<PAGE>
Dreyfus
BASIC
California Municipal
Money Market Fund
Annual Report
June 30, 1996
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus BASIC
California Municipal Money Market Fund. For its annual reporting period ended
June 30, 1996, your Fund produced an annualized yield of 3.13% per share.*
During this twelve-month period, the Fund paid income dividends of
approximately $.031 per share. Reinvesting these dividends and calculating
the effect of compounding resulted in an annualized effective yield of 3.18%.
** These dividends were exempt from Federal and State of California personal
income taxes, although some income may be subject to the Federal Alternative
Minimum Tax (AMT) for certain shareholders.
THE ECONOMY
So far this year, the economic story has been pleasant reading: solid
growth, strong gains in employment and low inflation. Yet along with this
good news has come the fear that the Federal Reserve Board (the "Fed") will
tighten monetary policy lest the continued economic expansion bring a
resurgence in inflation. The growth in the economy has resulted in strong
gains in employment. Over recent months, these reports of new jobs have been
accompanied by rises in long-term interest rates in the expectation that the
Fed would soon act to cool down an economy at risk of overheating. To date,
the Fed has refrained from any overt tightening moves. (The Fed cut rates
three times between last July and January of this year, and has since held
the Federal Funds rate steady at 5.25%, even as long-term rates in the bond
market have risen more than a full percentage point.)
The interplay between job growth and economic growth has become the
dominant force affecting how investors think about the outlook for inflation
and the possibility that the Fed will raise short-term interest rates. Along
with handsome increases in new jobs have come solid gains in retail sales,
although many economists feel that heavy consumer debt burdens will act as a
constraint against any acceleration in growth. Automobile sales remain
strong, the third year in a row of steady growth for auto manufacturers. Yet,
the factors focused on by investors and the Fed may be different. Near the
end of the reporting period, the Fed's Beige Book, a survey of business
conditions in the 12 districts of the Federal Reserve, reported that the
economy was growing at a moderate pace and that despite the tightening labor
markets "indications of rising wages remain scattered." Recent statements by
officials of the Federal Reserve Board have suggested that "sustained
moderate growth" is the most likely path for the economy and that labor
markets, while tightening, do not yet indicate significant inflationary
pressures.
There seem to be few signs of inflation. Commodity and producer
prices remain subdued. Anecdotal reports from companies continue to attest to
their lack of ability to raise prices. Another measure of potential
inflation, delivery lead times -- one of Chairman Greenspan's favorite
indicators -- has not changed much for months. Furthermore, some of the
inflationary consequences of running large budget deficits have eased due to
the growth in the economy. Higher than expected tax payments -- a result of
economic growth -- have reduced the Federal budget deficit to the $130 billion
level, the lowest since the early 1980s.
Nevertheless, there are limits to noninflationary economic expansion.
As always, we remain watchful for signs of price pressures that could lead to
a resurgence of inflation. For now, there are few indications of that. In
fact, there also appears to be a growing consensus that the rate of economic
growth could
<PAGE>
taper off in the second half of the year due to the effect of higher
long-term interest rates on certain key sectors of the economy like housing
and consumer spending.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Interest rates climbed throughout the first half of 1996 as stronger
than expected economic activity led investors to believe that the Federal
Reserve would tighten monetary policy to dampen potential inflation. The
yield on one-year tax-exempt securities rose approximately 50 basis points
during the first half of 1996. Demand for tax-exempt money market instruments
was strong throughout the reporting period, particularly in January and June
when the tax-exempt money market experienced positive cash flow from
seasonally heavy coupon payments and redemptions.
The Fund's average portfolio maturity was shortened at the beginning
of 1996 (27 days on January 2, 1996) to cushion the Fund against the negative
effect of rising interest rates. Beginning in May, the Fund's average
portfolio maturity was carefully extended to take advantage of a seasonal
lack of supply of tax-exempt money market investments as record coupon and
maturity monies flowed into the marketplace. By the end of the reporting
period, the Fund's average portfolio maturity was 52 days.
California's economy continues to enjoy solid growth. The
unemployment rate fell to 7.5% in May, down from 7.7%. While still below the
national average, job growth (coming mostly in the high-technology,
entertainment, and export-related manufacturing and service sectors) has
shown steady improvement. More important, these new jobs pay well. Eight of
the top 10 growth industries have aggregate wage levels at or above the
average wage for all California companies. Overall, economic trends in
California are positive. Additional signs of growth include nonresidential
construction, up 15% compared to levels of a year ago and first quarter
retail, up 7% compared to the first quarter 1995.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
Angela Deni
Portfolio Manager
July 15, 1996
New York, N.Y.
* Yield figures reflect the performance of the Fund's previously existing
Investor shares for the period from July 1, 1995 through November 19, 1995
and the Fund's single class shares from November 20, 1995 through June 30,
1996.
** Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
Statement of Investments June 30, 1996
Principal
Tax Exempt Investments--100.0% Amount Value
- ---------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Alameda County, MFMR, Refunding, VRDN
(Quail) 3.10%, Series A (LOC; Federal National Mortgage Association) (a,b)...... $ 200,000 $ 200,000
Anaheim Housing Authority, MFHR, VRDN (Bel Age Project)
3.20%, Series A (LOC; Federal National Mortgage Association) (a,b).............. 900,000 900,000
Azusa Redevelopment Agency, Tax Allocation, Prerefunded
(West End Redevelopment Project)
8%, Series A, 8/1/96 (Escrowed in; U.S. Government Securities).................. 440,000 450,373
Bay Area Government Association, LR, VRDN (Pooled Project)
3.10% (LOC; National Westminster Bank) (a,b).................................... 100,000 100,000
Brea Redevelopment Agency, Sub Tax Allocation, Prerefunded
(Redevelopment Project Area AB)
8.50%, 9/15/96 (Escrowed in; U.S. Government Securities)........................ 475,000 491,482
California Department of Water, Resource Water Revenue, CP
3.50%, Series 1, 7/16/96 (LOC: Bayerische Landesbank, Credit Suisse,
Landesbank Hessen, Morgan Guaranty Trust Co. and
Westdeutsche Landesbank) (b).................................................... 1,000,000 1,000,000
California Educational Facilities Authority, Revenue, Refunding, VRDN
(Stanford University) 2.90%, Series L-2 (Guaranty; Stanford University) (a)..... 900,000 900,000
California Health Facilities Authority, Revenue, Prerefunding
(Mercy Health Systems)
7%, Series B, 11/3/96 (Insured; MBIA and Escrowed in;
U.S. Government Securities)..................................................... 185,000 190,686
California Health Facilities Finance Authority, Revenue, VRDN:
(Catholic Health Care)
3%, Series B (Insured; MBIA and SBPA; Morgan Guaranty Trust Co.) (a).......... 200,000 200,000
(Pooled Loan Program) 2.80%, Series B (Insured; FGIC) (a)....................... 200,000 200,000
Refunding:
(Memorial Health Services) 3% (Guaranty; Memorial Health Services) (a)........ 1,600,000 1,600,000
(Catholic West) 3%, Series B (Insured; MBIA and SBPA;
Rabobank Nederland) (a)..................................................... 1,000,000 1,000,000
California Housing Finance Agency, Multi-Family Revenue, Refunding, VRDN
3.10%, Series C (LOC; Federal National Mortgage Association) (a,b).............. 1,000,000 1,000,000
California Pollution Control Financing Authority:
IDR, VRDN (Southdown Inc.) 3.40% (LOC; Societe Generale) (a,b).................. 300,000 300,000
PCR:
Refunding:
CP (Pacific Gas and Electric):
3.15%, Series E, 7/25/96 (LOC; Morgan Guaranty Trust Co.) (b)............. 800,000 800,000
3.25%, Series C, 7/31/96 (LOC; Credit Suisse) (b)......................... 500,000 500,000
VRDN:
Refunding (Pacific Gas and Electric)
3.40%, Series B (LOC: Rabobank Nederland) (a,b)........................... 1,500,000 1,500,000
(Southdown Inc.):
3.40% (LOC; Societe Generale) (a,b)....................................... 400,000 400,000
3.40%, Series B (LOC; Societe Generale) (a,b)............................. 600,000 600,000
RRR, VRDN:
(Burney Forest Produce Project)
3.65%, Series A (LOC; National Westminster Bank) (a,b)...................... 600,000 600,000
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Statement of Investments (continued) June 30, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- ---------------------------------------------------------------------------------- ---------- -----------
California Pollution Control Financing Authority (continued):
RRR, VRDN (continued):
(Delano Project) 3.75% (LOC; ABN-Amro Bank) (a,b)............................. $ 500,000 $ 500,000
Refunding:
(Ultra Power Malaga) 3.80%, Series A (LOC; Bank of America) (a,b)........... 400,000 400,000
(Ultra Power Rocklin):
3.80%, Series A (LOC; Bank of America) (a,b).............................. 100,000 100,000
3.80%, Series B (LOC; Bank of America) (a,b).............................. 100,000 100,000
California Public Works Board, LR, Prerefunded
(Department of Corrections)
7.375%, Series A, 11/1/96 (Escrowed in; U.S. Government Securities)............. 100,000 103,244
California School Cash Reserve Program Authority
4.75%, Series A, 7/2/97 (Insured; MBIA)......................................... 1,300,000 1,311,232
California Statewide Communities Development Corporation, Revenue, VRDN:
(Karcher Property Project) 3.25%, Series C (LOC; Bayerische Vereinsbank) (a,b).. 500,000 500,000
(Johanson Project)
3.25%, Series E (LOC; California State Teacher Retirement System) (a,b)....... 300,000 300,000
(Marko Products) 3.40% (LOC; Bank of Tokyo-Mitsubishi) (a,b).................... 610,000 610,000
(Tri-Valley) 3.25%, Series F (LOC; ABN-Amro Bank) (a,b)......................... 300,000 300,000
Concord, MFMR, VRDN (Crossroads)
3.10%, Series B (LOC; Federal National Mortgage Association) (a,b).............. 100,000 100,000
Fontana Special Tax Community Facility District #2, Prerefunded
7.875%, Series A, 9/1/96 (Escrowed in; U.S. Government Securities).............. 100,000 103,244
Foothill Eastern Transportation Corridor Agency, Toll Road, VRDN
3.10%, Series C (LOC; Credit Suisse) (a,b)...................................... 700,000 700,000
Fresno, Water Systems Revenue, (Water Remediation Project)
5.25%, Series A, 6/1/97 (Insured; FGIC)......................................... 100,000 101,335
Huntington Park Redevelopment Agency, Revenue
(Huntington Park Persons Storage II)
3.90%, 8/1/96 (LOC; Sanwa Bank) (b)............................................. 440,000 440,000
Kern High School District, Refunding, GO Notes
5.675%, Series A, 8/1/96 (Insured; MBIA)........................................ 815,000 816,610
Long Beach, Harbor Revenue, CP
3.60%, Series A, 7/24/96
(Line of Credit; Canadian Imperial Bank of Commerce)............................ 1,000,000 1,000,000
Los Angeles, Multi-Family Revenue, VRDN (Masselin Manor)
3.05% (LOC; Bank of America) (a,b).............................................. 300,000 300,000
Los Angeles County:
Pension Obligation, Refunding, VRDN
4.10%, Series C (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a)............ 600,000 600,000
TRAN 4.50%, 7/1/96 (LOC: Bank of America, Credit Suisse,
Morgan Guaranty Trust Co., Swiss Bank Corp., Union Bank of Switzerland
and Westdeutsche Landesbank) (b).............................................. 500,000 500,000
Los Angeles County Community Development Commission, COP, VRDN
(Willowbrook Project) 3.15% (LOC; Wells Fargo Bank) (a,b)....................... 300,000 300,000
Los Angeles County Transportation Commission,
Commission Sales Tax Revenue, Prerefunded
7.60%, Series A, 7/1/96 (Escrowed in; U.S. Government Securities)............... 700,000 714,000
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Statement of Investments (continued) June 30, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- ---------------------------------------------------------------------------------- ---------- -----------
Los Angeles Regional Airports Improvement Corporation, LR, VRDN
(American Airlines):
3.65%, Series E (LOC; Wachovia Bank of Georgia) (a,b)......................... $ 200,000 $ 200,000
3.65%, Series G (LOC; Wachovia Bank of Georgia) (a,b)......................... 100,000 100,000
Metropolitan Water District, CP
3.60%, Series B, 7/22/96 (Liquidity Facility; Westdeusche Landesbank)........... 800,000 800,000
Modesto, MFHR, Refunding, VRDN (Shadowbrook)
3.65%, Series A (LOC; Bank of America) (a,b).................................... 1,000,000 1,000,000
Moorpark, Multi-Family Revenue, VRDN (LeClub Apartments Project)
3.05%, Series A (LOC; Citibank) (a,b)........................................... 400,000 400,000
Newport Beach, Water Revenue, VRDN
(Water Services Capital Improvement Program)
5.375% (Insured; FGIC) (a)...................................................... 110,000 110,162
North City School Facilities Finance Authority,
Special Tax Community Facilities District # 1, Prerefunded
7.35%, Series A, 9/1/96 (Escrowed in; U.S. Government Securities)............... 100,000 100,635
Northern Power Agency, Public Power Revenue, Refunding, VRDN
(Geothermal Project # 3)
3.05%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a).............. 1,000,000 1,000,000
Ontario, Multi-Family Revenue, VRDN (Vineyard Village Project)
3.20% (LOC; Federal Home Loan Banks) (a,b)...................................... 1,000,000 1,000,000
Orange County, VRDN:
Apartment Development Revenue, Refunding (Pointe Niguel Project)
3.40%, Series C (LOC; Wells Fargo Bank) (a,b)................................. 1,000,000 1,000,000
COP (Florence Crittendoc Services)
3.30% (LOC; Swiss Bank Corp.) (a,b)........................................... 600,000 600,000
Otay Water District, COP, VRDN
(Capital Project) 3.20% (LOC; Landesbank Hessen) (a,b).......................... 800,000 800,000
Paramount Unified School District, TRAN 4.50%, 6/30/97............................ 1,000,000 1,004,790
Rainbow Municipal Water District, Refunding 5.10%, 6/1/97 (Insured; AMBAC)........ 225,000 227,802
Regional Airports Improvement Corporation,
Terminal Facilities Completion Revenue, VRDN (Los Angeles International Airport)
3.75% (LOC; Societe Generale) (a,b)............................................. 1,000,000 1,000,000
Sacramento County, COP, VRDN (Administration Center and Court House Project)
3.10% (LOC; Union Bank of Switzerland) (a,b).................................... 500,000 500,000
Sacramento Municipal Utilities District, CP
3.25%, Series H, 8/8/96
(LOC: Bank of America and Morgan Guaranty Trust Co.) (b)........................ 1,000,000 1,000,000
San Diego County:
MFHR, VRDN (Nationwide)
3.10%, Series C (LOC; Federal National Mortgage Association) (a,b)............ 100,000 100,000
TRAN 4.50%, 9/30/96
(LOC: Banque Nationale de Paris and National Westminster Bank) (b)............ 500,000 500,989
San Diego Housing Authority, MFHR, VRDN (Market Street Square Project)
3.10%, Series G (LOC; Barclays Bank) (a,b)...................................... 1,035,000 1,035,000
San Francisco City and County, (City Hall Improvement Project)
7%, Series A, 6/15/97 (Insured; FGIC)........................................... 700,000 722,069
San Francisco City and County Housing Authority, MFHR, VRDN (737 Post Project)
3.25%, Series D (LOC; Banque Nationale DeParis) (a,b)........................... 200,000 200,000
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Statement of Investments (continued) June 30, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- ---------------------------------------------------------------------------------- ---------- -----------
San Jose Redevelopment Agency, Tax Allocation, Prerefunding
(Merged Area Redevelopment Project)
7.50%, Series A, 8/1/96
(Insured; MBIA and Escrowed in; U.S. Government Securities)..................... $ 215,000 $ 220,080
San Jose, MFHR, VRDN (Foxchase)
3%, Series B (Insured; FGIC and Liquidity Facility; FGIC) (a)................... 100,000 100,000
Santa Ana, COP (Santa Ana Recycling Project)
3.90%, Series A, 5/1/97 (Insured; AMBAC)........................................ 500,000 500,000
Santa Clara County, COP, Prerefunding (Capital Project)
8%, 10/1/96 (Escrowed in; U.S. Government Securities)........................... 200,000 206,367
Simi Valley Unified School District, Prerefunded
6.875%, 8/1/96
(Insured; AMBAC and Escrowed in; U.S. Government Securities).................. 200,000 200,631
Southern California Public Power Authority, VRDN (Transmission Project)
3.10% (Insured; AMBAC and LOC; Swiss Bank Corp.) (a,b).......................... 200,000 200,000
Univeristy Housing Systems, Revenues, Prerefunded:
7.60%, Series X, 11/1/96
(Insured; MBIA and Escrowed in; U.S. Government Securities)................... 320,000 330,624
8%, Series X, 11/1/96
(Insured; MBIA and Escrowed in; U.S. Government Securities)................... 720,000 744,610
---------- -----------
TOTAL INVESTMENTS (cost $38,735,965).............................................. $38,735,965
-----------
-----------
<PAGE>
</TABLE>
Dreyfus BASIC California Municipal Money Market Fund
<TABLE>
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
CP Commercial Paper MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company MFMR Multi-Family Mortgage Revenue
GO General Obligation PCR Pollution Control Revenue
IDR Industrial Development Revenue RRR Resources Recovery Revenue
LOC Letter of Credit SBPA Standby Bond Purchase Agreement
LR Lease Revenue TRAN Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
Summary of Combined Ratings (Unaudited)
<S> <C> <C> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- --------- -------- ------------------- --------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 84.2%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 15.8%
-------
100.0%
-------
-------
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At June 30, 1996, 61.8% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
banks, government agencies and corporations.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
Statement of Assets and Liabilities June 30, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $38,735,965)--see Statement of Investments................... $38,735,965
Cash................................................................. 49,026
Interest receivable.................................................. 277,517
-----------
39,062,508
LIABILITIES:
Due to The Dreyfus Corporation--Note 2(a)............................ $ 18,805
Payable for investment securities purchased.......................... 2,316,022 2,334,827
---------- -----------
NET ASSETS............................................................. $36,727,681
-----------
-----------
REPRESENTED BY:
Paid-in capital...................................................... $36,724,181
Accumulated undistributed net realized gain on investments........... 3,500
-----------
NET ASSETS at value applicable to 36,724,190 shares outstanding
(unlimited number of shares of Beneficial Interest authorized)....... $36,727,681
-----------
-----------
NET ASSET VALUE, offering and redemption price per share
($36,727,681 / 36,724,190 shares of Beneficial Interest outstanding). $1.00
-----
-----
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Statement of Operations year ended June 30, 1996
<S> <C> <C>
INVESTMENT INCOME:
Interest Income......................................................... $ 932,767
Expenses:
Investment management fee--Note 2(a).................................... $ 106,265
Distribution fee--Note 2(b)............................................. 13,250
Trustees' fees and expenses--Note 2(c).................................. 2,817
---------
Total Expenses.................................................... 122,332
Less--reduction in management fee due to undertaking--Note 2(a)......... 17,286
---------
Net Expenses...................................................... 105,046
---------
INVESTMENT INCOME--NET...................................................... 827,721
NET REALIZED GAIN ON INVESTMENTS--Note 1(b)................................. 4,282
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 832,003
---------
---------
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Statement of Changes in Net Assets
Year Ended June 30,
--------------------------------
1996 1995*
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net......... ..................................... $ 827,721 $ 842,212
Net realized gain on investments........,,............................. 4,282 6
------------ ------------
Net Increase In Net Assets Resulting From Operations............... 832,003 842,218
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares...................................................... (703,677) (468,028)
Class R shares....................................................... (124,044) (374,184)
Net realized gain on investments:
Investor shares...................................................... (549) --
------------ ------------
Total Dividends.................................................... (828,270) (842,212)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares...................................................... 102,593,225 32,912,720
Class R shares....................................................... 14,319,110 32,480,825
Dividends reinvested:
Investor shares...................................................... 443,530 462,650
Class R shares....................................................... 65,137 265,428
Cost of shares redeemed:
Investor Shares...................................................... (81,850,739) (35,007,105)
Class R Shares....................................................... (21,813,892) (35,063,063)
------------ ------------
Increase (Decrease) In Net Assets From Beneficial Interest
Transactions..................................................... 13,756,371 (3,948,545)
------------ ------------
Total Increase (Decrease) In Net Assets.......................... 13,760,104 (3,948,539)
NET ASSETS:
Beginning of year...................................................... 22,967,577 26,916,116
------------ ------------
End of year............................................................ $ 36,727,681 $ 22,967,577
------------ ------------
------------ ------------
</TABLE>
___________________
*On October 17, 1994, the Trust shares were redesignated Class R shares.
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
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 Fund's financial statements.
<TABLE>
<CAPTION>
Investor shares
----------------------------------------------------------------------
Year Ended June 30, Period Ended Year Ended November 30,
------------------- June 30, -------------------------------
1996 1995(4) 1994(1)(2) 1993(1)(3) 1992(1)(3) 1991(1)
------ -------- ----------- ----------- ------------ ------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of year.......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Investment Operations;
Investment income--net...................... 0.031 0.031 0.012 0.023 0.031 0.046
----- ----- ----- ----- ----- -----
Distributions;
Dividends from investment income--net....... (0.031) (0.031) (0.012) (0.023) (0.031) (0.046)
----- ----- ----- ----- ----- -----
Net asset value, end of year................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN....................... 3.19% 3.10% 1.25% 2.41% 3.10% 4.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..... .44% .60% .47%(5) .32% .32% .32%
Ratio of net investment income to
average net assets........................ 3.36% 3.07% 2.11%(5) 2.40% 3.03% 4.57%
Decrease reflected in above expense ratios
due to undertakings by Manager............ .07% -- .38%(5) .76% .51% .46%
Net Assets, end of year (000's Omitted)..... $36,728 $15,538 $17,170 $15,490 $26,987 $27,831
</TABLE>
___________________
(1) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the Institutional Class and
Investment Class of shares. Effective April 4, 1994 the Retail and
Institutional Classes were reclassified as a single class of shares known as
Investor shares. The Financial Highlights for the year ended June 30, 1995
are based upon an Investor share outstanding. The amounts shown for the
period ended June 30, 1994 were calculated using the performance of a Retail
share outstanding from December 1, 1993 to April 3, 1994, and the performance
of an Investor share outstanding from April 4, 1994 to June 30, 1994. The
Financial Highlights for the year ended November 30, 1993 and prior periods
are based upon a Retail share outstanding.
(2) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30. Prior to April 4, 1994, The Boston
Company Advisors, Inc. served as the Fund's investment adviser. From April 4,
1994 through October 16, 1994, Mellon Bank, N.A., served as the Fund's
investment manager.
(3) The per share amounts have been calculated using the monthly average
shares method, which more appropriately presents per share data for this
period since use of the undistributed net investment income method did not
accord with results of operations.
(4) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(5) Annualized.
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Financial Highlights (continued)
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 Fund's financial statements.
<TABLE>
<CAPTION>
Class R shares(8)
--------------------------------------------------------
Year Ended Year Ended Period Ended Period Ended
June 30, June 30, June 30, November 30,
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(3) 1993(1)(4)
---------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of year............. $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
Investment Operations;
Investment income--net......................... 0.013 0.033(5) 0.013(5) 0.020(5)
------ ------ ------ ------
Distributions;
Dividends from investment income--net.......... (0.013) (0.033) (0.013) (0.020)
------ ------ ------ ------
Net asset value, end of year................... -- $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------
------ ------ ------ ------
TOTAL INVESTMENT RETURN.......................... -- 3.35% 1.31% 1.98%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........ .35%(6) .35% .29%(6)(7) .28%(6)(7)
Ratio of net investment income to average
net assets................................... 3.40%(6) 3.32% 2.29%(6) 2.13%(6)
Net Assets, end of year (000's Omitted)........ -- $7,430 $9,747 $6,408
</TABLE>
_________________
(1) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was reclassified as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated Class R
shares. The table above is based upon an Investment Class share outstanding
from February 1, 1993 to April 3, 1994 and a Trust share outstanding from
April 4, 1994 to October 16, 1994.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30. Prior to April 4, 1994, The Boston
Company Advisors, Inc., served as the Fund's investment adviser. From April
4, 1994, through October 16, 1994, Mellon Bank, N.A., served as the Fund's
investment manager.
(4) The per share amounts have been calculated using the monthly average
shares method, which more appropriately presents per share data for the
period since use of the undistributed net investment income method did not
accord with results of operations.
(5) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer agent
for the periods ended June 30, 1994 and November 30, 1993 were $0.011 and
$0.013, respectively.
(6) Annualized.
(7) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the periods ended June 30, 1994 and November 30, 1993 were
0.67% and 1.03%, respectively.
(8) Effective November 21, 1995, the Fund converted to a single Class Fund,
with the existing R shares converted into Investor shares.
