-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, O61uCKbt5bLT3TYGUO7kcS50s5bip1lyftsfT6jTwlwG0+qJ1YIr99aJ4teSknYO 0NtqNtyzt/jMlLFjigMhlA== 0000082693-96-000044.txt : 19960508 0000082693-96-000044.hdr.sgml : 19960508 ACCESSION NUMBER: 0000082693-96-000044 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960229 FILED AS OF DATE: 19960507 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN MUNICIPAL TRUST CENTRAL INDEX KEY: 0000836375 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: NY FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05579 FILM NUMBER: 96557530 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146942020 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVENUE CITY: PURCHASE STATE: NY ZIP: 10577 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN INVESTMENT TRUST CENTRAL INDEX KEY: 0000757440 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046599663 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04154 FILM NUMBER: 96557531 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146412305 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS/ DATE OF NAME CHANGE: 19940628 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION HIGH GRADE TAX FREE PORT DATE OF NAME CHANGE: 19940519 FORMER COMPANY: FORMER CONFORMED NAME: FIRST UNION FUNDS DATE OF NAME CHANGE: 19921230 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EVERGREEN MONEY MARKET TRUST CENTRAL INDEX KEY: 0000820636 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 136892172 STATE OF INCORPORATION: NY FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05300 FILM NUMBER: 96557532 BUSINESS ADDRESS: STREET 1: 2500 WESTCHESTER AVE CITY: PURCHASE STATE: NY ZIP: 10577 BUSINESS PHONE: 9146942020 MAIL ADDRESS: STREET 1: 2500 WESTCHESTER AVENUE CITY: PURCHASE STATE: NY ZIP: 10577 N-30D 1 EVERGREEN MONEY MARKET FUNDS EVERGREEN(SM) MONEY MARKET FUNDS (Photos of a $100 bill, an eagle, and coins appear here) SEMI-ANNUAL REPORT FEBRUARY 29, 1996 (Evergreen logo appears here) Evergreen Funds EVERGREEN MONEY MARKET FUNDS TABLE OF CONTENTS Economic Overview......................................................... 1 (Photo of a $100 bill) MONEY MARKET A Report From Your Portfolio Manager...................................... 3 FUND Statement of Investments.................................................. 4 Statement of Assets and Liabilities....................................... 8 Statement of Operations................................................... 9 Statement of Changes in Net Assets........................................ 10 Financial Highlights...................................................... 11 (Photo of an eagle) TAX-EXEMPT A Report From Your Portfolio Manager...................................... 13 MONEY MARKET FUND Statement of Investments.................................................. 14 Statement of Assets and Liabilities....................................... 25 Statement of Operations................................................... 26 Statement of Changes in Net Assets........................................ 27 Financial Highlights...................................................... 28 (Photo of coins) TREASURY A Report From Your Portfolio Manager...................................... 29 MONEY MARKET FUND Statement of Investments.................................................. 30 Statement of Assets and Liabilities....................................... 31 Statement of Operations................................................... 32 Statement of Changes in Net Assets........................................ 33 Financial Highlights...................................................... 34 Combined Notes to Financial Statements.................................... 36 Trustees and Officers...................................... Inside Back Cover
EVERGREEN(SM) is a Service Mark of Evergreen Asset Management Corp. Copyright 1995, Evergreen Asset Management Corp. EVERGREEN MONEY MARKET FUNDS ECONOMIC OVERVIEW BY EVERGREEN ASSET MANAGEMENT CHAIRMAN STEPHEN A. LIEBER The volatility of investment markets during the first (Photo of Stephen quarter of 1996 reflected a virtually constant A. Lieber) reappraisal of economic prospects. The prospects of sporadic commodity inflation, evidence of resurgent employment trends, failure of political negotiations to achieve a balanced budget agreement, declining demand in personal computer-based technological products, sizable consumer credit growth and greater credit card losses, the increase in imports without concomitant increases in exports, and the rise of the dollar, all drove the markets to mirror the fast changing trends of new statistics. The question of whether inflation might be reappearing was central to the investor reaction to these concerns. Fears of inflation increased through the first quarter, as evidenced by the sizable rise in bond market yields. By early April, long-term U.S. Treasury bond yields reached 7%, a level last seen in August 1995, and up more than one full percentage point from the beginning of the year. Clearly, investors were demanding more of an inflation premium in interest rates. The background with which this year has begun is inconclusive in its trends. We have previously held to the view that a wage-driven inflation is unlikely in the present economic environment due to the easy substitution of imported goods for many domestic goods, while competitive pressures for U.S. and world markets mount from the broadening dispersion of technology, capital, and capital goods. The strength of American industry, it is generally held, must come from its product innovation, its quality, and the rising productivity of its work force. These internal and external pressures have had a major impact in restraining wage-driven inflation. Monetary inflation has shown improving trends as the budget deficit, as a percentage of gross domestic product, continues to decline. Attention, however, must still be given to the longer term issues of potentially destabilized Federal budgeting due to entitlements. While no solution to this issue of government deficit control emerged from this years political negotiations, it is at least better established on the political agenda than ever before. Investment markets demand a risk premium when faced with elements of uncertainty. The risk premium lately built into the fixed income markets not only reflects the arguable issue of whether there is a risk of wage inflation in the United States, but also the sharp recent increases in some key commodity prices. The combination of a dearth of rainfall and reduced acreage in key agricultural states has spiked up major food commodity prices. Similarly, the draining of oil inventories because of the heat requirements of the abnormally long and cold winter in northern states, together with the cautious inventory policies of the oil industry faced with the possibility that Iraqi supplies might return to the market, has caused prices of oil and refined products to rise. Many watchers for inflationary trends have jumped on these commodity rises, which have lead them to conclude that the inflation rate will rise and, therefore, that bond yields have to go up. The dissent is widespread, arguing that these are temporary interruptions, which will in the long run serve more to shrink profit margins than to raise prices and arguing that these are only interruptions to a fundamentally steady low inflation trend. They point to the 2.8% increase in the Consumer Price Index for the twelve months ended March 31. More important in the analysis of the potentials for bond yields, many economists argue, is the current trend toward the reduction of interest rates in Europe, led by the recent half percent discount rate cut by the German Bundesbank. The revival of economic growth in Europe, it is felt, requires lower interest rates which in turn will facilitate a decline in rates in the United States, merely from reduced competitive investment pressures. We conclude that negative trends which have dominated the bond market in the first months of the year, as marked by the sharp rise in yields, may well reflect shorter-term factors rather than long-term trends. Federal Reserve Bank Governors in numerous recent speeches and interviews have made the point that they are confident 1 EVERGREEN MONEY MARKET FUNDS ECONOMIC OVERVIEW -- (CONTINUED) about the underlying trend of well-controlled inflation, suggesting that they are not aiming to increase the discount rates or to put any pressures to slow the economy. We conclude that the Federal Reserve is not aiming to stimulate the economy at this time, but will act to sustain a reasonable growth in the better than 2% range if there is any further evidence of broadly slowing economic activity. International competitive interest rate pressures are diminishing, the trade balance is improving and the economy has remained resilient in the recent period of inventory correction. These are all factors suggesting a period of comparative stability for the months ahead. The tax-exempt securities markets in late 1994 and 1995, and again in early 1996, were negatively affected by the flat tax proposals. The differential between the yields of taxable fixed income debt and tax-exempt debt shrank to record lows for recent years. For those who were convinced that a flat tax, or a substantially reduced income tax level, was not to be expected in the near-term, the tax-exempt fixed income market presented an outstanding comparative investment opportunity. The loss in the Presidential primaries of the one candidacy which featured a flat tax has already restored considerable confidence in the continuation of the present tax structure, and increased the spread between taxable and tax-exempt bonds. As the fall election campaign nears, the comparative strength of the tax-exempt market will reflect the positions of the candidates. Unless there is a major surprise in the conventions, tax-exempt obligations seem favorably situated. Credit issues in the tax-exempt market have not been paramount since the rare case of the Orange County, California default. The ripple effect of that default was shorter lived than many expected, and the resolution of Orange County's fiscal difficulties is well underway. Its positive impact was to develop pressure for many municipalities and agencies to tighten their controls on cash management policies and shift to a more prudent, credit worthy structure than had often been used. With our overall expectation of a gradual reduction in interest rates as the inflation premium recently built into the market is reduced, we anticipate an attractive total return for high-quality fixed income investments, and further relative gains for the tax-exempt securities market. 2 EVERGREEN MONEY MARKET FUND (Photo of a $100 bill) A REPORT FROM YOUR PORTFOLIO MANAGER ETHEL SUTTON We are pleased to present the Semi-Annual Report for Evergreen Money Market Fund. During the six months under review, (Photo of the Federal Reserve lowered the Fed Funds rate twice by 25 basis Ethel points: once in December and again in January. This brought the Sutton) basic inter-bank lending rate to 5 1/4%, down from the 6% level prior to the 25-basis-point rate cut in July. At its January 31 meeting, the Fed also lowered its discount rate, the rate at which member banks can borrow from the Federal Reserve, to 5 1/4%, and commercial banks immediately dropped the prime lending rate to 8 1/4%. At his semi-annual Congressional testimony in February, Federal Reserve Board Chairman, Alan Greenspan, commented that Federal Reserve Board members had wanted to ease interest rates as insurance against the risk of sub-par economic performance in the months ahead, adding that the odds of such a move's boosting inflation seemed low. The employment report released March 8 clearly altered the economic horizon, as the Labor Department reported an unemployment rate drop to 5 1/2% for February, more than retracing January's run-up to 5.8%. Since the financial markets had started the year by pricing to the expectation of continued economic weakness and further Fed ease, the dramatic rebound in job growth jolted investors. Some economists are suggesting, however, that the job statistics were skewed because of weather-related problems in January, coupled with a partial government shut-down, and that it will take more weeks of data to determine whether we are seeing an actual trend that could lead to tighter labor markets and possible inflation, or whether we are continuing in the "soft landing" that the Fed has tried to engineer. In the meantime, our educated guess is that the Fed will make no change in interest rates, at least until second quarter economic data can be evaluated. We have consistently maintained a longer weighted average portfolio maturity for Evergreen Money Market Fund than the monthly averages of all tier one money market funds reported in Donoghue's*, because we seek to capitalize on the declining interest rate trend in effect since last summer. We will be carefully monitoring economic data to see how we can best enhance value for our shareholders. *MONTHLY AVERAGES AS REPORTED IN THE MONTHLY DONOGHUE'S MONEY FUND REPORT. AS OF 2/29/96, THERE WERE 269 TIER ONE MONEY MARKET FUNDS TRACKED BY DONOGHUE'S. DONOGHUE'S IS AN INDEPENDENT MONEY MARKET MUTUAL FUND PERFORMANCE MONITOR. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. YIELDS FLUCTUATE. 3 EVERGREEN MONEY MARKET FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Photo of a $100 bill)
