neches River
Authority, Texas, Solid
Waste Disposal Revenue
Bonds (Series 1993), 4.40%
CP (Temple-Eastex,
Inc.)/(Temple-Inland, Inc.
GTD), Mandatory Tender
12/6/1999 4,000,000
2,550,000 Brazos Harbor, TX
Industrial Development
Corp., (Series 1991)
Weekly VRDNs (Rangen, Inc.
Project)/(Norwest Bank
Minnesota, N.A. LOC) 2,550,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
TEXAS--CONTINUED
$ 5,000,000 Brazos River Authority,
TX, (Series 1996B) Daily
VRDNs (Texas Utilities
Electric Co.)/(AMBAC
INS)/(Bank of New York, New
York LIQ) $ 5,000,000
15,000,000 Brazos River Authority,
TX, (Series 1999C) Weekly
VRDNs (TXU Electric
Co.)/(Bank of New York,
New York LOC) 15,000,000
3,230,000 Houston, TX Airport
System, (Series 1998A) PT- 1102 Weekly VRDNs (FGIC
INS)/(Merrill Lynch Capital Services, Inc.
LIQ) 3,230,000
2,995,000 2 Southeast Texas Housing
Finance Corp., PT-165,
3.35% TOBs (GNMA
COL)/(Banque Nationale de
Paris LIQ), Optional
Tender 3/9/2000 2,995,000
2,505,000 Tarrant County, TX IDC
Weekly VRDNs (Holden
Business Forms)/(Norwest
Bank Minnesota, N.A. LOC) 2,505,000
1,500,000 Tarrant County, TX IDC,
(Series 1997) Weekly VRDNs
(Lear Operations
Corp.)/(Chase Manhattan
Bank N.A., New York LOC) 1,500,000
TOTAL 44,180,000
UTAH--1.0%
4,000,000 West Jordan, UT, (Series
1999) Weekly VRDNs (Penco
Products, Inc.)/(KeyBank,
N.A. LOC) 4,000,000
VIRGINIA--3.9%
155,000 Carroll County, VA IDA,
IDRB (Series 1995) Weekly
VRDNs (Kentucky Derby
Hosiery Co, Inc
Project)/(Bank One,
Kentucky LOC) 155,000
12,000,000 2 Fairfax County, VA EDA,
Trust Receipt FR/RI-A15 (Series 1999), 3.95% TOBs (AMBAC
INS)/(National Westminster Bank, PLC, London LIQ), Optional
Tender 2/1/2000 12,000,000
4,000,000 Halifax, VA IDA, MMMs, PCR,
3.85% CP (Virginia
Electric Power Co.),
Mandatory Tender 3/10/2000 4,000,000
TOTAL 16,155,000
WASHINGTON--1.1%
4,500,000 Pierce County, WA EDC,
(Series 1995) Weekly VRDNs
(Simpson-Tacoma
Kraft Company
Project)/(Bank of America,
N.A. LOC) 4,500,000
WEST VIRGINIA--0.9%
2,000,000 Ritchie County, WV, IDRB
(Series 1996) Weekly VRDNs
(Simonton Building
Products, Inc.)/(PNC Bank,
N.A. LOC) 2,000,000
1,750,000 West Virginia Public
Energy Authority, Energy
Revenue Bonds (1989 Series
A), 3.80% CP (Morgantown
Energy Associates)/(UBS AG
LOC), Mandatory Tender
3/10/2000 1,750,000
TOTAL 3,750,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM MUNICIPALS-
continued 1
WISCONSIN--2.8%
$ 1,530,000 Marshfield, WI, IDR
(Series 1993) Weekly VRDNs
(Building Systems,
Inc.)/(Bank One,
Wisconsin, N.A. LOC) $ 1,530,000
4,875,000 Mukwonago, WI, (Series
1999) Weekly VRDNs (Empire
Level)/(Marshall &
Ilsley Bank, Milwaukee
LOC) 4,875,000
1,010,000 Plover, WI Weekly VRDNs
(Sirco Manufacturing,
Inc.)/(Norwest Bank
Minnesota, N.A. LOC) 1,010,000
3,030,000 Prentice Village, WI,
Limited Obligation Revenue
Refunding Bonds (Series A)
Weekly VRDNs (Biewer-
Wisconsin Sawmill, Inc.
Project)/(Michigan
National Bank, Farmington
Hills LOC) 3,030,000
1,320,000 Waukesha, WI, IDRB (Series
1995) Weekly VRDNs
(Weldall Manufacturing
Inc. Project)/(Bank One,
Wisconsin, N.A. LOC) 1,320,000
TOTAL 11,765,000
WYOMING--2.4%
10,000,000 2 Wyoming Community
Development Authority, PT-
195, 3.35% TOBs (Banco
Santander Central Hispano,
SA LIQ) 5/1/2000 10,000,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 3 $ 413,005,717
</TABLE>
Securities that are subject to the alternative minimum tax represent 92.6% of
the portfolio as calculated based upon total portfolio market value.
1 The fund may only invest in securities rated in one of the two highest
short-term rating categories by nationally recognized statistical rating
organizations ("NRSROs") or unrated securities of comparable quality. An NRSRO's
two highest rating categories are determined without regard for sub-categories
and gradations. For example, securities rated SP-1+, SP-1 or SP-2 by Standard &
Poor's, MIG-1, or MIG-2 by Moody's Investors Service, or F-1+, F-1 or F-2 by
Fitch IBCA, Inc., are all considered rated in one of the two highest short-term
rating categories. Securities rated in the highest short-term rating category
(and unrated securities of comparable quality) are identified as First Tier
securities. Securities rated in the second highest short-term rating category
(and unrated securities of comparable quality) are identified as Second Tier
securities. The fund follows applicable regulations in determining whether a
security is rated and whether a security rated by multiple NRSROs in different
rating categories should be identified as a First or Second Tier security.
At November 30, 1999, the portfolio securities were rated as follows:
Tier Rating Percentages Based on Total Market Value (Unaudited)
FIRST TIER SECOND TIER
96.9% 3.1%
2 Denotes a restricted security which is subject to restrictions on resale under
federal securities laws. These securities have been deemed liquid based upon
criteria approved by the fund's Board of Directors. At November 30, 1999, these
securities amounted to $79,820,000 which represents 19.2% of net assets.
3 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($414,761,834) at November 30, 1999.
The following acronyms are used throughout this portfolio:
AMBAC --American Municipal Bond Assurance Corporation AMT --Alternative Minimum
Tax BANs --Bond Anticipation Notes COL --Collateralized CP --Commercial Paper
EDA --Economic Development Authority EDC --Economic Development Commission EDRB
- --Economic Development Revenue Bonds FGIC --Financial Guaranty Insurance Company
FSA --Financial Security Assurance GNMA --Government National Mortgage
Association GTD --Guaranty HFA --Housing Finance Authority IDA --Industrial
Development Authority IDB --Industrial Development Bond IDC --Industrial
Development Corporation IDR --Industrial Development Revenue IDRB --Industrial
Development Revenue Bond INS --Insured LIQ --Liquidity Agreement LOC --Letter of
Credit MBIA --Municipal Bond Investors Assurance
MERLOTS --Municipal Exempt Receipts -- Liquidity Optional Tender Series MMMs
- --Money Market Municipals PCR --Pollution Control Revenue RANs --Revenue
Anticipation Notes TANs --Tax Anticipation Notes TOBs --Tender Option Bonds UT
- --Unlimited Tax VRDNs --Variable Rate Demand Notes
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
ASSETS:
Total investments in
securities, at amortized
cost and value $ 413,005,717
Income receivable 2,875,532
TOTAL ASSETS 415,881,249
LIABILITIES:
Income distribution
payable $ 591,959
Payable to Bank 315,993
Accrued expenses 211,463
TOTAL LIABILITIES 1,119,415
Net assets for 414,761,834
shares outstanding $ 414,761,834
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$414,761,834 / 414,761,834
shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 7,857,896
EXPENSES:
Investment advisory fee $ 1,100,937
Administrative personnel
and services fee 166,021
Custodian fees 13,576
Transfer and dividend
disbursing agent fees and
expenses 258,349
Directors'/Trustees' fees 3,422
Auditing fees 6,403
Legal fees 11,167
Portfolio accounting fees 42,181
Distribution services fee 220,187
Shareholder services fee 550,469
Share registration costs 25,085
Printing and postage 30,450
Insurance premiums 13,114
Taxes 16,056
Miscellaneous 7,323
TOTAL EXPENSES 2,464,740
WAIVER:
Waiver of investment
advisory fee (231,159)
Net expenses 2,233,581
Net investment income $ 5,624,315
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited) YEAR ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 5,624,315 $ 14,744,857
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (5,624,315) (14,744,857)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 676,759,463 2,025,211,320
Net asset value of shares
issued to shareholders in
payment of
distributions declared 4,850,227 13,799,382
Cost of shares redeemed (704,298,666) (2,249,372,662)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS (22,688,976) (210,361,960)
Change in net assets (22,688,976) (210,361,960)
NET ASSETS:
Beginning of period 437,450,810 647,812,770
End of period $ 414,761,834 $ 437,450,810
</TABLE>
See Notes which are an integral part of the Financial Statements
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited)
NOVEMBER 30, YEAR ENDED MAY 31,
1999 1999 1998 1997 1996 1995
<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 0.01 0.03 0.03 0.03 0.03 0.03
LESS DISTRIBUTIONS:
Distributions from net
investment income (0.01) (0.03) (0.03) (0.03) (0.03) (0.03)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 1.29% 2.58% 2.90% 2.80% 3.04% 2.84%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.01% 2 1.01% 1.01% 0.99% 0.99% 0.99%
Net investment income 2.55% 2 2.57% 2.86% 2.75% 2.99% 2.76%
Expense waiver/reimbursement 3 0.10% 2 0.12% 0.10% 0.09% 0.33% 0.05%
SUPPLEMENTAL DATA:
Net assets, end of period
(000 omitted) $414,762 $437,451 $647,813 $515,060 $478,605 $445,164
</TABLE>
1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
2 Computed on an annualized basis.
3 This voluntary expense decrease is reflected in both the expense and the net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
NOVEMBER 30, 1999
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 four portfolios. The financial
statements included herein are only those of Municipal Cash Series (the "Fund"),
a diversified portfolio. The financial statements of the other portfolios are
presented separately. The assets of each portfolio are segregated and a
shareholder's interest is limited to the portfolio in which shares are held. The
investment objective of the Fund is current income exempt from federal regular
income tax consistent with stability of principal.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS
Interest income and expenses are accrued daily. Bond premium and discount, if
applicable, are amortized as required by the Internal Revenue Code, as amended
(the "Code"). Distributions to shareholders are recorded on the ex-dividend
date. Non-cash dividends included in dividend income, if any, 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. Losses may occur on these transactions due to changes in market
conditions or the failure of counterparties to perform under the contract.
RESTRICTED SECURITIES
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from such registration.
Many restricted securities may be resold in the secondary market in transactions
exempt from registration. In some cases, the restricted securities may be resold
without registration upon exercise of a demand feature. Such restricted
securities may be determined to be liquid under criteria established by the
Board of Directors ("Directors"). The Fund will not incur any registration costs
upon such resales. Restricted securities are valued at amortized cost in
accordance with Rule 2a-7 under the Act.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on a trade date basis.
CAPITAL STOCK
At November 30, 1999, there were 12,500,000,000 par value shares ($0.001 per
share) authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited) YEAR ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
Shares sold 676,759,463 2,025,211,320
Shares issued to
shareholders in payment of
distributions declared 4,850,227 13,799,382
Shares redeemed (704,298,666) (2,249,372,662)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (22,688,976) (210,361,960)
</TABLE>
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Fund with administrative personnel and services. The fee
paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the
average aggregate daily net assets of all funds advised by Federated Investors,
Inc., subject to a $125,000 minimum per portfolio and $30,000 per each
additional class.
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 0.35% of
the average daily net assets of the Fund shares, annually, to reimburse FSC.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
INTERFUND TRANSACTIONS
During the period ended November 30, 1999, the Fund engaged in purchase and sale
transactions with funds that have a common investment adviser (or affiliated
investment advisers), common Directors/Trustees, and/or common Officers. These
purchase and sale transactions complied with Rule 17a-7 under the Act and
amounted to $327,390,000 and $423,239,000 respectively.
GENERAL
Certain of the Officers and Directors of the Corporation are Officers and
Directors or Trustees of the above companies.
Directors
JOHN F. DONAHUE
THOMAS G. BIGLEY
JOHN T. CONROY, JR.
NICHOLAS P. CONSTANTAKIS
JOHN F. CUNNINGHAM
J. CHRISTOPHER DONAHUE
LAWRENCE D. ELLIS, M.D.
PETER E. MADDEN
CHARLES F. MANSFIELD, JR.
JOHN E. MURRAY, JR., J.D., S.J.D.
MARJORIE P. SMUTS
JOHN S. WALSH
Officers
JOHN F. DONAHUE
Chairman
RICHARD B. FISHER
President
WILLIAM D. DAWSON III
Chief Investment Officer
J. CHRISTOPHER DONAHUE
Executive Vice President
EDWARD C. GONZALES
Executive Vice President
JOHN W. MCGONIGLE
Executive Vice President and Secretary
RICHARD J. THOMAS
Treasurer
LESLIE K. ROSS
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
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.
[Graphic]
Federated
World-Class Investment Manager
Municipal Cash Series
SEMI-ANNUAL REPORT
TO SHAREHOLDERS
SEMI-ANNUAL REPORT
NOVEMBER 30, 1999
[Graphic]
Federated
Municipal Cash Series
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Cusip 147551303
0122605 (1/00)
[Graphic]
SEMI-ANNUAL REPORT
President's Message
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Prime Cash
Series, a portfolio of Cash Trust Series, Inc., which covers the six- month
period ended November 30, 1999. The report begins with an investment review by
the fund's portfolio manager, which is followed by a complete listing of the
fund's investments and its financial statements.
During the reporting period, Prime Cash Series paid a total of $0.02 in
dividends per share. In addition to income on their ready cash, shareholders
benefited from the fund's daily liquidity and stability of principal. 1 Assets
continued to soar, surpassing the $4 billion mark at the reporting period's end.
At the end of the reporting period, the fund was invested across a diversified,
high-quality portfolio of money market securities that included commercial paper
(45.1%), variable notes (25.2%), corporate notes (10.0%), repurchase agreements
(5.7%), certificates of deposit (8.3%), loan participation notes (3.8%), a
Treasury bill (0.8%), a bank note (0.2%), a corporate bond (0.1%), time deposits
(4.2%).
Thank you for choosing Prime Cash Series as a convenient way to help your ready
cash earn daily income through the relative safety of high-quality money market
obligations. Please contact your investment representative if you have any
questions about the fund.
Sincerely,
[Graphic]
Richard B. Fisher
President
January 15, 2000
1 An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
money market funds seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.
Investment Review
Prime Cash Series invests in money market instruments maturing in 13 months or
less. The average maturity of these securities, computed on a dollar weighted
basis, is restricted to 90 days or less. Portfolio securities must be rated in
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.
The second half of 1999 brought low unemployment and a remarkable rise in
productivity in the United States. The Federal Reserve Board (the "Fed") policy
makers raised interest rates three times, in June, August and November,
increasing the Federal Funds Target Rate from 4.75% to 5.50%. The first two
interest rate increases were the central bank's attempt to partially undo the
three rate cuts from last year in the wake of the financial market crises
overseas. The November rate hike was viewed as an attempt to keep the strong
U.S. economy from overheating and preventing inflationary imbalances.
Thirty-day commercial paper started the reporting period at 4.86% on June 1,
1999, and then rose in anticipation of the three Federal Open Market Committee
interest rate increases. On November 30, the 30-day commercial paper rate was at
a high of 5.53% for the reporting period.
The money market yield curve for the second half of 1999 contained large spikes
at various points in time. At the end of September, as 3-month commercial paper
rates saw us through year-end and potential Y2K concerns, the 3-month commercial
paper rate jumped from 5.35% to 5.90% over two days. The same phenomenon
occurred in the one-month and two-month commercial paper rates, as these
maturity dates ran into January 2000. This spike in yields is expected to go
away in January 2000 and we anticipate a more normal money market yield curve
the remainder of the year. We also believe that the Fed will continue to raise
interest rates in early 2000 if economic indicators show demand exceeding
potential supply.
The target average maturity range for the fund remained in the 50-60 day range.
In structuring the fund, there was continued emphasis placed on positioning
30-35% of the fund's assets in variable rate demand notes and accomplishing a
modest barbell structure.
During the six month period ended November 30, 1999, the net assets of the fund
increased from $4.73 billion to $4.79 billion, while the 7-day net yield
increased from 3.99% to 4.72%. 1 The effective average maturity of the fund on
November 30, 1999 was 55 days.
1 Past performance is no guarantee of future results. Yield will vary. Yields
quoted for money market funds most closely reflect the fund's current earnings.
Last Meeting of Shareholders
A Special Meeting of Shareholders of Government Cash Series, Municipal Cash
Series, Prime Cash Series and Treasury Cash Series (the "Funds"), portfolios of
Cash Trust Series, Inc. (the "Company"), was held on June 30, 1999. On April 15,
1999, the record date for shareholders voting at the meeting, there were
6,707,649,226 total outstanding shares. The following items were considered by
shareholders and the results of their voting were as follows:
AGENDA ITEM 1
Election of Directors: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
FOR TO VOTE
<S> <C> <C>
John F. Cunningham 3,398,127,366 55,199,222
Charles F. Mansfield, Jr. 3,397,749,699 55,531,889
John S. Walsh 3,158,305,184 55,607,234
</TABLE>
1 The following Directors continued their terms as Directors: John F.
Donahue, Thomas G. Bigley, John T. Conroy, Jr., Nicholas P. Constantakis,
J. Christopher Donahue, Lawrence D. Ellis, M.D., Peter E. Madden, John E.
Murray, Jr., J.D., S.J.D., and Marjorie P. Smuts.
