<PAGE>
DEFINED ASSET FUNDSSM
- --------------------------------------------
- ----------------------------------
MUNICIPAL INVESTMENT TRUST FUND
MULTISTATE SERIES--57
(A UNIT INVESTMENT TRUST)
O CALIFORNIA, FLORIDA, MICHIGAN, NEW JERSEY, NEW
YORK AND PENNSYLVANIA PORTFOLIOS
O PORTFOLIOS OF INSURED LONG-TERM MUNICIPAL
BONDS
O DESIGNED FOR FEDERALLY TAX-FREE INCOME
O EXEMPT FROM SOME STATE TAXES
O MONTHLY DISTRIBUTIONS
SPONSORS:
Merrill Lynch,
Pierce, Fenner & Smith -------------------------------------------------
Incorporated The Securities and Exchange Commission has not
Salomon Smith Barney Inc. approved or disapproved these Securities or
Prudential Securities passed upon the adequacy of this prospectus. Any
Incorporated representation to the contrary is a criminal
PaineWebber Incorporated offense.
Dean Witter Reynolds Inc. Prospectus dated June 4, 1999.
<PAGE>
- --------------------------------------------------------------------------------
Def ined Asset FundsSM
Defined Asset FundsSM is America's oldest and largest family of unit investment
trusts, with over $160 billion sponsored over the last 28 years. Defined Asset
Funds has been a leader in unit investment trust research and product
innovation. Our family of Funds helps investors work toward their financial
goals with a full range of quality investments, including municipal, corporate
and government bond portfolios, as well as domestic and international equity
portfolios.
Defined Asset Funds offer a number of advantages:
o A disciplined strategy of buying and holding with a long-term view is the
cornerstone of Defined Asset Funds.
o Fixed portfolio: Defined Funds follow a buy and hold investment strategy;
funds are not managed and portfolio changes are limited.
o Defined Portfolios: We choose the stocks and bonds in advance, so you know
what you're investing in.
o Professional research: Our dedicated research team seeks out stocks or bonds
appropriate for a particular fund's objectives.
o Ongoing supervision: We monitor each portfolio on an ongoing basis.
No matter what your investment goals, tolerance for risk or time horizon,
there's probably a Defined Asset Fund that suits your investment style. Your
financial professional can help you select a Defined Asset Fund that works best
for your investment portfolio.
THE FINANCIAL INFORMATION IN THIS PROSPECTUS IS AS OF FEBRUARY 28, 1999, THE
EVALUATION DATE.
CONTENTS
PAGE
-----------
California Insured Portfolio--
Risk/Return Summary.................................. 3
Florida Insured Portfolio-- Risk/Return Summary......... 6
Michigan Insured Portfolio-- Risk/Return Summary........ 9
New Jersey Insured Portfolio--
Risk/Return Summary.................................. 12
New York Insured Portfolio--
Risk/Return Summary.................................. 15
Pennsylvania Insured Portfolio--
Risk/Return Summary.................................. 18
What You Can Expect From Your Investment................ 23
Monthly Income....................................... 23
Return Figures....................................... 23
Records and Reports.................................. 23
The Risks You Face...................................... 24
Interest Rate Risk................................... 24
Call Risk............................................ 24
Reduced Diversification Risk......................... 24
Liquidity Risk....................................... 24
Concentration Risk................................... 24
State Concentration Risk............................. 25
Bond Quality Risk.................................... 28
Insurance Related Risk............................... 29
Litigation and Legislation Risks..................... 29
Selling or Exchanging Units............................. 29
Sponsors' Secondary Market........................... 29
Selling Units to the Trustee......................... 29
Exchange Option...................................... 30
How The Fund Works...................................... 30
Pricing.............................................. 30
Evaluations.......................................... 30
Income............................................... 31
Expenses............................................. 31
Portfolio Changes.................................... 31
Fund Termination..................................... 32
Certificates......................................... 32
Trust Indenture...................................... 32
Legal Opinion........................................ 33
Auditors............................................. 33
Sponsors............................................. 33
Trustee.............................................. 33
Underwriters' and Sponsors' Profits 34
Public Distribution.................................. 34
Code of Ethics....................................... 34
Year 2000 Issues..................................... 34
Taxes................................................... 34
Supplemental Information................................ 37
Financial Statements.................................... D-1
2
<PAGE>
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CALIFORNIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$3,050,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 12%
/ / Hospital/Health Care 15%
/ / Municipal Water/Sewer Utilities 31%
/ / Refunded Bonds 10%
/ / Special Tax 16%
/ / Municipal Electric Utilities 16%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in municipal water/sewer
utility bonds, adverse developments in this sector may
affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF CALIFORNIA
SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO CALIFORNIA WHICH ARE BRIEFLY
DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
3
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.67
Annual Income per unit: $ 56.14
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.70
Trustee's Fee
$ 0.37
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.19
Evaluator's Fee
$ 0.36
Other Operating Expenses
-----------
$ 1.62
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
California Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior California Series
were offered between June 22, 1988 and September 27, 1996
and were outstanding on March 31, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 3/31/99.
NO SALES
WITH SALES FEE FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- -------------------------------------------------------------------
High 4.57% 7.62% 7.61% 8.82%
Average 2.32 5.66 5.52 6.70
Low 0.40 4.27 3.11 5.10
- -------------------------------------------------------------------
Average
Sales fee 3.18% 5.10%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
4
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,084.80
(as of February 28, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some California state and local personal income
taxes if you live in California.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
5
<PAGE>
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FLORIDA INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 6 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,500,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o The Fund is concentrated in refunded bonds.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 20%
/ / Hospital/Health Care 20%
/ / Municipal Water/Sewer Utilities 18%
/ / Refunded Bonds 42%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF FLORIDA SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO FLORIDA WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
6
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.68
Annual Income per unit: $ 56.17
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.70
Trustee's Fee
$ 0.37
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.23
Evaluator's Fee
$ 0.40
Other Operating Expenses
-----------
$ 1.70
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Florida Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior Florida Series
were offered between August 25, 1988 and December 6, 1996
and were outstanding on March 31, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 4.94% 7.40% 6.95% 7.59% 8.61% 7.55%
Average 2.24 5.62 6.79 5.45 6.67 7.39
Low -0.66 4.39 6.71 3.15 5.28 7.31
- -------------------------------------------------------------------
Average
Sales fee 3.19% 5.13% 5.82%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain adverse
credit or other conditions exist.
7
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,090.96
(as of February 28, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as well
as net accrued but undistributed interest on the unit, is
added to the unit price. An independent evaluator prices the
bonds at 3:30 p.m. Eastern time every business day. Unit
price changes every day with changes in the prices of the
bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other fee
when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Florida state and local taxes if you live in
Florida.
You will also receive principal payments if bonds are sold or
called or mature, when the cash available is more than $5.00
per unit. You will be subject to tax on any gain realized by
the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective. Income from this program will generally
be subject to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
8
<PAGE>
- --------------------------------------------------------------------------------
MICHIGAN INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,635,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / General Obligation 54%
/ / Hospital/Health Care 17%
/ / Housing 3%
/ / Industrial Development Revenue 9%
/ / Universities/Colleges 17%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in general obligation
bonds, adverse developments in this sector may affect the
value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF MICHIGAN SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO MICHIGAN WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
9
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.58
Annual Income per unit: $ 54.99
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
0.70
Trustee's Fee
$ 0.37
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.21
Evaluator's Fee
$ 0.39
Other Operating Expenses
-----------
$ 1.67
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Michigan Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior Michigan Series
were offered between June 20, 1989 and September 19, 1996
and were outstanding on March 31, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 1 YEAR 5 YEARS
- ---------------------------------------------------------------
High 3.69% 7.14% 7.06% 8.34%
Average 2.16 5.41 4.97 6.40
Low -0.27 4.25 3.04 5.16
- ---------------------------------------------------------------
Average
Sales fee 2.81% 4.88%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
10
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,077.16
(as of February 28, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Michigan state and local personal income
taxes if you live in Michigan.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds generally will not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
11
<PAGE>
- --------------------------------------------------------------------------------
NEW JERSEY INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured, long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$2,710,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o The bonds are rated AAA or Aaa by Standard & Poor's,
Moody's or Fitch.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / General Obligation 18%
/ / Hospital/Health Care 16%
/ / Industrial Development Revenue 18%
/ / Municipal Water/Sewer Utilities 37%
/ / Special Tax 11%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in municipal water/sewer
utility bonds, adverse developments in this sector may
affect the value of your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW JERSEY
SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS
SUBJECT TO RISKS PARTICULAR TO NEW JERSEY WHICH ARE BRIEFLY
DESCRIBED UNDER STATE CONCENTRATION RISKS LATER IN THIS
PROSPECTUS.
12
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.54
Annual Income per unit: $ 54.56
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.70
Trustee's Fee
$ 0.37
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.21
Evaluator's Fee
$ 0.42
Other Operating Expenses
-----------
$ 1.70
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
New Jersey Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior New Jersey Series
were offered between June 22, 1988 and September 19, 1996
and were outstanding on March 31, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 5.83% 7.04% 6.92% 7.45% 8.24% 7.52%
Average 2.55 5.41 6.80 5.53 6.46 7.40
Low 0.51 4.20 6.73 3.51 5.19 7.33
- -------------------------------------------------------------------
Average
Sales fee 2.96% 5.14% 5.82%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
13
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,073.38
(as of February 28, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some New Jersey state and local personal income
taxes if you live in New Jersey.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales
fee on exchanges.
14
<PAGE>
- --------------------------------------------------------------------------------
NEW YORK INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$3,335,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Airports/Ports/Highways 3%
/ / General Obligation 14%
/ / Hospital/Health Care 30%
/ / Lease Rental Appropriation 15%
/ / Refunded Bonds 24%
/ / Municipal Electric Utilities 14%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Because the Fund is concentrated in hospital/health care
bonds, adverse developments in this sector may affect the
value of your units.
Approximately 15% of the bonds are moral obligation bonds.
Generally the agency or authority issuing the bonds has no
taxing power, and repayment of these bonds is only a moral
commitment, but not a legal obligation of the state or
municipality.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
15
<PAGE>
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF NEW YORK SO
IT IS LESS DIVERSIFIED THAN A NATIONAL FUND AND IS SUBJECT
TO RISKS PARTICULAR TO NEW YORK WHICH ARE BRIEFLY DESCRIBED
UNDER STATE CONCENTRATION RISKS LATER IN THIS PROSPECTUS.
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.52
Annual Income per unit: $ 54.25
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
be charged a reduced sales fee of no less than $5.00 per
unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.70
Trustee's Fee
$ 0.37
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.17
Evaluator's Fee
$ 0.34
Other Operating Expenses
-----------
$ 1.58
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
New York Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior New York Series
were offered between January 14, 1988 and October 16, 1996
and were outstanding on March 31, 1999. OF COURSE, PAST
PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 5.38% 7.23% 7.44% 7.65% 8.43% 8.04%
Average 2.37 5.33 7.17 5.49 6.33 7.76
Low -0.98 4.23 7.00 3.37 5.12 7.59
- -------------------------------------------------------------------
Average
Sales fee 3.11% 4.90% 5.77%
- -------------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
16
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,062.45
(as of February 28, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some New York state and local personal income
taxes if you live in New York.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales
fee on exchanges.
17
<PAGE>
- --------------------------------------------------------------------------------
PENNSYLVANIA INSURED PORTFOLIO--RISK/RETURN SUMMARY
1. WHAT IS THE FUND'S OBJECTIVE?
The Fund seeks interest income that is exempt from regular
federal income taxes and some state and local taxes by
investing in a fixed portfolio consisting primarily of
insured long term municipal revenue bonds.
2. WHAT ARE MUNICIPAL REVENUE BONDS?
Municipal revenue bonds are bonds issued by states,
municipalities and public authorities to finance the cost
of buying, building or improving various projects intended
to generate revenue, such as airports, health care
facilities, housing and municipal electric, water and sewer
utilities. Generally, payments on these bonds depend solely
on the revenues generated by the projects, excise taxes or
state appropriations, and are not backed by the
government's taxing power.