PRINCIPAL AMOUNT (000) VALUE BANKERS' ACCEPTANCES* -- 10.0% Bank of Montreal: $13,000 5.14%, 4/4/96...................... $ 12,936,892 11,000 5.31%, 5/9/96...................... 10,888,047 1,000 5.20%, 5/28/96..................... 987,289 Bank of Tokyo, Ltd.: 5,500 5.53%, 3/5/96...................... 5,496,621 7,700 5.55%, 4/4/96...................... 7,659,639 10,000 5.70%, 4/4/96...................... 9,946,167 39,100 5.21%, 5/1/96...................... 38,754,823 10,000 5.20%, 7/8/96...................... 9,813,667 6,000 Chemical Bank of New York, 5.00%, 7/29/96..................... 5,875,000 12,000 Dai-Ichi Kangyo Bank, Ltd., 5.43%, 5/8/96...................... 11,876,920 Industrial Bank of Japan, Ltd.: 10,000 5.52%, 3/26/96..................... 9,961,667 29,000 5.23%, 4/8/96...................... 28,839,904 Mitsubishi Bank, Ltd.: 3,500 5.78%, 3/5/96...................... 3,497,752 5,250 5.51%, 3/11/96..................... 5,241,965 1,800 5.78%, 3/15/96..................... 1,795,954 4,550 5.51%, 3/25/96..................... 4,533,286 1,000 5.78%, 3/25/96..................... 996,147 Sanwa Bank, Ltd.: 10,000 5.77%, 3/11/96..................... 9,983,972 5,000 5.53%, 3/28/96..................... 4,979,262 10,000 5.70%, 4/4/96...................... 9,946,167 5,000 5.53%, 4/5/96...................... 4,973,118 8,200 5.67%, 4/11/96..................... 8,147,048 8,700 5.20%, 4/30/96..................... 8,624,600 TOTAL BANKERS' ACCEPTANCES (COST $215,755,907)................ 215,755,907 CERTIFICATES OF DEPOSITS -- 7.3% 25,000 Bayerische Landesbank Girozentrale: 5.71%, 12/11/96.................... 25,000,000 Bayerische Vereinsbank AG: 3,000 5.75%, 4/30/96..................... 3,000,234 25,000 5.53%, 1/22/97..................... 25,000,000 20,000 Canadian Imperial Bank of Commerce, 5.50%, 1/9/97...................... 20,000,000 10,000 Commerzbank AG NY Branch, 5.435%, 4/16/96.................... 10,000,925 PRINCIPAL AMOUNT (000) VALUE CERTIFICATES OF DEPOSITS -- CONTINUED $ 2,000 Rabobank Nederland N.V., 5.73%, 3/18/96..................... $ 2,000,028 Societe Generale: 10,000 5.88%, 3/1/96...................... 10,000,000 10,000 5.51%, 3/8/96...................... 9,989,286 20,000 5.50%, 1/9/97...................... 20,000,000 20,000 5.21%, 2/24/97..................... 20,000,000 Westdeutsche Landesbank Girozentrale: 10,000 5.43%, 4/9/96...................... 10,000,177 2,000 6.10%, 5/13/96..................... 2,000,968 TOTAL CERTIFICATES OF DEPOSITS (COST $156,991,618)................ 156,991,618 COMMERCIAL PAPER* -- 78.9% BANK HOLDING COMPANIES -- 18.8% ABN-AMRO North America Finance Inc.: 10,000 5.51%, 3/8/96...................... 9,989,286 10,000 5.10%, 7/24/96..................... 9,794,583 10,000 Banco Espirito Santo North America Capital Corp., 5.31%, 5/9/96...................... 9,898,225 Bankers Trust New York Corp.: 20,000 5.47%, 5/20/96..................... 19,756,889 10,000 5.27%, 7/3/96...................... 9,818,478 20,000 B.B.V. Finance (DE) Inc., 5.55%, 4/22/96..................... 19,839,667 10,000 BCI Funding Corp., 5.64%, 3/1/96...................... 10,000,000 6,300 BEX America Finance Inc., 5.01%, 6/6/96...................... 6,214,955 BHF Finance (DE) Inc.: 18,000 5.60%, 4/22/96..................... 17,854,400 50,000 5.17%, 6/20/96..................... 49,202,958 15,000 Canadian Imperial Holdings Inc., 5.185%, 4/2/96..................... 14,930,867 Compagnie Bancaire USA Finance Corp.: 5,000 5.54%, 3/15/96..................... 4,989,228 19,000 5.30%, 4/19/96..................... 18,864,426 Den Danske Corp. Inc.: 7,000 5.58%, 3/5/96...................... 6,995,660 2,000 5.61%, 4/10/96..................... 1,987,533 15,000 Dresdner U.S. Finance Inc., 5.22%, 3/4/96...................... 14,993,475
4 EVERGREEN MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of a $100 bill)
PRINCIPAL AMOUNT (000) VALUE COMMERCIAL PAPER* -- CONTINUED BANK HOLDING COMPANIES -- CONTINUED $25,000 Generale Bank Inc., 5.29%, 4/18/96..................... $ 24,823,667 MPS U.S. Commercial Paper Corp.: 20,000 5.11%, 5/7/96...................... 19,809,794 19,000 5.12%, 5/8/96...................... 18,816,249 20,000 Royal Bank of Canada, 5.02%, 7/1/96...................... 19,659,756 Svenska Handelsbanken Inc.: 30,000 5.12%, 5/3/96...................... 29,731,200 20,000 5.01%, 8/1/96...................... 19,574,150 25,000 4.92%, 8/23/96..................... 24,402,083 5,000 UBS Finance (DE) Inc., 5.38%, 3/8/96...................... 4,994,769 18,000 Unifunding Inc., 5.13%, 5/2/96...................... 17,840,970 404,783,268 CHEMICALS -- 3.0% Akzo Nobel America Inc.: 5,000 5.53%, 3/11/96..................... 4,992,319 15,000 5.35%, 4/12/96..................... 14,906,375 10,000 5.07%, 5/1/96...................... 9,914,092 25,300 U.S. Borax & Chemical Corp., 5.22%, 5/7/96...................... 25,054,211 10,000 Zeneca Wilmington Inc., 5.35%, 4/17/96..................... 9,930,153 64,797,150 DIVERSIFIED -- 8.0% American Home Products Corp.: 16,000 5.35%, 3/29/96..................... 15,933,422 25,000 5.21%, 4/4/96...................... 24,876,986 Daewoo International Corp., (America), (LOC: Korean Development Bank): 10,000 5.70%, 3/29/96..................... 9,955,667 9,000 5.30%, 5/7/96...................... 8,911,225 6,000 5.32%, 5/7/96...................... 5,940,593 20,000 5.18%, 5/23/96..................... 19,761,144 (LOC: Credit Suisse), 10,000 5.10%, 5/28/96..................... 9,875,333 First Brands Commercial Inc.: 10,000 5.35%, 3/25/96..................... 9,964,333 (Credit Support: Westdeutsche Landesbank Girozentrale), 14,262 5.20%, 4/12/96..................... 14,175,477 PRINCIPAL AMOUNT (000) VALUE DIVERSIFIED -- CONTINUED Mitsubishi International Corp.: $ 8,200 5.67%, 3/6/96...................... $ 8,193,543 8,000 5.20%, 6/6/96...................... 7,887,911 Mitsui & Co. (USA) Inc.: 12,000 5.40%, 4/8/96...................... 11,931,600 19,000 5.36%, 4/12/96..................... 18,881,187 5,000 Sunkyong America Inc., (LOC: Credit Suisse), 5.59%, 3/11/96..................... 4,992,236 171,280,657 ELECTRIC POWER -- 1.1% 10,500 IES Utilities Inc., 5.22%, 4/1/96...................... 10,452,803 13,700 National Rural Utilities Cooperative Finance Corp., 5.60%, 3/8/96...................... 13,685,082 24,137,885 ELECTRONICS -- 2.6% 42,000 Hewlett-Packard Co., 5.15%, 5/24/96..................... 41,495,300 7,715 Hitachi Credit America Corp., 5.40%, 3/27/96..................... 7,684,912 7,000 IBM Credit Corp., 5.57%, 3/6/96...................... 6,994,585 56,174,797 FINANCE -- 16.8% 10,000 Asset Securitization Cooperative Corp., 5.36%, 4/18/96..................... 9,928,533 6,000 Broadway Capital Corp., (LOC: Bank of Tokyo, Ltd.), 5.50%, 4/9/96...................... 5,964,250 15,000 Ciesco L.P., 5.375%, 3/25/96.................... 14,946,250 11,000 Diamond Asset Funding Corp., (LOC: Mitsuibishi Bank Ltd.), 5.40%, 4/4/96...................... 10,943,900 Finova Capital Corp.: 8,000 5.76%, 3/11/96..................... 7,987,200 36,100 5.24%, 4/3/96...................... 35,926,600 10,000 5.24%, 4/11/96..................... 9,940,322 10,000 5.26%, 4/30/96..................... 9,912,333 2,000 Ford Motor Credit Co., 5.42%, 3/27/96..................... 1,992,171
5 EVERGREEN MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of a $100 bill)
PRINCIPAL AMOUNT (000) VALUE COMMERCIAL PAPER* -- CONTINUED FINANCE -- CONTINUED $ 6,200 General Electric Capital Corp., 5.50%, 4/26/96..................... $ 6,146,956 General Motors Acceptance Corp.: 25,000 5.05%, 6/13/96..................... 24,635,278 25,000 4.89%, 8/14/96..................... 24,436,292 2,000 Goldman Sachs Group L.P., 5.62%, 3/19/96..................... 1,994,380 Hanson Finance (U.K.) PLC.: 30,000 5.25%, 3/19/96..................... 29,921,250 10,000 5.20%, 4/30/96..................... 9,913,333 41,000 5.12%, 5/22/96..................... 40,521,849 Island Finance Puerto Rico Inc.: 5,000 5.66%, 3/8/96...................... 4,994,497 20,000 5.18%, 4/18/96..................... 19,861,867 23,573 Ruby Asset Funding Corp., (LOC: Mitsubishi Bank, Ltd.), 5.50%, 3/29/96..................... 23,472,160 Special Purpose Accounts Receivable Cooperative Corp.: (Surety Bond: Capital Markets Assurance Corp.), 17,500 5.25%, 3/28/96..................... 17,431,094 5,000 5.38%, 4/18/96..................... 4,964,133 10,000 Stanford University, Board of Trustees (Leland), 5.46%, 5/17/96..................... 9,883,217 1,000 Transamerica Finance Corp., 5.38%, 4/4/96...................... 994,919 20,000 Twin Towers Inc., (LOC: Deutsche Bank AG, New York Branch), 5.50%, 3/15/96..................... 19,957,222 15,000 Wood Street Funding Corp., (LOC: PNC Bank N.A.), 5.24%, 5/16/96..................... 14,834,067 361,504,073 FOOD & BEVERAGES -- 2.7% American Home Food Products Inc.: 8,700 5.25%, 4/12/96..................... 8,646,713 13,000 5.21%, 5/29/96..................... 12,832,556 15,000 Coca-Cola Enterprises Inc., 5.15%, 5/8/96...................... 14,854,083 10,000 Golden Managers Acceptance Corp., (LOC: Republic National Bank of New York), 5.22%, 3/20/96..................... 9,972,450 PRINCIPAL AMOUNT (000) VALUE FOOD & BEVERAGES -- CONTINUED Golden Peanut Co.: $10,000 5.53%, 4/4/96...................... $ 9,947,772 2,000 5.00%, 5/22/96..................... 1,977,222 58,230,796 INSURANCE -- .7% 14,130 Allianz of America Finance Corp., 5.27%, 4/29/96..................... 14,007,960 LEASING -- 2.2% International Lease Finance Corp.: 21,800 5.10%, 5/16/96..................... 21,565,287 25,250 5.15%, 6/5/96...................... 24,903,233 46,468,520 MACHINERY, EQUIPMENT & AUTOS -- 7.0% American Honda Finance Corp.: 15,000 5.70%, 3/14/96..................... 14,969,125 26,100 5.20%, 4/19/96..................... 25,915,270 4,650 5.20%, 4/22/96..................... 4,615,073 15,000 5.32%, 4/30/96..................... 14,867,000 20,000 5.35%, 4/30/96..................... 19,821,667 9,550 5.13%, 5/8/96...................... 9,457,461 15,000 Browning-Ferris Industries Inc., 5.10%, 5/7/96...................... 14,857,625 Whirlpool Corp., 20,700 5.32%, 4/26/96..................... 20,528,696 Whirlpool Financial Corp., 25,000 5.27%, 5/8/96...................... 24,751,139 149,783,056 NATURAL GAS -- 4.3% British Gas Capital Corp.: 20,000 5.12%, 5/23/96..................... 19,763,911 40,000 5.11%, 5/23/96..................... 39,528,744 25,000 5.10%, 5/30/96..................... 24,681,250 7,500 Southern California Gas Co., 5.60%, 3/1/96...................... 7,500,000 91,473,905 OIL -- .9% Pemex Capital Inc., (LOC: Credit Suisse): 6,600 5.17%, 4/9/96...................... 6,563,035 7,000 5.37%, 4/10/96..................... 6,958,233 6,000 5.17%, 4/12/96..................... 5,963,810 19,485,078
6 EVERGREEN MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of a $100 bill)
PRINCIPAL AMOUNT (000) VALUE COMMERCIAL PAPER* -- CONTINUED REAL ESTATE -- 1.7% $26,919 Copley Financing Corp., (Surety Bond: Aetna Casualty & Surety Co.), 5.22%, 3/21/96..................... $ 26,840,935 10,400 Kamehameha Schools-Bishop Estate, 5.58%, 3/12/96..................... 10,382,268 37,223,203 TELECOMMUNICATIONS -- 4.3% 2,000 Ameritech Corp., 5.54%, 3/5/96...................... 1,998,769 12,000 AT&T Corp., 5.47%, 5/3/96...................... 11,885,130 20,000 GTE Corp., 5.25%, 3/28/96..................... 19,921,250 NYNEX Corp.: 20,000 5.46%, 3/21/96..................... 19,939,333 20,000 5.10%, 5/6/96...................... 19,813,000 20,000 5.15%, 5/20/96..................... 19,771,111 93,328,593 TEXTILE & APPAREL -- 1.4% Calcot Ltd.: 5,000 5.57%, 3/4/96...................... 4,997,679 10,000 5.63%, 3/8/96...................... 9,989,053 4,000 5.52%, 3/14/96..................... 3,992,026 5,000 5.43%, 3/26/96..................... 4,981,146 7,000 5.23%, 4/19/96..................... 6,950,170 30,910,074 TRANSPORTATION -- 3.4% BMW U.S. Capital Corp.: 11,000 5.60%, 3/11/96..................... 10,982,889 28,598 5.07%, 6/4/96...................... 28,215,383 Consolidated Rail Corp.: 10,000 5.17%, 5/1/96...................... 9,912,397 15,000 5.07%, 5/2/96...................... 14,869,025 10,000 Norfolk Southern Corp., 5.22%, 3/29/96..................... 9,959,400 73,939,094 TOTAL COMMERCIAL PAPER (COST $1,697,528,109).............. 1,697,528,109 PRINCIPAL AMOUNT (000) VALUE CORPORATE NOTES -- 5.0% $25,000 Federal National Mortgage Association, 5.245%, 4/11/97 (VR)............... $ 24,988,250 5,000 General Motors Acceptance Corp., 6.025%, 3/1/96 (VR)................ 5,000,000 25,000 Merrill Lynch & Co. Inc., 6.32%, 9/16/96 (VR)................ 25,000,000 5,000 Morgan (J.P.) & Co., Inc., 6.20%, 5/13/96..................... 5,000,000 10,000 Oakland Alameda County, (LOC: Canadian Imperial Bank of Commerce), 5.28%, 3/15/96..................... 10,000,000 15,000 PNC Bank NA Pittsburgh Pa., 6.23%, 10/4/96 (VR)................ 14,995,053 10,000 Society National Bank Cleveland Oh. 6.305%, 3/20/96 (VR)............... 9,999,872 12,456 Student Loan Marketing Association, 6.08%, 7/1/96...................... 12,476,009 TOTAL CORPORATE NOTES (COST $107,459,184)................ 107,459,184 U.S. GOVERNMENT OBLIGATIONS -- .0%+ 130 United States Treasury Bills 5.46%, 5/30/96 (COST $128,248).................... 128,248 SHARES (000) MUTUAL FUND SHARES -- .1% 1,501 Lehman Prime Value Money Market Fund Series A (at net asset value) (COST $1,500,992).................. 1,500,992 TOTAL INVESTMENTS (COST $2,179,364,058)....... 101.3% 2,179,364,058 OTHER ASSETS AND LIABILITIES -- NET.......... (1.3) (28,274,483) NET ASSETS.................. 100.0% $2,151,089,575
LOC -- Letter of Credit VR -- Variable rate issue * These securities held by the Fund at February 29, 1996 are traded on a discount basis; the interest rate shown is the discount rate to be earned at the time of purchase by the Fund. + Less than one-tenth of a percent. See accompanying notes to financial statements. 7 EVERGREEN MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Photo of a $100 bill)
ASSETS: Investments at value (amortized cost $2,179,364,058)........................................................ $2,179,364,058 Cash........................................................................................................ 638,585 Interest and dividends receivable........................................................................... 2,438,114 Receivable for Fund shares sold............................................................................. 2,132,039 Other assets................................................................................................ 124,187 Total assets.......................................................................................... 2,184,696,983 LIABILITIES: Payable for investment securities purchased................................................................. 24,988,250 Dividend payable............................................................................................ 5,649,120 Payable for Fund shares repurchased......................................................................... 1,232,582 Accrued expenses............................................................................................ 1,189,895 Accrued advisory fee........................................................................................ 547,561 Total liabilities..................................................................................... 33,607,408 NET ASSETS..................................................................................................... $2,151,089,575 NET ASSETS CONSIST OF: Paid-in capital............................................................................................. $2,151,610,283 Accumulated net realized loss on investment transactions.................................................... (520,708) Net assets............................................................................................ $2,151,089,575 CALCULATION OF NET ASSET VALUE PER SHARE: Class A Shares ($1,667,986,163 (division sign) 1,667,972,942 shares of beneficial interest outstanding)........................$1.00 Class B Shares ($7,905,575 (division sign) 7,905,417 shares of beneficial interest outstanding)................................$1.00 Class Y Shares ($475,197,837 (division sign) 475,729,875 shares of beneficial interest outstanding)............................$1.00
See accompanying notes to financial statements. 8 EVERGREEN MONEY MARKET FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED) (Photo of a $100 bill)
