-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, C0DNEL1pmdsGzbneWCCS1uaQrqX6r+W7Lv17mko1W1TSQDHKz3sQsrjlqqYRnM5v /71Suw3Khrvy+jZQxTw3Ww== 0000806176-95-000011.txt : 199506290000806176-95-000011.hdr.sgml : 19950629 ACCESSION NUMBER: 0000806176-95-000011 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950628 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIER STATE MUNICIPAL BOND FUND CENTRAL INDEX KEY: 0000806176 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-04906 FILM NUMBER: 95550132 BUSINESS ADDRESS: STREET 1: 144 GENN CURTISS BLVD CITY: NUIONDALE STATE: NY ZIP: 11556 BUSINESS PHONE: 2129226805 FORMER COMPANY: FORMER CONFORMED NAME: PREMIER SERIES TAX EXEMPT BOND FUND DATE OF NAME CHANGE: 19870224 N-30D 1 ANNUAL REPORT LETTER TO SHAREHOLDERS Dear Shareholder: At the close of your Series' fiscal year on April 30, 1995, the net asset value for Class A shares was $12.74, which was $.14 (1.11%) higher than the closing net asset value one year ago. Income dividends of approximately $.754 per share were paid during this period, which translates into a distribution rate per share of 5.65%, based on the April 30 closing maximum offering price. The net asset value for Class B shares was $12.75, which was $.14 (1.11%) higher than the closing net asset value one year ago. Income dividends of approximately $.692 per share were paid during this period, which translates into a distribution rate per share of 5.43% based on the April 30 closing net asset value. We are pleased to report that all dividends paid from the net investment income during this period were exempt from Federal and State of Arizona personal income taxes.* The past fiscal year was marked by market turbulence and mixed economic signals. The Series saw both sides of the volatile market as the Bond Buyer 25 Bond Revenue Index moved approximately 117 basis points. We attempted to manage the Series through these difficult times by purchasing defensive coupons to balance the discount holdings in the portfolio and by shortening the average duration of the portfolio. Factors which negatively affected the performance of the Series during the past fiscal year included interest rate increases by the Federal Reserve Board, inflation pressures, and certain conditions in the municipal marketplace. By the first quarter of 1995, however, these pressures had abated and both the market and the Series began a strong recovery. As your Series' fiscal year progressed, new issuance of municipal bonds in the specialty state sector became progressively thin, which forced secondary market prices to high levels. Supply continued to be scant after the New Year, but our investment posture remained unchanged. Because we did not chase the roller-coaster market as it moved through the second and third fiscal quarters, the Series was well positioned to capitalize on the market strength which materialized during the last fiscal quarter. As a result, your Series was able to rebound to its current level. Overall, we view the prospect of a continuation of the current market rally with a cautious eye, since it appears that much of the appreciation expected for 1995 is already behind us. With this in mind, the Series remains fully invested to seek to take advantage of any additional market run-up in an environment witnessing a continued scarcity of securities, and to seek a high level of tax exempt income. We have included a current Statement of Investments and recent financial statements for your review. We appreciate your investment in the Series and look forward to serving your investment needs in the future. Sincerely, [Richard J. Moynihan signature logo] Richard J. Moynihan Director, Municipal Portfolio Management The Dreyfus Corporation May 16, 1995 New York, N.Y. *Some income may be subject to the Federal Alternative Minimum Tax (AMT) for certain shareholders. PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES APRIL 30, 1995 COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX In Dollars $11,698 Lehman Brothers Municipal Bond Index* $11,383 Premier State Municipal Bond Fund, Arizona Series (Class A Shares) *Source: Lehman Brothers
AVERAGE ANNUAL TOTAL RETURNS CLASS A CLASS B ------------------------------ ------------------------------ % Return Reflecting % Return Applicable Contingent Reflecting % Return Deferred Sales % Return Without Maximum Initial Assuming No Charge Upon Periods ended 4/30/95 Sales Charge Sales Charge (4.5%) Periods ended 4/30/95 Redemption Redemption* - -------------------- -------- --------- ------------ ------ ---------- 1 Year 7.41% 2.61% 1 Year 6.88% 3.88% From Inception (9/3/92) 6.83 4.99 From Inception (1/15/93) 5.85 5.04
