EXHIBIT 24(A)(1)
SPARTAN(Registered trademark)
(Registered trademark)
NEW JERSEY
MUNICIPAL
HIGH YIELD
PORTFOLIO
ANNUAL REPORT
NOVEMBER 30, 1993
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 18 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 22 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 24 The auditor's opinion.
ACCOUNTANTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in Federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider tax-free investments like municipal bonds and municipal
bond funds. Often these can provide higher after-tax yields than comparable
taxable investments. For example, if you're in the new 36% Federal income
tax bracket and invest $10,000 in a taxable investment yielding 7%, you'll
pay $252 in Federal taxes and receive $448 in income. That same $10,000
invested in a tax-free bond fund yielding 5.5% would allow you to keep $550
in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income. If Fidelity had not reimbursed
certain fund expenses during the periods shown, the total returns,
dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan New Jersey Municipal
High Yield Portfolio 12.11% 62.48% 77.00%
Lehman Brothers Municipal Bond Index 11.08% 61.12% 75.70%
Average New Jersey Tax-exempt
Municipal Bond Fund 11.72% 61.51% 79.34%
Consumer Price Index 2.68% 21.20% 26.34%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years or since the fund started on January 1,
1988. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, you would end up with $1,050. You can compare these
figures to the performance of the Lehman Brothers Municipal Bond index - a
broad gauge of the municipal bond market. To measure how the fund stacked
up against its peers, you can look at the average New Jersey tax-exempt
municipal fund, which reflects the performance of 31 New Jersey municipal
bond funds tracked by Lipper Analytical Services. Both benchmarks include
reinvested dividends and capital gains, if any. Comparing the fund's
performance to the consumer price index helps show how your fund did
compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Spartan New Jersey Municipal
High Yield Portfolio 12.11% 10.19% 10.12%
Lehman Brothers Municipal Bond Index 11.08% 10.01% 9.99%
Average New Jersey Tax-exempt
Municipal Bond Fund 11.72% 10.06% 10.38%
Consumer Price Index 2.68% 3.92% 4.03%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Spartan NJ LB Muni
01/01/88 10000.00 10000.00
01/31/88 10382.99 10356.20
02/29/88 10489.58 10465.67
03/31/88 10108.41 10343.74
04/30/88 10162.42 10422.35
05/31/88 10195.16 10392.23
06/30/88 10424.31 10544.27
07/31/88 10490.37 10613.02
08/31/88 10515.89 10622.36
09/30/88 10760.93 10814.62
10/31/88 11060.18 11005.50
11/30/88 10893.59 10904.69
12/31/88 11089.94 11016.25
01/31/89 11261.41 11244.06
02/28/89 11131.82 11115.77
03/31/89 11142.30 11089.20
04/30/89 11470.47 11352.46
05/31/89 11712.36 11588.25
06/30/89 11899.59 11745.62
07/31/89 12030.89 11905.47
08/31/89 11882.88 11788.92
09/30/89 11837.44 11753.55
10/31/89 12002.50 11896.95
11/30/89 12181.54 12105.14
12/31/89 12237.61 12204.41
01/31/90 12116.04 12147.04
02/28/90 12239.41 12255.15
03/31/90 12260.71 12258.83
04/30/90 12101.33 12170.57
05/31/90 12416.90 12435.88
06/30/90 12542.36 12545.32
07/31/90 12738.81 12729.74
08/31/90 12493.09 12545.16
09/30/90 12573.56 12552.68
10/31/90 12751.56 12779.89
11/30/90 13053.06 13036.76
12/31/90 13111.66 13094.12
01/31/91 13270.57 13269.58
02/28/91 13355.11 13385.03
03/31/91 13389.35 13390.38
04/30/91 13575.50 13568.48
05/31/91 13686.76 13689.24
06/30/91 13684.33 13675.55
07/31/91 13910.27 13842.39
08/31/91 14075.10 14025.11
09/30/91 14253.49 14207.43
10/31/91 14405.60 14335.30
11/30/91 14441.04 14375.44
12/31/91 14728.41 14684.51
01/31/92 14753.13 14718.29
02/29/92 14761.20 14722.70
03/31/92 14733.41 14728.59
04/30/92 14852.05 14859.68
05/31/92 15067.78 15035.02
06/30/92 15308.14 15287.61
07/31/92 15854.11 15746.24
08/31/92 15632.74 15591.92
09/30/92 15697.06 15693.27
10/31/92 15375.33 15539.48
11/30/92 15787.98 15817.63
12/31/92 16010.91 15978.97
01/31/93 16206.24 16164.33
02/28/93 16838.39 16749.48
03/31/93 16627.16 16571.93
04/30/93 16820.45 16739.31
05/31/93 16957.57 16833.05
06/30/93 17267.40 17114.16
07/31/93 17270.95 17136.41
08/31/93 17674.72 17492.85
09/30/93 17885.81 17692.27
10/31/93 17892.26 17725.88
11/30/93 17701.63 17569.89
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan New
Jersey Municipal High Yield Portfolio on January 1, 1988, when the fund
started. As the chart shows, by November 30, 1993, the value of your
investment would have grown to $17,702 - a 77.02% increase on your initial
investment. This assumes you still own the fund on November 30, and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Municipal Bond index did over
the same period. With dividends reinvested, the same $10,000 would have
grown to $17,570 - a 75.70% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
INCOME
YEARS ENDED NOVEMBER 30, 1993 1992 1991
Income return 5.99% 6.59% 6.87%
Capital gain returns 1.51% .74% 0%
Change in share price 4.61% 1.99% 3.75%
Total return 12.11% 9.32% 10.62%
Income returns, capital gain returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund. Change in share price and total return
figures include the effect of the $5 account closeout fee on an average
size account.
DIVIDENDS AND YIELD
PERIODS ENDED NOVEMBER 30, 1993 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 31.61(cents) 63.95(cents)
Annualized dividend rate n/a 5.33% 5.50%
Annualized yield 5.06% n/a n/a
Tax-equivalent yield 8.50% n/a n/a
Dividends per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.83 over
the past six months and $11.62 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized yield is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 40.48%
combined federal and state tax bracket.
FUND TALK: THE MANAGER'S OVERVIEW
An interview with David Murphy,
Portfolio Manager of Spartan New
Jersey Municipal High-Yield Portfolio
Q. DAVID, HOW DID THE FUND DO?
A. Aside from November, when inflation fears pushed down bond prices, the
fund had a pretty good year. Total return for the year ended November 30,
1993 was 12.11%. That was slightly ahead of the average New Jersey
tax-exempt municipal bond fund, which returned 11.72%, according to Lipper
Analytical Services.
Q. WHAT DROVE THE FUND'S PERFORMANCE?
A. During most of this past year interest rates were falling, although
slowly. For example, 30-year AAA-rated municipal bonds were yielding an
average of 6.10% on November 30, 1992. One year later, these same bonds had
yields averaging 5.35%. When rates dropped, bond prices rose, providing the
fund with substantial price gains.
Q. HOW DID YOU INVEST THE FUND TO TAKE ADVANTAGE OF FALLING RATES?
A. Primarily by buying non-callable and discount bonds - 30.8% of the fund
at the end of November. Most municipal bonds have a call feature that
allows the issuer to redeem them early. With non-callable bonds, I can lock
into a coupon (or stated interest rate) for a longer period of time.
Discount bonds are purchased below face value, which means they have more
room for price gains when rates drop. Zero-coupon bonds - now about 10% of
the fund - combine the best features of both. I buy them at
a discount and they're non-callable, which makes their prices particularly
sensitive to changes in interest rates. They were far and away the fund's
best performers.
Q. BECAUSE THE PRICES OF ZERO-COUPON BONDS CAN BE VOLATILE, AREN'T THEY
MORE RISKY?
A. Yes. If interest rates had risen, their prices may have fallen further
than any other bonds in the fund. But I took steps to offset that risk.
Over the past year, I reduced the number of bonds with maturities longer
than 20 years from 48% of the fund to 41%. I also had 45% of the fund's
investments in 10- to 20- year bonds on November 30. The yield curve has
flattened this year, which means the difference in yield between long- and
short-term bonds has narrowed. At the end of November, a 30-year AAA-rated
municipal bond was yielding only .25% more than a 15-year issue. I didn't
think that was a big enough reward for the added risk of a longer maturity.
By leaning toward the 10- to 20-year bonds, I was able to secure strong
yields, while reducing risk.
Q. IS NEW JERSEY'S ECONOMY LOOKING UP?
A. Slowly. The state's recovery is still lagging the rest of the nation,
but there are bright spots. A stronger economy has gradually helped
issuers' creditworthiness - their ability to meet principal and interest
payments. Over the past year, that has prompted me to boost state and local
general obligation bonds to about 15% of the fund's investments. These are
bonds backed by tax revenues, which should increase as New Jersey's economy
picks up.
Q. IN TERMS OF SECTORS, WHERE HAVE YOU FOUND THE BEST INVESTING
OPPORTUNITIES?
A. I've increased the fund's stake in transportation bonds to 19.4%, up
from 10.3% a year ago. Most of these were bonds issued by the New Jersey
Turnpike Authority and the Garden State Parkway Authority. Because of the
sheer volume of debt in this sector, both authorities were forced to issue
bonds with yields that were high enough to attract investors; including
some non-callable bonds, which I discussed earlier. I saw this as an
opportunity to stock up on non-callables, which helped the fund.
Health-care bonds - the fund's third largest sector investment at 14.8% -
have improved in performance. With health-care reform close at hand,
careful research has shown some hospitals appear to be better positioned
than others to do well. We've sought out those issues that combine high
yields and the potential for credit upgrades.
Q. AND BETS THAT DIDN'T PAY OFF?
A. Housing was a disappointment. I reduced the fund's stake in housing only
about 2% from a year ago, leaving 8% of the fund's investments in this
sector at the end of November. In hindsight, I should have cut back more.
Many housing bonds were hurt by prepayments, which happened when homeowners
refinanced their mortgages.
Q. HAVE YOU KEPT THE FUND WEIGHTED TOWARD HIGH QUALITY BONDS?
A. Yes. As of November 30, 87.6% of the fund's bonds were rated "A" or
better by Fidelity's own credit analysts or by one of the bond rating
agencies. Because the recession hit New Jersey harder than the rest of the
nation, I've been concerned about the creditworthiness of issuers. However,
as New Jersey's economy improves, I'll be looking to add more BBB-rated
bonds. They offer attractive yields and the opportunity for credit
upgrades, as issuers improve their fiscal health.
Q. WHAT DO YOU SEE AS YOU LOOK OUT SIX MONTHS?
A. In November we saw a pretty sharp decline in bond prices as interest
rates spiked upward based on fears of inflation. But I believe this
movement is temporary. I think economic growth will remain only moderate in
the first half of '94, which should help keep interest rates within a
narrow range. Also, the tax-exempt bond market is very dependent upon
supply and demand, and the supply of new municipal issues in New Jersey
appears to be tailing off. If demand remains fairly level, bond prices
could rise, which would create a favorable investing environment for the
fund. I plan on keeping the fund's duration - which measures its
sensitivity to changes in interest rates - fairly long.
Q. HOW IS PRESIDENT CLINTON'S PACKAGE OF HIGHER TAXES AFFECTING DEMAND FOR
TAX-FREE BONDS?
A. It has kept demand high over the past year, and I don't see a drop off
on the horizon. I think there are still some folks in upper-income tax
brackets who haven't fully realized how much their taxes have gone up. New
Jersey joint filers in the 36% federal tax bracket now have an effective
rate - state and federal taxes combined - of 40.48%, while those in the
39.6% federal bracket are now paying a total of 43.83% of their income in
taxes. It'll hit many people during tax season, and I think this
"awakening" may help sustain the high demand for tax-free bonds.
FUND FACTS
GOAL: to provide high current
income exempt from New
Jersey state and federal
income taxes
START DATE: January 1, 1988
SIZE: as of November 30,
1993, over $422 million
MANAGER: David Murphy,
since April 1991; manager,
Spartan Short-Intermediate
Municipal and Fidelity Limited
Term Municipal, since
December 1989; Fidelity New
York Insured, since October
1992; Spartan Intermediate
Municipal, since April 1993
(checkmark)
DAVID MURPHY ON SUPPLY AND
DEMAND OF NEW JERSEY
MUNICIPAL BONDS:
"In 1993, almost two-thirds of
New Jersey municipal bonds
were issued through a
process known as
prerefunding. This involves
selling new lower-interest
bonds, investing the proceeds
in short-term government
securities, and paying off the
old bonds at the earliest
opportunity. Essentially this
wipes old, higher interest debt
off the balance sheet.
Because issuers can only do
this one time for municipal
bonds, I expect prerefunding
to slow down dramatically in
'94. This could cut the supply
of muni bonds in half. A lower
supply and constant demand
would help push bond prices
higher. That's why I'm
optimistic about the municipal
bond environment in the
coming year.
(bullet) On November 30, 1993,
general obligation bonds -
those backed by tax revenues
- - were 14.9% of the fund.
That's up from 13.2% six
months ago.
(bullet) During the past year, the
fund's share price has
fluctuated between $11.18
and $11.99."
DISTRIBUTIONS:
The Board of Trustees of
Fidelity Court Street Trust:
Spartan New Jersey
Municipal High Yield Portfolio
voted to pay on December 20,
1993, to shareholders of
record at the opening of
business on December 17,
1993 a distribution of $.15
derived from capital gains
realized from sales of portfolio
securities.
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Transportation 19.4 13.2
General Obligation 14.9 13.2
Health Care 14.8 15.7
Industrial Development 9.9 11.8
Escrowed/Prerefunded 8.7 8.8
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1993
6 MONTHS AGO
Years 19.4 18.6
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1993
6 MONTHS AGO
Years 8.4 7.4
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF NOVEMBER 30, 1993
(MOODY'S RATINGS)
Aaa 28%
Aa, A 53%
Baa 12%
Non-rated 7%
Row: 1, Col: 1, Value: 28.0
Row: 1, Col: 2, Value: 53.0
Row: 1, Col: 3, Value: 12.0
Row: 1, Col: 4, Value: 7.0
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS NOVEMBER 30, 1993
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 98.6%
MOODY'S
RATINGS (D) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
NEW JERSEY - 84.6%
Atlantic County Ctfs. of Prtn. (Pub. Facs. Lease
Agreement) (FGIC Insured):
7.40% 3/1/07 Aaa $ 3,035,000 $ 3,649,587 048490AR
7.40% 3/1/08 Aaa 3,260,000 3,920,150 048490AS
Atlantic County Impt. Auth. Luxury Tax Rev.
(Convention Ctr.) (MBIA Insured):
7.375% 7/1/10 Aaa 1,000,000 1,211,250 048503AT
7.40% 7/1/16 Aaa 3,510,000 4,391,887 048503AU
Bergen County Util. Auth. Wtr. Poll. Cont. Rev.
Series B, 5.75% 12/15/05, (FGIC Insured) Aaa 1,870,000 1,996,224
083791BE
Burlington County Bridge Commission Bridge
System Rev., 5.30% 10/1/13 Aa 2,000,000 1,972,500 121646AN
Camden County Muni. Util. Auth. Swr. Rev.
Series A, 0% 9/1/16, (FGIC Insured) Aaa 5,000,000 1,406,250 132813CJ
(Cap. Appreciation) (FGIC Insured):
Series A: 132813BY
0% 9/1/11 Aaa 3,500,000 1,325,624 132813BY
0% 9/1/17 Aaa 9,930,000 2,643,862 132813CM
0% 9/1/18 Aaa 1,375,000 345,468 132813CQ
Series B: 132813CH
0% 9/1/15 Aaa 2,500,000 750,000 132813CH
0% 9/1/16 Aaa 16,300,000 4,584,374 132813CK
Camden Gen. Oblig. Fiscal Adjustment
0% 2/15/07, (FSA Insured) Aaa 4,000,000 1,960,000 133051QE
Cape May County Ind. Poll. Cont. Fing. Auth.
Rev. Rfdg. (Atlantic City Elec. Co.) Series A,
6.80% 3/1/21, (MBIA Insured) Aaa 2,550,000 3,072,750 139525AC
Cape May Muni. Utils. Auth. Rfdg.:
Series A, 5.75% 1/1/16, (MBIA Insured) Aaa 2,000,000 2,057,500 139532DH
Series B, 4.90% 1/1/09 (FGIC Insured) Aaa 4,735,000 4,569,275 139532DW
Edison Township School Unltd. Tax 6.50% 6/1/11 A1 1,000,000 1,138,750
281047TQ
Essex County Impt. Auth. Rev. (East Orange School Dist.)
Series A: 296809EU
5.50% 11/1/04 A1 500,000 1,560,000 296809ET
5.60% 11/1/05 A1 250,000 1,303,125 296809EU
5.70% 11/1/06 A 1,600,000 1,670,000 296809EV
5.80% 11/1/07 A 1,000,000 1,046,250 296809EX
Gloucester County Impt. Auth. Solid Waste
Resources Recovery Rev. (SES Gloucester
Co. LP Proj.) Series A, 8.125% 7/1/10 Aa3 1,175,000 1,316,000 37970QAR
MUNICIPAL BONDS - CONTINUED
MOODY'S
RATINGS (D) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
Hudson County 5.125% 8/1/08 A+ $ 3,000,000 $ 2,891,250 443726SC
Hudson County Impt. Auth. (Essential Purp.
Pooled Gov't. Loan Prog.): 443728AG
6.625% 8/1/25 A+ 4,000,000 4,390,000 443728AJ
7.60% 8/1/25 A 5,275,000 6,026,688 443728AG
Jersey City Series B, (FSA Insured): 476575CS
0% 5/15/07 Aaa 4,740,000 2,292,975 476575CU
0% 5/15/11 Aaa 3,500,000 1,303,750 476575CS
Jersey City Swr. Auth. Rev., Rfdg. 6% 1/1/09
(AMBAC Insured) Aaa 1,000,000 1,072,500 476646GG
Keansburg Board of Ed. Ctfs. of Prtn. 8% 11/1/14
(Pre-Refunded to 11/1/99 @ 102) BBB- 1,500,000 1,758,750 486737AM
Lacey Muni. Util. Auth. Wtr. Rev., Rfdg.
Series A, Cap. Appreciation (MBIA Insured):
0% 12/1/08 Aaa 1,400,000 623,000 50547PBZ
0% 12/1/09 Aaa 1,400,000 588,000 50547PCA
0% 12/1/10 Aaa 1,400,000 551,250 50547PCB
Lenape Regional High School Dist. Unltd. Tax (MBIA Insured):
7.625% 1/1/13 Aaa 675,000 854,719 525876HD
7.625% 1/1/14 Aaa 1,000,000 1,273,750 525876HE
Mercer County Impt. Auth. Rev. Rfdg.
(Cap. Appreciation Solid Waste County Guaranteed):
0% 4/1/08 Aa1 6,000,000 2,730,000 587844MZ
0% 4/1/09 Aa1 6,500,000 2,811,250 587844NA
0% 4/1/10 Aa1 3,000,000 1,218,750 587844NB
0% 4/1/11 Aa1 3,500,000 1,343,125 587844NC
0% 4/1/12 Aa1 7,000,000 2,520,000 587844ND
0% 4/1/13 Aa1 7,000,000 2,388,750 587844NE
Mercer County Impt. Auth. Rev. Rfdg.
(Site & Disposal Facs. Proj.) 0% 4/1/09 Aa1 5,155,000 2,210,206
587844RA
Mercer County Impt. Auth. Rev. (Courthouse Proj.)
5.20% 11/1/10 Aa1 1,220,000 1,203,225 587844ZK
Mercer County Impt. Rev. Regional Sludge Proj.
5.20% 12/15/09 (FGIC Insured) Aaa 3,040,000 3,002,000 587844A3
Middlesex County Poll. Cont. Auth. Rev. Rfdg.
(Fing. Poll.) (Amerada Hess Corp.) :
7.875% 6/1/22(c) Aaa 7,750,000 8,311,875 596570AE
6.875% 12/1/22 - 5,000,000 5,425,000 596570AF
Middlesex County Util. Auth. Solid Waste Sys.
Rev. 5% 12/1/94, (FGIC Insured) Aaa 3,000,000 3,060,000 596590AC
Monmouth County Impt. Auth. Wastewtr.
Treatment Facs. Rev. (Asbury Park Proj.)
7.375% 12/1/09 Baa 1,000,000 1,090,000 609566BQ
MUNICIPAL BONDS - CONTINUED
MOODY'S
RATINGS (D) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Bldg. Auth. Bldg. Rev. 7.50% 6/15/09 Aa $ 1,700,000 $ 1,952,875
645771CX
New Jersey Econ. Dev. Auth. Econ. Dev. Rev.: 645775M3
Rfdg. (Holt Hauling & Warehouse)
8.60% 12/15/17(b) - 9,000,000 9,483,750 64577MLK
Rfdg. (Stolt Term. Proj.) 10.50% 1/15/18 - 2,500,000 2,956,250
645775M3
(777 Pattison Ave., Inc.) 8.95% 12/15/18 - 6,140,000 6,439,325
64577MMB
(Weyerhauser Co. Proj.) 9% 11/1/04 A2 2,000,000 2,642,500 645775R8
New Jersey Econ. Dev. Auth. 1st Mtg. Gross Rev.
(Franciscan Oaks Proj.) Series A,
8.50% 10/1/23 - 4,250,000 4,356,250 645776NL
New Jersey Econ. Dev. Auth. Poll. Cont. Rev.
(Central Pwr. & Lt.) 7.10% 7/1/15 A2 1,415,000 1,590,106 645778AS
New Jersey Edl. Facs. Fing. Auth. Rev.:
Rfdg. (Trenton State College) Series E, 6% 7/1/09,
(AMBAC Insured) Aaa 4,795,000 5,058,725 6460553W
(Ramapo College) Series B, 7.70% 7/1/13
(Pre-Refunded 7/1/98 @102) A 1,000,000 1,160,000 646055SP
(Union Commty. College) Series B,
7.25% 7/1/09 A 1,000,000 1,113,750 646055VF
New Jersey Health Care Facs. Fing. Auth. Rev.; 6457922Y
Rfdg. (Atlantic City Med. Ctr.) Series C,
6.80% 7/1/11 A 4,200,000 4,551,750 64579CLC
(Barnert Mem. Hosp.) 10.625% 8/1/14,
(FHA Gauranteed) Aa 5,090,000 5,439,938 6457924C
(Bridgeton Hosp. & Millvile Hosp.) Series 1988 A,
7.875% 7/1/10, (MBIA Insured) Aaa 1,250,000 1,435,938 645793XR
(Burdette Tomlin Mem. Hosp.) Series D (FGIC Insured): 64579CFA
6% 7/1/02 Aaa 1,715,000 1,852,200 64579CFA
6.25% 7/1/06 Aaa 1,710,000 1,838,250 64579CFE
(Cathedral Health) Series A, 7.25% 2/15/21 Aa 3,130,000 3,458,650
6457937C
(East Orange Gen. Hosp.) Series B, 7.75%
7/1/20 BBB+ 2,450,000 2,756,250 6457935F
(Elizabeth Gen'l. Med. Ctr.) Series C: 645793V7
7.10% 7/1/99 Baa1 1,125,000 1,229,063 645793V7
7.25% 7/1/06 Baa1 1,975,000 2,137,938 645793W3
(Helene Fuld Med. Ctr.) Series C,
8.125% 7/1/13 A 1,000,000 1,126,250 645793XA
(Holy Name Hosp.) Series A, 6.875% 7/1/04 Aaa 1,960,000 2,175,600
645793N5
(Jersey Shore Med. Ctr.) Series B, 8% 7/1/18,
(AMBAC Insured) Aaa 1,905,000 2,202,656 645793WE
(Kennedy Mem. Hosp. - Univ. Med. Ctr.)