INVESTMENT INCOME: Interest....................................................................................... $37,165,996 EXPENSES: Advisory fee................................................................................... $3,200,042 Distribution fee -- Class A Shares............................................................. 1,425,207 Distribution fee -- Class B Shares............................................................. 30,212 Shareholder services fee -- Class B Shares..................................................... 10,071 Registration and filing fees................................................................... 313,344 Transfer agent fee............................................................................. 274,612 Custodian fee.................................................................................. 164,102 Reports and notices to shareholders............................................................ 63,634 Professional fees.............................................................................. 24,587 Insurance...................................................................................... 16,929 Trustees' fees and expenses.................................................................... 11,013 Miscellaneous.................................................................................. 6,666 5,540,419 Less advisory fee waiver....................................................................... (1,133,446) Net expenses............................................................................. 4,406,973 Net investment income............................................................................. 32,759,023 Net realized gain on investment transactions...................................................... 1,968 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................................. $32,760,991
See accompanying notes to financial statements. 9 EVERGREEN MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS (Photo of a $100 bill)
SIX MONTHS ENDED FEBRUARY 29, YEAR ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income............................................................... $ 32,759,023 $ 19,245,941 Net realized gain on investments.................................................... 1,968 19,987 Net increase in net assets resulting from operations............................. 32,760,991 19,265,928 DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A Shares...................................................................... (23,995,389) (4,909,735) Class B Shares...................................................................... (175,957) (56,561) Class Y Shares...................................................................... (8,587,677) (14,279,645) Total distributions to shareholders.............................................. (32,759,023) (19,245,941) FUND SHARE TRANSACTIONS: Proceeds from shares sold........................................................... 2,126,832,444 1,749,914,977 Proceeds from shares issued from acquisition of FFB Cash Management Fund...................................................... 592,358,355 -- Proceeds from shares issued from acquisition of FFB Lexicon Cash Management Fund.............................................. 95,834,929 -- Proceeds from shares issued from acquisition of First Union Money Market Portfolio............................................... -- 642,287,528 Proceeds from reinvestment of distributions......................................... 11,164,961 14,341,469 Payments for shares redeemed........................................................ (1,650,853,309) (1,703,929,225) Net increase resulting from Fund share transactions.............................. 1,175,337,380 702,614,749 Net increase in net assets....................................................... 1,175,339,348 702,634,736 NET ASSETS: Beginning of period................................................................. 975,750,227 273,115,491 End of period....................................................................... $ 2,151,089,575 $ 975,750,227
See accompanying notes to financial statements. 10 EVERGREEN MONEY MARKET FUND -- CLASS Y SHARES FINANCIAL HIGHLIGHTS (Photo of a $100 bill)
SIX MONTHS ENDED TEN MONTHS FEBRUARY 29, YEAR ENDED ENDED 1996 AUGUST 31, AUGUST 31, YEAR ENDED OCTOBER 31, (UNAUDITED) 1995 1994# 1993 1992 1991 PER SHARE DATA: Net asset value, beginning of period... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income.................. .03 .05 .03 .03 .04 .07 Less distributions to shareholders from net investment income............... (.03) (.05) (.03) (.03) (.04) (.07) Net asset value, end of period......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 TOTAL RETURN+.......................... 2.7% 5.4% 2.9% 3.2% 4.2% 6.7% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)..................... $475,198 $ 282,668 $273,115 $299,418 $357,917 $437,933 Ratios to average net assets: Expenses**.......................... .46%* .53% .32%* .39% .36% .30% Net investment income**............. 5.34%* 5.26% 3.46%* 3.19% 4.18% 6.53%
# The Fund changed its fiscal year end from October 31 to August 31. + Total return is calculated for the periods indicated and is not annualized. * Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
SIX MONTHS ENDED TEN MONTHS FEBRUARY 29, YEAR ENDED ENDED 1996 AUGUST 31, AUGUST 31, YEAR ENDED OCTOBER 31, (UNAUDITED) 1995 1994# 1993 1992 1991 Expenses............................... .64%* .73% .71%* .71% .72% .70% Net investment income.................. 5.16%* 5.06% 3.07%* 2.87% 3.82% 6.13%
See accompanying notes to financial statements. 11 EVERGREEN MONEY MARKET FUND -- CLASS A AND B SHARES FINANCIAL HIGHLIGHTS (Photo of a $100 bill)
CLASS A SHARES CLASS B SHARES SIX MONTHS JANUARY 4, SIX MONTHS JANUARY 26, ENDED 1995* ENDED 1995* FEBRUARY 29, THROUGH FEBRUARY 29, THROUGH 1996 AUGUST 31, 1996 AUGUST 31, (UNAUDITED) 1995 (UNAUDITED) 1995 PER SHARE DATA: Net asset value, beginning of period.......................... $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income......................................... .03 .03 .02 .03 Less distributions to shareholders from net investment income..................................................... (.03) (.03) (.02) (.03) Net asset value, end of period................................ $1.00 $1.00 $1.00 $1.00 TOTAL RETURN+................................................. 2.6% 3.5% 2.2% 2.8% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)..................... $ 1,667,986 $685,155 $7,906 $7,927 Ratios to average net assets: Expenses**................................................. .76%++ .81%++ 1.46%++ 1.51%++ Net investment income**.................................... 5.05%++ 5.26%++ 4.37%++ 4.54%++
* Commencement of class operations. + Total return is calculated on net asset value. Contingent deferred sales charge is not reflected. Total return is calculated for the periods indicated and is not annualized. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS A SHARES CLASS B SHARES SIX MONTHS JANUARY 4, SIX MONTHS JANUARY 26, ENDED 1995* ENDED 1995* FEBRUARY 29, THROUGH FEBRUARY 29, THROUGH 1996 AUGUST 31, 1996 AUGUST 31, (UNAUDITED) 1995 (UNAUDITED) 1995 Expenses...................................................... .94%++ 1.02%++ 1.64%++ 2.39%++ Net investment income......................................... 4.87%++ 5.05%++ 4.19%++ 3.66%++
See accompanying notes to financial statements. 12 EVERGREEN TAX EXEMPT MONEY MARKET FUND (Photo of an eagle) A REPORT FROM YOUR PORTFOLIO MANAGER STEVEN C. SHACHAT We are pleased to present the Evergreen Tax Exempt Money Market Fund Semi-Annual Report. As you know, effective January (Photo of 19, 1996, First Fidelity Tax Free Money Market Fund was combined Steven C. into Evergreen Tax Exempt Money Market Fund. As of February 29, Shachat) the combined assets of the Fund totaled $1,179,182,666. The past six months have proven to be an exhilarating but challenging ride for market participants. Evidence that economic activity remained sluggish and that inflation continued to be under control moved the Federal Reserve Board to further ease the Federal Funds rate, the rate at which the nation's banks borrow money from each other and on which all other short-term rates are based, in January. This was the third reduction for this important rate in the past eight months, the first occurring in July. The latest 25-basis-point reduction in January put the rate at 5 1/4%. In addition, at its January meeting, the Fed also lowered its discount rate, the rate at which the Federal Reserve lends to member banks, to 5 1/4%, and, subsequently, commercial banks dropped the prime lending rate to 8 1/4%. More recently, however, economic strength has been reflected in some of the indicators released. In his semi-annual Humphrey-Hawkins testimony before Congress in February, Federal Reserve Board Chairman Alan Greenspan shocked the markets by making comments that indicated the Fed is probably not going to aggressively ease interest rates any time soon, barring more evidence that the economy is faltering badly. In addition, an unusual combination of circumstances had kept the true tempo of activity somewhat opaque as important economic statistics were first delayed by the government shutdown, and then skewed as a giant blizzard smothered the East Coast. Exceptionally weak data for January kept alive notions that the economy might be downsizing, but the unknown impact of the blizzard left a lot of doubt. Although everyone expected some rebound when the weather cleared, the avalanche of new jobs that appeared in February took the market by surprise. Since the February employment data, the financial markets have adjusted to the possibility of quickened economic growth and the absence of an accommodative Fed. We do not expect any further pronounced trend movement in interest rates until more solid statistics and distortion-free data become available. For now, it looks as if the Fed is on hold until it can evaluate the true, underlying tempo of economic activity. Although short-term interest rates fell in response to the Federal Reserve's reduction of the Federal Funds rate, the short-term municipal market continues to be influenced by market technicals (i.e. supply/demand). It is for this reason, along with a flat yield curve, that we continued to maintain a short maturity structure. The weighted average maturity as of February 29, 1996, was 21 days. The significant position in variable rate securities (79% of the total investments) allowed the Fund to benefit from the high returns available from the short-term maturity sector of the money market yield curve. As always, we remain dedicated to our effort of providing superior investment results, and look forward to maintaining the Fund's commitment to solid performance and quality service. * THE FUND'S YIELD MAY VARY, AND THERE CAN BE NO GUARANTEE THAT THE FUND WILL ACHIEVE ITS OBJECTIVE OR ANY PARTICULAR TAX EXEMPT YIELD. INCOME MAY BE SUBJECT TO SOME STATE OR LOCAL TAXES, AND THE FEDERAL ALTERNATIVE MINIMUM TAX FOR CERTAIN INVESTORS. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. 13 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- 99.6% ALABAMA -- 3.7% $ 3,170 Alabama Hsg. Fin. Auth. MHRB (Westshore Landing Apts.) Ser. H 1995, 3.45%-VRDN (LOC: Southtrust Bk. of Alabama, N.A.).............................. $ 3,170,000 2,420 Alabama IDA-IDRB (Air-Dro Cylinders, Inc.), 3.65%-VRDN (LOC: Southtrust Bk. of Alabama, N.A.).............................. 2,420,000 3,700 Alabama IDA-IDRB (Automation Technologies Ind. Inc.), 3.65%-VRDN (LOC: Columbus Bk. & Tr. Co.)...... 3,700,000 5,860 City of Northport Multifamily Hsg. Ref. Rev. Wt. Ser. A 1993 (Northbrook I), 3.45%-VRDN (LOC: Southtrust Bk. of Alabama, N.A.).............................. 5,860,000 2,265 City of Northport Multifamily Hsg. RRB (River Run Apt.) Series A, 3.60%-VRDN (LOC: Amsouth Bk., N.A.)........... 2,265,000 Coml. Dev. Auth. of the City of Birmingham RB, 3.70%-VRDN (LOC: Amsouth Bk., N.A.) 1,230 (Avondale Comm. Park, Phase II).... 1,230,000 705 (Southside Business Ctr.).......... 705,000 7,115 Ed. Bldg. Auth. of the City of Homewood RB (Samford Univ.) Ser. 1988C, 3.40%-VRDN (LOC: Amsouth Bk., N.A.)........... 7,115,000 3,500 IDB of Mobile Cnty. RB (Sherman Intl. Corp.) Ser. 1994-A, 3.65%-VRDN (LOC: Columbus Bk. & Tr. Co.)...... 3,500,000 3,000 IDB of Prattville IDRB (Kuhnash Ppty.), 3.65%-VRDN (LOC: PNC Bk.)..................... 3,000,000 2,475 IDB of the City of Foley IDRB (Vulcan, Inc.), 3.45%-VRDN (LOC: Amsouth Bk., N.A.)........... 2,475,000 1,100 IDB of the City of Livingston IDRB (Toin Corp. U.S.A.) Ser. 1989, 3.90%-VRDN (LOC: Indl. Bk. of Japan, Ltd.).... 1,100,000 PRINCIPAL AMOUNT (000) VALUE ALABAMA -- CONTINUED $ 2,300 IDB of the City of Pell IDRB (Reh Kinder/Gorbel), 3.70%-VRDN (LOC: Key Bk. of New York)......... $ 2,300,000 1,000 IDB of the City of Tuscaloosa RRB (Field Container Corp.) Ser. 1992, 3.35%-VRDN (LOC: Amer. Natl. Bk. & Tr. Co. of Chicago).................... 1,000,000 4,200 Port City Med. Clinic Brd. Mobile Hosp. RB (Mobile Infirmary Assn.) Ser. A, 3.75%-VRDN (LOC: Fuji Bk., Ltd.).............. 4,200,000 44,040,000 ARKANSAS -- .3% 3,700 City of Pine Bluff IDRB (Camden Wire), 3.45%-VRDN (LOC: Chemical Bk.)................ 3,700,000 ARIZONA -- 5.5% 200 Cnty. of Maricopa IDA-IDRB (McClane Co.) Ser. 1984, 3.50%-VRDN (LOC: Barclay's Bk. PLC)........... 200,000 9,000 IDA of the City of Phoenix Arpt. Fac. RB (Amer. West Airlines, Inc.) Ser. 1986, 3.75%-VRDN (LOC: Indl. Bk. of Japan, Ltd.).... 9,000,000 Maricopa Cnty. PCRB Ref.-VRDN (El Paso Electric Co. Palo Verde) 26,400 1984 Ser. E, 3.40% (LOC: Cr. Suisse).................. 26,400,000 5,000 1985 Ser. A, 3.55% (LOC: Westpac Bkg. Corp.).......... 5,000,000 24,800 1994 Ser. A, 3.50% (LOC: Citibank, N.A.).............. 24,800,000 65,400,000 CALIFORNIA -- 11.3% 22,500 California Rev. Antic. Wt. Ser. C, 5.75%, 4/25/96..................... 22,573,231 1,400 City of Barstow MHRB (Mercury Svgs. & Ln. Assn./Rimrock Vlg. Apts.) 1988 Ser. A, 3.70%-VRDN (LOC: Mercury Svgs. & Ln., Coll: US Treas. Bills)............. 1,400,000
14 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED CALIFORNIA -- CONTINUED $ 4,500 City of Corona MHRB (Household Bk.) 1985 Ser. B, 3.525%-VRDN (LOC: Household Bk.-Gtd. by Household Fin. Corp.).............. $ 4,500,000 1,500 City of Hemet MHRB (Mercury Svgs. & Ln. Assn. Sunwest Resort Vlg.) 1986 Ser. B, 3.50%-VRDN (LOC: Mercury Svgs. & Ln., Coll: U.S. Treas. Bills)........... 1,500,000 4,250 City of Paramount Hsg. Auth. MHRB (Century Pl. Apts.), 4.08%-VRDN (LOC: Heller Finl., Inc.)**........ 4,250,000 8,525 Cmnty. Dev. Commn. of the City of Oceanside MHRB (Parcwood Apt.) Ser. 1985A, 3.525%-VRDN (LOC: Western Fed. Svgs. & Ln. Assn., Coll: U.S. Treas. Bills)........... 8,525,000 800 Cnty. of Contra Costa TRANS (Contra Costa Public Fac. Corp.), 4.50%, 7/3/96...................... 802,067 13,995 Cnty. of Orange Irvine Coast Assmt. Dist. No. 88-1 Ltd. Oblig. Impt. Bds. 3.75%-VRDN (LOC: Indl. Bk. of Japan, Ltd., Fuji Bk., Ltd., & Mitsubishi Bk., Ltd., 1/3 each).................... 13,995,000 6,500 Cnty. of San Bernadino Multifamily Loan RB (Mercury Svgs. & Ln. Assn./Pooled) 1985 Ser. A, 3.95%-VRDN (LOC: Mercury Svgs. & Ln., Coll: U.S. Treas. Bills)........... 6,500,000 1,900 Glenn Cnty. IDA-PCRB (Land O'Lakes, Inc.) Ser. 1995, 3.90%-VRDN (LOC: Sanwa Bk., Ltd.)............. 1,900,000 4,500 Hsg. Auth. of the City of San Diego MHRB (Oro Vista Apt.) Ser. 1987A, 3.65%-VRDN (LOC: Mercury Svgs. & Ln., Coll: U.S. Treas. Bills)........... 4,500,000 5,000 Hsg. Auth. of the City of Santa Ana MHRB (Villa Verde Apt.) Ser. 1985B, 3.60%-VRDN (LOC: Mercury Svgs. & Ln., Coll: U.S. Treas. Bills)........... 5,000,000 PRINCIPAL AMOUNT (000) VALUE CALIFORNIA -- CONTINUED $ 2,600 IDA of the City of Simi Vly. IDRB (Wambold Furniture) Ser. 1984, 4.00%-VRDN (LOC: Wells Fargo Bk., N.A.)....... $ 2,600,000 8,500 Lancaster Redev. Agy. MHRB (Far West Svgs. & Ln. Assn./20th St. Apts.) 1985 Ser. R, 3.70%-VRDN (LOC: Far West Svgs. & Ln. Assn., Coll: U.S. Treas. Bills)............................. 8,500,000 21,831 Pitney Bowes Cr. Corp. Leasetops Trs. (Bart Telesystem Lease), 3.65%-VRDN (LOC: ABN Amro Bk.)**.............. 21,831,000 15,375 San Bernadino Cnty. COP Ser. 1995, 3.40%-VRDN (LIQ: Merrill Lynch Cap. Svcs.)**.. 15,375,000 4,300 San Bernadino Cnty. MHRB (Ontario), 3.65%-VRDN (LOC: Sanwa Bk., Ltd.)............. 4,300,000 1,000 San Diego TANS Ser. A, 4.75%, 7/3/96...................... 1,002,632 4,000 Santa Paula Pub. Fin. Auth. RB (Wtr. Sys. Acquisition) Ser. 1996, 3.70%-VRDN (LOC: Bk. of California & Sumitomo Bk., Ltd.).............. 4,000,000 133,053,930 COLORADO -- 3.0% 5,000 Adams Cnty. IDRB (Yellow Fght. Sys., Inc.) Ser. 1983, 3.60%-VRDN (LOC: Union Bk. of Switzerland).... 5,000,000 5,000 Arapahoe Cnty. MHRB Ref. (Stratford Sta.) Ser. 1994, 4.30%-VRDN (LOC: Heller Finl., Inc.).......... 5,000,000 2,680 Arapahoe Cnty. Parkview Met. Dist. GO Ser. 1993, 3.60%-VRDN (LOC: Cent. Bk./ Bk. Western, N.A.)................. 2,680,000 550 Boulder Cnty. Dev. RB (The Geological Society of Amer., Inc.) Ser. 1992-ARB, 4.25%, 12/1/96 (LOC: Banc One Boulder)............ 550,000 City and Cnty. of Denver Arpt. Sys. RB.-TECP (LOC: Sanwa Bk., Ltd.) 11,000 3.60%, 3/1/96...................... 11,000,000 5,000 3.55%, 4/9/96...................... 5,000,000