AGENDA ITEM 2
To ratify the selection of Deloitte and Touche LLP as the Funds' independent
auditors.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
3,383,325,530 23,014,450 46,986,608
</TABLE>
The meeting was adjourned to September 10, 1999, where all items were approved
as follows:
AGENDA ITEM 3
To make changes to the Funds' fundamental investment policies:
(a) To amend the Funds' fundamental investment policies regarding
diversification (Government Cash Series and Treasury Cash Series only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
291,983,396 12,529,883 49,367,162
</TABLE>
TREASURY CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
499,890,115 9,509,001 164,628,606
</TABLE>
(b) To amend the Funds' fundamental investment policies regarding borrowing
money and issuing senior securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,746,900,274 122,202,243 583,296,862
</TABLE>
(c) To amend the Funds' fundamental investment policies regarding investments in
real estate (Government Cash Series, Municipal Cash Series and Prime Cash Series
only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
290,710,542 13,827,306 49,342,592
</TABLE>
MUNICIPAL CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
225,556,983 12,897,647 34,394,134
</TABLE>
PRIME CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
1,724,125,798 92,073,775
</TABLE>
(d) To amend the Funds' fundamental investment policies regarding
investments in commodities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,721,156,403 150,142,468 581,100,505
</TABLE>
(e) To amend the Funds' fundamental investment policies regarding
underwriting securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,751,300,353 119,291,072 581,807,953
</TABLE>
(f) To amend the Funds' fundamental investment policies regarding lending
by the funds.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,729,753,612 141,234,182 581,411,584
</TABLE>
(g) To amend the Funds' fundamental investment policies regarding concentration
of the Funds' investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,247,267,965 113,674,026 417,420,664
</TABLE>
(h) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding buying securities on margin.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,710,166,597 162,331,238 579,901,543
</TABLE>
(i) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding pledging assets.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,678,032,092 160,004,528 614,362,758
</TABLE>
(j) To make non-fundamental the Fund's fundamental investment policies on
investing in restricted securities (Treasury Cash Series only).
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,003,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 4
To eliminate the Funds' fundamental investment policies on selling securities
short.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,033,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 5
To approve amendments to the Company's Articles of Incorporation to permit the
Board of Directors to liquidate assets of a series of a class without seeking
shareholder approval to the extent permitted under Maryland law.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,730,900,116 142,981,330 578,517,932
</TABLE>
Portfolio of Investments
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
BANK NOTE-0.2%
BANKING-0.2%
$ 10,000,000 Westpac Banking Corp.
Ltd., Sydney, 6.220%,
12/30/2000 $ 9,992,272
CERTIFICATES OF DEPOSIT-
8.3%
BANKING-8.3%
15,000,000 Bank of Montreal, 5.200%,
5/12/2000 14,996,776
35,000,000 Bank of Nova Scotia,
Toronto, 5.250%, 3/9/2000 34,996,346
25,000,000 Barclays Bank of Canada,
(Guaranteed by Barclays
Bank PLC, London), 5.050%,
1/13/2000 24,999,148
29,000,000 Bayerische Landesbank
Girozentrale, 5.115%,
3/21/2000 28,996,061
139,000,000 Canadian Imperial Bank of
Commerce, 5.000% - 5.270%,
1/27/2000 - 3/3/2000 138,987,500
14,000,000 Canadian Imperial Bank of
Commerce, 5.120%,
2/23/2000 13,998,758
10,000,000 Commerzbank AG, Frankfurt,
5.160%, 4/7/2000 9,998,649
55,000,000 Rabobank Nederland,
Utrecht, 5.140%, 3/20/2000 54,993,616
12,000,000 Svenska Handelsbanken,
Stockholm, 5.150%,
3/20/2000 11,998,955
65,000,000 UBS AG, 5.080% - 6.130%,
1/13/2000 - 11/29/2000 64,991,451
TOTAL CERTIFICATES OF
DEPOSIT 398,957,260
COMMERCIAL PAPER-45.1% 1
AEROSPACE/AUTO-2.0%
95,000,000 Johnson Controls, Inc
5.950%, 1/26/2000 -
1/28/2000 94,104,194
BANKING-14.7%
20,000,000 Abbey National N.A. Corp.,
(Guaranteed by Abbey
National Bank PLC,
London), 4.865%, 12/1/1999 20,000,000
36,000,000 Aspen Funding Corp.,
(MBIA), 6.030%, 2/2/2000 35,620,110
100,000,000 Barclays U.S. Funding
Corp., (Guaranteed by
Barclays Bank PLC,
London), 10.000%, 1/3/2000 99,916,667
5,605,000 Benedictine Health System,
(Harris Trust & Savings
Bank, Chicago LOC),
6.125%, 3/9/2000 5,510,591
2,735,000 Benedictine Living
Communities, Inc., (Harris
Trust & Savings Bank,
Chicago LOC), 6.125%,
3/9/2000 2,688,932
100,000,000 Cregem North America,
Inc., (Guaranteed by
Credit Communal de
Belgique, Brussles),
5.750% - 5.830%, 2/18/2000
- 4/17/2000 98,073,275
75,000,000 Den Danske Corp., Inc.,
(Guaranteed by Den Danske
Bank A/S), 5.790% - 5.890%,
3/1/2000 - 4/25/2000 73,797,424
20,000,000 Fountain Square Commercial
Funding Corp., (Fifth
Third Bank, Cincinnati
SA), 6.030%, 1/28/2000 19,805,700
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER-continued
BANKING-CONTINUED
$ 25,000,000 Market Street Funding
Corp., (PNC Bank, N.A.
LOC), 5.550%, 12/15/1999 $ 24,946,042
41,674,000 Park Avenue Receivables
Corp., 5.900, 2/10/2000 41,189,077
163,020,000 Three Rivers Funding
Corp., 5.400% - 5.600%,
12/10/1999 - 12/15/1999 162,701,676
100,000,000 UBS Finance (Delaware),
Inc., (UBS AG LOC), 4.860%
- 5.360%, 12/23/1999 -
12/1/2018 99,858,789
23,456,000 Wood Street Funding Corp.,
5.420% - 6.000%, 12/3/1999
- 1/28/2000 23,402,109
TOTAL 707,510,392
CHEMICALS-1.0%
14,436,000 IMC Global, Inc., 5.670 -
6.350%, 12/14/1999 -
2/7/2000 14,382,212
32,224,000 Rohm & Haas Co., 6.250% -
6.450%, 1/20/2000 -
2/4/2000 31,893,186
TOTAL 46,275,398
CONTAINER/PACKAGING-0.4%
18,060,000 Crown Cork & Seal Co.,
Inc., 5.670%, 12/17/1999 18,014,489
ELECTRIC POWER-0.2%
10,000,000 Southern Electric
Generating Co. (SEGCO),
5.450%, 12/9/99 9,987,889
FINANCE - AUTOMOTIVE-0.7%
4,500,103 Ford Credit Auto Owner
Trust 1999-B, Class A2,
5.114%, 5/15/2000 4,500,103
9,763,020 Honda Auto Lease Trust
1999-A, Class A1, 5.445%,
8/15/2000 9,763,020
19,749,673 Toyota Auto Receivables
1999-A Owner Trust, Class
1, 5.365%, 8/11/2000 19,749,673
TOTAL 34,012,796
FINANCE - COMMERCIAL-17.4%
20,000,000 Asset Securitization
Cooperative Corp., 5.850%,
2/22/2000 19,730,250
32,000,000 CIT Group, Inc., 5.950%,
2/10/2000 31,624,489
30,000,000 Corporate Asset Funding
Co., Inc. (CAFCO), 5.860%,
2/28/2000 29,565,383
57,600,000 FINOVA Capital Corp.,
5.430%, 12/10/1999 57,521,808
10,000,000 GE Capital International
Funding, Inc., (Guaranteed
by General Electric
Capital Corp.), 5.310%,
1/26/2000 9,917,400
156,732,000 General Electric Capital
Corp., 5.800% - 5.920%,
1/4/2000 - 3/10/2000 154,392,044
103,059,000 Greenwich Funding Corp.,
5.400% - 6.000%, 12/7/1999
- 2/25/2000 102,321,075
105,627,000 Receivables Capital Corp.,
5.820% - 5.940%, 1/14/2000