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 seven series including the Dreyfus BASICCalifornia
Municipal Money Market Fund (the "Fund"). The Fund's investment objective is
to provide a high level of current income exempt from Federal and state of
California personal income taxes to the extent consistent with the preservatio
n of capital and the maintenance of liquidity by investing in high quality,
short-term municipal securities. The Dreyfus Corporation ("Manager") serves
as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A. ("Mellon Bank").
On July 26, 1995, the Fund's Board of Trustees approved a new Investment
Management Agreement between the Fund and the Manager (the "New Agreement")
and certain other changes to restructure the Fund to enable it to join
Dreyfus' BASIC Family of Money Market Funds. Fund shareholders approved the
New Agreement at a special meeting of shareholders held on November 15, 1995
by a vote of 13,914,802 shares in favor of, and 4,050,090 shares against,
approval of the New Agreement, with 137,964 shares abstaining, and the New
Agreement and other changes became effective November 20, 1995.
On July 26, 1995, the Fund's Trustees approved a change to the Fund's
name, effective November 20, 1995, from "Dreyfus/Laurel California Tax-Free
Money Fund" to "Dreyfus BASICCalifornia Municipal Money Market Fund."
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. Prior to November 20, 1995, the Fund was
authorized to issue two classes of shares: Investor shares and Class R
shares. Investor shares were sold primarily to retail investors and were
subject to a distribution fee. Class R shares were sold primarily to bank
trust departments and other financial service providers (including Mellon
Bank and its affiliates) acting on behalf of customers having a qualified trus
t or investment account or relationship at such institution, and were not
subject to a distribution fee. Each class of shares had identical rights and
privileges, except with respect to the distribution fee and voting rights on
matters affecting a single class. Effective November 20, 1995, the Fund's
Investor and Class R descriptions were eliminated and the Fund became a
single class Fund without a separate class description. Fund shares currently
are offered to any investor.
Investment income, net of expenses (other than class specific expenses),
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.
The Fund's Financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: Investments are valued at amortized cost in
accordance with Rule 2a-7 of the Investment Company Act of 1940, which has
been determined by the Fund's Board of Trustees to represent the fair value
of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for the Fund; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
NOTES TO FINANCIAL STATEMENTS (continued)
it to do so. There is no assurance, however, that the Fund will be able
to maintain a stable net asset value of $1.00.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date 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. Realized
gain and loss from securities transactions are recorded on the identified
cost basis.
(c) Concentration of risk: The Fund 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 Fund.
(d) Distributions to shareholders: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain are normally declared and
paid annually, but the Fund 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, if any, it is the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund 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.
At June 30, 1996, 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).
NOTE 2 -- Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to the New Agreement with the
Manager, the Manager provides or arranges for one or more third parties to
provide investment advisory, administrative, custody, fund accounting and
transfer agency services to the Fund. The Manager also directs the
investments of the Fund in accordance with its investment objective, policies
and limitations. For these services, the Fund is contractually obligated to
pay the Manager a fee, calculated daily and paid monthly, at the annual rate
of .45% of the value of the Fund's average daily net assets. The Manager has
undertaken through November 19, 1996 to limit its unitary fee to .35 of 1% of
the Fund's average daily net assets excluding certain fees outlined below.
Out of its fee, the Manager pays all of the expenses of the Fund except
brokerage fees, taxes, interest, fees and expenses of non-interested Trustees
(including counsel fees) and extraordinary expenses. In addition, the Manager
is required to reduce its fee in an amount equal to the Fund's allocable
portion of fees and expenses of the non-interested Trustees (including
counsel). The reduction in management fee, pursuant to the undertaking,
amounted to $17,286 during the year ended June 30, 1996.
(b) Distribution plan: The Fund had adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its then
existing Investor shares. Under the Plan, the Fund paid annually up to .25%
of the value of the average daily net assets attributable to its Investor
shares to compensate
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
NOTES TO FINANCIAL STATEMENTS (continued)
the Distributor and Dreyfus Service Corporation, an affiliate of the
Manager, for shareholder servicing activities and the Distributor for
activities primarily intended to result in the sale of Investor shares. The
Class R shares did not bear a distribution fee. During the year ended June
30, 1996, the distribution fee for the Investor shares was $13,250. Effective
November 20, 1995, the Plan was terminated.
(c) Trustees' fees: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee attended and is reimbursed for
travel and out-of-pocket expenses. These expenses are paid in total by the
following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free
Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the Chairman
of the Board receives an annual fee of $75,000 per year. These fees and expens
es are charged and allocated to each series based on net assets.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and
liabilities, including the statement of investments of Dreyfus Basic
California Municipal Money Market Fund (formerly the Dreyfus/Laurel
California Tax-Free Money Fund) of The Dreyfus/Laurel Tax-Free Municipal
Funds as of June 30, 1996, and the related statement of operations for the
year then ended and statements of changes in net assets for each of the years
in the two-year period then ended and financial highlights for each of the
years or period in the three-year period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits. The financial
highlights for each of the years or period for the three-year period ended
November 30, 1993 were audited by other auditors whose report thereon, dated
January 18, 1994, expressed an unqualified opinion on those financial
highlights.
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 also
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 June 30, 1996, by correspondence with the custodian.
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 Dreyfus Basic California Municipal Money Market Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 1996, the results of
its operations for the year then ended and the changes in its net assets for
each of the years in the two-year period then ended and financial highlights
for each of the years or period in the three-year period then ended in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, NY
July 29, 1996
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all
the dividends paid from investment income--net during the fiscal year ended
June 30, 1996 as "exempt-interest dividends" (not subject to regular Federal
and, for individuals who are California residents, California personal income
taxes).
<PAGE>
Dreyfus
BASIC
California Municipal
Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 307AR966
<PAGE>
Dreyfus
BASIC New York
Municipal
Money Market Fund
Annual Report
June 30, 1996
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus BASIC
New York Municipal Money Market Fund. For its annual reporting period ended
June 30, 1996, your Fund produced an annualized yield of 3.09% per share.*
During this twelve-month period, the Fund paid income dividends of
approximately $.031 per share. Reinvesting these dividends and calculating
the effect of compounding resulted in an annualized effective yield of
3.13%.** These dividends were exempt from Federal, State of New York and New
York City personal income taxes, although some income may be subject to the
Federal Alternative Minimum Tax (AMT) for certain shareholders.
THE ECONOMY
So far this year, the economic story has been pleasant reading: solid
growth, strong gains in employment and low inflation. Yet along with this
good news has come the fear that the Federal Reserve Board (the "Fed") will
tighten monetary policy lest the continued economic expansion bring a
resurgence in inflation. The growth in the economy has resulted in strong
gains in employment. Over recent months, these reports of new jobs have been
accompanied by rises in long-term interest rates in the expectation that the
Fed would soon act to cool down an economy at risk of overheating. To date,
the Fed has refrained from any overt tightening moves. (The Fed cut rates
three times between last July and January of this year, and has since held
steady the Federal Funds rate at 5.25%, even as long-term rates in the bond
market have risen more than a full percentage point.)
The interplay between job growth and economic growth has become the
dominant force affecting how investors think about the outlook for inflation
and the possibility that the Fed will raise short-term interest rates. Along
with handsome increases in new jobs have come solid gains in retail sales,
although many economists feel that heavy consumer debt burdens will act as a
constraint against any acceleration in growth. Automobile sales remain
strong, the third year in a row of steady growth for auto manufacturers. Yet,
the factors focused on by investors and by the Fed may be different. Near the
end of the reporting period, the Fed's Beige Book, a survey of business
conditions in the 12 districts of the Federal Reserve, reported that the
economy was growing at a moderate pace and that despite the tightening labor
markets "indications of rising wages remain scattered." Recent statements by
officials of the Federal Reserve Board have suggested that "sustained
moderate growth" is the most likely path for the economy and that labor
markets, while tightening, do not yet indicate significant inflationary
pressures.
There seem to be few signs of inflation. Commodity and producer
prices remain subdued. Anecdotal reports from companies continue to attest to
their lack of ability to raise prices. Another measure of potential
inflation, delivery lead times -- one of Chairman Greenspan's favorite
indicators -- has not changed much for months. Furthermore, some of the
inflationary consequences of running large budget deficits have eased due to
the growth in the economy. Higher than expected tax payments -- a result of
economic growth -- have reduced the Federal budget deficit to the $130 billion
level, the lowest since the early 1980s.
Nevertheless, there are limits to non-inflationary economic
expansion. As always, we remain watchful for signs of price pressures that
could lead to a resurgence of inflation. For now, there are few indications
of that. In fact, there also appears to be a growing consensus that the rate
of economic growth could
<PAGE>
taper off in the second half of the year due to the effect of higher
long-term interest rates on certain key sectors of the economy like housing
and consumer spending.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Interest rates climbed throughout the first half of 1996 as stronger
than expected economic activity led investors to believe that the Federal
Reserve would tighten monetary policy to dampen potential inflation. The
yield on one-year tax-exempt securities rose approximately 50 basis points
during the first half of 1996. Demand for tax-exempt money market instruments
was strong throughout the reporting period, particularly in January and June
when the tax-exempt money market experienced positive cash flow from
seasonally heavy coupon payments and redemptions.
The Fund's average portfolio maturity was shortened at the beginning
of 1996 (49 days on January 2, 1996) to cushion the Fund against the negative
effect of rising interest rates. Beginning in May, the Fund's average
portfolio maturity was carefully extended to take advantage of a seasonal
lack of supply of tax-exempt money market investments as record coupon and
maturity monies flowed into the marketplace. By the end of the reporting
period, the Fund's average portfolio maturity of the Fund was 55 days.
The State finally passed a state budget after a 3-month delay. New
York concluded its fiscal year ending March 31, 1996 with a surplus of $445
million. This surplus was the result of $270 million in higher revenues, a
reduction of $120 million in welfare and medicaid costs and "underspending"
of $55 million in other programs. These budget surplus monies ($445 million)
were used to fund the State's rainy day fund; a $65 million allocation
brought the balance of that fund to $237 million. The remaining surplus ($380
million) will be employed to support additional spending programs. Overall,
we assess the State's economic growth prospects as neutral to mildly
positive.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
Angela Deni
Portfolio Manager
July 15, 1996
New York, N.Y.
* Yield figures reflect the performance of the Fund's previously existing
Investor shares for the period from July 1, 1995 through December 7, 1995 and
the Fund's single class shares from December 8, 1995 through June 30, 1996.
** Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC New York Municipal Money Market Fund
Statement of Investments June 30, 1996
Principal
Tax Exempt Investments--100% Amount Value
- --------------------------------------------------------------------------------------- ---------- ------------
<S> <C> <C>
New York--96.4%
Albany Industrial Development Agency, IDR, VRDN (Newkirk Products Inc., Project)
3.35%, Series A (LOC; Fleet Bank) (a,b).............................................. $1,620,000 $ 1,620,000
Babylon Industrial Development Agency, VRDN:
IDR (Napco Security System Inc., Facility) 3.10% (LOC; Chemical Bank) (a,b).......... 200,000 200,000
RRR (Equity Babylon Project) 3.65% (LOC; Union Bank of Switzerland) (a,b)............ 7,300,000 7,300,000
Broome County Industrial Development Agency, IDR, Refunding, VRDN
(Bing Realty Co. Project) 3.25% (LOC; Meridian Bank Corp.) (a,b)..................... 500,000 500,000
Buffalo Sewer Authority, Revenue, Prerefunded 7.625%, Series D, 7/1/96
(Insured; AMBAC and Escrowed in; U.S. Government Securities)......................... 1,000,000 1,030,000
Erie County, RAN 4.50%, 9/20/96 (LOC; Union Bank of Switzerland) (a)................... 700,000 700,969
Erie County Water Authority, Water Revenue, VRDN
3.10%, Series A (Insured; AMBAC and SBPA; National Bank of Australia) (b)............ 2,000,000 2,000,000
Franklin County Industrial Development Agency, IDR, VRDN
(Kes Chateaugay Limited Partnership Project)
3.40%, Series A (LOC; Bank of Tokyo) (a,b)........................................... 500,000 500,000
Huntington Unified Free School District, TAN 4.375%, 6/24/97........................... 4,000,000 4,021,680
Jefferson County Industrial Development Agency, IDR, VRDN
(Watertown-Carthage TV) 3.70% (LOC; First National Bank of Chicago) (a,b)............ 100,000 100,000
Liverpool Central School District, RAN 4.50%, 6/20/97.................................. 5,000,000 5,027,960
Metropolitan Transportation Authority:
Commuter Facilities Revenue, VRDN
3.15% (LOC: Bank of Tokyo-Mitsubishi, Industrial Bank of Japan,
Morgan Bank, National Westminster Bank and Sumitomo Bank) (a,b).................... 200,000 200,000
Transportation Facilities Revenue, Prerefunding
8.375%, Series F, 7/1/96 (Escrowed in; U.S. Government Securities)................. 1,100,000 1,122,000
Monroe County Industrial Development Agency, Revenue, Refunding, VRDN
(Office Building) 3.60% (LOC; Chemical Bank) (a,b)................................... 275,000 275,000
Montgomery Industrial Development Agency, IDR, VRDN
(Service Merchandise Co.) 3.60% (LOC; Industrial Bank of Japan) (a,b)................ 200,000 200,000
Nassau County General Improvement 5%, Series S, 3/1/97 (Insured; AMBAC)................ 2,415,000 2,442,457
New York City, GO:
Prerefunded:
7.375%, Series A, 8/15/96 (Escrowed in; U.S. Government Securities)................ 395,000 397,006
8.50%, Series D, 8/1/96 (Escrowed in; U.S. Government Securities).................. 4,045,000 4,142,661
VRDN:
3.10%, Series A-6 (LOC; Landesbank Hessen) (a,b)................................... 800,000 800,000
3.60%, Series B (LOC; Bank of Nova Scotia) (a,b)................................... 4,900,000 4,900,000
3.60%, Series B (Insured; MBIA and Liquidity Facility; Austria Aktiengesel) (b).... 1,500,000 1,500,000
New York City Housing Development Corporation, Mortgage Revenue, VRDN:
(Columbus Apartments)
3.10%, Series A (LOC; Federal National Mortgage Association) (a,b)................. 2,720,000 2,720,000
Multi-Family:
(Columbus) 3.10%, Series A (LOC; Citibank) (a,b)................................... 300,000 300,000
(Tribecca Towers)
3.20%, Series A (LOC; Federal National Mortgage Association) (a,b)............. 4,300,000 4,300,000
Refunding (James Tower Development) 3.20%, Series A (LOC; Citibank) (a,b)............ 500,000 500,000
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
Statement of Investments (continued) June 30, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------------------------- ---------- ------------
New York City Industrial Development Agency, IDR, VRDN
(Brooklyn Navy Yard Cogen) 3.40% (LOC; Bank of America) (a,b)........................ $ 400,000 $ 400,000
New York City Municipal Water Finance Authority:
CP:
3.70%, Series 3, 8/8/96 (LOC; Canadian Imperial Bank of Commerce) (a).............. 3,000,000 3,000,000
Water and Sewer Systems Revenue:
3.60%, Series 3, 7/3/96 (LOC: Bank of Nova Scotia and
Toronto Dominion) (a)........................................................ 3,000,000 3,000,000
3.20%, 8/8/96 (Insured; AMBAC and Liquidity Facility; Krediet Bank)............ 2,000,000 2,000,000
3.70%, 8/8/96 (LOC; Canadian Imperial Bank of Commerce) (a).................... 3,000,000 3,000,000
3.20%, Series A-3, 8/14/96 (Insured; FSA and LOC; Banque Paribas) (a).......... 4,200,000 4,200,000
VRDN, Water and Sewer Systems Revenue 3.55%, Series G (b)............................ 6,800,000 6,800,000
New York State Dormitory Authority, Revenues, VRDN:
(Cornell University) 3.45%, Series B (LOC; Morgan Guaranty Trust Co.) (a,b).......... 4,200,000 4,200,000
(Metropolitan Museum of Art)
3%, Series A (Guaranty; Metropolitan Museum of Art) (b)............................ 1,200,000 1,200,000
New York State Energy, Research and Development Authority:
PCR (New York State Electric and Gas):
3.30%, 3/15/97 (LOC; Morgan Bank) (a).............................................. 2,000,000 2,000,000
3.85%, Series B, 10/15/96 (LOC; Union Bank of Switzerland) (a)..................... 250,000 250,000
3.65%, Series D, 12/1/96 (LOC; Union Bank of Switzerland) (a)...................... 300,000 300,000
VRDN:
Electric Facilities Revenue (LILCO Project)
3.05%, Series A (LOC; Toronto-Dominion Bank) (a,b)............................... 500,000 500,000
PCR:
(Rochester Gas and Electric) 3.45% (LOC; The Bank of New York) (a,b)............. 700,000 700,000
Refunding (New York Electric and Gas)
3.55%, Series C (LOC; Morgan Guaranty Trust Co.) (a,b)......................... 3,300,000 3,300,000
New York State Environmental Facilities Corporation, SWDR, CP
(General Electric Co. Project)
3.60%, Series A, 7/23/96 (LOC; General Electric Co.) (a)............................. 1,900,000 1,900,000
New York State Housing Finance Agency, VRDN:
HR:
(East 84th Street) 3.30%, Series A (LOC: Fleet Bank) (a,b)......................... 1,600,000 1,600,000
(Liberty View Apartments) 3.35% (LOC; Chemical Bank) (a,b)......................... 2,200,000 2,200,000
Revenue:
(Mount Sinai School of Medicine) 3%, Series A (LOC; Sanwa Bank) (a,b).............. 1,800,000 1,800,000
(Normandie Court I Project) 3.05% (LOC; Societe Generale) (a,b).................... 100,000 100,000
New York State Job Development Authority, VRDN:
3.67%, Series D-1 to D-9 (LOC; Sumitomo Bank) (a,b).................................. 175,000 175,000
3.85%, Series A-1 to A-42 (Guaranty; New York State and SBPA; Fuji Bank) (b)......... 1,075,000 1,075,000
4%, Series A-1 to A-9 (LOC; Sumitomo Bank) (a,b)..................................... 515,000 515,000
4%, Series B-1 to B-6 (LOC; Sumitomo Bank) (a,b)..................................... 115,000 115,000
4%, Series C-1 to C-34 (LOC; Sumitomo Bank) (a,b).................................... 365,000 365,000
New York State Local Governmental Assistance Corporation, VRDN:
3%, Series B (LOC: Credit Suisse and Swiss Bank Corp.) (a,b)......................... 7,100,000 7,100,000
3.05%, Series F (LOC; Toronto-Dominion Bank) (a,b)................................... 4,100,000 4,100,000
3.10%, Series D (LOC; Societe Generale) (a,b)........................................ 5,900,000 5,900,000
3.10%, Series E (LOC; Canadian Imperial Bank of Commerce) (a,b)...................... 2,000,000 2,000,000
New York State Medical Care Facilities Finance Agency, Revenue, VRDN
(Pooled Equipment Loan Program II) 3.20% (LOC; Chemical Bank) (a,b).................. 4,200,000 4,200,000
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
Statement of Investments (continued) June 30, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------------------------- ---------- ------------
Niagara Falls Bridge Commission, Toll Revenue, VRDN
3.10%, Series A (Insured; FGIC and LOC; Industrial Bank of Japan) (a,b).............. $3,400,000 $ 3,400,000
North Tonawanda City School District, BAN 4.25%, 6/12/97............................... 3,386,000 3,401,449
Onondaga County Industrial Development Agency, IDR, VRDN
(Pass and Seymour Project) 3.40% (LOC; Banque Nationale DeParis) (a,b)............... 300,000 300,000
Town of Oyster Bay 7.10%, 3/1/97 (Insured; FGIC)...................................... 400,000 409,894
Village of Roslyn 4%, 12/18/96......................................................... 1,500,000 1,503,231
Roslyn Unified Free School District, BAN 3.55%, 7/18/96................................ 4,000,000 4,000,127
Saint Lawrence Industrial Development Agency, EIR, VRDN
(Reynolds Metals Co. Project) 3.35% (LOC; Royal Bank of Canada) (a,b)................ 1,100,000 1,100,000
Suffolk County, TAN 4%, Series I, 8/15/96 (LOC: Canadian Imperial Bank of
Commerce, National Westminster Bank and Westdeutsche Landesbank) (a)................. 1,000,000 1,000,846
Suffolk County Industrial Development Agency, VRDN:
Civil Facility Revenue (Suffolk Child Care Center Project)
3.25% (LOC; Barclays Bank) (a,b)................................................... 700,000 700,000
IDR:
(Algorex Corp Project) 3.30% (LOC; Marine Midland Bank) (a,b)...................... 1,850,000 1,850,000
Refunding (Target Rock Corporation) 3.15% (LOC; Bank of Nova Scotia) (a,b)......... 2,500,000 2,500,000
Suffolk County Southwest Sewer District, Refunding 4%, 2/1/97 (Insured; MBIA).......... 2,555,000 2,562,254
Suffolk County Water Authority, VRDN 3.25% (LOC; Bank of Nova Scotia) (a,b)............ 6,000,000 6,000,000
Syracuse Industrial Development Agency, Civil Facility Revenue, VRDN
(Syracuse University Project) 3.45% (LOC; Morgan Guaranty Trust Co.) (a,b)........... 3,500,000 3,500,000
Triborough Bridge and Tunnel Authority:
General Purpose Revenues, Prerefunding
8.10%, Series K, 1/1/97 (Escrowed in; U.S. Government Securities).................. 1,100,000 1,155,188
Special Obligation, VRDN 3.05% (Insured; FGIC and Liquidity Facility; FGIC) (b)...... 200,000 200,000
Westchester County 4.25%, Series B, 12/15/96........................................... 250,000 250,833
Western Nassau County Water Authority, Systems Revenue
3.70%, 5/1/97 (Insured; AMBAC)....................................................... 460,000 460,062
Yonkers Industrial Development Agency, Civil Facility Revenue, VRDN
(Consumers Union Facility)
3.20% (Insured; AMBAC and SBPA; Credit Locale De France) (b)......................... 3,500,000 3,500,000
U.S. Related--3.6%
Commonwealth of Puerto Rico Government Development Bank, Refunding, VRDN
3% (LOC; Credit Suisse) (a,b)........................................................ 1,500,000 1,500,000
Commonwealth of Puerto Rico Highway and Transportation Authority,
Highway Revenue, VRDN 3%, Series X (LOC: Landesbank Hessen,
Swiss Bank Corp. and Union Bank of Switzerland) (a,b)................................ 100,000 100,000
Puerto Rico Government Development Bank, CP 3.30%, 8/9/96.............................. 3,200,000 3,200,000
Puerto Rico Industrial Medical and Environmental Pollution Control Facility
Finance Authority, Revenue:
3.80%, 12/1/96 (LOC; Morgan Guaranty Trust Co.) (a)................................ 750,000 750,608
VRDN (AGMEF Project) 3.15% (LOC; Bank of Tokyo-Mitsubishi) (a,b)................... 200,000 200,000
------------
TOTAL INVESTMENTS
(cost $158,339,225).................................................................. $158,339,225
------------
------------
</TABLE>
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
<TABLE>
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
BAN Bond Anticipation Notes Insurance Corporation
CP Commercial Paper PCR Pollution Control Revenue
EIR Environment Improvement Revenue RAN Revenue Anticipation Notes
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
FSA Financial Security Assurance SBPA Standby Bond Purchase Agreement
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue TAN Tax Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
Summary of Combined Ratings (Unaudited)
<S> <C> <C> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- --------- --------- -------------------- -----------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 80.5%
F2 VMIG2/MIG2, P2 SP2, A2 1.1
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 9.6
Not Rated (f) Not Rated (f) Not Rated (f) 8.8
------
100.0%
------
------
</TABLE>
Notes to Statement of Investments:
(a) Secured by letters of credit. At June 30, 1996, 67.1% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
banks, government agencies and corporations.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest rates.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax-exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(f) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's, have been determined by the Fund's Board of Trustees to be of
comparable quality to those rated securities in which the Fund may invest.