15 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED COLORADO -- CONTINUED $ 6,340 Colorado Hsg. Fin. Auth. RB MERLOTS Ser. C-ARB, 4.125%, 2/1/97 (LIQ: Meridian Bk.)**.............. $ 6,340,000 35,570,000 DELAWARE -- 1.0% 3,000 Delaware EDA- IDRB (Arlon, Inc.) Ser. 1989, 3.75%-VRDN (LOC: Bk. of Amer., Illinois)...... 3,000,000 5,740 Delaware Hsg. Auth. RB MERLOTS Ser. G-ARB, 4.125%, 12/1/96 (FGIC)**........... 5,740,000 2,480 New Castle IDA-IDRB (Toys R Us), 3.40%-VRDN (LOC: Bankers Tr. Co.)............. 2,480,000 11,220,000 DISTRICT OF COLUMBIA -- 2.9% Dist. of Columbia GO Gen. Fd. Recovery Bd. Ser. B, 3.55%-VRDN 10,600 (LOC: Westdeutsche Landesbank)..... 10,600,000 7,800 (LOC: Union Bk. of Switzerland).... 7,800,000 5,120 Dist. of Columbia GO RB (Puttable Floating Opt. Tax-Exmp. Rcpt., Ser. PA-64) Ser. 1993C, 3.70%-VRDN (LIQ: Merrill Lynch Cap. Svs.)**... 5,120,000 Dist. of Columbia GO RFB, 3.50%-VRDN 3,800 Ser. 1992A-1 (LOC: Natl. Westminster Bk.)....... 3,800,000 3,400 Ser. 1992A-4 (LOC: Toronto Dominion Bk.)........ 3,400,000 3,100 Ser. 1992A-5 (LOC: Bk. of Nova Scotia).......... 3,100,000 33,820,000 PRINCIPAL AMOUNT (000) VALUE FLORIDA -- .7% $ 2,500 Florida Hsg. Fin. Auth. Long Option Mode Ser. 2-CR-25C ARB, 3.70%, 6/15/96 (FGIC)......... $ 2,500,000 500 Monroe Cnty. Sch. Dist. TANS, 4.00%, 6/5/96...................... 500,000 2,800 Orange Cnty. Hsg. Fin. Auth. MHRB Ser. E, (Oakwood)-ARB, 4.20%, 10/1/96 (LOC: Fleet Bk. N.A.).............. 2,800,000 1,070 Palm Beach Cnty. Hsg. RB (Meridian Hsg.) Ser. 1985, 4.075%-VRDN (LOC: Bk. of California, N.A.).................. 1,070,000 1,000 Putnam Cnty. Dev. Auth. PCRB (Seminole Elec. Coop) Ser. D-ARB, 3.30%, 6/15/96 (Coop Fin. Corp.).................. 1,000,000 7,870,000 GEORGIA -- 1.5% 1,000 Albany Dougherty Cnty. Hosp. RB Ser. 1984A, 3.65%-VRDN (Gtd. by Merck & Co., Inc.)........ 1,000,000 5,000 Albany Dougherty Payroll, 3.65%-VRDN (Gtd. by Merck & Co., Inc.)........ 5,000,000 2,550 Clayton Cnty. Hsg. Auth. RB (Oxford Townhomes), 3.50%-VRDN (LOC: Amsouth Bk., N.A.)........... 2,550,000 6,000 Dev. Auth. of Polk Cnty. RB (Kimoto Tech, Inc.) Ser. 1985, 3.65%-VRDN (LOC: Indl. Bk. of Japan, Ltd.).... 6,000,000 2,200 Hsg. Auth. of Columbus MHRB Ref. (Quail Ridge) Ser. 1988, 3.75%-VRDN (LOC: Columbus Bk. & Tr. Co.)...... 2,200,000 1,000 Hsg. Auth. of Marietta MHRB (Falls at Bells Ferry)-ARB, 3.55%, 7/15/96 (LOC: Guardian Svgs. & Ln., Houston)........................... 1,000,000 17,750,000
16 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED ILLINOIS -- 12.9% $ 9,740 Aurora MHRB (Fox Vly. Vlg.), 3.95%-VRDN (LOC: Sumitomo Bk., Ltd.).......... $ 9,740,000 15,660 Central Lake Cnty. Joint Action Wtr. Agy. (MSTR 1995 SG-11) Wtr. RRB Ser. 1993, 3.40%-VRDN (LIQ: Societe Generale)**.......... 15,660,000 1,000 Chicago Arpt. Spl. Fac. RB (CSX Beckett Aviation), 3.43%-VRDN (LOC: Barclay's Bk. PLC)........... 1,000,000 4,200 City of Chicago IDRB (Fed. Marine Term.), 3.60%-VRDN (LOC: Royal Bk. of Canada)......... 4,200,000 6,680 City of Chicago (MSTR 1995 SGA-8) GO Bds. Ser. 1993B, 3.40%-VRDN (LIQ: Societe Generale)**.......... 6,680,000 2,640 City of Jacksonville Indl. Proj. RB (AGI, Inc.) Ser. 1995, 3.60%-VRDN (LOC: Bk. of Amer., Illinois)...... 2,640,000 15,000 City of Oakbrook Terrace Multifamily Hsg. Mtg. RB (Renaissance) Ser. 1985A Subser. III-ARB, 4.75%, 4/1/96 (Invt. Agreement: Bayerische Landesbank, Girozentrale).......... 15,000,000 5,900 City of West Chicago IDRB (Acme Printing Inc.), 3.65%-VRDN (LOC: Bk. of Tokyo, Ltd.).......... 5,900,000 3,400 Illinois Dev. Fin. Auth. EDRB (MTI Corp.), 3.90%-VRDN (LOC: Indl. Bk. of Japan, Ltd.).... 3,400,000 Illinois Dev. Fin. Auth. IDRB-VRDN (LOC: Amer. Natl. Bk. & Tr. Co. of Chicago) 2,000 (Prairie Packaging), 3.55%......... 2,000,000 2,500 (Uhlich Children's Home), 3.35%.... 2,500,000 1,395 (Saint Xavier Univ.) Ser. 1992, 3.35%................... 1,395,000 1,000 (Camcraft, Inc.) Ser. 1993, 3.55%.. 1,000,000 3,250 (Icon Metalcraft, Inc.) Ser. 1995, 3.70%**................. 3,250,000 6,800 Illinois Dev. Fin. Auth. RB (Gen. Accident Ins. Co. of Amer.) Ser. 1985-ARB, 4.10%, 3/1/96 (Gtd. by Gen. Accident Ins. Co. of Amer.)...................... 6,800,000 PRINCIPAL AMOUNT (000) VALUE ILLINOIS -- CONTINUED $ 3,010 Illinois Health. Fac. Auth. RB (Elmhurst Mem. Hosp.) Ser. A, 3.65%-VRDN (LOC: Sanwa Bk., Ltd.)............. $ 3,010,000 1,000 Illinois Hlth. Fac. Auth. RB (Highland Park Hosp.)-ARB, 4.00%, 6/1/96 (SBPA: FGIC)......... 1,000,000 5,045 Illinois Hsg. Dev. Auth. RB (Illinois Ctr. Apts.), 3.65%-VRDN (LIQ: Fuji Bk., Ltd.).............. 5,045,000 14,184 LaSalle Natl. Bk. Leasetops Trs. Ser. 1995B 1995, 3.65%-VRDN (LIQ: LaSalle Natl. Bk.)**......... 14,183,741 3,000 Vlg. of Carol Stream IDRB (MI Enterprises, Inc.), 3.45%-VRDN (LOC: Amer. Natl. Bk. & Tr., Chicago)........................... 3,000,000 16,640 Vlg. of Hazel Crest Retirement Ctr. RB (Waterford Estates) Ser. A 1992, 3.95%-VRDN (LOC: Sumitomo Bk., Ltd.).......... 16,640,000 1,200 Vlg. of Palatine IDRB (Lightner Land Holdings LLC) Ser. 1995, 3.85%-VRDN (LOC: Bk. One, Chicago, N.A.)...... 1,200,000 10,000 Vlg. of Schaumburg MHRB (Treehouse II Apt.), 3.95%-VRDN (LOC: Sumitomo Bk., Ltd.).......... 10,000,000 2,000 Vlg. of Skokie EDRB (Skokie Fashion Square Assn.) Ser. 1984, 3.65%-VRDN (LOC: Bankers Tr. New York Co.).... 2,000,000 15,210 Vlg. of Vernon Hills MHRB (Hawthorn Lakes) Ser. 1991, 4.20%-VRDN (SBPA: Fuji Bk., Ltd.)............. 15,210,000 152,453,741 INDIANA -- 2.4% 16,000 City of Fort Wayne PCRB (Gen. Mtrs. Corp.), 3.75%-VRDN (Gty. Gen. Mtrs. Corp.)............ 16,000,000 2,750 City of Hammond EDRB of 1994 (Lear Seating Corp.), 3.95%-VRDN (LOC: Chemical Bk.)................ 2,750,000 1,000 Custer Cnty. PCRB (Amoco Oil Corp.)-ARB, 3.80%, 4/1/96...................... 1,000,000
17 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED INDIANA -- CONTINUED $ 3,150 Indianapolis EDA-EDRB (Sutton Pl. Apt.) Ser. A-ARB, 4.30%, 10/1/96 (Gtd. Inv. Contract: Berkshire Hathaway).......................... $ 3,150,000 3,500 Mishawaka EDA-EDRB (Elco Ind., Inc.), 4.00%-VRDN (LOC: First Chicago NBD Corp.)..... 3,500,000 2,000 South Bend IDB Multifamily RB (Maple Lane Assn.) Ser. 1987, 3.75%-VRDN (LOC: Society Bk. of Cleveland).... 2,000,000 28,400,000 KANSAS -- 1.3% 8,500 City of Lenexa MHRB Ref. (Charter House Apts.) Ser. 1988-ARB, 4.35%, 4/2/96 (LOC: Home Svgs. Assn. of Kansas City, Coll: Fed. Home Ln. Bk.)........................... 8,500,000 City of Salina RB (Salina Central Mall L.P.) Ser. 1984, 3.40%-VRDN (LOC: Boatmen's Bancshares, Inc.) 1,105 Dillard's.......................... 1,105,000 1,200 Penney's........................... 1,200,000 3,000 City of Wichita IDRB (Brenner Tank Inc.), 3.55%-VRDN (LOC: Banc One, Milwaukee)......... 3,000,000 1,800 Prairie Vlg. MHRB (J.C. Nichol's Co.), 3.70%-VRDN (Gtd. by Bankers Life Ins. Co.).... 1,800,000 15,605,000 KENTUCKY -- 1.6% 1,000 Clark Cnty. PCRB (East Kentucky Co.)-ARB, 3.70%, 4/15/96 (Gtd. by Coop Fin. Corp.).......... 1,000,000 10,300 Cnty. of Ohio PCRB (Big Rivers Elec. Corp.) Ser. 1985, 3.70%-VRDN (LOC: Chemical Bk.)................ 10,300,000 PRINCIPAL AMOUNT (000) VALUE KENTUCKY -- CONTINUED $ 904 Jefferson Cnty. IDRB (Belknap Inc.), 3.65%-VRDN (LOC: Chemical Bk.)................ $ 904,000 5,900 Kentucky Pollution Abatement Wtr. Res. Fin. Auth. RB (Toyota Motors), 5.60%-VRDN (LIQ: Sanwa Bk., Ltd.)............. 5,900,000 1,000 Pendleton Cnty. RB Self Ins. Fndg. Kentucky Assn. Cnty. Fund-ARB, 4.00%, 7/1/96 (LOC: PNC Bk.)..................... 1,000,000 19,104,000 LOUISIANA -- 1.6% 19,000 Parish of West Feliciana PCRB (Gulf St. Util. Co.) Ser. 1986, 4.20%-VRDN (LOC: Long-Term Cr. Bk. of Japan, Ltd.).............................. 19,000,000 MARYLAND -- .6% 1,000 Howard Cnty. MHRB (Sherwood Crossing L.P.) Ser. A 1985-ARB, 4.25%, 6/1/96 (LOC: Guardian Svgs. & Ln. Assn.)............................. 1,000,000 5,715 Maryland Cmnty. Dev. Admin. Dept. Single Family Prog. Bds.-ARB, 3.90%, 4/1/96 (LOC: First Natl. Bk. of Chicago)........................... 5,715,000 1,300 Mayor & City Council of Baltimore Economic Dev. RRB (Field Container Corp.), Ser. 1992, 3.35%-VRDN (LOC: Amer. Natl. Bk. & Tr. Co. of Chicago)................ 1,300,000 8,015,000 MASSACHUSETTS -- 1.5% 460 City of Lowell Indl. RB (Oak Realty Tr.) Ser. 1985, 4.075%-VRDN (LOC: First Natl. Bk. of Boston)... 460,000 15,000 Massachusetts Bay Transn. Auth. TRANS Ser A. 1995, 5.50%, 3/1/96...................... 15,000,000 500 Massachusetts Indl. Finl. Agy. (Copley Pharmac), 4.325%-VRDN (LOC: First Natl. Bk. of Boston)... 500,000
18 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED MASSACHUSETTS -- CONTINUED $ 855 Massachusetts Indl. Finl. Auth. IDRB (Jencoat Metal) Ser. 1994, 4.075%-VRDN (LOC: Bk. of Boston)............... $ 855,000 700 Massachusetts Indl. Finl. Auth. IDRB (Portland Causeway Rlty.) Ser. 1988, 4.075%-VRDN (LOC: Citibank, N.A.).............. 700,000 17,515,000 MICHIGAN -- 1.0% 2,909 Economic Dev. Corp. of the City of Battle Creek RB (Michigan Carton & Paperboard Co.) Ser. 1992, 3.35%-VRDN (LOC: Amer. Natl. Bk. & Tr. Co. of Chicago)........................... 2,909,000 2,000 Economic Dev. Corp. of the Twp. of Van Buren Economic RB (Daikin Clutch USA, Inc.) 3.65%-VRDN (LOC: Sanwa Bk., Ltd.)............. 2,000,000 6,800 Michigan Strategic Fund Ltd. Oblig. RB (Dow Chem. Co.), 3.70%-VRDN (Gtd. by Dow Chem. Co.)............ 6,800,000 500 Western Sch. Dist. Refunding GO, 3.70%, 5/1/96 (MBIA)........... 500,000 12,209,000 MINNESOTA -- 1.6% 2,500 Eagle Tax-Exmp. Tr. Cl. A- COP (Minnesota Hsg. Fin. Agy.) Ser. 94C2302, 3.42%-VRDN (LOC: Citibank, N.A.)**............ 2,500,000 14,905 Eden Prairie MHRB (Park at City West Apt.), 3.95%-VRDN (LOC: Sumitomo Bk., Ltd.).......... 14,905,000 890 Minneapolis St. Paul Hsg. Fin. Brd. RB Single Family Mtg. (Minneapolis/Saint Paul Family Hsg. Pgm., Phase VI) Ser. B 1988-ARB, 4.125%, 8/1/96 (Coll: GNMA)........ 890,000 18,295,000 PRINCIPAL AMOUNT (000) VALUE MISSISSIPPI -- .3% $ 3,000 Lee Cnty. IDRB (Hunter Douglas Inc.) Ser. 1985, 3.75%-VRDN (LOC: Bk. of Amer. Natl. Tr. & Svg. Assn.)............................. $ 3,000,000 MISSOURI -- 1.4% IDA of the City of Kansas MHRB Ser. A 1988-ARB, 4.35%, 4/1/96 (LOC: Home Svgs. Assn. of Kansas City) 3,890 (President Gardens Apt.)........... 3,890,000 3,000 (Twin Oaks I Apt.)................. 3,000,000 3,000 (Twin Oaks II Apt.)................ 3,000,000 2,175 Indl. Dev. Hosp. of Kansas City Hosp. RB (Health. Svc. Sys.) 3.55%-VRDN (LOC: Sumitomo Bk., Ltd.).......... 2,175,000 4,415 Missouri Dev. Fin. Brd. IDRB (Cook Composites & Polymers Co.) Ser. 1994 3.60%-VRDN (LOC: Societe Generale)............ 4,415,000 500 Missouri Environmental Impt. & Energy RB (Union Elec. Co.) Ser. 1984B-ARB, 4.00%, 6/1/96 (LOC: Union Bk. of Switzerland).... 500,000 16,980,000 MONTANA -- .3% 760 Butte Silver Bow City & Cnty. (Copper City Assn.), 5.00%-VRDN (LOC: Bank of America)............. 760,000 3,200 Chesterfield Cnty. IDA-PCRB (VA Elec. & Pwr. Co.)-ARB, 4.10%, 4/1/96...................... 3,200,000 3,960,000 NEBRASKA -- .4% 4,200 Lancaster Cnty. IDRB (AS Mid-Amer., Inc.) Ser. 1994, 4.30%-VRDN (LOC: Heller Finl., Inc.).......... 4,200,000 NEW HAMPSHIRE -- .4% 3,645 New Hampshire Higher Ed. & Health Fac. Auth. RB (MSTR 1995 SG-19) Dartmouth College Issue Ser. 1993, 3.40%-VRDN (LIQ: Societe Generale)**.......... 3,645,000
19 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED NEW HAMPSHIRE -- CONTINUED $ 1,500 New Hampshire Hsg. Fin. Auth. MHRB (Oxford), 3.60%-VRDN (Ins. by Contl. Cas. Co.).......... $ 1,500,000 5,145,000 NEW JERSEY -- .1% 1,000 New Jersey GO, 5.20%, 3/1/96...................... 1,000,000 NEW MEXICO -- 2.7% 31,300 City of Farmington PCRB (El Paso Elec. Co. Four Corners) 1994 Ser. A, 3.50%-VRDN (LOC: Citibank, N.A.).............. 31,300,000 NEW YORK -- 5.4% 8,000 Eagle Tax-Exmp. Tr. Cl. A-COP (New York State Environment Facs. Corp.) Ser. 943205, 3.42%-VRDN (LOC: Citibank, N.A.)**............ 8,000,000 9,500 Eagle Tax-Exmp. Tr. Cl. A-COP (Niagara Mohawk Pwr. Corp.) Ser. 943208, 3.42%-VRDN (LOC: Citibank, N.A.)**............ 9,500,000 1,000 Nassau Cnty. Indl. Dev. Agy. IDRB (Crane Plumbing, Inc.), 3.65%-VRDN (LOC: Amer. Natl. Bk. & Tr. of Chicago)........................... 1,000,000 10,000 New York City GO Periodic Floats, 3.50%-VRDN......................... 10,000,000 7,150 New York City GO Subser. E2, 3.50%-VRDN (LOC: Indl. Bk. of Japan, Ltd.).... 7,150,000 New York City GO Subser. H3-TECP, 3.50% (LIQ: Banque Paribas) 3,000 8/9/96............................. 3,000,000 11,900 8/19/96............................ 11,900,000 12,500 New York City GO Subser. E5, 3.50%-VRDN (LOC: Sumitomo Bk., Ltd.).......... 12,500,000 1,000 New York Energy Resh. and Dev. Auth. (Long Island Lighting Co.) Ser. B 1985-ARB, 4.70%, 3/1/96 (LOC: Deutsche Bk. AG)............. 1,000,000 64,050,000 PRINCIPAL AMOUNT (000) VALUE NORTH CAROLINA -- 1.0% $ 7,700 Columbus Cnty. Indl. Fac. & Pollution Ctl. Fin. Auth. Solid Waste Disposal RB (Fed. Paper Brd. Co., Inc.) Ser. 1992, 3.80%-VRDN (LOC: Dai-Ichi Kangyo Bk., Ltd.)... $ 7,700,000 3,000 Guilford Cnty. Indl. Fac. & Pollution Control Fing. Auth. RB Sewage Disp. (High Pt. Chem.), 3.90%-VRDN (LOC: Sumitomo Bk., Ltd.).......... 3,000,000 1,020 NCNB Pooled Tax-Exmp. Tr. COP Ser. 1990A, 4.125%-VRDN (LOC: NationsBank of North Carolina)**........................ 1,020,000 11,720,000 NORTH DAKOTA -- .9% 10,100 Grand Forks Hosp. Fac. RB (United Hosp. Oblig. Gp.), 3.45%-VRDN (LOC: LaSalle Natl. Bk.)........... 10,100,000 OHIO -- 1.4% 5,000 Dayton Ohio Spec. Fac. RB (Emery Air Fght. Corp.) Ser. 1993E, 3.60%-VRDN (LOC: Mellon Bk., N.A.)............ 5,000,000 3,000 Ohio Hsg. Fin. Agy. MHRB Ser. B, 4.20%-VRDN................. 3,000,000 (LIQ: Fuji Bk., Ltd.) 4,200 Summit Cnty. IDA-IDRB (Shin-Etsu Silicones of Amer. Inc.) Ser. 1994, 3.70%-VRDN (LOC: Bk. of Tokyo, Ltd. & Mitsubishi Bk., Ltd.)............ 4,200,000 4,800 Stark Cnty. IDRB (Crane Plumbing, Inc.), 3.65%-VRDN (LOC: Amer. Natl. Bk. & Tr. Co. of Chicago)........................... 4,800,000 17,000,000 OKLAHOMA -- .4% 1,190 Tulsa IDA-IDRB Ref. (Hillcrest Partnership) 3.50%-VRDN (LOC: Bk. of Tokyo, Ltd.).......... 1,190,000 3,000 Tulsa IDA Health Care Fac. RB (Medical Support Svcs.) 3.50%-VRDN (Gtd. by Medical Support Svcs.).... 3,000,000 4,190,000
