FIDELITY INCOME FUND: FIDELITY GINNIE MAE FUND AND
FIDELITY UNION STREET TRUST: SPARTAN GINNIE MAE FUND
PRO FORMA COMBINING STATEMENT OF ASSETS & LIABILITIES AS OF JULY 31,
1998
(UNAUDITED)
FIDELITY GINNIE MAE FUND SPARTAN GINNIE MAE FUND
ASSETS
Investment in securities, at
value
- See accompanying schedule $ 950,998,229 $669,162,310
Cash 692 46,913
Receivable for investments 89,801,968 49,469,663
sold
Receivable for fund shares 2,217,436 547,746
sold
Interest receivable 5,657,590 4,034,857
TOTAL ASSETS 1,048,675,915 723,261,489
LIABILITIES
Payable for investments 129,314,232 54,367,895
purchased
Payable for fund shares 1,019,123 639,611
redeemed
Distributions payable 565,453 602,082
Accrued management fee 297,276 212,985
Other payables and accrued 250,183 12,715
expenses
TOTAL LIABILITIES 131,446,267 55,835,288
NET ASSETS $ 917,229,648 $ 667,426,201
Net Assets consist of:
Paid in capital 925,828,686 $ 674,081,240
Distributions in excess net
investment
income (1,861,903) (1,853,914)
Accumulated undistributed net
realized gain (loss) on (21,644,702) (12,834,191)
investments
Net unrealized appreciation
(depreciation)
on investments 14,907,567 8,033,066
NET ASSETS $ 917,229,648 $ 667,426,201
NET ASSETS 917,229,648 $ 667,426,201
Net Asset Value, offering 10.87 $10.16
price and redemption
price per share
Shares outstanding 84,361,995 65,662,073
COMBINED PRO FORMA ADJUSTMENTS PRO FORMA COMBINED
ASSETS
Investment in securities, at
value
- See accompanying schedule $1,620,160,539 $ - $ 1,620,160,539
Cash 47,605 - 47,605
Receivable for investments 139,271,631 - 139,271,631
sold
Receivable for fund shares 2,765,182 - 2,765,182
sold
Interest receivable 9,692,447 - 9,692,447
TOTAL ASSETS 1,771,937,404 - 1,771,937,404
LIABILITIES
Payable for investments 183,682,127 - 183,682,127
purchased
Payable for fund shares 1,658,734 - 1,658,734
redeemed
Distributions payable 1,167,535 - 1,167,535
Accrued management fee 510,261 - 510,261
Other payables and accrued 262,898 - 262,898
expenses
TOTAL LIABILITIES 187,281,555 - 187,281,555
NET ASSETS $ 1,584,655,849 $ - $ 1,584,655,849
Net Assets consist of:
Paid in capital $ 1,599,909,926 - $ 1,599,909,926
Distributions in excess net
investment
income (3,715,817) (3,715,817)
Accumulated undistributed net
realized gain (loss) on (34,478,893) - (34,478,893)
investments
Net unrealized appreciation
(depreciation)
on investments 22,940,633 - 22,940,633
NET ASSETS $ 1,584,655,849 $ - $ 1,584,655,849
NET ASSETS $ 1,584,655,849 $ 1,584,655,849
Net Asset Value, offering $ 10.87
price and redemption
price per share
Shares outstanding 150,024,068 (4,261,319) (a) 145,762,749
FIDELITY INCOME FUND: FIDELITY GINNIE MAE FUND AND
FIDELITY UNION STREET TRUST: SPARTAN GINNIE MAE FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS FOR THE 12 MONTHS ENDED
JULY 31, 1998
(UNAUDITED)
FIDELITY GINNIE MAE FUND SPARTAN GINNIE MAE FUND COMBINED PRO FORMA ADJUSTMENTS
INVESTMENT INCOME
Interest $63,051,080 $43,724,580 $106,775,660 $ -
EXPENSES
Management fee 3,763,728 3,912,969 7,676,697 (1,289,144) (b)
Transfer agent fees 1,933,267 - 1,933,267 719,330 (c)
Accounting fees and expenses 278,469 - 278,469 122,944 (c)
Non-interested trustees' 12,741 5,174 17,915 -
compensation
Custodian fees and expenses 179,799 - 179,799 125,344 (c)
Registration fees 45,958 - 45,958 161,218 (d)
Audit 49,649 - 49,649 15,351 (c)
Legal 34,790 - 34,790 24,253 (c)
Reports to shareholders 76,608 - 76,608 -
Total expenses before 6,375,009 3,918,143 10,293,152 (120,704)
reductions
Expense reductions (143,429) (1,635,382) (e) (1,778,811) 807,719 (f)
Total expenses 6,231,580 2,282,761 8,514,341 687,015
NET INVESTMENT INCOME 56,819,500 41,441,819 98,261,319 (687,015)
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on 14,558,020 7,427,086 21,985,106 -
investment securities
Change in net unrealized
appreciation
(depreciation) on (13,816,946) (7,059,647) (20,876,593) -
investment securities
NET GAIN (LOSS) 741,074 367,439 1,108,513 -
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM $57,560,574 $41,809,258 $99,369,832 (687,015)
OPERATIONS
PRO FORMA COMBINED
INVESTMENT INCOME
Interest $106,775,660
EXPENSES
Management fee 6,387,553
Transfer agent fees 2,652,597
Accounting fees and expenses 401,413
Non-interested trustees' 17,915
compensation
Custodian fees and expenses 305,143
Registration fees 207,176
Audit 65,000
Legal 59,043
Reports to shareholders 76,608
Total expenses before 10,172,448
reductions
Expense reductions (971,092)
Total expenses 9,201,356
NET INVESTMENT INCOME 97,574,304
REALIZED AND UNREALIZED GAIN
(LOSS)
Net realized gain (loss) on 21,985,106
investment securities
Change in net unrealized
appreciation
(depreciation) on (20,876,593)
investment securities
NET GAIN (LOSS) 1,108,513
NET INCREASE (DECREASE) IN NET
ASSETS RESULTING FROM $98,682,817
OPERATIONS
CAPITALIZATION
The following table shows the capitalization of the funds as of July 31, 1998 and on a
pro forma combined basis (unaudited) as of that date giving effect to the Reorganization.