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC New York Municipal Money Market Fund
Statement of Assets and Liabilities June 30, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $158,339,225)--see Statement of Investments..................... $158,339,225
Cash.................................................................... 1,332,375
Interest receivable..................................................... 923,063
Other receivables....................................................... 605
------------
160,595,268
LIABILITIES:
Due to The Dreyfus Corporation--Note 2(a)............................... $ 82,287
Payable for investment securities purchased............................. 4,021,680 4,103,967
---------- ------------
NET ASSETS................................................................ $156,491,301
------------
------------
REPRESENTED BY:
Paid-in capital......................................................... $156,491,702
Accumulated net realized (loss) on investments.......................... (401)
------------
NET ASSETS at value applicable to 156,491,702 shares outstanding
(unlimited number of shares of Beneficial Interest authorized).......... $156,491,301
------------
------------
NET ASSET VALUE, offering and redemption price per share
($156,491,301 / 156,491,702 shares of Beneficial Interest outstanding).. $1.00
-----
-----
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC New York Municipal Money Market Fund
Statement of Operations year ended June 30, 1996
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest Income....................................................... $2,533,428
Expenses:
Investment management fee--Note 2(a).................................. $310,240
Distribution fee--Note 2(b)........................................... 26,897
Trustees' fees and expenses--Note 2(c)................................ 4,778
--------
Total Expenses.................................................... 341,915
Less--reduction in management fee due to undertaking--Note 2(a)....... 59,061
--------
Net Expenses...................................................... 282,854
----------
INVESTMENT INCOME--NET.................................................... 2,250,574
NET REALIZED (LOSS) ON INVESTMENT--Note 1(b).............................. (391)
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $2,250,183
----------
----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended June 30,
--------------------------------
1996 1995*
------------ ------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 2,250,574 $ 440,392
Net realized gain (loss) on investments.............................. (391) 349
------------ ------------
Net Increase In Net Assets Resulting From Operations............. 2,250,183 440,741
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares.................................................... (2,138,509) (248,024)
Class R shares..................................................... (112,065) (192,368)
Net realized gain on investments;
Investor shares.................................................... (349) --
------------ ------------
Total Dividends.................................................. (2,250,923) (440,392)
------------ ------------
BENEFICIALINTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares.................................................... 224,508,939 23,865,192
Class R shares..................................................... 4,827,833 10,336,048
Dividends reinvested:
Investor shares.................................................... 1,957,795 240,333
Class R shares..................................................... 23,917 44,938
Cost of shares redeemed:
Investor shares.................................................... (91,714,099) (10,377,536)
Class R shares..................................................... (12,901,810) (7,789,885)
------------ ------------
Increase In Net Assets From Beneficial Interest Transactions..... 126,702,575 16,319,090
------------ ------------
Total Increase In Net Assets................................... 126,701,835 16,319,439
NET ASSETS:
Beginning of year.................................................... 29,789,466 13,470,027
------------ ------------
End of year.......................................................... $156,491,301 $ 29,789,466
------------ ------------
------------ ------------
<FN>
- ---------------------
* Effective December 8, 1995, the Fund converted to a single class Fund, with
existing Class R shares converted into Investor Class shares.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investments return, ratios to average
net assets and other supplemental data for each year indicated. This
information has been derived from the Fund's financial statements.(1)
<TABLE>
<CAPTION>
Investors shares
------------------------------------------------------------------
Year Ended June 30, Period Ended Year Ended November 30,
------------------- June 30, -------------------------------
1996 1995(2)(3) 1994(2)(4) 1993(2) 1992(2) 1991(2)
---- ---------- ---------- ------- ------- -------
PER SHARE DATA:
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Investment Operations;
Investment income--net...................... .031 .029 .012 .021 .031 .046
----- ----- ----- ----- ----- -----
Distributions:
Dividends from investment income--net....... (.031) (.029) (.012) (.021) (.031) (.046)
Distribution from net realized capital
gains..................................... -- -- -- -- .00(5) --
----- ----- ----- ----- ----- -----
Net asset value, end of year................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN....................... 3.14% 2.95% 1.23% 2.15% 3.11% 4.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..... .43% .60% .44%(6) .31% .32% .32%
Ratio of net investment income to
average net assets........................ 3.43% 2.97% 2.12%(6) 2.13% 3.08% 4.58%
Decrease reflected in above expense
ratios due to undertakings by
the Manager............................... .09% -- .53%(6) .98% .71% .61%
Net Assets, end of year (000's Omitted)..... $156,491 $21,739 $8,011 $9,356 $11,183 $15,989
<FN>
- ---------------------
(1) Effective December 8, 1995, the Fund's Investor shares became a single
class Fund without a class designation.
(2) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the Institutional Class and
Investment Class of shares. Effective April 4, 1994 the Retail and
Institutional Classes were reclassified as a single class of shares known as
Investor shares. The Financial Highlights for the year ended June 30, 1995
are based upon an Investor share outstanding. The amounts shown for the
period ended June 30, 1994 were calculated using the performance of a Retail
share outstanding from December 1, 1993 to April 3, 1994, and the performance
of an Investor share outstanding from April 4, 1994 to June 30, 1994. The
Financial Highlights for the year ended November 30, 1993 and prior periods
are based upon a Retail Share outstanding.
(3) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30. Prior to April 4, 1994, The Boston
Company Advisors, Inc. served as the Fund's investment adviser. From April 4,
1994 through October 16, 1994, Mellon Bank, N.A., served as the Fund's
investment manager.
(5) Amount represents less than .001 per share.
(6) Annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
Financial Highlights (continued)
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 Fund's financial statements.
<TABLE>
<CAPTION>
Class R shares(1)
--------------------------------------------------------------
Year Ended June 30, Period Ended Period Ended
----------------------- June 30, November 30,
PER SHARE DATA: 1996 1995(2) 1994(3)(4) 1993(3)
-------- --------- ------------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of year............ $1.00 $1.00 $1.00 $1.00
----- ----- ----- -----
Investment Operations;
Investment income--net........................ .015 .031 .013(5) .018(5)
----- ----- ----- -----
Distributions;
Dividends from investment income--net......... (.015) (.031) (.013) (.018)
----- ----- ----- -----
Net asset value, end of year.................. -- $1.00 $1.00 $1.00
----- ----- ----- -----
----- ----- ----- -----
TOTAL INVESTMENT RETURN......................... -- 3.21% 1.32% 1.76%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets....... .35%(6) .35% .28%(6)(7) .26%(6)(7)
Ratio of net investment income to average
net assets.................................. 3.32%(6) 3.22% 2.27%(6) 2.12%(6)
Net Assets, end of year (000's Omitted)....... -- $8,050 $5,459 $7,700
<FN>
- ---------------
(1) Effective December 8, 1995, the Fund converted to a single Class Fund,
with the existing R shares converted into Investor shares.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(3) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was reclassified as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated Class R
shares. The above is based upon an Investment Class share outstanding from
February 1, 1993 to April 3, 1994 and a Trust outstanding from April 4, 1994
to October 16, 1994.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30. Prior to April 4, 1994, The Boston
Company Advisors, Inc. served as the Fund's investment adviser. From April 4,
1994 through October 16, 1994, Mellon Bank, N.A. served as the Fund's
investment manager.
(5) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer agent
for the periods ended June 30, 1994 and November 30, 1993 were $0.010 and
$0.007, respectively.
(6) Annualized.
(7) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the periods ended June 30, 1994 and November 30, 1993 were
0.82% and 1.22%, respectively.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 seven series including the Dreyfus BASIC New York
Municipal Money Market Fund (the "Fund"). The Fund's investment objective is
to provide a high level of current income exempt from Federal income taxes
and New York State and New York City personal income taxes to the extent consi
stent with the preservation of capital and the maintenance of liquidity by
investing in high quality, short-term municipal securities. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
On July 26, 1995, the Fund's Board of Trustees approved a new Investment
Management Agreement between the Fund and the Manager (the "New Agreement")
and certain other changes to restructure the Fund to enable it to join
Dreyfus' BASIC Family of Money Market Funds. Fund shareholders approved the
New Agreement at a special meeting of shareholders held on December 6, 1995
by a vote of 13,769,202 shares in favor of, and 3,820,727 shares against,
approval of the New Agreement, with 409,310 shares abstaining, and the
NewAgreement and other changes became effective December 8, 1995.
On July 26, 1995, the Fund's Trustees approved a change to the Fund's
name, effective December 8, 1995, from "Dreyfus/Laurel New York Tax-Free
Money Fund" to "Dreyfus BASIC New York Municipal Money Market Fund."
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. Prior to December 8, 1995 the Fund was
authorized to issue two classes of shares: Investor shares and Class R
shares. Investor shares are sold primarily to retail investors and were
subject to a distribution fee. Class R shares were sold primarily to bank
trust departments and other financial service providers (including Mellon
Bank and its affiliates) acting on behalf of customers having a qualified trus
t or investment account or relationship at such institution, and were not
subject to a distribution fee. Each class of shares had identical rights and
privileges, except with respect to the distribution fee and voting rights on
matters affecting a single class. Effective December 8, 1995, the Fund's
Investor and Class R designations were eliminated and the Fund became a
single class Fund without a separate class designation. Fund shares currently
are offered to any investor.
Investment income, net of expenses (other than class specific expenses),
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: Investments are valued at amortized cost in
accordance with Rule 2a-7 of the Investment Company Act of 1940, which has
been determined by the Fund's Board of Trustees to represent the fair value
of the Fund's investments.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
NOTES TO FINANCIAL STATEMENTS (continued)
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for the Fund; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that the Fund will be able to maintain a
stable net asset value of $1.00.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date 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. Realized
gain and loss from securities transactions are recorded on the identified
cost basis.
(c) Concentration of risk: The Fund 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 Fund.
(d) Distributions to shareholders: It is the policy of the Fund to
declare dividends daily from investment income-net; such dividends are paid
monthly. Dividends from net realized capital gain are normally declared and
paid annually, but the Fund 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, if any, it is the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund 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.
At June 30, 1996, 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).
NOTE 2 - Investment Management Fee And Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to the New Agreement with the
Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody,
fund accounting and transfer agency services to the Fund. The Manager also
directs the investments of the Fund in accordance with its investment
objective, policies and limitations. For these services, the Fund is
contractually obligated to pay the Manager a fee, calculated daily and paid
monthly, at the annual rate of .45% of the value of the Fund's average daily
net assets. The Manager has undertaken through December 7, 1996 to limit its
unitary fee to .35 of 1% of the Fund's average daily net assets excluding
certain fees outlined below. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, fees and
expenses of non-interested Trustees (including counsel fees) and
extraordinary expenses. In addition, the Manager is required to reduce its
fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel). The reduction in
management fee, pursuant to the undertaking, amounted to $59,061 during the
year ended June 30, 1996.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
NOTES TO FINANCIAL STATEMENTS (continued)
(b) Distribution plan: The Fund had adopted a Distribution Plan (the
"Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
then-existing Investor shares. Under the Plan, the Fund paid annually up to
.25% of the value of the average daily net assets attributable to its
Investor shares to compensate the Distributor and Dreyfus Service
Corporation, an affiliate of the Manager, for shareholder servicing
activities and the Distributor for activities primarily intended to result in
the sale of Investor shares. The Class R shares did not bear a distribution
fee. During the year ended June 30, 1996, the distribution fee for the
Investor shares was $26,897. Effective December 8, 1995, the Plan was
terminated.
(c) Trustees' fees: Each trustee who is not an interested person as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee attended and is reimbursed for
travel and out-of-pocket expenses, which is paid in total by the following
funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal
Funds, and The Dreyfus/Laurel Funds Trust. In addition the Chairman of the
Board receives an annual fee of $75,000 per year. These fees and expenses are
charged and allocated to each series based on net assets.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments of Dreyfus Basic New York Municipal
Money Market Fund (formerly the Dreyfus/Laurel New York Tax-Free Money Fund)
of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 1996, and the
related statement of operations for the year then ended and statements of
changes in net assets for each of the years in the two-year period then ended
and financial highlights for each of the years or period in the three-year
period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits. The financial highlights presented for each of the years in the
three-year period ended November 30, 1993 were audited by other auditors
whose report thereon, dated January 18, 1994, expressed an unqualified
opinion on those financial highlights.
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 also
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 June 30, 1996, by correspondence with the custodian.
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 Dreyfus Basic New York Municipal Money Market Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 1996, the results of
its operations for the year then ended and the changes in its net assets for
each of the years in the two-year period then ended and financial highlights
for each of the years or period in the three-year period then ended in
conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, NY
July 29, 1996
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income--net during the fiscal year ended June
30, 1996 as "exempt-interest dividends" (not subject to regular Federal and,
for individuals who are New York residents, 99.46% of such dividends are not
subject to New York State and New York City personal income taxes).
<PAGE>
Dreyfus Basic New York
Municipal Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 316AR966
Premier Limited Term
Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. PLTAR966
Annual Report
Premier Limited Term
Municipal Fund
June 30, 1996
Premier Limited Term Municipal Fund
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited
Term Municipal Fund. For its annual reporting period ended June 30, 1996,
your Fund produced total returns of 5.25%, 4.71%, 4.81% and 5.51% for its
Class A, Class B, Class C and Class R shares, respectively.* During this
twelve-month period, the Fund paid income dividends, which were exempt from
Federal personal income taxes, in the amounts of approximately $.545 per
share for Class A shares, $.483 per share for Class B shares, $.485 per share
for Class C shares, and $.575 per share for Class R shares.** This amounts to
an annualized Federally tax-free distribution rate per share of 4.44%, 4.05%,
4.06% and 4.83% for Class A, Class B, Class C and Class R shares,
respectively.***
THE ECONOMY
So far this year, the economic story has been upbeat: solid growth,
strong gains in employment and low inflation. Yet along with this good news
has come the fear that the Federal Reserve Board will tighten monetary policy
with the expectation that the continued economic expansion will bring a
resurgence in inflation. The growth in the economy has resulted in strong
gains in employment. Over recent months, these reports of new jobs have been
accompanied by rises in long-term interest rates, a reflection of the
market's concern that inflation perceptions by the Fed would result in its
acting to cool down an economy that risks overheating. To date, the Fed has
refrained from any tightening moves. The Fed cut rates three times between
last July and January, and has since held steady the Federal Funds rate at
5.25%, even as long-term rates in the bond market have risen more than a full
percentage point.
The interplay between job growth and economic growth has become the
dominant force affecting how investors take the outlook for inflation and the
possibility that the Fed will raise short-term interest rates. Along with
handsome increases in new jobs have come solid gains in retail sales,
although many economists feel that heavy consumer debt burdens will act as a
constraint against any acceleration in growth. Automobile sales remain
strong, the third year in a row of steady growth for auto manufacturers. Yet,
the factors focused on by investors and the Fed may be different. On June 19,
the Fed's Beige Book, a survey of business conditions in the 12 districts of
the Federal Reserve, reported that the economy was growing at a moderate pace
and that despite the tightening labor markets "indications of rising wages
remain scattered." Recent statements by officials of the Federal Reserve
Board have suggested that "sustained moderate growth" is the most likely path
for the economy and that labor markets, while tightening, do not yet indicate
significant inflationary pressures.
There seem to be few signs of inflation. Commodity and producer prices
remain subdued. Anecdotal reports from companies continue to attest to their
lack of ability to raise prices. Furthermore, some of the inflationary
consequences of running large budget deficits have eased due to the growth in
the economy. Higher than expected tax payments _ a result of economic growth
_ have reduced the Federal budget deficit to the $130 billion level, the
lowest since the early 1980s.
Nevertheless, there are limits to non-inflationary economic expansion. As
always, we remain watchful for signs of price pressures that could lead to a
resurgence of inflation. For now, there are few indications of that. In fact,
there also appears to be a growing consensus that the rate of economic growth
could taper off in the second half of the year due to the effect of higher
long-term interest rates on certain key sectors of the economy like housing
and consumer spending.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
In a dramatic reversal of the bull market that prevailed over the first
six months of the reporting period, the bond market suffered significant
losses during the first half of 1996 because of the strengthening economy and
the related concern that the Federal Reserve would soon tighten monetary
policy. Since the beginning of this year, the yield on the benchmark 30-year
Treasury bond rose almost one full percentage point. Yields on municipal
bonds rose at about half the rate of taxable securities. This occurred
because diminished attention to tax reform legislation improved the demand
for tax-exempt bonds, which in turn helped cushion the price erosion caused
by the rise in interest rates. On an after-tax basis, the municipal market
has provided attractive income alternatives when compared to the Treasury
market; at the end of the reporting period, municipal bond yields were
approximately 75% of the yield of a comparable maturity Treasury bond.
In keeping with its objective of maximizing current income exempt from
Federal income tax consistent with the prudent risk of capital, the Fund
continued to emphasize premium coupon, high quality issues throughout the
reporting period. In an attempt to moderate some of the price volatility
caused by the rising interest rate environment over the first six months of
this year, the weighted average maturity was shortened modestly from 8.54
years on December 31, 1995 to 8.32 years on June 30, 1996.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
(logo signature)
John Flahive
Portfolio Manager
July 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. These figures do not take into account the maximum initial sales charge
in the case of Class A shares, or the applicable contingent deferred sales
charge in the case of Class B and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period divided by the maximum
offering price per share at the end of the period in the case of Class A
shares, or the net asset value per share at the end of the period in the case
of Class B, Class C and Class R shares.
Premier Limited Term Municipal Fund June 30,
1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER LIMITED TERM
MUNICIPAL FUND
CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX AND
THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
*Source: Lehman Brothers
Exhibit A
$22,143
Lehman Brothers
10-Year Municipal Bond Index*
Dollars
$21,777
Lehman Brothers
7-Year Municipal Bond Index*
$20,543
Premier Limited Term
Municipal Fund (Class A Shares)
<TABLE>
<CAPTION>
Average Annual Total Returns
Class A Shares Class B Shares
------------------------------------------------------------ ---------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 6/30/96 Sales Charge Sales Charge (3.0%) Period Ended 6/30/96 Redemption Redemption*
- ----------------------- ------------- ------------------ ------------------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
1 Year 5.25% 2.05% 1 Year 4.71% 1.71%
5 Year 7.02 6.37 From Inception (12/28/94) 7.34 5.47
10 Year 7.79 7.46
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Class R Shares
------------------------------------------------------------ ---------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 6/30/96 No Redemption Redemption** Period Ended 6/30/96
- ----------------------- ------------ ---------------- --------------------
<S> <C> <C> <C> <C>
1 Year 4.81% 4.06% 1 Year 5.51%
From Inception (12/28/94) 7.41 7.41 From Inception (2/1/93) 5.45
</TABLE>
*The maximum contingent deferred sales charge for Class B shares is 3%
and is reduced to 0% after five years.
** The maximum contingent deferred sales charge for Class C shares is
.75% for shares redeemed within one year of the date of purchase.
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 6/30/86 to a $10,000 investment made in the Lehman Brothers 10-Year
Municipal Bond Index (the "Lehman 10-Year Index") on that date, as well as to
the Lehman Brothers 7-Year Municipal Bond Index (the "Lehman 7-Year Index")
which are described below. The Lehman 7-Year Index began in January of 1990.
This investment assumes a beginning value of $13,700 which is equal to the
value of the $10,000 investment in the Fund at the starting point of this
Index, without taking into account the Fund's maximum initial sales charge on
Class A shares. All dividends and capital gain distributions are reinvested.
Performance for Class B, Class C and Class R shares will vary from the
performance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in investment-grade municipal bonds with
intermediate maturities and expects to maintain an average maturity of less
than 10 years. The Fund's 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 Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
10-year tax exempt bond market, consisting of municipal bonds with maturities
of more than 8 years and less than 12 years. The Lehman 7-Year Index consists
of bonds with similar characteristics, with maturities of 6-8 years. The
Indices do not take into account charges, fees and other expenses which can
contribute to the Indices potentially outperforming the Fund. Further
information relating to Fund performance, including expense reimbursements,
if applicable, is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
Statement of Investments June 30, 1996
Principal
Long-Term Municipal Investments_93.2% Amount Value
----------- -----------
<S> <C> <C>
Alaska_3.1%
Anchorage, Port and Term Facilities Revenue, Refunding
6%, 2/1/2003 (Insured; MBIA)............................................ $ 1,110,000 $ 1,175,779
Arizona_5.1%
Maricopa County Unified School District Number 69 (Paradise Valley)
6.35%, 7/1/2010 (Insured; MBIA)......................................... 550,000 599,467
Phoenix, Refunding 6.25%, 7/1/2016.......................................... 1,250,000 1,352,550
Arkansas_1.4%
North Little Rock, Electric Revenue, Refunding 6%, 7/1/2001 (Insured; MBIA). 500,000 529,050
California_2.8%
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
8%, 7/1/1997 (Insured; AMBAC)........................................... 1,000,000 1,042,140
Connecticut_4.2%
Connecticut 5.95%, 11/15/2000............................................... 1,000,000 1,052,340
Stamford 6.60%, 1/15/2007................................................... 500,000 558,635
Florida_4.7%
Dade County:
Public Improvement 7.125%, 10/1/2016.................................... 100,000 102,666
Water and Sewer System Revenue 6.25%, 10/1/2008 (Insured; FGIC)......... 535,000 581,599
Miami Health Facilities Authority, Health Facilities Revenue (Mercy Hospital
Project)
6.75%, 8/1/2020 (Insured; AMBAC) (Prerefunded 8/1/2001) (a)............. 1,000,000 1,108,330
Georgia_1.5%
Fulton De Kalb Hospital Authority, HR
7.25%, 1/1/2020 (Insured; AMBAC) (Prerefunded 1/1/2000) (a)............. 500,000 550,230
Illinois_8.3%
Chicago, Refunding 7.25%, 1/1/2010 (Insured; MBIA) (Prerefunded 7/1/1996) (a) 100,000 102,029
Chicago Metropolitan Water Reclamation District (Chicago Capital Improvement)
7.25%, 12/1/2012........................................................ 1,000,000 1,182,560
Illinois, Sales Tax Revenue, Refunding 6.75%, 6/15/2006 (Prerefunded 6/15/1997) (a) 1,000,000 1,047,960
Regional Transportation Authority 7.75%, 6/1/2012 (Insured; FGIC)........... 390,000 477,243
Sangamon County School District Number 186 (Springfield)
7.70%, 6/1/2001 (Insured; MBIA)......................................... 300,000 337,812
Indiana_.1%
Indiana Transportation Finance Authority, Highway Revenue
7.875%, 12/1/2011 (Prerefunded 12/1/1998) (a)........................... 50,000 54,993
Premier Limited Term Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
-------------- ------------
Iowa_2.7%
Iowa Student Loan Liquidity Corp., Student Loan Revenue, Refunding
5.65%, 12/1/2005........................................................ $ 1,000,000 $ 1,008,280
Kentucky_2.9%
Kentucky Turnpike Authority, Economic Development Road Revenue, Refunding
(Revitalization Projects) 6.50%, 7/1/2007 (Insured; AMBAC).............. 1,000,000 1,110,140
Massachusetts_5.0%
Massachusetts, Special Obligation Revenue 7%, 6/1/2002...................... 1,000,000 1,106,000
Worcester, Refunding (Municipal Purpose)
6.25%, 7/1/2009 (Insured; MBIA)......................................... 720,000 777,010
Michigan_4.8%
Berkley City School District (Qualified School Board Loan Fund)
7%, 1/1/2009 (Insured; FGIC)............................................ 1,030,000 1,175,941
Comstock Park Public Schools 6%, 5/01/2016 (Prerefunded 5/1/1999) (a)....... 50,000 52,796
Saint John's Public Schools (Qualified School Board Loan Fund)
6.50%, 5/1/2006 (Insured; FGIC)......................................... 525,000 579,779
Mississippi_1.8%
Mississippi Higher Education Assisstance Corporation, Student Loan Revenue
6.05%, 9/1/2007......................................................... 650,000 663,150
New Jersey_1.4%
Cumberland County Improvement Authority, SWDR
6%, 1/1/2001 (Insured; FGIC)............................................ 500,000 525,020
New York_5.1%
New York State, Refunding 6.25%, 8/15/2004.................................. 1,000,000 1,079,480
New York State Dormitory Authority, Revenues (State University Educational)
7.125%, 5/15/2009 (Insured; FGIC)....................................... 200,000 215,480
New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund) 7.50%, 6/15/2012........................... 500,000 550,600
Triborough Bridge and Tunnel Authority, General Purpose Revenue
7%, 11/1/2011 (Prerefunded 1/1/1999) (a)................................ 100,000 107,716
North Carolina_3.9%
Charlotte, Refunding 5.50%, 7/1/2004........................................ 1,405,000 1,468,239
North Carolina Eastern Municipal Power Agency,
Power System Revenue, Refunding 8%, 1/1/2021 (Prerefunded 1/1/1998) (a) 5,000 5,386
Premier Limited Term Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
------------- -------------
Ohio_2.4%
Cuyahoga County, HR, Refunding (Mount Sinai Medical Center)
8.125%, 11/15/2014 (Prerefunded 11/15/1997) (a)......................... $ 250,000 $ 269,025
Gahanna - Jefferson City School District, Refunding
5.10%, 12/1/2001 (Insured; AMBAC)....................................... 625,000 635,481
Oregon_2.1%
Oregon Department of General Services, COP 6.60%, 9/1/1998 (Insured; AMBAC). 500,000 523,650
Tri County Metropolitan Transportation District (Light Rail Extension)
5.60%, 7/1/2003......................................................... 250,000 261,405
Pennsylvania_5.8%
Pennsylvania Intergovernmental Coop Authority, Special Tax Revenue
(City of Philadelphia Funding Program) 6.80%, 6/15/2022
(Prerefunded 6/15/2002) (a)........................................... 1,000,000 1,102,370
Somerset County General Authority, Commonwealth LR
6.70%, 10/15/2003 (Insured; FGIC) (Prerefunded 10/15/2001) (a).......... 1,000,000 1,091,510
South Carolina_1.4%
Anderson County, Hospital Facilities Revenue (Anderson Memorial Hospital)
7.50%, 2/1/2018 (Insured; MBIA) (Prerefunded 2/1/1998) (a).............. 500,000 535,460
Texas_9.1%
Austin, Utility System Revenue
8%, 11/15/2016 (Prerefunded 5/15/2001) (a).............................. 200,000 227,956
Fort Bend Independant School District, Refunding (Permanent School Fund
Guaranteed)
6.60%, 2/15/2004........................................................ 875,000 963,138
Lewisville Independant School District (Building Bonds)
(Permanent School Fund Guaranteed):
7.50%, 8/15/2006...................................................... 650,000 765,681
7.50%, 8/15/2007...................................................... 600,000 710,142
Red River Authority, PCR (Hoechst Celanese Corp. Project)
6.875%, 4/1/2017........................................................ 750,000 795,863
Vermont_3.5%
Vermont Educational and Health Buildings Financing Agency, Revenue
(Middlebury College Project) 6%, 11/1/2003.............................. 1,260,000 1,340,917
Premier Limited Term Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
-------------- ------------
Virginia_2.8%
Virginia Transportation Board, Transportation Contract Revenue, Refunding
(Route 28 Project) 6%, 4/1/2005......................................... $ 1,000,000 $ 1,058,619
Washington_6.0%
Grant County Public Utility District Number 002, Electric Revenue
7.20%, 1/1/2007 (Prerefunded 7/1/1996) (a).............................. 100,000 100,029
Spokane Regional Solid Waste Management System, Revenue
7.625%, 1/1/2011 (Insured; AMBAC) (Prerefunded 1/1/1999) (a)............ 1,000,000 1,093,600
Washington Public Power Supply System, Revenue, Refunding
(Nuclear Project Number 1) 7%, 7/1/2008................................. 1,000,000 1,098,209
Wisconsin_1.3%
Wisconsin, Health and Educational Facilities Revenue
(Aurora Medical Group Inc.) 5.75%, 11/15/2007 (Insured; FSA)............ 500,000 509,164
-----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $34,541,925)...................................................... $35,362,619
============
Short-Term Municipal Investments_6.8%
Alabama_.3%
Northern Alabama Environmental Improvement Authority, PCR, Refunding,
VRDN (Reynold Metals) 3.65% (LOC; Bank of Nova Scotia Trust Company
of New York) (b,c)...................................................... $ 100,000 $ 100,000
California_2.3%
California Health Facilities Financing Authority, Revenue, Refunding, VRDN
(Memorial Health Services) 3% (b)....................................... 200,000 200,000
Foothill, Eastern Transportation Corridor Agency, Toll Road Revenue, VRDN
3.10% (LOC; Credit Suisse) (b,c)........................................ 100,000 100,000
Los Angeles Regional Airports Improvement Corp., LR, VRDN
(American Airlines-Los Angeles International) 3.65%
(LOC; Wachovia Bank) (b,c).............................................. 600,000 600,000
Massachusetts_1.3%
Massachusetts:
3.60% (LOC; National Westminster Bank) (b,c)............................ 200,000 200,000
3.60% (LOC; ABN Amro Bank of N.V.) (b,c)................................ 200,000 200,000
Massachusetts Industrial Finance Agency, RRR, Refunding, VRDN (Ogden
Haverhill
Premier Limited Term Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Short Term Municipal Investments (continued) Amount Value
------------- ----------
Massachusetts (continued)
Project) 3.35% (LOC; Union Bank of Switzerland) (b,c)................... $ 100,000 $ 100,000
Texas_1.3%
Grapevine Industrial Development Corporation, Revenue, VRDN
(Multiple Mode-American Airlines):
3.65% (b)............................................................. 200,000 200,000
3.65% (LOC; The Sanwa Bank) (b,c)..................................... 100,000 100,000
3.65% (LOC; The Sanwa Bank) (b,c)..................................... 100,000 100,000
Lonestar Airport Improvement Authority Inc., Revenue, VRDN
(Multiple Mode-Dem-B-2)
3.65% (LOC; The Royal Bank of Canada) (b,c)............................. 100,000 100,000
Wyoming_1.6%
Green River, PCR, Refunding, VRDN (Rhone-Poulenc Inc. Project):
3.70% (LOC; ABN - Amro Bank) (b,c)...................................... 200,000 200,000
3.70% (LOC; ABN - Amro Bank) (b,c)...................................... 400,000 400,000
------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $2,600,000)....................................................... $ 2,600,000
============
TOTAL INVESTMENTS_100.0%
(cost $ 37,141,925)..................................................... $37,962,619
============
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FSA Financial Security Assurance RRR Resources Recovery Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
<S> <C> <C> <C>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- --------- --------- -------------------- -----------------------
AAA Aaa AAA 61.2%
AA Aa AA 25.3
A A A 8.1
F1 MIG1/P1 SP1/A1 5.3
Not Rated(e) Not Rated(e) Not Rated(e) .1
------
100.0%
======
</TABLE>
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) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Secured by letters of credit.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) Securities which, while not rated by Fitch, Moody's or Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
See notes to financial statements.