20 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED OREGON -- 1.0% Oregon EDRB Series CLVI, 3.85%-VRDN (LOC: Bk. of California, N.A.) $ 1,960 (Pacific Coast Seafoods Co.)....... $ 1,960,000 1,210 (Pacific Oyster Co.)............... 1,210,000 2,300 Oregon EDRB (Stagg Foods, Inc.) Ser. 75, 3.60%-VRDN (LOC: Bk. of Amer.)................ 2,300,000 5,050 Oregon Health Hsg. Ed. & Culture Fac. Auth. RB (Evangelical Lutheran) Ser A, 3.40%-VRDN (LOC: First Natl. Bk. Sys.)........ 5,050,000 1,000 Port Portland IDA-IDRB (Schnitzer Steel), 3.30%-VRDN (LOC: Westpak Bkg. Corp.).......... 1,000,000 11,520,000 PENNSYLVANIA -- 3.5% 1,430 Chester Cnty. IDA Coml. Dev. RB (Plaza Assn.) Ser. A, 3.70%-VRDN (LOC: First Fed. Svgs. & Ln.)...... 1,430,000 3,000 Chester Cnty. IDA Mfg. Fac. RB (Devault Packing Co., Inc.) Ser. 1995, 3.85%-VRDN (LOC: Meridian Bk.)................ 3,000,000 4,300 Delaware Cnty. IDA-IDRB (Scott Paper Co.) Ser. 1984C, 3.85%-VRDN (LOC: Fuji Bk., Ltd.).............. 4,300,000 500 Elk Cnty. IDA-IDRB Ref. (Stackpole Corp.) Ser. 1989, 4.075%-VRDN (LOC: First Natl. Bk. of Boston)... 500,000 Emmaus Gen. Auth. Local Govt. RB Series 1989E, 3.90%-VRDN (LOC: Fuji Bk., Ltd.) 7,000 (City of Harrisburg) Subser. E7.... 7,000,000 10,000 (Dover Area Sch. Dist.) Subser. B11................................ 10,000,000 650 Lawrence Cnty. IDA-PCRB (Calgon Carbon) 1983 Ser. A, 3.65%-VRDN (LOC: The Bk. of New York)......... 650,000 4,000 Mercer Cnty. IDA-IDRB (Penntecq, Inc.), 3.85%-VRDN (LOC: Dai-Ichi Kangyo Bk., Ltd.)... 4,000,000 PRINCIPAL AMOUNT (000) VALUE PENNSYLVANIA -- CONTINUED $ 1,500 Montgomery Cnty. IDA-RB (Laneko Engineering Co.) Ser. 1995, 3.85%-VRDN (LOC: Meridian Bk.)................ $ 1,500,000 3,000 Moon IDRB (One Thorn Run Ctr.) Ser. A 1995, 3.65%-VRDN (LOC: Integra Bk.)................. 3,000,000 1,300 Pennsylvania Economic Dev. Fin. Auth. RB (C.F. Martin & Co., Inc.) Ser. H, 3.85%-VRDN (LOC: Meridian Bk.)**.............. 1,300,000 2,050 West Cornwall Twp. Mun. Auth. RB (Lebanon Vly. Brethren Home) Ser. 1995, 3.625%-VRDN (LOC: Meridian Bk.)................ 2,050,000 2,995 Westmoreland Cnty. IDA-IDRB (White Consolidated Ind., Inc.) ARB, 4.18%, 6/1/96 (LOC: Chemical Bk.)................ 2,996,325 41,726,325 RHODE ISLAND -- .4% 5,000 Rhode Island Solid Waste Mgmt. Corp. Landfill Lease Notes Ser. A 1995, 4.75%, 8/1/96......... 5,007,002 SOUTH CAROLINA -- 2.2% 3,500 Darlington Cnty. IDA-IDRB (Hobart Corp.), 4.20%-VRDN (LOC: Fuji Bk., Ltd.).............. 3,500,000 4,000 South Carolina Jobs EDA-EDRB (B.F. Shaw, Inc.) Ser. 1995, 3.80%-VRDN (LOC: Mercantile Bk. of St. Louis N.A.)............. 4,000,000 South Carolina Jobs EDA-EDRB Ser. 1989B, 3.55%-VRDN (LOC: Cr. Coml. de France) 650 (Ridge Pallets).................... 650,000 800 (Tuttle Co., Inc.)................. 800,000 2,700 South Carolina Jobs EDA-EDRB (Roller Bearing Co.) Ser. 1994A, 4.17%-VRDN (LOC: Cr. Coml. de France)**....... 2,700,000 8,355 South Carolina Pub. Svs. Auth. RRB (MSTR 1994 SG-2) Ser. 1993A, 3.40%-VRDN (LIQ: Societe Generale)**.......... 8,355,000
21 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED SOUTH CAROLINA -- CONTINUED $ 5,049 State Cap. Impt. Bd. (Ser. BTP-27 Ctf. ) Ser. V, 3.45%-VRDN (LOC: Bankers Tr. Co.)............. $ 5,049,000 1,000 York Cnty. PCRB (North Carolina Elec.) NRU 84N Subser. 5-ARB, 3.75%, 3/15/96..................... 1,000,000 26,054,000 SOUTH DAKOTA -- .3% 3,500 South Dakota Hsg. Dev. Auth. RB (Homeownership Mtg. Bd.) Ser. E 1995, 4.05%, 10/24/96....... 3,500,000 TENNESSEE -- 3.8% 1,000 Blount Cnty. IDB-IDRB (Advanced Crystal, Inc.) Ser. 1988, 3.90%-VRDN (LOC: Indl. Bk. of Japan, Ltd.).... 1,000,000 5,000 City of Morristown IDB-IDRB (Camvac Intl., Inc.) Ser. 1983, 3.525%-VRDN (LOC: ABN Amro Bk.)................ 5,000,000 3,700 IDB of Rutherford Cnty. IDRB Ref. (Outboard Marine Corp.) Ser. 1987, 3.70%-VRDN (LOC: First Chicago NBD Corp.)..... 3,700,000 3,200 IDB of the City of Chattanooga RRB (Radisson Read House) Ser. 1995, 4.00%-VRDN (LOC: Heller Finl., Inc.)**........ 3,200,000 3,610 IDB of the Met. Govt. of Nashville & Davidson Cnty. IDRB Ref. (Perimeter Two) 3.65%-VRDN (LOC: Lincoln Natl. Corp.)......... 3,610,000 3,300 IDB of the Met. Govt. of Nashville & Davidson Cnty. MHRB (Hickory Terrace Apts.) Ser. 1995, 3.45%-VRDN (LOC: Natl. City Bk.).............. 3,300,000 IDB of the Met. Govt. of Nashville & Davidson Cnty. RB, 3.95%-VRDN (LOC: Sumitomo Bk.) 4,680 (Belle Vly.)....................... 4,680,000 6,710 (Graybrook Apts.).................. 6,710,000 8,995 (Beechwood)........................ 8,995,000 PRINCIPAL AMOUNT (000) VALUE TENNESSEE -- CONTINUED $ 4,285 Smyrna Hsg. Assn. MFHR (Imperial Gardens Apts.) 3.95%-VRDN (LOC: Sumitomo Bk., Ltd.).......... $ 4,285,000 44,480,000 TEXAS -- 6.5% 1,250 Austin Texas Util. Sys. RFB 7.75%, 5/15/96 (LIQ: FGIC)......... 1,271,863 1,000 Bexar Cnty. Hsg. Fin. Corp. Gtd. Mtg. Multifamily RFB Ser. A 1988 (Creightons Mill Dev.), 3.55%-VRDN (Cr. Support: N.E. Mut. Life Ins. Co.)................ 1,000,000 5,800 City of Austin Higher Ed. Auth. RB (Saint Edward's Univ.) Ser. 1995, 3.45%-VRDN (LOC: NationsBank of Texas)........ 5,800,000 4,250 City of Dallas Indl. Dev. Corp. IDRB (Crane Plumbing Inc.), 3.65%-VRDN (LOC: Amer. Natl. Bk. & Tr. Co. of Chicago).............. 4,250,000 6,000 Eagle Tax-Exmp. Tr. Cl. A COP (Harris Cnty.) Ser. 1994E, 3.42%-VRDN (LOC: Citibank, N.A.)**............ 6,000,000 1,200 El Paso, Wtr. and Swr. RB 10.00%, 3/1/96 (Coll: US Govt. Sec.)**............ 1,200,000 6,225 Galveston Hsg. Fin. Corp. MHRB Ref. (Vlg. by the Sea Apt.) Ser. 1993, 3.70%-VRDN (LOC: Sumitomo Bk., Ltd.).......... 6,225,000 1,000 Harris Cnty. Health Fac. Hosp. (Methodist Hosp.) 3.45%-VRDN (LIQ: Morgan Guaranty, New York)... 1,000,000 1,000 Harris Cnty. Hsg. Fin. Corp, MHRB (Arbor II Ltd.)-ARB, 3.95%, 10/1/96 (LOC: Guardian Svgs. & Ln., Houston)........................... 1,000,000 5,000 Harris Cnty. Toll Road Unlimited Tax and Sub Lien RB Ser. 1994A, 3.42%-VRDN (LIQ: Citibank, N.A.).............. 5,000,000
22 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED TEXAS -- CONTINUED $ 1,000 Hockley Cnty. IDA-PCRB (Amoco Corp./Std. Oil Corp.) ARB 3.65%, 3/1/96.................. $ 1,000,000 1,000 Hockley Cnty. IDA-PCRB (Amoco Corp.)-ARB 3.75%, 5/1/96...................... 1,000,000 2,000 Houston, Wtr. and Swr. Sys. TECP, 3.30%, 4/11/96 (LOC: Westdeutsche Landesbank)..... 2,000,000 Lone Star TX Apt. Impt. Auth. RB 3.50%-VRDN (LOC: Royal Bk of Canada) 1,800 Ser. A............................. 1,800,000 2,800 Ser. B............................. 2,800,000 3,950 NCNB Pooled Tax Empt.-Tr. COP Sers. 1990B, 4.125%-VRDN (LOC: NationsBank of Texas)**...... 3,950,000 3,000 North Cent. Health Fac. Dev. Corp. RB (Methodist Hosp. of Dallas) Ser. A 1991-TECP, 3.75%, 3/14/96 (SPA: Fuji Bk., Ltd.).............. 3,000,000 4,000 Port of Corpus Christi Auth. Nueces Cnty. RRB ser. 1989 (Union Pacific Corp.)-TECP, 3.75%, 4/1/96 (Gtd. by Union Pacific Corp.)...... 4,000,000 1,345 Robertson Cnty. IDRB (Crane Plumbing Inc.) Ser. 1990, 3.65%-VRDN (LOC: Amer Natl. Bk. & Tr. Co. of Chicago).... 1,345,000 1,000 San Antonio Wtr. RRB, 5.20%, 5/15/96 (FGIC).............. 1,003,431 4,380 Tarrant Cnty. Hsg. Fin. Corp. MHRB Ref. (Lincoln Meadows) Ser. 1988-ARB, 4.30%, 12/1/96 (Surety Bond: Contl. Cas. Corp.)... 4,380,000 17,000 Texas Ser. A TRANS, 4.75%, 8/30/96..................... 17,057,573 1,000 Tyler Health Fac. Dev. Corp. RB (East Texas Med. Ctr. Regl. Hlth.) TECP, 3.50%, 4/12/96 (LOC: Banque Paribas).............. 1,000,000 77,082,867 PRINCIPAL AMOUNT (000) VALUE UTAH -- 4.5% $ 3,900 City of Provo Multifamily Rent. Hsg. RRB (Branbury Park) Ser. A 1987, 3.60%-VRDN (LOC: Dai-Ichi Kangyo Bk., Ltd.)... $ 3,900,000 2,200 Intermountain Pwr. Agy. Pwr. Sup. RB Ser. A, Prerefunded @102, 7.75%, 7/1/96...................... 2,270,141 2,900 Summit Cnty. IDRB (Hornes' Kimball Junction L.P.) Ser. 1985, 3.65%-VRDN (LOC: West One Tr.)................ 2,900,000 Tooele Cnty. Hazardous Waste Treatment RB Ser. A-TECP (Union Pacific Corp.) (Gtd. by Union Pacific Corp.) 3,990 3.60%, 3/1/96...................... 3,990,000 22,200 3.60%, 4/8/96...................... 22,200,000 12,300 3.60%, 4/29/96..................... 12,300,000 5,000 Utah Cnty. IDRB (McWane Inc.), 3.60%-VRDN (LOC: Amsouth Bk., N.A.)........... 5,000,000 52,560,141 VIRGINIA -- .6% 6,200 Amelia Cty. RB (Chambers Waste Sys. of Virginia, Inc.) Ser. 1991, 3.60%-VRDN (LOC: NationsBank)................. 6,200,000 1,000 Rockingham Cnty. Indl. Dev. PCRB (Merck & Co., Inc. ) Ser. A 1982, 3.40%-VRDN............ 1,000,000 7,200,000 WASHINGTON -- 4.6% 8,450 Pilchuck Dev. Pub. Corp. IDRB (Crystal Creek Lot #11) Ser. III, 3.65%-VRDN (LOC: Mitsubishi Bk., Ltd.)........ 8,450,000 3,000 Port Pasco EDRB (Douglas Fruit Co.), 3.70%-VRDN (LOC: US Bk. of Washington)........ 3,000,000 5,725 Washington Cmnty. Econ. Brd. Revitalization Bond, 3.80%-VRDN (LOC: Indl. Bk. of Japan, Ltd.).... 5,725,000 15,020 Washington GO Ser. A 1995, 3.42%-VRDN (LIQ: Citibank, N.A.).............. 15,020,000
23 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF INVESTMENTS -- (CONTINUED) FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
PRINCIPAL AMOUNT (000) VALUE SHORT-TERM MUNICIPAL SECURITIES -- CONTINUED WASHINGTON -- CONTINUED $ 5,335 Washington Hsg. Fin. MHRB (Canyon Lakes II) Ser. 1994 3.60%-VRDN (LOC: U.S. Bk. of Washington)...... $ 5,335,000 6,410 Washington Pub. Pwr. Sup. Sys. Nuclear Proj. No. 2 RB (CR-145) Ser. 1990, 3.42%-VRDN (LOC: Citibank, N.A.).............. 6,410,000 8,240 Washington Pub. Pwr. Sup. Sys. (MSTR 1995 SG-13) Nuclear Proj. No. 3 RRB Ser.1993B, 3.40%-VRDN (LIQ: Societe Generale)**.......... 8,240,000 1,500 Washington GO Ser. 1995C, 5.50%, 7/1/96...................... 1,507,920 53,687,920 WEST VIRGINIA -- .1% 1,000 Marshall Cnty. PCRB (Allied Signal Co.), 3.40%-VRDN (Gtd. by Allied Signal, Co.)....... 1,000,000 WISCONSIN -- .3% 3,000 City of Whitewater IDRB (Maclean-Fogg Co.) Ser. 1989, 3.70%-VRDN (LOC: Bk. of Amer. Illinois)....... 3,000,000 1,000 Wisconsin GO Ser.1986B, 7.75%, 8/1/96 Prefunded @101.5..... 1,032,003 4,032,003 WYOMING -- .3% 2,600 Converse Cnty. PCRB Ref. (Pacific Corp.), 3.55%-VRDN (SBPA: The Bank of New York)....... 2,600,000 OTHER -- 2.4% 28,100 Puttable Floating Opt. Tax-Empt. PPT4, 3.45%-VRDN (LIQ: Cr. Suisse)**................ 28,100,000 TOTAL INVESTMENTS (COST $1,174,215,929).............. 99.6% 1,174,215,929 OTHER ASSETS AND LIABILITIES -- NET................. .4 4,966,737 NET ASSETS......................... 100.0% $1,179,182,666
Summary of Abbreviations: ARB -- Adjustable Rate Bonds COP -- Certificates of Participation EDA -- Economic Development Authority EDRB -- Economic Development Revenue Bond FGIC -- Insured by Financial Guaranty Insurance Co. GO -- General Obligations IDA -- Industrial Development Authority IDB -- Industrial Development Board IDRB -- Industrial Development Revenue Bond LIQ -- Liquidity Provider LOC -- Letter of Credit MBIA -- Insured by Municipal Bond Investors Assurance Corp. MERLOTS -- Municipal Exempt Receipts Liquidity Option Tenders MHRB -- Multifamily Housing Revenue Bond MSTR -- Municipal Securities Trust Receipt PCRB -- Pollution Control Revenue Bond RB -- Revenue Bonds RFB -- Refunding Bonds RRB -- Refunding Revenue Bonds SBPA -- Standby Bond Purchase Agreement TANS -- Tax Anticipation Notes TECP -- Tax Exempt Commercial Paper TRANS -- Tax Revenue Anticipation Notes VRDN -- Variable Rate Demand Notes Adjustable Rate Bonds are putable back to the issuer or other parties not affiliated with the issuer at par quarterly, semi-annually or annually depending upon the terms of the security. Interest rates are determined and set by the issuer on such put dates. Interest rates presented for these securities are those in effect at February 29, 1996. These securities represent 8% of total investments at February 29, 1996. Variable Rate Demand Notes are payable on demand on no more than seven calendar days notice given by the Fund to the issuer or other parties not affiliated with the issuer. Interest rates are determined and reset by the issuer daily, weekly or monthly depending upon the terms of the security. Interest rates presented for these securities are those in effect at February 29, 1996. These securities represent 79% of total investments at February 29, 1996. Adjustable rate bonds and variable rate demand notes held in the portfolio may be considered derivative securities. Management has determined that these securities comply with the standards imposed by the Securities and Exchange Commission under Rule 2a-7 which were designed to minimize both credit and market risk. ** Rule 144A security which is restricted in resale to qualified institutions and are considered liquid. See accompanying notes to financial statements. 24 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES February 29, 1996 (UNAUDITED) (Photo of an eagle)
ASSETS: Investments at value (identified cost $1,174,215,929)....................................................... $1,174,215,929 Cash........................................................................................................ 530,730 Dividends and interest receivable........................................................................... 7,861,164 Receivable for Fund shares sold............................................................................. 293,036 Other assets................................................................................................ 93,693 Total assets.......................................................................................... 1,182,994,552 LIABILITIES: Dividends payable........................................................................................... 1,643,342 Payable for Fund shares repurchased......................................................................... 1,378,937 Accrued expenses............................................................................................ 441,673 Accrued advisory fee........................................................................................ 347,934 Total liabilities..................................................................................... 3,811,886 NET ASSETS..................................................................................................... $1,179,182,666 NET ASSETS CONSISTS OF: Paid-in capital............................................................................................. $1,179,439,195 Accumulated net realized loss on investment transactions.................................................... (256,529) Net assets............................................................................................ $1,179,182,666 CALCULATION OF NET ASSET VALUE PER SHARE: Class A Shares ($669,382,207 (division sign) 669,501,114 shares of beneficial interest outstanding)......... $ 1.00 Class Y Shares ($509,800,459 (division sign) 509,900,991 shares of beneficial interest outstanding)......... $ 1.00