Series D, 7.875% 7/1/09 A 3,000,000 3,311,250 645793UF
(Kimball Med. Ctr.) Issue C, 8% 7/1/13 Baa 2,900,000 3,211,750
6457933M
(Lady of Lourdes Med. Ctr.) Series B,
9.75% 2/1/15, (FHA Gauranteed) Aa 170,000 184,025 6457925H
MUNICIPAL BONDS - CONTINUED
MOODY'S
RATINGS (D) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Health Care Facs. Fing. Auth. Rev - continued 6457922Y
(Millville Hosp.) Series A, 10.625% 8/1/14,
(FHA Gauranteed) A- $ 150,000 $ 160,313 6457922Y
(Mountainside Hosp.) Series A, 9% 8/1/25
(Pre-Refunded 8/1/95 @102) Aa 3,165,000 3,505,238 645793AC
(Muhlenberg Regional Med. Ctr.) Series B,
8% 7/1/18, (AMBAC Insured) Aaa 2,000,000 2,312,500 645793VN
(Newcombe Med. Ctr.) Series A,
7.875% 7/1/03 Baa 3,950,000 4,419,063 6457932F
(Pascack Valley Hosp.) Series 1991,
6.70% 7/1/11 A- 5,500,000 5,823,125 64579CGK
(St. Elizabeth Hosp.) Series B, 8.25% 7/1/20 Baa 8,500,000 9,445,625
6457935U
(St. Francis Hosp. - Franciscan Sisters)
9.25% 7/1/12 Baa 500,000 531,250 645793EH
(St. Peters Med. Ctr.) Series F: 64579CRD
4.70% 7/1/06 (MBIA Insured) Aaa 2,000,000 1,900,000 64579CRD
4.80% 7/1/08 (MBIA Insured) Aaa 2,000,000 1,890,000 64579CRF
(Wayne Gen. Hosp.) Series A, 10.75% 8/1/24,
(FHA Gauranteed) Aa 250,000 265,313 6457923B
New Jersey Gen. Oblig. Rfdg.
Series D 6% 2/15/11 Aa1 3,500,000 3,797,500 646038WK
New Jersey Gen. Oblig. Rfdg. (Cap. Appreciation)
Series D, 0% 2/15/04 Aa1 5,335,000 3,234,344 646038WS
New Jersey Gen. Oblig. Rfdg. Unltd. Tax
Series D, 0% 2/15/06 Aa1 6,445,000 3,480,300 646038WU
New Jersey Hwy. Auth. Garden State Parkway
Gen. Rev. (Sr. Parkway):
6.10% 1/1/06 A1 2,750,000 2,945,938 646088FG
6.20% 1/1/10 A1 19,000,000 21,042,500 646088FP
6% 1/1/19, Escrowed to Maturity Aaa 4,485,000 4,911,075 646088GA
New Jersey Hsg. Fin. Agcy. (Gen. Resolution
Section 8) Series A: 646109CE
6.90% 11/1/07 AA+ 2,670,000 2,880,263 646109CE
6.95% 11/1/08 AA+ 2,265,000 2,443,369 646109CF
7% 11/1/09 AA+ 2,855,000 3,079,831 646109CG
7.05% 11/1/10 AA+ 3,500,000 3,780,000 646109CH
7.10% 11/1/11 AA+ 3,000,000 3,247,500 646109CJ
New Jersey Hsg. & Mtg. Fin. Agcy. (Home Buyer)
Series B, 7.90% 10/1/22,
(MBIA Insured) (b) Aaa 1,875,000 2,003,906 646128S2
New Jersey Hsg. & Mtg. Fin. Custodial Receipts
Secondary Series 1, 9.088%
11/1/07(e) A+ 5,000,000 5,325,000 6461286B
MUNICIPAL BONDS - CONTINUED
MOODY'S
RATINGS (D) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
NEW JERSEY - CONTINUED
New Jersey Tpk. Auth. Tpk. Rev. Rfdg.: 646139CF
10.375% 1/1/03 (Escrowed to Maturity)(b) AAA $ 11,160,000 $ 14,215,050
646139CF
Series C: 646139JP
6.50% 1/1/09 A 6,700,000 7,545,875 646139JU
6.50% 1/1/16 A 14,225,000 16,287,625 646139JP
New Jersey Wastewtr. Treatment Trust Loan Rev: 646148HA
6.875% 6/15/06 Aa 1,320,000 1,463,550 646148HA
6.875% 6/15/09 Aa 2,500,000 2,784,375 646148HD
7% 6/15/10 Aa 1,750,000 1,960,000 646148HE
Ocean County Utils. Auth. Wastewtr. Rev. Rfdg.
Series B, 5.75% 1/1/18 Aa 4,855,000 4,958,169 674758EV
Pennsauken Township Board of Ed. Ctfs. of Prtn.
7.75% 7/15/09, (MBIA Insured) Aaa 500,000 578,125 708478AQ
Sayreville Hsg. Dev. Corp. Mtg. Rev. Rfdg.
(Lakeview) Section 8, 7.75% 8/1/24,
(FHA Guaranteed) AAA 2,500,000 2,631,250 805796AE
South Jersey Port Corp. Rev. Rfdg. (Marine Term.)
Series G, 5.60% 1/1/23 A+ 2,875,000 2,885,781 838530EQ
Stony Brook Regional Swr. Auth. Rev.
Series A, 7.40% 12/1/09 Aa 1,000,000 1,171,250 862070DU
Union County Utils. Auth. Solid Waste Rev.(b): 906365AY
Series A: 906365AT
6.95% 6/15/03(b) A- 9,000,000 9,877,500 906365AX
7% 6/15/04 A- 7,200,000 7,902,000 906365AY
7.15% 6/15/09 A- 1,040,000 1,131,000 906365AT
New Jersey Univ. (Medicine & Dentistry)
Series C, 7.20% 12/1/19 A 3,500,000 3,972,500 91444PAL
Wanaque Valley Reg'l. Swr. Auth. Rfdg. Series B,
5.75% 9/1/18, (AMBAC Insured) Aaa 2,000,000 2,092,500 933685BM
West New York Muni. Util. Auth. Swr. Rev. Rfdg. (Cap.
Appreciation) 0% 12/15/19, (FGIC Insured) Aaa 6,395,000 1,494,831
954710CS
357,872,012
NEW YORK & NEW JERSEY - 6.2%
New York & New Jersey Port Auth.:
Consolidated 59th Series, 7.75% 1/15/23(b) A1 1,000,000 1,058,750
733580EJ
Consolidated 83rd Series, 6.375% 10/15/17 A1 2,000,000 2,170,000
733580WF
Consolidated 85th Series, 5.375% 3/1/28 A1 9,000,000 8,898,750
733580YM
Series 61st. 8.125% 8/15/23(b) A1 2,800,000 3,031,000 733580FD
Series 62nd, 8% 12/1/23(b) A1 2,500,000 2,734,375 733580FN
Series 77th, 6.25% 1/15/27 A1 7,000,000 7,385,000 733580QR
MUNICIPAL BONDS - CONTINUED
MOODY'S
RATINGS (D) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
NEW YORK & NEW JERSEY - CONTINUED
New York & New Jersey Port Auth. Spl. Oblig.
Rev. (Continental Airlines Corp./Eastern
Airlines, Inc. Proj.) 9.125% 12/1/15 Ba3 $ 700,000 $ 819,875 73358EAA
26,097,750
PUERTO RICO - 7.8%
Puerto Rico Commonwealth Hwy. Auth. Hwy. Rev.
Series Q, 6% 7/1/20 Baa1 4,000,000 4,060,000 745194QY
Puerto Rico Commonwealth Urban Renewal &
Hsg. Corp. Rfdg. 7.875% 10/1/04 Baa1 5,235,000 6,066,056 745245ES
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Rfdg.
Series M, 8% 7/1/08 Baa1 1,300,000 1,491,750 745268GZ
Puerto Rico Hsg. Fin. Corp. Rev. (Multi-Family Mtg.
Portfolio A) Series I, 7.50% 4/1/22, LOC
Puerto Rico Gov't. Dev. AA 3,230,000 3,520,700 745270HH
Puerto Rico Infrastructure Fing. Auth. Spl. Tax
Series 1988 A, 7.75% 7/1/08 Baa1 2,255,000 2,542,513 745219AQ
Puerto Rico Pub. Bldgs. Auth. Rev. Rfdg.
Series L, 5.50% 7/1/21 Baa1 10,000,000 9,875,000 745235GJ
Puerto Rico Tel. Auth. Rev. 6.85% 1/1/03,
(AMBAC Insured) (e) Aaa 5,000,000 5,081,250 745297HT
32,637,269
TOTAL MUNICIPAL BONDS (Cost $384,165,270) 416,607,031
MUNICIPAL NOTES (A) - 1.4%
NEW JERSEY - 1.4%
New Jersey Econ. Dev. Auth. Ind. & Econ Dev.
(Casa DiBertacchi Corp. Facs.) Series 1988,
2.65%, LOC Marine Midland Bank, VRDN A-2 3,000,000 3,000,000 645777MG
New Jersey Econ. Dev. Auth. Rev.:
(Hoffman - La Roche Inc.) 2.15%, LOC
Bayerische Landes bank, VRDN - 1,000,000 1,000,000 645905LK
(Danic Urban Renewal Co. Proj.) Series 1985,
2.45%, LOC Marine Midland Bank, VRDN P-2 1,800,000 1,800,000 645775UQ
TOTAL MUNICIPAL NOTES (Cost $5,800,000) 5,800,000
PURCHASED OPTIONS - 0%
AMOUNTS IN THOUSANDS EXPIRATION DATE/ UNDERLYING FACE
STRIKE PRICE AMOUNT AT VALUE
Call Option on December Municipal Futures Contracts
(Cost $22,332) Dec 1993/102 50,000 $ 30,469
TOTAL INVESTMENTS - 100% (Cost $389,987,602) $ 422,437,500
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Security purchased on a delayed delivery basis. (see Note 2 of Notes
to Financial Statements).
(d) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(e) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
INCOME TAX INFORMATION
At November 30,1993, the aggregate cost of investment securities for income
tax purposes was $389,987,602. Net unrealized appreciation (depreciation)
aggregated $32,449,898, of which $32,891,047 related to appreciated
investment securities and $441,149 related to depreciated investment
securities.
The fund hereby designates $488,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investments for the period ended is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 63% AAA, AA, A 79%
Baa 11% BBB 7%
Ba 0.1% BB %
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 8%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investments, is as follows:
Health Care 15%
General Obligation 15
Transportation 19
Others
(individually less than 10%) 51
TOTAL 100.0%
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1993
1.ASSETS 2. 3.
4.Investment in securities, at value (cost $389,987,602) 5. $ 422,437,500
(Notes 1 and 2) - See accompanying schedule
6.Cash 7. 52,777
8.Interest receivable 9. 8,455,141
10.Other receivables 11. 175
12. TOTAL ASSETS 13. 430,945,593
14.LIABILITIES 15. 16.
17.Payable for investments purchased 18.
19. Delayed delivery (Note 2) $ 7,684,358 20.
21.Payable for fund shares redeemed 135,783 22.
23.Dividends payable 414,486 24.
25.Accrued management fee 191,881 26.
27. TOTAL LIABILITIES 28. 8,426,508
29.30.NET ASSETS 31. $ 422,519,085
32.Net Assets consist of: 33. 34.
35.Paid in capital 36. $ 384,282,309
37.Accumulated undistributed net realized gain (loss) on 38. 5,786,878
investments
39.Net unrealized appreciation (depreciation) on 40. 32,449,898
investment securities
41.42.NET ASSETS, for 35,927,904 shares outstanding 43. $ 422,519,085
44.45.NET ASSET VALUE, offering price and redemption 46. $11.76
price per share ($422,519,085 (divided by) 35,927,904 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1993
47.INTEREST INCOME 48. $ 24,224,779
49.EXPENSES 50. 51.
52.Management fee (Note 4) $ 2,193,155
53.Non-interested trustees' compensation 2,537
54. TOTAL EXPENSES 55. 2,195,692
56.NET INTEREST INCOME 57. 22,029,087
58.REALIZED AND UNREALIZED GAIN (LOSS) ON 60. 61.
INVESTMENTS
(NOTES 1 AND 3)
59.Net realized gain (loss) on:
62. Investment securities 4,921,111 63.
64. Futures contracts 488,018 5,409,129
65.Change in net unrealized appreciation (depreciation) 66. 16,830,884
on investment securities
67.NET GAIN (LOSS) 68. 22,240,013
69.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 70. $ 44,269,100
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED NOVEMBER 30,
1993 1992
71.INCREASE (DECREASE) IN NET ASSETS
72.Operations $ 22,029,087 $ 20,179,340
Net interest income
73. Net realized gain (loss) on investments 5,409,129 5,445,260
74. Change in net unrealized appreciation (depreciation) 16,830,884 2,910,837
on investments
75. NET INCREASE (DECREASE) IN NET ASSETS RESULTING 44,269,100 28,535,437
FROM OPERATIONS
76.Distributions to shareholders from: (22,029,087) (20,179,340)
Net interest income
77. Net realized gain (4,879,335) (2,125,805)
78.Share transactions 117,264,900 117,253,146
Net proceeds from sales of shares
79. Reinvestment of distributions from: 18,107,953 17,000,352
Net interest income
80. Net realized gain 4,178,032 1,860,252
81. Cost of shares redeemed (77,178,149) (89,465,319)
82. Redemption fees (Notes 1 and 3) 52,148 63,255
83. Net increase (decrease) in net assets resulting 62,424,884 46,711,686
from
share transactions
84. TOTAL INCREASE (DECREASE) IN NET ASSETS 79,785,562 52,941,978
85.NET ASSETS 86. 87.
88. Beginning of period 342,733,523 289,791,545
89. End of period $ 422,519,085 $ 342,733,523
90.OTHER INFORMATION 92. 93.
91.Shares
94. Sold 10,139,177 10,698,905
95. Issued in reinvestment of distributions from: 1,556,067 1,526,197
Net interest income
96. Net realized gain 376,061 168,807
97. Redeemed (6,628,468) (8,200,730)
98. Net increase (decrease) 5,442,837 4,193,179
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
99. YEARS ENDED NOVEMBER 30,
100. 1993 1992 1991 1990 1989
101.SELECTED PER-SHARE DATA
102.Net asset value, $ 11.240 $ 11.020 $ 10.620 $ 10.650 $ 10.190
beginning of period
103.Income from .640 .694 .694 .674 .710
Investment Operations
Net interest income
104. Net realized and .678 .298 .398 .050 .460
unrealized gain
(loss)
on investments
105. Total from 1.318 .992 1.092 .724 1.170
investment
operations
106.Less Distributions (.640) (.694) (.694) (.674) (.710)
From net interest
income
107. From net realized (.160) (.080) - (.080) -
gain
on investments
108. Total distributions (.800) (.774) (.694) (.754) (.710)
109.Redemption fees .002 .002 .002 - -
added
to paid in capital
110.Net asset value, $ 11.760 $ 11.240 $ 11.020 $ 10.620 $ 10.650
end of period
111.TOTAL RETURN 12.12 9.33 10.63 7.15 11.82
% % % % %
112.RATIOS AND SUPPLEMENTAL DATA
113.Net assets, end of $ 422,519 $ 342,734 $ 289,792 $ 209,658 $ 158,655
period (000 omitted)
114.Ratio of expenses .55 .51 .52 .65 .56
to average net assets % % % % %
115.Ratio of expenses .55 .56 .64 .68 .82
to average net assets % % % % %
before expense
reductions
116.Ratio of net interest 5.52 6.22 6.44 6.47 6.76
% % % % %
income to average
net assets
117.Portfolio turnover 25 33 42 82 90
rate % % % % %
</TABLE>
NOTES TO FINANCIAL STATEMENTS
for the period ended November 30, 1993
1. 1. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan New Jersey Municipal High Yield Portfolio (the fund) is a fund of
Fidelity Court Street Trust(the trust) and is authorized to issue an
unlimited number of shares. The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Massachusetts business trust. The
following summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities (including restricted securities) of which quotations are not
readily available through the pricing service are valued at their fair
value as determined in good faith under consistently applied procedures
under the general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, the fund is not subject to income taxes to
the extent that it distributes all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Interest income, which includes accretion of original
issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are declared daily and paid
monthly from net investment income. Distributions from realized gains, if
any, are recorded on the ex-dividend date.
REDEMPTION FEES. Shares held in the fund less than 180 days are subject to
a redemption fee equal to .50% of the proceeds of the redeemed shares. A
portion of the fee is accounted for as a reduction of transfer agent
expenses. This portion of the redemption fee is used to offset the
transaction costs and other expenses that short-term trading imposes on the
fund and its shareholders. The remainder of the redemption fee is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. 3. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying
2. OPERATING POLICIES -
CONTINUED
DELAYED DELIVERY TRANSACTIONS -
CONTINUED
securities and the date when the securities will be delivered and paid for
are fixed at the time the transaction is negotiated. The fund may receive
compensation for interest forgone on entering into delayed delivery
transactions. The fund identifies securities as segregated in its custodial
records with a value at least equal to the amount of the purchase
commitment.
FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures contracts and
write options. These investments involve, to varying degrees, elements of
market risk and risks in excess of the amount recognized in the Statement
of Assets and
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
4. 5. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term, aggregated
$167,749,488 a nd $95,351,903 respectively. The face value of futures
contracts opened and closed amounted to $96,304,281 and $96,304,281
respectively.
6. 7. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, FMR pays all expenses
except the compensation of the non-interested Trustees and certain
exceptions such as interest, taxes, brokerage commissions and extraordinary
expenses. FMR receives a fee that is computed daily at an annual rate of
.55% of the fund's average net assets.
FMR also bears the cost of providing shareholder services to the fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $9,745.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and the Shareholders of the
Spartan New Jersey Municipal High Yield Portfolio:
We have audited the accompanying statement of assets and liabilities of
Spartan New Jersey Municipal High Yield Portfolio, a portfolio of the
Fidelity Court Street Trust, including the schedule of portfolio
investments, as of November 30, 1993, the related statement of operations
for the year then ended, the statement of changes in net assets for each of
the two years in the period then ended, and the financial highlights for
each of the five years in the period then ended. These financial statements
and financial highlights are the responsibility of the Fund's management.
Our responsibility is to express an opinion on these financial statements
and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1993, by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Spartan New Jersey Municipal High Yield Portfolio as of November 30,
1993, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended,
in conformity with generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
December 30, 1993
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
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PRESS
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1.
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2.
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3.
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4.
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1.
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2.
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* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
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AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road, South
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
David Murphy, Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
FIDELITY TAX-FREE BOND FUNDS
Aggressive Tax-Free
California Tax-Free High Yield
California Tax-Free Insured
High Yield Tax-Free
Insured Tax-Free
Limited Term Municipals
Massachusetts Tax-Free High Yield
Michigan Tax-Free High Yield
Minnesota Tax-Free
Municipal Bond
New York Tax-Free High Yield
New York Tax-Free Insured
Ohio Tax-Free High Yield
Spartan Aggressive Tax-Free
Spartan California Municipal High Yield
Spartan Connecticut Municipal High Yield
Spartan Florida Municipal Income
Spartan Intermediate Municipal
Spartan Maryland Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal High Yield
Spartan New York Municipal High Yield
Spartan Pennsylvania Municipal High Yield
Spartan Short-Intermediate Municipal
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
EXHIBIT 24(A)(2)
SPARTAN(Registered trademark)
(Registered trademark)
FLORIDA
MUNICIPAL
FUNDS
ANNUAL REPORT
NOVEMBER 30, 1993
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 21 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE 25 How the fund has done over time.
FUND TALK 27 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 29 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 30 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 35 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 39 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 42 The auditor's opinion.
ACCOUNTANTS
</TABLE>
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in Federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider tax-free investments like municipal bonds and municipal
bond funds. Often these can provide higher after-tax yields than comparable
taxable investments. For example, if you're in the new 36% Federal income
tax bracket and invest $10,000 in a taxable investment yielding 7%, you'll
pay $252 in Federal taxes and receive $448 in income. That same $10,000
invested in a tax-free bond fund yielding 5.5% would allow you to keep $550
in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income. If Fidelity had not reimbursed
certain fund expenses during the periods shown, the total returns,
dividends and yields would have been lower.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal Income Portfolio 13.51% 24.79%
Lehman Brothers Municipal Bond Index 11.08% n/a
Average Florida Tax-exempt
Municipal Bond Fund 12.22% 20.83%
Consumer Price Index 2.68% 4.52%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period, in
this case, one year or since the fund started on March 16, 1992. For
example, if you invested $1,000 in a fund that had a 5% return over the
past year, you would end up with $1,050. You can compare these figures to
the performance of the Lehman Brothers Municipal Bond index - a broad gauge
of the municipal bond market. To measure how the fund stacked up against
its peers, you can look at the average Florida municipal bond fund, which
reflects the performance of 43 Florida tax-exempt municipal bond funds
tracked by Lipper Analytical Services. Both benchmarks include reinvested
dividends and capital gains, if any. Comparing the fund's performance to
the consumer price index helps show how your fund did compared to
inflation.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal Income Portfolio 13.51% 13.81%
Lehman Brothers Municipal Bond Index 11.08% n/a
Average Florida Tax-exempt
Municipal Bond Fund 12.22% 12.02%
Consumer Price Index 2.68% 2.82%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Spartan FLA Lehman Muni
03/31/92 10000.00 10000.00
04/30/92 10172.61 10089.00
05/31/92 10350.02 10208.05
06/30/92 10575.19 10379.55
07/31/92 11028.25 10690.93
08/31/92 10779.39 10586.16
09/30/92 10823.44 10654.97
10/31/92 10580.51 10550.55
11/30/92 10944.39 10739.41
12/31/92 11095.24 10848.95
01/31/93 11245.75 10974.80
02/28/93 11812.46 11372.08
03/31/93 11626.24 11251.54
04/30/93 11765.70 11365.18
05/31/93 11841.81 11428.83
06/30/93 12066.54 11619.69
07/31/93 12101.29 11634.79
08/31/93 12393.62 11876.80
09/30/93 12566.59 12012.19
10/31/93 12600.06 12035.02
11/30/93 12423.64 11929.11
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Florida Municipal Income Portfolio on March 31, 1992, shortly after the
fund started. As the chart shows, by November 30, 1993, the value of your
investment would have grown to $12,424 - a 24.24% increase on your initial
investment. This assumes you still own the fund on November 30, and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Municipal Bond index did over
the same period. With dividends reinvested, the same $10,000 would have
grown to $11,929 - a 19.29% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
INCOME
MARCH 16, 1992
(COMMENCEME
NT
OF OPERATIONS) T
YEARS ENDED NOVEMBER 30, 1993 O
NOVEMBER 30,
1992
Income return 6.10% 4.74%
Capital gain returns .10% 0%
Change in share price 7.31% 5.19%
Total return 13.51% 9.93%
Income returns, capital gains returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund. Change in share price and total return
figures include the effect of the $5 account closeout fee.
DIVIDENDS AND YIELD
PERIODS ENDED NOVEMBER 30, 1993 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 30.12(cents) 61.50(cents)
Annualized dividend rate n/a 5.29% 5.54%
Annualized yield 5.06% n/a n/a
Tax-equivalent yield 7.91% n/a n/a
Dividends per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.34 over
the past six months and $11.10 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized yield is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 36%
combined federal tax bracket.
SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Generally, interest rates fell during
the year ended November 30, 1993.
As a result, bond prices rose and
most fixed-income investors -
including those in tax-free bonds -
enjoyed attractive returns. The
period began amid expectations of
higher interest rates to come. This
was based on signs that the
economic recovery was finally taking
hold, as well as uncertainty over the
spending plans of the
president-elect. But as President
Clinton promised to tackle the deficit
and fight inflation, the bond market
signaled its approval. The yield on
the benchmark 30-year Treasury
bond dipped below 6% in September
and reached an historic low of 5.79%
in mid-October. By the end of the
period, as inflation fears returned, the
30-year bond was yielding 6.30%.
Two factors affected tax-free bonds
specifically: On the positive side,
higher federal taxes - discussed all
year and approved in August -
boosted demand. At the same time,
record new issuance kept supplies
high, which somewhat dampened
prices. Overall during the period,
tax-free bonds performed well
compared to other fixed-income
investments. The Lehman Brothers
Municipal Bond Index - a broad
measure of the tax-free bond market
- - rose 11.08%. By comparison, the
Lehman Brothers Aggregate Bond
Index - which tracks
investment-grade taxable bonds -
rose only 10.89%, due in part to
relatively poor performance by
mortgage-backed securities.
An interview with Anne Punzak,
Portfolio Manager of Spartan Florida
Municipal Income Portfolio
Q. ANNE, HOW DID THE FUND DO?
A. For the 12 months ended November 30, 1993, the fund had a total return
of 13.51%. That outpaced the average Florida municipal bond fund which
returned 12.22% over the same period, according to Lipper Analytical
Services.
Q. WHAT STRATEGIES HELPED THE FUND BEAT THE AVERAGE?
A. Mainly, having a longer than average duration - meaning it was more
sensitive to changes in interest rates. A year ago, I felt the economy
would grow slowly, and that interest rates would continue to fall. Since
interest rates did fall quite a bit over the past 12 months, having a
longer duration - 8.5 years at the end of November - really helped the
fund.