3. WHAT IS THE FUND'S INVESTMENT STRATEGY?
O The Fund plans to hold to maturity 7 long-term tax-exempt
municipal bonds with an aggregate face amount of
$3,110,000.
o The Fund is a unit investment trust which means that,
unlike a mutual fund, the Portfolio is not managed.
o When the bonds were initially deposited they were rated A
or better by Standard & Poor's, Moody's or Fitch. The
quality of the bonds may currently be lower.
o Many of the bonds can be called at a premium declining over
time to par value. Some bonds may be called earlier at par
for extraordinary reasons.
o 100% of the bonds are insured by insurance companies that
guarantee timely payments of principal and interest on the
bonds (but not Fund units or the market value of the bonds
before they mature).
The Portfolio consists of municipal bonds of the following
types:
APPROXIMATE
PORTFOLIO
PERCENTAGE
/ / Hospital/Health Care 24%
/ / Industrial Development Revenue 16%
/ / Municipal Water/Sewer Utilities 16%
/ / Refunded Bonds 12%
/ / Special Tax 16%
/ / Universities/Colleges 16%
4. WHAT ARE THE SIGNIFICANT RISKS?
YOU CAN LOSE MONEY BY INVESTING IN THE FUND. THIS CAN
HAPPEN FOR VARIOUS REASONS, INCLUDING:
o Rising interest rates, an issuer's worsening financial
condition or a drop in bond ratings can reduce the price of
your units.
o Assuming no changes in interest rates, when you sell your
units, they will generally be worth less than your cost
because your cost included a sales fee.
o The Fund will receive early returns of principal if bonds
are called or sold before they mature. If this happens your
income will decline and you may not be able to reinvest the
money you receive at as high a yield or as long a maturity.
ALSO, THE PORTFOLIO IS CONCENTRATED IN BONDS OF
PENNSYLVANIA SO IT IS LESS DIVERSIFIED THAN A NATIONAL FUND
AND IS SUBJECT TO RISKS PARTICULAR TO PENNSYLVANIA WHICH
ARE BRIEFLY DESCRIBED UNDER STATE CONCENTRATION RISKS LATER
IN THIS PROSPECTUS.
18
<PAGE>
5. IS THIS FUND APPROPRIATE FOR YOU?
Yes, if you want federally tax-free income. You will
benefit from a professionally selected and supervised
portfolio whose risk is reduced by investing in insured
bonds of several different issuers.
The Fund is not appropriate for you if you want a
speculative investment that changes to take advantage of
market movements, if you do not want a tax-advantaged
investment or if you cannot tolerate any risk.
DEFINING YOUR INCOME
WHAT YOU MAY EXPECT (Payable on the 25th day of
the month to holders of record on the 10th day
of the month):
Regular Monthly Income per unit $ 4.59
Annual Income per unit: $ 55.11
These figures are estimates determined on the evaluation
day; actual payments may vary.
6. WHAT ARE THE FUND'S FEES AND EXPENSES?
This table shows the costs and expenses you may pay,
directly or indirectly, when you invest in the Fund.
INVESTOR FEES
Maximum Sales Fee (Load) on new
purchases (as a percentage of
$1,000 invested) 2.90%
Employees of some of the Sponsors and their affiliates may
pay a reduced sales fee of no less than $5.00 per unit.
The maximum sales fee is reduced if you invest at least
$100,000, as follows:
YOUR MAXIMUM
SALES FEE
IF YOU INVEST: WILL BE:
----------------------------------- -----------------
Less than $100,000 2.90%
$100,000 to $249,999 2.65%
$250,000 to $499,999 2.40%
$500,000 to $999,999 2.15%
$1,000,000 and over 1.90%
Maximum Exchange Fee 1.90%
ESTIMATED ANNUAL FUND OPERATING EXPENSES
AMOUNT
PER UNIT
-----------
$ 0.70
Trustee's Fee
$ 0.37
Portfolio Supervision,
Bookkeeping and
Administrative Fees
(including updating
expenses)
$ 0.18
Evaluator's Fee
$ 0.37
Other Operating Expenses
-----------
$ 1.62
TOTAL
The Sponsors historically paid updating expenses.
7. HOW HAVE SIMILAR FUNDS PERFORMED IN THE PAST?
In the following chart we show past performance of prior
Pennsylvania Portfolios, which had investment objectives,
strategies and types of bonds substantially similar to
this Fund. These prior Series differed in that they
charged a higher sales fee. These prior Pennsylvania
Series were offered between May 19, 1988 and September 13,
1996 and were outstanding on March 31, 1999. OF COURSE,
PAST PERFORMANCE OF PRIOR SERIES IS NO GUARANTEE OF FUTURE
RESULTS OF THIS FUND.
AVERAGE ANNUAL COMPOUND TOTAL RETURNS
FOR PRIOR SERIES
Reflecting all expenses. For periods ended 3/31/99.
WITH SALES FEE NO SALES FEE
1 YEAR 5 YEARS 10 YEARS 1 YEAR 5 YEARS 10 YEARS
- -------------------------------------------------------------------
High 3.65% 7.30% 6.98% 7.57% 8.50% 7.56%
Average 2.17 5.45 6.92 5.22 6.47 7.51
Low -0.52 3.96 6.81 1.23 4.98 7.41
- -------------------------------------------------------------------
Average
Sales fee 3.03% 5.04% 5.68%
- ----------------------------------------------------------------
Note: All returns represent changes in unit price with distributions reinvested
into the Municipal Fund Investment Accumulation Program.
8. IS THE FUND MANAGED?
Unlike a mutual fund, the Fund is not managed and bonds are
not sold because of market changes. Rather, experienced
Defined Asset Funds financial analysts regularly review the
bonds in the Fund. The Fund may sell a bond if certain
adverse credit or other conditions exist.
19
<PAGE>
9. HOW DO I BUY UNITS?
The minimum investment is one unit.
You can buy units from any of the Sponsors and other
broker-dealers. The Sponsors are listed later in this
prospectus. Some banks may offer units for sale through
special arrangements with the Sponsors, although certain
legal restrictions may apply.
UNIT PRICE PER UNIT $1,073.08
(as of February 28, 1999)
Unit price is based on the net asset value of the Fund plus
the sales fee. An amount equal to any principal cash, as
well as net accrued but undistributed interest on the unit,
is added to the unit price. An independent evaluator prices
the bonds at 3:30 p.m. Eastern time every business day.
Unit price changes every day with changes in the prices of
the bonds in the Fund.
10. HOW DO I SELL UNITS?
You may sell your units at any time to any Sponsor or the
Trustee for the net asset value determined at the close of
business on the date of sale. You will not pay any other
fee when you sell your units.
11. HOW ARE DISTRIBUTIONS MADE AND TAXED?
The Fund pays income monthly.
In the opinion of bond counsel when each bond was issued,
interest on the bonds in this Fund is generally 100% exempt
from regular federal income tax. Your income may also be
exempt from some Pennsylvania state and local personal
income taxes if you live in Pennsylvania.
You will also receive principal payments if bonds are sold
or called or mature, when the cash available is more than
$5.00 per unit. You will be subject to tax on any gain
realized by the Fund on the disposition of bonds.
12. WHAT OTHER SERVICES ARE AVAILABLE?
REINVESTMENT
You will receive your income in cash unless you choose to
compound your income by reinvesting at no sales fee in the
Municipal Fund Investment Accumulation Program, Inc. This
program is an open-end mutual fund with a comparable
investment objective, but the bonds will generally not be
insured. Income from this program will generally be subject
to state and local income taxes. For more complete
information about the program, including charges and fees,
ask the Trustee for the program's prospectus. Read it
carefully before you invest. The Trustee must receive your
written election to reinvest at least 10 days before the
record day of an income payment.
EXCHANGE PRIVILEGES
You may exchange units of this Fund for units of certain
other Defined Asset Funds. You may also exchange into this
Fund from certain other funds. We charge a reduced sales fee
on exchanges.
20
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR CALIFORNIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 20.10 5.01 5.63 6.26 6.88 7.51 8.14 8.76 9.39 10.01
$ 25,751- 62,450 $ 43,051-104,050 34.70 6.13 6.89 7.66 8.42 9.19 9.95 10.72 11.48 12.25
$ 62,451-130,250 $104,051-158,550 37.42 6.39 7.19 7.99 8.79 9.59 10.39 11.19 11.98 12.78
$130,251-283,150 $158,551-283,150 41.95 6.89 7.75 8.61 9.47 10.34 11.20 12.06 12.92 13.78
OVER $283,151 OVER $283,151 45.22 7.30 8.21 9.13 10.04 10.95 11.87 12.78 13.69 14.60
</TABLE>
FOR FLORIDA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 15.00 3.53 4.12 4.71 5.29 5.88 6.47 7.06 7.65 8.24
$ 27,751- 62,450 $ 43,051-104,050 28.00 4.17 4.86 5.56 6.25 6.94 7.64 8.33 9.03 9.72
$ 62,451-130,250 $104,051-158,550 31.00 4.35 5.07 5.80 6.52 7.25 7.97 8.70 9.42 10.14
$130,251-283,150 $158,551-283,150 36.00 4.69 5.47 6.25 7.03 7.81 8.59 9.38 10.16 10.94
OVER $283,151 OVER $283,151 39.60 4.97 5.79 6.62 7.45 8.28 9.11 9.93 10.76 11.59
</TABLE>
FOR NEW JERSEY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 16.49 4.79 5.39 5.99 6.59 7.18 7.78 8.38 8.98 9.58
$ 25,751- 62,450 $ 43,051-104,050 31.98 5.88 6.62 7.35 8.09 8.82 9.56 10.29 11.03 11.76
$ 62,451-130,250 $104,051-158,550 35.40 6.19 6.97 7.74 8.51 9.29 10.06 10.84 11.61 12.38
$130,251-283,150 $158,551-283,150 40.08 6.68 7.51 8.34 9.18 10.01 10.85 11.68 12.52 13.35
OVER $283,151 OVER $283,151 43.45 7.07 7.96 8.84 9.73 10.61 11.49 12.38 13.26 14.15
</TABLE>
FOR MICHIGAN RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 18.74 3.69 4.31 4.92 5.54 6.15 6.77 7.38 8.00
$ 25,751- 62,450 $ 43,051-104,050 31.17 4.36 5.08 5.81 6.54 7.26 7.99 8.72 9.44
$ 62,451-130,250 $104,051-158,550 34.04 4.55 5.31 6.06 6.82 7.58 8.34 9.10 9.85
$130,251-283,150 $158,551-283,150 38.82 4.90 5.72 6.54 7.35 8.17 8.99 9.81 10.62
OVER $283,151 OVER $283,151 42.26 5.20 6.06 6.93 7.79 8.66 9.53 10.39 11.26
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1999
federal and applicable State income tax rates and assumes that all income would
otherwise be taxed at the investor's highest tax rate. Yield figures are for
example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, you should consult your own tax advisers in this
regard.