See accompanying notes to financial statements. 25 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED) (Photo of an eagle)
INVESTMENT INCOME: Interest....................................................................................... $20,471,323 EXPENSES: Advisory fee................................................................................... $2,504,390 Distribution fee -- Class A Shares............................................................. 865,546 Registration and filing fees................................................................... 232,977 Transfer agent fee............................................................................. 89,750 Custodian fee.................................................................................. 82,902 Reports and notices to shareholders............................................................ 19,868 Insurance...................................................................................... 11,552 Professional fees.............................................................................. 11,517 Trustees' fees and expenses.................................................................... 9,199 Miscellaneous.................................................................................. 11,554 3,839,255 Less advisory fee waiver....................................................................... (580,141) Net expenses................................................................................ 3,259,114 Net investment income............................................................................. 17,212,209 Net realized loss on investments.................................................................. (6,583) NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.............................................. $17,205,626
See accompanying notes to financial statements. 26 EVERGREEN TAX EXEMPT MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS (Photo of an eagle)
SIX MONTHS ENDED FEBRUARY 29, YEAR ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income................................................................... $ 17,212,209 $ 16,223,403 Net realized loss on investments........................................................ (6,583) (374,299) Net increase in net assets resulting from operations................................. 17,205,626 15,849,104 DISTRIBUTIONS TO SHAREHOLDERS FROM NET INVESTMENT INCOME: Class A Shares.......................................................................... (9,532,236) (2,645,739) Class Y Shares.......................................................................... (7,679,973) (13,577,664) Total distributions to shareholders.................................................. (17,212,209) (16,223,403) FUND SHARE TRANSACTIONS: Proceeds from shares sold............................................................... 975,036,045 523,419,419 Proceeds from shares issued from acquisition of FFB Tax-Free Money Market Fund.......... 103,129,021 -- Proceeds from shares issued from acquisition of First Union Tax-Free Money Market Portfolio............................................................................. -- 604,010,226 Proceeds from reinvestment of distributions............................................. 7,529,549 13,277,476 Payments for shares redeemed............................................................ (882,919,196) (566,638,173) Net increase resulting from Fund share transactions.................................. 202,775,419 574,068,948 CAPITAL CONTRIBUTION (NOTE 4).............................................................. -- 300,000 Net increase in net assets........................................................... 202,768,836 573,994,649 NET ASSETS: Beginning of period..................................................................... 976,413,830 402,419,181 End of period........................................................................... $1,179,182,666 $976,413,830
See accompanying notes to financial statements. 27 EVERGREEN TAX EXEMPT MONEY MARKET FUND FINANCIAL HIGHLIGHTS (Photo of an eagle)
CLASS A SHARES CLASS Y SHARES SIX MONTHS JANUARY 5, SIX MONTHS ENDED 1995* ENDED FEBRUARY 29, THROUGH FEBRUARY 29, 1996 AUGUST 31, 1996 YEAR ENDED AUGUST 31, (UNAUDITED) 1995 (UNAUDITED) 1995 1994 1993 1992 PER SHARE DATA: Net asset value, beginning of period....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income...................... .02 .02 .02 .04 .02 .03 .04 Less distributions to shareholders from net investment income........................ (.02) (.02) (.02) (.04) (.02) (.03) (.04) Net asset value, end of period............. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 TOTAL RETURN+.............................. 1.7% 2.2% 1.8% 3.6% 2.5% 2.6% 3.7% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................. $669,382 $554,924 $509,800 $421,490 $402,419 $401,376 $416,924 Ratios to average net assets: Expenses**............................... .78%++ .78%++ .48%++ .50% .34% .34% .32% Net investment income**.................. 3.31%++ 3.28%++ 3.61%++ 3.53% 2.47% 2.58% 3.72%
1991 PER SHARE DATA: Net asset value, beginning of period....... $1.00 Income from investment operations: Net investment income...................... .05 Less distributions to shareholders from net investment income........................ (.05) Net asset value, end of period............. $1.00 TOTAL RETURN+.............................. 5.5% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (000's omitted)................................. $510,160 Ratios to average net assets: Expenses**............................... .28% Net investment income**.................. 5.23%
* Commencement of class operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. ++ Annualized. ** Net of expense waivers and reimbursement. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS A SHARES CLASS Y SHARES SIX MONTHS JANUARY 5, SIX MONTHS ENDED 1995* ENDED FEBRUARY 29, THROUGH FEBRUARY 29, 1996 AUGUST 31, 1996 YEAR ENDED AUGUST 31, (UNAUDITED) 1995 (UNAUDITED) 1995 1994 1993 1992 1991 Expenses........................ .90%++ .90%++ .60%++ .63% .64% .63% .63% .66% Net investment income........... 3.19%++ 3.16%++ 3.49%++ 3.40% 2.17% 2.29% 3.41% 4.85%
See accompanying notes to financial statements. 28 EVERGREEN TREASURY MONEY MARKET FUND (Photo of coins) A REPORT FROM YOUR PORTFOLIO MANAGER KELLIE ALLEN Expectations for economic growth and interest rates underwent (Photo of a significant shift during the past six months. This created Kellie Allen) considerable turbulence in the fixed income markets during the first quarter of 1996, and also drove rates on short-term investments higher. During the fourth quarter of 1995, interest rates continued to decline as investors and the Federal Reserve saw weakness in the economy and indications that inflation continued to be subdued. In December, the Federal Reserve reduced the Fed Funds rate from 5.75% to 5.5% in an effort to bolster the apparently weak economy. At year-end, the yield on two-year treasury notes stood at 5.15%, 35 basis points below the Fed Funds rate. This reflected investor expectations that the Fed would ease further based continued signs of low inflation, economic weakness, and expectations for a balanced budget. After falling briefly in January, interest rates reversed course and rose sharply during the quarter. Investors were surprised to see signs of an economy on the mend after several months of anemic growth. Federal Reserve Chairman, Alan Greenspan, confirmed bond investors' concerns in his semi-annual economic outlook in February, indicating the country was "on track for sustained growth". The recent rise in yields, in all probability, discounted the improvement in the economy. The Fed will likely be on hold over the short-term to demonstrate their resolve to fight potential inflationary pressures. Our analysis indicates that the strengthening in the economy will prove to be temporary, resulting in an environment where interest rates stay relatively unchanged until the secular theme of slow-growth and low inflation becomes more apparent in the early summer. Within the Fund, we are maintaining a maturity at the longer end of our normal range in an attempt to lock in higher, more attractive rates. Thus far, we have accomplished this by investing in U.S. Treasury notes, bonds and bills. In addition, the Fund invests in overnight repurchase agreements which are fully collateralized by treasury obligations. This combination helps to give the Fund a competitive yield advantage, and locks in longer maturities on a portion of the Fund should rates continue to decline. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. YIELDS FLUCTUATE. 29 EVERGREEN TREASURY MONEY MARKET FUND STATEMENT OF INVESTMENTS FEBRUARY 29, 1996 (UNAUDITED) (Photo of coins)
PRINCIPAL AMOUNT (000) VALUE U.S. TREASURY BILLS -- 6.7% $ 20,170 4.96% to 5.20%, 4/11/96............ $ 20,050,355 42,543 4.92% to 5.08%, 4/18/96............ 42,255,348 30,817 5.16% to 5.24%, 4/25/96............ 30,569,432 31,233 4.97% to 5.26%, 5/2/96............. 30,955,639 56,325 5.02% to 5.03%, 5/9/96............. 55,781,210 21,600 4.92% to 5.21%, 5/16/96............ 21,374,246 1,500 5.03%, 5/23/96..................... 1,482,604 1,129 4.94%, 6/13/96..................... 1,116,195 TOTAL U.S.TREASURY BILLS (COST $203,585,029)................ 203,585,029 U.S. TREASURY NOTES -- 32.0% 25,000 7.75%, 3/31/96..................... 25,042,159 170,000 9.375%, 4/15/96.................... 170,793,703 70,000 5.50%, 4/30/96..................... 70,000,579 25,000 7.375%, 5/15/96.................... 170,574,438 120,000 5.875%, 5/31/96.................... 120,059,389 85,000 7.875%, 7/15/96.................... 25,252,195 20,000 6.50%, 9/30/96..................... 20,075,968 30,000 8.00%, 10/15/96.................... 30,406,620 150,000 6.875%, 10/31/96................... 151,691,410 125,000 7.50%, 1/31/97..................... 127,764,571 65,000 6.875%, 2/28/97.................... 66,100,500 TOTAL U.S. TREASURY NOTES (COST $977,761,532)................ 977,761,532 *REPURCHASE AGREEMENTS -- 60.5% 90,000 Barclays Bank PLC, 5.35%, dated 2/29/96, due 3/1/96 (1)............ 90,000,000 200,000 Daiwa Securities Co., Ltd., 5.44%, dated 2/29/96, due 3/1/96 (2)...... 200,000,000 100,000 Dean Witter Reynolds, Inc., 5.40%, dated 2/26/96, due 3/4/96 (3)...... 100,000,000 120,000 Donaldson, Lufkin & Jenrette Securities Corp., 5.375%, dated 2/29/96, due 3/1/96 (4)............ 120,000,000 141,834 Dresdner Bank AG, 5.375%, dated 2/29/96, due 3/1/96 (5)............ 141,834,000 PRINCIPAL AMOUNT (000) VALUE $ 50,000 Dresdner Bank AG, 5.375%, dated 2/27/96, due 3/4/96 (6)............ $ 50,000,000 100,000 Goldman, Sachs Group L.P., 5.70%, dated 2/29/96, due 3/1/96 (7)...... 100,000,000 100,000 HSBC Securities, Inc., 5.35%, dated 2/29/96, due 3/1/96 (8)............ 100,000,000 150,000 Merrill Lynch, Pierce, Fenner & Smith, 5.375%, dated 3/1/96, due 3/1/96 (9)......................... 150,000,000 200,000 Morgan Guaranty Trust Co. of New York, 5.43%, dated 2/29/96, due 3/1/96 (10)........................ 200,000,000 200,000 Morgan Stanley Co., 5.42%, dated 2/29/96, due 3/1/96(11)............ 200,000,000 100,000 NationsBank, 5.43%, dated 2/29/96, due 3/1/96 (12).................... 100,000,000 200,000 Nikko Securities Co. International, Inc., 5.43%, dated 2/26/96, due 3/4/96 (13)........................ 200,000,000 100,000 State Street Bank & Trust Co., 5.35%, dated 2/29/96, due 3/1/96 (14)............................... 100,000,000 TOTAL REPURCHASE AGREEMENTS (COST $1,851,834,000).............. 1,851,834,000
SHARES (000) MUTUAL FUND SHARES -- .5% 16,634 Fidelity U.S. Treasury, Inc. Portfolio (COST $16,633,541)................. 16,633,541 TOTAL INVESTMENTS (COST $3,049,814,102)....... 99.7% 3,049,814,102 OTHER ASSETS AND LIABILITIES -- NET.......... .3 8,230,108 NET ASSETS.................. 100.0% $3,058,044,210
See accompanying notes to financial statements. * Collateralized by: (1) $47,790,000 U.S. Treasury Bonds, 8.75% to 11.25%, 2/15/15 to 8/15/17; value including accrued interest -- $66,642,558 and $24,855,000 U.S. Treasury Notes, 7.25%, 11/30/96; value including accrued interest -- $26,142,315. (2) $205,405,000 U.S. Treasury Bills, 4/18/96; value -- $204,000,030. (3) $292,063,500 U.S. Treasury Strips, 5/15/96 to 2/15/23; value -- $102,000,164. (4) $67,502,000 U.S. Treasury Notes, 8.00% to 8.50%, 10/15/96 to 7/15/97; value including accrued interest -- $72,408,352 and $47,896,000 U.S. Treasury Bonds, 7.25%, 8/15/22; value including accrued interest -- $48,887,334. (5) $141,239,000 U.S. Treasury Notes, 4.25% to 9.375%, 4/15/96 to 2/15/06; value including accrued interest -- $144,016,502. (6) $48,545,000 U.S. Treasury Notes, 6.75%, 6/30/99; value including accrued interest -- $51,588,395. (7) $94,822,000 U.S. Treasury Notes, 5.875% to 7.50%, 4/30/97 to 11/15/01; value including accrued interest -- $102,000,433. (8) $100,935,000 U.S. Treasury Notes, 5.125% to 8.875%, 7/31/97 to 2/15/99; value including accrued interest -- $103,213,673. (9) $127,951,000 U.S. Treasury Bonds, 7.875% to 8.75%, 8/15/20 to 2/15/21; value including accrued interest -- $153,000,631. (10) $208,943,000 U.S. Treasury Bills, 5/2/96 to 12/12/96, value -- $204,002,816. (11) $80,805,000 U.S. Treasury Bonds, 7.875%, 2/15/21; value including accrued interest -- $205,557,559. (12) $102,800,000 U.S. Treasury Bills, 4/18/96; value including accrued interest -- $102,095,820. (13) $194,100,000 U.S. Treasury Notes, 4.75% to 8.50%, 5/1/97 to 5/1/00; value including accrued interest -- $200,497,162. (14) $80,805,000 U.S. Treasury Notes, 8.75%, 5/15/97; value including accrued interest -- $104,082,994. 30 EVERGREEN TREASURY MONEY MARKET FUND STATEMENT OF ASSETS AND LIABILITIES FEBRUARY 29, 1996 (UNAUDITED) (Photo of coins)
ASSETS: Investments in repurchase agreements........................................................................ $1,851,834,000 Investments in securities................................................................................... 1,197,980,102 Investments at value (identified cost $3,049,814,102).................................................... 3,049,814,102 Cash........................................................................................................ 5,450,383 Interest receivable......................................................................................... 14,518,094 Prepaid expenses............................................................................................ 47,228 Total assets.......................................................................................... 3,069,829,807 LIABILITIES: Dividends payable........................................................................................... 9,210,202 Accrued expenses............................................................................................ 1,961,765 Accrued advisory fee........................................................................................ 580,743 Payable for Fund shares repurchased......................................................................... 32,887 Total liabilities..................................................................................... 11,785,597 NET ASSETS..................................................................................................... $3,058,044,210 NET ASSETS CONSIST OF: Paid-in capital............................................................................................. $3,057,991,406 Accumulated net realized gain on investment transactions.................................................... 52,804 Net assets............................................................................................ $3,058,044,210 CALCULATION OF NET ASSET VALUE PER SHARE: Class A Shares ($2,681,601,405 (division sign) 2,681,567,200 shares of beneficial interest outstanding)............................................................................................. $ 1.00 Class Y Shares ($376,442,805 (division sign) 376,440,757 shares of beneficial interest outstanding)......... $ 1.00