- 2/11/2000 104,626,430
240,000,000 Sheffield Receivables
Corp., 5.900% - 6.150%,
1/20/2000 - 2/11/2000 237,637,281
91,000,000 Sigma Finance, Inc.,
(Guaranteed by Sigma
Finance Corp.), 5.550% -
5.770%, 2/4/2000 -
5/10/2000 89,337,306
TOTAL 836,673,466
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
COMMERCIAL PAPER-continued
FINANCE - EQUIPMENT-0.8%
$ 10,450,168 Caterpillar Financial
Asset Trust 1999-A, Class
1, 5.365%, 7/25/2000 $ 10,450,168
4,300,000 Comdisco, Inc., 6.550%,
1/11/2000 4,267,923
19,397,041 Copelco Capital Funding
LLC 1999-B, Class A-1,
5.937%, 10/18/2000 19,397,041
4,798,238 Heller Equipment Asset
Receivables Trust 1999-1,
Class A1, 4.947%,
5/13/2000 4,798,238
TOTAL 38,913,370
FINANCE - RETAIL-3.3%
50,000,000 Associates Corp. of North
America, 5.720%, 12/1/1999 50,000,000
90,000,000 Diageo Capital PLC,
(Guaranteed by Diageo
PLC), 5.700% - 5.890%,
1/31/2000 - 4/11/2000 88,570,611
20,000,000 Island Finance, Puerto
Rico Inc., 6.020%,
2/28/2000 19,702,344
TOTAL 158,272,955
HOMEBUILDING-0.0%
1,400,000 Centex Corp., 5.520%,
12/15/1999 1,396,995
INDUSTRIAL PRODUCTS-1.0%
47,575,000 Praxair, Inc., 6.260% -
6.320%, 2/1/2000 47,058,238
INSURANCE-0.7%
35,000,000 CXC, Inc., 5.910% - 5.940%,
1/27/2000 - 2/2/2000 34,656,763
MACHINERY, EQUIPMENT,
AUTO-0.9%
45,500,000 Eaton Corp., 5.550%,
1/27/2000 45,100,169
PHARMACEUTICALS AND HEALTH
CARE-0.2%
10,000,000 American Home Products
Corp., 5.700%, 2/9/2000 9,889,167
RETAIL-0.9%
41,000,000 Safeway, Inc., 5.520% -
6.300%, 12/3/1999 -
1/19/2000 40,904,743
TRANSPORTATION-0.9%
43,900,000 FDX Corp., 6.350%,
1/5/2000 43,628,978
TOTAL COMMERCIAL PAPER 2,166,400,002
CORPORATE BOND-0.1%
FINANCE - COMMERCIAL-0.1%
4,500,000 FINOVA Capital Corp.,
6.450%, 6/1/2000 4,510,991
CORPORATE NOTES-10.0%
BANKING-2.3%
20,000,000 Abbey National Treasury
Services, PLC, 4.990%,
1/10/2000 19,999,366
89,000,000 Bank One, Illinois, N.A.,
6.070 - 6.200%, 10/10/2000
- 10/23/2000 88,963,520
TOTAL 108,962,886
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
CORPORATE NOTES-continued
BROKERAGE-2.4%
$ 64,000,000 Goldman Sachs Group, Inc.,
5.450% - 6.010, 3/29/2000 $ 64,000,000
50,000,000 Goldman Sachs Group, LP,
6.000%, 3/14/2000 50,000,000
TOTAL 114,000,000
FINANCE - COMMERCIAL-5.3%
215,000,000 Beta Finance, Inc., 5.000%
- 6.020, 2/1/2000 -
9/1/2000 214,999,588
20,000,000 FINOVA Capital Corp.,
5.150%, 6/12/2000 20,000,000
21,500,000 Sigma Finance, Inc.,
6.150% - 6.360%, 9/8/2000 -
10/26/2000 21,500,000
TOTAL 256,499,588
TOTAL CORPORATE NOTES 479,462,474
LOAN PARTICIPATION-3.8%
ELECTRICAL EQUIPMENT-0.5%
25,700,000 Mt. Vernon Phenol Plant
Partnership, (Guaranteed
by General Electric Co.),
6.120%, 5/17/2000 25,700,000
ELECTRONICS-0.5%
25,000,000 Hewlett-Packard Co.,
5.460%, 12/10/1999 25,000,000
FINANCE - AUTOMOTIVE-1.3%
63,200,000 General Motors Acceptance
Corp., Mortgage of PA,
(Guaranteed by General
Motors Acceptance Corp.),
5.447% - 5.630%, 12/1/1999
- 12/17/1999 63,200,000
FINANCE - EQUIPMENT-1.5%
70,000,000 Pitney Bowes Credit Corp.,
5.400%, 12/10/1999 69,905,500
TOTAL LOAN PARTICIPATION 183,805,500
NOTES - VARIABLE-25.2% 2
BANKING-7.4%
8,410,000 Adena Health System, Adena
Health System Project
(Series 1998), (Fifth
Third Bank, Cincinnati
LOC), 5.660%, 12/02/1999 8,410,000
2,000,000 American Health Care
Centers, (Series 1998),
(FirstMerit Bank, N.A.
LOC), 5.710%, 12/02/1999 2,000,000
4,245,000 Aurora City, IL, (Series
1995), (National City
Bank, Michigan/Illinois
LOC), 5.857%, 12/02/1999 4,245,000
725,000 Avalon Hotel Associates,
(First Union National
Bank, Charlotte, NC LOC),
6.436%, 12/02/1999 725,000
1,435,000 BeMacs Service, Inc.,
(SouthTrust Bank of
Alabama, Birmingham LOC),
6.160%, 12/03/1999 1,435,000
2,910,000 Blackwell Investments,
Inc., (Bank One, Louisiana
LOC), 5.850%, 12/02/1999 2,910,000
7,000,000 Bond Holdings, LP.,
(SouthTrust Bank of
Alabama, Birmingham LOC),
5.700%, 12/03/1999 7,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
NOTES-VARIABLE-continued 3
BANKING-CONTINUED
$ 1,560,000 Boozer Lumber Co.,
(SouthTrust Bank of
Alabama, Birmingham LOC),
6.160%, 12/03/1999 $ 1,560,000
65,000,000 Comerica Bank, 5.403% -
5.643%, 12/09/1999-
12/25/1999 64,963,867
1,315,000 Denver Urban Renewal
Authority, (Series 1992-
B), (Paribas, Paris LOC),
5.710%,12/02/1999 1,315,000
5,550,000 Dewberry III, LP., (FMB
Bank LOC), 5.640%,
12/07/1999 5,550,000
1,385,000 Edgefield County, SC,
Series 1997 (Bondex Inc
Project), (HSBC Bank USA
LOC), 6.101%, 12/02/1999 1,385,938
1,640,000 Gahanna OH, City of,
Franklin Steel Co Project,
(Star Bank, N.A.,
Cincinnati LOC),
5.900%,12/02/1999 1,640,000
3,000,000 Gervais Street Associates,
(Series 1998), (Wachovia
Bank of NC, N.A. LOC),
6.540%, 1/05/2000 3,000,000
3,500,000 Great Southern Wood
Preserving Co.,
(SouthTrust Bank of
Alabama, Birmingham LOC),
6.160%, 12/18/2018 3,500,000
9,000,000 Grob Systems, Inc.,
(Series 1998 & 1999),
(Fifth Third Bank,
Cincinnati LOC), 5.650%,
12/02/1999 9,000,000
10,180,000 HJH Associates of Alabama,
Hilton Hotel, Huntsville,
(SouthTrust Bank of
Alabama, Birmingham LOC),
6.160%, 12/03/1999 10,180,000
8,155,000 HSI Funding, LLC, Variable
Rate (Series A), (National
City Bank,
Michigan/Illinois LOC),
5.600%, 12/02/1999 8,155,000
3,380,000 James F. Taylor, Series
1999, (SouthTrust Bank of
Alabama, Birmingham LOC),
6.150%, 12/03/1999 3,380,000
1,895,000 La-Man Corp., (SouthTrust
Bank of Alabama,
Birmingham LOC), 6.160%,
12/03/1999 1,895,000
2,290,000 Lake Sherwood Senior
Living Center, LLC, (Union
Planters NB, Memphis, TN
LOC), 6.350%, 12/02/1999 2,290,000
51,000,000 Liquid Asset Backed
Securities Trust, Series
1996-3A, (Westdeutsche
Landesbank Girozentrale
Swap Agreement), 5.4475%,
12/31/1999 51,000,000
29,542,144 3 Liquid Asset Backed
Securities Trust, Series
1997-1A, (Westdeutsche
Landesbank Girozentrale
Swap Agreement), 5.4275%,
12/29/1999 29,542,144
3,185,000 Maryland State IDFA,
(Genetic Therapy, Inc.),
(FMB Bank LOC), 6.050%,
1/10/2000 3,185,000
5,400,000 Maryland State IDFA,
(Kelly Springfield Tire),
(FMB Bank LOC), 5.960%,
12/06/1999 5,400,000
2,026,000 Maryland State IDFA, Human
Genome, Series1994, (FMB
Bank LOC), 5.910%,
12/06/1999 2,026,000
4,200,000 Memphis, TN Center City
Revenue Finance Corp.,
South Bluffs Project
(Series1998-A), (National
Bank of Commerce, Memphis,
TN LOC), 5.700%,
12/02/1999 4,200,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
NOTES-VARIABLE-continued 3
BANKING-CONTINUED
$ 7,800,000 Mississippi Business
Finance Corp., Howard
Industries, Inc. Series
1997, (First American
National Bank, Nashville,
TN LOC), 5.800%, 12/2/1999 $ 7,800,000
570,000 New Jersey EDA, Series 1992
K-3, (Banque Nationale de
Paris LOC), 5.690%,
12/6/1999 570,000
3,455,000 New Jersey EDA, Series
1992-H, (Banque Nationale
de Paris LOC), 5.810%,
12/6/1999 3,455,000
6,885,000 O'Dovero Consolidated,
LLC, (Series 1998-A),
(National City Bank,
Michigan/Illinois LOC),
5.600%, 12/02/1999 6,885,000
14,100,000 Park Avenue Receivables
Corp., 5.517%, 2/3/2000 14,100,000
5,300,000 Pennsylvania EDFA, (Series
1993-C), (Barclays Bank
PLC, London LOC), 5.900%,
12/02/1999 5,300,000
9,615,774 3 Rabobank Optional
Redemption Trust, Series
1997-101, 6.186%,
2/17/2004 9,615,774
1,600,000 Saegertown Manufacturing
Corp., (PNC Bank, N.A.