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
Statement of Assets and Liabilities June 30, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $37,141,925)_see Statement of Investments....................... $37,962,619
Cash.................................................................... 206,521
Interest receivable..................................................... 672,385
------------
38,841,525
LIABILITIES:
Due to The Dreyfus Corporation_Note 2(a)................................ $ 30,535
Due to Distributor_Note 2(b)............................................ 4,147
Payable for investment securities purchased............................. 1,451,246
Payable for shares of Beneficial Interest redeemed...................... 84,693 1,570,621
----------- -----------
NET ASSETS ................................................................ $37,270,904
===========
REPRESENTED BY:
Paid-in capital......................................................... $36,390,992
Accumulated distributions in excess of investment income_net............ (23,994)
Accumulated undistributed net realized gain on investments.............. 83,212
Accumulated net unrealized appreciation on investments_Note 3........... 820,694
------------
NET ASSETS at value......................................................... $37,270,904
===========
NET ASSET VALUE, per share:
Class A Shares
unlimited number of shares of Beneficial Interest authorized
($18,750,551 / 1,576,564 shares of Beneficial Interest outstanding)... $11.89
======
Class B Shares
unlimited number of shares of Beneficial Interest authorized
($499,627 / 42,012 shares of Beneficial Interest outstanding)......... $11.89
======
Class C Shares
unlimited number of shares of Beneficial Interest authorized
($150,540 / 12,654 shares of Beneficial Interest outstanding)......... $11.90
======
Class R Shares
unlimited number of shares of Beneficial Interest authorized
($17,870,186 / 1,502,593 shares of Beneficial Interest outstanding)... $11.89
======
See notes to financial statements.
Premier Limited Term Municipal Fund
Statement of Operations year ended June 30, 1996
INVESTMENT INCOME:
Interest Income......................................................... $2,037,678
Expenses:
Investment management fee_Note 2(a)................................... $183,084
Distribution fee_Note 2(b)............................................ 50,668
Trustees' fees and expenses_Note 2(c)................................. 9,479
Service fee_Note 2(b)................................................. 1,143
---------
Total Expenses.................................................... 244,374
----------
INVESTMENT INCOME_NET............................................. 1,793,304
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS_Note 3:
Net realized gain on investments........................................ $192,693
Net realized gain on financial futures.................................. 56,530
---------
Net Realized Gain..................................................... 249,223
Net unrealized (depreciation) on investments............................ (638)
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 248,585
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,041,889
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
Statement of Changes in Net Assets
Year Ended June 30,
-------------------------------
1996 1995
--------------- -----------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 1,793,304 $ 1,717,471
Net realized gain (loss) on investments................................. 249,223 (166,012)
Net unrealized appreciation (depreciation)
on investments for the year........................................... (638) 737,035
------------ ------------
Net Increase In Net Assets Resulting From Operations.............. 2,041,889 2,288,494
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A Shares........................................................ (879,802) (1,028,941)
Class B Shares........................................................ (13,817) (1,466)
Class C Shares........................................................ (4,466) (402)
Class R Shares........................................................ (895,219) (686,662)
Net realized gain on investments:
Class A Shares........................................................ ___ (50,842)
Class R Shares........................................................ ___ (31,702)
------------ ------------
Total Dividends................................................... (1,793,304) (1,800,015)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares........................................................ 1,917,807 5,989,210
Class B Shares........................................................ 488,218 81,474
Class C Shares........................................................ 65,040 84,008
Class R Shares........................................................ 6,442,697 7,987,960
Dividends reinvested:
Class A Shares........................................................ 712,884 929,728
Class B Shares........................................................ 10,430 161
Class C Shares........................................................ 1,403 64
Class R Shares........................................................ 185,865 161,104
Cost of shares redeemed:
Class A Shares........................................................ (5,397,222) (9,531,849)
Class B Shares........................................................ (81,163) (10)
Class C Shares........................................................ (239) ___
Class R Shares........................................................ (5,593,570) (4,215,852)
------------ ------------
Increase (Decrease) In Net Assets From Beneficial
Interest Transactions........................................... (1,247,850) 1,485,998
------------ ------------
Total Increase (Decrease) In Net Assets......................... (999,265) 1,974,477
NET ASSETS:
Beginning of year....................................................... 38,270,169 36,295,692
------------ ------------
End of year [including accumulated distributions in excess of
investment income_net: ($23,994) in 1996 and ($23,994) in 1995]....... $37,270,904 $38,270,169
========== ===========
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
Statement of Changes in Net Assets (continued)
Shares
------------------------------------------------------------------
Class A Class B
----------------------------- ----------------------------
Year Ended June 30, Year Ended Period Ended
-----------------------------
June 30, June 30,
1996 1995(1) 1996 1995(2)
---------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 159,936 517,296 40,828 7,145
Shares issued for dividends reinvested. 59,279 80,218 867 13
Shares redeemed........................ (451,257) (823,489) (6,840) (1)
---------- ---------- ----------- -----------
Net Increase (Decrease) In
Shares Outstanding............... (232,042) (225,975) 34,855 7,157
=========== ========= ========= =========
Shares
-----------------------------------------------------------------
Class C Class R
------------------------------- ----------------------------
Year Ended Period Ended Year Ended June 30,
----------------------------
June 30, June 30,
1996 1995(2) 1996 1995(1)
---------- ---------- ----------- -----------
CAPITAL SHARE TRANSACTIONS (continued):
Shares sold............................ 5,436 7,116 537,652 689,685
Shares issued for dividends reinvested. 117 5 15,459 13,891
Shares redeemed........................ (20) __ (465,937) (367,505)
---------- ---------- ----------- -----------
Net Increase In Shares Outstanding... 5,533 7,121 87,174 336,071
=========== ========= ========= =========
(1) On October 17, 1994, the Investor and Trust shares were redesignated
Class A and Class R shares, respectively.
(2) The Fund commenced selling Class B and Class C shares on
December 28, 1994.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
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 Fund's financial statements.
Class A Shares
------------------------------------------------------------
Year Ended June 30,
------------------------------------------------------------
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(2) 1993(2) 1992
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $11.82 $11.66 $12.61 $12.21 $11.58
-------- -------- -------- ------- -------
Investment Operations:
Investment income_net........................ .54 .53 .54(3) .60(3) .70(3)
Net realized and unrealized gain (loss)
on investments............................. .08 .19 (.41) .68 .65
-------- -------- -------- ------- -------
Total from Investment Operations........... .62 .72 .13 1.28 1.35
-------- -------- -------- ------- -------
Distributions:
Dividends from investment income_net......... (.55) (.53) (.54) (.60) (.70)
Dividends from net realized gain on investments -- (.03) (.54) (.28) (.02)
-------- -------- -------- ------- -------
Total Distributions........................ (.55) (.56) (1.08) (.88) (.72)
-------- -------- -------- ------- -------
Net asset value, end of year................. $11.89 $11.82 $11.66 $12.61 $12.21
======= ======= ======= ======= ======
TOTAL INVESTMENT RETURN(4)....................... 5.25% 6.37% .96% 10.95% 11.94%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .75% .75% .76%(5) 1.03%(5) .97%(5)
Ratio of net investment income to average net assets 4.53% 4.59% 4.43% 4.91% 5.82%
Portfolio Turnover Rate...................... 55.07% 61.00% 57.00% 103.00% 30.00%
Net Assets, end of year (000's Omitted)...... $18,751 $21,375 $23,715 $18,251 $26,192
</TABLE>
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. From April 4,1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's
investment manager. Prior to April 4, 1994,The Boston Company Advisors,
Inc. served as the Fund's investment adviser.
(2) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the
Institutional Class and Investment Class of shares. Effective April 4,
1994 the Retail and Institutional Classes were reclassified as a single
class of shares known as the Investor shares. Effective October 17, 1994,
the Investor shares were redesignated Class A shares. The Financial
Highlights for the year ended June 30, 1995 are based upon a Class A
(formerly Investor) share outstanding. The amounts shown for the year
ended June 30, 1994 were calculated using the performance of a Retail
shares outstanding from July 1, 1993 to April 3, 1994, and the
performance of an Investor share outstanding from April 4, 1994 to June
30, 1994.The Financial Highlights for the year ended June 30, 1993 and
prior years are based upon a Retail share outstanding.
(3) Net investment income before waiver of fees and/or reimbursement of
expenses by the investment adviser and/or custodian
and/or transfer agent for the years ended June 30, 1994, 1993 and 1992
were $.49, $.59, and $.68, respectively.
(4) Exclusive of sales load.
(5) Annualized expense ratios before voluntary waiver of fees and/or
reimbursement of expenses by the investment adviser
and/or custodian and/or transfer agent for the years ended June 30, 1994,
1993 and 1992 were 1.09%, 1.11% and 1.12%, respectively.
See notes to financial statements.
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
Financial Highlights (continued)
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 Fund's financial statements.
Class B Shares Class C Shares
-------------------------------- -------------------------------
Year Ended Period Ended Year Ended Period Ended
June 30, June 30, June 30, June 30,
PER SHARE DATA: 1996 1995(1) 1996 1995(1)
------------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.... $11.82 $11.32 $11.82 $11.32
------ ------ ------ -----
Investment Operations:
Investment income_net................. .48 .24 .48 .24
Net realized and unrealized gain
on investments...................... .07 .50 .08 .50
------ ------ ------ -----
Total from Investment Operations .55 .74 .56 .74
------ ------ ------ -----
Distributions;
Dividends from investment income_net.. (.48) (.24) (.48) (.24)
------ ------ ------ -----
Net asset value, end of year.......... $11.89 $11.82 $11.90 $11.82
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)................ 4.71% 6.59%(3) 4.81% 6.59%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.25% 1.25%(4) 1.24% 1.25%(4)
Ratio of net investment income to average
net assets.......................... 3.98% 4.09%(4) 4.00% 4.09%(4)
Portfolio Turnover Rate............... 55.07% 61.00%(3) 55.07% 61.00%(3)
Net Assets, end of year (000's Omitted) $500 $85 $150 $84
(1) The Fund commenced selling Class B and Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Municipal Fund
Financial Highlights (continued)
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 Fund's financial statements.
Class R Shares
--------------------------------------------------------
Period Ended
Year Ended June 30, June 30,
----------------------------------------
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(2) 1993(2)
------- -------- -------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.................. $11.82 $11.66 $12.61 $12.21
------- -------- -------- -------
Investment Operations:
Investment income_net............................... .57 .56 .58(3) .25(3)
Net realized and unrealized gain (loss) on investments .08 .19 (.43) .40
------- -------- -------- -------
Total from Investment Operations.................. .65 .75 .15 .65
------- -------- -------- -------
Distributions:
Dividends from investment income_net................ (.58) (.56) (.56) (.25)
Dividends from net realized gain on investments..... -- (.03) (.54) --
------- -------- -------- -------
Total Distributions............................... (.58) (.59) (1.10) (.25)
------- -------- -------- -------
Net asset value, end of year........................ $11.89 $11.82 $11.66 $12.61
====== ======= ======= ======
TOTAL INVESTMENT RETURN(4).............................. 5.51% 6.64% 1.08% 5.36%(5)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............. .50% .50% .50%(6) .68%(6)(7)
Ratio of net investment income to average net assets 4.77% 4.84% 4.69% 4.82%(7)
Portfolio Turnover Rate............................. 55.07% 61.00% 57.00% 103.00%(5)
Net Assets, end of year (000's Omitted)............. $17,870 $16,727 $12,581 $8,974
</TABLE>
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. From April 4, 1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's
investment manager. Prior to April 4, 1994, The Boston Company Advisors,
Inc. served as the Fund's investment adviser.
(2) The Fund commenced selling Investment Class shares on February 1,
1993. Effective April 4, 1994 the Investment Class was
redesignated the Trust shares. Effective October 17, 1994 Trust shares
were redesignated Class R shares. The table above is based upon an
Investment share outstanding from February 1, 1993 to April 3, 1994 and a
Trust share outstanding from April 4, 1994 to October 16, 1994.
(3) Net investment income before waiver of fees and/or reimbursement of
expenses by the investment adviser and/or custodian
and/or transfer agent for the year ended June 30, 1994 and for the period
ended June 30, 1993 were $.54 and $.24, respectively.
(4) Exclusive of sales load.
(5) Not annualized.
(6) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the year ended June 30, 1994 and for
the period ended June 30, 1993 were .83% and .93%, respectively.
(7) Annualized.
See notes to financial statements.
Premier Limited Term Municipal Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1_Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 seven series including the Premier Limited Term Municipal
Fund (the "Fund"). The Fund's investment objective is to maximize current
income exempt from Federal income taxes consistent with the prudent risk of
capital by investing in municipal securities which are of investment-grade
quality and intermediate maturities. The Dreyfus Corporation ("Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary
of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund currently offers four classes of
shares: Class A, Class B, Class C and Class R shares. Class A, Class B and
Class C shares are sold primarily to retail investors through financial
intermediaries and bear a distribution fee and/or service fee. Class A shares
are sold with a front-end sales charge, while Class B and Class C shares are
subject to a contingent deferred sales charge ("CDSC") and a service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution or service fees.
Class R shares are offered without a front-end sales load or CDSC. Each class
of shares has identical rights and privileges, except with respect to
distribution and service fees and voting rights on matters affecting a single
class.
Investment income, net of expenses (other than class specific expenses),
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: The Fund's 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.
Premier Limited Term Municipal Fund
NOTES TO FINANCIAL STATEMENTS (continued)
(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.
(c) Financial futures: The Fund may invest in financial futures contracts
in order to gain exposures to or protect against changes in the market. The
Fund is exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require
the Fund to "mark to market" on a daily basis, which reflects the change in
the market value of the contract at the close of each day's trading.
Typically, variation margin payments are received or made to reflect daily
unrealized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial margin
deposits with a custodian, which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. At June 30, 1996, there were no financial futures
contracts outstanding.
(d) Distributions to shareholders: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain are normally declared and
paid annually, but the Fund 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, if any, it is the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund 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.
NOTE 2_-Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties and/or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. The Manager also directs the investments of the Fund in accordance with
its investment objective, policies and limitations. For these services, the
Fund is contractually obligated to pay the Manager a fee, calculated daily
and paid monthly, at the annual rate of .50% of the value of the Fund's
average daily net assets. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, Rule 12b-1
distribution fees and expenses, fees and expenses of non-interested Trustees
(including counsel fees) and extraordinary expenses. In addition, the Manager
is required to reduce its fee in an amount equal to the Fund's allocable
portion of fees and expenses of the non-interested Trustees (including
counsel).
(b) Distribution and service plan: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, the Fund may pay annually up to .25%
of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder
Premier Limited Term Municipal Fund
NOTES TO FINANCIAL STATEMENTS (continued)
servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .50% of the value of the average daily net assets of Class B and
Class C shares. Class B and Class C shares are also subject to a service plan
adopted pursuant to Rule 12b-1, under which the Fund pays Dreyfus Service
Corporation or the Distributor for providing certain services to the holders
of Class B and Class C shares a fee at the annual rate of .25% of the value
of the average daily net assets of Class B and Class C shares. Class R shares
bear no service or distribution fee. For the year ended June 30, 1996, the
distribution fee for Class A, Class B and Class C shares was $48,383, $1,728
and $557, respectively. For the year ended June 30, 1996, the service fee for
Class B and Class C shares was $864 and $279, respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Trustees who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(c) Trustees' fees: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee meeting attended and is reimbursed
for travel and out-of-pocket expenses. These expenses are paid in total by
the following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the
Chairman of the Board receives an annual fee of $75,000 per year. These fees
and expenses are charged and allocated to each series based on net assets.
NOTE 3_Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the year ended June 30, 1996,
amounted to $20,122,006 and $22,128,418, respectively.
At June 30, 1996, accumulated net unrealized appreciation on investments
was $820,694, consisting of $918,851 gross unrealized appreciation and
$98,157 gross unrealized depreciation.
At June 30, 1996, 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 Limited Term Municipal Fund
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments of Premier Limited Term Municipal Fund
of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 1996, and the
related statement of operations for the year then ended, statements of
changes in net assets for each of the years in the two-year period then ended
and financial highlights for each of the years or period in the three-year
period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits. The financial highlights for each of the years or period in the
three-year period ended June 30, 1993 were audited by other auditors whose
report thereon, dated August 11, 1993, expressed an unqualified opinion on
those financial highlights.
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 also
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 June 30, 1996, 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 Limited Term Municipal Fund of The Dreyfus/Laurel
Tax-Free Municipal Funds as of June 30, 1996, the results of its operations
for the year then ended, the changes in its net assets for each of the years
in the two-year period then ended and the financial highlights for each of
the years or period in the three-year period then ended in conformity with
generally accepted accounting principles.
(logo signature)
New York, New York
July 29, 1996
Premier Limited Term Municipal Fund
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during its fiscal year ended June
30, 1996 as "exempt-interest dividends" (not generally subject to regular
Federal income tax).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited
Term California Municipal Fund. For its annual reporting period ended June
30, 1996, your Fund produced total returns of 5.43%, 4.89%, 5.14% and 5.68%
for its Class A, Class B, Class C and Class R shares, respectively.* During
this twelve-month period, the Fund paid income dividends, which were exempt
from Federal and State of California personal income taxes, in the amounts of
approximately $.597 per share for Class A shares, $.530 per share for Class B
shares, $.531 per share for Class C shares, and $.628 per share for Class R
shares.** This amounts to an annualized tax-free distribution rate per share
of 4.48%, 4.10%, 4.09% and 4.86% for Class A, Class B, Class C and Class R
shares, respectively.***
THE ECONOMY
So far this year, the economic story has been upbeat: solid growth,
strong gains in employment and low inflation. Yet along with this good news
has come the fear that the Federal Reserve Board will tighten monetary policy
with the expectation that the continued economic expansion will bring a
resurgence in inflation. The growth in the economy has resulted in strong
gains in employment. Over recent months, these reports of new jobs have been
accompanied by rises in long-term interest rates, a reflection of the
market's concern that inflation perceptions by the Fed would result in its
acting to cool down an economy that risks overheating. To date, the Fed has
refrained from any tightening moves. The Fed cut rates three times between
last July and January, and has since held steady the Federal Funds rate at
5.25%, even as long-term rates in the bond market have risen more than a full
percentage point.
The interplay between job growth and economic growth has become the
dominant force affecting how investors take the outlook for inflation and the
possibility that the Fed will raise short-term interest rates. Along with
handsome increases in new jobs have come solid gains in retail sales,
although many economists feel that heavy consumer debt burdens will act as a
constraint against any acceleration in growth. Automobile sales remain
strong, the third year in a row of steady growth for auto manufacturers. Yet,
the factors focused on by investors and the Fed may be different. On June 19,
the Fed's Beige Book, a survey of business conditions in the 12 districts of
the Federal Reserve, reported that the economy was growing at a moderate pace
and that despite the tightening labor markets "indications of rising wages
remain scattered." Recent statements by officials of the Federal Reserve
Board have suggested that "sustained moderate growth" is the most likely path
for the economy and that labor markets, while tightening, do not yet indicate
significant inflationary pressures.
There seem to be few signs of inflation. Commodity and producer prices
remain subdued. Anecdotal reports from companies continue to attest to their
lack of ability to raise prices. Furthermore, some of the inflationary
consequences of running large budget deficits have eased due to the growth in
the economy. Higher than expected tax payments _ a result of economic growth
_ have reduced the Federal budget deficit to the $130 billion level, the
lowest since the early 1980s.
Nevertheless, there are limits to non-inflationary economic expansion. As
always, we remain watchful for signs of price pressures that could lead to a
resurgence of inflation. For now, there are few indications of that. In fact,
there also appears to be a growing consensus that the rate of economic growth
could taper off in the second half of the year due to the effect of higher
long-term interest rates on certain key sectors of the economy like housing
and consumer spending.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
In a dramatic reversal of the bull market that prevailed over the first
six months of the reporting period, the bond market suffered significant
losses during the first half of 1996 because of the strengthening economy and
the related concern that the Federal Reserve would soon tighten monetary
policy. Since the beginning of this year, the yield on the benchmark 30-year
Treasury bond rose almost one full percentage point. Yields on municipal
bonds rose at about half the rate of taxable securities. This occurred
because diminished attention to tax reform legislation improved the demand
for tax-exempt bonds, which in turn helped cushion the price erosion caused
by the rise in interest rates. On an after-tax basis, the municipal market
has provided attractive income alternatives when compared to the Treasury
market; at the end of the reporting period, municipal bond yields were
approximately 75% of the yield of a comparable maturity Treasury bond.