Q. HOW DID YOU GO ABOUT LENGTHENING THE FUND'S DURATION?
A. Primarily by investing in non-callable bonds. These are bonds that can't
be prematurely returned to their issuers, and therefore have a longer
duration. That's because non-callable bonds always trade to their maturity
date, rather than a shorter call date. When interest rates are falling and
bond prices are rising - as they have been during the past year -
non-callable bonds tend to do well. I focused on non-callables that were
cheap compared to what I thought their prices should be.
Q. MUNICIPAL RATING AGENCIES HAVE RECENTLY EXPRESSED CONCERN ABOUT ELECTRIC
UTILITY BONDS. ARE YOU WORRIED THAT THE FUND'S 19.9% STAKE IN THEM WILL BE
AFFECTED?
A. No, because the rating agencies have singled out investor-owned electric
utilities as being at risk. Though the fund has invested in some very
strong investor-owned utilities, I stick mainly to public electric
utilities. Investor-owned electric utilities have to compete with one
another for large, industrial customers. But public electric utilities,
which serve primarily homeowners, don't face much competition. I'm
optimistic about public electric utility bonds because they typically
provide attractive yields and should become scarce once refinancings are
completed. There were major buildup programs during the '80s, which means
there's little need for new plants. The scarcity should help push up
prices. I look for electric utilities with high ratings and strong
managements like Jacksonville Electric Authority, the fund's largest
investment.
Q. DO YOU STILL THINK THAT THE FUND'S 18.1% STAKE IN HEALTH-CARE BONDS
WON'T BE HURT BY PRESIDENT CLINTON'S HEALTH-CARE REFORM PROPOSALS?
A. Yes. In fact I believe that some hospitals could actually benefit from
health-care reform. I look for hospitals located in growing suburban areas
with strong HMO relationships that have done a good job managing costs.
Reform could spur a number of consolidations within the sector, which might
also offer some opportunities. I'm particularly interested in smaller,
lower-rated hospitals that I think could benefit from being taken over by a
larger, higher rated hospital. The acquired hospital's bonds would assume
the higher rating of its acquirer. When a municipal bond is upgraded, the
price of that bond can increase.
Q. WHAT'S YOUR OUTLOOK FOR FLORIDA MUNICIPAL BONDS?
A. I'm optimistic partly because the supply of Florida munis could decrease
while demand could increase. Over the past several years there's been an
abundant supply of Florida municipals, driven in part by issuers
refinancing older, more expensive debt. But that supply should diminish
somewhat as refinancings slow. On the demand side of the equation, higher
taxes could motivate investors to buy more tax-free municipals to shield
their income from higher taxes. Decreased supply and increased demand are
normally a recipe for higher prices.
Q. WHAT'S YOUR OUTLOOK FOR FLORIDA'S ECONOMY?
A. Despite the negative publicity, Florida's economy is doing well. Retail
sales and housing permits have picked up. The state's done a good job of
transforming its economy from one that's heavily reliant on tourism and
agriculture to one that's a more balanced mix of those industries and
service and trade businesses. There's been a substantial increase in the
number of financial services companies opening or relocating operations in
the state. Florida has also benefited from many companies opening offices
there to take advantage of the state's proximity to Latin and South
American markets. Over the next year, I believe that Florida will
experience similar, if not faster, growth than the nation as a whole.
FUND FACTS
GOAL: high current income
exempt from federal income
tax and the Florida intangible
personal property tax by
investing mainly in long-term,
investment-grade Florida
municipal bonds
START DATE: March 16, 1992
SIZE: as of November 30,
1993, over $428 million
MANAGER: Anne Punzak,
since March 1992; manager,
Fidelity Aggressive Tax Free
Fund, since January, 1986;
Fidelity High Yield Tax-Free
Fund, since October 1993;
Spartan Aggressive Municipal
Bond Fund, since April 1993,
Fidelity Insured Tax-free
Fund, October 1989 to
September 1993
(checkmark)
ANNE PUNZAK'S OUTLOOK
ON INTEREST RATES:
"Although the United States
economy is still limping along,
it's healthier than it was a year
ago and inflation, appears to
be in check. Two early
inflationary
signs-commodity prices and
wages - haven't shown any
real evidence of rebounding.
To me, that signals that
inflation could remain where it
is for some time. Even though
national economic growth has
picked up a little, inflation
hasn't risen. All other things
being equal, it's quite possible
that we're in for several years
of 3% or 4% growth, with
inflation in the 2% range. A
low growth, low inflation
environment is usually
positive for bonds.
(bullet) Transportation bonds are
the fund's largest sector
concentration at 19.8% of the
fund's investments. They're
attractive because their
backed primarily by tolls and
excise taxes and most have
strong credit quality.
DISTRIBUTIONS:
The Board of Trustees of
Fidelity Court Street Trust,
Spartan Florida Municipal
Income Portfolio voted to pay
on December 20, 1993, to the
shareholders of record at the
opening of business on
December 17, 1993 a
distribution of $.20 derived
from capital gains realized
from sales of portfolio
securities.
SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Electric Revenue 19.9 23.1
Transportation 19.8 17.8
Health Care 18.1 13.9
Water & Sewer 10.9 9.7
General Obligation 10.3 8.2
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1993
6 MONTHS AGO
Years 19.68 20.30
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1993
6 MONTHS AGO
Years 8.5 8.0
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF NOVEMBER 30, 1993
(MOODY'S RATINGS)
Aaa 56.9%
Aa, A 7.5%
Baa 28.6%
Non-rated 7%
Row: 1, Col: 1, Value: 56.9
Row: 1, Col: 2, Value: 7.5
Row: 1, Col: 3, Value: 28.6
Row: 1, Col: 4, Value: 7.0
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO
INVESTMENTS/NOVEMBER 30, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 96.6%
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - 83.9%
Acme Impt. Dist. Wtr. & Swr. Rev. Rfdg.
6% 6/1/09, (MBIA Insured) Aaa $ 650,000 $ 714,187 004692CH
Alachua County Health Facs. Auth. Health Facs. Rev.:
Rfdg. (Santa Fe Healthcare Facs. Proj.)
6% 11/15/09 Baa 1,950,000 1,942,687 010685FT
6.05% 11/15/09 Baa 3,500,000 3,460,624 010685FU
(Beverly Enterprises Proj.) 10.125% 4/1/10 - 895,000 1,025,893
010686AA
(Santa Fe Health Care Facs. Proj.)
7.60% 11/15/13 Baa 1,000,000 1,106,250 010685FN
Bay County Ind. Dev. Correctional Facs. Rev.
(Corrections Corp. America Proj.) Series A,
8.875% 11/1/05(b) - 2,855,000 3,015,593 072224AA
Boynton Beach Util. Sys. Rev. Rfdg.
6.25% 11/1/12, (FGIC Insured) Aaa 1,500,000 1,595,624 103580AM
Brevard County Health Facs. Auth. Rev. Rfdg.
(Westhoff Mem. Hosp.) Series B,
7.20% 4/1/13 Baa1 750,000 811,874 107416JH
Broward County Arpt. Sys. Rev. Rfdg. Series C,
5% 10/1/05, (AMBAC Insured) Aaa 5,000,000 4,993,750 114894BG
Broward County Health Facs. Auth. Hosp. Rev.
(Holy Cross Hosp. Inc.) 5.85% 6/1/12,
(AMBAC Insured) Aaa 2,000,000 2,067,500 115023CR
Broward County School Dist. Rfdg. 115067EJ
5.60% 2/15/07 A1 2,000,000 2,065,000 115067EJ
Broward County School Dist. Rfdg. Unltd. Tax
5.70% 2/15/08 A1 2,000,000 2,065,000 115067EK
Cape Canaveral Hosp. Dist. Ctfs. Rev.
6.875% 1/1/21, (AMBAC Insured) Aaa 250,000 274,687 139252BU
Charlotte County Util. Rev. Rfdg. 5.25%
10/1/21, (FGIC Insured) Aaa 4,650,000 4,434,937 160811BP
Citrus County Poll. Cont. Rev. Rfdg. (Florida Pwr.
Corp. Crystal River):
Series A, 6.625% 1/1/27 A1 2,700,000 2,926,124 177464AL
Series B, 6.35% 2/1/22 A1 5,000,000 5,343,750 177464AN
Cocoa Wtr. & Swr. Rev. Impt. Series B,
5.125% 10/1/13, (AMBAC Insured) Aaa 4,575,000 4,289,344 191783BW
Collier County Ind. Dev. Auth. Retirement Rent
Hsg. Rev. Rfdg. (Beverly Enterprises Proj.)
10.75% 3/1/03 - 1,395,000 1,701,900 194643AB
Collier County Wtr. Swr. Dist. Wtr. Rev.
6.375% 7/1/10, (FGIC Insured) Aaa 1,000,000 1,080,000 222642DG
Dade County Aviation Rev.(b):
Series P, 6.75% 10/1/94 Aa 2,900,000 2,990,625 233455KX
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Aviation Rev.(b)- Continued:
Series B, 6.25% 10/1/05, (MBIA Insured) Aaa $ 2,000,000 $ 2,170,000
233455TZ
Series B, 6.55% 10/1/13, (MBIA Insured) Aaa 2,000,000 2,167,500
233455UB
Dade County Edl. Facs. Auth. Rev. Rfdg.
(Intl. Univ. Proj.) 5% 10/1/16, (MBIA Insured) Aaa 2,000,000 1,872,500
233490KB
Dade County Pub. Facs. Rev. Rfdg.
(Jackson Mem. Hosp.) Series A, 4.75% 6/1/10,
(MBIA Insured) Aaa 3,540,000 3,256,800 233543GG
Delray Beach Wtr. & Swr. Rev. Series B,
(AMBAC Insured):
0% 10/1/12 Aaa 4,475,000 1,543,875 247325MY
0% 10/1/13 Aaa 2,760,000 897,000 247325MZ
0% 10/1/14 Aaa 4,400,000 1,336,500 247325NB
Dunedin Hosp. Rev. (Mease Health Care)
(MBIA Insured):
6.75% 11/15/21 Aaa 1,000,000 1,152,500 265368CR
5.25% 11/15/06 Aaa 1,400,000 1,412,250 265368DF
Dunedin Util Sys. Rev. Rfdg. 6.25% 10/1/11,
(FGIC Insured) Aaa 1,360,000 1,484,100 265377BH
Dunes Commty. Dev. Dist. Rev. Rfdg.
(Wtr. & Swr. Proj.) 6.10% 10/1/18 A3 1,500,000 1,545,000 265437BQ
Duval County Hsg. Fin. Auth. Single Family
Mtg. Rev. Series C, 7.70% 9/1/24,
(FGIC Insured) (GNMA Coll.) Aaa 745,000 787,838 267156KN
Escambia County Health Facs. Auth. Rev. Rfdg.:
Rfdg. (Baptist Hosp. Inc.) 6% 10/1/14 BBB+ 2,400,000 2,361,000
296110DT
(Baptist Hosp. & Baptist Manor) 6.75%
10/1/14 BBB+ 3,250,000 3,428,750 296110DH
Escambia County Hsg. Fin. Auth. Single Family
Mtg. Rev. (Multi-County Prog.) Series A,
6.90% 4/1/20, (GNMA Coll.) (b) Aaa 1,000,000 1,067,500 296122JU
Escambia County Poll. Cont. Rev. Rfdg.
(Gulf Pwr. Co. Proj.) 6.75% 3/1/22 A2 2,000,000 2,127,500 296130BL
Escambia County Util. Auth. Rev. Series B, 6.25%
1/1/15 (FGIC Insured) Aaa 1,500,000 1,651,875 296177GB
Florida Board Ed. Cap. Outlay (Pub. Ed.) 341421BF:
Series A 341421BF:
0% 6/1/14 Aa 1,500,000 390,000 341420P8
6.75% 6/1/21 Aa 1,870,000 2,052,325 341421BF
7.25% 6/1/23 Aa 325,000 377,813 341420Q8
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida Board Ed. Cap. Outlay (Pub. Ed.) 341421BF: - continued
Series B, 6.70% 6/1/22 Aa $ 2,250,000 $ 2,463,750 341421CN
Series C, 6.625% 6/1/22 Aa 1,000,000 1,095,000 341421DX
Florida Board of Ed. Cap. Outlay Rfdg. Unltd.
Tax (Pub. Ed.) Series D, 5.125% 6/1/22 Aa 8,000,000 7,530,000 341421RC
Florida Division Board Fin. Dept. Gen. Svcs. Rev.
(Dept. of Natural Resources Preservation 2000)
Series A, (AMBAC Insured):
6.25% 7/1/07 Aaa 1,000,000 1,082,500 342812SQ
6.25% 7/1/08 Aaa 2,500,000 2,706,250 342812SR
6.75% 7/1/08 Aaa 1,350,000 1,503,563 342812QX
Florida Hsg. Fin. Agcy. SIngle Family Mtg. Rev.
Series A, 7.90% 1/1/16 AA 1,040,000 1,067,300 340736BR
Florida Keys Aqueduct Auth. Wtr. Rev.
5.25% 9/1/21, (AMBAC Insured) Aaa 1,800,000 1,723,500 340765EX
Florida Mid-Bay Bridge Auth. Rev..
Series A:
7.50% 10/1/17 - 1,700,000 1,880,625 342814AL
6.875% 10/1/22 - 3,000,000 3,491,250 342814AM
Florida Muni. Pwr. Agcy. Rev.:
Rfdg. (St. Lucie Proj.) 5.50% 10/1/12,
(FGIC Insured) Aaa 2,635,000 2,631,706 342816JE
Rfdg. (Stanton II Proj.) 4.50% 10/1/16,
(AMBAC Insured) Aaa 3,000,000 2,628,750 342816LC
(Stanton II Proj.) 6.50% 10/1/20,
(AMBAC Insured) Aaa 2,000,000 2,285,000 342816HH
Florida Tpk. Auth. Tpk. Rev. Series A: 343136CE
Rdfg. 5.10% 7/1/04, (FDIC Insured) Aaa 1,000,000 1,017,500 343136EU
Rfdg. 5% 7/1/19, (FGIC Insured) Aaa 2,100,000 1,958,250 343136FL
5.25% 7/1/06, (FGIC Insured) Aaa 1,500,000 1,520,625 343136EW
5.90% 7/1/06, (FGIC Insured) Aaa 5,000,000 5,287,500 343136DC
7.20% 7/1/11, (AMBAC Insured) Aaa 1,500,000 1,762,500 343136CE
6.30% 7/1/12, (FGIC Insured) Aaa 1,000,000 1,068,750 343136DJ
5.25% 7/1/22, (FGIC Insured) Aaa 1,000,000 957,500 343136FB
6.35% 7/1/22, (FGIC Insured) Aaa 1,630,000 1,727,800 343136GB
Gainesville Util. Sys. Rev.:
Series A, 6.50% 10/1/22 Aa 1,225,000 1,330,656 362848GE
Series B, 5.50% 10/1/13 Aa 1,750,000 1,745,625 362848HR
Greater Orlando Aviation Auth. Arpt. Facs. Rev: 392274FX
Series A: 392274FX
6.50% 10/1/05, (FGIC Insured) (b) Aaa 3,550,000 3,913,875 392274FX
6.375% 10/1/21, (FGIC Insured) (b) Aaa 6,310,000 6,672,825 392274GA
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Greater Orlando Aviation Auth. Arpt. Facs. Rev. - continued 392274FX
Rfdg. Series D, 6.20% 10/1/08,
(AMBAC Insured) Aaa $ 1,000,000 $ 1,076,250 392274HU
Hernando County Ind. Dev. Rev. Rfdg.
(Beverly Enterprises, Inc.) 10% 9/1/11 - 1,000,000 1,180,000 427666AS
Hillsborough County Aviation Auth. Rev. Rfdg.
(Tampa Int'l. Aprt.): 432308JH
Series A, 6.90% 10/1/11, (FGIC Insured) Aaa 4,250,000 4,701,563
Series B, 5.30% 10/10/06, (FGIC Insured) Aaa 2,075,000 2,108,719
432308LE
Hillsborough County Cap. Impt. Rev.
(County Proj.) 2nd Series, 6.75% 7/1/22 A 3,120,000 3,393,000 43232LCH
Hillsborough County Envir. Sensitive Land
Acquisition & Protection Ltd. Tax
6.375% 7/1/11 A 2,000,000 2,142,500 432290EV
Hillsborough County Util. Rev. Rfdg.
(Cap. Appreciation) Series A: 432347FH
0% 8/1/05 Baa1 17,445,000 9,420,300 432347FH
0% 8/1/06 Baa1 10,000,000 5,062,500 432347FJ
0% 8/1/07 Baa1 9,250,000 4,405,313 432347FK
7% 8/1/14 Baa1 ,1,500,000 1,667,812 432347GP
Homestead Spl. Ins. Assessment Rev. (Hurricane
Andrew Covered Claims) (MBIA Insured): 437762AD
3.85% 3/1/95 Aaa 1,750,000 1,758,750 437762AD
5% 3/1/01 Aaa 3,000,000 3,052,500 437762AR
Jacksonville Beach Utils. Rev. 5.50% 10/1/14,
(MBIA Insured) Aaa 1,000,000 998,750 469286KV
Jacksonville Elec. Auth. Rev.:
Rfdg. (St. Johns River Pwr. 2) Series 7,
5.75%10/1/12 Aa1 9,750,000 9,908,438 469363S6
Rfdg. (St. Johns River Issue 2) Series 8,
5.125%10/1/07 Aa1 1,000,000 998,750 469363Y2
(Bulk Pwr. Supply) 6.75% 10/1/21 AA 3,500,000 3,994,375 469363P4
(Elec. Sys.) Series 3 A, 5.25% 10/1/28 Aa1 3,000,000 2,838,750
469363W3
Jacksonville Excise Tax Rev. Rfdg. 6.25%
10/1/05, (AMBAC Insured) Aaa 2,000,000 2,195,000 469383NF
Jacksonville Health Facs. Auth. Hosp. Rev.:
Rfdg. (Methodist Hosp. Proj.) Series A,
8% 10/1/15 - 2,260,000 2,186,550 469404HG
(Baptist Med. Ctr.) Series A, 7.30% 6/1/19,
(MBIA Insured) Aaa 500,000 563,125 469404GJ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Jacksonville Health Facs. Auth. Ind. Dev. Rev.:
(Cypress Village Proj.) 7% 12/1/14 Baa1 $ 1,000,000 $ 1,073,750 46940HAZ
Rfdg. (Cypress Village Proj.):
(Nat'l. Benevolent Assn.) 7% 12/1/22 Baa1 2,000,000 2,132,500 46940HBA
(Nat'l. Benevolent Assn.) 6.25% 12/1/23 Baa1 2,000,000 1,997,500
46940HBR
Jacksonville Hosp. Rev. (Univ. Med. Ctr.)
(Connie Lee Insured)
6.50% 2/1/07 AAA 2,000,000 2,147,500 46940TAR
6.60% 2/1/21 AAA 1,275,000 1,389,750 46940TAT
Jacksonville Ind. Dev. Rev. Rfdg.
(Cargill, Inc. Proj.) 6.40% 3/1/11 (c) AA- 1,250,000 1,342,188 469407AZ
Jacksonville Wtr. & Swr. Gen. Wtrwks. Dev. Rev.
(Jacksonville Suburban Utils.) 6.75%
6/1/22 (b) A2 1,000,000 1,088,750 469510AA
Key West Util. Board Elec. Rev. Rfdg.
0% 10/1/14, (AMBAC Insured) Aaa 6,755,000 2,060,275 493230JS
Kissimmee Util. Auth. Elec. Sys. Rev. Rfdg. & Impt.
5.25% 10/1/18, (FGIC Insured) Aaa 3,000,000 2,880,000 497850DA
Kissemmee Wtr. & Swr. Rev. Rfdg.
6% 10/1/11, (AMBAC Insured) Aaa 2,000,000 2,097,500 497857DX
Lake Worth Rfdg. 5.80% 10/1/05,
(AMBAC Insured) Aaa 1,000,000 1,055,000 511354CZ
Lee County Cap. Impt. Rev. Rfdg. Series B,
(MBIA Insured):
0% 10/1/11 Aaa 1,975,000 720,875 523484HE
0% 10/1/12 Aaa 1,060,000 367,025 523484HF
Lee County Hosp. Board Directors Hosp.
Rev. 9.524% 3/26/20, (MBIA Insured)(d) Aaa 1,000,000 1,120,000 52349FCG
Lee County Ind. Dev. Auth. Econ. Dev. Rev. Rfdg.
(Encore Nursing Ctr.) (Beverly Enterprises, Inc.)
8.125% 12/1/07 - 1,000,000 1,063,750 52348PAA
Lee County Trans. & Cap. Facs. Rev. Rfdg.
Series A, 5.50% 10/1/13, (MBIA Insured) Aaa 2,000,000 2,000,000
523481BC
Leesburg Hosp. Rev. Rfdg. (Leesburg Reg'l.
Med. Ctr. Proj.) Series B, 5.625% 7/1/13 Baa1 1,500,000 1,415,625
524360DH
Leon County 5.50% 10/1/07, (MBIA Insured) Aaa 1,000,000 1,022,500
52643HAM
Marion County Hosp. Dist. Rev. Rfdg.
(Munroe Reg'l. Med. Ctr.) 6.25% 10/1/12,
(FGIC Insured) Aaa 1,000,000 1,060,000 568787DP
Melbourne Wtr. & Swr. Rev. Rfdg. Series A,
6.50% 10/1/14, (FGIC Insured) Aaa 1,000,000 1,088,750 585395VY
Miami Beach Health Facs. Auth. Hosp. Rev. Rfdg.
(Mt. Sinai Med. Ctr. Proj.) (Cap. Gtd. Insured):
6.25% 11/15/08 Aaa 2,000,000 2,137,500 593211AL
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Miami Beach Health Facs. Auth. Hosp. Rev. Rfdg.
(Mt. Sinai Med. Ctr. Proj.) (Cap. Gtd. Insured):- continued
6.25% 11/15/19 Aaa $ 4,350,000 $ 4,567,500 593211AM
Miami Sports & Exhibit Auth. Spl. Oblig. Rfdg.
Series A, 6.15% 10/1/09, (FGIC Insured) Aaa 1,500,000 1,590,000
593496BX
Naples Hosp. Rev. Rfdg. (Naples Commty.
Hosp., Inc. Proj.) 5.10% 10/1/07,
(MBIA Insured) Aaa 3,205,000 3,148,913 630475CF
Nassau County Poll. Cont. Rev. Rfdg.
6.2% 7/1/15 Baa 1,000,000 1,041,250 631582AW
(ITT Rayonier Proj.):
7.65% 6/1/06 Baa2 1,415,000 1,572,419 631582AA
6.25% 6/1/10 Baa2 9,500,000 9,951,250 631582AQ
North Broward Hosp. Dist. Rev.: 658000EG
Rfdg. 6.40% 1/1/06, (MBIA Insured) Aaa 950,000 1,037,875 658000EL
Rfdg. 6.25% 1/1/12, (MBIA Insured) Aaa 3,000,000 3,172,500 658000FB
6.50% 1/1/12, (MBIA Insured) Aaa 350,000 378,438 658000EG
Ocala Util. Sys. Rev. Rfdg. Sub-Series A,
6.25% 10/1/15, (AMBAC Insured) Aaa 250,000 264,063 674564BJ
Orange County Health Facs. Auth.
(Orlando Regl. Healthcare) Series A,
5.75% 11/1/07, (MBIA Insured) Aaa 2,000,000 2,075,000 684503RZ
Orange County Hsg. Fin. Auth. Mtg. Rev.
Series A, 7.875% 9/1/10, (GNMA Coll.) (b) AAA 585,000 614,981 684904DC
Orange County Solid Waste Facs. Rev.
6.25% 10/1/12, (FGIC Insured) Aaa 2,175,000 2,324,531 684534BL
Orlando & Orange Co. Expressway Auth.
Rev. Rfdg. Sr. Lien : 686543HU
5.25% 7/1/12, (AMBAC Insured) Aaa 2,000,000 1,955,000 686543JG
5.25% 7/1/14, (AMBAC Insured) Aaa 2,425,000 2,358,313 686543HU
Orlando Util. Commission Wtr. & Elec. Rev. : 686509TS
Rfdg. Sub-Series D, 6.75% 10/1/17 Aa 1,000,000 1,153,750 686509TS
Sub-Series A: 686509TY
6% 10/1/20 Aa 3,500,000 3,600,625 686509UF
6.50% 10/1/20 Aa 1,405,000 1,512,131 686509TY
5.50% 10/1/26 Aa 3,935,000 3,831,706 686509TZ
Orlando Util. Commission Wtr. & Elec.