LOC), 5.86%, 12/6/1999 1,600,000
4,200,000 Smith Garden Products,
Inc., (SouthTrust Bank of
Alabama, Birmingham LOC),
6.160%, 12/03/1999 4,200,000
4,420,000 Sojourn Project, Series
1997, (FirstMerit Bank,
N.A. LOC), 5.710%,
12/02/1999 4,420,000
5,225,000 Sun Valley, Inc.,
(SouthTrust Bank of
Georgia, Atlanta LOC),
6.160%, 12/03/1999 5,225,000
15,000,000 Three Rivers Funding
Corp., 4.910%, 12/31/1999 15,000,000
18,525,000 Union Development Co.,
(Bank of America, N.A.
LOC), 5.971%, 12/2/1999 18,525,000
2,175,000 United Jewish Federation
of Greater Pittsburgh
VRDB, Series 1995A, (PNC
Bank, N.A. LOC), 5.700%,
12/2/1999 2,175,000
6,140,000 Van Dyne Crotty Co.,
(Huntington National Bank,
Columbus, OH LOC), 5.960%,
12/02/1999 6,140,000
4,685,000 Visalia, CA Community
Redevelopment Agency, East
Visalia Redevelopment
Project (Series 1990),
(Union Bank of California
LOC), 5.800%, 12/02/1999 4,685,000
5,230,000 Woodbury Business Forms,
Inc./Carribean Business
Forms, Series 1996 Taxable
Revenue Bonds, (Columbus
Bank and Trust Co., GA
LOC), 6.170%, 12/02/1999 5,230,000
TOTAL 354,818,723
BROKERAGE-3.0%
142,000,000 Morgan Stanley, Dean
Witter & Co., 5.860%-
5.910, 12/31/1999 142,000,000
FINANCE - AUTOMOTIVE-3.5%
71,000,000 General Motors Acceptance
Corp., 4.860%, 12/31/1999 71,000,000
100,000,000 General Motors Acceptance
Corp., Mortgage of PA,
(General Motors Acceptance
Corp. LOC), 6.088,
1/4/2000 99,434,045
TOTAL 170,434,045
FINANCE - COMMERCIAL-2.3%
11,000,000 Asset Securitization
Cooperative Corp., 5.456%,
12/14/1999 11,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
NOTES-VARIABLE-continued 3
FINANCE - COMMERCIAL-
CONTINUED
$ 100,000,000 Sigma Finance, Inc.,
(Guaranteed by Sigma
Finance Corp.), 5.65% -
5.680%, 12/27/1999 -
1/5/2000 $ 100,000,000
1,100,000 Sigma Finance, Inc.,
Variable Medium Term Note,
(Guaranteed by Sigma
Finance Corp.), 6.157%,
2/09/2000 1,100,000
TOTAL 112,100,000
FINANCE - RETAIL-0.6%
31,000,000 AFS Insurance Premium
Receivables Trust, (Series
1994-A), 5.962%,
12/31/1999 31,000,000
HOMEBUILDING-1.0%
46,100,000 Centex Corp., 5.810%,
7/27/2000 46,100,000
INSURANCE-7.4%
37,000,000 Aspen Funding Corp.,
(MBIA), 5.4325%,
12/29/1999 37,000,000
25,000,000 GE Life and Annuity
Assurance Co., 5.592%,
12/1/1999 25,000,000
84,000,000 Jackson National Life
Insurance Co, 5.682% -
6.240%, 12/29/1999 -
1/29/2000 84,000,000
21,991,200 3 Liquid Asset Backed
Securities Trust, Series
1997-3, Sr. Notes,
(Guaranteed by AMBAC
Financial Group, Inc.),
5.486%, 1/29/2000 21,991,200
16,771,856 3 Liquid Asset Backed
Securities Trust Series
1998-1, Sr. Notes,
(Guaranteed by AMBAC
Financial Group, Inc.),
5.593%, 12//1999 16,771,856
40,000,000 Principal Life Insurance
Co., 5.652%, 12/01/1999 40,000,000
23,000,000 Protective Life Insurance
Co., 6.355%, 2/29/2000 23,000,000
70,000,000 Security Life of Denver
Insurance Co., 5.371% -
6.358%, 1/29/2000 -
2/10/2000 70,000,000
20,000,000 Transamerica Life
Insurance and Annuity Co.,
6.168%, 2/29/2000 20,000,000
15,000,000 Transamerica Occidental
Life Insurance Co.,
6.328%, 2/29/2000 15,000,000
TOTAL 352,763,056
TOTAL NOTES - VARIABLE 1,209,215,824
REPURCHASE AGREEMENTS-5.7%
4
163,800,000 Bank of America, 5.780%,
dated 11/30/1999, due
12/1/1999 163,800,000
50,000,000 Deutsche Bank Financial,
Inc., 5.740%, dated
11/30/1999, due 12/1/1999 50,000,000
50,000,000 Donaldson, Lufkin and
Jenrette Securities Corp.,
5.680%, dated 11/30/1999,
due 12/1/1999 50,000,000
11,800,000 Societe Generale
Securities Corp., 5.680%,
dated 11/30/1999, due
12/1/1999 11,800,000
TOTAL REPURCHASE
AGREEMENTS 275,600,000
TIME DEPOSITS-4.2%
BANKING-4.2%
175,000,000 Bank of Tokyo-Mitsubishi
Ltd., 5.750%, 12/1/1999 175,000,000
25,000,000 Westdeutsche Landesbank
Girozentrale, 5.750%,
12/1/1999 25,000,000
TOTAL TIME DEPOSITS 200,000,000
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
U.S. TREASURY-0.8%
TREASURY SECURITIES-0.8%
$38,000,000 United States Treasury
Bills, 4.730%, 1/6/2000 $ 37,820,260
TOTAL INVESTMENTS (AT
AMORTIZED COST) 5 $ 4,965,764,583
</TABLE>
1 Each issue shows the rate of discount at the time of purchase for discount
issues, or the coupon for interest bearing issues.
2 Current rate and next reset date shown.
3 Denotes a restricted security which is subject to restrictions on resale under
federal securities laws. These securities have been deemed liquid by criteria
approved by the fund's Board of Directors. At November 30, 1999, these
securities amounted to $77,920,974 which represents 1.62% of net assets.
4 The repurchase agreements are fully collateralized by U.S. government and/or
agency obligations based on market prices at the date of the portfolio. The
investments in the repurchase agreements are through participation in joint
accounts with other Federated funds.
5 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($4,798,485,869) at November 30, 1999.