In keeping with its objective of maximizing current income exempt from
relevant taxes consistent with the prudent risk of capital, the Fund
continued to emphasize premium coupon, high quality issues throughout the
reporting period. The weighted average maturity was shortened modestly (from
7.45 years on December 31, 1995 to 7.15 years on June 30, 1996) during the
rising interest rate environment over the first six months of this year.
California's economy continues to enjoy solid growth. While still above
the national average, the unemployment rate fell to 7.5% in May, down from
7.7%. Job growth has shown steady improvement, coming mostly in
high-technology, entertainment, and export-related manufacturing and service
sectors. Importantly, these new jobs pay well. Eight of the top ten growth
industries have aggregate wage levels at or above the average wage for all
California companies. Overall, economic trends in California are positive.
Additional signs of growth include non-residential construction, up 15%
compared to year-ago levels, and first quarter retail sales, up 7% compared
to the first quarter of 1995.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
(Kritin Lindquist Signature)
Kristin Lindquist
Portfolio Manager
July 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. These figures do not take into account the maximum initial sales charge
in the case of Class A shares, or the applicable contingent deferred sales
charge in the case of Class B and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period divided by the maximum
offering price per share at the end of the period in the case of Class A
shares, or the net asset value per share at the end of the period in the case
of Class B, Class C and Class R shares, adjusted for capital gain
distributions.
Exhibit A
$18,848
Lehman Brothers
10-Year Municipal Bond Index*
$18,015
Lehman Brothers
7-Year Municipal Bond Index*
$17,080
<TABLE>
<CAPTION>
Premier Limited Term California Municipal Fund June 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER LIMITED TERM
CALIFORNIA MUNICIPAL FUND CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR
MUNICIPAL BOND INDEX AND THE
LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
*Source: Lehman Brothers
Average Annual Total Returns
Class A Shares Class B Shares
- ------------------------------------------------------------ -----------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 6/30/96 Sales Charge Sales Charge (3.0%) Period Ended 6/30/96 Redemption Redemption*
- --------------------- ---------------- ------------------ ---------------------- ------------ -------------------
<S> <C> <C> <C> <C> <C>
1 Year 5.43% 2.24% 1 Year 4.89% 1.89%
5 Year 6.88 6.23 From Inception (12/28/94) 7.47 5.60
From Inception (3/7/88) 7.04 6.65
Class C Shares Class R Shares
- --------------------------------------------------------------------------- ----------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 6/30/96 No Redemption Redemption** Period Ended 6/30/96
- --------------------- -------------- ------------------ -----------------------
1 Year 5.14% 4.39% 1 Year 5.68%
From Inception (12/28/94 7.63 7.63 From Inception (2/1/93) 5.81
*The maximum contingent deferred sales charge for Class B shares is 3%
and is reduced to 0% after five years.
** The maximum contingent deferred sales charge for Class C shares is
.75% for shares redeemed within one year of the date of purchase.
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 3/7/88 (Inception Date) to a $10,000 investment made in the Lehman
Brothers 10-Year Municipal Bond Index (the "Lehman 10-Year Index") on that
date, as well as to the Lehman Brothers 7-Year Municipal Bond Index (the
"Lehman 7-Year Index") which are described below. For comparative purposes,
the value of the Lehman 10-Year Index on 2/29/88 is used as the beginning value
on 3/7/88. The Lehman 7-Year Index began in January of 1990. This investment
assumes a beginning value of $11,033 which is equal to the value of the
$10,000 investment in the Fund at the starting point of this Index, without
taking into account the Fund's maximum initial sales charge on Class A
shares. All dividends and capital gain distributions are reinvested.
Performance for Class B, Class C and Class R shares will vary from the
performance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in California investment-grade municipal bonds
with intermediate maturities and expects to maintain an average maturity of
less than 10 years. The Fund's 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 Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
geographically unrestricted 10-year tax exempt bond market, consisting of
municipal bonds with maturities of more than 8 years and less than 12 years.
The Lehman 7-Year Index consists of bonds with similar characteristics, with
maturities of 6-8 years. The Indices do not take into account charges, fees
and other expenses. Also, unlike the Fund which principally limits
investments to California municipal obligations, the Indices are not state
specific. These factors can contribute to the Indices potentially
outperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
Premier Limited Term California Municipal Fund
Statement of Investments June 30, 1996
Principal
Long-Term Municipal Investments_97.0% Amount Value
------------- -------------
<S> <C> <C>
California_81.2%
Anaheim, Electric Revenue, Refunding 6.80%, 10/1/1999....................... $ 150,000 $ 153,346
California Health Facilities Financing Authority, Revenue (Unihealth America)
7.10%, 10/1/1999 (Prerefunded 10/1/1998) (Insured; AMBAC) (a)........... 150,000 162,285
California Public Works Board, Lease Revenue:
(Corcoran State Prison) 7%, 9/1/1998.................................... 200,000 204,874
High Technology Facilities (Berkeley Campus) 7.20%, 3/1/2001............ 150,000 158,261
Elk Grove Unified School District, Special Tax Revenue, Refunding
(Community Facilities District No. 1) 6.50%, 12/1/2006 (Insured; AMBAC). 400,000 446,028
Franklin-McKinley School District, Refunding 5.20%, 7/1/2004 (Insured; MBIA) 375,000 382,005
Fresno, Sewer Revenue 6%, 9/1/2007 (Insured; MBIA).......................... 500,000 533,755
Kern High School District, Refunding
6.40%, 2/1/2012 (Insured; MBIA)......................................... 750,000 813,847
Long Beach Redevelopment Agency (Downtown Redevelopment Project)
7.125%, 11/1/1999 (Prerefunded 11/1/1998) (Insured; AMBAC) (a).......... 100,000 108,465
Los Angeles, Wastewater System Revenue:
6.60%, 6/1/1998......................................................... 400,000 417,032
7.10%, 11/1/1998........................................................ 150,000 157,877
Los Angeles County Health Facilities Authority, Lease Revenue, Refunding
(Olive View Medical Center) 6.80%, 3/1/1998............................. 150,000 156,460
Los Angeles County Housing Authority, MFHR (Monrovia Project)
7.625%, 12/1/1999 (Insured; CIC)........................................ 100,000 102,043
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
8%, 7/1/2000 (Insured; AMBAC)........................................... 500,000 563,235
Los Angeles County Transportation Commission, Sales Tax Revenue 6.80%, 7/1/1999 150,000 159,388
Los Angeles Department of Water and Power, Electric Plant Revenue 7%, 5/1/2000 125,000 133,494
Metropolitan Water District of Southern California, Waterworks Revenue
6.375%, 7/1/2002........................................................ 835,000 906,793
Northern California, Transmission Revenue, Refunding (Project No. 1)
6.25%, 8/15/2000 (Insured; MBIA)........................................ 360,000 378,342
Port Oakland, Port Revenue 6%, 11/1/2002 (Insured; MBIA).................... 500,000 529,075
Riverside County Transportation Commission, Sales Tax Revenue
6.50%, 6/1/2001 (Insured; AMBAC)........................................ 520,000 563,436
Sacramento Municipal Utilities District, Electrical Revenue:
5.85%, 7/1/2000 (Insured; FGIC)......................................... 100,000 104,957
6.30%, 9/1/2001 (Insured; MBIA)......................................... 500,000 537,875
San Bernardino Transportation Authority, Sales Tax Revenue
6%, 3/1/2002 (Insured; FGIC)............................................ 440,000 467,381
San Diego County Regional Transportation Commission, Sales Tax Revenue
Premier Limited Term California Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
------------ --------------
California (continued)
6%, 4/1/2004 (Insured; FGIC)............................................ $ 750,000 $ 800,903
San Diego County Water Authority, COP, Water Revenue 6%, 5/1/2001........... 300,000 314,310
San Diego Redevelopment Agency, Tax Allocation (Centre City Project)
5.50%, 9/1/2001 (Insured; AMBAC)........................................ 600,000 624,438
San Francisco Bay Area Rapid Transit District, Sales Tax Revenue, Refunding
6.70%, 7/1/2000......................................................... 500,000 539,645
San Francisco City and County Airports Commission, International Airport
Revenue
6.35%, 5/1/2000 (Insured; MBIA)......................................... 750,000 798,803
San Francisco City and County Public Utilities Commssion, Water Revenue,
Refunding:
6%, 11/1/2003........................................................... 750,000 804,360
6.375%, 11/1/2006....................................................... 500,000 540,690
San Mateo County Transit District, Sales Tax Revenue 6.20%, 6/1/1999 (Insured; MBIA) 100,000
105,657
Santa Rosa:
Wastewater Revenue:
6.60%, 9/1/2000 (Prerefunded 9/1/1999) (Insured; FGIC) (a)............ 480,000 519,970
(Subregional Wastewater Project)
6.20%, 9/1/2003 (Prerefunded 9/1/2002) (Insured; FGIC) (a)........ 350,000 382,063
Wastewater Services Facilities District, Refunding 7.40%, 7/2/1997...... 150,000 155,642
Simi Valley Unified School District, Refunding 6.25%, 8/1/2004 (Insured; FGIC) 700,000 757,848
Southern California Public Power Authority, Power Project Revenue, Refunding
(Hydroelectric-Hoover Uprating Project) 6.30%, 10/1/2002................ 420,000 455,204
State of California 6.60%, 2/1/2009......................................... 510,000 561,189
West and Central Basin Financing Authority, Revenue 6%, 8/1/2005 (Insured; AMBAC) 620,000 659,327
U.S. Related_15.8%
Commonwealth of Puerto Rico, Refunding 6.25%, 7/1/2011 (Insured; MBIA)...... 750,000 812,167
Puerto Rico Public Buildings Authority, Government Guaranteed Facilities
6.25%, 7/1/2010 (Insured; AMBAC)........................................ 750,000 812,467
Puerto Rico Electric Power Authority, Power Revenue 6.50%, 7/1/2006 (Insured; MBIA) 625,000
691,631
University of Puerto Rico, University Revenue Refunding
6.25%, 6/1/2008 (Insured; MBIA)......................................... 750,000 816,165
-------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $18,608,103)...................................................... $19,292,733
=============
Los Angeles Regional Airports Improvement Corp., Lease Revenue:
Premier Limited Term California Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Short-Term Municipal Investments_3.0% Amount Value
------------- -------------
VRDN 3.60% (LOC; Societe Generale) (b,c)................................ $ 300,000 $ 300,000
VRDN 3.65% (LOC; Societe Generale) (b,c)................................ 300,000 300,000
-------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $600,000)......................................................... $ 600,000
=============
TOTAL INVESTMENTS_100.0%
(cost $19,208,103)...................................................... $19,892,733
=============
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
CIC Continental Insurance Company Insurance Corporation
COP Certificate of Participation MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company VRDN Variable Rate Demand Notes
LOC Letter of Credit
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
<S> <C> <C> <C>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- ---------- --------- --------------------- -----------------------
AAA Aaa AAA 68.0%
AA Aa AA 20.1
A A A 8.1
F1 MIGI SP1 3.0
Not Rated (e) Not Rated (e) Not Rated (e) .8
-------
100.0%
=======
</TABLE>
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) Secured by letters of credit.
(c) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) Securities which, while not rated by Fitch, Moody's and Standard &
Poor's, have been determined by the Manager to be of comparable quality
to those rated securities in which the Fund may invest.
(f) At June 30, 1996, the Fund had $5,505,864 (27.2%) and $6,118,530
(30.2%) of net assets invested in securities whose payment of principal
and interest were dependent upon revenues generated from transportation
and water & utilities projects, respectively.
(g) At June 30, 1996, 31.6% of the Fund's net assets are insured by
MBIA.
See notes to financial statements.
<TABLE>
<CAPTION>
Premier Limited Term California Municipal Fund
Statement of Assets and Liabilities June 30, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $19,208,103)_see Statement of Investments....................... $19,892,733
Interest receivable..................................................... 363,025
-----------
20,255,758
LIABILITIES:
Due to The Dreyfus Corporation_Note 2(a)................................ $17,109
Due to Distributor...................................................... 1,613
Cash overdrafts due to Custodian........................................ 5,855 24,577
------- -----------
NET ASSETS.................................................................. $20,231,181
===========
REPRESENTED BY:
Paid-in capital......................................................... $19,573,380
Accumulated distributions in excess of investment income_net............ (150)
Accumulated net realized (loss) on investments.......................... (26,679)
Accumulated net unrealized appreciation on investments_Note 3........... 684,630
-----------
NET ASSETS at value......................................................... $20,231,181
===========
NET ASSET VALUE, offering and redemption price per share:
Class A Shares
unlimited number of shares of Beneficial Interest authorized
($7,744,869 / 601,459 shares of Beneficial Interest outstanding)...... $12.88
======
Class B Shares
unlimited number of shares of Beneficial Interest authorized
($77,689 / 6,034 shares of Beneficial Interest outstanding)........... $12.88
======
Class C Shares
unlimited number of shares of Beneficial Interest authorized
($24,979 / 1,935 shares of Beneficial Interest outstanding)........... $12.91
======
Class R Shares
unlimited number of shares of Beneficial Interest authorized
($12,383,644 / 961,737 shares of Beneficial Interest outstanding)..... $12.88
======
See notes to financial statements.
Premier Limited Term California Municipal Fund
Statement of Operations year ended June 30, 1996
INVESTMENT INCOME:
Interest Income......................................................... $1,048,564
Expenses:
Investment management fee_Note 2(a)................................... $92,758
Distribution fee_Note 2(b)............................................ 21,534
Trustees' fees and expenses_Note 2(c)................................. 5,401
Service fee_Note 2(b)................................................. 108
-------
Total Expenses.................................................. 119,801
----------
INVESTMENT INCOME_NET........................................... 928,763
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS_Note 3:
Net realized gain on investments........................................ $ 2,558
Net realized gain on financial futures.................................. 17,834
-------
Net Realized Gain..................................................... 20,392
Net unrealized appreciation on investments.............................. 33,999
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 54,391
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $ 983,154
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term California Municipal Fund
Statement of Changes in Net Assets
Year Ended June 30,
-------------------------------
1996 1995
-------------- ------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 928,763 $ 951,773
Net realized gain (loss) on investments................................. 20,392 (14,211)
Net unrealized appreciation on investments for the year................. 33,999 241,097
-------------- ------------
Net Increase In Net Assets Resulting From Operations.............. 983,154 1,178,659
-------------- ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A Shares........................................................ (391,455) (474,831)
Class B Shares........................................................ (867) (107)
Class C Shares........................................................ (890) (132)
Class R Shares........................................................ (535,551) (476,652)
Net realized gain on investments:
Class A Shares........................................................ (14,350) (7,864)
Class B Shares........................................................ (39) ___
Class C Shares........................................................ (42) ___
Class R Shares........................................................ (18,429) (7,048)
-------------- ------------
Total Dividends................................................... (961,623) (966,634)
-------------- ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares........................................................ 645,645 2,197,261
Class B Shares........................................................ 67,799 8,761
Class C Shares........................................................ 25,025 25,015
Class R Shares........................................................ 8,085,552 2,806,491
Dividends reinvested:
Class A Shares........................................................ 291,515 330,931
Class B Shares........................................................ 679 102
Class C Shares........................................................ 815 138
Class R Shares........................................................ 309,750 238,156
Cost of shares redeemed:
Class A Shares........................................................ (1,744,945) (4,294,848)
Class B Shares........................................................ (16) ___
Class C Shares........................................................ (26,530) ___
Class R Shares........................................................ (4,798,508) (6,549,186)
-------------- ------------
Increase (Decrease) In Net Assets From
Beneficial Interest Transactions................................ 2,856,781 (5,237,179)
-------------- ------------
Total Increase (Decrease) In Net Assets......................... 2,878,312 (5,025,154)
NET ASSETS:
Beginning of year....................................................... 17,352,869 22,378,023
-------------- ------------
End of year [including distributions in excess of net investment
income_net:
($150) in 1995 and ($150) in 1996].................................... $20,231,181 $17,352,869
============== ============
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term California Municipal Fund
Statement of Changes in Net Assets (continued)
Shares
--------------------------------------------------------------------
Class A Class B
------------------------------ -------------------------------
Year Ended June 30, Year Ended June 30,
------------------------------- -------------------------------
1996 1995(1) 1996 1995(2)
------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 49,480 174,483 5,287 688
Shares issued for dividends reinvested. 22,390 26,315 52 8
Shares redeemed........................ (134,672) (340,612) (1) ___
------------- ------------- ------------- -------------
Net Increase (Decrease) In
Shares Outstanding............... (62,802) (139,814) 5,338 696
------------- ------------- ------------- -------------
Shares
--------------------------------------------------------------------
Class C Class R
------------------------------- -------------------------------
Year Ended June 30, Year Ended June 30,
------------------------------- -------------------------------
1996 1995(2) 1996 1995(1)
------------ --------------- ------------- -------------
CAPITAL SHARE TRANSACTIONS (continued):
Shares sold............................ 1,931 1,950 619,872 223,405
Shares issued for dividends reinvested. 62 11 23,809 18,939
Shares redeemed........................ (2,019) ___ (370,223) (523,959)
------------ --------------- ------------- -------------
Net Increase (Decrease) In
Shares Outstanding............... (26) 1,961 273,458 (281,615)
============ =============== ============= =============
(1) On October 17, 1994, Investor shares and Trust shares were redesignated
Class A shares and Class R shares, respectively. (2) The Fund commenced selling
Class B and C shares on December 28, 1994.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term California Municipal Fund
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 Fund's financial statements.
Class A Shares
--------------------------------------------------------------------------
Period Ended
Year Ended June 30, June 30, Year Ended November 30,
------------------------ ----------------------------
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(2)(3) 1993(1) 1992 1991
------- ---------- ------------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.. $12.80 $12.61 $13.07 $12.81 $12.53 $12.29
------- ---------- ------------- ----------- ------- -------
Investment Operations:
Investment income_net (4)........... .60 .59 .34 .67 .70 .73
Net realized and unrealized gain (loss)
on investments.................... .10 .21 (.46) .66 .44 .24
------- ---------- ------------- ----------- ------- -------
Total from Investment Operations.. .70 .80 (.12) 1.33 1.14 .97
------- ---------- ------------- ----------- ------- -------
Distributions:
Dividends from investment income_net (.60) (.60) (.34) (.67) (.70) (.73)
Dividends from net realized gain
on investments.................... (.02) (.01) (.00)(5) (.40) (.16) ._
------- ---------- ------------- ----------- ------- -------
Total Distributions............... (.62) (.61) (.34) (1.07) (.86) (.73)
------- ---------- ------------- ----------- ------- -------
Net asset value, end of year........ $12.88 $12.80 $12.61 $13.07 $12.81 $12.53
======= ========== ============= =========== ======= =======
TOTAL INVESTMENT RETURN (6)............. 5.43% 6.48% (.95%) 10.58% 9.27% 8.07%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets (7) .75% .75% .58%(8) .45%(9) .45% .45%
Ratio of net investment income to
average net assets................ 4.59% 4.71% 4.51%(8) 5.09% 5.38% 5.84%
Portfolio Turnover Rate............. 39.09% 49.00% 5.00%(10) 38.00% 41.00% 27.00%
Net Assets, end of year (000's Omitted) $7,745 $8,506 $10,143 $10,971 $21,831 $16,203
</TABLE>
(1) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the Institutional Class and
Investment Class of shares. Effective April 4, 1994 the Retail and
Institutional Classes were reclassified as a single class of
shares known as the Investor shares. Effective October 17, 1994, the Investor
Class was redesignated Class A. The Financial Highlights for the year ended
June 30, 1995 are based upon a Class A share (formerly Investor shares)
outstanding. The amounts shown for the period ended June 30, 1994 were
calculated using the performance of a Retail share outstanding from December
1, 1993 to April 3, 1994 and the performance of an Investor share outstanding
from April 4, 1994 to June 30, 1994. The Financial Highlights for the year
ended November 30, 1993 and prior years are based upon a Retail share
outstanding.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to
April 4, 1994, The Boston Company Advisors, Inc. served as the Fund's
investment adviser.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30.
(4) Net investment income per share before waiver of fees and reimbursement of
expenses by the investment adviser and/or custodian and/or transfer agent for
the period ended June 30, 1994, for the years ended November 30, 1993, 1992 and
1991 were $.31, $.67, $.64 and $.66, respectively.
(5) Amount represents less than $.01 per share.
(6) Exclusive of sales load.
(7) Annualized expense ratios before voluntary waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer agent for
the period ended June 30, 1994, for the years ended November 30, 1993, 1992 and
1991 were .95%, 1.10%, .93% and 1.03%, respectively.
(8) Annualized.
(9) The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was .46% for the year ended November
30, 1993.
(10) Not annualized.
See notes to financial statements.
Premier Limited Term California Municipal Fund
Financial Highlights (continued)
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 Fund's financial statements.
<TABLE>
<CAPTION>
Class B Shares Class C Shares
---------------------------- ----------------------------
Year Ended Period Ended Year Ended Period Ended
June 30, June 30, June 30, June 30,
PER SHARE DATA: 1996 1995(1) 1996 1995(1)
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value, beginning of year................... $12.80 $12.28 $12.80 $12.28
------ ------ ------ ------
Investment Operations:
Investment income_net................................ .53 .27 .53 .28
Net realized and unrealized gain on investments...... .10 .53 .13 .52
------ ------ ------ ------
Total from
Investment Operations.......................... .63 .80 .66 .80
------ ------ ------ ------
Distributions:
Dividends from investment income_net................. (.53) (.28) (.53) (.28)
Dividends from net realized gain on investments...... (.02) ._ (.02) ._
------ ------ ------ ------
Total Distributions................................ (.55) (.28) (.55) (.28)
------ ------ ------ ------
Net asset value, end of year......................... $12.88 $12.80 $12.91 $12.80
====== ====== ====== ======
TOTAL INVESTMENT RETURN (2).............................. 4.89% 6.51% 5.14% 6.51%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............. 1.25% 1.25%(3) 1.25% 1.25%(3)
Ratio of net investment income to average net assets. 4.08% 4.20%(3) 4.06% 4.22%(3)
Portfolio Turnover Rate.............................. 39.09% 49.00% 39.09% 49.00%
Net Assets, end of year (000's Omitted).............. $78 $9 $25 $25
(1) The Fund commenced selling Class B and Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term California Municipal Fund
Financial Highlights (continued)
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 period indicated. This
information has been derived from the Fund's financial statements.
Class R Shares
-------------------------------------------------------------------------
Period Ended Year Ended
Year Ended June 30, June 30, November 30,
-----------------------
PER SHARE DATA: 1996 1995(1) 1994(1)(2) 1993(3)
------- --------- ----------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of year........... $12.80 $12.61 $13.07 $12.96
------- --------- ----------- -------
Investment Operations:
Investment income_net........................ .63 .63 .35(4) .55(4)
Net realized and unrealized gain (loss) on investment .10 .20 (.46) .52
------- --------- ----------- -------
Total from Investment Operations........... .73 .83 (.11) 1.07
------- --------- ----------- -------
Distributions:
Dividends from investment income_net......... (.63) (.63) (.35) (.56)
Dividends from net realized gain on investments (.02) (.01) (.00)(5) (.40)
------- --------- ----------- -------
Total Distributions........................ (.65) (.64) (.35) (.96)
------- --------- ----------- -------
Net asset value, end of year................. $12.88 $12.80 $12.61 $13.07
======= ========= =========== =======
TOTAL INVESTMENT RETURN (6)...................... 5.68% 6.75% (.87%)(7) 8.32%(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .50% .50% .42%(8)(9) .40%(8)(9)(10)
Ratio of net investment income to average net assets 4.84% 4.96% 4.68%(8) 5.04%(8)
Portfolio Turnover Rate...................... 39.09% 49.00% 5.00%(7) 38.00%
Net Assets, end of year (000's Omitted)...... $12,384 $8,813 $12,235 $8,291
</TABLE>
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to
April 4, 1994, The Boston Company Advisors, Inc. served as the Fund's
investment adviser.
(2) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
(3) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was reclassified as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated Class R
shares. The table above is based upon a Retail share outstanding from
February 1, 1993 to April 3, 1994 and a Trust share outstanding from
April 4, 1994 to October 16, 1994.
(4) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer agent
for the periods ended June 30, 1994 and November 30, 1993 were $.32 and $.49,
respectively.
(5) Amount represents less than $.01 per share.
(6) Exclusive of sales load.
(7) Not annualized.
(8) Annualized.
(9) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the periods ended June 30, 1994 and November 30, 1993 were
.79% and 1.06%, respectively.
(10) The operating expense ratio excludes interest expense.
The operating expense ratio including interest expense was .41% for the
period ended November 30, 1993.
See notes to financial statements.