7.902%, 10/31/13 (d) Aa 3,000,000 3,071,250 686509XA
Osceola County Gas Tax Rev. Rfdg. & Impt.
6% 4/1/09, (FGIC Insured) Aaa 1,915,000 2,010,750 688024BC
Palm Beach County Arpt. Sys. Rev. Rfdg.
6.375%, 10/1/14, (MBIA Insured) Aaa 1,000,000 1,067,500 696499BK
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Pasco County Wtr. & Swr. Rev. Rfdg.
Series A, 5.75% 10/1/07, (FGIC Insured) Aaa $ 3,500,000 $ 3,640,000
702541CV
Pembroke Pines Cons. Util. Sys. Rev. Rfdg.
6.25% 9/1/17, (FGIC Insured) Aaa 1,000,000 1,051,250 706436AQ
Pinellas County Health Facs. Auth. Sun Coast
Health Sys. Rev. (Sun Coast Hosp. Proj.)
Series A, 8.50% 3/1/20 BBB 2,970,000 3,318,975 72316EAA
Plantation Health Facs. Auth. Rev. (Covenant
Retirement Communities Inc.)
7.75% 12/1/22 - 2,500,000 2,596,875 72736MAN
Polk County Ind. Dev. Auth. Ind. Dev. Rev.
(Winter Haven Hosp.) Series 2,
6.25% 9/1/15, (MBIA Insured) Aaa 1,500,000 1,590,000 731120LK
Reedy Creek Impt. Dist. Util. Rev.
(Cap. Appreciation) Series 1991-1,
6.25% 10/1/11, (MBIA Insured) AaA 3,500,000 3,701,250 75845HCA
St. John's County Indl. Dev. Auth. Rev. Rfdg. : 790397AQ
(Flagler Hosp. Proj.) 6% 8/1/22 A 4,240,000 4,282,400 79039MAM
(Vicars Lndg. Proj.) Series A, 6.75% 2/15/12 - 4,000,000 3,870,000
790397AQ
St. Lucie County Solid Waste Disp. Rev.
(Florida Pwr. & Lt. Co. Proj.) 6.70% 5/1/27 (b) A2 2,000,000
2,167,500 79208EAT
St. Petersburg Health Facs. Auth. Rev.: 793309CX
(Allegany Health Sys.) Series A, 7% 12/1/15,
(MBIA Insured) Aaa 1,000,000 1,130,000 793309CX
(Allegany Health Sys. Loan Proj.)
5.75% 12/1/21, (MBIA Insured) Aaa 140,000 141,225 793309DP
(Allegany Health Sys. - St. Mary's) 7% 12/1/21,
(MBIA Insured) Aaa 1,500,000 1,695,000 793309CZ
Sarasota Wtr. & Swr. Util. Rev. First Rfdg.
9.305% 10/1/11, (FGIC Insured)(d) Aaa 2,000,000 2,317,500 803408GB
Seminole County Wtr. & Swr. Rev. Rfdg. & Impt.: 816705EF
6% 10/1/09, (MBIA Insured) Aaa 1,500,000 1,605,000 816705EJ
6% 10/1/12, (MBIA Insured) Aaa 1,500,000 1,597,500 816705EF
Sumter County School Dist. Rev.
(Multi-Dist. Loan Prog.) 7.15% 11/1/15,
(Cap. Guaranty Insured) Aaa 1,000,000 1,215,000 866537BC
Sunrise Pub. Facs. Rev. Series B,
0% 10/1/13, (MBIA Insured) Aaa 2,840,000 937,200 86768GAY
Sunrise Spl. Tax Dist. #1 Rfdg. 6.375% 11/1/21,
LOC Bayer Hypotheken Bank Aa1 2,000,000 2,115,000 86768RAP
Tallahassee Health Facs. Facs. Rev. Rfdg.
(Tallahassee Mem. Regl. Med.) Series B,
6% 12/1/09, (MBIA Insured) Aaa 2,000,000 2,080,000 874485CJ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Tallahassee Muni. Elec. Rev. Series B,
6.20% 10/1/12 Aa $ 4,500,000 $ 4,725,000 874466KY
Tampa Cap. Impt. Proj. Rev.
Series B: 875148AU
8.25% 10/1/05 BBB 4,500,000 4,972,500 875148AU
8.375% 10/1/18 A- 1,800,000 1,991,250 875148AV
Tampa Rev. (Allegheny Health Sys. - St. Joseph)
6.75% 12/1/17, (MBIA Insured) Aaa 150,000 165,563 875231BD
Tampa Wtr. & Swr. Rev. (Short/Rites)
Series A-1, 9.410% 10/1/06,
(FGIC Insured) (d) Aaa 3,000,000 3,513,750 875290GY
Tarpan Springs Health Facs. Auth. Hosp. Rev.
(Helen Ellis Mem. Hosp. Proj.) : 876258CC
7.5% 5/1/11 BBB- 1,225,000 1,313,813 876258CC
7.625% 5/1/21 BBB- 245,000 263,988 876258CD
347,251,542
PUERTO RICO - 11.5%
Puerto Rico Commonwealth Aqueduct & Swr.
Auth. Rev. Series A, 7.875% 7/1/17 Baa 1,000,000 1,147,500 745160KC
Puerto Rico Commonwealth Gen. Oblig.
5% 7/1/21 Baa1 3,850,000 3,532,375 745144KJ
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy.
Rev.: 745181BA
Rfdg. Series X, 5.50% 7/1/15 Baa1 5,000,000 4,925,000 745181FD
Series T, 6.625% 7/1/18 Baa1 7,500,000 8,165,625 745181BA
Series W: 745181BZ
5.50% 7/1/13 Baa1 8,000,000 7,890,000 745181BZ
5.50% 7/1/15 Baa1 4,000,000 3,940,000 745181CB
Puerto Rico Commonwealth Infrastructuring
Fing. Auth. Spl. Series A, 7.50% 7/1/09 Baa1 1,000,000 1,127,500
745219AR
Puerto Rico Commonwealth Rfdg. & Impt.
Unltd. Tax 5.30% 7/1/04 Baa1 2,000,000 2,020,000 745144KC
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. : 745268JT
Series N, 7.125% 7/1/14 Baa1 800,000 873,000 745268JT
Series P, 7% 7/1/21 Baa1 4,450,000 4,911,688 745268LL
Puerto Rico Elec. Pwr. Auth. Rev.
(Pwr. Resources Auth.) Series R,
6.25% 7/1/17 Baa1 2,000,000 2,097,500 745268ND
Puerto Rico Pub. Bldgs. Auth. Rev. Rfdg.
Series L, 5.50% 7/1/21 Baa1 3,000,000 2,962,500 745235GJ
MUNICIPAL BONDS - CONTINUED
MOODY'S RATINGS(E) PRINCIPAL VALUE
(UNAUDITED) AMOUNT (NOTE 1)
PUERTO RICO - CONTINUED
Puerto Rico Tel. Auth. Rev. 6.95% 1/1/04,
(AMBAC Insured) Inverse Floating
Rate Notes (d) Aaa $ 4,000,000 $ 4,075,000 745297HX
47,667,688
U.S. VIRGIN ISLANDS - 1.7%
Virgin Islands Pub. Fin. Auth. Rev. Rfdg.
Series A, 7.25% 10/1/18
(Escrowed to Maturity) (b) - 6,300,000 6,977,250 927676CF
GUAM - 2.9%
Guam Arpt. Auth. Gen. Rev. Series B,
6.40% 10/1/05 (b) BBB 2,500,000 2,637,500 400648BB
Guam Arpt. Auth. Rev. : 400648BK
6.30% 10/1/22 BBB 2,150,000 2,227,938 400653AN
Series A: 400648BK
6.60% 10/1/10 BBB 1,500,000 1,588,125 400648BK
5.25% 10/1/13 BBB 1,250,000 1,164,063 400653BF
Series B, 6.70% 10/1/23 BBB 3,950,000 4,201,813 400648BM
11,819,439
TOTAL MUNICIPAL BONDS (Cost $397,113,630) 413,715,919
MUNICIPAL NOTES (A) - 3.4%
FLORIDA - 3.4%
Dade County Health Facs. Auth. Hosp. Rev.
(Miami Childrens Hosp. Proj.) Series 1990,
2.35%, LOC Barnett Bank, VRDN VMIG 8,600,000 8,600,000 233904KQ
Dade County Ind. Dev. Rev. (Montenay Dade
Ltd. Proj.) Series 1990-A, 2.40%, LOC
Banque Paribas, VRDN A-1 5,000,000 5,000,000 233561AB
Hillsborough County Ind. Dev. Auth. Poll. Cont.
Rev. Rfdg. (Tampa Elec. Co. Proj.)
Series 1990, 1.90%, VRDN - 1,100,000 1,100,000 432320CL
TOTAL MUNICIPAL NOTES (Cost $14,700,000) 14,700,000
TOTAL INVESTMENTS - 100% (Cost $411,813,630) $ 428,415,919
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(f) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(g) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(h) Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,342,188 or 0.3% of net
assets.
(i) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
(j) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investments for the period ended is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 60% AAA, AA, A 74%
Baa 21% BBB 16%
Ba .1% BB 0.0%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The distribution of municipal securities by revenue source, as a percentage
of total value of investments, is as follows:
Electric Revenue 19.9%
Transportation 19.8%
Health Care 18.1%
Water & Sewer 10.9%
General Obligation 10.3%
Others (individually
less than 10%) 21.0
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30,1993 the aggregate cost of investment securities for income
tax purposes was $411,813,630 Net unrealized appreciation aggregated
$16,602,289, of which $17,978,595 related to appreciated investment
securities and $1,376,306 related to depreciated investment securities.
The fund hereby designates $794,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
SPARTAN FLORIDA MUNICIPAL INCOME PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1993
8.ASSETS 9. 10.
11.Investment in securities, at value (cost $411,813,630) 12. $ 428,415,919
(Notes 1 and 2) - See accompanying schedule
13.Cash 14. 241,924
15.Receivable for investments sold 16. 1,001,819
17.Interest receivable 18. 6,117,812
19.Receivable from investment adviser for expense 20. 17,821
reductions (Note 5)
21. TOTAL ASSETS 22. 435,795,295
23.LIABILITIES 24. 25.
26.Payable for investments purchased $ 6,559,318 27.
28.Dividends payable 672,981 29.
30.Accrued management fee 196,032 31.
32. TOTAL LIABILITIES 33. 7,428,331
34.35.NET ASSETS 36. $ 428,366,964
37.Net Assets consist of: 38. 39.
40.Paid in capital 41. $ 403,756,117
42.Accumulated undistributed net realized gain (loss) on 43. 8,008,558
investments
44.Net unrealized appreciation (depreciation) on 45. 16,602,289
investment securities
46.47.NET ASSETS, for 37,951,331 shares outstanding 48. $ 428,366,964
49.50.NET ASSET VALUE, offering price and redemption 51. $11.29
price per share ($428,366,964 (divided by) 37,951,331 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1993
52.INTEREST 53. $ 21,762,517
54.EXPENSES 55. 56.
57.Management fee (Note 4) $ 2,073,795
58.Non-interested trustees' compensation 2,365 59.
60. Total expenses before reductions 2,076,160 61.
62. Expense reductions (Note 5) (1,147,661) 928,499
63.NET INVESTMENT INCOME 64. 20,834,018
65.REALIZED AND UNREALIZED GAIN (LOSS) ON 67. 68.
INVESTMENTS
(NOTES 1 AND 3)
66.Net realized gain (loss) on:
69. Investment securities 8,367,459 70.
71. Futures contracts (249,214) 8,118,245
72.Change in net unrealized appreciation (depreciation) 73. 74.
on:
75. Investment securities 15,486,147 76.
77. Futures contracts (50,618) 15,435,529
78.NET GAIN (LOSS) 79. 23,553,774
80.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 81. $ 44,387,792
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
82. YEAR ENDED MARCH 16, 1992
NOVEMBER 30, (COMMENCEMENT
1993 OF OPERATIONS) TO
NOVEMBER 30,
1992
83.INCREASE (DECREASE) IN NET ASSETS
84.Operations $ 20,834,018 $ 5,269,681
Net investment income
85. Net realized gain (loss) on investments 8,118,245 117,708
86. Change in net unrealized appreciation (depreciation) 15,435,529 1,166,760
on investments
87. NET INCREASE (DECREASE) IN NET ASSETS RESULTING 44,387,792 6,554,149
FROM
OPERATIONS
88.Distributions to shareholders from: (20,834,018) (5,269,681)
Net investment income
89. Net realized gain (227,395) -
90.Share transactions 242,254,359 250,151,152
Net proceeds from sales of shares
91. Reinvestment of distributions from: 13,798,681 3,577,304
Net investment income
92. Net realized gain 162,331 -
93. Cost of shares redeemed (88,378,513) (17,974,253)
94. Redemption fees (Note 1) 94,890 70,166
95. Net increase (decrease) in net assets resulting 167,931,748 235,824,369
from
share transactions
96. TOTAL INCREASE (DECREASE) IN NET ASSETS 191,258,127 237,108,837
97.NET ASSETS 98. 99.
100. Beginning of period 237,108,837 -
101. End of period $ 428,366,964 $ 237,108,837
102.OTHER INFORMATION 104. 105.
103.Shares
106. Sold 22,071,403 23,926,650
107. Issued in reinvestment of distributions from: 1,237,013 341,743
Net investment income
108. 15,431 -
Net realized gain
109. Redeemed (7,911,287) (1,729,622)
110. Net increase (decrease) 15,412,560 22,538,771
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C>
111. YEAR ENDED MARCH 16, 1992
NOVEMBER 30, (COMMENCEMENT
1993 OF OPERATIONS) TO
NOVEMBER 30,
1992
112.SELECTED PER-SHARE DATA
113.Net asset value, beginning of period $ 10.520 $ 10.000
114.Income from Investment Operations .615 .459
Net investment income
115. Net realized and unrealized gain (loss) on .777 .514
investments
116. Total from investment operations 1.392 .973
117.Less Distributions (.615) (.459)
From net interest income
118. From net realized gain on investments (.010) -
119. Total distributions (.625) (.459)
120.Redemption fees added to paid in capital .003 .006
121.Net asset value, end of period $ 11.290 $ 10.520
122.TOTAL RETURN (dagger) 13.52% 9.94%
123.RATIOS AND SUPPLEMENTAL DATA
124.Net assets, end of period (000 omitted) $ 428,367 $ 237,109
125.Ratio of expenses to average net assets .25% .03%*
126.Ratio of expenses to average net assets before .55% .55%*
expense reductions (dagger)(dagger)
127.Ratio of net interest income to average 5.52% 6.25%*
net assets
128.Portfolio turnover rate 50% 38%*
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal
Money Market Portfolio 2.50% 3.30%
Consumer Price Index 2.68% 3.48%
Average All Tax-Free
Money Market Fund 2.00% 2.64%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - one
year, or since the fund started on August 24,1992. For example, if you
invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. Comparing the fund's performance to the consumer
price index (CPI) helps show how your investment did compared to inflation.
To measure how the fund stacked up against its peers, you can compare its
return to the average all tax-free money market fund's total return. This
average currently reflects the performance of 333 tax-free money market
funds tracked by IBC/Donoghue. (The periods covered by the CPI and
IBC/Donoghue numbers are the closest available match to those covered by
the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 LIFE OF
YEAR FUND
Spartan Florida Municipal
Money Market Portfolio 2.50% 2.59%
Consumer Price Index 2.68% 2.77%
Average All Tax-Free
Money Market Fund 2.00% 2.03%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11/30/92 2/28/93 5/31/93 8/31/93 11/30/93
Spartan Florida 2.65% 2.29% 2.80% 2.48% 2.26%
Municipal Money Market
Portfolio
Average Tax-Free 2.18% 1.82% 2.20% 2.00% 1.94%
Money Market Fund
Spartan Florida 4.14% 3.58% 4.38% 3.88% 3.53%
Municipal Money Market
Portfolio - Tax-equivalent
Average All Taxable 2.77% 2.71% 2.64% 2.64% 2.69%
Money Market Fund
</TABLE>
Row: 1, Col: 1, Value: 2.65
Row: 1, Col: 2, Value: 2.18
Row: 2, Col: 1, Value: 2.29
Row: 2, Col: 2, Value: 1.82
Row: 3, Col: 1, Value: 2.8
Row: 3, Col: 2, Value: 2.2
Row: 4, Col: 1, Value: 2.48
Row: 4, Col: 2, Value: 2.0
Row: 5, Col: 1, Value: 2.26
Row: 5, Col: 2, Value: 1.94
Spartan Florida
Municipal Money
Market Portfolio
Average Florida
Tax-Free Money
Market Fund
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. This
would have been lower if Fidelity had not reimbursed certain fund expenses.
You can compare these yields to the average all tax-free money market fund.
Or you can look at the fund's tax-equivalent yield, which is based on a
combined effective 1993 federal tax rate of 36%. The tax-equivalent figures
are useful in seeing how the fund stacked up against the average taxable
money market fund as tracked by IBC/Donoghue.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield -- the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield -- makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Deborah Watson,
Portfolio Manager of Spartan Florida
Municipal Money Market Portfolio
Q. DEB, CAN YOU DESCRIBE THE CONDITIONS YOU'VE FACED FOR THE LAST YEAR?
A. Sure. In terms of interest rates, there's not much to report. Tax-free
short-term rates took their cue from the federal funds rate, which held
steady at or near 3% all year. We encountered renewed inflation fears last
May, and again in late October. But both episodes were temporary, and so
did not significantly influence the way I managed the fund. In the absence
of major interest-rate swings, technical factors also played an important
part in guiding my strategy.
Q. IN WHAT WAY?
A. Like most states, Florida does the bulk of its borrowing in mid-summer.
The annual increase in supply generally presents a good buying opportunity,
and I anticipated that by gradually lowering the fund's average maturity
into the 30-day range by the end of June. Then, as supply entered the
market and interest rates remained stable, I bought longer-term issues and
extended the fund's average maturity again - to 79 days by the end of
October. Throughout November, I maintained a long average maturity, this
time in anticipation of the flood of new assets into the fund that occurs
each year in the weeks leading up to January 1, when Florida levies its
intangibles tax. But supply was scarce, and by the end of November, the
average maturity rolled down slightly to 66 days.
Q. HOW DID THE FUND PERFORM?
A. The fund's seven-day yield on November 30, 1993 was 2.26%, compared to
2.65% last year. The tax-equivalent yield for investors in the 36% federal
tax bracket was 3.53%. Total return for the same period was 2.50%. That
beat the total return of the average all tax-free money market fund tracked
by IBC/Donoghue, which was 2.00%.
Q. WHY DID THE FUND BEAT ITS PEERS?
A. There were several factors: successful interest-rate forecasting; a 25%
stake in issues subject to the alternative minimum tax, which offer more
yield; and a 14% stake in some simple derivatives. The derivatives I bought
combine a long-term municipal bond with a "put," or an option to sell to a
third party, typically a bank. The end product is an investment that pays a
short-term variable interest rate and can be put on short notice, usually
seven days. It acts much like any other variable rate demand note the fund
might own, with one key difference: the yield is slightly higher, a fact
that has more to do with the added complexity of these instruments than
added investment risk.
Q. WHAT'S AHEAD FOR THE FUND?
A. Shareholders can expect a sharp increase in the percentage of the fund's
variable rate demand notes (VRDN) as we approach January 1, and a
corresponding drop in the fund's average maturity. That trend should begin
to reverse itself later in January as assets flow back out of the fund. In
the months ahead, the short-term market may experience some volatility. I
expect the economy to continue to show sporadic signs of improvement,
leading to growing expectations that the fed may move to increase rates.
Therefore, I would probably take a more defensive approach, and keep the
average maturity somewhere between 50 and 65 days.
FUND FACTS
GOAL: income exempt from
federal income tax and the
Florida intangible personal
property tax and stability by
investing in high-quality,
short-term Florida municipal
securities
START DATE: August 24, 1992
SIZE: as of November 30,
1993, over $300 million
MANAGER: Deborah Watson,
since August 1992; manager,
Spartan California and
Pennsylvania Municipal Money
Market Portfolios, since 1989;
and Fidelity California Tax-Free
Money Market Fund, since
1988
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/93 5/31/93 11/30/92
0 - 30 63 66 64
31 - 90 13 18 20
91 - 180 1 10 1
181 - 397 23 6 15
WEIGHTED AVERAGE MATURITY
11/30/93 5/31/93 11/30/92
Spartan Florida
Municipal Money Market
Portfolio 66 days 46 days 60 days
Average Florida Tax-Free
Money Market Fund* 64 days 48 days 62 days
ASSET ALLOCATION
AS OF 11/30/93 AS OF 11/30/92
Row: 1, Col: 1, Value: 59.0
Row: 1, Col: 2, Value: 15.0
Row: 1, Col: 3, Value: 0.0
Row: 1, Col: 4, Value: 18.0
Row: 1, Col: 5, Value: 8.0
Row: 1, Col: 1, Value: 56.0
Row: 1, Col: 2, Value: 28.0
Row: 1, Col: 3, Value: 2.0
Row: 1, Col: 4, Value: 14.0
Row: 1, Col: 5, Value: 2.0
Variable rate
demand notes
(VRDNs) 59%
Commercial
paper 15%
Tender bonds 0%
Municipal
notes 18%
Other 8%
Variable rate
demand notes
(VRDNs) 56%
Commercial
paper 28%
Tender bonds 1%
Municipal
notes 14%
Other 1%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENTS/NOVEMBER 30, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - 100%
Alachua County Health Facs. (Academic Research Bldg.
Proj. 1989) 2.75% 1/7/94, LOC Barnett Bank of
Jacksonville, VT $ 1,500,000 $ 1,500,000 0106859A
Alachua County Bonds 4.30% 2/1/94, (FSA Insured) 2,340,000 2,346,583
010691BH
Brevard County Hsg. Fin. Auth. (Sun Pointe Bay Apts. Proj.)
Series 1993 2.40%, VRDN 500,000 500,000 106904EC
Brevard County Hsg. Rev. (Palm Place Hsg. Proj.)
Series 1985, 2.30%, LOC Chemical Bank ,VRDN 2,160,000 2,160,000
106904DY
Broward County Airport System Rev. 2.90% 10/1/94
(AMBAC Insured) (c) 1,500,000 1,501,181 114894AU
Broward County Fin. Auth. Multi-Family Hsg. Rev.
(Parkview Partnership Ltd. Proj.)
Series 1985, 2.675%, LOC Fuji Bank, VRDN 200,000 200,000 115027CL
Broward County Hsg. Fin. Auth. (Sawgrass Pines Apt. Proj.)
Series 1993 A, 2.80%, LOC First Union Bank of Florida (c) 11,000,000
11,000,000 115027CX
Broward County Ind. Dev. Auth. Ind. Dev. Rev. (Rib Associates
Proj.) Series 1989, 2.55%, LOC Sun Bank, VRDN ( c) 1,540,000 1,540,000
115032AA
Broward County Sales Tax Rev. Notes Series 1989 B, CP (c):
2.45%, 12/14/93, LOC Industrial Bank of Japan 500,000 499,972 1150329P
2.70%, 1/12/94, LOC Industrial Bank of Japan 2,400,000 2,400,000
1150329N
Charlotte County School Dist. TAN, Series 1993,
3.25% 6/30/94 6,750,000 6,769,155 160803AX
Collier County Ind. Dev. Auth. Wtr. & Swr. Ind. Dev. Rev.