The following acronyms are used throughout this portfolio:
AMBAC -American Municipal Bond Assurance Corporation EDA -Economic Development
Authority EDFA -Economic Development Financing Authority IDFA -Industrial
Development Finance Authority LOC -Letter of Credit MBIA -Municipal Bond
Investors Assurance VRDB -Variable Rate Demand Bond
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Total investments in
securities, at amortized
cost and value $ 4,965,764,583
Receivable for shares sold 9,879,756
Income receivable 33,923,761
TOTAL ASSETS 5,009,568,100
LIABILITIES:
Payable for investments
purchased $ 198,700,273
Income distribution
payable 10,215,890
Accrued expenses 2,166,068
TOTAL LIABILITIES 211,082,231
Net assets for
4,798,485,869 shares
outstanding $ 4,798,485,869
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$4,798,485,869 /
4,798,485,869 shares
outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 125,408,549
EXPENSES:
Investment adviser fee $ 11,691,193
Administrative personnel
and services fee 1,763,032
Custodian fees 153,284
Transfer and dividend
disbursing agent fees and
expenses 3,923,353
Directors'/Trustees' fees 15,119
Auditing fees 6,705
Legal fees 17,589
Portfolio accounting fees 79,094
Distribution services fee 2,338,239
Shareholder services fee 5,845,596
Share registration costs 127,382
Printing and postage 663,820
Insurance premiums 130,621
Taxes 200,384
Miscellaneous 9,220
TOTAL EXPENSES 26,964,631
Waiver of investment
adviser fee (3,481,911)
Net expenses 23,482,720
Net investment income $ 101,925,829
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited) YEAR ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 101,925,829 $ 183,783,668
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (101,925,829) (183,783,668)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 7,696,485,729 14,914,745,750
Net asset value of shares
issued to shareholders in
payment of distributions
declared 92,585,927 177,005,053
Cost of shares redeemed (7,719,034,153) (14,111,336,402)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS 70,037,503 980,414,401
Change in net assets 70,037,503 980,414,401
NET ASSETS:
Beginning of period 4,728,448,366 3,748,033,965
End of period $ 4,798,485,869 $ 4,728,448,366
</TABLE>
See Notes which are an integral part of the Financial Statements
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited)
NOVEMBER 30, YEAR ENDED
MAY 31,
1999 1999 1998
1997 1996 1995
<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 0.02 0.04
0.05 0.05 0.05 0.05
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.04)
(0.05) (0.05) (0.05) (0.05)
NET ASSET VALUE, END OF PERIOD $ 1.00 $ 1.00 $ 1.00
$ 1.00 $ 1.00 $ 1.00
TOTAL RETURN 1 2.20% 4.46%
4.83% 4.64% 4.90% 4.60%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.00% 2 1.00%
1.00% 0.99% 0.99% 0.99%
Net investment income 4.36% 2 4.36%
4.73% 4.55% 4.78% 4.57%
Expense waiver/reimbursement 3 0.25% 2 0.16%
0.18% 0.20% 0.38% 0.20%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $4,798,486 $4,728,448 $3,748,034
$2,363,382 $1,539,235 $1,027,083
</TABLE>
1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
2 Computed on an annualized basis.
3 This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
NOVEMBER 30, 1999 (UNAUDITED)
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 four portfolios. The financial
statements included herein are 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. The investment objective of the Fund
is current income consistent with stability of principal and liquidity.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors (the "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.
The Fund, along with other affiliated investment companies may utilize a joint
trading account for the purpose of entering into one or more repurchase
agreements.
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. Non-cash dividends included in dividend income if any are recorded at fair
value.
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. Losses may occur on these transactions due to changes in market
conditions or the failure of counterparties to perform under the contract.
RESTRICTED SECURITIES
Restricted securities are securities that may only be resold upon registration
under federal securities laws or in transactions exempt from such registration.
In some cases, the issuer of restricted securities has agreed to register such
securities for resale, at the issuer's expense, either upon demand by the Fund
or in connection with another registered offering of the securities. Many
restricted securities may be resold in the secondary market in transaction
exempt from registration. Such restricted securities may be determined to be
liquid under criteria established by the Directors. The Fund will not incur any
registration costs upon such resales. The Fund's restricted securities are
valued at the price provided by dealers in the secondary market or, if no market
prices are available, at the fair value as determined by the Fund's pricing
committee.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on a trade date basis.
CAPITAL STOCK
At November 30, 1999, there were 12,500,000,000 shares ($0.001 par value per
share) authorized. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
Shares sold 7,696,485,729 14,914,745,750
Shares issued to
shareholders in payment of
distributions declared 92,585,927 177,005,053
Shares redeemed (7,719,034,153) (14,111,336,402)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS 70,037,503 980,414,401
</TABLE>
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment adviser fee equal to
0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Fund with administrative personnel and services. The fee
paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors, Inc., subject to a $125,000 minimum per portfolio and
$30,000 for each additional class.
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 Fund
shares. The Plan provides that the Fund may incur distribution expenses up to
0.35% of the average daily net assets of the Fund shares, annually, to reimburse
FSC.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund shares for the period. The fee paid to FSSC is used to
finance certain services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
GENERAL
Certain of the Officers and Directors of the Corporation are Officers and
Directors or Trustees of the above companies.
Directors
JOHN F. DONAHUE
THOMAS G. BIGLEY
JOHN T. CONROY, JR.
NICHOLAS P. CONSTANTAKIS
JOHN F. CUNNINGHAM
J. CHRISTOPHER DONAHUE
LAWRENCE D. ELLIS, M.D.
PETER E. MADDEN
CHARLES F. MANSFIELD, JR.
JOHN E. MURRAY, JR., J.D., S.J.D.
MARJORIE P. SMUTS
JOHN S. WALSH
Officers
JOHN F. DONAHUE
Chairman
RICHARD B. FISHER
President
WILLIAM D. DAWSON III
Chief Investment Officer
J. CHRISTOPHER DONAHUE
Executive Vice President
EDWARD C. GONZALES
Executive Vice President
JOHN W. MCGONIGLE
Executive Vice President and Secretary
RICHARD J. THOMAS
Treasurer
LESLIE K. ROSS
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
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.
[Graphic]
Federated
World-Class Investment Manager
SEMI-ANNUAL REPORT
Prime Cash Series
SEMI-ANNUAL REPORT TO SHAREHOLDERS
NOVEMBER 30, 1999
[Graphic]
Federated
Prime Cash Series
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Cusip 147551105
0122606 (1/00)
[Graphic]
SEMI-ANNUAL REPORT
President's Message
Dear Shareholder:
I am pleased to present the Semi-Annual Report to Shareholders for Treasury Cash
Series, a portfolio of Cash Trust Series, Inc., which covers the six- month
period ended November 30, 1999. The report begins with an investment review by
the fund's portfolio manager, which is followed by a complete listing of the
fund's investments and its financial statements.
During the reporting period, Treasury Cash Series paid a total of $0.02 in
dividends per share. In addition to income on their ready cash, shareholders
benefited from the fund's daily liquidity and stability of principal. 1
At the end of the reporting period, most of the fund's $949 million portfolio
was invested in repurchase agreements backed by U.S. government securities,
because these securities offered yield advantage over many direct government
securities. The remainder of the fund's assets were invested in direct U.S.
Treasury bills and notes.
Thank you for choosing Treasury Cash Series as a convenient way to help your
ready cash earn daily income through the relative safety of U.S. Treasury money
market obligations. Please contact your investment representative if you have
any questions about your investment.
Sincerely,
[Graphic]
Richard B. Fisher
President
January 15, 2000
1 An investment in money market funds is neither insured nor guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Although
money market funds seek to preserve the value of your investment at $1.00 per
share, it is possible to lose money by investing in the fund.
Investment Review
Treasury Cash Series is invested in direct obligations of the U.S. Treasury,
either in the form of notes and bills or as collateral for repurchase
agreements. The fund is rated AAAm by Standard & Poor's and Aaa by Moody's
Investors Service. 1
The Federal Reserve Board (the "Fed") tightened monetary policy on three
separate occasions over the semi-annual reporting period, bringing the Federal
funds target level 75 basis points higher to its present level of 5.50%. The
three 25 basis point policy adjustments completely removed the degree of
liquidity that the Fed had infused into the fixed income markets at the height
of the global economic crisis in the fourth quarter of 1998. Vigorous economic
growth spurred onward by robust consumer spending forced the Fed's hand in spite
of generally well-contained inflationary pressures.
Short-term interest rates rose steadily over the reporting period. By the time
of the first 25 basis point tightening at the end of June, the front end of the
yield curve had fully anticipated the action to be taken by the Fed, a pattern
that repeated itself for the subsequent moves in mid- August and mid-November.
Overall, the yield on the one year Treasury bill, which began the reporting
period in June at 5.00%, rose to 5.70% by the end of the reporting period in
November. After the Fed's mid-November move, the market correctly interpreted
that the Fed would be on the sidelines for the remainder of the year, in order
to avoid additional uncertainty ahead of the century date change at the end of
the year.
The fund maintained a 40- to 50-day average maturity target range over the
reporting period, moving within that range according to relative value
opportunities. The tendency of the market to anticipate the policy changes from
the Fed allowed us to continue to maintain our maturity stance in spite of the
expectation of rising interest rates. The fund's structure remained barbelled,
combining a significant portion in repurchase agreements with purchases of
securities with 6 to 13 month maturities. Toward the end of the reporting
period, with the Fed temporarily on hold and expectations of lower short-term
interest rates-particularly on repurchase agreements-as a result of Y2K, we
reduced our overnight repurchase agreement position in favor of term repurchase
agreements with longer maturities.