Past performance is not predictive of future performance. Share price and investment return fluctuate and share price may be more or less than original cost upon redemption. The above graph compares a $10,000 investment made in Class A shares of Premier State Municipal Bond Fund, Arizona Series on 9/3/92 (Inception Date) to a $10,000 investment made in the Lehman Brothers Municipal Bond Index on that date. For comparative purposes the value of the Index on 8/31/92 is used as the beginning value on 9/3/92. All dividends and capital gain distributions are reinvested. Performance for Class B shares will differ from the results shown above due to difference in charges and expenses charged to that class. The Series invests primarily in Arizona municipal securities and its performance shown in the line graph takes into account the maximum initial sales charge on Class A shares and all other applicable fees and expenses. Unlike the Series, the Lehman Brothers Municipal Bond Index is an unmanaged total return performance benchmark for the long-term, investment grade, geographically unrestricted tax exempt bond market, calculated by using municipal bonds selected to be representative of the market. The Index does not take into account charges, fees and other expenses. Also, unlike the Fund which principally limits investments to Arizona municipal obligations, the Index is not state-specific. Further information relating to Series performance, including expense reimbursements, if applicable, is contained in the Condensed Financial Information section of the Prospectus and elsewhere in this report. *Maximum contingent deferred sales charge for Class B shares is 3% and is reduced to 0% after five years.
PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES STATEMENT OF INVESTMENTS APRIL 30, 1995 PRINCIPAL LONG-TERM MUNICIPAL INVESTMENTS-90.7% AMOUNT VALUE ------- ------- ARIZONA-84.1% Arizona Board of Regents - Arizona State University, System Revenue, Refunding: 6.125%, 7/1/2015........................................................ $ 100,000 $ 101,303 5.50%, 7/1/2019......................................................... 750,000 699,683 Arizona Educational Loan Marketing Corp., Educational Loan Revenue 6.375%, 9/1/2005........................................................ 100,000 104,422 Arizona Health Facilities Authority, Hospital System Revenue, Refunding (Samaritan Health System) 5.625%, 12/1/2015 (Insured; MBIA)............. 700,000 672,350 Casa Grande Industrial Development Authority, PCR (Frito-Lay, Inc. Pollution Control Project) 6.60%, 12/1/2010 (Guaranteed; Pepsico) 200,000 205,036 Chandler, Water and Sewer Revenue, Refunding 6.25%, 7/1/2013 (Insured; FGIC) 200,000 205,026 Douglas Industrial Development Authority, IDR, Refunding (KMart Corp. Project) 6%, 1/1/2003............................................................ 460,000 459,673 Glendale, Improvement Revenue, District Number 59 6%, 1/1/2013.............. 100,000 98,917 Maricopa County Hospital District Number 1, Hospital Facilities, Refunding: 6.25%, 6/1/2010 (Insured; FGIC)......................................... 100,000 104,302 6.125%, 6/1/2015 (Insured; FGIC)........................................ 200,000 201,666 Maricopa County Industrial Development Authority: Health Facility Revenue (Catholic Healthcare West) 5.50%, 7/1/2010 (Insured; MBIA) 500,000 484,460 MFHR, Refunding (Laguna Private Apartments Project) 6.75%, 7/1/2019..... 1,000,000 1,007,670 Maricopa County Pollution Control Corp., PCR, Refunding (Public Service Co.-Palo Verde) 6.375%, 8/15/2023....................... 1,000,000 913,060 Maricopa County School District: Number 6 (Washington Elementary) 6%, 7/1/2009 (Insured; AMBAC).......... 200,000 207,908 Number 28 (Kyrene Elementary) 6%, 7/1/2013 (Insured; AMBAC) (Prerefunded 7/1/2001) (a)............................................ 175,000 183,615 School Improvement Number 3 (Tempe Elementary) 6%, 7/1/2008 (Prerefunded 7/1/2006) (a)............................................ 100,000 101,824 Maricopa County Stadium District, Revenue 5.50%, 7/1/2013 (Insured; MBIA)... 1,000,000 954,600 Maricopa County Unified School District, School Improvement: Chandler, Refunding 6.40%, 7/1/2010 (Insured; FGIC)..................... 300,000 312,732 Gilbert, Refunding, Zero Coupon, 7/1/2005 (Insured; FGIC) (b)........... 1,860,000 1,049,914 Paradise Valley 5.875%, 7/1/2012 (Insured; FGIC)........................ 