(Marco Island Util. Proj.) Series 1992, 2.55%
LOC Sun Bank, VRDN (c) 5,125,000 5,125,000 19464TAB
Collier County Wtr. & Swr. Ind. Dev. Rev. Series 1990
(Marco Island Util. Proj.) 2.55%, LOC Sun Bank,
VRDN (c) 6,700,000 6,700,000 19464TAA
Dade County Aviation Facs. Rev., Series 1984 A, 2.40%,
LOC Fuji Bank, VRDN 2,500,000 2,500,000 233455FK
Dade County Health Facs. Auth. Hosp. Rev. Bonds (Baptist
Hosp. of Miami Proj.) 6.20% 5/1/94 1,320,000 1,339,275 233904FE
Dade County Ind. Dev. Rev. VRDN:
(Montenay-Dade Proj.) :
Series 1988, 2.40%, LOC Banque Paribas (c) 3,500,000 3,500,000
233494AP
Series 1990 A, 2.40%, LOC Banque Paribas (c) 18,840,000 18,840,000
233561AB
(Dolphins Stadium Proj.) :
Series 1985 B, 2.40%, LOC Citibank, Marine Midland
Bank 2,900,000 2,900,000 233905BA
Series 1985 C, 2.40%, LOC Citibank 2,400,000 2,400,000 233905BB
Series 1985 D, 2.40%, LOC Citibank 1,300,000 1,300,000 233905BC
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Dade County Ind. Dev. Rev. VRDN: - continued
(Flamingo Graphics Proj.) Series 1989, 2.55%
LOC Sun Bank (c) $ 485,000 $ 485,000 233905BV
(Guastafeste Proj.) Series 1987, 2.55%,
LOC Sun Bank (c) 835,000 835,000 233905BN
(Guastafeste Proj.) Series 1991, 2.55%
LOC Sun Bank (c) 815,000 815,000 233905CQ
Dade County Multi-Family Hsg. Rev. (Biscayne View
Apts. Proj.) Series 1993, 2.70%, (BPA Commonwealth
Life Ins. Co.), VRDN (c) 15,000,000 15,000,000 233911HX
Duval County Multi-Family Hsg. Fin. Auth. Rev. (Lakes
of Mayport Apts.) Series 1985 F, 2.60%, LOC Bank of
Boston, VRDN 3,200,000 3,200,000 267152EV
Escambia Co. Solid Waste. Disp. Rev. (Monsanto Co. Proj.),
Series 1993, 2.65%, VRDN, (c) 5,300,000 5,300,000 296163AZ
Florida Dept. of Trans. Tpk. Rev. Rfdg. Ctfs. of Partnership,
Series 1993 A, 2.55%, (FGIC Insured),
(Liquidity Enhancement Merrill Lynch) (b) 12,360,000 12,360,000
343136GC
Florida Hsg. Fin. Agcy. Mult-Family Gtd. Mtg. Rev., VRDN:
Series 1983 K, 2.40% 1,160,000 1,160,000 340737KW
Series 1983 J, 2.40% 2,400,000 2,400,000 340737KV
Florida Hsg. Fin. Agcy. Multi-Family Hsg. Rev., VRDN:
(Beville-Oxford Proj.) Series 1990 B, 2.50% 1,000,000 1,000,000
3407375U
(Brandon-Oxford Proj.) Series 1990 C, 2.50% 5,500,000 5,500,000
3407375T
(Hillsborough-Oxford Proj.) Series D, 2.50% 200,000 200,000 3407375V
(Players Club) Series 1991 C, 3.12%,
LOC Sumitomo Trust 7,100,000 7,100,000 3407376B
(Town Colony II Proj.) Series 1985 EE, 2.40% 1,000,000 1,000,000
340737ZS
Florida League of Cities First Muni. Pooled Loan Prog.,VT:
Series 1, 2.70% 1/18/94, LOC Sumitomo Bank 5,500,000 5,500,000
321991CF
Series 2, 2.75% 1/25/94, LOC Sumitomo Bank 2,900,000 2,900,000
321991CD
Series 2, 2.70% 1/20/94, LOC Sumitomo Bank 2,000,000 2,000,000
321991CH
Florida Muni. Pwr. Agcy., Ctfs. of Partnership
(Stanton II Proj.) Series 1993, 2.55%, (AMBAC Insured),
(Liquidity Enhancement Merrill Lynch) (b) 3,660,000 3,660,000 342816LF
Florida State Board of Ed. Cap. Outlay Multi Modal
Tender Option Bonds, Series 1993 A, 2.55%, (Liquidity
Enhancement Citibank) (b) 5,230,000 5,230,000 341421LX
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Florida State Board of Ed. Cap. Outlay, Series 86 A,
BTP Class A Ctfs., 2.50% (Liquidity Enhancement
Banker's Trust) (b) $ 4,008,600 $ 4,008,600 341421RJ
Florida State Board of Ed. Cap. Outlay Pub Ed.Gen. Oblig.:
Series B, 5.30%, 6/1/94 1,500,000 1,518,838 341421GJ
Series C, 4.80%, 6/1/94 4,700,000 4,749,294 341421MA
Florida State Div. Fin. Dept. Natural Resource Preservation,
Series 2000 A, 6.10% 7/1/94, (AMBAC Insured) 1,000,000 1,018,838
342812QH
Hillsborough County Cap. Impt. Prog. Rev. (Criminal
Justice Facs. Proj. 4.75%, 8/1/94, (FGIC Insured) 3,035,000 3,069,525
43232FCE
Hillsborough County Ind. Dev. Auth. Poll. Cont. Rev. Rfdg.,
(Tampa Elec. Co. Gann Coal Proj.) Series 1992,
1.90%, VRDN 700,000 700,000 432320CM
Homestead Spl. Ins. Assessment Rev. Bonds
(Hurricane Andrew Cvd. Claims)
Series 1993, 2.875% 3/1/94, (MBIA Insured) 1,200,000 1,200,000 437762AB
Indian River County Hosp. Dist. Hosp. Rev.:
Series 1985, 2.50%, LOC Kredietbank, VRDN 2,600,000 2,600,000
454408AB
Series 1988, 2.75%, 1/21/94, LOC Kredietbank, VT 2,350,000 2,350,000
45499CAE
Series 1989, 2.65% 12/7/93, LOC Kredietbank, VT 1,200,000 1,200,000
45499CAA
Series 1989, 2.80% 1/25/94, LOC Kredietbank, VT 3,000,000 3,000,000
45499CAC
Series 1990, 2.80% 2/17/94, LOC Kredietbank, VT 5,000,000 5,000,000
45499CAG
Indian Trace Commty. Dev. Dist. (Broward Co. Basin I
Wtr. Mgmt. Spl. Benefit), VT:
Series 1991:
3.10% 12/6/93, LOC Tokai Bank 1,500,000 1,500,000 227994JR
3.10% 12/7/93, LOC Tokai Bank 2,000,000 2,000,000 227994JT
3.10% 12/6/93, LOC Tokai Bank 3,000,000 3,000,000 227994JS
Jacksonville Elec. Auth. Rev. Ctfs. of Partnership, 2.50%, 4693635T
(Liquidity Enhancement Merrill Lynch ) (b) 3,320,000 3,320,000
4693635T
Jacksonville Elec. Auth. Rev. (St. John's River Pwr. Pk. Sys.)
10% 10/1/94 3,000,000 3,235,092 469363FW
Jacksonville Hosp. Rev. (Baptist Medical Ctr. Proj.), VRDN: 469404CZ
Series 1984, 2.30%, LOC First Union Nat'l Bank 4,710,000 4,710,000
469404CZ
Series 1989, 2.30%, LOC First Union Nat'l Bank 550,000 550,000
46940TAF
Jacksonville Ind. Dev. Rev. (Samuel C. Taylor Foundation
1987 Proj.) 2.55%, LOC Barnett Bank of
Jacksonville, VRDN 1,800,000 1,800,000 469407AY
Lee County Gas Tax Ref. Bd. 3.25% 10/1/94
(MBIA Insured)(d) 1,260,000 1,264,864 52349LAQ
Lee County Hosp. Board Hosp. Rev. Series 1992 C,
(Lee Memorial Hosp. Proj.) 2.70% 1/14/94, VT 3,000,000 3,000,000
523995AE
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
Marion County Hsg. Fin. Auth. VRDN:
(Belvedere Apt. Proj.) Series 1985 C, 2.60%,
LOC Bank of Boston $ 2,650,000 $ 2,650,000 568788AA
(Oakhurst Apt. Proj.) Series 1985 E, 2.60%,
LOC Bank of Boston 2,700, 568788AB000 2,700,000
(Paddock Place Proj.) Series 1985 F, 2.60%,
LOC Bank of Boston 2,500,000 2,500,000 568788AC
(Summer Trace Apts.) Series 1985 D, 2.60%
LOC Bank of Boston 2,500,000 2,500,000 568788AD
Martin County Ind. Dev. Auth. Ind. Dev. Rev.
Series 1992 A, (Indiantown Cogeneration Proj.) 2.40%,
LOC Credit Suisse, VRDN (c) 2,900,000 2,900,000 573904AF
Martin County School Dist. TAN 3.40% 6/30/94 5,000,000 5,012,667
573900BA
Miami TAN 3.25% 9/28/94 5,000,000 5,018,856 593388T2
Monroe County School Dist. RAN Series 1992, 3.25%
12/28/93 2,500,000 2,500,000 610518AG
Ocean Hwy, & Port Auth. Series 1990, 2.55%,
LOC ABN-AMRO Bank, VRDN (c) 5,300,000 5,300,00 678438AA0
Okeechobee County Solid Waste Rev. (Chambers Waste Sys.)
Series 1992, 2.90%, LOC NationsBank, VRDN (c) 1,000,000 1,000,000
678438AA
Orange County Health Facs Auth. Custodial Receipt,
Series 1993, 2.60%, (MBIA Insured)
(Liquidity Enhancement Sakura Bank) (b) 13,435,000 13,435,000 684503SY
Orange County Health Fac. Auth. Rfdg. Prog. Rev. Series 1985
2.75%, 1/11/94, (MBIA Insured), VT 3,000,000 3,000,000 68499CAD
Orange County School Dist. TAN 3% 6/30/94 23,500,000 23,536,879
684519AQ
Orange County Solid Waste Facs. Rev. Rfdg. Series 1993,
3.50% 10/1/94 (MBIA Insured) 1,170,000 1,176,666 684534BQ
Orlando & Orange Expressway Rev. Auth. Rev.
Ctfs. of Partnership, 2.55%, (AMBAC Insured)
(Liquidity Enhancement Merrill Lynch) (b) 6,300,000 6,300,000
686543JX
Orlando Util. Commission Wtr. & Elec. Rev. 10.50%
10/1/94 1,360,000 1,485,413 686509RS
Palm Beach County Hsg. Fin. Auth. Rev. (Lake Crystal
Apts. Proj. Phase II) Series 1988 A, 2.50%,
LOC Citibank, VRDN (c) 7,480,000 7,480,000 696508CV
Pasco County School Dist. TAN 3.25% 6/30/94 6,800,000 6,819,297
702537CW
Pasco County School Dist. TRAN 3% 10/27/94 2,160,000 2,160,000 702537CX
Pinellas County Health Facs. Auth. Rev. (Pooled Hosp. Loan
Prog.) 2%, LOC Chemical Bank, VRDN 1,100,000 1,100,000 72316MAA
Putnam County Solid Wst. Assessment Rfdg. Bonds,
Series 1993, 2.70% 6/1/94, (MBIA Insured) 955,000 955,000 746483AN
St. Lucie County School Dist. TAN 3.25% 6/30/94 4,400,000 4,406,047
792076BV
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
FLORIDA - CONTINUED
St. Lucie School Dist RAN 3.75% 4/18/94 $ 2,600,000 $ 2,603,320 792076BU
Sarasota County Pub. Hosp. Dist. Rev., VT:
(Sarasota Memorial Hosp.):
Series 1991, 2.75% 1/13/94 2,700,000 2,700,000 803996LC
Series 1993 A, 2.60% 1/6/94 5,000,000 5,000,000 803996LV
TOTAL INVESTMENTS - 100% $ 319,700,362
Total Cost for Income Tax Purposes $ 319,700,345
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
VT - Variable Tender
LEGEND
(k) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(l) Provides evidence of ownership in an underlying pool of municipal
bonds.
(m) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(n) Security purchased on a delayed delivery basis. Interest rate to be
determined at settlement date (see Note 2 of Notes to Financial
Statements).
CAPITAL LOSS CARRYFORWARDS
At November 30,1993, the fund had a capital loss carryforward of
approximately $1200 of which $100, and $1,100 will expire on November 30,
2000, and 2001, respectively.
SPARTAN FLORIDA MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1993
129.ASSETS 130. 131.
132.Investment in securities, at value (Note 1) - See 133. $ 319,700,362
accompanying schedule
134.Cash 135. 4,159,249
136.Interest receivable 137. 1,697,836
138. TOTAL ASSETS 139. 325,557,447
140.LIABILITIES 141. 142.
143.Payable for investments purchased $ 18,697,119 144.
145.Dividends payable 28,361 146.
147.Accrued management fee 91,074 148.
149. TOTAL LIABILITIES 150. 18,816,554
151.152.NET ASSETS 153. $ 306,740,893
154.Net Assets consist of: 155. 156.
157.Paid in capital 158. $ 306,742,133
159.Accumulated net realized gain (loss) on 160. (1,257)
investments
161.Unrealized gain from accretion of market discount 162. 17
(Note 1)
163.164.NET ASSETS, for 306,742,133 shares 165. $ 306,740,893
outstanding
166.167.NET ASSET VALUE, offering price and 168. $1.00
redemption price per share ($306,740,893 (divided by)
306,742,133 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1993
169.INTEREST INCOME 170. $ 5,435,697
171.EXPENSES 172. 173.
174.Management fee (Note 4) $ 1,021,002
175.Non-interested trustees' compensation 1,223 176.
177. Total expenses before reductions 1,022,225 178.
179. Expense reductions (Note 5) (655,781) 366,444
180.NET INTEREST INCOME 181. 5,069,253
182.REALIZED AND UNREALIZED GAIN (LOSS) ON 184. (1,143)
INVESTMENTS
(NOTE 1)
183.Net realized gain (loss) on investment securities
185.Increase (decrease) in net unrealized gain from 186. 17
accretion
of market discount
187.NET GAIN (LOSS) 188. (1,126)
189.NET INCREASE IN NET ASSETS RESULTING FROM 190. $ 5,068,127
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED AUGUST 24, 1992
NOVEMBER 30, (COMMENCEMENT
OF OPERATIONS) TO
NOVEMBER 30,
1993 1992
191.INCREASE (DECREASE) IN NET ASSETS
192.Operations $ 5,069,253 $ 124,626
Net interest income
193. Net realized gain (loss) on investments (1,143) (114)
194. Increase (decrease) in net unrealized gain from 17 -
accretion of market discount
195. 5,068,127 124,512
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS
196.Dividends to shareholders from net interest income (5,069,253) (124,626)
197.Share transactions at net asset value of $1.00 per 523,059,131 58,251,173
share
Proceeds from sales of shares
198. Reinvestment of dividends from net interest 4,777,607 112,763
income
199. Cost of shares redeemed (270,561,793) (8,896,748)
200. 257,274,945 49,467,188
Net increase (decrease) in net assets and shares
resulting from share transactions
201. 257,273,819 49,467,074
TOTAL INCREASE (DECREASE) IN NET ASSETS
202.NET ASSETS 203. 204.
205. Beginning of period 49,467,074 -
206. End of period $ 306,740,893 $ 49,467,074
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C>
207. YEAR ENDED AUGUST 24, 1992
NOVEMBER 30, (COMMENCEMENT
1993 OF OPERATIONS) TO
NOVEMBER 30,
1992
208.SELECTED PER-SHARE DATA
209.Net asset value, beginning of period $ 1.000 $ 1.000
210.Income from Investment Operations .025 .008
Net interest income
211. Dividends from net interest income (.025) (.008)
212.Net asset value, end of period $ 1.000 $ 1.000
213.TOTAL RETURN (dagger) 2.51% .78%
214.RATIOS AND SUPPLEMENTAL DATA
215.Net assets, end of period (000 omitted) $ 306,741 $ 49,467
216.Ratio of expenses to average net assets .18% -%
217.Ratio of expenses to average net assets before .50% .50%*
expense reductions (dagger)(dagger)
218.Ratio of net interest income to average net assets 2.48% 2.91%*
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
for the period ended November 30, 1993
1. 2. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan Florida Municipal Income Portfolio(the income fund) is a fund of
Fidelity Court Street Trust. Spartan Florida Municipal Money Market
Portfolio (the money market fund) is a fund of Fidelity Court Street Trust
II. Each trust is registered under the Investment Company Act of 1940, as
amended (the 1940 Act), as an open-end management investment company.
Fidelity Court Street Trust and Fidelity Court Street Trust II (the trusts)
are organized as a Massachusetts business trust and a Delaware business
trust, respectively. Each fund is authorized to issue an unlimited number
of shares. The following summarizes the significant accounting policies of
the money market fund and the income fund:
SECURITY VALUATION.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the 1940 Act, and
certain conditions therein, securities are valued initially at cost and
thereafter assume a constant amortization to maturity of any discount or
premium.
INCOME FUND. Securities are valued based upon a computerized matrix system
and/or appraisals by a pricing service, both of which consider market
transactions and dealer-supplied valuations. Short-term securities maturing
within sixty days are valued either at amortized cost or original cost plus
accrued interest, both of which approximate current value. Securities for
which quotations are not readily available through the pricing service are
valued at their fair value as determined in good faith under consistently
applied procedures under the general supervision of the Board of Trustees.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
REDEMPTION FEES. Shares held in the income fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
A portion of the fee is accounted for as a reduction of transfer agent
expenses. This portion of the redemption fee is used to offset the
transaction costs and other expenses that short-term trading imposes on the
fund and its shareholders. The remainder of the redemption fee is accounted
for as an addition to paid in capital.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
3. 4. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The income fund may invest in futures
contracts and write options. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect
the extent of the involvement the high yield fund has in the particular
classes of instruments. Risks may be caused by an imperfect correlation
between movements in the price of the instruments and the price of the
underlying securities and interest rates. Risks also may arise if there is
an illiquid secondary market for the instruments, or due to the inability
of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The fund
may receive compensation for interest forgone on entering into delayed
delivery transactions. The fund identifies securities as segregated in its
custodial records with a value at least equal to the amount of the purchase
commitment.
5. 6. PURCHASES AND SALES OF
INVESTMENTS.
INCOME FUND. Purchases and sales of securities, other than short-term
securities, aggregated $507,056,918 and $333,830,247 respectively. The face
value of futures contracts opened and closed amounted to $ 67,962,094 and
$75,462,094, respectively
7. 8. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
& Research Company (FMR) pays all expenses except the compensation of
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
the non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .50% and .55% of average net assets
for the money market and income funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $4,401 and $4,170 for the Money Market and
Income funds, respectively.
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
9. 10. EXPENSE REDUCTIONS.
FMR has voluntarily agreed to reimburse the funds for total operating
expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above a specified percentage of average net assets.
MONEY MARKET FUND. For the period, this expense limitation ranged from an
annual rate of 0% to .40% of average net assets and the reimbursement
amounted to $655,781.
INCOME FUND. For the period, this expense limitation ranged from an annual
rate of .05% to .50% of average net assets and the reimbursement amounted
to $1,147,661.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street
Trust and Fidelity Court Street Trust II
and the Shareholders of the
Spartan Florida Municipal Income
Portfolio and the Spartan Florida
Municipal Money Market Portfolio:
We have audited the accompanying statements of assets and liabilities of
Spartan Florida Municipal Income Portfolio, a portfolio of the Fidelity
Court Street Trust, and Spartan Florida Municipal Money Market Portfolio ,
a portfolio of Fidelity Court Street Trust II, including the schedules of
portfolio investments, as of November 30, 1993, the related statements of
operations for the year then ended, and the statements of changes in net
assets and the financial highlights for the year ended November 30 ,1993
and the period from March 16, 1992 (commencement of operations) to November
30, 1992 for the Spartan Municipal Income Portfolio, and the year ended
November 30, 1993 and the period from August 24, 1992 (commencement of
operations) to November 30, 1992 for the Spartan Florida Municipal Money
Market Portfolio .These financial statements and financial highlights are
the responsibility of the Funds' management. Our responsibility is to
express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Spartan Florida Municipal Income Portfolio and Spartan Florida Municipal
Money Market Portfolio as of November 30, 1993, the results of their
operations for the year then ended and the changes in their net assets and
financial highlights for the year ended November 30,1993 and the period
from March 16, 1992 (commencement of operations) to November 30, 1992 for
the Spartan Municipal Income Portfolio, and the year ended November 30,
1993 and the period from August 24,1992 (commencement of operations) to
November 30, 1992 for the Spartan Florida Municipal Money Market Portfolio
in conformity with generally accepted accounting principals.
COOPERS & LYBRAND
Boston, Massachusetts
December 30, 1993
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
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services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
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(PIN)
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only you have automated telephone
access to your account information.
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you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
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representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Anne Punzak, Vice President
Thomas D. Maher, Assistant
Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*(see note)
Phyllis Burke Davis*(see note)
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*(see note)
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
FIDELITY'S TAX-FREE
MONEY MARKET FUNDS
California Tax-Free Money Market
Connecticut Municipal Money Market
Massachusetts Tax-Free Money Market
Michigan Municipal Money Market
New Jersey Tax-Free Money Market
New York Tax-Free Money Market
Ohio Municipal Money Market
Spartan California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money Fund
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
Tax-Exempt Money Market
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
(see note) MONEY MARKET ONLY
EXHIBIT 24(A)(3)
SPARTAN(Registered trademark)
(Registered trademark)
CONNECTICUT
MUNICIPAL
PORTFOLIOS
ANNUAL REPORT
NOVEMBER 30, 1993
CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 19 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE 23 How the fund has done over time.
FUND TALK 25 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 27 A summary of major shifts in the
fund's investments over the last six
months
and one year.
INVESTMENTS 28 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 32 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 36 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 39 The auditor's opinion.
ACCOUNTANTS
</TABLE>
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR
DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR
ACCOMPANIED BY
AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in Federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider tax-free investments like municipal bonds and municipal
bond funds. Often these can provide higher after-tax yields than comparable
taxable investments. For example, if you're in the new 36% Federal income
tax bracket and invest $10,000 in a taxable investment yielding 7%, you'll
pay $252 in Federal taxes and receive $448 in income. That same $10,000
invested in a tax-free bond fund yielding 5.5% would allow you to keep $550
in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each figure
includes changes in a fund's share price, reinvestment of any dividends (or
income) and capital gains (the profits the fund earns when it sells bonds
that have grown in value), and the effect of the $5 account closeout fee.
You can also look at the fund's income.
CUMULATIVE TOTAL RETURNS
YEARS ENDED NOVEMBER 30, 1993 PAST 1 PAST 5 LIFE
YEAR YEARS OF FUND
Spartan Connecticut Municipal
High Yield Portfolio 11.81% 58.33% 75.52%
Lehman Brothers Municipal Bond Index 11.09% 61.12% n/a
Average Connecticut Tax-exempt
Municipal Bond Fund 12.08% 57.20% n/a
Consumer Price Index 2.68% 21.20% n/a
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - in
this case, one year, five years, or since the fund started on October 29,
1987. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, you would end up with $1,050. You can compare these
figures to the performance of the Lehman Brothers Municipal Bond index - a
broad gauge of the municipal bond market. To measure how the fund stacked
up against its peers, you can look at the average Connecticut tax-exempt
municipal bond fund, which reflects the performance of 12 Connecticut
municipal bond funds tracked by Lipper Analytical Services. Both benchmarks
include reinvested dividends and capital gains, if any. Comparing the
fund's performance to the consumer price index helps show how your fund did
compared to inflation.