21
<PAGE>
- --------------------------------------------------------------------------------
TAX-FREE VS. TAXABLE INCOME: A COMPARISON OF TAXABLE AND TAX-FREE YIELDS
FOR NEW YORK CITY RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 43,060 23.59 5.24 5.89 6.54 7.20 7.85 8.51 9.16 9.82 10.47
$ 0-25,750- 23.63 5.24 5.89 6.55 7.20 7.86 8.51 9.17 9.82 10.48
$ 25,751- 62,450 $ 43,051-104,050 35.35 6.19 6.96 7.73 8.51 9.28 10.05 10.83 11.60 12.37
$ 62,451-130,250 $104,051-158,550 38.04 6.46 7.26 8.07 8.88 9.68 10.49 11.30 12.11 12.91
$130,251-283,150 $158,551-283,150 42.53 6.96 7.83 8.70 9.57 10.44 11.31 12.18 13.05 13.92
OVER $283,151 OVER $283,151 45.77 7.38 8.30 9.22 10.14 11.06 11.98 12.91 13.83 14.75
</TABLE>
FOR NEW YORK STATE RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 4% 4.5% 5% 5.5% 6% 6.5% 7% 7.5% 8%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 20.82 5.05 5.68 6.31 6.95 7.58 8.21 8.84 9.47 10.10
$ 25,751- 62,450 $ 43,051-104,050 32.93 5.96 6.71 7.46 8.20 8.95 9.69 10.44 11.18 11.93
$ 62,451-130,250 $104,051-158,550 35.73 6.22 7.00 7.78 8.56 9.34 10.11 10.69 11.67 12.45
$130,251-283,150 $158,551-283,150 40.38 6.71 7.55 8.39 9.23 10.06 10.90 11.74 12.58 13.42
OVER $283,151 OVER $283,151 43.74 7.11 8.00 8.89 9.78 10.66 11.55 12.44 13.33 14.22
</TABLE>
FOR PENNSYLVANIA RESIDENTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
COMBINED
EFFECTIVE
TAXABLE INCOME 1999* TAX RATE TAX-FREE YIELD OF
SINGLE RETURN JOINT RETURN % 3% 3.5% 4% 4.5% 5% 5.5% 6% 6.5% 7%
IS EQUIVALENT TO A TAXABLE YIELD OF
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0- 25,750 $ 0- 43,050 17.38 3.63 4.24 4.84 5.45 6.05 6.66 7.26 7.87 8.47
$ 27,751- 62,450 $ 43,051-104,050 30.02 4.29 5.00 5.72 6.43 7.14 7.86 8.57 9.29 10.00
$ 62,451-130,250 $104,051-158,550 32.93 4.47 5.22 5.96 6.71 7.46 8.20 8.95 9.69 10.44
$130,251-283,150 $158,551-283,150 37.79 4.82 5.63 6.43 7.23 8.04 8.84 9.65 10.45 11.25
OVER $283,151 OVER $283,151 41.29 5.11 5.96 6.81 7.66 8.52 9.37 10.22 11.07 11.92
</TABLE>
To compare the yield of a taxable security with the yield of a tax-free
security, find your taxable income and read across. The table incorporates 1999
federal and applicable State (and City) income tax rates and assumes that all
income would otherwise be taxed at the investor's highest tax rate. Yield
figures are for example only.
*Based upon net amount subject to federal income tax after deductions and
exemptions. This table does not reflect the possible effect of other tax
factors, such as alternative minimum tax, personal exemptions, the phase out of
exemptions, itemized deductions or the possible partial disallowance of
deductions. Consequently, investors are urged to consult their own tax advisers
in this regard.
22
<PAGE>
WHAT YOU CAN EXPECT FROM YOUR INVESTMENT
MONTHLY INCOME
The Fund will pay you regular monthly income. Your monthly income may vary
because of:
o elimination of one or more bonds from the Fund's portfolio because of
calls, redemptions or sales;
o a change in the Fund's expenses; or
o the failure by a bond's issuer to pay interest.
Changes in interest rates generally will not affect your income because the
portfolio is fixed.
Along with your income, you will receive your share of any available bond
principal.
RETURN FIGURES
We cannot predict your actual return, which will vary with unit price, how long
you hold your investment and changes in the portfolio, interest income and
expenses.
Estimated Current Return equals the estimated annual cash to be received from
the bonds in the Fund less estimated annual Fund expenses, divided by the Unit
Price (including the maximum sales fee):
Estimated Annual Estimated
Interest Income - Annual Expenses
- -------------------------------------------------
Unit Price
Estimated Long Term Return is a measure of the estimated return over the
estimated life of the Fund. Unlike Estimated Current Return, Estimated Long Term
Return reflects maturities, discounts and premiums of the bonds in the Fund. It
is an average of the yields to maturity (or in certain cases, to an earlier call
date) of the individual bonds in the portfolio, adjusted to reflect the Fund's
maximum sales fee and estimated expenses. We calculate the average yield for the
portfolio by weighting each bond's yield by its market value and the time
remaining to the call or maturity date.
Yields on individual bonds depend on many factors including general conditions
of the bond markets, the size of a particular offering and the maturity and
quality rating of the particular issues. Yields can vary among bonds with
similar maturities, coupons and ratings.
These return quotations are designed to be comparative rather than predictive.
RECORDS AND REPORTS
You will receive:
o a monthly statement of income payments and any principal payments;
o a notice from the Trustee when new bonds are deposited in exchange or
substitution for bonds originally deposited;
o an annual report on Fund activity; and
o annual tax information. This will also be sent to the IRS. You must report the
amount of tax-exempt interest received during the year.
You may request:
o copies of bond evaluations to enable you to comply with federal and state tax
reporting requirements; and
o audited financial statements of the Fund.
You may inspect records of Fund transactions at the Trustee's office during
regular business hours.
23
<PAGE>
THE RISKS YOU FACE
INTEREST RATE RISK
Investing involves risks, including the risk that your investment will decline
in value if interest rates rise. Generally, bonds with longer maturities will
change in value more than bonds with shorter maturities. Bonds in the Fund are
more likely to be called when interest rates decline. This would result in early
returns of principal to you and may result in early termination of the Fund. Of
course, we cannot predict how interest rates may change.
CALL RISK
Many bonds can be prepaid or 'called' by the issuer before their stated
maturity.
For example, some bonds may be required to be called pursuant to mandatory
sinking fund provisions.
Also, an issuer might call its bonds during periods of falling interest rates,
if the issuer's bonds have a coupon higher than current market rates.
An issuer might call its bonds in extraordinary cases, including if:
o it no longer needs the money for the original purpose;
o the project is condemned or sold;
o the project is destroyed and insurance proceeds are used to redeem the
bonds;
o any related credit support expires and is not replaced; or
o interest on the bonds become taxable.
If the bonds are called, your income will decline and you may not be able to
reinvest the money you receive at as high a yield or as long a maturity. An
early call at par of a premium bond will reduce your return.
REDUCED DIVERSIFICATION RISK
If many investors sell their units, the Fund will have to sell bonds. This could
reduce the diversification of your investment and increase your share of Fund
expenses.
LIQUIDITY RISK
You can always sell back your units, but we cannot assure you that a liquid
trading market will always exist for the bonds in the portfolio, especially
since current law may restrict the Fund from selling bonds to any Sponsor. The
bonds will generally trade in the over-the-counter market. The value of the
bonds, and of your investment, may be reduced if trading in bonds is limited or
absent.
CONCENTRATION RISK
When a certain type of bond makes up 25% or more of the portfolio, it is said to
be 'concentrated' in that bond type, which makes the Portfolio less diversified.
Here is what you should know about the New York Portfolio's concentration in
hospital and health care bonds.
o payment for these bonds depends on revenues from private third-party payors
and government programs, including Medicare and Medicaid, which have
generally undertaken cost containment measures to limit payments to health
care providers;
o hospitals face increasing competition resulting from hospital mergers and
affiliations;
o hospitals need to reduce costs as HMOs increase market penetration and
hospital supply and drug companies raise prices;
o hospitals and health care providers are subject to various legal claims by
patients and others and are adversely affected by increasing costs of
insurance; and
24
<PAGE>
o many hospitals are aggressively buying physician practices and assuming
risk contracts to gain market share. If revenues do not increase
accordingly, this practice could reduce profits;
o Medicare is changing its reimbursement system for nursing homes. Many
nursing home providers are not sure how they will be treated. In many
cases, the providers may receive lower reimbursements and these would have
to cut expenses to maintain profitability; and
o most retirement/nursing home providers rely on entrance fees for operating
revenues. If people live longer than expected and turnover is lower than
budgeted, operating revenues would be adversely affected by less than
expected entrance fees.
Here is what you should know about the Michigan Portfolio's concentration in
general obligation bonds.
o general obligation bonds are backed by the issuer's pledge of its full
faith, credit and taxing power;
o but the taxing power of any government issuer may be limited by provisions
of the state constitution or laws as well as political considerations; and
o an issuer's credit can be negatively affected by various factors, including
population decline that erodes the tax base, natural disasters, decline in
industry, limited access to capital markets or heavy reliance on state or
federal aid.
Here is what you should know about the California and New Jersey Portfolios'
concentrations in municipal water and sewer revenue bonds. The payment of
interest and principal of these bonds depends on the rates the utilities may
charge, the demand for their services and the cost of operating their business
which includes the expense of complying with environmental and other energy and
licensing laws and regulations. The operating results of utilities are
particularly influenced by:
o increases in operating and construction costs; and
o unpredicability of future usage requirements.
Here is what you should know about the Florida Portfolio's concentration in
refunded bonds. Refunded bonds are typically:
o backed by direct obligations of the U.S. government; or
o in some cases, backed by obligations guaranteed by the U.S. government and
placed in escrow with an independent trustee;
o noncallable prior to maturity; but
o sometimes called for redemption prior to maturity.
Changes to the portfolio from bond redemptions, maturities and sales may affect
the Fund's concentrations over time.
STATE CONCENTRATION RISK
CALIFORNIA RISKS
Generally
From the late 1980s through the early 1990s, an economic recession eroded
California's revenue base. At the same time rapid population growth caused State
expenditures to exceed budget appropriations.
o As a result California experienced a period of sustained budget imbalance.
o Since that time the California economy has improved and the extreme
budgetary pressures have begun to lessen.
State Government
The 1997-98 Budget Act allocated a State budget of approximately $66.9 Billion
and contains no tax increases or reductions. Despite this somewhat improved
state,
25
<PAGE>
California's budget is still subject to certain unforeseeable events. For
example:
o In December, 1994, Orange County and its investment pool filed for
bankruptcy. While a settlement has been reached, the full impact on the
State and Orange County is still unknown.
o California faces constant fluctuations in other expenses (including health
and welfare caseloads, property tax receipts, federal funding and natural
disaster relief) that will undoubtedly create new budgetary pressure and
reduce issuers' ability to pay their debts.
o California's general obligation bonds are currently rated A1 by Moody's and
A+ by Standard & Poor's.
Other Risks
Issuers' ability to make payments on bonds (and the remedies available to
bondholders) could also be adversely affected by the following constraints:
o Certain provisions of California's Constitution, laws and regulatory system
contain tax, spending and appropriations limits and prohibit certain new
taxes.
o Certain other California laws subject the users of bond proceeds to strict
rules and limits regarding revenue repayment.
o Bonds of healthcare institutions which are subject to the strict rules and
limits regarding reimbursement payments of California's Medi-Cal program
for health care services to welfare recipients and bonds secured by liens
on real property are two of the types of bonds affected by these
provisions.
FLORIDA RISKS
Generally
Florida's financial condition is affected by numerous national, economic, social
and environmental policies and conditions. For example:
o south Florida is heavily involved with foreign tourism, trade and
investment capital. As a result, the region is susceptible to international
trade and currency imbalances and economic problems in Central and South
America;
o central and northern Florida are more vulnerable to agricultural problems,
such as crop failures or severe weather conditions, especially in the
citrus and sugar industries; and
o the state as a whole is also very dependent on tourism and construction.
State and Local Government
The state of Florida and its local governments are restricted in their ability
to raise taxes and incur debts. These restrictions limit their ability to
generate revenue, and so could hurt their ability to pay debts.
General obligations of the state are rated Aa2 by Moody's, AA+ by Standard &
Poor's and AA by Fitch.
MICHIGAN RISKS
Because Michigan's leading sectors are closely integrated with the manufacturing
of durable goods, its economy is more cyclical than non-industrial states and
the nation as a whole. As a result:
o any substantial national economic downturn will likely hurt Michigan's
economy and its state and local governments;
26
<PAGE>
o because the state is highly reliant on the auto industry, its economy could
be hurt by changes in that industry, expecially consolidation, plant
closings and labor disputes;
o while in the past the state's unemployment rate was higher than the
national average, for several years it has been near or below the national
average.
Certain tax changes have reduced or changed the mix of tax revenues of the state
and local governments. In recent years:
o the state sales tax rate was raised;
o the income tax rate was lowered;
o an annual cap was imposed on property tax assessment increases; and
o property taxes used for school funding were cut, and now schools are paid
for by a combination of property taxes and general and restricted state
revenues.