Premier Limited Term California Municipal Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1_Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Fund (the "Trust") 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 seven series including the Premier Limited Term California
Municipal Fund (the "Fund"). The Fund's investment objective is to maximize
current income exempt from Federal income taxes and state personal income
taxes for resident shareholders of California consistent with the prudent
risk of capital by investing in municipal securities which are of
investment-grade quality and intermediate maturities. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund currently offers four classes of
shares: Class A, Class B, Class C and Class R shares. Class A, Class B and
Class C shares are sold primarily to retail investors through financial
intermediaries and bear a distribution fee and/or service fee. Class A shares
are sold with a front-end sales charge, while Class B and Class C shares are
subject to a contingent deferred sales charge ("CDSC") and a service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution or service fees.
Class R shares are offered without a front-end sales load or CDSC. Each class
of shares has identical rights and privileges, except with respect to
distribution and service fees and voting rights on matters affecting a single
class.
Investment income, net of expenses (other than class specific expenses),
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: The Fund's 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.
Premier Limited Term California Municipal Fund
NOTES TO FINANCIAL STATEMENTS (continued)
(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.
(c) Financial futures: The Fund may invest in financial futures contracts
in order to gain exposure to or protect against changes in the market. The
Fund is exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require
the Fund to "mark to market" on a daily basis, which reflects the change in
the market value of the contract at the close of each day's trading.
Typically, variation margin payments are received or made to reflect daily
unrealized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial margin
deposits with a custodian, which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. At June 30, 1996, there were no financial futures
contracts outstanding.
(d) Concentration of risk: The Fund 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 Fund.
(e) Distributions to shareholders: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain are normally declared and
paid annually, but the Fund 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, if any, it is the policy of the Fund not to distribute such gain.
(f) Federal income taxes: It is the policy of the Fund 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.
NOTE 2_Investment Management Fee And Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties and/or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. The Manager also directs the investments of the Fund in accordance with
its investment objective, policies and limitations. For these services, the
Fund is contractually obligated to pay the Manager a fee, calculated daily
and paid monthly, at the annual rate of .50% of the value of the Fund's
average daily net assets. Out of its fee, the Manager pays all of the
expenses of the Fund except brokerage fees, taxes, interest, Rule 12b-1
Premier Limited Term California Municipal Fund
NOTES TO FINANCIAL STATEMENTS (continued)
distribution fees and expenses, fees and expenses of non-interested Trustees
(including counsel fees) and extraordinary expenses. In addition, the Manager
is required to reduce its fee in an amount equal to the Fund's allocable
portion of fees and expenses of the non-interested Trustees (including
counsel).
(b) Distribution and service plan: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, the Fund may pay annually up to .25%
of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .50% of the value of the average daily net assets of Class B and
Class C shares. Class B and Class C shares are also subject to a service plan
adopted pursuant to Rule 12b-1, under which the Fund pays Dreyfus Service
Corporation or the Distributor for providing certain services to the holders
of Class B and Class C shares a fee at the annual rate of .25% of the value
of the average daily net assets of Class B and Class C shares. Class R shares
bear no service or distribution fee. For the year ended June 30, 1996, the
distribution fee for Class A, Class B and Class C shares was $21,318, $107
and $109, respectively. For the year ended June 30, 1996, the service fee for
Class B shares and Class C shares was $53 and $55, respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Trustees who are not "interested persons" of the Investment Company and who
have no direct or indirect financial interest in the operation of the Plan or
in any agreement related to the Plan.
(c) Trustees' fees: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee attended and is reimbursed for
travel and out-of-pocket expenses. These expenses are paid in total by the
following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free
Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the Chairman
of the Board receives an annual fee of $75,000 per year. These fees and
expenses are charged and allocated to each series based on net assets.
NOTE 3_Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the year ended June 30, 1996,
amounted to $9,235,484 and $7,319,886, respectively.
At June 30, 1996, accumulated net unrealized appreciation on investments
was $684,630, consisting of $714,238 gross unrealized appreciation and
$29,608 gross unrealized depreciation.
At June 30, 1996, 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 Limited Term California Municipal Fund
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments of Premier Limited Term California
Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
1996, and the related statement of operations for the year then ended and
statements of changes in net assets for each of the years in the two-year
period then ended and financial highlights for each of the years or period in
the three-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for each
of the years or period for the three-year period ended November 30, 1993 were
audited by other auditors whose report thereon, dated and January 18, 1994,
expressed an unqualified opinion on those financial highlights.
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 also
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 June 30, 1996, 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 Limited Term California Municipal Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 1996, the results of
its operations for the year then ended and the changes in its net assets for
each of the years in the two-year period then ended and financial highlights
for each of the years or period in the three-year period then ended in conform
ity with generally accepted accounting principles.
(logo signature)
New York, NY
July 29, 1996
Premier Limited Term California Municipal Fund
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended June 30, 1996:
_ all the dividends paid from investment income_net are "exempt interest
dividends" (not subject to regular Federal and, for individuals who are
California residents, California personal income taxes), and
_ the Fund hereby designates $.0032 per share as a long-term capital gain
distribution of the $.0211 per share paid on December 7, 1995.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
Premier Limited Term
California Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
(Dreyfus Lion Logo)
Printed in U.S.A. LTCAR966
Annual Report
Premier Limited Term
California
Municipal Fund
June 30, 1996
Premier Limited Term California Municipal Fund
Premier Limited Term Massachusetts Municipal Fund
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited
Term Massachusetts Municipal Fund. For its annual reporting period ended June
30, 1996, your Fund produced total returns of 5.22%, 4.87%, 4.68% and 5.46%
for its Class A, Class B, Class C and Class R shares, respectively.* During
this twelve-month period, the Fund paid income dividends, which were exempt
from Federal and Commonwealth of Massachusetts personal income taxes, in the
amounts of approximately $.539 per share for Class A shares, $.479 per share
for Class B shares, $.477 per share for Class C shares and $.567 per share
for Class R shares.** This amounts to annualized tax-free distribution rates
per share of 4.35%, 3.98%, 3.97% and 4.71% for Class A, Class B, Class C and
Class R shares, respectively.***
THE ECONOMY
So far this year, the economic story has been upbeat: solid growth,
strong gains in employment and low inflation. Yet along with this good news
has come the fear that the Federal Reserve Board will tighten monetary policy
with the expectation that the continued economic expansion will bring a
resurgence in inflation. The growth in the economy has resulted in strong
gains in employment. Over recent months, these reports of new jobs have been
accompanied by rises in long-term interest rates, a reflection of the
market's concern that inflation perceptions by the Fed would result in its
acting to cool down an economy that risks overheating. To date, the Fed has
refrained from any tightening moves. The Fed cut rates three times between
last July and January, and has since held steady the Federal Funds rate at
5.25%, even as long-term rates in the bond market have risen more than a full
percentage point.
The interplay between job growth and economic growth has become the
dominant force affecting how investors take the outlook for inflation and the
possibility that the Fed will raise short-term interest rates. Along with
handsome increases in new jobs have come solid gains in retail sales,
although many economists feel that heavy consumer debt burdens will act as a
constraint against any acceleration in growth. Automobile sales remain
strong, the third year in a row of steady growth for auto manufacturers. Yet,
the factors focused on by investors and the Fed may be different. On June 19,
the Fed's Beige Book, a survey of business conditions in the 12 districts of
the Federal Reserve, reported that the economy was growing at a moderate pace
and that despite the tightening labor markets "indications of rising wages
remain scattered." Recent statements by officials of the Federal Reserve
Board have suggested that "sustained moderate growth" is the most likely path
for the economy and that labor markets, while tightening, do not yet indicate
significant inflationary pressures.
There seem to be few signs of inflation. Commodity and producer prices
remain subdued. Anecdotal reports from companies continue to attest to their
lack of ability to raise prices. Furthermore, some of the inflationary
consequences of running large budget deficits have eased due to the growth in
the economy. Higher than expected tax payments _ a result of economic growth
_ have reduced the Federal budget deficit to the $130 billion level, the
lowest since the early 1980s.
Nevertheless, there are limits to non-inflationary economic expansion. As
always, we remain watchful for signs of price pressures that could lead to a
resurgence of inflation. For now, there are few indications of that. In fact,
there also appears to be a growing consensus that the rate of economic growth
could taper off in the second half of the year due to the effect of higher
long-term interest rates on certain key sectors of the economy like housing
and consumer spending.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
In a dramatic reversal of the bull market that prevailed over the first
six months of the reporting period, the bond market suffered significant
losses during the first half of 1996 because of the strengthening economy and
the related concern that the Federal Reserve would soon tighten monetary
policy. Since the beginning of this year, the yield on the benchmark 30-year
Treasury bond rose almost one full percentage point. Yields on municipal
bonds rose at about half the rate of taxable securities. This occurred
because diminished attention to tax reform legislation improved the demand
for tax-exempt bonds, which in turn helped cushion the price erosion caused
by the rise in interest rates. On an after-tax basis, the municipal market
has provided attractive income alternatives when compared to the Treasury
market; at the end of the reporting period, municipal bond yields were
approximately 75% of the yield of a comparable maturity Treasury bond.
In keeping with its objective of maximizing current income exempt from
relevant taxes consistent with the prudent risk of capital, the Fund
continued to emphasize premium coupon, high quality issues throughout the
reporting period. The weighted average portfolio maturity was shortened
modestly (from 8.49 years on December 31, 1995 to 8.07 years on June 30,
1996) during the rising interest rate environment over the first six months
of this year.
The Massachusetts economy maintained moderate growth throughout the
reporting period. The unemployment rate fell to 4.8% in March of this year,
its lowest level since December 1989. Job growth has been highest in the
services and construction industries, while continuing to decline in the
manufacturing sector. The state government under Governor William Weld
continues to operate under a balanced budget, thus improving its financial
profile _ long-term general obligation bonds are rated A+ by Standard and
Poor's and A1 by Moody's. Local governments are also benefiting from the
improved state economy and stronger overall financial condition through
increased state aid. This offsets some of the revenue raising restrictions
imposed on local governments by Proposition 2 1/2. Overall, financial trends
remain positive at both the state and local government levels.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
(logo signature)
Kristin Lindquist
Portfolio Manager
July 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. These figures do not take into account the maximum initial sales charge
in the case of Class A shares, or the applicable contingent deferred sales
charge in the case of Class B and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period divided by the maximum
offering price per share at the end of the period in the case of Class A
shares, or the net asset value per share at the end of the period in the case
of Class B, Class C and Class R shares, adjusted for capital gain
distributions.
Premier Limited Term Massachusetts Municipal Fund June 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER LIMITED TERM
MASSACHUSETTS MUNICIPAL FUND CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR
MUNICIPAL BOND INDEX AND
THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
<TABLE>
<CAPTION>
Exhibit A
*Source: Lehman Brothers
Average Annual Total Returns
Class A Shares Class B Shares
------------------------------------------------------------ ---------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 6/30/96 Sales Charge Sales Charge (3.0%) Period Ended 6/30/96 Redemption Redemption*
- ----------------------- ------------- ------------------ ------------------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
1 Year 5.25% 2.05% 1 Year 4.71% 1.71%
5 Year 7.02 6.37 From Inception (12/28/94) 7.34 5.47
10 Year 7.79 7.46
Class C Shares Class R Shares
------------------------------------------------------------ ---------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 6/30/96 No Redemption Redemption** Period Ended 6/30/96
- ----------------------- ------------ ---------------- --------------------
1 Year 4.68% 3.93% 1 Year 5.46%
From Inception (12/28/94) 7.10 7.10 From Inception (2/1/93) 5.39
*The maximum contingent deferred sales charge for Class B shares is 3%
and is reduced to 0% after five years.
** The maximum contingent deferred sales charge for Class C shares is
.75% for shares redeemed within one year of the date of purchase.
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 6/30/86 to a $10,000 investment made in the Lehman Brothers 10-Year
Municipal Bond Index (the "Lehman 10-Year Index") on that date, as well as to
the Lehman Brothers 7-Year Municipal Bond Index (the "Lehman 7-Year Index")
which are described below. The Lehman 7-Year Index began in January of 1990.
This investment assumes a beginning value of $13,076 which is equal to the
value of the $10,000 investment in the Fund at the starting point of this
Index, without taking into account the Fund's maximum initial sales charge on
Class A shares. All dividends and capital gain distributions are reinvested.
Performance for Class B, Class C and Class R shares will vary from the
performance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in Massachusetts investment-grade municipal bonds
with intermediate maturities and expects to maintain an average maturity of
less than 10 years. The Fund's 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 Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
geographically unrestricted 10-year tax exempt bond market, consisting of
municipal bonds with maturities of more than 8 years and less than 12 years.
The Lehman 7-Year Index consists of bonds with similar characteristics, with
maturities of 6-8 years. The Indices do not take into account charges, fees
and other expenses. Also, unlike the Fund which principally limits
investments to Massachusetts municipal obligations, the Indices are not state
specific. These factors can contribute to the Indices potentially
outperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
Premier Limited Term Massachusetts Municipal Fund
Statement of Investments June 30, 1996
Principal
Long-Term Municipal Investments_98.2% Amount Value
------------- -----------
<S> <C> <C>
Massachusetts_81.4%
Amherst, GO 6%, 1/15/2003................................................... $ 200,000 $ 212,018
Belmont 5.50%, 1/15/2005.................................................... 585,000 604,100
Boston, Revenue (Boston City Hospital)
7.15%, 8/15/2001 (Insured; FHA, Prerefunded 8/1/2000) (a)............... 1,500,000 1,665,060
Boston Water and Sewer Commission, Revenue:
9.25%, 1/1/2011......................................................... 100,000 130,753
Crossover, Refunding 7.875%, 11/1/2013 ................................. 160,000 165,382
Crossover, Refunding 7.875%, 11/1/2013 (Prerefunded 11/1/1996) (a)...... 290,000 299,544
Cambridge:
GO 6.60%, 6/15/2000..................................................... 675,000 726,050
Municipal Purpose Loan 5.60%, 11/1/2001................................. 500,000 523,530
Cohasset, Municipal Purpose Loan:
6.70%, 11/1/1998 (Insured; MBIA)........................................ 160,000 168,437
6.90%, 11/1/2000 (Insured; MBIA)........................................ 150,000 162,855
Dedham-Westwood Water And Sewer Commission, Revenue
6.40%, 12/1/2005 (Prerefunded 12/1/1996) (a)............................ 500,000 515,290
Easton, Municipal Purpose Loan 6%, 9/15/2006................................ 105,000 110,727
Franklin, GO 6.25%, 11/15/2005 (Insured; MBIA).............................. 430,000 465,974
Massachusetts, Port Authority Revenue 7%, 7/1/2000 (Insured; FGIC).......... 1,000,000 1,080,860
Massachusetts, Refunding:
5.40%, 11/1/2006........................................................ 1,000,000 1,013,130
6.50%, 8/1/2008......................................................... 500,000 549,980
Massachusetts, Special Obligation Revenue 5.80%, 6/1/2000................... 880,000 915,411
Massachusetts, Water Pollution Abatement Revenue (Pooled Loan Program)
6.125%, 2/1/2007........................................................ 625,000 670,806
Massachusetts Bay Transportation Authority:
Massachusetts General Transportation 5.25%, 3/1/2011 (Insured; AMBAC)... 1,000,000 966,660
Refunding 5.90%, 3/1/2004............................................... 550,000 579,216
Massachusetts Consolidated Loan:
7%, 7/1/2006 (Insured; MBIA, Prerefunded 7/1/2000) (a).................. 500,000 551,125
7.625%, 6/1/2008 (Prerefunded 6/1/2001) (a)............................. 400,000 456,968
7.375%, 12/1/2008 (Prerefunded 12/1/1998) (a)........................... 250,000 272,720
Massachusetts Education Loan Authority, Education Loan Revenue
6.20%, 7/1/2013 (Insured; AMBAC)........................................ 1,000,000 1,003,160
Massachusetts Health and Educational Facilities Authority, Revenue:
(Beth Israel Hospital) 7.80%, 7/01/2014................................. 500,000 534,545
(Harvard University):
6.20%, 12/1/2001...................................................... 1,000,000 1,076,750
Massachusetts Health and Educational Facilities Authority, Revenue
(continued):
Premier Limited Term Massachusetts Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
------------- -------------
Massachusetts (continued)
(Harvard University) (continued):
Refunding 6.50%, 11/1/2004............................................ $ 700,000 $ 774,620
(Lahey Clinic) 7.625%, 7/1/2018 (Prerefunded 7/1/1998) (a).............. 1,000,000 1,085,420
(Malden Hospital Project) 9.50%, 8/1/2008............................... 35,000 35,074
(Northeastern University) 6.80%, 10/1/1999 (Insured; AMBAC)............. 1,000,000 1,069,680
Refunding (Dana-Farber Cancer Institute) 5.55%, 12/1/2003 (Insured; FGIC) 400,000 412,740
(Salem University) 8.15%, 7/1/2014 (Prerefunded 7/1/1999) (a)........... 750,000 840,810
(South Shore Hospital):
7.50%, 7/1/2010 (Insured; MBIA, Prerefunded 7/1/2000) (a)............. 350,000 391,849
7.50%, 7/1/2020 (Insured; MBIA, Prerefunded 7/1/2000) (a)............. 500,000 559,785
(Wenworth Institute of Technology):
7.15%, 4/1/2000 (Insured; AMBAC)...................................... 225,000 244,694
7.40%, 4/1/2010 (Insured; AMBAC, Prerefunded 4/1/2000) (a)............ 220,000 244,750
Massachusetts Industrial Finance Agency:
Museum Revenue, Refunding (Museum of Fine Arts of Boston)
5.375%, 1/1/2007 (Insured; MBIA)...................................... 1,000,000 1,011,200
Revenue:
(Brooks School):
5.70%, 7/1/2006................................................... 260,000 263,468
5.75%, 7/1/2007................................................... 275,000 277,500
5.80%, 7/1/2008................................................... 290,000 292,630
5.85%, 7/1/2009................................................... 305,000 306,693
(Nantucket Electric Co. Project) 6.75%, 7/1/2006 (Insured; AMBAC)..... 1,400,000 1,543,514
(Refunding_College of The Holy Cross) 5.50%, 3/1/2007 (Insured; MBIA). 1,145,000 1,163,858
(Springfield College Project) 7.80%, 10/1/2009
(LOC; Fleet Bank of Massachusetts, Prerefunded 10/1/1999) (a,b)... 1,100,000 1,238,204
Massachusetts Municipal Wholesale Electric Co.,
Power Supply System Revenue, Refunding 6.30%, 7/1/2000 (Insured; AMBAC). 500,000 525,565
Massachusetts Water Resource Authority, Refunding 5.875%, 11/1/2004......... 500,000 524,290
New England Education Loan Marketing Corp., Refunding (Student Loan)
5.70%, 7/1/2005......................................................... 1,750,000 1,768,410
Northampton, School Project Loan 6.40%, 5/15/2004 (Insured; MBIA)........... 750,000 816,885
Rockport, GO 6.90%, 12/15/2007.............................................. 1,000,000 1,075,190
Southeastern University Building Authority, Revenue, Refunding
5.90%, 5/1/2010 (Insured; AMBAC)........................................ 500,000 510,110
Springfield, School Project Loan 6.10%, 9/1/2002 (Insured; AMBAC)........... 600,000 640,386
Whitman, GO:
7.75%, 6/1/2007 (Prerefunded 6/1/1998) (a).............................. 180,000 196,294
7.75%, 6/1/2008 (Prerefunded 6/1/1998) (a).............................. 250,000 272,630
Premier Limited Term Massachusetts Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
------------- -------------
Massachusetts (continued)
Worchester, Municipal Purpose, Refunding 6.25%, 7/1/2010 (Insured; MBIA).... $ 755,000 $ 814,026
Yarmouth, GO 8.60%, 10/1/2000............................................... 100,000 114,736
U.S. Related_16.8%
Guam Government, Limited Obligation Highway, Refunding
6%, 5/1/2003 (Insured; CGIC)............................................ 750,000 795,848
Commonwealth of Puerto Rico:
GO, Refunding:
6.50%, 7/1/2003 (Insured; MBIA)....................................... 550,000 604,918
6.25%, 7/1/2011 (Insured; MBIA)....................................... 1,050,000 1,137,035
Public Improvement 6.70%, 7/1/1998 (Insured; FGIC)...................... 400,000 419,500
Commonwealth of Puerto Rico Highway and Transportation Authority, Revenue
6.25%, 7/1/2009 (Insured; MBIA)......................................... 1,000,000 1,084,060
Puerto Rico Electric Power Authority, Power Revenue
6.50%, 7/1/2006 (Insured; MBIA)......................................... 1,000,000 1,106,610
Puerto Rico Public Buildings Authority, Revenue 6.75%, 7/1/2005 (Insured; AMBAC) 1,000,000 1,127,610
University of Puerto Rico, University Revenue 6.25%, 6/1/2005............... 750,000 818,205
-----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $40,620,652).................... $41,529,848
===========
Short-Term Municipal Investments_1.8%
Massachusetts:
Massachusetts, VRDN 3.60% (LOC; ABN Amro Bank) (b,c)........................ $ 200,000 $ 200,000
Massachusetts Health and Educational Authority, Revenue, VRDN
(Wellesley College) 3.10% (c)........................................... 600,000 600,000
------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $800,000)...................... $ 800,000
===========
TOTAL MUNICIPAL INVESTMENTS_100.0%
(cost $41,420,652)...................................................... $42,329,848
===========
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Massachusetts Municipal Fund
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
CGIC Capital Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FHA Federal Housing Administration VRDN Variable Rate Demand Notes
GO General Obligation
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
<S> <C> <C> <C>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- --------- --------- -------------------- -----------------------
AAA Aaa AAA 74.7%
AA Aa AA 6.9
A A A 16.5
F1, F-1+ MIG1, VMIG1 & P1 SP1, A1 1.9
--------
100.0%
=======
</TABLE>
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) Secured by letters of credit.
(c) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
See notes to financial statements.
<TABLE>
<CAPTION>
Premier Limited Term Massachusetts Municipal Fund
Statement of Assets and Liabilities June 30, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $41,420,652)_see Statement of Investments....................... $42,329,848
Interest receivable..................................................... 792,146
Receivable for investment securities sold............................... 629,587
------------
43,751,581
LIABILITIES:
Due to The Dreyfus Corporation_Note 2(a)................................ $ 32,404
Due to Distributor_Note 2(b)............................................ 3,307
Cash overdraft due to custodian......................................... 49,880
Payable for investment securities purchased............................. 1,525,514
Trustees' fees payable_Note 2(c)........................................ 2,708 1,613,813
---------- ----------
NET ASSETS ................................................................ $42,137,768
===========
REPRESENTED BY:
Paid-in capital......................................................... $41,190,714
Accumulated undistributed net realized gain on investments.............. 37,858
Accumulated net unrealized appreciation on investments_Note 3........... 909,196
------------
NET ASSETS at value......................................................... $42,137,768
===========
NET ASSET VALUE, per share:
Class A Shares
unlimited number of shares of Beneficial Interest authorized
($15,688,404 / 1,310,848 shares of Beneficial Interest outstanding)... $11.97
======
Class B Shares
unlimited number of shares of Beneficial Interest authorized
($452,200 / 37,704 shares of Beneficial Interest outstanding)......... $11.99
======
Class C Shares
unlimited number of shares of Beneficial Interest authorized
($16,494 / 1,378 shares of Beneficial Interest outstanding)........... $11.97
======
Class R Shares
unlimited number of shares of Beneficial Interest authorized
($25,980,670 / 2,171,092 shares of Beneficial Interest outstanding)... $11.97
======
See notes to financial statements.