AVERAGE ANNUAL TOTAL RETURNS
YEARS ENDED NOVEMBER 30, 1993 PAST 1 PAST 5 LIFE
YEAR YEARS OF FUND
Spartan Connecticut Municipal
High Yield Portfolio 11.81% 9.63% 9.67%
Lehman Brothers Municipal Bond Index 11.09% 10.01% n/a
Average Connecticut Tax-exempt
Municipal Bond Fund 12.08% 9.47% n/a
Consumer Price Index 2.68% 3.92% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Spartan CT Hi LB Muni
10/31/87 10000.00 10000.00
11/30/87 10121.14 10261.10
12/31/87 10253.38 10409.99
01/31/88 10621.32 10780.79
02/29/88 10727.51 10894.75
03/31/88 10415.77 10767.82
04/30/88 10463.24 10849.66
05/31/88 10515.59 10818.30
06/30/88 10713.45 10976.57
07/31/88 10766.94 11048.14
08/31/88 10821.12 11057.86
09/30/88 11033.66 11258.01
10/31/88 11228.48 11456.71
11/30/88 11123.75 11351.77
12/31/88 11289.83 11467.90
01/31/89 11442.62 11705.06
02/28/89 11333.30 11571.50
03/31/89 11345.51 11543.84
04/30/89 11654.63 11817.90
05/31/89 11899.34 12063.35
06/30/89 12098.25 12227.17
07/31/89 12229.61 12393.59
08/31/89 12100.69 12272.25
09/30/89 12064.54 12235.44
10/31/89 12207.62 12384.71
11/30/89 12387.76 12601.44
12/31/89 12467.79 12704.77
01/31/90 12357.27 12645.06
02/28/90 12469.60 12757.60
03/31/90 12491.35 12761.43
04/30/90 12296.36 12669.55
05/31/90 12602.21 12945.74
06/30/90 12730.25 13059.66
07/31/90 12919.65 13251.64
08/31/90 12687.36 13059.49
09/30/90 12769.38 13067.33
10/31/90 12962.06 13303.85
11/30/90 13241.66 13571.25
12/31/90 13302.08 13630.97
01/31/91 13449.70 13813.62
02/28/91 13534.39 13933.80
03/31/91 13556.04 13939.37
04/30/91 13728.33 14124.77
05/31/91 13850.06 14250.48
06/30/91 13743.00 14236.23
07/31/91 13906.13 14409.91
08/31/91 14057.21 14600.12
09/30/91 14183.28 14789.92
10/31/91 14323.10 14923.03
11/30/91 14357.59 14964.82
12/31/91 14709.44 15286.56
01/31/92 14731.79 15321.72
02/29/92 14739.08 15326.32
03/31/92 14671.72 15332.45
04/30/92 14749.26 15468.90
05/31/92 14951.26 15651.44
06/30/92 15245.81 15914.38
07/31/92 15720.88 16391.81
08/31/92 15498.37 16231.17
09/30/92 15604.48 16336.68
10/31/92 15338.53 16176.58
11/30/92 15752.70 16466.14
12/31/92 15918.26 16634.09
01/31/93 16155.62 16827.05
02/28/93 16812.50 17436.19
03/31/93 16583.73 17251.36
04/30/93 16736.58 17425.60
05/31/93 16834.45 17523.19
06/30/93 17132.67 17815.82
07/31/93 17158.03 17838.98
08/31/93 17547.21 18210.03
09/30/93 17760.00 18417.63
10/31/93 17769.50 18452.62
11/30/93 17613.40 18290.24
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Spartan
Connecticut Municipal High Yield Portfolio on October 31, 1987, shortly
after the fund started. As the chart shows, by November 30, 1993, the value
of your investment would have grown to $17,613 - a 76.13% increase on your
initial investment. This assumes you still own the fund on November 30, and
therefore does not include the effect of the $5 account closeout fee. For
comparison, look at how the Lehman Brothers Municipal Bond index did over
the same period. With dividends reinvested, the same $10,000 would have
grown to $18,290 - a 82.90% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds will vary.
That means if you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
INCOME
YEARS ENDED NOVEMBER 30, 1993 1992 1991 1990 1989
Income return 6.29% 6.59% 6.65% 6.71% 7.19%
Capital gain returns 0.00% 0.00% 0.38% 0.19% 0.00%
Change in share price 5.52% 3.12% 1.39% -0.01% 4.16%
Total return 11.81% 9.71% 8.42% 6.89% 11.35%
Income returns, capital gain returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits realized from selling bonds that
have grown in value. The returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund. Change in share price and total return
figures include the effect of the $5 account closeout fee on an average
size account.
DIVIDENDS AND YIELD
PERIODS ENDED NOVEMBER 30, 1993 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 33.62(cents) 67.96(cents)
Annualized dividend rate n/a 5.64% 5.81%
Annualized yield 5.12% n/a n/a
Tax-equivalent yield 8.38% n/a n/a
Dividends per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $11.89 over
the past six months and $11.70 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized yield is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 38.88%
combined federal and state tax bracket.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Generally, interest rates fell during
the year ended November 30, 1993.
As a result, bond prices rose and
most fixed-income investors -
including those in tax-free bonds -
enjoyed attractive returns. The
period began amid expectations of
higher interest rates to come. This
was based on signs that the
economic recovery was finally taking
hold, as well as uncertainty over the
spending plans of the
president-elect. But as President
Clinton promised to tackle the deficit
and fight inflation, the bond market
signaled its approval. The yield on
the benchmark 30-year Treasury
bond dipped below 6% in September
and reached an historic low of 5.79%
in mid-October. By the end of the
period, as inflation fears returned, the
30-year bond was yielding 6.30%.
Two factors affected tax-free bonds
specifically: On the positive side,
higher federal taxes - discussed all
year and approved in August -
boosted demand. At the same time,
record new issuance kept supplies
high, which somewhat dampened
prices. Overall during the period,
tax-free bonds performed well
compared to other fixed-income
investments. The Lehman Brothers
Municipal Bond Index - a broad
measure of the tax-free bond market
- - rose 11.09%. By comparison, the
Lehman Brothers Aggregate Bond
Index - which tracks
investment-grade taxable bonds -
rose only 10.89%, due in part to
relatively poor performance by
mortgage-backed securities.
An interview with Peter Allegrini,
Portfolio Manager of Spartan Connecticut Municipal High Yield Portfolio
Q. PETER, HOW DID THE FUND DO?
A. For the 12 months ended November 30, 1993, the fund had a total return
of 11.81%. That slightly lagged the average Connecticut tax-exempt
municipal bond fund which returned 12.08% over the same period, according
to Lipper Analytical Services.
Q. WHAT'S BEHIND THAT PERFORMANCE?
A. The fund had a slightly shorter duration than other Connecticut funds -
meaning it was less sensitive to interest rate declines than other funds.
As interest rates fell over the past year, funds with longer durations
tended to do better. This fund is one of the oldest Connecticut funds
available, and so, has some premium bonds that trade to their shorter call
dates, rather than to their stated maturities. I hold on to them because
they carry an interest rate above the current rate for similar bonds and
they help generate the fund's above-average income. But I've worked
steadily all year to lengthen the fund's duration to 8.3 years on November
30, 1993. Over the next six months to a year, I'll probably keep the fund's
duration between 8 and 8 1/2 years because I think long-term interest rates
could continue to fall.
Q. WHAT KINDS OF BONDS DID YOU BUY TO LENGTHEN THE FUND'S DURATION?
A. Mainly non-callable bonds and discount bonds. At the end of the period
the fund had about a 26% stake in non-callable bonds, which are bonds that
can't be prematurely returned to their issuers, and therefore have a longer
duration. That's because non-callables always trade to their maturity date,
rather than a shorter call date. When interest rates are falling and bond
prices are rising, non-callable bonds tend to do well. It's the same for
discount bonds, which trade at less than face value because they carry an
interest rate below the current rate for similar bonds.
Q. ARE YOU CONCERNED THAT FEDERAL HEALTH-CARE REFORM WILL HURT THE FUND'S
29% STAKE IN HEALTH-CARE BONDS?
A. Not particularly. More than half the fund's hospital bonds are insured,
which means that timely interest and principal payments are guaranteed.
Unlike other states, pressure to cut costs and be more competitive, isn't
really a factor for Connecticut hospitals. The state's health authorities
have strategically located hospitals in key areas around the state, so most
of those don't have much competition from other hospitals in the same area.
Also, Connecticut doesn't suffer from an oversupply of hospital beds like
other states do.
Q. AT THE END OF NOVEMBER, ABOUT 53% OF THE FUND WAS CONCENTRATED IN
INTERMEDIATE BONDS WITH MATURITIES OF FIVE TO 20 YEARS. WHAT MADE THEM SO
ATTRACTIVE?
A. During the past year the slope of the yield curve - or the difference in
yield between different maturity bonds - was fairly flat, meaning you
didn't get rewarded much for taking on the extra risk of buying a bond with
a 30-year maturity. For example, you could pick up about 95% of the yield
of a 30-year bond with a 15-year bond. I just didn't think that a 5%
difference in yield justified the added price risk of a 30-year bond.
Q. HOW DOES CONNECTICUT'S ECONOMY STACK UP AGAINST THE NATIONAL AVERAGE?
A. I think Connecticut's economy is in the process of bottoming and has
started to stabilize. The state's economy has a heavy emphasis on the
defense and insurance industries, which haven't done very well lately. Both
sectors have gone through huge restructurings, primarily by cutting jobs.
These changes are not cyclical, they're permanent and it may take a while
for all the effects of massive restructuring to work their way through. On
a brighter note, the state's fiscal situation is improving, primarily as a
result of the tax reform enacted in 1991. New tax laws have brought
stability to the amount of revenues collected and the state has balanced
its budget for two straight years.
Q. SO, ARE YOU OPTIMISTIC ABOUT MUNICIPAL BONDS FOR 1994?
A. I am. I expect interest rates to continue to stay low, despite some
recent jitters in the bond market. Most commodity prices and wages, two
early warning signals for higher inflation, have stabilized, with no real
signs of heading up. As long as inflation stays down, and economic growth
stays at a 2% to 3% level, interest rates and bond yields could continue to
stay low. Even so, it's probably realistic for investors to expect more
modest returns than we've seen during the past 12 months.
FUND FACTS
GOAL: to provide high current
income exempt from
Connecticut state and federal
income tax by investing
primarily in bonds rated Baa
or better
START DATE: October 29, 1987
SIZE: as of November 30,
1993, over $450.1 million
MANAGER: Peter Allegrini,
since October 1987; manager,
Fidelity Advisor High Income
Municipal Fund, since
November 1985; Fidelity
Michigan Tax-Free and Ohio
Tax-Free Funds, since
November 1985; formerly
manager, Fidelity Minnesota
Tax-Free Fund from
November 1985 - September
1993; formerly manager
Spartan Pennsylvania
Municipal Fund, August 1986
- - September 1993
(checkmark)
PETER ALLEGRINI'S INVESTMENT
STRATEGY:
"I try to find the best value for
the money, across a variety of
credit qualities. I manage the
fund for total rate of return,
not just high yield. The best
way to achieve a consistently
high rate of return is to keep
the fund invested for a
substantial amount of income
and to take advantage of
changes in interest rates,
which sometimes create
inefficient prices. In October,
for example, many investors
sold bonds because they
feared a surge in inflation.
That created an opportunity
to buy some attractive bonds
at cheaper prices."
(bullet) Because of recent tax hikes
at the federal level, some
Connecticut residents could
be subject to a tax-rate as
high as 42.32% in 1994.
(bullet) For the year ended
November 30, 1993, the
fund's share price fluctuated
between a high of $12.18 and
a low of $11.24 It closed the
fiscal year at $11.84.
DISTRIBUTIONS:
The Board of Trustees of
Fidelity Court Street Trust:
Spartan Connecticut
Municipal High Yield Portfolio
voted to pay on December
20, 1993 to shareholders of
record at the opening of
business on December 17,
1993, a distribution of $.33
derived from capital gains
realized from sales of
portfolio securities.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENT CHANGES
TOP FIVE SECTORS AS OF NOVEMBER 30, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
IN THESE SECTORS
6 MONTHS AGO
Health Care 28.9 32.4
General Obligation 24.1 18.4
Education 9.4 8.7
Special Tax 6.1 4.5
Transportation 6.0 n/a
AVERAGE YEARS TO MATURITY AS OF NOVEMBER 30, 1993
6 MONTHS AGO
Years 20.7 20.8
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF NOVEMBER 30, 1993
6 MONTHS AGO
Years 8.3 6.8
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF NOVEMBER 30, 1993
(MOODY'S RATINGS)
Aaa 28.5%
Aa, A 36.5%
Baa 24.9%
Ba or B 1.8%
Non-rated 8.3%
Row: 1, Col: 1, Value: 28.5
Row: 1, Col: 2, Value: 36.4
Row: 1, Col: 3, Value: 24.9
Row: 1, Col: 4, Value: 2.0
Row: 1, Col: 5, Value: 8.300000000000001
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
INVESTMENTS/NOVEMBER 30, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL BONDS - 99.0%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - 87.0%
Berlin Unltd. Tax:
7.10% 6/15/04 A1 $ 100,000 $ 116,875 084851LB
7.20% 6/15/06 A1 135,000 159,469 084851LD
Branford Gen. Oblig. Unltd. Tax :
7% 6/15/08, (FGIC Insured) Aaa 500,000 586,875 105385ME
7% 6/15/09, (FGIC Insured) Aaa 500,000 587,500 105385MF
Bridgeport Gen. Oblig. Series B, 7.75% 11/15/10 Ba 3,235,000 3,578,719
108151SE
Bridgeport Unltd. Tax Series A:
7.20% 3/1/98 Ba 930,000 977,662 108151RE
7.40% 3/1/00 Ba 1,080,000 1,158,300 108151RJ
7.25% 6/1/02 Ba 565,000 608,081 108151QE
7.625% 1/15/09 Ba 1,500,000 1,631,250 108151RM
Brookfield Gen. Oblig. :
5.25% 7/15/10 Aa 200,000 199,500 112709JE
5.25% 7/15/11 Aa 200,000 198,500 112709JF
5.25% 7/15/12 Aa 200,000 198,250 112709JG
5.25% 7/15/13 Aa 190,000 188,337 112709JH
Canterbury Unltd. Tax:
7.20% 5/1/05 A 350,000 415,625 138105BL
7.20% 5/1/06 A 195,000 231,806 138105BM
Cheshire Unltd. Tax :
6.90% 2/15/06 A1 100,000 115,125 165375KS
6.90% 2/15/07 A1 100,000 114,875 165375KT
6.90% 2/15/08 A1 100,000 114,625 165375KU
Colchester Unltd. Tax 7.10% 12/15/04,
(MBIA Insured) Aaa 210,000 251,475 192792DZ
Connecticut Clean Wtr. Fund Rev.:
Series 1991, 7% 1/1/11 Aa 2,500,000 2,818,750 207915BC
5.875% 4/1/08 Aa 1,000,000 1,072,500 207915DS
6% 10/1/12 Aa 5,800,000 6,314,750 207915DU
Connecticut Dev. Auth. Health Care Rev.:
(Jerome Home Proj.) 8% 11/1/19 - 2,000,000 2,165,000 207913AC
(Masonic Charity Foundation) 6.50% 8/1/20,
(AMBAC Insured) Aaa 5,800,000 6,329,250 207913AM
Connecticut Dev. Auth. Health Care Rfdg.
(Duncaster, Inc. Proj.) 6.75% 9/1/15 Aa3 3,000,000 3,240,000 207901BD
Connecticut Dev. Auth. 1st. Mtg. Gross Rev.
(Health Care Proj.):
(Baptist Homes, Inc.):
8.75% 9/1/12 - 2,415,000 2,544,806 207902JK
9% 9/1/22 - 4,240,000 4,542,100 207902JL
(Inter-Church Residences, Inc.):
9.50% 5/1/13 - 1,200,000 1,312,500 207902HE
9.625% 4/1/21 - 3,500,000 3,850,000 207902HF
(Mary Wade Home, Inc. Proj.)
8.875%, 12/1/18 - 1,670,000 1,786,900 207902FD
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Dev. Auth. Parking Facs. Rev.
(Hartford Hosp.) 6.875% 10/1/06,
(MBIA Insured) (b) Aaa $ 5,195,000 $ 5,805,413 207903AN
Connecticut Dev. Auth. Poll. Cont. Rev. :
(Pfizer, Inc. Proj.) 6.55% 2/15/13 Aaa 4,000,000 4,470,000 207728AW
(United Illuminating Co. Proj.) 9.50% 6/1/16 BBB- 2,625,000 2,933,437
207728AS
Connecticut Dev. Auth. Solid Waste & Elec. Rev.
(Ogden Martin Sys. Bristol, Inc.) 10% 7/1/14 BBB+ 2,570,000 2,852,700
207908AR
Connecticut Dev. Auth. Rev. (Hartford Civic Ctr.)
Series A:
6% 11/15/07 A1 1,525,000 1,650,812 207910CE
6% 11/15/08 A1 3,050,000 3,290,187 207910CF
4.75% 11/15/13 A1 1,525,000 1,408,719 207910CL
Connecticut Dev. Auth. Wtr. Facs. Rev. Rfdg.
(Bridgeport Hydraulic Co. Proj.):
Series A, 6.05% 3/1/29, (MBIA Insured) (f) Aaa 2,000,000 2,070,000
207900AX
7.75% 8/1/19 A 4,000,000 4,095,000 207900AP
7.25% 6/1/20 A 1,000,000 1,110,000 207900AQ
Connecticut Gen. Oblig.:
Rfdg. Unltd. Tax, Series B, 5.50% 3/15/10 Aa 3,000,000 3,068,750
2077265A
(College Savings Plan):
Series A:
0% 5/15/07 Aa 2,250,000 1,102,500 207726VC
0% 5/15/10 Aa 7,980,000 3,341,625 207726VF
0% 5/15/11 Aa 3,350,000 1,319,062 207726B6
Series 1991 A, 0% 5/15/10 Aa 1,000,000 418,750 207726B5
Series B, 0% 11/1/06 Aa 2,800,000 1,449,000 207726TH
Unltd. Tax:
Series A, 0% 6/15/10 Aa 2,188,000 910,755 20772EAN
Series B:
0%, 12/15/10 Aa 2,428,000 986,375 207726E9
0%, 12/15/11 Aa 1,496,000 570,350 207726F2
(College Savings Plan - Cap. Appreciation) :
Series A:
0% 12/1/07 Aa 4,000,000 1,920,000 207726QP
0% 12/1/08 Aa 558,000 252,495 207726QR
Series B, 0% 11/15/10 Aa 4,460,000 1,817,450 207726XY
Unltd. Tax Series B, 0% 11/1/09 Aa 11,390,000 4,911,937 207726TL
Series A:
0% 7/1/98 Aa 780,000 642,525 207726RR
0% 7/1/03 Aa 4,000,000 2,510,000 207726RW
0% 7/1/04 Aa 4,514,000 2,674,545 207726RX
0% 7/1/05 Aa 750,000 415,312 207726RY
0% 7/1/07 Aa 2,430,000 1,190,700 207726SA
0% 7/1/08 Aa 4,690,000 2,169,125 207726SB
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl. Facs. Auth. Rev. :
(Bridgeport Hosp.) Series A, 6.625% 7/1/18,
(MBIA Insured) Aaa $ 3,825,000 $ 4,236,187 207742UH
(Bristol Hosp.) Issue A:
7% 7/1/09 (MBIA Insured) Aaa 2,500,000 2,806,250 207742FD
7% 7/1/20 (MBIA Insured) Aaa 4,180,000 4,692,050 207742FE
(Cap. Asset Issue) Series C:
6.875% 1/1/10, (MBIA Insured) Aaa 1,000,000 1,111,250 207742JD
7% 1/1/20, (MBIA Insured) Aaa 3,730,000 4,205,575 207742JE
(Fairfield Univ.) Series F:
6.875% 7/1/09 A 3,540,000 3,916,125 207742CM
6.90% 7/1/14 A 1,000,000 1,107,500 207742CN
(Hartford Univ.):
Series C, 8% 7/1/18, (Pre-Refunded to
7/1/03 @ 100) (c) Aaa 7,310,000 8,982,162 2077414A
Series D, 6.80% 7/1/22 Baa 6,320,000 6,873,000 207742YA
(Lutheran Gen. Health Care Sys.) 7.375% 7/1/19 Aaa 3,195,000 3,861,956
207742BF
(New Britain Mem. Hosp.) Series A,
7.75% 7/1/22 BBB- 12,900,000 14,335,125 207742PD
(Norwalk Health Care, Inc.) Series A,
8.70% 7/1/22 - 6,600,000 6,946,500 207742TR
(Quinnipiac Coll.):
Rfdg. Series D:
6%, 7/1/13 BBB- 3,750,000 3,754,687 207742F3
6% 7/1/23 BBB- 3,975,000 3,975,000 207742F4
Series C, 7.75% 7/1/20 BBB- 1,000,000 1,197,500 207742GU
(St. Francis Hosp. & Med. Ctr.) 5% 7/1/13,
(FGIC Insured) Aaa 6,000,000 5,685,000 207742J9
(St. Mary's Hosp.)
Issued B:
7.60% 7/1/03 Baa 900,000 988,875 2077414V
7.80% 7/1/09 Baa 7,985,000 8,573,894 2077414S
Series C, 7.375% 7/1/20 Baa 7,420,000 7,902,300 207742GR
(St. Raphael Hosp.) Series H:
6.50% 7/1/11, (AMBAC Insured) Aaa 2,780,000 3,113,600 207742S5
6.50% 7/1/13, (AMBAC Insured) Aaa 3,125,000 3,523,437 207742S7
5.25% 7/1/14, (AMBAC Insured) Aaa 4,400,000 4,328,500 207742R3
(Sacred Heart Univ.) Series A, 6.85% 7/1/22,
LOC Fleet Nat'l. Bank A 1,000,000 1,086,250 207742YN
(Sharon Healthcare, Inc.) Series A:
8.75% 7/1/06 - 450,000 480,375 207742NE
9% 7/1/13 - 1,300,000 1,408,875 207742NF
9.20% 7/1/21 - 1,500,000 1,642,500 207742NG
(Taft School):
Series A, 7.40% 7/1/10 A 2,190,000 2,581,462 207742FU
Series A, 7.375% 7/1/20 A 1,700,000 1,999,625 207742FV
(The Griffin Hosp.) Series A, 6% 7/1/13 Baa1 5,000,000 4,925,000
207742C8
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Edl. Facs. Auth. Rev. - continued
(Tolland County Health Care, Inc.) Series A:
8.75% 7/1/08 - $ 350,000 $ 373,625 207742NS
9% 7/1/13 - 1,000,000 1,083,750 207742NT
9.20% 7/1/21 - 3,600,000 3,942,000 207742NU
(Trinity College) Series C, 6% 7/1/22,
(MBIA Insured) Aaa 3,000,000 3,153,750 207742WU
(Waterbury Hosp.) Issue B, 7% 7/1/20,
(FSA Insured) Aaa 2,800,000 3,139,500 207742HS
(Yale-New Haven Hosp.):
Series D, 9% 7/1/12, (HIB Insured)
(Pre-Refunded to 7/1/95 @ 102) (c) Aaa 300,000 331,125 207741V7
Series F, 7.10% 7/1/25, (MBIA Insured) Aaa 12,000,000 13,575,000
207742HG
(Yale Univ.) 9.038% 5/15/30 (d) Aaa 7,000,000 7,472,500 207742WW
Connecticut Higher Ed. Supplemental Loan Auth. Rev.:
(Family Ed. Loan Prog.) Series A: (b)
6.80% 11/15/02 A 480,000 517,800 207743BW
7.20% 11/15/10 A 975,000 1,084,687 207743CE
Series A: (b)
7.375% 11/15/05 A 590,000 646,050 207743BH
7.50% 11/15/10 A 2,035,000 2,230,869 207743BN
Connecticut Hsg. Fin. Auth. (Hsg. Mtg. Fin. Prog.) :
Series A, 7.50% 11/15/09 (b) Aa 3,355,000 3,602,431 207745W3
Series B, 8.80% 11/15/02 Aa 3,000,000 3,243,750 207745K7
Sub-Series B-1, 7.55% 11/15/08 Aa 2,000,000 2,175,000 207745Y5
Sub-Series B-3:
7.70% 11/15/09 (b) Aa 2,950,000 3,193,375 207745Y3
7.755% 11/15/22 (b) Aa 2,515,000 2,706,769 207745Y6
Series C, 7.625% 11/15/17 Aa 545,000 562,031 207745A7
Sub-Series C-1, 6.60% 11/15/23 Aa 1,500,000 1,599,375 2077453X
Series E, 8.75% 11/15/18 Aa 4,455,000 4,694,456 207745A2
Connecticut Muni. Elec. Energy Co-op. Pwr. Supply
Sys. Rev. Series A, 5% 1/1/18, (MBIA Insured) Aaa 7,750,000 7,275,312
207752CS
Connecticut Resource Recovery Auth. Rev.
(American Refuse Fuel Co.) 8.10% 11/15/15 (b) A2 4,500,000 5,242,500
207755FA
Connecticut Spl. Tax. Oblig. Rev. (Trans. Infrastructure):
Rfdg. Series 1993 A, 5.375% 9/1/08 A1 6,705,000 6,780,431 207757NF
Series A:
Rfdg. 5.25% 9/1/07 A1 7,165,000 7,227,694 207757NE
7.125% 6/1/10 A1 3,550,000 4,206,750 207757HD
Series B:
0% 6/1/08 A1 3,500,000 1,601,250 207757DQ
6.10% 9/1/08 A1 2,500,000 2,706,250 207757LU
6.15% 9/1/09 A1 3,500,000 3,819,375 207757LV
6.50% 10/1/10 A1 3,250,000 3,664,375 207757KF
6.125% 9/1/12 A1 6,400,000 6,936,000 207757LY
6.50% 10/1/12 A1 2,500,000 2,818,750 207757KH
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Danbury Impt. Unltd. Tax 6.70% 2/1/07 Aa $ 305,000 $ 350,750 235865PX
Eastern Resources Recovery Auth. Solid Waste Rev.