In addition, certain state laws limit the overall amount of state revenues that
can be raised from taxes, which could affect State operations and restrict the
sharing of revenue with local governments. This, combined with the above tax
changes, could hurt the value of Michigan bonds in the portfolio or make it more
difficult for Michigan's local governments to pay their debt service.
The state's general obligation bonds are rated Aa1 by Moody's, AA+ by Standard &
Poor's and AA+ by Fitch.
NEW JERSEY RISKS
State and Local Government
Certain features of New Jersey law could affect the repayment of debt:
o the State of New Jersey and its agencies and public authorities issue
general obligation bonds, which are secured by the full faith and credit of
the state, backed by its taxing authority, without recourse to specific
sources of revenue, therefore, any liability to increase taxes could impair
the state's ability to repay debt; and
o the state is required by law to maintain a balanced budget, and state
spending for any given municipality or county cannot increase by more than
5% per year. This limit could make it harder for any particular county or
municipality to repay its debts.
In recent years the state budget's main expenditures have been
o elementary and secondary education, and
o state agencies and programs, including police and corrections facilities,
higher education, and environmental protection.
The state's general obligations are rated Aa1 by Moody's and AA+ by Standard &
Poor's.
NEW YORK RISKS
Generally
For decades, New York's economy has trailed the rest of the nation. Both the
state and New York City have experienced long-term structural imbalances between
revenues and expenses, and have repeatedly relied substantially on non-recurring
measures to achieve budget balance. The pressures that contribute to budgetary
problems at both the state and local level include:
o the high combined state and local tax burden;
o a decline in manufacturing jobs, leading to above-average unemployment;
o sensitivity to the financial services industry; and
o dependence on federal aid.
27
<PAGE>
State Government
The State government frequently has difficulty approving budgets on time. Budget
gaps of $1 billion and $4 billion are projected for the next two years. The
State's general obligation bonds are rated A by Standard & Poor's and A2 by
Moody's. There is $37 billion of state-related debt outstanding.
New York City Government
Even though the City had budget surpluses each year from 1981, budget gaps of $2
billion are projected for each of the next three years. New York City faces
fiscal pressures from:
o aging public facilities that need repair or replacement;
o welfare and medical costs;
o expiring labor contracts; and
o a high and increasing debt burden.
The City requires substantial state aid, and its fiscal strength depends heavily
on the securities industry. Its general obligation bonds are rated A-by Standard
& Poor's and A3 by Moody's.
PENNSYLVANIA RISKS
Generally
Pennsylvania and many of its municipalities (including Philadelphia) have
undergone an economic decline:
o coal, steel, railroads and other heavy industry historically associated
with the Commonwealth has given way to increased competition from foreign
producers.
o agriculture and related industries are still an important part of the
Commonwealth's economy.
o Recently, however, service sector industries (trade, medical and health
services, education and financial services) have provided new sources of
growth.
State and Local Governments
Historically, both the Commonwealth and the City of Philadelphia have
experienced serious revenue shortfalls. At the same time, rising demands for
state and local programs and services (particularly medical assistance and cash
assistance programs) have lead to increased spending.
o In recent years, both the Commonwealth and the City of Philadelphia have
tried to balance their budgets with a mix of tax increases and spending
cuts.
o Philadelphia has considered significant service cuts and privatization of
certain services which it has provided to date.
o In 1991, the Commonwealth created the Pennsylvania Inter-Governmental
Cooperation Authority ('PICA') which it authorized to issue debt to cover
Philadelphia's budget shortfalls, eliminate the City's projected deficits
and fund its capital spending. PICA issued approximately $1.76 billion of
Special Revenue Bonds on Philadelphia's behalf. Its power to issue bonds on
Philadelphia's behalf expired at the end of 1996; as of June 30, 1997,
approximately $1.1 billion in PICA Special Revenue Bonds were outstanding.
o Pennsylvania's general obligation bonds are currently rated A1 by Moody's
and AA-by Standard & Poor's. Philadelphia's general obligation bonds are
rated Baa by Moody's and BBB by Standard & Poor's. There can be no
assurance that these ratings will not be lowered.
28
<PAGE>
BOND QUALITY RISK
A reduction in a bond's rating may decrease its value and, indirectly, the value
of your investment in the Fund.
INSURANCE RELATED RISK
The bonds are backed by insurance companies (as shown under Portfolios).
Insurance policies generally make payments only according to a bond's original
payment schedule and do not make early payments when a bond defaults or becomes
taxable. Although the federal government does not regulate the insurance
business, various state laws and federal initiatives and tax law changes could
significantly affect the insurance business. The claims-paying ability of the
insurance companies is generally rated A or better by Standard & Poor's or
another nationally recognized rating organization. The insurance company ratings
are subject to change at any time at the discretion of the rating agencies.
LITIGATION AND LEGISLATION RISKS
We do not know of any pending litigation that might have a material adverse
effect upon the Fund.
Future tax legislation could affect the value of the portfolio by:
o limiting real property taxes,
o reducing tax rates,
o imposing a flat or other form of tax, or
o exempting investment income from tax.
SELLING OR EXCHANGING UNITS
You can sell your units at any time for a price based on net asset value. Your
net asset value is calculated each business day by:
o adding the value of the bonds, net accrued interest, cash and any other
Fund assets;
o subtracting accrued but unpaid Fund expenses, unreimbursed Trustee
advances, cash held to buy back units or for distribution to investors and
any other Fund liabilities; and
o dividing the result by the number of outstanding units.
Your net asset value when you sell may be more or less than your cost because of
sales fees, market movements and changes in the portfolio.
SPONSORS' SECONDARY MARKET
While we are not obligated to do so, we will buy back units at net asset value
without any other fee or charge. We may resell the units to other buyers or to
the Trustee. You should consult your financial professional for current market
prices to determine if other broker-dealers or banks are offering higher prices.
We have maintained the secondary market continuously for over 25 years, but we
could discontinue it without prior notice for any business reason.
SELLING UNITS TO THE TRUSTEE
Regardless of whether we maintain a secondary market, you can sell your units to
the Trustee at any time by sending the Trustee a letter (with any outstanding
certificates if you hold Unit certificates). You must properly endorse your
certificates (or execute a written transfer instrument with signatures
guaranteed by an eligible institution). Sometimes, additional documents are
needed such as a trust document, certificate of corporate authority, certificate
of death or appointment as executor, administrator or guardian.
Within seven days after your request and the necessary documents are received,
the Trustee
29
<PAGE>
will mail a check to you. Contact the Trustee for additional information.
As long as we are maintaining a secondary market, the Trustee will sell your
units to us at a price based on net asset value. If there is no secondary
market, the Trustee may sell your units in the over-the-counter market for a
higher price, but it is not obligated to do so. In that case, you will receive
the net proceeds of the sale.
If the Fund does not have cash available to pay you for units you are selling,
the agent for the Sponsors will select bonds to be sold. Bonds will be selected
based on market and credit factors. These sales could be made at times when the
bonds would not otherwise be sold and may result in your receiving less than the
unit par value and also reduce the size and diversity of the Fund.
There could be a delay in paying you for your units:
o if the New York Stock Exchange is closed (other than customary weekend and
holiday closings);
o if the SEC determines that trading on the New York Stock Exchange is
restricted or that an emergency exists making sale or evaluation of the
bonds not reasonably practicable; and
o for any other period permitted by SEC order.
EXCHANGE OPTION
You may exchange units of certain Defined Asset Funds for units of this Fund at
a maximum exchange fee of 1.90%. You may exchange units of this Fund for units
of certain other Defined Asset Funds at a reduced sales fee if your investment
goals change. To exchange units, you should talk to your financial professional
about what funds are exchangeable, suitable and currently available.
Normally, an exchange is taxable and you must recognize any gain or loss on the
exchange. However, the IRS may try to disallow a loss if the portfolios of the
two funds are not materially different; you should consult your own tax adviser.
We may amend or terminate this exchange option at any time without notice.
HOW THE FUND WORKS
PRICING
The price of a unit includes interest accrued on the bonds, less expenses, from
the initial most recent Record Day up to, but not including, the settlement
date, which is usually three business days after the purchase date of the unit.
A portion of the price of a unit consists of cash so that the Trustee can
provide you with regular monthly income. When you sell your units you will
receive your share of this cash.
EVALUATIONS
An independent Evaluator values the bonds on each business day (excluding
Saturdays, Sundays and the following holidays as observed by the New York Stock
Exchange: New Year's Day, Presidents' Day, Martin Luther King, Jr. Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas).
Bond values are based on current bid or offer prices for the bonds or comparable
bonds. In the past, the difference between bid and offer prices of publicly
offered tax-exempt bonds has ranged
30
<PAGE>
from 0.5% of face amount on actively traded issues to 3.5% on inactively traded
issues; the difference has averaged between 1 and 2%.
INCOME
The Trustee credits interest to an Income Account and other receipts to a
Capital Account. The Trustee may establish a Reserve Account by withdrawing from
these accounts amounts it considers appropriate to pay any material liability.
These accounts do not bear interest.
EXPENSES
The Trustee is paid monthly. It also benefits when it holds cash for the Fund in
non-interest bearing accounts. The Trustee may also receive additional amounts:
o to reimburse the Trustee for the Fund's operating expenses;
o for extraordinary services and costs of indemnifying the Trustee and the
Sponsors;
o costs of actions taken to protect the Fund and other legal fees and
expenses;
o expenses for keeping the Fund's registration statement current; and
o Fund termination expenses and any governmental charges.
The Sponsors are currently reimbursed up to 45 cents per $1,000 face amount
annually for providing portfolio supervisory, bookkeeping and administrative
services and for any other expenses properly chargeable to the Fund. Legal,
typesetting, electronic filing and regulatory filing fees and expenses
associated with updating the Portfolio's registration statement yearly are also
now chargeable to the Portfolio. While this fee may exceed the amount of these
costs and expenses attributable to this Fund, the total of these fees for all
Series of Defined Asset Funds will not exceed the aggregate amount attributable
to all of these Series for any calendar year. The Fund also pays the Evaluator's
fees.
The Trustee's, Sponsors' and Evaluator's fees may be adjusted for inflation
without investors' approval.
The Sponsors will pay advertising and selling expenses at no charge to the Fund.
If Fund expenses exceed initial estimates, the Fund will owe the excess. The
Trustee has a lien on Fund assets to secure reimbursement of Fund expenses and
may sell bonds if cash is not available.
PORTFOLIO CHANGES
The Sponsors and Trustee are not liable for any default or defect in a bond; if
a contract to buy any bond.
Unlike a mutual fund, the portfolio is designed to remain intact and we may keep
bonds in the portfolio even if their credit quality declines or other adverse
financial circumstances occur. However, we may sell a bond in certain cases if
we believe that certain adverse credit conditions exist or if a bond becomes
taxable.
If we maintain a secondary market in units but are unable to sell the units that
we buy in the secondary market, we will redeem units, which will affect the size
and composition of the portfolio. Units offered in the secondary market may not
represent the same face amount of bonds that they did originally.
We decide whether or not to offer units for sale that we acquire in the
secondary market after reviewing:
o diversity of the portfolio;
31
<PAGE>
o size of the Fund relative to its original size;
o ratio of Fund expenses to income;
o current and long-term returns;
o degree to which units may be selling at a premium over par; and
o cost of maintaining a current prospectus.
FUND TERMINATION
The Fund will terminate following the stated maturity or sale of the last bond
in the portfolio. The Fund may also terminate earlier with the consent of
investors holding 51% of the units or if total assets of the Fund have fallen
below 40% of the face amount of bonds deposited. We will decide whether to
terminate the Fund early based on the same factors used in deciding whether or
not to offer units in the secondary market.
When the Fund is about to terminate you will receive a notice, and you will be
unable to sell your units after that time. On or shortly before termination, we
will sell any remaining bonds, and you will receive your final distribution. Any
bond that cannot be sold at a reasonable price may continue to be held by the
Trustee in a liquidating trust pending its final sale.
You will pay your share of the expenses associated with termination, including
brokerage costs in selling bonds. This may reduce the amount you receive as your
final distribution.