See accompanying notes to financial statements. 31 EVERGREEN TREASURY MONEY MARKET FUND STATEMENT OF OPERATIONS SIX MONTHS ENDED FEBRUARY 29, 1996 (UNAUDITED) (Photo of coins)
INVESTMENT INCOME: Interest...................................................................................... $52,840,421 EXPENSES: Advisory fee.................................................................................. $ 3,261,622 Administrative personnel and services fees.................................................... 475,758 Distribution fee -- Class A Shares............................................................ 2,310,524 Registration and filing fees.................................................................. 534,077 Custodian fee................................................................................. 190,431 Reports and notices to shareholders........................................................... 33,340 Professional fees............................................................................. 31,899 Transfer agent fee............................................................................ 27,092 Trustees' fees and expenses................................................................... 25,440 Insurance..................................................................................... 2,523 Miscellaneous................................................................................. 12,068 6,904,774 Less advisory fee waiver...................................................................... (1,098,626) Net expenses............................................................................... 5,806,148 Net investment income............................................................................ 47,034,273 Net realized gain on investments................................................................. 164,838 NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................................. $47,199,111
See accompanying notes to financial statements. 32 EVERGREEN TREASURY MONEY MARKET FUND STATEMENT OF CHANGES IN NET ASSETS (Photo of coins)
SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, (UNAUDITED) 1995 INCREASE (DECREASE) IN NET ASSETS: OPERATIONS: Net investment income............................................................... $ 47,034,273 $ 43,113,269 Net realized gain (loss) on investments............................................. 164,838 (7,403) Net increase in net assets resulting from operations............................. 47,199,111 43,105,866 DISTRIBUTIONS TO SHAREHOLDERS FROM: NET INVESTMENT INCOME: Class A Shares...................................................................... (38,531,004) (33,495,553) Class Y Shares...................................................................... (8,503,269) (9,617,716) Total distributions to shareholders from net investment income................... (47,034,273) (43,113,269) IN EXCESS OF NET INVESTMENT INCOME: Class A Shares...................................................................... -- (67,232) Class Y Shares...................................................................... -- (15,822) Total distributions to shareholders in excess of net investment income............................................................. -- (83,054) Total distributions to shareholders........................................... (47,034,273) (43,196,323) FUND SHARE TRANSACTIONS: Proceeds from shares sold........................................................... 2,273,580,540 2,358,670,175 Proceeds from shares issued from acquisition of FFB U.S. Treasury Fund........................................................ 1,070,672,333 -- Proceeds from shares issued from acquisition of FFB U.S. Government Fund...................................................... 327,532,054 -- Proceeds from shares issued from acquisition of FFB 100% Treasury Fund........................................................ 28,227,573 -- Proceeds from reinvestment of distributions......................................... 6,269,464 5,178,570 Payments for shares redeemed........................................................ (2,103,663,451) (1,826,468,286) Net increase resulting from Fund share transactions.............................. 1,602,618,513 537,380,459 Net increase in net assets....................................................... 1,602,783,351 537,290,002 NET ASSETS: Beginning of period................................................................. 1,455,260,859 917,970,857 End of period....................................................................... $ 3,058,044,210 $ 1,455,260,859
See accompanying notes to financial statements. 33 EVERGREEN TREASURY MONEY MARKET FUND FINANCIAL HIGHLIGHTS (Photo of coins)
CLASS A SHARES SIX MONTHS EIGHT ENDED MONTHS FEBRUARY 29, ENDED YEAR ENDED 1996 AUGUST 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 1992 PER SHARE DATA: Net asset value, beginning of period....................... $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income...................................... .03 .03 .04 .03 .03 Less distributions to shareholders from net investment income................................................... (.03) (.03) (.04) (.03) (.03) Net asset value, end of period............................. $1.00 $1.00 $1.00 $1.00 $1.00 TOTAL RETURN+.............................................. 2.5% 3.6% 3.8% 2.7% 3.4% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (in millions).................... $2,682 $1,178 $755 $261 $209 Ratios to average net assets: Expenses**............................................... .67%++ .63%++ .50% .48% .48% Net investment income**.................................. 5.00%++ 5.30%++ 3.91% 2.70% 3.22%
MARCH 6, 1991* THROUGH DECEMBER 31, 1991 PER SHARE DATA: Net asset value, beginning of period....................... $1.00 Income from investment operations: Net investment income...................................... .04 Less distributions to shareholders from net investment income................................................... (.04) Net asset value, end of period............................. $1.00 TOTAL RETURN+.............................................. 4.5% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (in millions).................... $100 Ratios to average net assets: Expenses**............................................... .47%++ Net investment income**.................................. 4.95%++
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS A SHARES SIX MONTHS EIGHT MARCH 6, ENDED MONTHS 1991* FEBRUARY 29, ENDED YEAR ENDED THROUGH 1996 AUGUST 31, DECEMBER 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 1992 1991 Expenses...................................... .79%++ .79%++ .78% .82% .82% 1.08%++ Net investment income......................... 4.88%++ 5.14%++ 3.63% 2.36% 2.88% 4.34%++
See accompanying notes to financial statements. 34 EVERGREEN TREASURY MONEY MARKET FUND FINANCIAL HIGHLIGHTS (Photo of coins)
CLASS Y SHARES SIX MONTHS EIGHT ENDED MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, YEAR ENDED DECEMBER 31, (UNAUDITED) 1995# 1994 1993 1992 PER SHARE DATA: Net asset value, beginning of period....................... $1.00 $1.00 $1.00 $1.00 $1.00 Income from investment operations: Net investment income...................................... .03 .04 .04 .03 .04 Less distributions to shareholders from net investment income................................................... (.03) (.04) (.04) (.03) (.04) Net asset value, end of period............................. $1.00 $1.00 $1.00 $1.00 $1.00 TOTAL RETURN+.............................................. 2.7% 3.8% 4.1% 3.0% 3.7% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (in millions).................... $376 $277 $163 $366 $286 Ratios to average net assets: Expenses**............................................... .37%++ .33%++ .20% .18% .17% Net investment income**.................................. 5.30%++ 5.60%++ 3.78% 3.00% 3.61%
MARCH 6, 1991* THROUGH DECEMBER 31, 1991 PER SHARE DATA: Net asset value, beginning of period....................... $1.00 Income from investment operations: Net investment income...................................... .05 Less distributions to shareholders from net investment income................................................... (.05) Net asset value, end of period............................. $1.00 TOTAL RETURN+.............................................. 4.7% RATIOS & SUPPLEMENTAL DATA: Net assets, end of period (in millions).................... $265 Ratios to average net assets: Expenses**............................................... .20%++ Net investment income**.................................. 5.53%++
# The Fund changed its fiscal year end from December 31 to August 31. * Commencement of operations. + Total return is calculated on net asset value per share for the periods indicated and is not annualized. ++ Annualized. ** Net of expense waivers and reimbursements. If the Fund had borne all expenses that were reimbursed or waived by the investment adviser, the annualized ratios of expenses and net investment income to average net assets would have been the following:
CLASS Y SHARES SIX MONTHS EIGHT MARCH 6, ENDED MONTHS 1991* FEBRUARY 29, ENDED THROUGH 1996 AUGUST 31, YEAR ENDED DECEMBER 31, DECEMBER 31, (UNAUDITED) 1995# 1994 1993 1992 1991 Expenses............................................... .49%++ .49%++ .48% .52% .52% .52%++ Net investment income................................... 5.18%++ 5.44%++ 3.50% 2.66% 3.26% 5.21%++
See accompanying notes to financial statements. 35 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 1 -- ORGANIZATION AND NATURE OF OPERATIONS The Evergreen Money Market Funds (the "Funds") are separate series of open-end management companies registered under the Investment Company Act of 1940, as amended (the "Act"). The Evergreen Money Market Funds consist of Evergreen Money Market Fund ("Money Market"), Evergreen Tax-Exempt Money Market Fund ("Tax-Exempt") and Evergreen Treasury Money Market Fund ("Treasury"), known collectively as the Funds. Money Market is the sole series of the Evergreen Money Market Trust, Tax-Exempt is a series of the Evergreen Municipal Trust and Treasury is a series of the Evergreen Investment Trust. The investment objective of Money Market is to achieve as high a level of current income as is consistent with preserving capital and providing liquidity. The investment objective of Tax-Exempt is to achieve as high a level of current income exempt from Federal income tax, as is consistent with preserving capital and providing liquidity. Treasury's investment objective is to maintain stability of principal while earning current income. NOTE 2 -- ACQUISITION INFORMATION Effective January 1, 1996, First Union Corporation, the corporate parent of First Union National Bank of North Carolina ("First Union") consummated a merger with First Fidelity Bancorporation through a non-taxable exchange. On January 19, 1996, the Funds noted below acquired substantially all of the net assets of the following management investment companies previously advised by a subsidiary of First Fidelity Bancorporation through a non-taxable exchange. The net assets acquired and class of shares exchanged are as follows:
CLASS OF SHARES NET ASSETS ACQUIRED FUND ACQUIRING FUND EXCHANGED ACQUIRED FFB Cash Management Fund Money Market Class A $ 592,358,355 FFB Lexicon Cash Management Fund Money Market Class Y 95,834,929 FFB Tax-Free Money Market Fund Tax-Exempt Class A 103,129,021 FFB U.S. Treasury Fund Treasury Class A 1,070,672,333 FFB U.S. Government Fund Treasury Class A 327,532,054 FFB 100% U.S. Treasury Fund Treasury Class A 28,227,573
The aggregate net assets of Money Market, Tax-Exempt and Treasury immediately after the acquisitions were $1,865,328,722, $1,141,961,188 and $3,053,739,559, respectively. Effective July 7, 1995, Money Market acquired substantially all of First Union Money Market Portfolio's net assets, valued at $1.00 per share through a non-taxable exchange for 642,283,253 shares of Money Market. The aggregate net assets of Money Market immediately after the acquisition were $884,502,198. In addition, effective July 7, 1995, Tax-Exempt acquired substantially all of First Union Tax-Free Money Market Portfolio's net assets, valued at $1.00 per share through a non-taxable exchange for 604,175,076 shares of Tax-Exempt. The aggregate net assets of Tax-Exempt immediately after the acquisition were $952,382,736. NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements. These policies are in conformity with generally accepted accounting principles. SECURITY VALUATIONS -- Portfolio securities are valued at amortized cost which approximates market value. The amortized cost method involves valuing a security at cost on the date of purchase and thereafter assuming a straight-line amortization of any discount or premium to maturity. 36 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 3 -- SIGNIFICANT ACCOUNTING POLICIES -- continued SECURITY TRANSACTIONS -- Security transactions are accounted for on the date purchased or sold. Net realized gains or losses are determined on the identified cost basis. INVESTMENT INCOME AND EXPENSES -- Interest income and expenses are accrued daily. Premiums and discounts paid on securities are amortized or accreted into interest income. REPURCHASE AGREEMENTS -- Securities pledged as collateral for repurchase agreements are held by the Federal Reserve Bank and are designated as being held on each Fund's behalf by its custodian under a book-entry system. Each Fund monitors the adequacy of the collateral on a daily basis, and can require the seller to provide additional collateral in the event the market value of the securities pledged falls below the carrying value of the repurchase agreement, including accrued interest. Each Fund will only enter into repurchase agreements with banks and other financial institutions which are deemed by the investment adviser to be creditworthy pursuant to guidelines established by each Funds' Trustees. WHEN ISSUED AND DELAYED DELIVERY TRANSACTIONS -- The Funds record when-issued or delayed delivery transactions on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis begin earning interest on the settlement date. DIVIDENDS TO SHAREHOLDERS -- Dividends from net investment income are declared daily and paid monthly. Dividends from net realized capital gains on investments, if any, will be distributed at least annually. Income distributions and capital gain distributions are determined in accordance with income tax regulations which may differ from the amounts available for distribution under generally accepted accounting principles. To the extent these differences are permanent in nature, such amounts are reclassified within the components of net assets. INCOME TAXES -- It is each Fund's policy to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable and other net income to its shareholders. Accordingly, no provisions for Federal income or excise taxes are necessary. To the extent that realized capital gains can be offset by capital loss carryforwards, it is each Fund's policy not to distribute such gains. At August 31, 1995 each fund's most recent fiscal year end, the Funds had capital loss carryforwards in the following amounts:
EXPIRATION 2001 2002 2003 Money Market..................... -- $ 2,036 $522,676 Tax-Exempt....................... $175,647 -- 15,847 Treasury......................... -- 83,054 21,577
Capital losses incurred after October 31 within the Fund's fiscal year are deemed to arise on the first business day of the following fiscal year for tax purposes. Tax-Exempt and Treasury have incurred and will elect to defer $58,452 and $7,403, respectively of such capital losses. ALLOCATION OF EXPENSES -- Expenses specifically identifiable to a class of shares are charged to that class. Expenses common to a Trust as a whole are allocated to the funds in that Trust. Net investment income (other than class specific expenses) and realized and unrealized gains and losses are allocated daily to each class of shares based upon the relative proportion of net assets of each class. USE OF ESTIMATES -- The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates. 37 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES INVESTMENT ADVISORY AGREEMENTS -- First Union is entitled to an annual fee of .35 of 1% of Treasury's average daily net assets pursuant to the fund's investment advisory agreement. For the six-month period ended February 29, 1996, First Union voluntarily waived $1,098,626 of its advisory fee. First Union can modify or terminate this voluntary waiver at any time. Pursuant to an agreement with Money Market's and Tax-Exempt's investment adviser, Evergreen Asset Management Corp. (Evergreen Asset), a wholly owned subsidiary of First Union, Evergreen Asset is entitled to an annual fee based on Money Market's and Tax-Exempt's average daily net assets, for the six months ended February 29, 1996, in accordance with the following schedule:
ADVISORY FEE AVERAGE DAILY NET ASSETS 0.50% on the first $1 billion 0.45% in excess of $1 billion
Evergreen Asset has agreed to reimburse Money Market and Tax-Exempt to the extent that either Fund's operating expenses (including the investment advisory fee but excluding interest, taxes, brokerage commissions, 12b-1 distribution and shareholder services fees and extraordinary expense) exceeds 1.00% of its average daily net assets for any fiscal year. For the six months ended February 29, 1996, the expenses of Money Market and Tax-Exempt did not exceed this limit. For the six months ended February 29, 1996, Evergreen Asset voluntarily waived $1,133,446 and $580,141 of its advisory fee for Money Market and Tax-Exempt, respectively. Evergreen Asset can modify or terminate these voluntary waivers at any time. Lieber & Company, an affiliate of First Union is the investment sub-adviser to Money Market and Tax-Exempt. Lieber & Company is reimbursed by Evergreen Asset at no additional expense to the Funds. During the year ended August 31, 1995, Tax-Exempt entered into stand-by purchase agreements ("agreements") with First Union with regards to securities issued by Orange County, California. The agreements enabled the securities to be valued at par, which was $300,000 in excess of the securities fair market value on the date of the issuance. The increase in the value is deemed to be a voluntary contribution of capital to offset the loss in value. The agreements were exercised during the year and accordingly, the securities were sold to First Union at par. ADMINISTRATION AGREEMENT -- Evergreen Asset furnishes Money Market and Tax-Exempt with administrative services as part of their advisory agreements and accordingly, these Funds do not pay a separate administration fee. Furman Selz LLC ("Furman Selz") is each of Fund's sub-administrator. As sub-administrator, Furman Selz provides the officers of the funds. For Money Market and Tax-Exempt, Furman Selz' fee is paid by Evergreen Asset and is not a fund expense. Evergreen Asset is also Treasury's Administrator and Furman Selz is the sub-administrator. Evergreen Asset's and Furman Selz' fees for Treasury are based on the average daily net assets of all the funds administered by Evergreen Asset for which First Union or Evergreen Asset is also investment adviser. These are calculated at the following annual rates:
ADMINISTRATION FEE AVERAGE DAILY NET ASSETS 0.050% on the first $7 billion 0.035% on the next $3 billion 0.030% on the next $5 billion 0.020% on the next $10 billion 0.015% on the next $5 billion 0.010% in excess of $30 billion SUB-ADMINISTRATION FEE AVERAGE DAILY NET ASSETS 0.0100% on the first $7 billion 0.0075% on the next $3 billion 0.0050% on the next $15 billion 0.0040% in excess of $25 billion
38 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 4 -- INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES -- continued At February 29, 1996, assets for which Evergreen Asset was the administrator for which either Evergreen Asset or First Union was investment adviser totaled approximately $14.4 billion. PLANS OF DISTRIBUTION -- The Funds have adopted for their Class A Shares and Class B Shares (Money Market only) Distribution Plans (the "Plans") pursuant to Rule 12b-1 under the Act. (See Note 5) Under the terms of the Plans, the Funds may incur distribution-related and shareholder servicing expenses which may not exceed .75 of 1% for Class A shares for Money Market and Tax-Exempt and .35 of 1% for Class A shares for Treasury. The payments for Class A for each of the Funds were voluntarily limited to .30 of 1% of average daily net assets. Money Market may incur distribution-related and shareholder servicing expenses, which may not exceed an annual fee of 1% for its Class B Shares. Such fees are accrued daily and paid monthly. In connection with their Plans, the Funds have entered into distribution agreements with Evergreen Funds Distributor, Inc. ("EFD"), a subsidiary of Furman Selz whereby each Fund will compensate EFD for its services at a rate which may not exceed .30 of 1% of its Class A average daily net assets and 1% of its Class B average daily net assets (Money Market only). A portion of Money Market's Class B Plan, up to .25 of 1% of average daily net assets may constitute a shareholder service fee. EFD has entered into a Shareholder Services Agreement with First Union Brokerage Services ("FUBS"), an affiliate of First Union, whereby EFD will compensate FUBS for certain services provided to shareholders and/or maintenance of shareholder accounts relating to Money Market's Class B shares. NOTE 5 -- SHARES OF BENEFICIAL INTEREST Money Market and Tax-Exempt have an unlimited number of $0.0001 par value shares of beneficial interest authorized. Treasury has an unlimited number of $.001 par value shares of beneficial interest authorized. The shares are divided into classes which are designated Class Y, Class A and Class B Shares (Money Market only). Class Y shares are available only to investment advisory clients of First Union and its affiliates, certain institutional investors or Class Y shareholders of record of certain other funds managed by the First Union and its affiliates as of December 30, 1994. The classes have identical voting, dividend, liquidation and other rights, except that Class A and Class B shares bear distribution expenses (see Note 4) and have exclusive voting rights with respect to their distribution plans. 39 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued Transactions in shares of beneficial interest (valued at $1.00 per share) were as follows:
SIX MONTHS ENDED FEBRUARY 29, YEAR ENDED 1996 AUGUST 31, MONEY MARKET (UNAUDITED) 1995* CLASS A Shares sold.................................................................................. 1,263,316,721 263,807,185 Shares issued from acquisition of FFB Cash Management Fund................................... 592,362,245 -- Shares issued from acquisition of First Union Money Market Portfolio......................... -- 577,090,623 Shares issued from reinvestment of distributions............................................. 4,604,551 1,073,970 Shares redeemed.............................................................................. (877,451,570) (156,830,783) Net increase................................................................................. 982,831,947 685,140,995 CLASS B Shares sold.................................................................................. 2,643,416 1,222,632 Shares issued from acquisition of First Union Money Market Portfolio......................... -- 8,848,122 Shares issued from reinvestment of distributions............................................. 135,037 41,082 Shares redeemed.............................................................................. (2,799,783) (2,185,089) Net increase (decrease)...................................................................... (21,330) 7,926,747 CLASS Y Shares sold.................................................................................. 860,872,307 1,484,885,160 Shares issued from acquisition of FFB Lexicon Cash Management Fund........................... 95,834,876 -- Shares issued from acquisition of First Union Money Market Portfolio......................... -- 56,344,508 Shares issued from reinvestment of distributions............................................. 6,425,373 13,226,417 Shares redeemed.............................................................................. (770,601,956) (1,544,913,353) Net increase................................................................................. 192,530,600 9,542,732 Total net increase resulting from Fund share transactions.................................... 1,175,341,217 702,610,474
* The Fund share activity for Class A reflects the period from January 4, 1995 (commencement of class operations) through August 31, 1995. The Fund share activity for Class B reflects the period from January 26, 1995 (commencement of class operations) through August 31, 1995. 40 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 5 -- SHARES OF BENEFICIAL INTEREST -- continued
SIX MONTHS ENDED FEBRUARY 29, YEAR ENDED 1996 AUGUST 31, TAX-EXEMPT (UNAUDITED) 1995* CLASS A Shares sold.................................................................................. 613,354,245 126,822,267 Shares issued from acquisition of FFB Tax-Free Money Market Fund............................. 103,102,728 -- Shares issued from acquisition of First Union Tax-Free Money Market Portfolio................ -- 529,834,393 Shares issued from reinvestment of distributions............................................. 1,584,081 499,871 Shares redeemed.............................................................................. (603,605,089) (102,091,382) Net increase................................................................................. 114,435,965 555,065,149 CLASS Y Shares sold.................................................................................. 361,681,800 396,597,152 Shares issued from acquisition of First Union Tax-Free Money Market Portfolio................ -- 74,340,683 Shares issued from reinvestment of distributions............................................. 5,945,468 12,777,605 Shares redeemed.............................................................................. (279,314,107) (464,546,791) Net increase................................................................................. 88,313,161 19,168,649 Total net increase resulting from Fund share transactions.................................... 202,749,126 574,233,798
* The Fund share activity for Class A reflects the period from January 5, 1995 (commencement of class operations) through August 31, 1995.
SIX MONTHS ENDED EIGHT MONTHS FEBRUARY 29, ENDED 1996 AUGUST 31, TREASURY (UNAUDITED) 1995 CLASS A Shares sold.................................................................................. 1,712,364,282 1,854,109,537 Shares issued from acquisition of FFB U.S. Treasury Fund..................................... 1,070,688,429 -- Shares issued from acquisition of FFB U.S. Government Fund................................... 327,554,031 -- Shares issued from acquisition of FFB 100% U.S. Treasury Fund................................ 28,227,628 -- Shares issued from reinvestment of distributions............................................. 6,114,776 5,178,018 Shares redeemed.............................................................................. (1,641,334,969) (1,436,384,809) Net increase................................................................................. 1,503,614,177 422,902,746 CLASS Y Shares sold.................................................................................. 561,216,258 504,560,638 Shares issued from reinvestment of distributions............................................. 154,688 552 Shares redeemed.............................................................................. (462,328,482) (390,083,477) Net increase................................................................................. 99,042,464 114,477,713 Total net increase resulting from Fund share transactions.................................... 1,602,656,641 537,380,459
41 COMBINED NOTES TO FINANCIAL STATEMENTS NOTE 6 -- CONCENTRATION OF CREDIT RISK Each Fund maintains a diversified portfolio of money market instruments which are deemed, under Rule 2a-7 of the Act to have a maturity of 397 days or less and whose ratings are determined to be of eligible quality under Securities and Exchange Commission rules. The ability of the issuers of the securities held by the Funds to meet their obligations may be affected by economic developments in a specific industry, state, region or country. Certain instruments may be entitled to the benefit of standby letters of credit or other guarantees of banks or other financial institutions. 42 (This Page Left Blank Intentionally) 43 (This Page Left Blank Intentionally) 44 TRUSTEES AND OFFICERS TRUSTEES: Laurence B. Ashkin* Foster Bam* James S. Howell, Chairman Robert J. Jeffries* Gerald M. McDonnell Thomas L. McVerry William W. Pettit Russell A. Salton, III M.D. Michael S. Scofield OFFICERS: John J. Pileggi President and Treasurer Joan V. Fiore Secretary Sheryl Hirschfeld Assistant Secretary Donald E. Brostrom Assistant Treasurer Stephen W. St. Clair Assistant Treasurer * Not a Trustee for Evergreen Treasury Money Market Fund. NOT May lose value FDIC No bank guarantee INSURED 42608 Evergreen Funds Distributor, Inc. 538357 4/96 -----END PRIVACY-ENHANCED MESSAGE-----