(Wheelabrator Lisbon Proj.)
Series A, 5.50% 1/1/15 (b) A 8,000,000 7,560,000 276318AL
Franklin Unltd. Tax :
7.30% 3/15/04 A 225,000 263,812 352550AQ
7.30% 3/15/05 A 225,000 265,781 352550AR
7.30% 3/15/06 A 225,000 268,312 352550AS
Hartford County Metropolitan Dist.:
Unltd. Tax (School Boards) 9.50% 6/1/03 Aa1 100,000 134,000 416488EE
6.20% 11/15/09 Aa1 250,000 274,687 416488GD
Manchester Hsg. Dev. Agcy. (Multi-Family Hsg.)
7.20% 12/1/18 - 1,565,000 1,611,950 562132AB
Mansfield Gen. Oblig. Unltd. Tax:
6.80% 6/15/03 A1 300,000 343,875 564198EQ
6.80% 6/15/04 A1 300,000 346,125 564198ER
6.80% 6/15/07 A1 300,000 345,750 564198EU
6.80% 6/15/08 A1 150,000 173,250 564198EV
Meriden Unltd. Tax 7% 10/1/07, (MBIA Insured) Aaa 500,000 591,875
589535QJ
Milford Gen. Oblig.:
Unltd. Tax:
6.70% 2/1/05 Aa 400,000 457,000 599377KT
6.70% 2/1/07 Aa 315,000 360,675 599377KV
6.70% 2/1/08 Aa 315,000 361,462 599377KW
5.20% 1/15/11 Aa 550,000 540,375 599377PW
5.20% 1/15/13 Aa 500,000 488,125 599377PY
Monteville Gen. Oblig.:
6.30% 3/1/10 Aa 405,000 451,069 615292GU
7% 3/15/13 Aa 220,000 266,200 615292DK
7% 3/15/14 Aa 220,000 267,575 615292DL
7% 3/15/15 Aa 210,000 256,725 615292DM
Naugatuck Unltd. Tax:
7.25% 9/1/04, (MBIA Insured) Aaa 215,000 258,269 639064LK
6.90% 6/15/07, (FGIC Insured) Aaa 485,000 568,663 639064KR
7.40% 9/1/07, (MBIA Insured) Aaa 370,000 452,325 639064LN
7.40% 9/1/08, (MBIA Insured) Aaa 370,000 452,325 639064LP
New Britain:
Unltd. Tax:
Rfdg. 6% 2/1/12, (MBIA Insured) Aaa 400,000 431,000 642713TN
7% 4/1/07, (MBIA Insured) Aaa 580,000 680,775 642713QZ
7% 4/1/08, (MBIA Insured) Aaa 580,000 682,950 642713RA
Series B, 6% 3/1/12, (MBIA Insured) Aaa 2,000,000 2,155,000 642713VF
New Haven Facs. Rev. (Easter Seal Goodwill
Rehabilitation Proj.) 8.875% 4/1/16 - 1,600,000 1,690,000 645032AJ
New Haven Gen. Oblig.:
Series A, 7.40% 3/1/12 Baa 1,000,000 1,096,250 645019K2
8.25% 8/15/01 Baa 3,280,000 3,829,400 645019H9
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Newington Unltd. Tax:
6.50% 2/1/06 A1 $ 320,000 $ 359,600 651469KB
6.60% 2/1/07 A1 200,000 226,250 651469KC
North Haven Unltd. Tax 7% 10/1/08 Aa 375,000 439,219 659579LW
North Thompsonville Fire Dist.:
6.75% 6/1/07, (MBIA Insured) Aaa 180,000 205,200 66286HAR
6.75% 6/1/08, (MBIA Insured) Aaa 190,000 216,838 66286HAS
6.75% 6/1/09, (MBIA Insured) Aaa 200,000 233,250 66286HAT
6.75% 6/1/10, MBIA Insured) Aaa 215,000 252,088 66286HAU
6.75% 6/1/11, (MBIA Insured) Aaa 230,000 271,113 66286HAV
Norwalk Hsg. Auth. Mtg. Rev. (Monterey Village)
Series 1985 B, Section 8, 9% 11/1/99 BBB 180,000 188,550 668868BE
Oxford Gen. Oblig. Unltd. Tax 6.90% 2/1/07,
(FGIC Insured) Aaa 925,000 1,018,656 691412CM
Plainville Gen. Oblig.:
Unltd. Tax:
6.60% 8/15/09 A1 250,000 286,563 726770LF
6.60% 8/15/10 A1 250,000 286,563 726770LG
6.60% 8/15/11 A1 250,000 287,813 726770LH
6.60% 8/15/08 A1 250,000 282,500 726770LE
Stamford Gen. Oblig.:
Unltd. Tax:
6.60% 1/15/07 Aaa 295,000 338,144 852631WM
6.60% 1/15/08 Aaa 1,480,000 1,700,150 852631WN
6.60% 1/15/09 Aaa 1,000,000 1,166,250 852631WP
7% 6/15/08, (FGIC Insured) Aaa 500,000 586,875 862811MZ
6.125% 11/1/12 Aaa 1,050,000 1,134,000 852631XX
Thomaston Unltd. Tax:
6.50% 8/1/07 A 210,000 232,838 884510FG
6.50% 8/1/08 A 210,000 234,150 884510FH
6.50% 8/1/09 A 210,000 235,988 884510FJ
Vernon Unltd. Tax:
7.10% 10/15/07 A1 250,000 292,188 924427MA
7.10% 10/15/08 A1 250,000 292,813 924427MB
Voluntown Gen. Oblig. Unltd. Tax:
6.75% 10/1/03 A 210,000 238,875 928822BE
6.75% 10/1/04 A 210,000 239,138 928822BF
6.80% 10/1/06 A 210,000 243,075 928822BH
6.80% 10/1/07 A 210,000 240,187 928822BJ
6.80% 10/1/08 A 210,000 245,438 928822BK
6.80% 10/1/09 A 185,000 215,063 928822BL
West Haven Impt. Unltd. Tax 6.70% 2/15/04,
(MBIA Insured) Aaa 710,000 819,163 953140MZ
Winchester Gen. Oblig. Unltd. Tax:
7.10% 11/15/06 A1 125,000 147,031 972737EU
7.10% 11/15/08 A1 110,000 132,688 972737EW
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Wolcott Gen. Oblig. Unltd. Tax:
7% 6/15/09, (FGIC Insured) Aaa $ 445,000 $ 525,100 977623HE
7% 6/15/10, (FGIC Insured) Aaa 440,000 522,500 977623HF
Woodstock Spl. Oblig. Rev. (Woodstock Academy):
7% 3/1/07, (AMBAC Insured) Aaa 725,000 830,125 980324AS
7% 3/1/08, (AMBAC Insured) Aaa 725,000 830,125 980324AT
384,886,456
PUERTO RICO - 11.7%
Puerto Rico Commonwealth Gen. Oblig. Rfdg.
Unltd. Tax, 5% 7/1/21 Baa1 5,000,000 4,587,500 745144KJ
Puerto Rico Commonwealth Hwy. & Trans. Auth. Rev.:
Rfdg.:
Series W, 5.50% 7/1/13 Baa1 14,250,000 14,054,063 745181BZ
Series X, 5.50% 7/1/13 Baa1 2,500,000 2,465,625 745181CA
Series X, 5.50% 7/1/15 Baa1 8,000,000 7,880,000 745181FD
Series W, 5.50% 7/1/15 Baa1 2,000,000 1,970,000 745181CB
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Resources
Auth. Pwr. Rev.:
Series P, 7% 7/1/21 Baa1 1,750,000 1,931,563 745268LL
Series R, 6.25% 7/1/17 Baa1 1,000,000 1,048,750 745268ND
Puerto Rico Pub. Bldgs. Auth. Rev. Rfdg.
Series L, 5.50% 7/1/21 Baa1 12,000,000 11,850,000 745235GJ
Puerto Rico Tel. Auth. Rev.:
6.85% 1/1/03, (AMBAC Insured) (d) Aaa 1,000,000 1,016,250 745297HT
6.95% 1/1/04, (AMBAC Insured) (d) Aaa 2,000,000 2,037,500 745297HX
8.03% 1/16/15, MBIA Insured) (d) Aaa 3,000,000 3,086,250 745297JT
51,927,501
U.S. VIRGIN ISLANDS - 0.3%
Virgin Islands Wtr. & Pwr. Auth. Elec. Sys.
Series A, 7.40% 7/1/11 - 1,000,000 1,138,750 927688BX
TOTAL MUNICIPAL BONDS (Cost $405,017,048) 437,952,707
MUNICIPAL NOTES (A) - 1.0%
CONNECTICUT - 1.0 %
Connecticut Spl. Assessment Unemployment Rev.
Series 1993 B, 2.25%, LOC Industrial Bank of
Japan, Mitsubishi Bank, VRDN VMIG 1 1,100,000 1,100,000 207756AR
Connecticut State Dev. Auth. (Light & Pwr. Co.
Proj. 1993) Series A, 2.15%, LOC
Deutsche Bank, VRDN VMIG 1 3,400,000 3,400,000 207728BA
TOTAL MUNICIPAL NOTES (Cost $4,500,000) 4,500,000
TOTAL INVESTMENTS - 100% (Cost $409,517,048) $ 442,452,707
SECURITY TYPE ABBREVIATIONS
VRDN - Variable Rate Demand Notes
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
(c) Security collateralized by an amount sufficient to pay interest and
principal.
(d) Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
(e) Standard & Poor's Corporation credit ratings are used in the
absence of a rating by Moody's Investors Service, Inc.
(o) Security purchased on a delayed delivery basis. (see Note 2 of Notes to
Financial Statements).
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investments for the period ended is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 60.1% AAA, AA, A 71.0%
Baa 18.1% BBB 9.3%
Ba 1.8% BB 1.8%
B 0.0% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
The percentage not rated by either S&P or Moody's amounted to 8.3%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investments, is as follows:
Health Care 28.9%
General Obligation 24.1
Others
(individually less than 10%) 47.0
TOTAL 100.0%
INCOME TAX INFORMATION
At November 30, 1993, the aggregate cost of investment securities for
income tax purposes was $409,520,381. Net unrealized appreciation
(depreciation) aggregated $32,932,326, of which $34,625,973 related to
appreciated investment securities and $1,693,647 related to depreciated
investment securities.
The fund hereby designates $790,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
SPARTAN CONNECTICUT MUNICIPAL HIGH YIELD PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1993
11.ASSETS 12. 13.
14.Investment in securities, at value (cost 15. $ 442,452,707
$409,517,048) (Notes 1 and 2) - See accompanying
schedule
16.Cash 17. 29,926
18.Receivable for investments sold 19. 21,250,455
20.Interest receivable 21. 7,629,876
22. TOTAL ASSETS 23. 471,362,964
24.LIABILITIES 25. 26.
27.Payable for investments purchased 28. 29.
30. Regular delivery $ 17,369,532 31.
32. Delayed delivery (Note 2) 1,978,480 33.
34.Payable for fund shares redeemed 1,303,890 35.
36.Dividends payable 393,053 37.
38.Accrued management fee 205,385 39.
40. TOTAL LIABILITIES 41. 21,250,340
42.43.NET ASSETS 44. $ 450,112,624
45.Net Assets consist of: 46. 47.
48.Paid in capital 49. $ 404,508,282
50.Accumulated undistributed net realized gain (loss) on 51. 12,668,683
investments
52.Net unrealized appreciation (depreciation) on 53. 32,935,659
investment securities
54.55.NET ASSETS, for 38,008,433 shares outstanding 56. $ 450,112,624
57.58.NET ASSET VALUE, offering price and redemption 59. $11.84
price per share ($450,112,624 (divided by) 38,008,433 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1993
60.INTEREST 61. $ 28,653,720
62.EXPENSES 63. 64.
65.Management fee (Note 4) 66.
$ 2,474,254
67.Non-interested trustees' compensation 68.
2,885
69. TOTAL EXPENSES 70. 2,477,139
71.NET INVESTMENT INCOME 72. 26,176,581
73.REALIZED AND UNREALIZED GAIN (LOSS) ON 75. 76.
INVESTMENTS
(NOTES 1 AND 3)
74.Net realized gain (loss) on:
77. Investment securities 16,259,306 78.
79. Futures contracts (1,364,615) 14,894,691
80.Change in net unrealized appreciation (depreciation) 81. 82.
on:
83. Investment securities 8,977,415 84.
85. Futures contracts 756 8,978,171
86.NET GAIN (LOSS) 87. 23,872,862
88.NET INCREASE (DECREASE) IN NET ASSETS RESULTING 89. $ 50,049,443
FROM OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED NOVEMBER 30,
1993 1992
90.INCREASE (DECREASE) IN NET ASSETS
91.Operations $ 26,176,581 $ 24,220,829
Net investment income
92. Net realized gain (loss) on investments 14,894,691 (511,592)
93. Change in net unrealized appreciation (depreciation) 8,978,171 12,190,553
on investments
94. NET INCREASE (DECREASE) IN NET ASSETS RESULTING 50,049,443 35,899,790
FROM
OPERATIONS
95.Distributions to shareholders from net investment (26,176,581) (24,220,829)
income
96.Share transactions 109,111,103 136,138,818
Net proceeds from sales of shares
97. Reinvestment of distributions from net investment 21,413,874 20,385,554
income
98. Cost of shares redeemed (118,085,422) (101,311,107)
99. Redemption fees (Note 1) 52,698 74,383
100. 12,492,253 55,287,648
Net increase (decrease) in net assets resulting from
share transactions
101. 36,365,115 66,966,609
TOTAL INCREASE (DECREASE) IN NET ASSETS
102.NET ASSETS 103. 104.
105. Beginning of period 413,747,509 346,780,900
106. End of period $ 450,112,624 $ 413,747,509
107.OTHER INFORMATION 109. 110.
108.Shares
111. Sold 9,381,355 12,299,965
112. Issued in reinvestment of distributions from net 1,827,287 1,837,742
investment income
113. Redeemed (10,079,212) (9,137,279)
114. Net increase (decrease) 1,129,430 5,000,428
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
115. YEARS ENDED NOVEMBER 30,
116. 1993 1992 1991 1990 1989
117.SELECTED PER-SHARE DATA
118.Net asset value, $ 11.220 $ 10.880 $ 10.730 $ 10.730 $ 10.300
beginning of period
119.Income from .680 .689 .684 .687 .706
Investment
Operations
Net investment
income
120. Net realized and .619 .338 .188 .020 .430
unrealized gain (loss)
on investments
121. Total from 1.299 1.027 .872 .707 1.136
investment operations
122.Less Distributions (.680) (.689) (.684) (.687) (.706)
From net interest
income
123. From net realized - - (.040) (.020) -
gain on investments
124. Total distributions (.680) (.689) (.724) (.707) (.706)
125.Redemption fees .001 .002 .002 - -
added to paid in
capital
126.Net asset value, $ 11.840 $ 11.220 $ 10.880 $ 10.730 $ 10.730
end of period
127.TOTAL RETURN 11.81 9.72 8.43 6.89 11.36
% % % % %
128.RATIOS AND SUPPLEMENTAL DATA
129.Net assets, end of $ 450,113 $ 413,748 $ 346,781 $ 251,855 $ 180,385
period (000 omitted)
130.Ratio of expenses .55 .55 .55 .62 .54
to average net assets % % % % %
131.Ratio of expenses .55 .55 .60 .62 .73
to average net assets % % % % %
before expense
reductions
132.Ratio of net 5.81 6.21 6.34 6.51 6.62
interest income to % % % % %
average net assets
133.Portfolio turnover 45 11 6 18 8
rate % % % % %
</TABLE>
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
PERFORMANCE: THE BOTTOM LINE
To measure a money market fund's performance, you can look at either total
return or yield. Total return reflects the change in a fund's share price
over a given period, reinvestment of its dividends (or income), and the
effect of the fund's $5 account closeout fee. Yield measures the income
paid by a fund. Since a money market fund tries to maintain a $1 share
price, yield is an important measure of performance.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 LIFE OF
YEAR FUND
Spartan Connecticut Municipal
Money Market Portfolio 2.21% 8.48%
Consumer Price Index 2.68% 8.16%
Average Connecticut Tax-Free
Money Market Fund 1.89% 7.66%
CUMULATIVE TOTAL RETURNS reflect actual performance over a set period - one
year, or since the fund started on March 4, 1991. For example, if you
invested $1,000 in a fund that had a 5% return over the past year, you
would end up with $1,050. Comparing the fund's performance to the consumer
price index (CPI) helps show how your investment did compared to inflation.
To measure how the fund stacked up against its peers, you can compare its
return to the average Connecticut tax-free money market fund's total
return. This average currently reflects the performance of ten Connecticut
tax-free money market funds tracked by IBC/Donoghue. (The periods covered
by the CPI and IBC/Donoghue numbers are the closest available match to
those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED NOVEMBER 30, 1993 PAST 1 LIFE OF
YEAR FUND
Spartan Connecticut Municipal
Money Market Portfolio 2.21% 3.01%
Consumer Price Index 2.68% 2.89%
Average Connecticut Tax-Free
Money Market Fund 1.89% 2.72%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had achieved that return
by performing at a constant rate each year.
YIELDS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
11/30/92 2/28/93 5/31/93 8/31/93 11/30/93
Spartan Connecticut Municip 2.48% 2.10% 2.56% 2.14% 1.96%
al
Money Market Portfolio
Average Connecticut 1.99% 1.76% 2.11% 1.87% 1.81%
Tax-Free
Money Market Fund
Spartan Connecticut 4.05% 3.43% 4.16% 3.49% 3.19%
Municipal Money Market
Portfolio - Tax-equivalent
Average All Taxable 2.77% 2.71% 2.64% 2.64% 2.69%
Money Market Fund
</TABLE>
Row: 1, Col: 1, Value: 2.48
Row: 1, Col: 2, Value: 1.99
Row: 2, Col: 1, Value: 2.1
Row: 2, Col: 2, Value: 1.76
Row: 3, Col: 1, Value: 2.56
Row: 3, Col: 2, Value: 2.11
Row: 4, Col: 1, Value: 2.14
Row: 4, Col: 2, Value: 1.87
Row: 5, Col: 1, Value: 1.96
Row: 5, Col: 2, Value: 1.81
Spartan Connecticu
t
Municipal Money
Market Portfolio
Average
Connecticut
Tax-Free Money
Market Fund
3% -
2% -
1% -
0%
YIELD refers to the income paid by the fund over a given period. Yields for
money market funds are usually for seven-day periods, expressed as annual
percentage rates. A yield that assumes income earned is reinvested or
compounded is called an effective yield. The chart above shows the fund's
current seven-day yield at quarterly intervals over the past year. This
would have been lower if Fidelity had not reimbursed certain fund expenses.
You can compare these yields to those of the average Connecticut tax-free
money market fund. Or you can look at the fund's tax-equivalent yields.
Tax-equivalent yields are based on a combined effective 1993 federal and
Connecticut state income tax rate of 38.88% and reflect that a portion of
the fund's yields for the periods were subject to state taxes. The
tax-equivalent figures are useful in seeing how the fund stacked up against
the average taxable money market fund as tracked by IBC/Donoghue. A portion
of the fund's income may be subject to the federal alternative minimum tax.
A MONEY MARKET FUND'S TOTAL RETURNS AND YIELDS REFLECT PAST RESULTS RATHER
THAN PREDICT FUTURE PERFORMANCE.
COMPARING
PERFORMANCE
Yields on tax-free investments
are usually lower than yields
on taxable investments.
However, a straight
comparison between the two
may be misleading because it
ignores the way taxes reduce
taxable returns. Tax-equivalent
yield -- the yield you'd have to
earn on a similar taxable
investment to match the
tax-free yield -- makes the
comparison more meaningful.
Keep in mind that the U.S.
government neither insures nor
guarantees a money market
fund. In fact, there is no
assurance that a money fund
will maintain a $1 share price.
(checkmark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Scott Orr, Portfolio
Manager of Spartan Connecticut Municipal Money Market Portfolio
Q. SCOTT, CAN YOU BRING US UP TO DATE ON THE SHORT-TERM SIDE OF THE MARKET
AS OF THE END OF NOVEMBER?
A. I can best describe the market over the past year as uneventful. The
Federal Reserve has kept the federal funds rate at 3% since September 1992,
and that held short-term interest rates low. Fears of inflation bounced
rates up slightly last May and again in late October. But neither episode
caused me to significantly change the way I managed the fund. Over the last
six months, supply and demand factors had a bigger influence on how I
positioned the fund than changes in interest rates.
Q. CAN YOU EXPLAIN?
A. Sure. Because Connecticut is so small, there is often a low supply of
short-term municipal debt in the state, especially issues with six-month to
one-year maturities. That was the case through the summer, which forced me
to keep the fund's average maturity on the short side. All of that changed
in September. Suddenly, several state agencies and authorities - the
Connecticut Housing Finance Authority among others - flooded the
muni-market with new issues. The new supply was more than Connecticut funds
like ours could snatch up, so issuers boosted yields to attract national
buyers. I responded by selling some of the fund's lower-yielding issues to
make room for this longer-maturity, higher-yielding debt. The move was
reflected in the fund's average maturity, which increased from 38
days at the end of August to 80 days by the end of September. I've kept
that figure on the long side ever since by holding on to the
higher-yielding issues.
Q. HOW DID THE FUND'S PERFORMANCE LOOK NEXT TO THE COMPETITION?
A. Total return for the year ended November 30, 1993 was 2.21%, compared to
1.89% for the average Connecticut tax-free money market fund tracked by
IBC/Donoghue. The fund's seven-day yield on November 30 was 1.96%, compared
to 2.56% at the end of May. The latest yield translates into a
tax-equivalent yield of 3.19% for investors in the 38.88% combined
effective 1993 federal and state tax bracket.
Q. WHAT INFLUENCED PERFORMANCE?
A. One relatively new investing strategy that helped performance was is the
use of simple derivatives. They combine a long-term municipal bond with a
"put," or an option to sell to a third party, typically a bank. The end
product is an investment that pays a short-term variable interest rate and
can be put on short notice, usually seven days. It acts much like any other
variable rate demand note the fund might own, with one key difference: the
yield is slightly higher, a fact that has more to do with the added
complexity of these instruments than added risk. Derivatives made up about
8% of the fund at the end of November.
Q. HOW DO YOU SEE THE NEXT SIX MONTHS SHAPING UP?
A. Rates in the tax-free market generally have been drifting lower, even
during upturns in the taxable market. In an environment of falling rates, I
want to hold onto my longer-term issues to take advantage of their higher
yields. In general, I think rates will remain in a narrow range over the
next six months. The economy is showing signs of strength. I wouldn't be
surprised if, at some point, the Fed decides there's a real threat of
rising inflation and moves to tighten the money supply by raising the
federal funds rate. As the likelihood of tightening increases, I might
position the fund to take advantage of rising rates by shortening its
average maturity.
FUND FACTS
GOAL: tax-free income and
stability by investing in
high-quality, short-term,
Connecticut municipal securities
START DATE: March 4, 1991
SIZE: as of November 30,
1993, over $163 million
MANAGER: Scott Orr, since
October 1993; manager, Fidelity
Connecticut Municipal Money
Market, since October 1993;
Fidelity Michigan Municipal
Money Market, Fidelity New
Jersey Tax-Free Money Market
& Spartan New Jersey
Money Market, since
January 1992
(checkmark)
WORDS TO KNOW
COMMERCIAL PAPER: A security
issued by a municipality to
finance capital or operating
needs.
FEDERAL FUNDS RATE: The interest
rate banks charge each other
for overnight loans.
MATURITY: The time remaining
before an issuer is scheduled
to repay the principal amount
on a debt security. When the
fund's average maturity -
weighted by dollar amount -
is short, the fund manager is
anticipating a rise in interest
rates. When the average
maturity is long, the manager
is expecting rates to fall.
When the average maturity is
neutral, the manager wants
the flexibility to respond to
rising rates, while still
capturing a portion of the
higher yields available from
issues with longer maturities.
MUNICIPAL NOTE: A security
issued in advance of future
tax or other revenues and
payable from those specific
sources.
TENDER BOND: A variable-rate,
long-term security that gives
the bond holder the option to
redeem the bond at face
value before maturity.