Premier Limited Term Massachusetts Municipal Fund
Statement of Operations year ended June 30, 1996
INVESTMENT INCOME:
Interest Income......................................................... $2,076,091
Expenses:
Investment management fee_Note 2(a)................................... $188,533
Distribution fee_Note 2(b)............................................ 41,329
Trustees' fees and expenses_Note 2(c)................................. 11,221
Service fee_Note 2(b)................................................. 150
---------
Total Expenses.................................................... 241,233
----------
INVESTMENT INCOME_NET............................................. 1,834,858
----------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS_Note 3:
Net realized gain on investments........................................ $ 22,557
Net realized gain on financial futures.................................. 44,495
---------
Net Realized Gain..................................................... 67,052
Net unrealized appreciation on investments.............................. 57,430
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................... 124,482
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,959,340
==========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Massachusetts Municipal Fund
Statement of Changes in Net Assets
Year Ended June 30,
-------------------------------
1996 1995
-------------- ------------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 1,834,858 $ 1,668,665
Net realized gain on investments........................................ 67,052 28,732
Net unrealized appreciation on investments for the year................. 57,430 610,550
------------ ------------
Net Increase In Net Assets Resulting From Operations.............. 1,959,340 2,307,947
------------ ------------
DIVIDENDS TO SHAREHOLDERS:
From investment income_net:
Class A Shares........................................................ (730,953) (856,242)
Class B Shares........................................................ (1,544) ___
Class C Shares........................................................ (709) (149)
Class R Shares........................................................ (1,101,652) (812,274)
From net realized gain on investments:
Class A Shares........................................................ (23,631) (54,707)
Class B Shares........................................................ (14) ___
Class C Shares........................................................ (26) ___
Class R Shares........................................................ (32,290) (49,756)
------------ ------------
Total Dividends................................................... (1,890,819) (1,773,128)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares........................................................ 1,601,368 3,717,270
Class B Shares........................................................ 450,001 15
Class C Shares........................................................ ___ 18,015
Class R Shares........................................................ 9,355,436 8,491,325
Dividends reinvested:
Class A Shares........................................................ 574,790 714,238
Class B Shares........................................................ 1,133 ___
Class C Shares........................................................ 651 151
Class R Shares........................................................ 498,611 324,993
Cost of shares redeemed:
Class A Shares........................................................ (3,075,439) (9,400,166)
Class B Shares........................................................ (16) ___
Class C Shares........................................................ (2,522) ___
Class R Shares........................................................ (3,553,482) (5,138,820)
------------ ------------
Increase (Decrease) In Net Assets From
Beneficial Interest Transactions................................ 5,850,531 (1,272,979)
------------ ------------
Total Increase (Decrease) In Net Assets......................... 5,919,052 (738,160)
NET ASSETS:
Beginning of year....................................................... 36,218,716 36,956,876
------------ ------------
End of year............................................................. $42,137,768 $36,218,716
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Massachusetts Municipal Fund
Statement of Changes in Net Assets (continued)
Shares
-------------------------------------------------------------------
Class A Class B
------------------------------ ------------------------------
Year Ended June 30, Year Ended June 30,
------------------------------ ------------------------------
1996 1995(1) 1996 1995(2)
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 132,502 316,736 37,610 1
Shares issued for dividends reinvested. 47,482 61,078 94 ___
Shares redeemed........................ (254,257) (804,575) (1) ___
------------ ------------ ------------ -----------
Net Increase (Decrease) In
Shares Outstanding............... (74,273) (426,761) 37,703 1
========== ========= ======= ========
Shares
-------------------------------------------------------------------
Class C Class R
------------------------------ ------------------------------
Year Ended June 30, Year Ended June 30,
------------------------------ ------------------------------
1996 1995(2) 1996 1995(1)
------------ ------------ ------------ -----------
CAPITAL SHARE TRANSACTIONS (continued):
Shares sold............................ ___ 1,521 770,353 725,392
Shares issued for dividends reinvested. 54 12 41,214 27,778
Shares redeemed........................ (209) ___ (294,159) (434,867)
------------ ------------ ------------ -----------
Net Increase (Decrease) In
Shares Outstanding............... (155) 1,533 517,408 318,303
========== =========== =========== =========
(1) On October 17, 1994, the Investor and Trust shares were redesignated
Class A and Class R shares, respectively.
(2) The Fund commenced selling Class B and Class C shares on
December 28, 1994.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Massachusetts Municipal Fund
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 Fund's financial statements.
Class A Shares
------------------------------------------------------------
Year Ended June 30,
------------------------------------------------------------
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(2) 1993(1) 1992
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $11.91 $11.74 $12.38 $11.83 $11.23
------ ------ ------ ------ ------
Investment Operations:
Investment income_net(3)..................... .54 .55 .54 .64 .73
Net realized and unrealized gain (loss)
on investments............................. .08 .20 (.36) .55 .60
------ ------ ------ ------ ------
Total from Investment Operations........... .62 .75 (.18) 1.19 1.33
------ ------ ------ ------ ------
Distributions:
Dividends from investment income_net......... (.54) (.54) (.54) (.64) (.73)
Dividends from net realized gain on investments (.02) (.04) (.28) --- ---
------ ------ ------ ------ ------
Total Distributions........................ (.56) (.58) (.82) (.64) (.73)
------ ------ ------ ------ ------
Net asset value, end of year................. $11.97 $11.91 $11.74 $12.38 $11.83
====== ======= ====== ======= =======
TOTAL INVESTMENT RETURN(4)....................... 5.22% 6.60% 1.38% 10.27% 12.21%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .75% .75% .76%(5) .75%(5) .76%
Ratio of net investment income to average
net assets................................. 4.44% 4.65% 4.40% 5.30% 6.34%
Portfolio Turnover Rate...................... 39.16% 25.00% 19.00% 60.00% 23.00%
Net Assets, end of year (000's Omitted)...... $15,689 $16,501 $21,276 $20,106 $20,513
</TABLE>
(1) On February 1, 1993 existing shares of the Fund were designated
the Retail Class and the Fund began offering the Institutional Class
and Investment Class of shares. Effective April 4, 1994 the Retail and
Institutional Classes were reclassified as a single class of shares
known as the Investor shares. Effective October 17, 1994, the Investor
shares were redesignated Class A. The Financial Highlights for the year
ended June 30, 1995 are based upon a Class A share (formerly Investor
shares) outstanding. The amounts shown for the year ended June 30, 1994
were calculated using the performance of a Retail share outstanding from
July 1, 1993 to April 3, 1994, and the performance of an Investor Share
outstanding from April 4, 1994 to June 30, 1994. The Financial Highlights
for the year ended June 30, 1993 and prior years are based upon a Retail
share outstanding.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. From April 4, 1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's
investment manager. Prior to April 4, 1994, The Boston Company Advisors,
Inc. served as the Fund's investment adviser.
(3) Net investment income per share before waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the years ended June 30, 1994 and
1993 were $.53 and $.62, respectively.
(4) Exclusive of sales load.
(5) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the years ended June 30, 1994 and
1993 were .89% and .92%, respectively.
See notes to financial statements.
Premier Limited Term Massachusetts Municipal Fund
Financial Highlights (continued)
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 Fund's financial statements.
<TABLE>
<CAPTION>
Class B Shares Class C Shares
------------------- ----------------------------
Year Ended Year Ended Period Ended
June 30, June 30, June 30,
PER SHARE DATA: 1996(1) 1996 1995(2)
------ ------ ------
<S> <C> <C> <C>
Net asset value, beginning of year...................... $11.91 $11.91 $11.45
------ ------ ------
Investment Operations:
Investment income_net................................... .48 .48 .26
Net realized and unrealized gain on investments......... .10 .08 .45
------ ------ ------
Total from Investment Operations...................... .58 .56 .71
------ ------ ------
Distributions:
Dividends from investment income_net.................... (.48) (.48) (.25)
Dividends from net realized gain on investments......... (.02) (.02) ---
------ ------ ------
Total Distributions................................... (.50) (.50) (.25)
------ ------ ------
Net asset value, end of year............................ $11.99 $11.97 $11.91
====== ====== ======
TOTAL INVESTMENT RETURN(3).................................. 4.87% 4.68% 6.24%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. 1.25% 1.25% 1.25%(4)
Ratio of net investment income to average net assets.... 3.67% 3.93% 4.15%(4)
Portfolio Turnover Rate................................. 39.16% 39.16% 25.00%
Net Assets, end of year (000's Omitted)................. $452 $16 $18
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) The Fund commenced selling Class C shares on December 28, 1994.
(3) Exclusive of sales load.
(4) Annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term Massachusetts Municipal Fund
Financial Highlights (continued)
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 Fund's financial statements.
Class R Shares
--------------------------------------------------
Period Ended
Year Ended June 30, June 30,
----------------------------
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(2) 1993(1)
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net asset value, beginning of year...................... $11.91 $11.74 $12.38 $12.08
------ ------ ------ ------
Investment Operations:
Investment income-_net.................................. .57 .57 .55(3) .25(3)
Net realized and unrealized gain (loss) on investments.. .08 .21 (.35) .29
------ ------ ------ ------
Total from Investment Operations...................... .65 .78 .20 .54
------ ------ ------ ------
Distributions:
Dividends from investment income_net.................... (.57) (.57) (.56) (.24)
Dividends from net realized gain on investments......... (.02) (.04) (.28) ---
------ ------ ------ ------
Total Distributions................................... (.59) (.61) (.84) (.24)
------ ------ ------ ------
Net asset value, end of year............................ $11.97 $11.91 $11.74 $12.38
====== ====== ====== ======
TOTAL INVESTMENT RETURN(4).................................. 5.46% 6.87% 1.53% 4.53%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. .50% .50% .62%(6) .65%(5)(6)
Ratio of net investment income to average net assets.... 4.68% 4.90% 4.54% 4.84%(5)
Portfolio Turnover Rate................................. 39.16% 25.00% 19.00% 60.00%
Net Assets, end of year (000's Omitted)................. $25,981 $19,700 $15,681 $9,411
</TABLE>
(1) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class
was reclassified as the Trust shares. Effective October 17, 1994 Trust
shares were redesignated Class R shares. The table above is based upon an
Investment share outstanding from February 1, 1993 to April 3, 1994 and a
Trust share outstanding from April 4, 1994 to October 16, 1994.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. From April 4, 1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's
investment manager. Prior to April 4, 1994, The Boston Company Advisors,
Inc. served as the Fund's investment adviser.
(3) Net investment income per share before waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the year ended June 30, 1994 and for
the period ended June 30, 1993 were $.54 and $.24, respectively.
(4) Exclusive of sales load.
(5) Annualized.
(6) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the year ended June 30, 1994 and for
the period ended June 30, 1993 were .75% and .87%, respectively.
See notes to financial statements.
Premier Limited Term Massachusetts Municipal Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1_Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 seven series including the Premier Limited Term
Massachusetts Municipal Fund (the "Fund"). The Fund's investment objective is
to maximize current income exempt from Federal income taxes and state
personal income taxes for resident shareholders of the named state consistent
with what is believed to be the prudent risk of capital by investing in
municipal obligations of the named state which are of investment-grade
quality and intermediate maturities. The Dreyfus Corporation ("Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary
of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund currently offers four classes of
shares: Class A, Class B, Class C and Class R shares. Class A, Class B and
Class C shares are sold primarily to retail investors through financial
intermediaries and bear a distribution fee and/or service fee. Class A shares
are sold with a front-end sales charge, while Class B and Class C shares are
subject to a contingent deferred sales charge ("CDSC") and a service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee or service
fees. Class R shares are offered without a front-end sales load or CDSC. Each
class of shares has identical rights and privileges, except with respect to
distribution and service fees and voting rights on matters affecting a single
class.
Investment income, net of expenses (other than class specific expenses),
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: The Fund's 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.
Premier Limited Term Massachusetts Municipal Fund
NOTES TO FINANCIAL STATEMENTS (continued)
(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.
(c) Financial futures: The Fund may invest in trading financial futures
contracts in order to gain exposure to or protect against changes in the
market. The Fund is exposed to market risk as a result of changes in the
value of the underlying financial instruments. Investments in financial
futures require the Fund to "mark to market" on a daily basis, which reflects
the change in the market value of the contract at the close of each day's
trading. Accordingly, variation margin payments are received or made to
reflect daily unrealized gains or losses. When the contracts are closed, the
Fund recognizes a realized gain or loss. These investments require initial
margin deposits which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. At June 30, 1996, there were no financial futures
contracts outstanding.
(d) Concentration of risk: The Fund 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 Fund.
(e) Distributions to shareholders: It is the policy of the Fund 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 Fund 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 Fund not to distribute such
gain.
(f) Federal income taxes: It is the policy of the Fund 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.
NOTE 2_Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out
of its fee, the Manager pays all of the expenses of the Fund except brokerage
fees, taxes, interest, Rule 12b-1 distribution fees and expenses, fees and
expenses of non-interested Trustees (including counsel fees) and
extraordinary expenses. In addition, the Manager is required to reduce its
fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel).
Premier Limited Term Massachusetts Municipal Fund
NOTES TO FINANCIAL STATEMENTS (continued)
(b) Distribution and service plan: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, the Fund may pay annually up to .25%
of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .50% of the value of the average daily net assets of Class B and
Class C shares. Class B and Class C shares are also subject to a service plan
adopted pursuant to Rule 12b-1, under which the Fund pays Dreyfus Service
Corporation or the Distributor for providing certain services to the holders
of Class B and Class C shares a fee at the annual rate of .25% of the value
of the average daily net assets of Class B and Class C shares. Class R shares
bear no service or distribution fee. For the year ended June 30, 1996, the
distribution fee for Class A, Class B, and Class C shares was $41,030, $209
and $90, respectively. For the year ended June 30, 1996, the service fee for
Class B shares and Class C shares was $105 and $45, respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Trustees who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(c) Trustees' fees: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee attended and is reimbursed for
travel and out-of-pocket expenses. These expenses are paid in total by the
following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free
Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the Chairman
of the Board receives an annual fee of $75,000 per year. These fees and expens
es are charged and allocated to each series based on net assets.
NOTE 3_Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the year ended June 30, 1996,
amounted to $20,695,058 and $15,110,163, respectively.
At June 30, 1996, accumulated net unrealized appreciation on investments
was $909,196, consisting of $1,042,083 gross unrealized appreciation and
$132,887 gross unrealized depreciation.
At June 30, 1996, 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 Limited Term Massachusetts Municipal Fund
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments of Premier Limited Term Massachusetts
Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
1996, and the related statement of operations for the year then ended and
statements of changes in net assets for each of the years in the two-year
period then ended and financial highlights for each of the years or period in
the three-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for each
of the years or period in the two-year period ended June 30, 1993 were
audited by other auditors whose report thereon, dated August 11, 1993,
expressed an unqualified opinion on those financial highlights.
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 also
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 June 30, 1996, 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 Limited Term Massachusetts Municipal Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 1996, the results of
its operations for the year then ended and the changes in its net assets for
each of the years in the two-year period then ended and financial highlights
for each of the years or period in the three-year period then ended in
conformity with generally accepted accounting principles.
(logo signature)
New York, NY
July 29, 1996
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended June 30, 1996:
_ all the dividends paid from investment income_net are "exempt -interest
dividends" (not subject to regular Federal and, for individuals who are
Massachusetts residents, Massachusetts personal income taxes), and
_ the Fund hereby designates $.0166 per share as a long-term capital gain
distribution of the $.0169 per share paid on December 6, 1995.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
Premier Limited Term Massachusetts
Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. LTMAAR966
Annual Report
Premier Limited Term
Massachusetts
Municipal Fund
June 30, 1996
Premier Limited Term New York Municipal Fund
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited
Term New York Municipal Fund. For its annual reporting period ended June 30,
1996, your Fund produced total returns of 4.23%, 3.85%, 4.02% and 4.49% for
Class A, Class B, Class C and Class R shares, respectively.* During this
twelve-month period, the Fund paid income dividends, which were exempt from
Federal, New York State and New York City personal income taxes, in the
amounts of approximately $.594 per share for Class A shares, $.538 per share
for Class B shares, $.538 per share for Class C shares, and $.626 per share
for Class R shares.** This amounts to annualized tax-free distribution rates
per share of 4.54%, 4.24%, 4.23% and 4.93% for Class A, Class B, Class C and
Class R shares, respectively.***
THE ECONOMY
So far this year, the economic story has been upbeat: solid growth,
strong gains in employment and low inflation. Yet along with this good news
has come the fear that the Federal Reserve Board will tighten monetary policy
with the expectation that the continued economic expansion will bring a
resurgence in inflation. The growth in the economy has resulted in strong
gains in employment. Over recent months, these reports of new jobs have been
accompanied by rises in long-term interest rates, a reflection of the
market's concern that inflation perceptions by the Fed would result in its
acting to cool down an economy that risks overheating. To date, the Fed has
refrained from any tightening moves. The Fed cut rates three times between
last July and January of this year, and has since held steady the Federal
Funds rate at 5.25%, even as long-term rates in the bond market have risen
more than a full percentage point.
The interplay between job growth and economic growth has become the
dominant force affecting how investors take the outlook for inflation and the
possibility that the Fed will raise short-term interest rates. Along with
handsome increases in new jobs have come solid gains in retail sales,
although many economists feel that heavy consumer debt burdens will act as a
constraint against any acceleration in growth. Automobile sales remain
strong, the third year in a row of steady growth for auto manufacturers. Yet,
the factors focused on by investors and Fed may be different. On June 19, the
Fed's Beige Book, a survey of business conditions in the 12 districts of the
Federal Reserve, reported that the economy was growing at a moderate pace and
that despite the tightening labor markets "indications of rising wages remain
scattered." Recent statements by officials of the Federal Reserve Board have
suggested that "sustained moderate growth" is the most likely path for the
economy and that labor markets, while tightening, do not yet indicate
significant inflationary pressures.
There seem to be few signs of inflation. Commodity and producer prices
remain subdued. Anecdotal reports from companies continue to attest to their
lack of ability to raise prices. Furthermore, some of the inflationary
consequences of running large budget deficits have eased due to the growth in
the economy. Higher than expected tax payments _ a result of economic growth
_ have reduced the Federal budget deficit to the $130 billion level, the
lowest since the early 1980s.
Nevertheless, there are limits to non-inflationary economic expansion. As
always, we remain watchful for signs of price pressures that could lead to a
resurgence of inflation. For now, there are few indications of that. In fact,
there also appears to be a growing consensus that the rate of economic growth
could taper off in the second half of the year due the effect of higher
long-term interest rates on certain key sectors of the economy like housing
and consumer spending.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
In a dramatic reversal of the bull market that prevailed over the first
six months of the reporting period, the bond market suffered significant
losses during the first half of 1996 because of the strengthening economy and
the related concern that the Federal Reserve would soon tighten monetary
policy. Since the beginning of this year, the yield on the benchmark 30-year
Treasury bond rose almost one full percentage point. Yields on municipal
bonds rose at about half the rate of taxable securities. This occurred
because diminished attention to tax reform legislation improved the demand
for tax-exempt bonds, which in turn helped cushion the price erosion caused
by the rise in interest rates. On an after-tax basis, the municipal market
provided attractive income alternatives when compared to the Treasury market;
at the end of the reporting period, municipal bond yields were approximately
75% of the yield of a comparable maturity Treasury bond.
In keeping with its objective of maximizing current income consistent
with the prudent risk of capital, the Fund continued to emphasize premium
coupon, high quality issues throughout the reporting period. The weighted
average maturity remained modestly defensive over the period of rising
interest rates. The average portfolio maturity was 6.73 years on June 30,
1996, slightly longer than the 6.15 year average maturity on December 31,
1995, but still significantly less than the Fund's maximum allowable average
maturity of 10 years.
The State of New York finally passed a state budget after a 3-month
delay. New York State concluded its fiscal year ending March 31, 1996 with a
surplus of $445 million. This surplus was the result of $270 million in
higher revenues, a reduction of $120 million in welfare and Medicaid costs
and "underspending" of $55 million in other programs. These budget surplus
monies ($445 million) were used to fund the State's rainy day fund; a $65
million allocation brought the balance of that fund to $237 million. The
remaining surplus ($380 million) will be employed to support additional
spending programs. Overall, we assess the State's economic growth prospects
as neutral to mildly positive.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are informative.
Please know that we appreciate greatly your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
(logo signature)
Kristin Lindquist
Portfolio Manager
July 15, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid. These figures do not take into account the maximum initial sales charge
in the case of Class A shares, or the applicable contingent deferred sales
charge in the case of Class B and Class C shares.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Annualized distribution rate per share is based upon dividends per share
paid from net investment income during the period divided by the maximum
offering price per share at the end of the period in the case of Class A
shares, or the net asset value per share at the end of the period in the case
of Class B, Class C and Class R shares.
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN PREMIER LIMITED TERM
NEW YORK MUNICIPAL FUND CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR
MUNICIPAL BOND INDEX AND
THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
Exhibit A
$18,848
Lehman Brothers
10-Year Municipal Bond Index*
$17,586
Lehman Brothers
7-Year Municipal Bond Index*
*Source: Lehman Brothers
<TABLE>
<CAPTION>
Average Annual Total Returns
Class A Shares Class B Shares
------------------------------------------------------------ ---------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 6/30/96 Sales Charge Sales Charge (3.0%) Period Ended 6/30/96 Redemption Redemption*
- ----------------------- ------------- ------------------ ------------------- ---------- --------------------
<S> <C> <C> <C> <C> <C>
1 Year 4.23% 1.13% 1 Year 3.85% 0.86%
5 Year 6.30 5.65 From Inception (12/28/94) 6.65 4.77
From Inception (3/7/88) 6.34 5.96
</TABLE>
<TABLE>
<CAPTION>
Class C Shares Class R Shares
------------------------------------------------------------ ---------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 6/30/96 No Redemption Redemption** Period Ended 6/30/96
- ----------------------- ------------ ---------------- --------------------
<S> <C> <C> <C> <C>
1 Year 4.02% 3.27% 1 Year 4.49%
From Inception (12/28/94) 6.75 6.75 From Inception (2/1/93) 5.07
</TABLE>
*The maximum contingent deferred sales charge for Class B shares is 3%
and is reduced to 0% after five years.
** The maximum contingent deferred sales charge for Class C shares is
.75% for shares redeemed within one year of the date of purchase.
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 3/7/88 (Inception Date) to a $10,000 investment made in the Lehman
Brothers 10-Year Municipal Bond Index (the "Lehman 10-Year Index") on that
date, as well as to the Lehman Brothers 7-Year Municipal Bond Index (the
"Lehman 7-Year Index") which are described below. For comparative purposes,
the value of the Lehman 10-Year Index on 2/29/88 is used as the beginning
value on 3/7/88. The Lehman 7-Year Index began in January of 1990. This
investment assumes a beginning value of $11,063 which is equal to the value
of the $10,000 investment in the Fund at the starting point of this Index,
without taking into account the Fund's maximum initial sales charge on Class
A shares. All dividends and capital gain distributions are reinvested.
Performance for Class B, Class C and Class R shares will vary from the
performance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in New York investment-grade municipal bonds with
intermediate maturities and expects to maintain an average maturity of less
than 10 years. The Fund's 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 Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
geographically unrestricted 10-year tax exempt bond market, consisting of
municipal bonds with maturities of more than 8 years and less than 12 years.
The Lehman 7-Year Index consists of bonds with similar characteristics with
maturities of 6-8 years. The Indices do not take into account charges, fees
and other expenses. Also, unlike the Fund which principally limits
investments to New York municipal obligations, the Indices are not state
specific. These factors can contribute to the Indices potentially
outperforming the Fund. Further information relating to Fund performance,
including expense reimbursements, if applicable, is contained in the
Financial Highlights section of the Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
Premier Limited Term New York Municipal Fund
Statement of Investments June 30, 1996
Principal
Long-Term Municipal Investments_95.2% Amount Value
------------ ------------
<S> <C> <C>
New York_85.5%
Albany County 7%, 10/1/2000 (Insured; FGIC, Prerefunded 10/1/1999) (a)...... $ 125,000 $ 137,907
Amherst, Public Improvement 6.20%, 4/1/2002 (Insured; FGIC)................. 150,000 161,262
Erie County Water Authority, Water Revenue, Refunding:
6.65%, 12/1/1999 (Insured; AMBAC)....................................... 250,000 267,487
7%, 12/1/2000 (Insured; AMBAC).......................................... 200,000 219,136
Greece Central School District 6%, 6/15/2010................................ 225,000 237,096
Town of Hempstead 6.30%, 1/1/2002 (Insured; AMBAC).......................... 150,000 160,216
Metropolitan Transportation Authority, Transporation Facilities Revenue:
6.30%, 7/1/2007 (Insured; MBIA)......................................... 250,000 272,500
(Service Contract) 7%, 7/1/1998 (Insured; AMBAC)........................ 100,000 105,132
Monroe County, Public Improvement 7%, 6/1/2003 (Insured; FGIC).............. 200,000 224,340
Municipal Assistance Corporation for New York City:
7.10%, 7/1/2000......................................................... 100,000 108,469
Refunding 5.25%, 7/1/2002 (Insured; AMBAC).............................. 125,000 127,873
Nassau County 7%, 7/1/2002 (Insured; AMBAC, Prerefunded 7/1/2000) (a)....... 100,000 109,585
New York State, Refunding 6.25%, 8/15/2004.................................. 200,000 215,896
New York State Dormitory Authority, Revenue:
(Colgate University) 6.50%, 7/1/2021 (Insured; MBIA, Prerefunded 7/1/2001) (a) 250,000 274,365
(FIT Student Housing) 5.75%, 7/1/2006 (Insured; AMBAC).................. 130,000 134,447
Refunding (Vassar College) 6%, 7/1/2005................................. 250,000 266,740
New York State Housing Finance Agency, Refunding
(State University Construction) 7.15%, 11/1/1997........................ 155,000 161,882
New York State Local Government Assistance Corporation 6.375%, 4/1/2000..... 200,000 211,118
New York State Medical Care Facilities Finance Agency, Revenue
(Mental Health Services Facilities) 6.60%, 8/15/1996.................... 100,000 100,353
New York State Mortgage Agency, Homeowner Mortgage Revenue
7.50%, 10/1/1998........................................................ 45,000 46,548
New York State Power Authority, General Purpose Revenue
7%, 1/1/2018 (Prerefunded 1/1/2010) (a)................................. 100,000 114,736
Orange County 5.10%, 11/15/2002............................................. 130,000 132,508
Oyster Bay 7.125%, 4/15/2000 (Insured; FGIC)................................ 180,000 196,078
Port Washington Union Free School District 6%, 8/1/2001..................... 125,000 131,958
Suffolk County, Public Improvement
7%, 4/1/2002 (Insured; MBIA, Prerefunded 4/1/2001) (a).................. 150,000 165,165
Triborough Bridge and Tunnel Authority, General Purpose Revenue:
7.40%, 1/1/2003 (Prerefunded 1/1/1999) (a).............................. 200,000 217,314
7%, 1/1/2011 (Prerefunded 1/1/1999) (a)................................. 150,000 161,574
Triborough Bridge and Tunnel Authority, General Purpose Revenue (continued):
Premier Limited Term New York Municipal Fund
Statement of Investments (continued) June 30, 1996
Principal
Long-Term Municipal Investments (continued) Amount Value
------------ ------------
New York (continued)
Refunding 5.90%, 1/1/2007............................................... $ 100,000 $ 105,058
Westchester County 6.625%, 11/1/2004........................................ 250,000 279,310
Western Nassau County Water Authority,
Water Systems Revenue 5.50%, 5/1/2004 (Insured; AMBAC).................. 250,000 258,583
U. S. Related_9.6%
Puerto Rico Commonwealth, Refunding 6.25%, 7/1/2011 (Insured; MBIA)......... 200,000 216,578
Puerto Rico Commonwealth Highway and Transporation Authority,
Highway Revenue 6.25%, 7/1/2009 (Insured; MBIA)......................... 150,000 162,609
University of Puerto Rico, University Revenues, Refunding
6.25%, 6/1/2006......................................................... 200,000 218,136
----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $5,733,454)..................... $5,901,959
==========
Short-Term Municipal Investments_4.8%
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue, VRDN 3.55% (Insured; FGIC) (b)......... $ 100,000 $ 100,000
New York State Energy Research and Development Authority, PCR, Refunding,
VRDN
3.55% (LOC; Morgan Guaranty Trust Co.) (b,c)............................ 200,000 200,000
----------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $300,000)...................... $ 300,000
==========
TOTAL INVESTMENTS_100.0%
(cost $6,033,454)....................................................... $6,201,959
==========
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term New York Municipal Fund
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company VRDN Variable Rate Demand Notes
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
<S> <C> <C> <C>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- --------- --------- --------------------- -----------------------
AAA Aaa AAA 69.5%
AA Aa AA 12.8
A A A 6.9
BBB Baa BBB 6.0
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 4.8
------
100.0%
======
</TABLE>
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) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Secured by letters of credit.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
See notes to financial statements.