200,000 198,380 Scottsdale 6%, 7/1/2012 (Prerefunded 7/1/2002) (a)...................... 100,000 105,854 City of Mesa 5.70%, 7/1/2008 (Insured; MBIA)................................ 300,000 299,421 Navajo County Pollution Control Corp., PCR, Refunding (Arizona Public Service Co.) 5.875%, 8/15/2028 (Insured; AMBAC)...................................... 1,000,000 967,990 City of Phoenix, Refunding: 5.10%, 7/1/2013......................................................... 750,000 675,848 Street and Highway User Revenue: 6.60%, 7/1/2007....................................................... 250,000 267,905 6.25%, 7/1/2011 (Insured; FGIC)....................................... 200,000 206,456 Phoenix Civic Improvement Corp.: Wastewater System Lease Revenue: 6.125%, 7/1/2014 (Prerefunded 7/1/2003) (a)........................... 100,000 107,924 6.125%, 7/1/2023 (Prerefunded 7/1/2003) (a)........................... 500,000 539,095 PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1995 PRINCIPAL LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) AMOUNT VALUE _______ ______ ARIZONA (CONTINUED) Phoenix Civic Improvement Corp. (continued): Water Systems Revenue 5.40%, 7/1/2014................................... $ 1,000,000 $ 926,730 Phoenix Industrial Development Authority, SFMR 6.30%, 12/1/2012 (Insured: FNMA, GNMA) (c).............................. 1,000,000 987,380 Pima County, Tuscon Unified School District Number 1, School Improvement: 6.10%, 7/1/2010 (Insured; FGIC)......................................... 100,000 101,958 5.875%, 7/1/2014 (Insured; FGIC)........................................ 1,000,000 992,520 Pima and Maricopa Counties Industrial Development Authority, Multi-Family Revenue 5.875%, 1/1/2029 (Insured; FNMA)........................................ 500,000 456,180 Salt River Agricultural Improvement and Power District, Electric System Revenue (Salt River Project): 6%, 1/1/2013.......................................................... 150,000 150,185 5.50%, 1/1/2028....................................................... 1,000,000 901,070 Refunding 5.75%, 1/1/2013............................................. 200,000 193,942 City of Scottsdale Municipal Property Corp., Excise Tax Revenue, Refunding 6.25%, 11/1/2014 (Insured; FGIC)........................................ 100,000 101,976 City of Tempe 6%, 7/1/2009.................................................. 200,000 204,512 City of Tuscon, Refunding: 6.10%, 7/1/2012 (Insured; FGIC)......................................... 250,000 253,300 Water System Revenue: 5.75%, 7/1/2012....................................................... 100,000 98,384 5.75%, 7/1/2018....................................................... 500,000 478,385 University of Arizona, COP (Administrative and Packaging Facility Project) 6%, 7/15/2023 (Insured; MBIA)........................................... 1,000,000 989,160 University of Arizona Medical Center Corp., HR, Refunding 6.25%, 7/1/2010 (Insured; MBIA)......................................... 200,000 207,032 U.S. RELATED-6.6% Commonwealth of Puerto Rico, Refunding 6%, 7/1/2014......................... 400,000 391,492 Puerto Rico Electric Power Authority, Power Revenue: 6%, 7/1/2010............................................................ 550,000 541,876 6.25%, 7/1/2017......................................................... 520,000 517,473 ------- TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $20,297,684).................... $19,930,589 =========== SHORT-TERM MUNICIPAL INVESTMENTS-9.3% ARIZONA; Pima County, Industrial Development Authority, Industrial Revenue, VRDN (Tuscon Electric Power-Ivington Project): 4.70%, 7/1/2022 (LOC; Societe Generale) (d)........................... $ 1,950,000 $ 1,950,000 4.70%, 10/1/2022 (LOC; Bank of America) (d)........................... 100,000 100,000 ------- TOTAL SHORT_TERM MUNICIPAL INVESTMENTS (cost $2,050,000)................... $ 2,050,000 ============ TOTAL INVESTMENTS-100.0% (cost $22,347,684)...................................................... $21,980,589 =============
PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES SUMMARY OF ABBREVIATIONS AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit COP Certificate of Participation MBIA Municipal Bond Investors Assurance FGIC Financial Guaranty Insurance Company Insurance Association FNMA Federal National Mortgage Association MFHR Multi-Family Housing Revenue GNMA Government National Mortgage Association PCR Pollution Control Revenue HR Hospital Revenue SFMR Single Family Mortgage Revenue IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