Looking forward, with the aftermath from Y2K being relatively minor and fourth
quarter gross domestic product growth expected to have exceeded 5.0%, we expect
the Fed to resume its tightening trend in the first quarter of 2000.
1 An AAAm rating is obtained after S&P evaluates a number of factors, including
credit quality, market price exposure, and management. S&P monitors the
portfolio weekly for developments that could cause changes in the ratings. Money
market funds and bond funds rated Aaa by Moody's are judged to be of an
investment quality similar to Aaa-rated fixed income obligations, that is, they
are judged to be of the best quality. These ratings to not remove market risks
and are subject to change.
Last Meeting of Shareholders
A Special Meeting of Shareholders of Government Cash Series, Municipal Cash
Series, Prime Cash Series and Treasury Cash Series (the "Funds"), portfolios of
Cash Trust Series, Inc. (the "Company"), was held on June 30, 1999. On April 15,
1999, the record date for shareholders voting at the meeting, there were
6,707,649,226 total outstanding shares. The following items were considered by
shareholders and the results of their voting were as follows:
AGENDA ITEM 1
Election of Directors: 1
<TABLE>
<CAPTION>
WITHHELD
AUTHORITY
FOR TO VOTE
<S> <C> <C>
John F. Cunningham 3,398,127,366 55,199,222
Charles F. Mansfield, Jr. 3,397,749,699 55,531,889
John S. Walsh 3,158,305,184 55,607,234
</TABLE>
1 The following Directors continued their terms as Directors: John F.
Donahue, Thomas G. Bigley, John T. Conroy, Jr., Nicholas P. Constantakis,
J. Christopher Donahue, Lawrence D. Ellis, M.D., Peter E. Madden, John E.
Murray, Jr., J.D., S.J.D., and Marjorie P. Smuts.
AGENDA ITEM 2
To ratify the selection of Deloitte and Touche LLP as the Funds' independent
auditors.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
3,383,325,530 23,014,450 46,986,608
</TABLE>
The meeting was adjourned to September 10, 1999, where all items were approved
as follows:
AGENDA ITEM 3
To make changes to the Funds' fundamental investment policies:
(a) To amend the Funds' fundamental investment policies regarding
diversification (Government Cash Series and Treasury Cash Series only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
291,983,396 12,529,883 49,367,162
</TABLE>
TREASURY CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
499,890,115 9,509,001 164,628,606
</TABLE>
(b) To amend the Funds' fundamental investment policies regarding borrowing
money and issuing senior securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,746,900,274 122,202,243 583,296,862
</TABLE>
(c) To amend the Funds' fundamental investment policies regarding investments in
real estate (Government Cash Series, Municipal Cash Series and Prime Cash Series
only).
GOVERNMENT CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
290,710,542 13,827,306 49,342,592
</TABLE>
MUNICIPAL CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
225,556,983 12,897,647 34,394,134
</TABLE>
PRIME CASH SERIES
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
1,724,125,798 92,073,775
</TABLE>
(d) To amend the Funds' fundamental investment policies regarding
investments in commodities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,721,156,403 150,142,468 581,100,505
</TABLE>
(e) To amend the Funds' fundamental investment policies regarding
underwriting securities.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,751,300,353 119,291,072 581,807,953
</TABLE>
(f) To amend the Funds' fundamental investment policies regarding lending
by the funds.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,729,753,612 141,234,182 581,411,584
</TABLE>
(g) To amend the Funds' fundamental investment policies regarding concentration
of the Funds' investments in the securities of companies in the same industry.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,247,267,965 113,674,026 417,420,664
</TABLE>
(h) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding buying securities on margin.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,710,166,597 162,331,238 579,901,543
</TABLE>
(i) To amend, and to make non-fundamental, the Funds' fundamental investment
policies regarding pledging assets.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,678,032,092 160,004,528 614,362,758
</TABLE>
(j) To make non-fundamental the Fund's fundamental investment policies on
investing in restricted securities (Treasury Cash Series only).
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,003,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 4
To eliminate the Funds' fundamental investment policies on selling securities
short.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,689,033,085 151,258,087 612,108,206
</TABLE>
AGENDA ITEM 5
To approve amendments to the Company's Articles of Incorporation to permit the
Board of Directors to liquidate assets of a series of a class without seeking
shareholder approval to the extent permitted under Maryland law.
<TABLE>
<CAPTION>
FOR AGAINST ABSTENTIONS
<S> <C> <C>
2,730,900,116 142,981,330 578,517,932
</TABLE>
Portfolio of Investments
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT VALUE
<C> <S> <C>
SHORT-TERM U.S. TREASURY
OBLIGATIONS-25.0%
1 U.S. TREASURY BILLS-0.7%
$ 7,000,000 4.470%-5.210%, 3/30/2000-
11/9/2000 $ 6,756,162
U.S. TREASURY NOTES-24.3%
230,550,000 4.000%-7.750%, 12/31/1999-
10/31/2000 230,797,433
TOTAL SHORT-TERM
U.S. TREASURY OBLIGATIONS 237,553,595
REPURCHASE AGREEMENTS-
74.7% 2
45,000,000 ABN AMRO, Inc., 5.670%,
dated 11/30/1999, due
12/1/1999 45,000,000
45,000,000 Banc One Capital Markets,
5.680%, dated 11/30/1999,
due 12/1/1999 45,000,000
45,000,000 Barclays de Zoete Wedd
Securities, Inc., 5.700%,
dated 11/30/1999, due
12/1/1999 45,000,000
45,000,000 Bear, Stearns and Co.,
5.690%, dated 11/30/1999,
due 12/1/1999 45,000,000
45,000,000 CIBC Wood Gundy Securities
Corp., 5.680%, dated
11/30/1999, due 12/1/1999 45,000,000
31,000,000 3 Credit Suisse First
Boston, Inc., 5.430%,
dated 11/18/1999, due
1/18/2000 31,000,000
46,300,000 Deutsche Bank Financial,
Inc., 5.680%, dated
11/30/1999, due 12/1/1999 46,300,000
45,000,000 Donaldson, Lufkin and
Jenrette Securities Corp.,
5.680%, dated 11/30/1999,
due 12/1/1999 45,000,000
45,000,000 Greenwich Capital Markets,
Inc., 5.690%, dated
11/30/1999, due 12/1/1999 45,000,000
34,000,000 3 Lehman Brothers, Inc.,
5.430%, dated 11/19/1999,
due 1/18/2000 34,000,000
45,000,000 Salomon Brothers, Inc.,
5.700%, dated 11/30/1999,
due 12/1/1999 45,000,000
45,000,000 Societe Generale
Securities Corp., 5.680%,
dated 11/30/1999, due
12/1/1999 45,000,000
45,000,000 Toronto Dominion
Securities (USA) Inc.,
5.680%, dated 11/30/1999,
due 12/1/1999 45,000,000
14,000,000 3 Warburg Dillon Reed LLC,
5.340%, dated 8/18/1999,
due 2/14/2000 14,000,000
16,000,000 3 Warburg Dillon Reed LLC,
5.450%, dated 11/22/1999,
due 1/24/2000 16,000,000
30,000,000 3 Warburg Dillon Reed LLC,
5.460%, dated 11/17/1999,
due 1/18/2000 30,000,000
45,000,000 Warburg Dillon Reed LLC,
5.690%, dated 11/30/1999,
due 12/1/1999 45,000,000
45,000,000 Westdeutsche Landesbank
Girozentrale, 5.670%,
dated 11/30/1999, due
12/1/1999 45,000,000
TOTAL REPURCHASE
AGREEMENTS 711,300,000
TOTAL INVESTMENTS (AT
AMORTIZED COST) 4 $ 948,853,595
</TABLE>
1 The issue shows the rate of discount at time of purchase.
2 The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio. The investments
in the repurchase agreements are through participation in joint accounts with
other Federated funds.
3 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.
4 Also represents cost for federal tax purposes.
Note: The categories of investments are shown as a percentage of net assets
($951,393,689) at November 30, 1999.