CERTIFICATES
Certificates for units are issued on request. You may transfer certificates by
complying with the requirements for redeeming certificates, described above. You
can replace lost or mutilated certificates by delivering satisfactory indemnity
and paying the associated costs.
TRUST INDENTURE
The Fund is a 'unit investment trust' governed by a Trust Indenture, a contract
among the Sponsors, the Trustee and the Evaluator, which sets forth their duties
and obligations and your rights. A copy of the Indenture is available to you on
request to the Trustee. The following summarizes certain provisions of the
Indenture.
The Sponsors and the Trustee may amend the Indenture without your consent:
o to cure ambiguities;
o to correct or supplement any defective or inconsistent provision;
o to make any amendment required by any governmental agency; or
o to make other changes determined not to be materially adverse to your best
interest (as determined by the Sponsors).
Investors holding 51% of the units may amend the Indenture. Every investor must
consent to any amendment that changes the 51% requirement. No amendment may
reduce your interest in the Fund without your written consent.
The Trustee may resign by notifying the Sponsors. The Sponsors may remove the
Trustee without your consent if:
o it fails to perform its duties and the Sponsors determine that its
replacement is in your best interest; or
o it becomes incapable of acting or bankrupt or its affairs are taken over by
public authorities.
Investors holding 51% of the units may remove the Trustee. The Evaluator may
resign
32
<PAGE>
or be removed by the Sponsors and the Trustee without the consent of investors.
The resignation or removal of either becomes effective when a successor accepts
appointment. The Sponsors will try to appoint a successor promptly; however, if
no successor has accepted within 30 days after notice of resignation, the
resigning Trustee or Evaluator may petition a court to appoint a successor.
Any Sponsor may resign as long as one Sponsor with a net worth of $2 million
remains and agrees to the resignation. The remaining Sponsors and the Trustee
may appoint a replacement. If there is only one Sponsor and it fails to perform
its duties or becomes bankrupt the Trustee may:
o remove it and appoint a replacement Sponsor;
o liquidate the Fund; or
o continue to act as Trustee without a Sponsor.
Merrill Lynch, Pierce, Fenner & Smith Incorporated acts as agent for the
Sponsors.
The Trust Indenture contains customary provisions limiting the liability of the
Trustee, the Sponsors and the Evaluator.
LEGAL OPINION
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017, as
counsel for the Sponsors, has given an opinion that the units are validly
issued. Special counsel located in the relevant states have given state and
local tax opinions.
AUDITORS
Deloitte & Touche LLP, 2 World Financial Center, New York, New York 10281,
independent accountants, audited the Statements of Condition included in this
prospectus.
SPONSORS
The Sponsors are:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED (a wholly-owned subsidiary of
Merrill Lynch & Co., Inc.)
P.O. Box 9051,
Princeton, NJ 08543-9051
SALOMON SMITH BARNEY INC. (an indirectly wholly-owned subsidiary of Citigroup
Inc.)
388 Greenwich Street--23rd Floor,
New York, NY 10013
DEAN WITTER REYNOLDS INC. (a principal operating subsidiary of Morgan Stanley
Dean Witter & Co.)
Two World Trade Center--59th Floor,
New York, NY 10048
PRUDENTIAL SECURITIES INCORPORATED (an
indirect wholly-owned subsidiary of the
Prudential Insurance Company of America)
One New York Plaza
New York, NY 10292
PAINEWEBBER INCORPORATED (a wholly-owned subsidiary of PaineWebber Group Inc.)
1285 Avenue of the Americas,
New York, NY 10019
Each Sponsor is a Delaware corporation and it, or its predecessor, has acted as
sponsor to many unit investment trusts. As a registered broker-dealer each
Sponsor buys and sells securities (including investment company shares) for
others (including investment companies) and participates as an underwriter in
various selling groups.
TRUSTEE
The Chase Manhattan Bank, Unit Investment Trust Department, 4 New York
Plaza--6th
33
<PAGE>
Floor, New York, New York 10004, is the Trustee.
It is supervised by the Federal Deposit Insurance Corporation, the Board of
Governors of the Federal Reserve System and New York State banking authorities.
UNDERWRITERS' AND SPONSORS' PROFITS
Underwriters receive sales charges when they sell units. The Sponsors also
realized a profit or loss on the initial date of deposit of the bonds. Any cash
made available by you to the Sponsors before the settlement date for those units
may be used in the Sponsors' businesses to the extent permitted by federal law
and may benefit the Sponsors.
A Sponsor or Underwriter may realize profits or sustain losses on bonds in the
Fund which were acquired from underwriting syndicates of which it was a member.
In maintaining a secondary market, the Sponsors will also realize profits or
sustain losses in the amount of any difference between the prices at which they
buy units and the prices at which they resell or redeem them.
PUBLIC DISTRIBUTION
The Sponsors do not intend to qualify units for sale in any foreign countries.
This prospectus does not constitute an offer to sell units in any country where
units cannot lawfully be sold.
CODE OF ETHICS
Merrill Lynch, as agent for the Sponsors, has adopted a code of ethics requiring
preclearance and reporting of personal securities transactions by its employees
with access to information on portfolio transactions. The goal of the code is to
prevent fraud, deception or misconduct against the Fund and to provide
reasonable standards of conduct.
YEAR 2000 ISSUES
Many computer systems were designed in such a way that they may be unable to
distinguish between the year 2000 and the year 1900 (commonly known as the 'Year
2000 Problem'). We do not expect that the computer system changes necessary to
prepare for the Year 2000 will cause any major operational difficulties for the
Fund. The Year 2000 Problem may adversely affect the issuers of the securities
contained in the Portfolios, but we cannot predict whether any impact will be
material to any Portfolio as a whole.
TAXES
The following summary describes some of the important income tax consequences of
holding units. It assumes that you are not a dealer, financial institution,
insurance company or other investor with special circumstances. You should
consult your own tax adviser about your particular circumstances.
At the date of issue of each bond, counsel for the issuer delivered an opinion
to the effect that interest on the bond is exempt from regular federal income
tax. However, interest may be subject to state and local taxes and federal
alternative minimum tax. Neither we nor our counsel have reviewed the issuance
of the bonds, related proceedings or the basis for the opinions of counsel for
the issuers. We cannot assure you that the issuer (or other users) have complied
or will comply with any requirements necessary for a bond to be tax-
34
<PAGE>
exempt. If any of the bonds were determined not to be tax-exempt, you could be
required to pay income tax for current and prior years, and if the Fund were to
sell the bond, it might have to sell it at a substantial discount.
In the opinion of our counsel, under existing law:
GENERAL TREATMENT OF THE FUND AND YOUR INVESTMENT
The Fund will not be taxed as a corporation for federal income tax purposes, and
you will be considered to own directly your share of each bond in the Fund.
INCOME OR LOSS UPON DISPOSITION
When all or part of your share of a bond is disposed of (for example, when the
Fund sells, exchanges or redeems a bond or when you sell or exchange your
units), you will generally recognize capital gain or loss. Your gain, however,
will generally be ordinary income to the extent of any accrued 'market
discount'. Generally you will have market discount to the extent that your basis
in a bond when you purchase a unit is less than its stated redemption price at
maturity (or, if it is an original issue discount bond, the issue price
increased by original issue discount that has accrued on the bond before your
purchase). You should consult your tax adviser in this regard.
If your net long-term capital gains exceed your net short-term capital losses,
the excess may be subject to tax at a lower rate than ordinary income. Any
capital gain from the Fund will be long-term if you are considered to have held
your investment on each bond for more than one year and short-term if you held
it for one year or less. If you are an individual and sell your units after
holding them for more than one year, you may be entitled to a 20% maximum
federal tax rate on any resulting gains. Consult your tax adviser in this
regard. Because the deductibility of capital losses is subject to limitations,
you may not be able to deduct all of your capital losses.
YOUR BASIS IN THE BONDS
Your aggregate basis in the bonds will be equal to the cost of your units,
including any sales charges and the organizational expenses you pay, adjusted to
reflect any accruals of 'original issue discount,' 'acquisition premium' and
'bond premium'. You should consult your tax adviser in this regard.
EXPENSES
If you are not a corporate investor, you will not be entitled to a deduction for
your share of fees and expenses of the Fund. Also, if you borrowed money in
order to purchase or carry your units, you will not be able to deduct the
interest on this borrowing for federal income tax purposes. The IRS may treat
your purchase of units as made with borrowed money even if the money is not
directly traceable to the purchase of units.
STATE AND LOCAL TAXES
Under the income tax laws of the State and City of New York, the Fund will not
be taxed as a corporation. If you are a New York taxpayer, your income from the
Fund will not be tax-exempt in New York except to the extent that the income is
earned on bonds that are tax-exempt for New York purposes. Depending on where
you live, your income from the Fund may be subject to state and
35
<PAGE>
local taxation. You should consult your tax adviser in this regard.
CALIFORNIA TAXES
In the opinion of O'Melveny & Myers LLP, Los Angeles, California, special
counsel on California tax matters:
Under the income tax laws of the State of California, the Trust will not be
taxed as a corporation and you will be considered to own directly your share of
each bond of the Trust. If you are a California taxpayer, your share of the
income from the bonds of the Trust will not be tax-exempt in California except
for California personal income tax purposes and only to the extent that the
income is earned on bonds that are exempt for such purposes. If you are a
California taxpayer and all or part of your share of a bond is disposed of (for
example, when a bond is sold, exchanged or redeemed at maturity or you sell or
exchange your units), you will recognize gain or loss for California tax
purposes. Depending on where you live, your income from the Trust may be subject
to state and local taxation. You should consult your tax advisor in this regard.
FLORIDA TAXES
In the opinion of Greenberg, Traurig, P.A., Miami, Florida, special counsel on
Florida tax matters:
Under the income tax laws of the State of Florida, the Fund will not be taxed as
a corporation. Florida imposes an income tax on corporations but does not impose
a personal income tax. Accordingly, if you are an individual taxpayer your
income from the Fund will not be subject to tax in Florida. However, if you are
an entity that is normally taxed as a corporation, your income from the fund
will not be exempt from tax in Florida and special rules for taxation apply
depending on the type of entity. You should consult your tax adviser in this
regard.
Florida also imposes a tax on intangible personal property, such as stocks,
bonds, notes and units in trusts. The tax is imposed on Florida taxpayers as of
January 1st of each year. Florida exempts certain types of bonds and debt
obligations from this tax. Your units will be exempt from the intangible
personal property tax as long as the Fund invests exclusively in bonds and other
debt obligations that are tax-exempt for Florida purposes.
MICHIGAN TAXES
In the opinion of Miller, Canfield, Paddock and Stone, P.L.C. Bloomfield Hills,
Michigan, special counsel on Michigan tax matters:
Under the income tax laws of the State of Michigan, the Fund will not be taxed
as a corporation. If you are a Michigan taxpayer, your interest income from the
Fund will not be tax-exempt in Michigan except to the extent that the interest
is earned on bonds that are tax-exempt for Michigan purposes. Capital gain
distributions and capital gain or loss on your Fund units themselves will be
subject to Michigan income tax. Depending on where you live, your income from
the Fund may be subject to state and local taxation. You should consult your tax
adviser in this regard.
NEW JERSEY TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on New Jersey tax matters:
36
<PAGE>
The Fund will not be taxed as a corporation under the current income tax laws of
the State of New Jersey. Your income from the Fund may be subject to taxation
depending on where you live. If you are a New Jersey taxpayer your income from
the Fund (including gains on sales of bonds by the Fund) and gains on sales of
units by you will be tax-exempt to the extent that income and gains are earned
on bonds that are tax-exempt for New Jersey purposes. You should consult your
tax adviser as to the consequences to you with respect to any investment you
make in the Fund.
PENNSYLVANIA TAXES
In the opinion of Drinker Biddle & Reath LLP, Philadelphia, Pennsylvania,
special counsel on Pennsylvania tax matters:
The Pennsylvania Trust will not be taxed as a corporation under the current
income tax laws of Pennsylvania. Your income from the Trust may be subject to
taxation depending on where you live. If you are a Pennsylvania taxpayer your
interest income from the Trust will be tax exempt to the extent that income is
earned on bonds that are tax exempt for Pennsylvania purposes. However, gains on
the sale of bonds by the Trust or on the sale of your Units will be subject to
Pennsylvania income tax. If you are a Philadelphia resident you may be subject
to the Philadelphia school district tax on any gains realized from the sale of
bonds by the Trust or the sale of Units by you to the extent either the bonds or
Units have been held for six months or less. You should consult your tax adviser
as to the consequences to you with respect to any investment you make in the
Trust.