SUMMARY OF COMBINED RATINGS (UNAUDITED) FITCH (E) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE - ----- ----- ---------- ------------ AAA Aaa AAA 48.6% AA Aa AA 19.4 A A A 16.4 BBB Baa BBB 2.1 BB Ba BB 4.2 F1+ VMIG1 SP1 9.3 ------ 100.0% ======
NOTES TO STATEMENT OF INVESTMENTS: (a) Bonds which are prerefunded are collateralized by U.S. Government securities which are held in escrow and are used to pay principal and interest on the municipal issue and to retire the bonds in full at the earliest refunding date. (b) Wholly held by the custodian in a segregated account as collateral for a delayed delivery security. (c) Purchased on a when-issued basis. (d) Secured by letter of credit. Securities payable on demand. The interest rate, which is subject to change, is based upon bank prime rates or an index of market rates. (e) Fitch currently provides creditworthiness information for a limited number of investments. See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1995 ASSETS: Investments in securities, at value (cost $22,347,684)-see statement...................................... $21,980,589 Interest receivable..................................................... 354,387 Receivable for shares of Beneficial Interest subscribed................. 29,558 Prepaid expenses........................................................ 11,230 Due from The Dreyfus Corporation........................................ 8,185 ------- 22,383,949 LIABILITIES: Due to Distributor...................................................... $ 7,815 Due to Custodian........................................................ 94,110 Payable for investment securities purchased............................. 1,003,150 Payable for shares of Beneficial Interest redeemed...................... 13 Accrued expenses and other liabilities.................................. 51,116 1,156,204 ------- ------ NET ASSETS ................................................................ $21,227,745 ========== REPRESENTED BY: Paid-in capital......................................................... $21,938,293 Accumulated net realized (loss) on investments.......................... (343,453) Accumulated net unrealized (depreciation) on investments-Note 3......... (367,095) ------- NET ASSETS at value......................................................... $21,227,745 ============ Shares of Beneficial Interest outstanding: Class A Shares (unlimited number of $.001 par value shares authorized)............... 1,018,275 ========== Class B Shares (unlimited number of $.001 par value shares authorized)............... 647,399 ========== NET ASSET VALUE per share: Class A Shares ($12,972,013 / 1,018,275 shares)...................................... $12.74 ====== Class B Shares ($8,255,732 / 647,399 shares)......................................... $12.75 ====== See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES STATEMENT OF OPERATIONS YEAR ENDED APRIL 30, 1995 INVESTMENT INCOME: INTEREST INCOME......................................................... $1,173,115 EXPENSES: Management fee-Note 2(a).............................................. $ 106,761 Shareholder servicing costs-Note 2(c)................................. 68,466 Distribution fees (Class B shares)-Note 2(b).......................... 37,203 Auditing fees......................................................... 8,357 Prospectus and shareholders' reports.................................. 6,495 Organization expenses................................................. 4,600 Registration fees..................................................... 2,360 Custodian fees........................................................ 2,269 Legal fees............................................................ 1,819 Trustees' fees and expenses-Note 2(d)................................. 195 Miscellaneous......................................................... 9,833 ----- 248,358 Less-expense reimbursement from Manager due to undertakings-Note 2(a)............................................ 210,380 _____ TOTAL EXPENSES.................................................. 37,978 ______ INVESTMENT INCOME-NET........................................... 1,135,137 REALIZED AND UNREALIZED GAIN ON INVESTMENTS: Net realized (loss) on investments-Note 3............................... $(343,444) Net unrealized appreciation on investments.............................. 