See Notes which are an integral part of the Financial Statements
Statement of Assets and Liabilities
NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
ASSETS:
Investments in repurchase
agreements $ 711,300,000
Investments in securities 237,553,595
Total investments in
securities, at amortized
cost and value $ 948,853,595
Received for shares sold 2,227,964
Income receivable 3,251,662
TOTAL ASSETS 954,333,221
LIABILITIES:
Income distribution
payable 2,570,393
Accrued expenses 369,139
TOTAL LIABILITIES 2,939,532
Net assets for 951,393,689
shares outstanding $ 951,393,689
NET ASSET VALUE, OFFERING
PRICE AND REDEMPTION
PROCEEDS PER SHARE:
$951,393,689 / 951,393,689 shares outstanding $1.00
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Operations
SIX MONTHS ENDED NOVEMBER 30, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $ 24,920,692
EXPENSES:
Investment adviser fee $ 2,452,291
Administrative personnel
and services fee 369,805
Custodian fees 42,913
Transfer and dividend
disbursing agent fees and
expenses 392,750
Directors'/Trustees' fees 4,900
Auditing fees 6,520
Legal fees 3,641
Portfolio accounting fees 63,944
Distribution services fee 490,458
Shareholder services fee 1,226,146
Share registration costs 15,586
Printing and postage 36,070
Insurance premiums 1,563
Taxes 38,306
Miscellaneous 7,004
TOTAL EXPENSES 5,151,897
WAIVER:
Waiver of investment
adviser fee (225,735)
Net expenses 4,926,162
Net investment income $ 19,994,530
</TABLE>
See Notes which are an integral part of the Financial Statements
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited) YEAR ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
INCREASE (DECREASE) IN NET
ASSETS
OPERATIONS:
Net investment income $ 19,994,530 $ 39,647,864
DISTRIBUTIONS TO
SHAREHOLDERS:
Distributions from net
investment income (19,994,530) (39,647,864)
SHARE TRANSACTIONS:
Proceeds from sale of
shares 2,250,961,608 3,989,765,831
Net asset value of shares
issued to shareholders in
payment of
distributions declared 15,921,147 35,074,368
Cost of shares redeemed (2,285,081,257) (3,876,732,235)
CHANGE IN NET ASSETS
RESULTING FROM SHARE
TRANSACTIONS (18,198,502) 148,107,964
Change in net assets (18,198,502) 148,107,964
NET ASSETS:
Beginning of period 969,592,191 821,484,227
End of period $ 951,393,689 $ 969,592,191
</TABLE>
See Notes which are an integral part of the Financial Statements
Financial Highlights
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited)
NOVEMBER 30, YEAR
ENDED MAY 31,
1999 1999 1998
1997 1996 1995
<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 0.02 0.04 0.05
0.04 0.05 0.04
LESS DISTRIBUTIONS:
Distributions from net investment income (0.02) (0.04) (0.05)
(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 1 2.06% 4.21% 4.70%
4.50% 4.83% 4.34%
RATIOS TO AVERAGE NET ASSETS:
Expenses 1.00% 2 1.00% 1.00%
0.99% 0.99% 0.99%
Net investment income 4.08% 2 4.11% 4.60%
4.41% 4.70% 4.26%
Expense waiver/reimbursement 3 0.05% 2 0.07% 0.24%
0.03% 0.29% 0.08%
SUPPLEMENTAL DATA:
Net assets, end of period (000 omitted) $951,394 $969,592 $821,484
$771,164 1 $593,730 $424,091
</TABLE>
1 Based on net asset value, which does not reflect the sales charge or
contingent deferred sales charge, if applicable.
2 Computed on an annualized basis.
3 This voluntary expense decrease is reflected in both the expense and net
investment income ratios shown above.
See Notes which are an integral part of the Financial Statements
Notes to Financial Statements
NOVEMBER 30, 1999 (UNAUDITED)
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 four portfolios. The financial
statements included herein are 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. The investment objective of the Fund
is current income consistent with stability of principal and liquidity.
SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. These
policies are in conformity with generally accepted accounting principles.
INVESTMENT VALUATIONS
The Fund uses the amortized cost method to value its portfolio securities in
accordance with Rule 2a-7 under the Act.
REPURCHASE AGREEMENTS
It is the policy of the Fund to require the custodian bank to take possession,
to have legally segregated in the Federal Reserve Book Entry System, or to have
segregated within the custodian bank's vault, all securities held as collateral
under repurchase agreement transactions. Additionally, procedures have been
established by the Fund to monitor, on a daily basis, the market value of each
repurchase agreement's collateral to ensure that the value of collateral at
least equals the repurchase price to be paid under the repurchase agreement
transaction.
The Fund will only enter into repurchase agreements with banks and other
recognized financial institutions, such as broker/dealers, which are deemed by
the Fund's adviser to be creditworthy pursuant to the guidelines and/or
standards reviewed or established by the Board of Directors (the "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. The Fund, along with
other affiliate investment companies may utilize a joint trading account for the
purpose of entering into one or more repurchase agreements.
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. Non-cash dividends included in dividend income, if any are recorded at
fair value.
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. Losses may occur on these transactions due to changes in market
conditions on the failure of counterparties to perform under the contract.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts of assets, liabilities, expenses and revenues reported in the
financial statements. Actual results could differ from those estimated.
OTHER
Investment transactions are accounted for on a trade date basis.
CAPITAL STOCK
At November 30, 1999, there was 12,500,000,000 shares ($0.001 par value per
share) authorized. At November 30, 1999, capital paid-in aggregated
$951,393,689. Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
(unaudited) YEAR ENDED
NOVEMBER 30, MAY 31,
1999 1999
<S> <C> <C>
Shares sold 2,250,961,608 3,989,765,831
Shares issued to
shareholders in payment of
distributions declared 15,921,147 35,074,368
Shares redeemed (2,285,081,257) (3,876,732,235)
NET CHANGE RESULTING FROM
SHARE TRANSACTIONS (18,198,502) 148,107,964
</TABLE>
INVESTMENT ADVISER FEE AND OTHER TRANSACTIONS WITH AFFILIATES
INVESTMENT ADVISER FEE
Federated Investment Management Company, the Fund's investment adviser (the
"Adviser"), receives for its services an annual investment advisory fee equal to
0.50% of the Fund's average daily net assets. The Adviser may voluntarily choose
to waive any portion of its fee. The Adviser can modify or terminate this
voluntary waiver at any time at its sole discretion.
ADMINISTRATIVE FEE
Federated Services Company ("FServ"), under the Administrative Services
Agreement, provides the Fund with administrative personnel and services. The fee
paid to FServ is based on a scale that ranges from 0.15% to 0.075% of the
average aggregate daily net assets of all funds advised by subsidiaries of
Federated Investors, Inc., subject to a $125,000 minimum per portfolio and
$30,000 per each additional class.
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 0.35% of
the average daily net assets of the Fund shares, annually, to compensate FSC.
SHAREHOLDER SERVICES FEE
Under the terms of a Shareholder Services Agreement with Federated Shareholder
Services Company ("FSSC"), the Fund will pay FSSC up to 0.25% of average daily
net assets of the Fund for the period. The fee paid to FSSC is used to finance
certain services for shareholders and to maintain shareholder accounts.
TRANSFER AND DIVIDEND DISBURSING AGENT FEES AND EXPENSES
FServ, through its subsidiary FSSC, serves as transfer and dividend disbursing
agent for the Fund. The fee paid to FSSC is based on the size, type, and number
of accounts and transactions made by shareholders.
PORTFOLIO ACCOUNTING FEES
FServ maintains the Fund's accounting records for which it receives a fee. The
fee is based on the level of the Fund's average daily net assets for the period,
plus out-of-pocket expenses.
GENERAL
Certain of the Officers and Directors of the Corporation are Officers and
Directors or Trustees of the above companies.
Directors
JOHN F. DONAHUE
THOMAS G. BIGLEY
JOHN T. CONROY, JR.
NICHOLAS P. CONSTANTAKIS
JOHN F. CUNNINGHAM
J. CHRISTOPHER DONAHUE
LAWRENCE D. ELLIS, M.D.
PETER E. MADDEN
CHARLES F. MANSFIELD, JR.
JOHN E. MURRAY, JR., J.D., S.J.D.
MARJORIE P. SMUTS
JOHN S. WALSH
Officers
JOHN F. DONAHUE
Chairman
RICHARD B. FISHER
President
WILLIAM D. DAWSON III
Chief Investment Officer
J. CHRISTOPHER DONAHUE
Executive Vice President
EDWARD C. GONZALES
Executive Vice President
JOHN W. MCGONIGLE
Executive Vice President and Secretary
RICHARD J. THOMAS
Treasurer
LESLIE K. ROSS
Assistant Secretary
Mutual funds are not bank deposits or obligations, are not guaranteed by any
bank, and are not insured or guaranteed by the U.S. government, the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other
government agency. Investment in mutual funds involves investment risk,
including the possible loss of principal.
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.
[Graphic]
Federated
World-Class Investment Manager
SEMI-ANNUAL REPORT
Treasury Cash Series
SEMI-ANNUAL REPORT TO SHAREHOLDERS
NOVEMBER 30, 1999
[Graphic]
Federated
Treasury Cash Series
Federated Investors Funds
5800 Corporate Drive
Pittsburgh, PA 15237-7000
1-800-341-7400
WWW.FEDERATEDINVESTORS.COM
Federated Securities Corp., Distributor
Cusip 147551402
0122607 (1/00)
[Graphic]