SUPPLEMENTAL INFORMATION
You can receive at no cost supplemental information about the Fund by calling
the Trustee. The supplemental information includes more detailed risk disclosure
about the types of bonds that may be in the Fund's portfolios, general risk
disclosure concerning any insurance securing certain bonds, and general
information about the structure and operation of the Fund. The supplemental
information is also available from the SEC.
37
MUNICIPAL INVESTMENT TRUST FUND - MULTISTATE SERIES - 57
(CALIFORNIA, FLORIDA, MICHIGAN, NEW JERSEY, NEW YORK AND
PENNSYLVANIA TRUSTS), DEFINED ASSET FUNDS
REPORT OF INDEPENDENT ACCOUNTANTS
The Sponsors, Trustee and Holders
of Municipal Investment Trust Fund, Multistate
Series - 57 (California, Florida, Michigan,
New Jersey, New York and Pennsylvania Trusts),
Defined Asset Funds:
We have audited the accompanying statements of condition of
Municipal Investment Trust Fund - Multistate Series - 57
(California, Florida, Michigan, New Jersey, New York and
Pennsylvania Trusts), Defined Asset Funds, including the
portfolios, as of February 28, 1999 and the related
statements of operations and of changes in net assets for
the years ended February 28, 1999, 1998 and 1997. These
financial statements are the responsibility of the Trustee.
Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that
we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures
in the financial statements. Securities owned at February
28, 1999, as shown in such portfolios, were confirmed to us
by The Chase Manhattan Bank, the Trustee. An audit also includes
assessing the accounting principles used and significant estimates
made by the Trustee, 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 referred to above
present fairly, in all material respects, the financial position
of Municipal Investment Trust Fund - Multistate Series - 57
(California, Florida, Michigan, New Jersey, New York and
Pennsylvania Trusts), Defined Asset Funds at February 28, 1999
and the results of their operations and changes in their net
assets for the above-stated years in conformity with generally
accepted accounting principles.
DELOITTE & TOUCHE LLP
New York, N.Y.
April 14, 1999
D - 1.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(ALIFORNIA TRUST), DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of February 28, 1999
<TABLE>
<CAPTION>
<S> <C> <C> <C>
TRUST PROPERTY:
Investment in marketable securities -
20 at value (cost $ 2,926,642 )(Note 1)......... $ 3,245,460
36 Accrued interest ............................... 45,998
32 Cash - income .................................. 14,290
34 Cash - principal ............................... 2,229
-----------
40 Total trust property ......................... 3,307,977
LESS LIABILITIES:
50 Income advance from Trustee..................... $ 22,646
51 Accrued Sponsors' fees ......................... 190
52 Trustee's fees and expenses payable............. 517 23,353
----------- -----------
NET ASSETS, REPRESENTED BY:
80 3,060 units of fractional undivided
80 interest outstanding (Note 3)................ 3,247,689
105 Undistributed net investment income ............ 36,935 $ 3,284,624
----------- ===========
130UNIT VALUE ($ 3,284,624 / 3,060 units )........... $ 1,073.41
===========
</TABLE>
See Notes to Financial Statements.
D - 2.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(CALIFORNIA TRUST), DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
INVESTMENT INCOME:
<S> <C> <C> <C>
10 Interest income ........................ $ 184,697 $ 197,565 $ 204,250
20 Trustee's fees and expenses ............ (4,560) (4,901) (4,890)
30 Sponsors' fees ......................... (1,183) (1,241) (1,246)
------------------------------------------------
40 Net investment income .................. 178,954 191,423 198,114
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
50 securities sold or redeemed .......... 16,013 16,559
Unrealized appreciation (depreciation)
60 of investments ....................... 16,575 141,129 (5,340)
------------------------------------------------
Net realized and unrealized
70 gain (loss) on investments ........... 32,588 157,688 (5,340)
------------------------------------------------
NET INCREASE IN NET ASSETS
80 RESULTING FROM OPERATIONS .............. $ 211,542 $ 349,111 $ 192,774
================================================
</TABLE>
See Notes to Financial Statements.
D - 3.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(CALIFORNIA TRUST), DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
OPERATIONS:
<S> <C> <C> <C>
10 Net investment income .................. $ 178,954 $ 191,423 $ 198,114
Realized gain on
20 securities sold or redeemed .......... 16,013 16,559
Unrealized appreciation (depreciation)
30 of investments ....................... 16,575 141,129 (5,340)
------------------------------------------------
Net increase in net assets
40 resulting from operations ............ 211,542 349,111 192,774
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
50 Income ................................ (179,642) (191,706) (198,102)
60 Principal .............................. (9,774) (9,801)
------------------------------------------------
70 Total distributions .................... (189,416) (201,507) (198,102)
------------------------------------------------
SHARE TRANSACTIONS:
82 Redemption amounts - income ............ (2,112) (2,965)
83 Redemption amounts - principal ......... (195,512) (264,440)
------------------------------------------------
84 Total share transactions ............... (197,624) (267,405)
------------------------------------------------
90NET DECREASE IN NET ASSETS ............... (175,498) (119,801) (5,328)
100NET ASSETS AT BEGINNING OF YEAR .......... 3,460,122 3,579,923 3,585,251
------------------------------------------------
110NET ASSETS AT END OF YEAR ................ $ 3,284,624 $ 3,460,122 $ 3,579,923
================================================
PER UNIT:
Income distributions during
120 year ................................. $ 56.38 $ 56.48 $ 56.60
================================================
Principal distributions during
130 year ................................. $ 3.15 $ 2.96
=====================================
Net asset value at end of
140 year ................................. $ 1,073.41 $ 1,067.28 $ 1,022.84
================================================
TRUST UNITS:
83 Redeemed during year ................... 182 258
150 Outstanding at end of year ............. 3,060 3,242 3,500
================================================
</TABLE>
See Notes to Financial Statements.
D - 4.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(CALIFORNIA TRUST), DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and applicable
expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<CAPTION>
<S> <C> <C>
10 Cost of 3,060 units at Date of Deposit ..................... $ 3,090,513
20 Less sales charge .......................................... 139,077
-----------
25 Net amount applicable to Holders ........................... 2,951,436
31 Redemptions of units - net cost of 440 units redeemed
143 less redemption amounts (principal)....................... (35,561)
40 Realized gain on securities sold or redeemed ............... 32,571
50 Principal distributions .................................... (19,575)
70 Unrealized appreciation of investments...................... 318,818
-----------
80 Net capital applicable to Holders .......................... $ 3,247,689
===========
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $318,818, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,926,642 at February 28, 1999.
D - 5.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(CALIFORNIA TRUST) (INSURED), DEFINED ASSET FUNDS
PORTFOLIO
As of February 28, 1999
<TABLE>
<CAPTION>
Rating of PE VER C. Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 State Pub. Works Bd. of the State of AAA $ 295,000 6.400 % 2016(5) 12/01/02 $ 302,997 $ 330,751
CA, Lease Rev. Bonds (The Regents of 13068GKW5 @ 102.000
the Univ. of CA), 1992 Ser. A (Various
Univ. of CA Proj.) (AMBAC Ins.)
2 The City of Los Angeles, CA, Wastewater AAA 460,000 5.700 2020 06/01/03 438,937 483,400
Sys. Rev. Bonds, Rfdg. Ser. 1993-A 544652SP6 @ 102.000
(MBIA Ins.)
3 Brea Redev. Agy. (Orange Cnty., CA), AAA 500,000 5.750 2023 08/01/03 476,185 531,425
1993 Tax Alloc. Rfdg. Bonds (Redev. 106287EF8 @ 102.000
Proj. AB) (MBIA Ins.)
4 City of Loma Linda, CA, Hosp. Rev. AAA 465,000 5.375 2022 12/01/03 419,556 473,798
Rfdg. Bonds (Loma Linda Univ. Med. 541482GZ2 @ 102.000
Center Proj.), Ser. 1993-C (MBIA Ins.)
5 Elsinore Valley, CA, Mun. Wtr. Dist. AAA 500,000 5.750 2019 07/01/02 477,545 526,395
(Riverside Cnty.), Rfdg. Cert. of Part., 290319CR1 @ 102.000
Ser. 1992 A (Financial Guaranty Ins.)
6 City and Cnty. of San Francisco, CA, AAA 70,000 6.000 2020(5) 05/01/03 69,539 77,726
Airports Comm., San Francisco Intl. 79765ACA2 @ 102.000
Arpt., Second Ser. Rfdg. Rev. Bonds
(MBIA Ins.)
AAA 260,000 6.000 2020 05/01/03 258,288 283,384
79765ACJ3 @ 102.000
7 Department of Wtr. and Pwr. of the City AAA 500,000 5.875 2030 09/01/03 483,595 538,581
of Los Angeles, CA, Elec. Plant Rfdg. 544508FU3 @ 102.000
Rev. Bonds, Issue of 1993 (MBIA Ins.)
--------- --------- ---------
TOTAL $ 3,050,000 $ 2,926,642 $ 3,245,460
========= ========= =========
</TABLE>
See Notes to Portfolios on Page D - 32.
D - 6.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(FLORIDA TRUST), DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of February 28, 1999
<TABLE>
<CAPTION>
TRUST PROPERTY:
Investment in marketable securities -
<S> <C> <C> <C>
20 at value (cost $ 2,419,287 )(Note 1)......... $ 2,681,534
36 Accrued interest ............................... 40,650
32 Cash - income .................................. 11,806
34 Cash - principal ............................... 18
-----------
40 Total trust property ......................... 2,734,008
LESS LIABILITIES:
50 Income advance from Trustee..................... $ 19,705
143 Accrued Sponsors' fees ......................... 188 19,893
----------- -----------
NET ASSETS, REPRESENTED BY:
80 2,512 units of fractional undivided
80 interest outstanding (Note 3)................ 2,681,553
105 Undistributed net investment income ............ 32,562 $ 2,714,115
----------- ===========
130UNIT VALUE ($ 2,714,115 / 2,512 units )........... $ 1,080.46
===========
</TABLE>
See Notes to Financial Statements.
D - 7.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(FLORIDA TRUST), DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest income ........................ $ 155,533 $ 182,900 $ 189,341
Trustee's fees and expenses ............ (3,624) (4,612) (4,364)
Sponsors' fees ......................... (1,102) (1,133) (1,154)
------------------------------------------------
Net investment income .................. 150,807 177,155 183,823
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 46,112 2,401 1,414
Unrealized appreciation (depreciation)
of investments ....................... (6,096) 180,105 (50,137)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... 40,016 182,506 (48,723)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 190,823 $ 359,661 $ 135,100
================================================
</TABLE>
See Notes to Financial Statements.
D - 8.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(FLORIDA TRUST), DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
OPERATIONS:
<S> <C> <C> <C>
Net investment income .................. $ 150,807 $ 177,155 $ 183,823
Realized gain on
securities sold or redeemed .......... 46,112 2,401 1,414
Unrealized appreciation (depreciation)
of investments ....................... (6,096) 180,105 (50,137)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 190,823 359,661 135,100
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (150,350) (177,334) (183,906)
Principal .............................. (21,615) (3,200) (2,470)
------------------------------------------------
Total distributions .................... (171,965) (180,534) (186,376)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (8,301) (648) (1,014)
Redemption amounts - principal ......... (628,362) (60,689) (84,251)
------------------------------------------------
Total share transactions ............... (636,663) (61,337) (85,265)
------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS..... (617,805) 117,790 (136,541)
NET ASSETS AT BEGINNING OF YEAR .......... 3,331,920 3,214,130 3,350,671
------------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,714,115 $ 3,331,920 $ 3,214,130
================================================
PER UNIT:
Income distributions during
year ................................. $ 56.33 $ 56.71 $ 56.95
================================================
Principal distributions during
year ................................. $ 8.48 $ 1.03 $ 0.78
================================================
Net asset value at end of
year ................................. $ 1,080.46 $ 1,072.39 $ 1,014.88
================================================
TRUST UNITS:
Redeemed during year ................... 595 60 83
Outstanding at end of year ............. 2,512 3,107 3,167
================================================
</TABLE>
See Notes to Financial Statements.