602,025 _____ NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 258,581 ______ NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,393,718 ========== See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES STATEMENT OF CHANGES IN NET ASSETS YEAR ENDED APRIL 30, ---------------- 1994 1995 -------- ------ OPERATIONS: Investment income-net................................................... $ 748,595 $ 1,135,137 Net realized (loss) on investments...................................... -- (343,444) Net unrealized appreciation (depreciation) on investments for the year.. (1,152,136) 602,025 _______ ______ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS... (403,541) 1,393,718 _______ ______ DIVIDENDS TO SHAREHOLDERS FROM: Investment income-net: Class A shares........................................................ (524,294) (722,637) Class B shares........................................................ (224,301) (412,500) Net realized gain on investments: Class A shares........................................................ (5,370) -- Class B shares........................................................ (2,805) -- _______ ______ TOTAL DIVIDENDS................................................... (756,770) (1,135,137) ______ _______ BENEFICIAL INTEREST TRANSACTIONS: Net proceeds from shares sold: Class A shares........................................................ 8,029,274 3,423,651 Class B shares........................................................ 5,684,625 2,606,355 Dividends reinvested: Class A shares........................................................ 282,465 336,271 Class B shares........................................................ 94,531 161,187 Cost of shares redeemed: Class A shares........................................................ (736,531) (3,489,944) Class B shares........................................................ (534,479) (1,143,645) _______ ______ INCREASE IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS...... 12,819,885 1,893,875 _______ ______ TOTAL INCREASE IN NET ASSETS.................................... 11,659,574 2,152,456 NET ASSETS: Beginning of year....................................................... 7,415,715 19,075,289 _______ ______ End of year............................................................. $19,075,289 $21,227,745 ======== ========
SHARES ---------------------------------- CLASS A CLASS B ---------------- ---------------- YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, ---------------- ---------------- 1994 1995 1994 1995 ------ ------- ------- ------- CAPITAL SHARE TRANSACTIONS: Shares sold............................ 594,166 281,816 420,705 206,514 Shares issued for dividends reinvested. 21,163 27,031 7,085 12,967 Shares redeemed........................ (54,791) (283,309) (39,666) (93,196) ------- -------- ------- ------- NET INCREASE IN SHARES OUTSTANDING 560,538 25,538 388,124 126,285 ======= ======= ======= ======= See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES FINANCIAL HIGHLIGHTS Contained below is per share operating performance data for a share of Beneficial Interest outstanding, total investment return, ratios to average net assets and other supplemental data for each year indicated. This information has been derived from the Series' financial statements. CLASS A SHARES CLASS B SHARES -------------- -------------- YEAR ENDED APRIL 30, YEAR ENDED APRIL 30, -------------- -------------- PER SHARE DATA: 1993(1) 1994 1995 1993(2) 1994 1995 ---- ---- ---- ---- ---- ---- Net asset value, beginning of year................. $12.50 $13.12 $12.60 $12.65 $13.12 $12.61 ---- ---- ---- ---- ---- ---- INVESTMENT OPERATIONS: Investment income-net.............................. .51 .75 .75 .21 .68 .69 Net realized and unrealized gain (loss) on investments .62 (.51) .14 .47 (.50) .14 ---- ---- ---- ---- ---- ---- TOTAL FROM INVESTMENT OPERATIONS................. 1.13 .24 .89 .68 .18 .83 ---- ---- ---- ---- ---- ---- DISTRIBUTIONS: Dividends from investment income-net............... (.51) (.75) (.75) (.21) (.68) (.69) Dividends from net realized gain on investments.... -- (.01) -- -- (.01) -- ---- ---- ---- ---- ---- ---- TOTAL DISTRIBUTIONS.............................. (.51) (.76) (.75) (.21) (.69) (.69) ---- ---- ---- ---- ---- ---- Net asset value, end of year....................... $13.12 $12.60 $12.74 $13.12 $12.61 $12.75 ===== ====== ====== ====== ====== ====== TOTAL INVESTMENT RETURN(3)............................. 14.01%(4) 1.61% 7.41% 18.49%(4) 1.16% 6.88% RATIOS/SUPPLEMENTAL DATA: Ratio of expenses to average net assets ........... -- -- -- .50%(4) .50% .50% Ratio of net investment income to average net assets 5.71%(4) 5.51% 6.04% 4.61%(4) 4.95% 5.54% Decrease reflected in above expense ratios due to undertaking by the Manager ...................... 1.87%(4) 1.26% 1.07% 1.68%(4) 1.27% 1.10% Portfolio Turnover Rate ........................... 5.94%(5) 3.65% 21.96% 5.94%(5) 3.65% 21.96% Net Assets, end of year (000's Omitted)............ $5,671 $12,506 $12,972 $1,745 $6,569 $8,256 (1) From September 3, 1992 (commencement of operations) to April 30, 1993. (2) From January 15, 1993 (commencement of initial offering) to April 30, 1993. (3) Exclusive of sales load. (4) Annualized. (5) Not annualized. See notes to financial statements.
PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES NOTES TO FINANCIAL STATEMENTS NOTE 1-SIGNIFICANT ACCOUNTING POLICIES: Premier State Municipal Bond Fund (the "Fund") is registered under the Investment Company Act of 1940 ("Act") as a non-diversified open-end management investment company and operates as a series company currently offering fifteen series including the Arizona Series (the "Series"). Dreyfus Service Corporation, until August 24, 1994, acted as the distributor of the Fund's shares. Dreyfus Service Corporation is a wholly-owned subsidiary of The Dreyfus Corporation ("Manager"). Effective August 24, 1994, the Manager became a direct subsidiary of Mellon Bank, N.A. On August 24, 1994, Premier Mutual Fund Services, Inc. (the "Distributor") was engaged as the Fund's distributor. The Distributor, located at One Exchange Place, Boston, Massachusetts 02109, is a wholly-owned subsidiary of FDI Distribution Services, Inc., a provider of mutual fund administration services, which in turn is a wholly-owned subsidiary of FDI Holdings, Inc., the parent company of which is Boston Institutional Group, Inc. The Fund accounts separately for the assets, liabilities and operations of each series. Expenses directly attributable to each series are charged to that series' operations; expenses which are applicable to all series are allocated among them on a pro rata basis. The Series offers both Class A and Class B shares. Class A shares are subject to a sales charge imposed at the time of purchase and Class B shares are subject to a contingent deferred sales charge imposed at the time of redemption on redemptions made within five years of purchase. Other differences between the two Classes include the services offered to and the expenses borne by each Class and certain voting rights. (A) PORTFOLIO VALUATION: The Series' investments (excluding options and financial futures on municipal and U.S. treasury securities) are valued each business day by an independent pricing service ("Service") approved by the Board of Trustees. Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are carried at fair value as determined by the Service, based on methods which include consideration of: yields or prices of municipal securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. Options and financial futures on municipal and U.S. treasury securities are valued at the last sales price on the securities exchange on which such securities are primarily traded or at the last sales price on the national securities market on each business day. Investments not listed on an exchange or the national securities market, or securities for which there were no transactions, are valued at the average of the most recent bid and asked prices. Bid price is used when no asked price is available. (B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded on a trade date basis. Realized gain and loss from securities transactions are recorded on the identified cost basis. Interest income, adjusted for amortization of premiums and original issue discounts on investments, is earned from settlement date and recognized on the accrual basis. Securities purchased or sold on a when-issued or delayed-delivery basis may be settled a month or more after the trade date. PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES NOTES TO FINANCIAL STATEMENTS (CONTINUED) The Series follows an investment policy of investing primarily in municipal obligations of one state. Economic changes affecting the state and certain of its public bodies and municipalities may affect the ability of issuers within the state to pay interest on, or repay principal of, municipal obligations held by the Series. (C) DIVIDENDS TO SHAREHOLDERS: It is the policy of the Series to declare dividends daily from investment income-net. Such dividends are paid monthly. Dividends from net realized capital gain, if any, are