VARIABLE RATE DEMAND NOTE
(VRDN): A tender bond that
can be redeemed on short
notice, typically one or seven
days. VRDNs are useful in
managing the fund's average
maturity and liquidity.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENT CHANGES
MATURITY DIVERSIFICATION
DAYS % OF FUND ASSETS % OF FUND ASSETS % OF FUND ASSETS
11/30/93 5/31/93 11/30/92
0 - 30 66 71 59
31 - 90 10 19 15
91 - 180 5 5 9
181 - 397 19 5 17
WEIGHTED AVERAGE MATURITY
11/30/93 5/31/93 11/30/92
Spartan Connecticut
Municipal Money Market
Portfolio 72 days 38 days 72 days
Average Connecticut
Tax-Free Money 76 days 44 days 61 days
Market Fund*
ASSET ALLOCATION
AS OF 11/30/93 AS OF 5/31/93
Row: 1, Col: 1, Value: 54.0
Row: 1, Col: 2, Value: 19.0
Row: 1, Col: 3, Value: 21.0
Row: 1, Col: 4, Value: 5.0
Row: 1, Col: 5, Value: 2.0
Row: 1, Col: 1, Value: 53.0
Row: 1, Col: 2, Value: 21.0
Row: 1, Col: 3, Value: 4.0
Row: 1, Col: 4, Value: 15.0
Row: 1, Col: 5, Value: 7.0
Variable rate
demand notes
(VRDNs) 54%
Commercial
paper 19%
Tender bonds 21%
Municipal
notes 5%
Other 1%
Variable rate
demand notes
(VRDNs) 53%
Commercial
paper 21%
Tender bonds 4%
Municipal
notes 15%
Other 7%
* SOURCE: IBC/DONOGHUE'S MONEY FUND REPORT(Registered trademark)
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
INVESTMENTS/NOVEMBER 30, 1993
(Showing Percentage of Total Value of Investments)
MUNICIPAL SECURITIES (A) - 100%
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CALIFORNIA - 0.8%
California Poll. Cont. Fing. Auth. Resource Recovery Rev.
(Delano Proj.) Series 1990, 2.20%,
LOC Algemene Bank, VRDN (b) $ 300,000 $ 300,000 130535BB
Orange County Apt. Dev. Rfdg., Series 1990 A, 3.10%
12/1/93, LOC Tokai Bank, VT 1,000,000 1,000,000 684990GB
1,300,000
CONNECTICUT - 75.9%
Connecticut Dev. Auth. Arpt. Facs. Rev. (Arpt. Hotel Bradley
Assoc. Ltd. Partnership Proj.) 2.25%, LOC Daiwa
Bank, VRDN 6,500,000 6,500,000 207907AK
Connecticut Dev. Auth. Hlth. Care Rev. (Corp. for Independent
Living Proj.), VRDN:
Series 1990, 2.25%, LOC Cr. Commercial de France 4,100,000 4,100,000
207913AP
Series 1993 A, 2.25%, LOC Daiwa Bank 2,400,000 2,400,000 207913BK
Connecticut Dev. Auth. Poll. Cont. Rev. (Conn. Light &
Power Co. Proj. 1993), VRDN:
Series A, 2.15%, LOC Deutsche Bank 7,500,000 7,500,000 207728BA
Series B, 2.20%, LOC Union Bank of Switzerland (b) 7,900,000 7,900,000
207728BB
Connecticut Dev. Auth. Rev. Gen. Oblig. Bond,
Series 1993 A, 5% 11/15/94 750,000 766,154 207910BR
Connecticut Dev. Auth. (Shelton Inn Proj.) Series 1986,
2.90%, LOC Bank of Tokyo, VRDN (b) 200,000 200,000 207727DN
Connecticut Dev. Auth. Solid Waste Disp. Fac. Rev., VRDN: (b)
(Exeter Energy Proj.):
Series 1989 A, 2.30%, LOC Sanwa Bank 1,500,000 1,500,000 207910AW
Series 1989 B, 2.30%, LOC Sanwa Bank 4,900,000 4,900,000 207910AX
(Rand-Whitney Containerboard), 2.30%,
LOC Chase Manhattan Bank 3,300,000 3,300,000 207910BQ
Connecticut Economic Recovery Gen. Oblig. Notes,
Series 1991 B, 2.25%, BPA Canadian Imperial
Bank, VRDN 1,700,000 1,700,000 207726D2
Connecticut Gen. Oblig. Ctfs. of Prtn., Series PA1,
2.50%, (Liquidity Enhancement Merrill Lynch) (c) 2,000,000 2,000,000
20772EBG
Connecticut Gen. Oblig. Series 1992 B, 4.50% 5/15/94 500,000 503,763
207726P4
Connecticut Gen. Oblig. Tender Option Bonds: (c)
Series BT 89, 2.60%, (Liquidity Enhancement
Banker's Trust) 1,600,000 1,600,000 2077265F
Series BT 130, 2.65%, (Liquidity Enhancement
Bankers Trust) 3,200,000 3,200,000 20772EGE
Series Mgt. 17A, 2.40%, (Liquidity Enhancement Morgan
Guaranty) 500,000 500,000 2077265D
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Health & Ed. Facs. Auth. Rev.:
VRDN:
(Charlotte Hungerford Hosp.) Series B, 2.30%,
LOC Mitsubishi Bank Ltd. $ 1,800,000 $ 1,800,000 207742GT
(Kent School) Series A, 2.20%, LOC Barclays Bank PLC 5,900,000
5,900,000 207742JF
VT:
(Windham Commty. Mem. Hosp.) Series B, 2.35%
12/14/93, LOC Banque Paribas 4,000,000 4,000,000 207994SS
(Yale University):
Series L:
2.60% 2/8/94 1,550,000 1,550,000 207994SN
2.55% 2/17/94 500,000 500,000 207994SQ
Series M:
2.45% 12/8/93 2,000,000 2,000,000 207994SA
2.60% 2/16/94 3,900,000 3,900,000 207994SH
Series N:
2.45% 12/9/93 1,100,000 1,100,000 207994RW
2.50% 12/13/93 1,000,000 1,000,000 207994RJ
2.60% 2/16/94 1,350,000 1,350,000 207994SK
Series O:
2.45% 12/8/93 1,150,000 1,150,000 207994RY
2.60% 2/16/94 1,500,000 1,500,000 207994SG
Connecticut Hsg. Fin. Agcy. Hsg. Mtg. Fin. Prog.
Bonds, MT:
Series 1992 D-2, 2.75% 5/16/94 4,000,000 4,000,000 2077454L
Series 1993 H-1, 2.80% 11/15/94 6,800,000 6,800,000 207746BK
Series 1993 H-2, 2.90% 11/15/94 (b) 4,500,000 4,500,000 207746BL
Connecticut Hsg. Fin. Auth. Hsg. Mtg. Fin. Prog., VT: (b)
Series 1989 D:
2.55% 12/8/93 1,165,000 1,165,000 207995FY
2.50% 12/10/93 1,000,000 1,000,000 207995FU
2.45% 12/14/93 255,000 255,000 207995FV
2.60% 2/9/94 3,500,000 3,500,000 207995GA
Series 1990 C, 2.70% 2/8/94 800,000 800,000 207995GB
Connecticut Second Lien Special Tax Oblig. Bonds
(Transport Infrastructure) Series 1, 2.45%,
LOC Industrial Bank of Japan, VRDN 7,100,000 7,100,000 207757HF
Connecticut Spl. Assessment Unemployment Compensation
Advance Fund Rev. Tender Option Bonds, Series 1993 A,
2.70%, (Liquidity Enhancement Sumitomo Bank) (c) 2,000,000 2,000,000
207756AU
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
CONNECTICUT - CONTINUED
Connecticut Spl. Assessment Unemployment Rev.,:
Series 1993 B, 2.25%, LOC Ind. Bank of Japan, VRDN $ 1,000,000 $
1,000,000 207756AR
Series 1993 C, 3% 7/1/94, MT 12,000,000 12,013,489 207756AS
Hartford Redev. Auth. (Underwood Towers Proj.), 2.45%,
(FSA Insured) (Liquidity Enhancement Sumitomo Trust &
Banking Ltd.), VRDN 1,700,000 1,700,000 416461AY
Milford BAN 2.68% 2/17/94 400,000 400,018 599377QA
120,553,424
FLORIDA - 2.6%
Dade County Ind. Dev. Rev. (Montenay-Dade Ltd. Proj.)
Series 1990 A, 2.40%, LOC Banque Paribas, VRDN (b) 4,100,000 4,100,000
233561AB
NEW YORK - 1.0%
New York City Ind. Dev. Agcy. Ind. Dev. Rev.
(Nippon Cargo Airlines Co.) Series 1992, 2.45%,
LOC Ind. Bank of Japan, VRDN (b) 1,600,000 1,600,000 649705FV
PUERTO RICO - 13.7%
Puerto Rico Commonwealth TRAN Series A, 3% 7/29/94 7,000,000 7,012,917
745144VX
Puerto Rico Hwy. and Trans. Rev. Series 1993 X, 2%,
LOC Union Bank of Switzerland,VRDN 6,000,000 6,000,000 745181LA
Puerto Rico Ind. Med. Higher Ed. & Envir. Cont. Fac. Fin. Auth., VT:
(A.G. Mendez Proj.) Series 1991, 2.45% 12/1/93,
LOC Banco Santander 700,000 700,000 745993JP
(Inter-America Univ.) Series 1988, 2.60% 12/7/93,
LOC Bank of Tokyo 4,000,000 4,000,000 745993JM
Puerto Rico Variable Rate Trust Certificates 2.175%
(Liquidity Enhancement Bankers Trust) (c) 4,060,000 4,060,000 99299DAA
21,772,917
SOUTH CAROLINA - 1.7%
South Carolina Jobs Econ. Dev. Auth. Rev.
(Wellman Inc. Proj.), VRDN: (b)
Series 1990, 2.30%, LOC Wachovia Bank & Trust 1,200,000 1,200,000
837031BP
Series 1992, 2.30%, LOC Wachovia Bank & Trust 1,500,000 1,500,000
837031DA
2,700,000
VIRGINIA - 4.3%
Richmond Ind. Dev. Auth. (I) Rev. (Cogentrix of Richmond
Inc. Proj.) Series 1990 A, 2.35%, LOC Banque
Paribas, VRDN (b) 3,600,000 3,600,000 765415KE
MUNICIPAL SECURITIES (A) - CONTINUED
PRINCIPAL VALUE
AMOUNT (NOTE 1)
VIRGINIA - CONTINUED
Richmond Ind. Dev. Auth. (II) Rev.(Cogentrix of Richmond
Inc. Proj.) Series 1991 A, 2.35%, LOC Banque
Paribas, VRDN (b) $ 1,800,000 $ 1,800,000 765415KF
Southampton County Ind. Dev. Auth. Ind. Rev.
(Hadson Pwr. 11 - Southampton Proj.) Series 1990 A,
2.30%, LOC Credit Suisse, VRDN (b) 1,400,000 1,400,000 841022AA
6,800,000
TOTAL INVESTMENTS - 100% $ 158,826,341
Total Cost for Income Tax Purposes $ 158,826,341
SECURITY TYPE ABBREVIATIONS
BAN - Bond Anticipation Notes
CP - Commercial Paper
FRDN - Floating Rate Demand Notes
MT - Mandatory Tender
OT - Optional Tender
RAN - Revenue Anticipation Notes
TAN - Tax Anticipation Notes
TRAN - Tax & Revenue Anticipation Notes
VRDN - Variable Rate Demand Notes
VT - Variable Tender
LEGEND
(a) The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
(b) Private activity obligations whose interest is subject to the federal
alternative minimum tax for individuals (AMT securities).
Provides evidence of ownership in an underlying pool of municipal bonds.
INCOME TAX INFORMATION
At November 30, 1993, the fund had a capital loss carryforward of
approximately $7,460 of which $40, $2,090, and $5,330 will expire on
November 30, 1999, 2000, and 2001, respectively.
SPARTAN CONNECTICUT MUNICIPAL MONEY MARKET PORTFOLIO
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
NOVEMBER 30, 1993
134.ASSETS 135. 136.
137.Investment in securities, at value (Note 1) - 138. $ 158,826,341
See accompanying schedule
139.Cash 140. 4,052,021
141.Receivable for investments sold 142. 600,169
143.Interest receivable 144. 456,867
145. TOTAL ASSETS 146. 163,935,398
147.LIABILITIES 148. 149.
150.Payable for investments purchased $ 767,763 151.
152.Dividends payable 2,855 153.
154.Accrued management fee 63,157 155.
156. TOTAL LIABILITIES 157. 833,775
158.159.NET ASSETS 160. $ 163,101,623
161.Net Assets consist of: 162. 163.
164.Paid in capital 165. $ 163,109,080
166.Accumulated net realized gain (loss) on 167. (7,457)
investments
168.169.NET ASSETS, for 163,109,080 shares 170. $ 163,101,623
outstanding
171.172.NET ASSET VALUE, offering price and 173. $1.00
redemption price per share ($163,101,623 (divided by)
163,109,080 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED NOVEMBER 30, 1993
174.INTEREST INCOME 175. $ 3,100,095
176.EXPENSES 177. 178.
179.Management fee (Note 4)
$ 641,483
180.Non-interested trustees' compensation 827 181.
182. Total expenses before reductions 642,310 183.
184. Expense reductions (Note 5) (331,281) 311,029
185.NET INTEREST INCOME 186. 2,789,066
187.NET REALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 188. (5,334)
1)
189.NET INCREASE IN NET ASSETS RESULTING FROM 190. $ 2,783,732
OPERATIONS
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEARS ENDED NOVEMBER 30,
1993 1992
191.INCREASE (DECREASE) IN NET ASSETS
192.Operations $ 2,789,066 $ 1,412,862
Net interest income
193. Net realized gain (loss) on investments (5,334) (2,086)
194. Increase (decrease) in net unrealized gain from - (342)
accretion of market discount
195. 2,783,732 1,410,434
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM
OPERATIONS
196.Dividends to shareholders from net interest income (2,789,066) (1,412,862)
197.Share transactions at net asset value of $1.00 per 224,246,405 121,556,249
share
Proceeds from sales of shares
198. Reinvestment of dividends from net interest 2,693,169 1,363,445
income
199. Cost of shares redeemed (150,504,642) (58,492,682)
200. 76,434,932 64,427,012
Net increase (decrease) in net assets and shares
resulting from share transactions
201. 76,429,598 64,424,584
TOTAL INCREASE (DECREASE) IN NET ASSETS
202.NET ASSETS 203. 204.
205. Beginning of period 86,672,025 22,247,441
206. End of period $ 163,101,623 $ 86,672,025
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
207. YEARS ENDED NOVEMBER 30, MARCH 4, 1991
(COMMENCEME
NT
OF OPERATIONS) T
O
NOVEMBER 30,
208. 1993 1992 1991
209. 210. 211.
212.SELECTED PER-SHARE DATA
213.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000
214.Income from Investment Operations .022 .030 .029
Net interest income
215. Dividends from net interest income (.022) (.030) (.029)
216.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000
217.TOTAL RETURN (dagger) 2.21% 3.08% 2.97%
218.RATIOS AND SUPPLEMENTAL DATA
219.Net assets, end of period (000 omitted) $ 163,102 $ 86,672 $ 22,247
220.Ratio of expenses to average net .24% .02% -
assets (dagger)(dagger)
221.Ratio of expenses to average net .50% .50% .50%*
assets
before expense reductions (dagger)(dagger)
222.Ratio of net interest income to average 2.17% 2.90% 4.05%*
net assets
</TABLE>
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(dagger)(dagger) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS
for the period ended November 30, 1993
1. 2. SIGNIFICANT ACCOUNTING
POLICIES.
Spartan Connecticut Municipal High Yield Portfolio (the high yield fund) is
a fund of Fidelity Court Street Trust. Spartan Connecticut Municipal Money
Market Portfolio (the money market fund) is a fund of Fidelity Court Street
Trust II. Each trust is registered under the Investment Company Act of
1940, as amended (the 1940 Act), as an open-end management investment
company. Fidelity Court Street Trust and Fidelity Court Street Trust II
(the trusts) are organized as a Massachusetts business trust and a Delaware
business trust, respectively. Each fund is authorized to issue an unlimited
number of shares. The following summarizes the significant accounting
policies of the money market fund and the high yield fund:
SECURITY VALUATION.
HIGH YIELD FUND. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which quotations are not readily available through the
pricing service are valued at their fair value as determined in good faith
under consistently applied procedures under the general supervision of the
Board of Trustees.
MONEY MARKET FUND. As permitted under Rule 2a-7 of the Act, and certain
conditions therein, securities are valued initially at cost and thereafter
assume a constant amortization to maturity of any discount or premium.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to income taxes to
the extent that it distributes all of its taxable income for the fiscal
year. The schedules of investments include information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned. For the
money market fund, accretion of market discount represents unrealized gain
until realized at the time of a security disposition or maturity.
EXPENSES. Most expenses of each trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS. Dividends are declared daily and paid
monthly from net interest income. Distributions to shareholders from
realized capital gains on investments, if any, are recorded on the
ex-dividend date.
REDEMPTION FEES. Shares held in the high yield fund less than 180 days are
subject to a redemption fee equal to .50% of the proceeds of the redeemed
shares. The fee, which is retained by the fund, is accounted for as an
addition to paid in capital.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis
of identified cost.
3. 4. OPERATING POLICIES.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment basis. Payment and delivery may take
place a month or more after the date of the transaction. The price of the
underlying securities and the date when the securities will be delivered
and paid for are fixed at the time the transaction is negotiated. The fund
identifies securities as segregated in its custodial records with a value
at least equal to the amount of the purchase commitment.
FUTURES CONTRACTS AND OPTIONS. The high yield fund may invest in futures
contracts and write options. These investments involve, to varying degrees,
elements of market risk and risks in excess of the amount recognized in the
Statement of Assets and Liabilities. The face or contract amounts reflect
the extent of the involvement the high yield fund has in the particular
classes of instruments. Risks may be caused by an imperfect correlation
between movements in the price of the instruments and the price of the
underlying securities and interest rates. Risks also may arise if there is
an illiquid secondary market for the instruments, or due
to the inability of counterparties to perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
5. 6. PURCHASES AND SALES OF
INVESTMENTS.
HIGH YIELD FUND. Purchases and sales of securities, other than short-term
securities, aggregated $210,010,966 and $197,122,719, respectively. The
face value of futures contracts opened and closed amounted to $247,245,563
and $252,995,251, respectively.
7. 8. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, Fidelity Management
& Research Company (FMR) pays all expenses except the compensation of
the non-interested Trustees and certain exceptions such as interest, taxes,
brokerage commissions and extraordinary expenses. FMR receives a fee that
is computed daily at an annual rate of .50% and .55% of average net assets
for the money market and high yield funds, respectively.
FMR also bears the cost of providing shareholder services to each fund. For
the period, FMR or its affiliates collected certain transaction fees from
shareholders which aggregated $8,635 and $4,895 for the high yield and
money market funds, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SUB-ADVISER FEE. As the money market fund's investment sub-adviser, FMR
Texas Inc., a wholly owned subsidiary of FMR, receives a fee from FMR of
50% of the management fee payable to FMR. The fee is paid prior to any
voluntary expense reimbursements which may be in effect, and after reducing
the fee for any payments by FMR pursuant to the fund's Distribution and
Service Plan.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plans (the Plans), and in accordance with Rule 12b-1 of the Act, FMR or the
funds' distributor, Fidelity Distributors Corporation (FDC), an affiliate
of FMR, may use their resources to pay administrative and promotional
expenses related to the sale of each fund's shares. Subject to the approval
of each Board of Trustees, the Plans also authorize payments to third
parties that assist in the sale of each fund's shares or render shareholder
support services. FMR or FDC has informed the funds that payments made to
third parties under the Plans amounted to $2,763 for the high yield fund
and no payments were made for the money market fund for the period.
9. 10. REIMBURSEMENT OF
EXPENSES.
FMR has voluntarily agreed to reimburse the money market fund for total
operating expenses (excluding interest, taxes, brokerage commissions and
extraordinary expenses) above a specified percentage of average net assets.
During the period, this expense limitation ranged from expenses in excess
of an annual rate of .05% to .50% of average net assets and the
reimbursement amounted to $331,281.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Court Street Trust and Fidelity Court Street
Trust II and the Shareholders of Spartan Connecticut Municipal High Yield
Portfolio and Spartan Connecticut Municipal Money
Market Portfolio:
We have audited the accompanying statements of assets and liabilities of
Spartan Connecticut Municipal High Yield Portfolio, a portfolio of Fidelity
Court Street Trust, and Spartan Connecticut Municipal Money Market
Portfolio, a portfolio of Fidelity Court Street Trust II including the
schedules of portfolio investments, as of November 30, 1993, the related
statements of operations for the year then ended, the statements of changes
in net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended
for the Spartan Connecticut Municipal High Yield Portfolio, and the
financial highlights for each of the two years in the period then ended and
for the period March 4, 1991 (commencement of operations) to November 30,
1991 for the Spartan Connecticut Municipal Money Market Portfolio. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of November 30, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Spartan Connecticut Municipal High Yield Portfolio and Spartan
Connecticut Municipal Money Market Portfolio as of November 30, 1993, the
results of their operations for the year then ended, the changes in their
net assets for each of the two years in the period then ended, and the
financial highlights for each of the five years in the period then ended
for the Spartan Connecticut Municipal High Yield Portfolio, and the
financial highlights for each of the two years in the period then ended and
for the period March 4, 1991 (commencement of operations) to November 30,
1991 for the Spartan Connecticut Municipal Money Market Portfolio, in
conformity with generally accepted accounting principles.
COOPERS & LYBRAND
Boston, Massachusetts
December 30, 1993
TO CALL FIDELITY
FOR FUND INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you
to set up your Personal Identification
Number (PIN). The PIN assures that
only you have automated telephone
access to your account information.
Please have your Customer Number
(T-account #) handy when you call --
you'll need it to establish your PIN. If
you would ever like to change your PIN, just choose the "Change your
Personal
Identification Number" option when
you call. If you forget your PIN, please
call a Fidelity representative at 1-800-
544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1.
For an individual fund quote.
2.
For the ten most frequently
requested Fidelity fund quotes.
3.
For quotes on Fidelity Select
Portfolios.(Registered trademark)
4.
To change your Personal
Identification Number (PIN).
5.
To speak with a Fidelity
representative.
6.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC)(PHONE_GRAPHIC
(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL
VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS
MEANS THAT
YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO
ASSURANCE THAT
MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN
INVESTMENT IN
A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT.
TOTAL
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS
AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO WRITE FIDELITY
Please locate the address that is closest to you. We'll give your
correspondence immediate attention and send you written confirmation upon
completion of your request. Please send ALL correspondence about retirement
accounts to Dallas.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 2269
Boston, MA 02107-2269
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30280
Salt Lake City, UT 84130-0280
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
Additional Payments
P.O. Box 2656
Boston, MA 02293-0656
Fidelity Investments
Additional Payments
P.O. Box 620024
Dallas, TX 75262-0024
Fidelity Investments
Additional Payments
P.O. Box 31455
Salt Lake City, UT 84131-0455
OVERNIGHT EXPRESS
Fidelity Investments
Additional Payments
World Trade Center
164 Northern Avenue
Boston, MA 02210
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02103-0878
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02101-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 620024
Dallas, TX 75262-0024
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
Los Angeles, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
455 Market Street
San Francisco, CA
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road, South
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research
Company
Boston, MA
SUB-ADVISER
FMR Texas Inc.
Irving, TX
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Peter Allegrini, Vice President,
HIGH YIELD FUND
Thomas D. Maher, Assistant
Vice President, MONEY MARKET FUND
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*, MONEY MARKET FUND
Phyllis Burke Davis*, MONEY MARKET FUND
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*, MONEY MARKET FUND
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENTS
United Missouri Bank, N.A.
Kansas City, MO
and
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
FIDELITY'S TAX-FREE
MONEY MARKET FUNDS
California Tax-Free Money Market
Connecticut Municipal Money Market
Massachusetts Tax-Free Money Market
Michigan Municipal Money Market
New Jersey Tax-Free Money Market
New York Tax-Free Money Market
Ohio Municipal Money Market
Spartan California Municipal
Money Market
Spartan Connecticut Municipal
Money Market
Spartan Florida Municipal Money Market
Spartan Massachusetts Municipal
Money Market
Spartan Municipal Money Fund
Spartan New Jersey Municipal
Money Market
Spartan New York Municipal
Money Market
Spartan Pennsylvania Municipal
Money Market
Tax-Exempt Money Market
THE FIDELITY
TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.)
TDD Service 1-800-544-0111
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