D - 9.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(FLORIDA TRUST), DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1 SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2 DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and applicable
expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<CAPTION>
<S> <C> <C>
Cost of 2,512 units at Date of Deposit ..................... $ 2,565,591
Less sales charge .......................................... 115,452
-----------
Net amount applicable to Holders ........................... 2,450,139
Redemptions of units - net cost of 738 units redeemed
less redemption amounts (principal)....................... (53,476)
Realized gain on securities sold or redeemed ............... 49,928
Principal distributions .................................... (27,285)
Unrealized appreciation of investments...................... 262,247
-----------
Net capital applicable to Holders .......................... $ 2,681,553
===========
</TABLE>
4 INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $262,247, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,419,287 at February 28, 1999.
D - 10.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(FLORIDA TRUST) (INSURED), DEFINED ASSET FUNDS
PORTFOLIO
As of February 28, 1999
<TABLE>
<CAPTION>
Rating of PE VER C. Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 State of Florida, Orlando-Orange Cnty. AAA $ 500,000 5.500 % 2018 07/01/03 $ 468,210 $ 518,090
Expwy. Auth., Sr. Lien Rev. Rfdg. 686543HV4 @ 102.000
Bonds, Ser. of 1993
(Financial Guaranty Ins.)
2 State of Florida, Dept. of Trans., AAA 440,000 6.350 2022(5) 07/01/02 450,762 481,716
Turnpike Rev. Bonds, Ser. 1992 A 343136GB7 @ 101.000
(Financial Guaranty Ins.)
3 Pinellas Cnty., FL, Sewer Rev. Bonds, AAA 110,000 6.000 2024(5) 10/01/02 110,424 120,764
Ser. 1994 (Financial Guaranty Ins.) 723215DG1 @ 102.000
4 City of Miami Beach, FL, Hlth. Fac. AAA 500,000 6.250 2019 11/15/02 507,710 547,300
Auth., Hosp. Rev. Rfdg. Bonds, Ser. 1992 593211AM7 @ 102.000
(Mount Sinai Med. Center Proj.)
(Financial Guaranty Ins.)
5 City of Hollywood, FL, Wtr. and Swr. AAA 450,000 5.600 2023 10/01/03 425,236 469,354
Rev. Rfdg. Bonds, Ser. 1993 436212CN2 @ 102.000
(Financial Guaranty Ins.)
6 Village Center Cmnty. Dev. Dist. AAA 500,000 5.375 2023(5) 11/01/03 456,945 544,310
(Lake Cnty., Fl), Util. rev. Bonds, 927063AN7 @ 102.000
Ser. 1993 (Financial Guaranty Ins.)
--------- --------- ---------
TOTAL $ 2,500,000 $ 2,419,287 $ 2,681,534
========= ========= =========
</TABLE>
See Notes to Portfolios on Page D - 32.
D - 11.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(MICHIGAN TRUST), DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of February 28, 1999
<TABLE>
<CAPTION>
TRUST PROPERTY:
<S> <C> <C>
Investment in marketable securities -
at value (cost $ 2,517,045 )(Note 1)......... $ 2,781,248
Accrued interest ............................... 40,862
Cash - income .................................. 12,111
Cash - principal ............................... 616
-----------
Total trust property ......................... 2,834,837
LESS LIABILITIES:
Income advance from Trustee..................... $ 19,808
Accrued Sponsors' fees ......................... 166 19,974
----------- -----------
NET ASSETS, REPRESENTED BY:
2,650 units of fractional undivided
interest outstanding (Note 3)................ 2,781,864
Undistributed net investment income ............ 32,999 $ 2,814,863
----------- ===========
UNIT VALUE ($ 2,814,863 / 2,650 units )........... $ 1,062.21
===========
</TABLE>
See Notes to Financial Statements.
D - 12.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(MICHIGAN TRUST), DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest income ........................ $ 154,665 $ 162,172 $ 169,874
Trustee's fees and expenses ............ (3,644) (4,456) (4,224)
Sponsors' fees ......................... (1,008) (1,044) (1,062)
------------------------------------------------
Net investment income .................. 150,013 156,672 164,588
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 10,770 9,204 1,178
Unrealized appreciation (depreciation)
of investments ....................... 9,695 157,069 (55,688)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... 20,465 166,273 (54,510)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 170,478 $ 322,945 $ 110,078
================================================
</TABLE>
See Notes to Financial Statements.
D - 13.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(MICHIGAN TRUST), DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
OPERATIONS:
<S> <C> <C> <C>
Net investment income .................. $ 150,013 $ 156,672 $ 164,588
Realized gain on
securities sold or redeemed .......... 10,770 9,204 1,178
Unrealized appreciation (depreciation)
of investments ....................... 9,695 157,069 (55,688)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 170,478 322,945 110,078
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (150,138) (156,740) (164,699)
Principal .............................. (5,213) (6,589) (1,833)
------------------------------------------------
Total distributions .................... (155,351) (163,329) (166,532)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (1,523) (2,176) (393)
Redemption amounts - principal ......... (136,607) (178,274) (37,101)
------------------------------------------------
Total share transactions ............... (138,130) (180,450) (37,494)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (123,003) (20,834) (93,948)
NET ASSETS AT BEGINNING OF YEAR .......... 2,937,866 2,958,700 3,052,648
------------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,814,863 $ 2,937,866 $ 2,958,700
================================================
PER UNIT:
Income distributions during
year ................................. $ 55.09 $ 55.06 $ 55.37
================================================
Principal distributions during
year ................................. $ 1.93 $ 2.37 $ 0.62
================================================
Net asset value at end of
year ................................. $ 1,062.21 $ 1,056.79 $ 1,000.91
================================================
TRUST UNITS:
Redeemed during year ................... 130 176 37
Outstanding at end of year ............. 2,650 2,780 2,956
================================================
</TABLE>
See Notes to Financial Statements.
D - 14.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(MICHIGAN TRUST), DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and applicable
expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<CAPTION>
<S> <C> <C>
Cost of 2,650 units at Date of Deposit ..................... $ 2,664,118
Less sales charge .......................................... 119,886
-----------
Net amount applicable to Holders ........................... 2,544,232
Redemptions of units - net cost of 600 units redeemed
less redemption amounts (principal)....................... 487
Realized loss on securities sold or redeemed ............... (5,633)
Principal distributions .................................... (21,425)
Unrealized appreciation of investments...................... 264,203
-----------
Net capital applicable to Holders .......................... $ 2,781,864
===========
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $264,203, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,517,045 at February 28, 1999.
D - 15.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(MICHIGAN TRUST) (INSURED), DEFINED ASSET FUNDS
PORTFOLIO
As of February 28, 1999
<TABLE>
<CAPTION>
Rating of PE VER C. Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Gaylord Comm. Schools, Counties of AAA $ 460,000 5.625 % 2021 05/01/03 $ 434,084 $ 482,057
Otsego, Antrim and Crawford, State of 368172HT2 @ 102.000
MI, 1993 Rfdg. Bonds (G.O.-Unltd. Tax)
(MBIA Ins.)
2 Michigan State Hosp. Fin. Auth., Hosp. AAA 445,000 5.500 2013 11/01/03 417,103 463,108
Rev. Rfdg. Bonds (Oakwood Hosp. Oblig. 59465CP92 @ 102.000
Group), (Financial Guaranty Ins.)
3 Livonia Pub. School Dist., Cnty. of AAA 500,000 5.500 2021 05/01/03 463,555 517,410
Wayne, State of MI, 1993 Rfdg. Bonds 539243PA7 @ 102.000
(G.O.-Unltd. Tax)
(Financial Guaranty Ins.)
4 Michigan Mun. Bond Auth., Loc. Govt. AAA 65,000 6.125 2018 12/01/04 64,543 72,294
Loan Prog. Rev. Bonds, Ser. 1994 A 5945536E4 @ 102.000
(Wayne Cnty. Bldg. Auth. Bonds)
(Financial Guaranty Ins.)
5 Huron Valley Sch. Dist., Counties of AAA 465,000 6.125 2020 05/01/03 469,627 509,789
Oakland and Livingston, State of 447726GM6 @ 102.000
MI, 1993 Rfdg. Bonds (G.O.-Unltd. Tax)
(Financial Guaranty Ins.)
6 The Econ. Dev. Corp. of the Cnty. of AAA 250,000 6.050 2024 08/01/02 248,255 270,718
St. Clair, State of MI, Poll. Ctl. Rfdg. 788684AB4 @ 102.000
Rev. Bonds (The Detroit Edison Co. Proj.),
(AMBAC Ins.)
7 Board of Trustees of Western Michigan AAA 450,000 5.500 2016 07/15/03 419,878 465,872
Univ., Gen. Rev. Bonds, Ser. 1993 A 958638LY2 @ 102.000
(Financial Guaranty Ins.)
--------- --------- ---------
TOTAL $ 2,635,000 $ 2,517,045 $ 2,781,248
========= ========= =========
</TABLE>
See Notes to portfolios on page D - 32.
D - 16.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW JERSEY TRUST), DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of February 28, 1999
<TABLE>
<CAPTION>
TRUST PROPERTY:
<S> <C> <C>
Investment in marketable securities -
at value (cost $ 2,618,489 )(Note 1)......... $ 2,862,068
Accrued interest ............................... 34,866
Cash - income .................................. 12,900
Cash - principal ............................... 6,159
-----------
Total trust property ......................... 2,915,993
LESS LIABILITIES:
Income advance from Trustee..................... $ 14,689
Accrued Sponsors' fees ......................... 172 14,861
----------- -----------
NET ASSETS, REPRESENTED BY:
2,724 units of fractional undivided
interest outstanding (Note 3)................ 2,868,228
Undistributed net investment income ............ 32,904 $ 2,901,132
----------- ===========
UNIT VALUE ($ 2,901,132 / 2,724 units )........... $ 1,065.03
===========
</TABLE>
See Notes to Financial Statements.
D - 17.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW JERSEY TRUST), DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest income ........................ $ 159,478 $ 176,078 $ 183,102
Trustee's fees and expenses ............ (3,817) (4,706) (4,482)
Sponsors' fees ......................... (1,053) (1,129) (1,154)
------------------------------------------------
Net investment income .................. 154,608 170,243 177,466
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain (loss) on
securities sold or redeemed .......... 15,080 12,192 (1,080)
Unrealized appreciation (depreciation)
of investments ....................... 13,534 150,316 (41,871)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... 28,614 162,508 (42,951)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 183,222 $ 332,751 $ 134,515
================================================
</TABLE>
See Notes to Financial Statements.
D - 18.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW JERSEY TRUST), DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
OPERATIONS:
<S> <C> <C> <C>
Net investment income .................. $ 154,608 $ 170,243 $ 177,466
Realized gain (loss) on
securities sold or redeemed .......... 15,080 12,192 (1,080)
Unrealized appreciation (depreciation)
of investments ....................... 13,534 150,316 (41,871)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 183,222 332,751 134,515
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (154,767) (170,204) (177,589)
Principal .............................. (4,620) (8,442) (5,278)
------------------------------------------------
Total distributions .................... (159,387) (178,646) (182,867)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (2,128) (3,629) (542)
Redemption amounts - principal ......... (196,277) (295,270) (49,066)
------------------------------------------------
Total share transactions ............... (198,405) (298,899) (49,608)
------------------------------------------------
NET DECREASE IN NET ASSETS ............... (174,570) (144,794) (97,960)
NET ASSETS AT BEGINNING OF YEAR .......... 3,075,702 3,220,496 3,318,456
------------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 2,901,132 $ 3,075,702 $ 3,220,496
================================================
PER UNIT:
Income distributions during
year ................................. $ 54.69 $ 54.92 $ 55.22
================================================
Principal distributions during
year ................................. $ 1.64 $ 2.90 $ 1.65
================================================
Net asset value at end of
year ................................. $ 1,065.03 $ 1,056.58 $ 1,006.72
================================================
TRUST UNITS:
Redeemed during year ................... 187 288 51
Outstanding at end of year ............. 2,724 2,911 3,199
================================================
</TABLE>
See Notes to Financial Statements.