normally declared and paid annually, but the Series may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code. To the extent that net realized capital gain can be offset by capital loss carryovers, it is the policy of the Series not to distribute such gain. (D) FEDERAL INCOME TAXES: It is the policy of the Series to continue to qualify as a regulated investment company, which can distribute tax exempt dividends, by complying with the applicable provisions of the Internal Revenue Code, and to make distributions of income and net realized capital gain sufficient to relieve it from substantially all Federal income and excise taxes. The Fund has an unused capital loss carryover of approximately $262,000 available for Federal income tax purposes to be applied against future net securities profits, if any, realized subsequent to April 30, 1995. The carryover does not include net realized securities losses from November 1, 1994 through April 30, 1995 which are treated, for Federal income tax purposes, as arising in fiscal 1996. If not applied, the carryover expires in fiscal 2003. NOTE 2-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES: (A) Pursuant to a management agreement ("Agreement") with the Manager, the management fee is computed at the annual rate of .55 of 1% of the average daily value of the Series' net assets and is payable monthly. The Agreement provides for an expense reimbursement from the Manager should the Series' aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and extraordinary expenses, exceed the expense limitation of any state having jurisdiction over the Series for any full fiscal year. However, the Manager has undertaken from May 1, 1994 through April 2, 1995 to reimburse all fees and expenses of the Series (excluding 12b-1 distribution plan fees and certain expenses as described above), and thereafter through April 30, 1995, to reduce the shareholder services plan fee paid by and reimburse such excess expenses of the Series, to the extent that the Series' aggregate expenses (excluding certain expenses as described above) exceeded specified annual percentages of the Series' average daily net assets. The expense reimbursement, pursuant to the undertakings, amounted to $210,380 for the year ended April 30, 1995. The Manager has currently undertaken through June 30, 1995 or until such time as the net assets of the Series exceed $50 million, regardless of whether they remain at that level, to reimburse all fees and expenses of the Series (excluding 12b-1 distribution plan fees, shareholder services plan fees and certain expenses as described above). The undertaking may be modified by the Manager from time to time, provided that the resulting expense reimbursement would not be less than the amount required pursuant to the Agreement. Dreyfus Service Corporation retained $5,509 during the year ended April 30, 1995 from commissions earned on sales of the Series' Class A shares. PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES NOTES TO FINANCIAL STATEMENTS (CONTINUED) Prior to August 24, 1994, Dreyfus Service Corporation retained $9,435 from contingent deferred sales charges imposed upon redemptions of the Series' Class B shares. (B) On August 3, 1994, Series' shareholders approved a revised Distribution Plan with respect to Class B shares only (the "Class B Distribution Plan") pursuant to Rule 12b-1 under the Act. Pursuant to the Class B Distribution Plan, effective August 24, 1994, the Fund pays the Distributor for distributing the Series' Class B shares at an annual rate of .50 of 1% of the value of the average daily net assets of Class B shares. Prior to August 24, 1994, the Distribution Plan ("prior Class B Distribution Plan") provided that the Series pays Dreyfus Service Corporation at an annual rate of .50 of 1% of the value of the Series' Class B shares average daily net assets, for the costs and expenses in connection with advertising, marketing and distributing the Series' Class B shares. Dreyfus Service Corporation made payments to one or more Service Agents based on the value of the Series' Class B shares owned by clients of the Service Agent. During the year ended April 30, 1995, $26,079 was charged to the Series pursuant to the Class B Distribution Plan and $11,124 was charged to the Series pursuant to the prior Class B Distribution Plan. (C) Under the Shareholder Services Plan, the Series pays the Distributor, at an annual rate of .25 of 1% of the value of the average daily net assets of Class A and Class B shares for servicing shareholder accounts. The