<TABLE>
<CAPTION>
Premier Limited Term New York Municipal Fund
Statement of Assets and Liabilities June 30, 1996
<S> <C> <C>
ASSETS:
Investments in securities, at value
(cost $6,033,454)_see Statement of Investments........................ $6,201,959
Cash.................................................................... 12,091
Receivable for investment securities sold............................... 240,162
Interest receivable..................................................... 113,290
----------
6,567,502
LIABILITIES:
Due to The Dreyfus Corporation_Note 2(a)................................ $ 4,819
Due to Distributor_Note 2(b)............................................ 497
Payable for investment securities purchased............................. 223,931
Trustees' fee payable_Note 2(c)......................................... 452 229,699
---------- ---------
NET ASSETS.................................................................. $6,337,803
==========
REPRESENTED BY:
Paid-in capital......................................................... $6,138,455
Accumulated distributions in excess of investment income_net............ (22)
Accumulated undistributed net realized gain on investments.............. 30,865
Accumulated net unrealized appreciation on investments_Note 3........... 168,505
----------
NET ASSETS at value......................................................... $6,337,803
==========
NET ASSET VALUE, per share:
Class A Shares
unlimited number of shares of Beneficial Interest authorized
($2,106,373 / 166,546 shares of Beneficial Interest outstanding)...... $12.65
======
Class B Shares
unlimited number of shares of Beneficial Interest authorized
($120,118 / 9,487 shares of Beneficial Interest outstanding).......... $12.66
======
Class C Shares
unlimited number of shares of Beneficial Interest authorized
($51,692 / 4,077 shares of Beneficial Interest outstanding)........... $12.68
======
Class R Shares
unlimited number of shares of Beneficial Interest authorized
($4,059,620 / 321,017 shares of Beneficial Interest outstanding)...... $12.65
======
See notes to financial statements.
Premier Limited Term New York Municipal Fund
Statement of Operations year ended June 30, 1996
<S> <C> <C>
INVESTMENT INCOME:
Interest Income......................................................... $298,982
Expenses:
Investment management fee_Note 2(a)................................... $26,270
Distribution fee_Note 2(b)............................................ 6,209
Trustees' fees and expenses_Note 2(c)................................. 1,519
Service fee_Note 2(b)................................................. 220
-------
Total Expenses.................................................... 34,218
--------
INVESTMENT INCOME_NET............................................. 264,764
REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS_Note 3:
Net realized gain on investments........................................ $41,273
Net realized (loss) on financial futures................................ (4,415)
-------
Net Realized Gain..................................................... 36,858
Net unrealized (depreciation) on investments............................ (63,766)
--------
NET REALIZED AND UNREALIZED (LOSS) ON INVESTMENTS................. (26,908)
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $237,856
========
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term New York Municipal Fund
Statement of Changes in Net Assets
Year Ended June 30,
------------------------------
1996 1995
------------ -----------
<S> <C> <C>
OPERATIONS:
Investment income_net................................................... $ 264,764 $ 274,395
Net realized gain on investments........................................ 36,858 5,110
Net unrealized appreciation (depreciation) on investments for the year.. (63,766) 74,362
------------ -----------
Net Increase In Net Assets Resulting From Operations.............. 237,856 353,867
------------ -----------
DIVIDENDS TO SHAREHOLDERS:
From investment income_net:
Class A Shares........................................................ (106,844) (128,592)
Class B Shares........................................................ (1,519) --
Class C Shares........................................................ (2,084) (571)
Class R Shares........................................................ (154,347) (145,224)
From net realized gain on investments:
Class A Shares........................................................ ___ (7,144)
Class R Shares........................................................ ___ (6,625)
In excess of net realized gain on investments:
Class A Shares........................................................ ___ (3,114)
Class R Shares........................................................ ___ (2,887)
------------ -----------
Total Dividends................................................... (264,794) (294,157)
------------ -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A Shares........................................................ 304,803 2,659,825
Class B Shares........................................................ 119,997 15
Class C Shares........................................................ 127,309 66,765
Class R Shares........................................................ 1,483,810 2,784,534
Dividends reinvested:
Class A Shares........................................................ 76,624 95,205
Class B Shares........................................................ 1,520 ___
Class C Shares........................................................ 1,925 528
Class R Shares........................................................ 12,580 9,422
Cost of shares redeemed:
Class A Shares........................................................ (606,642) (3,357,585)
Class B Shares........................................................ (16) ___
Class C Shares........................................................ (147,090) ___
Class R Shares........................................................ (262,285) (2,376,553)
------------ -----------
Increase (Decrease) In Net Assets From
Beneficial Interest Transactions................................ 1,112,535 (117,844)
------------ -----------
Total Increase (Decrease) In Net Assets......................... 1,085,597 (58,134)
NET ASSETS:
Beginning of year....................................................... 5,252,206 5,310,340
------------ -----------
End of year [including distributions in excess of investment income_net;
($22) in 1996]........................................................ $6,337,803 $5,252,206
========== ==========
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term New York Municipal Fund
Statement of Changes in Net Assets (continued)
Shares
-------------------------------------------------------------------
Class A Class B
------------------------------ ------------------------------
Year Ended June 30, Year Ended June 30,
------------------------------ ------------------------------
1996 1995(1) 1996 1995(2)
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............................ 23,900 216,459 9,368 1
Shares issued for dividends reinvested. 5,966 7,633 119 ___
Shares redeemed........................ (47,503) (272,051) (1) ___
------------ ------------ ------------ -----------
Net Increase (Decrease) In
Shares Outstanding............... (17,637) (47,959) 9,486 1
========= ========= ========== =========
</TABLE>
<TABLE>
<CAPTION>
Shares
-------------------------------------------------------------------
Class C Class R
------------------------------ ------------------------------
Year Ended June 30, Year Ended June 30,
------------------------------ ------------------------------
1996 1995(2) 1996 1995(1)
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS (continued):
Shares sold............................ 9,989 5,292 116,482 224,379
Shares issued for dividends reinvested. 150 42 980 756
Shares redeemed........................ (11,396) ___ (20,278) (191,061)
------------ ------------ ---------- -----------
Net Increase (Decrease) In
Shares Outstanding............... (1,257) 5,334 97,184 34,074
========== ========= ========= =========
---------- ---------- ---------- ----------
(1) On October 17, 1994, Investor shares and Trust shares were redesignated
Class A shares and Class R shares, respectively. (
2)The Fund commenced selling Class B and C shares on December 28, 1994.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term New York Municipal Fund
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 Fund's financial statements.
Class A Shares
--------------------------------------------------------------------------
Period Ended
Year Ended June 30, June 30, Year Ended November 30,
---------------------- -------------------------
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(2)(3) 1993(1) 1992 1991
------ ------- ------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year.. $12.71 $12.59 $13.04 $12.70 $12.34 $12.02
------ ------- ------- ------ ------ -----
Investment Operations:
Investment income_net(4)............ .59 .60 .35 .66 .68 .70
Net realized and unrealized gain (loss)
on investments.................... (.06) .17 (.45) .46 .36 .32
------ ------- ------- ------ ------ -----
Total from Investment Operations.. .53 .77 (.10) 1.12 1.04 1.02
------ ------- ------- ------ ------ -----
Distributions:
Dividends from investment income_net (.59) (.60) (.35) (.66) (.68) (.70)
Dividends from net realized gain
on investments.................... -- (.04) -- (.12) -- --
Dividends in excess of net realized gain
on investments.................... -- (.01) -- -- -- --
------ ------- ------- ------ ------ -----
Total Distributions............... (.59) (.65) (.35) (.78) (.68) (.70)
------ ------- ------- ------ ------ -----
Net asset value, end of year.......... $12.65 $12.71 $12.59 $13.04 $12.70 $12.34
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(5).............. 4.23% 6.39% (.80%)(6) 9.00% 8.65% 8.71%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets(7) .75% .75% .57%(8) .46% .45% .45%
Ratio of net investment income to
average net assets................ 4.62% 4.83% 4.66%(8) 5.11% 5.43% 5.74%
Portfolio Turnover Rate............. 43.43% 32.00% 13.00%(6) 32.00% -- --
Net Assets, end of year (000's Omitted) $2,106 $2,340 $2,922 $2,100 $5,308 $5,202
</TABLE>
(1) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the
Institutional Class and Investment Class of shares. Effective April 4, 1994
the Retail and Institutional Classes were recalssified as a single class of
shares known as the Investor shares. Effective October 17, 1994, the Investor
Class was redesignated Class A shares. The Financial Highlights for the year
ended June 30, 1995 are based upon a Class A (formerly Investor shares)
outstanding. The amounts shown for the period ended June 30, 1994 were
calculated using the performance of a Retail share outstanding from December
1, 1993 to April 3, 1994 and the performance of an Investor share outstanding
from April 4, 1994 to June 30, 1994. The Financial Highlights for the year
ended November 30, 1993 and prior years are based upon a Retail share
outstanding.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. From April 4, 1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's investment
manager. Prior to April 4, 1994, The Boston Company Advisors, Inc. served as
the Fund's investment adviser.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
(4) Net investment income per share before waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the period ended June 30, 1994, for the
years ended November 30, 1993, 1992 and 1991 were $.28, $.42, $.52 and $.52,
respectively.
(5) Exclusive of sales load.
(6) Not annualized.
(7) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the period ended June 30, 1994, for the
years ended November 30, 1993, 1992 and 1991 were 1.51%, 2.32%, 1.70% and
1.88%, respectively.
(8) Annualized.
See notes to financial statements.
Premier Limited Term New York Municipal Fund
Financial Highlights (continued)
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 Fund's financial statements.
<TABLE>
<CAPTION>
Class B Shares Class C Shares
---------------------- ----------------------------
Year Ended Year Ended Period Ended
June 30, June 30, June 30,
PER SHARE DATA: 1996(1) 1996 1995(1)
------- ------- -------
<S> <C> <C> <C>
Net asset value, beginning of year...................... $12.71 $12.71 $12.21
------- ------- -------
Investment Operations:
Investment income_net................................... .54 .54 .28
Net realized and unrealized gain (loss) on investments.. (.05) (.03) .49
------- ------- -------
Total from Investment Operations...................... .49 .51 .77
------- ------- -------
Distributions;
Dividends from investment income_net.................... (.54) (.54) (.27)
------- ------- -------
Net asset value, end of year............................ $12.66 $12.68 $12.71
======= ====== =======
TOTAL INVESTMENT RETURN(2).................................. 3.85% 4.02% 6.39%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................. 1.25% 1.25% 1.25%(4)
Ratio of net investment income to average net assets.... 3.97% 4.15% 4.34%(4)
Portfolio Turnover Rate................................. 43.43% 43.43% 32.00%
Net Assets, end of year (000's Omitted)................. $120 $52 $68
(1) The Fund commenced selling Class B and Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Premier Limited Term New York Municipal Fund
Financial Highlights (continued)
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 Fund's financial statements.
Class R Shares
------------------------------------------------------
Year Ended June 30, Period Ended Period Ended
--------------------
June 30, November 30,
PER SHARE DATA: 1996 1995(1) 1994(1)(2) 1993(3)
------- ------- ------- -------
<S> <C> <C> <C> <C>
Net asset value, beginning of year.................. $12.71 $12.59 $13.04 $12.85
------- ------- ------- -------
Investment Operations:
Investment income_net............................... .63 .64 .37(4) .57(4)
Net realized and unrealized gain (loss) on investments (.06) .17 (.45) .31
------- ------- ------- -------
Total from Investment Operations.................. .57 .81 (.08) .88
------- ------- ------- -------
Distributions:
Dividends from investment income_net................ (.63) (.64) (.37) (.57)
Dividends from net realized gain on investments..... -- (.04) -- (.12)
Dividends in excess of net realized gain on investments -- (.01) -- --
------- ------- ------- -------
Total Distributions............................... (.63) (.69) (.37) (.69)
------- ------- ------- -------
Net asset value, end of year........................ $12.65 $12.71 $12.59 $13.04
====== ====== ====== ======
TOTAL INVESTMENT RETURN(5).............................. 4.49% 6.65% (.67%)(6) 6.95%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............. .50% .50% .29%(7)(8) .25%(7)(8)
Ratio of net investment income to average net assets 4.87% 5.08% 4.94%(7) 5.20%(7)
Portfolio Turnover Rate............................. 43.43% 32.00% 13.00%(6) 32.00%
Net Assets, end of year (000's Omitted)............. $4,060 $2,844 $2,388 $2,542
</TABLE>
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. From April 4, 1994
through October 16, 1994, Mellon Bank, N.A. served as the Fund's investment
manager. Prior to April 4, 1994, The Boston Company Advisors, Inc. served as
the Fund's investment adviser.
(2) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
(3) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was
reclassified as the Trust shares. Effective October 17, 1994 Trust shares
were redesignated Class R shares. The table above is based upon a Retail
share outstanding from February 1, 1993 to April 3, 1994 and a Trust share
outstanding from April 4, 1994 to October 16, 1994.
(4) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or
custodian and/or transfer agent for the periods ended June 30, 1994 and
November 30, 1993 were $.30 and $.36, respectively.
(5) Exclusive of sales load.
(6) Not annualized.
(7) Annualized.
(8) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the periods ended June 30, 1994 and
November 30, 1993 were 1.23% and 2.22%, respectively.
See notes to financial statements.
Premier Limited Term New York Municipal Fund
NOTES TO FINANCIAL STATEMENTS
NOTE 1_Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 seven series including the Premier Limited Term New York
Municipal Fund (the "Fund"). The Fund's investment objective is to maximize
current income exempt from Federal, New York State and New York City income
taxes to the extent consistent with the preservation of capital. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund currently offers four classes of
shares: Class A, Class B, Class C and Class R shares. Class A, Class B and
Class C shares are sold primarily to retail investors through financial
intermediaries and bear a distribution fee and/or service fee. Class A shares
are sold with a front-end sales charge, while Class B and Class C shares are
subject to a contingent deferred sales charge ("CDSC") and a service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee or service
fee. Class R shares are offered without a front-end sales load or CDSC. Each
class of shares has identical rights and privileges, except with respect to
distribution fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
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.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: The Fund's 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 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.
(c) Financial futures: The Fund may invest in financial futures contracts
in order to gain exposure to or protect against changes in the market. The
Fund is exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require
the Fund to "mark to market" on a daily basis, which reflects the change in
the market value of the contract at the close of each day's trading.
Typically, variation margin payments are received or made to reflect daily
unrealized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial margin
deposits with a custodian, which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. At June 30, 1996, there were no financial futures
contracts outstanding.
(d) Concentration of risk: The Fund 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 Fund.
(e) Distributions to shareholders: It is the policy of the Fund to
declare dividends daily from investment income-net. Such dividends are paid
monthly. Dividends from net realized capital gain are normally declared and
paid annually, but the Fund 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, if any, it is the policy of the Fund not to distribute such gain.
(f) Federal income taxes: It is the policy of the Fund 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.
NOTE 2_Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or more
third parties to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out
of its fee, the Manager pays all of the expenses of the Fund except brokerage
fees, taxes, interest, Rule 12b-1 distribution fees and expenses, fees and
expenses of non-interested Trustees (including counsel fees) and
extraordinary expenses. In addition, the Manager is required to reduce its
fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel).
(b) Distribution and service plan: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, the Fund may pay annually up to .25%
of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the
sale of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .50% of the value of the average daily net assets of Class B and
Class C shares. Class B and Class C shares are also subject to a service plan
adopted pursuant to Rule 12b-1, under which the Fund pays Dreyfus Service
Corporation or the Distributor for providing certain services to the holders
of Class B and Class C shares a fee at the annual rate of .25% of the value
of the average daily net assets of Class B and Class C shares. Class R shares
bear no service or distribution fee. For the year ended June 30, 1996, the
distribution fee for Class A, Class B and Class C shares was $5,769, $190 and
$250, respectively. For the year ended June 30, 1996, the service fee for
Class B and Class C shares was $95 and $125, respectively.
Under its terms, the Plan shall remain in effect from year to year,
provided such continuance is approved annually by a vote of majority of those
Trustees who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
(c) Trustees' fees: Each trustee who is not an "interested person" as
defined in the Act receives $27,000 per year, $1,000 for each Board meeting
attended and $750 for each Audit Committee attended and is reimbursed for
travel and out-of-pocket expenses. These expenses are paid in total by the
following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free
Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the
Chairman of the Board receives an annual fee of $75,000 per year. These fees
and expenses are charged and allocated to each series based on net assets.
NOTE 3_Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the year ended June 30, 1996,
amounted to $3,203,806 and $2,296,230, respectively.
At June 30, 1996, accumulated net unrealized appreciation on investments
was $168,505, consisting of $185,032 gross unrealized appreciation and
$16,527 gross unrealized depreciation.
At June 30, 1996, 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 Limited Term New York Municipal Fund
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Premier Limited Term Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments of Premier Limited Term New York
Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
1996, and the related statement of operations for the year then ended and
statements of changes in net assets for each of the years in the two-year
period then ended and financial highlights for each of the years or period in
the three-year period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits. The financial highlights for each
of the years or period for the three-year period ended November 30, 1993 were
audited by other auditors whose report thereon, dated January 18, 1994,
expressed an unqualified opinion on those financial highlights.
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 also
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 June 30, 1996, 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 Limited Term New York Municipal Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 1996, the results of
its operations for the year then ended and the changes in its net assets for
each of the years in the two-year period then ended and financial highlights
for each of the years or period in the three-year period then ended in conform
ity with generally accepted accounting principles.
New York, NY
July 29, 1996
Premier Limited Term New York Municipal Fund
Important Tax Information (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended June
30, 1996 as "exempt-interest dividends" (not subject to regular Federal and,
for individuals who are New York residents, New York State and New York City
personal income taxes).
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1996 calendar year
on Form 1099-DIV which will be mailed by January 31, 1997.
Premier Limited Term
New York Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. LTNYAR966
Annual Report
Premier Limited Term
New York
Municipal Fund
June 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM MUNICIPAL FUND CLASS A SHARES
WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
____________________________________________________________________
| | PREMIER | | |
| | LIMITED TERM | LEHMAN BROTHERS |LEHMAN BROTHERS |
| PERIOD | MUNICIPAL FUND | 10-YEAR MUNICIPAL |7-YEAR MUNICIPAL |
| |(CLASS A SHARES) | BOND INDEX* | BOND INDEX* |
|----------|------------------| ------------------|------------------|
| 6/30/86 | 9,702 | 10,000 | - |
| 6/30/87 | 10,523 | 11,025 | - |
| 6/30/88 | 11,387 | 11,787 | - |
| 6/30/89 | 12,901 | 12,920 | - |
| 12/31/89 | - | - | 13,700 |
| 6/30/90 | 13,554 | 13,839 | 14,075 |
| 6/30/91 | 14,633 | 15,118 | 15,327 |
| 6/30/92 | 16,381 | 16,830 | 17,002 |
| 6/30/93 | 18,174 | 18,948 | 18,828 |
| 6/30/94 | 18,349 | 19,135 | 19,067 |
| 6/30/95 | 19,518 | 20,814 | 20,636 |
| 6/30/96 | 20,543 | 22,143 | 21,777 |
|-----------------------------| ------------------|------------------|
*Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND CLASS A
SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
_____________________________________________________________________
| | PREMIER LIMITED | | |
| | TERM CALIFORNIA | LEHMAN BROTHERS |LEHMAN BROTHERS |
| PERIOD | MUNICIPAL FUND | 10-YEAR MUNICIPAL |7-YEAR MUNICIPAL |
| |(CLASS A SHARES) | BOND INDEX* | BOND INDEX* |
|-----------|------------------| ------------------|------------------|
| 3/7/88 | 9,701 | 10,000 | - |
| 6/30/88 | 9,835 | 10,033 | - |
| 6/30/89 | 10,654 | 10,997 | - |
| 12/31/89 | - | - | 11,333 |
| 6/30/90 | 11,245 | 11,779 | 11,643 |
| 6/30/91 | 12,249 | 12,868 | 12,679 |
| 6/30/92 | 13,494 | 14,325 | 14,064 |
| 6/30/93 | 14,934 | 16,128 | 15,575 |
| 6/30/94 | 15,203 | 16,287 | 15,773 |
| 6/30/95 | 16,201 | 17,716 | 17,071 |
| 6/30/96 | 17,080 | 18,848 | 18,015 |
|-----------|------------------| ------------------|------------------|
*Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL
BOND INDEX AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
_____________________________________________________________________
| | PREMIER LIMITED | | |
| |TERM MASSACHUSETTS| LEHMAN BROTHERS |LEHMAN BROTHERS |
| PERIOD | MUNICIPAL FUND | 10-YEAR MUNICIPAL |7-YEAR MUNICIPAL |
| |(CLASS A SHARES) | BOND INDEX* | BOND INDEX* |
|-----------|------------------| ------------------|------------------|
| 6/30/86 | 9,703 | 10,000 | - |
| 6/30/87 | 10,311 | 11,025 | - |
| 6/30/88 | 11,174 | 11,787 | - |
| 6/30/89 | 12,340 | 12,920 | - |
| 12/31/89 | - | - | 13,076 |
| 6/30/90 | 12,974 | 13,839 | 13,434 |
| 6/30/91 | 14,029 | 15,118 | 14,628 |
| 6/30/92 | 15,742 | 16,830 | 16,227 |
| 6/30/93 | 17,358 | 18,948 | 17,970 |
| 6/30/94 | 17,599 | 19,135 | 18,198 |
| 6/30/95 | 18,760 | 20,814 | 19,696 |
| 6/30/96 | 19,739 | 22,143 | 20,785 |
|------------------------------| ------------------|------------------|
*Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND CLASS A
SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
_____________________________________________________________________
| | PREMIER LIMITED | | |
| | TERM NEW YORK | LEHMAN BROTHERS |LEHMAN BROTHERS |
| PERIOD | MUNICIPAL FUND | 10-YEAR MUNICIPAL |7-YEAR MUNICIPAL |
| |(CLASS A SHARES) | BOND INDEX* | BOND INDEX* |
|-----------|------------------| ------------------|------------------|
| 3/7/88 | 9,701 | 10,000 | - |
| 6/30/88 | 9,718 | 10,033 | - |
| 6/30/89 | 10,405 | 10,997 | - |
| 12/31/89 | - | - | 11,063 |
| 6/30/90 | 11,010 | 11,779 | 11,366 |
| 6/30/91 | 11,923 | 12,868 | 12,376 |
| 6/30/92 | 13,071 | 14,325 | 13,729 |
| 6/30/93 | 14,411 | 16,128 | 15,204 |
| 6/30/94 | 14,592 | 16,287 | 15,397 |
| 6/30/95 | 15,525 | 17,716 | 16,664 |
| 6/30/96 | 16,182 | 18,848 | 17,586 |
|------------------------------| ------------------|------------------|
*Source: Lehman Brothers