Reinvest price: $ 10.87
NET ASSET VALUE Fidelity Ginnie $ 917,229,648 Totals
Spartan Ginnie $ 667,426,201 $
1,584,655,849
SHARES Fidelity Ginnie 84,361,995 84,361,995
OUTSTANDING Spartan Ginnie 65,662,073 61,400,754 $
145,762,749
FIDELITY INCOME FUND: FIDELITY GINNIE MAE FUND
FIDELITY UNION STREET TRUST: SPARTAN GINNIE MAE FUND
PRO FORMA COMBINING STATEMENT OF INVESTMENTS, JULY 31, 1998
(UNAUDITED)
FIDELITY GINNIE MAE FUND SPARTAN GINNIE MAE FUND COMBINED
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
AMOUNT (NOTE 1) AMOUNT (NOTE 1) AMOUNT (NOTE 1)
U.S. GOVERNMENT AGENCY -
MORTGAGE-BACKED SECURITIES
- -- 98.0%
Fannie Mae - 0.2%
7% 8/1/28 $ 121,000 $ 122,739 $ 121,000 $ 122,739
8.5% 6/1/08 to 4/1/16 $ 978,785 $ 1,020,500 978,785 1,020,500
9% 10/1/11 190,270 198,887 190,270 198,887
10.25% 12/1/15 to 10/1/18 487,107 535,710 487,107 535,710
11.5% 6/1/13 to 9/1/15 363,454 411,555 363,454 411,555
12.25% 6/1/15 6,918 7,893 6,918 7,893
12.5% 11/1/13 to 7/1/16 232,984 272,327 802,538 927,217 1,035,522 1,199,544
13.25% 9/1/11 335,162 399,718 335,162 399,718
14% 11/1/12 8,561 10,326 8,561 10,326
__________ ___________ ___________
2,449,305 1,457,567 3,906,872
__________ ___________ ___________
Freddie Mac: - 2.0%
8.5% 2/1/04 to 2/1/19 819,553 852,027 15,770 16,643 835,323 868,670
9% 7/1/08 to 7/1/21 3,039,049 3,189,494 2,946,040 3,109,763 5,985,089 6,299,257
9.75% 12/1/08 to 4/1/13 233,438 250,444 233,438 250,444
10% 10/1/04 to 11/1/20 5,852,594 6,334,987 3,633,223 3,938,025 9,485,817 10,273,012
10.25% 2/1/09 to 11/1/16 2,935,720 3,187,844 621,988 677,213 3,557,708 3,865,057
10.5% 5/1/10 to 12/1/20 4,340,561 4,834,930 2,153,651 2,400,184 6,494,212 7,235,114
11.25% 2/1/10 to 10/1/14 249,352 278,447 249,352 278,447
11.75% 11/1/11 108,012 120,734 108,012 120,734
12% 5/1/10 to 2/1/17 306,707 355,009 376,268 433,482 682,975 788,491
12.5% 11/1/12 to 5/1/15 693,746 806,082 622,928 725,546 1,316,674 1,531,628
13% 11/1/12 to 11/1/14 182,570 216,076 182,570 216,076
13.5% 1/1/13 to 12/1/14 69,441 83,370 69,441 83,370
__________ ___________ ___________
19,959,554 11,850,746 31,810,300
__________ ___________ ___________
FIDELITY GINNIE MAE FUND SPARTAN GINNIE MAE FUND COMBINED
PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
AMOUNT (NOTE 1) AMOUNT (NOTE 1) AMOUNT (NOTE 1)
Government National Mortgage
Association - 95.8%
6% 10/15/23 to 7/15/28 13,626,374 13,290,113 10,099,847 9,851,134 23,726,221 23,141,247
6.5% 5/15/08 to 8/15/28 128,951,671 128,844,080 94,449,880 94,364,914 223,401,551 223,208,994
7% 10/15/07 to 8/15/28 232,064,147 235,780,544 166,047,747 168,678,543 398,111,894 404,459,087
7.5% 6/15/02 to 8/15/28 198,427,464 204,255,949 148,584,217 152,935,972 347,011,681 357,191,921
8% 7/15/01 to 8/15/28 189,741,963 196,985,484 142,274,358 147,707,858 332,016,321 344,693,342
8.5% 2/15/05 to 2/15/23 47,609,538 50,537,462 27,388,718 29,078,073 74,998,256 79,615,535
9% 12/15/04 to 12/15/24 15,325,537 16,424,636 8,199,120 8,785,684 23,524,657 25,210,320
9.5% 4/15/01 to 1/15/23 29,275,416 31,555,378 23,616,786 25,473,845 52,892,202 57,029,223
10% 10/15/00 to 2/15/25 2,077,556 2,273,713 8,663,410 9,500,252 10,740,966 11,773,965
10.5% 11/15/98 to 09/15/19 4,901,410 5,415,438 2,638,223 2,916,233 7,539,633 8,331,671
11% 1/15/10 to 7/15/20 3,800,943 4,267,016 2,390,102 2,684,350 6,191,045 6,951,366