services provided may include personal services relating to shareholder accounts, such as answering shareholder inquiries regarding the Series and providing reports and other information, and services related to the maintenance of shareholder accounts. The Distributor may make payments to Service Agents in respect of these services. The Distributor determines the amounts to be paid to Service Agents. From May 1, 1994 through August 23, 1994, $9,574 and $5,562 were charged to Class A and Class B shares, respectively, by Dreyfus Service Corporation. From August 24, 1994 through April 30, 1995, $20,352 and $13,040 were charged to Class A and Class B shares, respectively, by the Distributor pursuant to the Shareholder Services Plan. (D) Prior to August 24, 1994, certain officers and trustees of the Fund were "affiliated persons," as defined in the Act, of the Manager and/or Dreyfus Service Corporation. Each trustee who is not an "affiliated person" receives from the Fund an annual fee of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board receives an additional 25% of such compensation. NOTE 3-SECURITIES TRANSACTIONS: The aggregate amount of purchases and sales of investment securities amounted to $13,042,072 and $10,087,640, respectively, for the year ended April 30, 1995, and consisted entirely of long-term and short-term municipal investments. At April 30, 1995, accumulated net unrealized depreciation on investments was $367,095, consisting of $178,743 gross unrealized appreciation and $545,838 gross unrealized depreciation. At April 30, 1995, the cost of investments for Federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments). PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS SHAREHOLDERS AND BOARD OF TRUSTEES PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES We have audited the accompanying statement of assets and liabilities, including the statement of investments, of Premier State Municipal Bond Fund, Arizona Series (one of the series constituting the Premier State Municipal Bond Fund) as of April 30, 1995, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and financial highlights for each of the years indicated therein. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of April 30, 1995 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Premier State Municipal Bond Fund, Arizona Series at April 30, 1995, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the indicated years, in conformity with generally accepted accounting principles. [Ernst and Young LLP signature logo] New York, New York June 6, 1995 PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES IMPORTANT TAX INFORMATION (UNAUDITED) In accordance with Federal tax law, the Series hereby designates all the dividends paid from investment income_net during the fiscal year ended April 30, 1995 as "exempt_interest dividends" (not subject to regular Federal and, for individuals who are Arizona residents, Arizona personal income taxes). As required by Federal tax law rules, shareholders will receive notification of their portion of the Series' taxable ordinary dividends (if any) and capital gain distributions (if any) paid for the 1995 calendar year on Form 1099-DIV which will be mailed by January 31, 1996. [Dreyfus lion "d" logo] PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES 200 Park Avenue New York, NY 10166 MANAGER The Dreyfus Corporation 200 Park Avenue New York, NY 10166 CUSTODIAN The Bank of New York 90 Washington Street New York, NY 10286 TRANSFER AGENT & DIVIDEND DISBURSING AGENT The Shareholder Services Group, Inc. P.O. Box 9671 Providence, RI 02940 Further information is contained in the Prospectus, which must precede or accompany this report. Printed in U.S.A. 067/626AR954 [Dreyfus logo] Annual Report Premier State Municipal Bond Fund Arizona Series April 30, 1995 EX-99.A 2 GRAPH IN THE PRESIDENT'S LETTER OF THE ANNUAL REPORT COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER STATE MUNICIPAL BOND FUND, ARIZONA SERIES CLASS A SHARES AND THE LEHMAN BROTHERS MUNICIPAL BOND INDEX EXHIBIT A: ____________________________________________________ | | | | | | | PREMIER STATE | | PERIOD | LEHMAN BROTHERS |MUNICIPAL BOND FUND, | | | MUNICIPAL | ARIZONA SERIES | | | BOND INDEX * | (CLASS A SHARES) | |-----------|-----------------|---------------------| | 9/3/92 | 10,000 | 9,549 | | 4/30/93 | 10,736 | 10,429 | | 4/30/94 | 10,968 | 10,597 | | 4/30/95 | 11,698 | 11,383 | |---------------------------------------------------| *Source: Lehman Brothers -----END PRIVACY-ENHANCED MESSAGE-----