11.5% 3/15/10 to 4/15/19 4,445,502 5,006,804 1,587,000 1,789,511 6,032,502 6,796,315
12% 5/15/00 to 11/15/15 922,018 1,050,239 273,449 313,353 1,195,467 1,363,592
13% 2/15/11 to 5/15/15 633,298 742,177 302,583 355,275 935,881 1,097,452
13.5% 5/15/10 to 1/15/15 363,756 428,337 363,756 428,337
______________ ______________ ______________
896,857,370 654,434,997 1,551,292,367
______________ ______________ ______________
TOTAL U.S. GOVERNMENT AGENCY 919,266,229 667,743,310 1,587,009,539
- - MORTGAGE-BACKED SECURITIES
______________ ______________ ______________
FIDELITY GINNIE MAE FUND SPARTAN GINNIE MAE FUND COMBINED
CASH EQUIVALENTS -- 2.0%
Investments in repurchase MATURITY MATURITY MATURITY
agreements
(U.S. Treasury obligations), AMOUNT AMOUNT AMOUNT
In a joint account at:
5.62%, dated 7/31/98 due $31,746,888 31,732,000 $ 1,419,666 1,419,000 $33,166,554 33,151,000
8/03/98
______________ ______________ ______________
TOTAL CASH EQUIVALENTS 31,732,000 1,419,000 33,151,000
______________ ______________ ______________
TOTAL INVESTMENTS IN $ 950,998,229 $ 669,162,310 $1,620,160,539
SECURITIES - 100%
============== ============== ==============
TOTAL COST OF INVESTMENTS $ 936,090,662 $ 661,129,244 $1,597,219,906
============== ============== ==============
Fidelity Income Fund: Fidelity Ginnie Mae Fund and
Fidelity Union Street Trust: Spartan Ginnie Mae Fund
Notes to Pro Forma Combining Financial Statements
(Unaudited)
The accompanying unaudited Pro Forma Combining Schedule of
Investments and Statement of Assets and Liabilities as of July 31,
1998 and the unaudited Pro Forma Combining Statement of Operations for
the year ended July 31, 1998 are intended to present the financial
condition and related results of operations of Fidelity Ginnie Mae
Fund as if the reorganization with Spartan Ginnie Mae Fund, had been
consummated at August 1, 1997. Had the pro forma adjustments not
included the effect of the FMR Voluntary expense limitations, Pro
Forma Combined Expense reductions would have been $31,439, resulting
in Pro Forma Combined Net Investment Income and Pro Forma Combined Net
Increase in Net Assets resulting from operations of $96,634,651 and
$97,743,164, respectively.
The pro forma adjustments to these pro forma financial statements are
comprised of:
(a) Reflects the conversion of Spartan Ginnie Mae Fund shares as of
July 31,1998.
(b) Decrease in management fee to reflect Fidelity Ginnie Mae Fund's
management fee applied to the combined fund's average net assets.
(c) Increase in fees reflects change from Spartan Ginnie Mae Fund's
all-inclusive fee structure to Fidelity Ginnie Mae Fund's fee
structure.
(d) Increase in fees reflects net increase in costs incurred as a
result of the reorganization.
(e) For the period ended July 31, 1998, FMR voluntarily agreed to
limit the Spartan Ginnie Mae Fund's operating expenses to 0.38% of
it's average net assets.
(f) Reflects FMR's agreement to voluntarily limit the combined fund's
operating expenses to 0.63% of average net assets.
The unaudited pro forma combining statements should be read in
conjunction with the separate annual audited financial statements as
of July 31, 1998 for Fidelity Ginnie Mae Fund, and August 31, 1998 for
Spartan Ginnie Mae Fund, which are incorporated by reference in the
Statement of Additional Information to this Proxy Statement and
Prospectus.