D - 19.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW JERSEY TRUST), DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and applicable
expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<CAPTION>
<S> <C> <C>
Cost of 2,724 units at Date of Deposit ..................... $ 2,771,100
Less sales charge .......................................... 124,705
-----------
Net amount applicable to Holders ........................... 2,646,395
Redemptions of units - net cost of 526 units redeemed
less redemption amounts (principal)....................... (29,598)
Realized gain on securities sold or redeemed ............... 26,192
Principal distributions .................................... (18,340)
Unrealized appreciation of investments...................... 243,579
-----------
Net capital applicable to Holders .......................... $ 2,868,228
===========
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $243,579, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,618,489 at February 28, 1999.
D - 20.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW JERSEY TRUST) (INSURED), DEFINED ASSET FUNDS
PORTFOLIO
As of February 28, 1999
<TABLE>
<CAPTION>
Rating of PE VER C. Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
1 NJ Hlth. Care Fac. Fin. Auth., Rev. AAA $ 440,000 5.500 % 2013 07/01/04 $ 419,861 $ 468,917
Bonds, Monmouth Med. Ctr. Issue, 64579CWL0 @ 102.000
ser. 1994 (AMBAC Ins.)
2 New Jersey Sports and Expos. Auth. AAA 270,000 6.250 2020 07/01/02 277,163 294,548
Conv. Ctr. Luxury Tax Bonds, 646029BE7 @ 102.000
Ser. 1992 A (MBIA Ins.)
3 The Evesham Mun. Util. Auth., NJ, AAA 460,000 5.550 2018 07/01/03 442,189 479,932
Rev. Bonds, (Burlington Cnty., NJ), 300463DJ2 @ 102.000
Ser. 1993 B (MBIA Ins.)
4 The Essex Cnty. Imp. Auth., NJ, Cnty. AAA 500,000 5.500 2020 12/01/03 476,465 519,385
G.O. Lease Rev. Rfdg. Bonds, Ser. 1993 296806BS0 @ 102.000
(AMBAC Ins.)
5 The Pollution Ctl. Fin. Auth. of Salem AAA 500,000 5.550 2033 11/01/03 469,655 519,730
Cnty., NJ, Poll. Ctl. Rev. Rfdg. Bonds, 794103BE0 @ 102.000
(Pub. Svc. Elec. & Gas Co. Proj.)
Ser. 1993 C (MBIA Ins.)
6 The Borough of Keansburg Mun. Util. AAA 430,000 6.000 2019 12/01/02 433,324 468,102
Auth., NJ, Rev. Bonds (Monmouth Cnty., 486720EQ4 @ 102.000
New Jersey), Ser. 1992 (Financial
Guaranty Ins.)
7 The Town of West New York Mun. Util. AAA 110,000 5.125 2017 12/15/04 99,832 111,454
Auth. (Hudson Cnty., New Jersey), Swr. 954710ET2 @ 102.000
Rev. Rfdg. Bonds, Ser. 1993 (Financial
Guaranty Ins.)
--------- --------- ---------
TOTAL $ 2,710,000 $ 2,618,489 $ 2,862,068
========= ========= =========
</TABLE>
See Notes to Portfolios on Page D - 32.
D - 21.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW YORK TRUST), DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of February 28, 1999
<TABLE>
<CAPTION>
TRUST PROPERTY:
<S> <C> <C>
Investment in marketable securities -
at value (cost $ 3,149,693 )(Note 1)......... $ 3,473,610
Accrued interest ............................... 31,389
Cash - income .................................. 15,158
Cash - principal ............................... 1,692
-----------
Total trust property ......................... 3,521,849
LESS LIABILITIES:
Income advance from Trustee..................... $ 3,310
Accrued Sponsors' fees ......................... 208 3,518
----------- -----------
NET ASSETS, REPRESENTED BY:
3,346 units of fractional undivided
interest outstanding (Note 3)................ 3,475,301
Undistributed net investment income ............ 43,030 $ 3,518,331
----------- ===========
UNIT VALUE ($ 3,518,331 / 3,346 units )........... $ 1,051.50
===========
</TABLE>
See Notes to Financial Statements.
D - 22.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW YORK TRUST), DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest income ........................ $ 191,452 $ 195,827 $ 195,875
Trustee's fees and expenses ............ (4,261) (5,391) (4,777)
Sponsors' fees ......................... (1,270) (1,260) (1,248)
------------------------------------------------
Net investment income .................. 185,921 189,176 189,850
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 12,608 3,480
Unrealized appreciation (depreciation)
of investments ....................... 27,000 205,472 (39,005)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... 39,608 208,952 (39,005)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 225,529 $ 398,128 $ 150,845
================================================
</TABLE>
See Notes to Financial Statements.
D - 23.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW YORK TRUST), DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
OPERATIONS:
<S> <C> <C> <C>
Net investment income .................. $ 185,921 $ 189,176 $ 189,850
Realized gain on
securities sold or redeemed .......... 12,608 3,480
Unrealized appreciation (depreciation)
of investments ....................... 27,000 205,472 (39,005)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 225,529 398,128 150,845
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (185,970) (189,525) (189,561)
Principal .............................. (7,633)
------------------------------------------------
Total distributions .................... (193,603) (189,525) (189,561)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (1,503) (408)
Redemption amounts - principal ......... (123,748) (36,227)
------------------------------------------------
Total share transactions ............... (125,251) (36,635)
------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS..... (93,325) 171,968 (38,716)
NET ASSETS AT BEGINNING OF YEAR .......... 3,611,656 3,439,688 3,478,404
------------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 3,518,331 $ 3,611,656 $ 3,439,688
================================================
PER UNIT:
Income distributions during
year ................................. $ 54.26 $ 54.15 $ 54.16
================================================
Principal distributions during
year ................................. $ 2.23
================================================
Net asset value at end of
year ................................. $ 1,051.50 $ 1,042.32 $ 982.77
================================================
TRUST UNITS:
Redeemed during year ................... 119 35
Outstanding at end of year ............. 3,346 3,465 3,500
================================================
</TABLE>
See Notes to Financial Statements.
D - 24.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW YORK TRUST), DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and applicable
expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<CAPTION>
<S> <C> <C>
Cost of 3,346 units at Date of Deposit ..................... $ 3,306,340
Less sales charge .......................................... 148,763
-----------
Net amount applicable to Holders ........................... 3,157,577
Redemptions of units - net cost of 154 units redeemed
less redemption amounts (principal)....................... (14,648)
Realized gain on securities sold or redeemed ............... 16,088
Principal distributions .................................... (7,633)
Unrealized appreciation of investments...................... 323,917
-----------
Net capital applicable to Holders .......................... $ 3,475,301
===========
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $323,917, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $3,149,693 at February 28, 1999.
D - 25.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(NEW YORK TRUST) (INSURED), DEFINED ASSET FUNDS
PORTFOLIO
As of February 28, 1999
<TABLE>
<CAPTION>
Rating of PE VER C. Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Dorm. Auth. of the State of New York, AAA $ 500,000 5.750 % 2022 07/01/02 $ 476,505 $ 519,745
Ins. Rev. Bonds, (Upstate Comm. 649832T36 @ 102.000
Colleges), Ser. 1992 A (Connie Lee Ins.)
2 New York State Med. Care Fac. Fin. AAA 500,000 5.800 2022 02/15/03 483,105 524,355
Agy., Mental Hlth. Services Fac. Imp. 64988H5W0 @ 102.000
Rev. Bonds, Ser. A (AMBAC Ins.)
3 New York State Thruway Auth., Gen. Rev. AAA 415,000 5.500 2023(5) 01/01/02 386,689 436,136
Bonds, Ser. A (Financial Guaranty Ins.) 650009DS9 @ 100.000
4 Triborough Bridge and Tunnel Auth., NY, AAA 400,000 5.500 2017(5) 01/01/02 375,308 420,372
Spec. Oblig. Bonds, Ser. 1992, 896033NT0 @ 100.000
(AMBAC Ins.)
AAA 100,000 5.500 2017 01/01/02 93,827 101,649
896033PC5 @ 100.000
5 New York City Hlth. and Hosp. Corp., AAA 500,000 5.750 2022 02/15/03 483,135 524,130
Hlth. Sys. Bonds, Ser. 1993 A 649674BD9 @ 102.000
(AMBAC Ins.)
6 New York City, NY, Mun. Wtr. Fin. AAA 460,000 5.500 2023 06/15/04 428,435 478,170
Auth., Wtr. and Swr. Sys. Rev. Bonds, 649706F60 @ 101.500
Ser. 1994 F (MBIA Ins.)
7 The City of New York, G.O. Bonds, AAA 460,000 5.375 2019 10/01/03 422,689 469,053
Fiscal Ser. 1994 C (AMBAC Ins.) 649660PS0 @ 101.500
--------- --------- ---------
TOTAL $ 3,335,000 $ 3,149,693 $ 3,473,610
========= ========= =========
</TABLE>
See Notes to Portfolios on Page D - 32.
D - 26.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(PENNSYLVANIA TRUST), DEFINED ASSET FUNDS
STATEMENT OF CONDITION
As of February 28, 1999
<TABLE>
<CAPTION>
TRUST PROPERTY:
<S> <C> <C>
Investment in marketable securities -
at value (cost $ 2,930,514 )(Note 1)......... $ 3,262,950
Accrued interest ............................... 47,586
Cash - income .................................. 14,289
Cash - principal ............................... 9
-----------
Total trust property ......................... 3,324,834
LESS LIABILITIES:
Income advance from Trustee..................... $ 20,867
Accrued Sponsors' fees ......................... 192 21,059
----------- -----------
NET ASSETS, REPRESENTED BY:
3,113 units of fractional undivided
interest outstanding (Note 3)................ 3,262,959
Undistributed net investment income ............ 40,816 $ 3,303,775
----------- ===========
UNIT VALUE ($ 3,303,775 / 3,113 units )........... $ 1,061.28
===========
</TABLE>
See Notes to Financial Statements.
D - 27.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(PENNSYLVANIA TRUST), DEFINED ASSET FUNDS
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
INVESTMENT INCOME:
<S> <C> <C> <C>
Interest income ........................ $ 179,913 $ 185,375 $ 185,376
Trustee's fees and expenses ............ (4,080) (4,831) (4,559)
Sponsors' fees ......................... (1,177) (1,170) (1,160)
------------------------------------------------
Net investment income .................. 174,656 179,374 179,657
------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Realized gain on
securities sold or redeemed .......... 9,811
Unrealized appreciation (depreciation)
of investments ....................... 6,766 212,770 (43,325)
------------------------------------------------
Net realized and unrealized
gain (loss) on investments ........... 16,577 212,770 (43,325)
------------------------------------------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS .............. $ 191,233 $ 392,144 $ 136,332
================================================
</TABLE>
See Notes to Financial Statements.
D - 28.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(PENNSYLVANIA TRUST), DEFINED ASSET FUNDS
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
Years Ended February 28,
1999 1998 1997
---- ---- ----
OPERATIONS:
<S> <C> <C> <C>
Net investment income .................. $ 174,656 $ 179,374 $ 179,657
Realized gain on
securities sold or redeemed .......... 9,811
Unrealized appreciation (depreciation)
of investments ....................... 6,766 212,770 (43,325)
------------------------------------------------
Net increase in net assets
resulting from operations ............ 191,233 392,144 136,332
------------------------------------------------
DISTRIBUTIONS TO HOLDERS (Note 2):
Income ................................ (174,958) (179,368) (179,660)
Principal .............................. (8,094)
------------------------------------------------
Total distributions .................... (183,052) (179,368) (179,660)
------------------------------------------------
SHARE TRANSACTIONS:
Redemption amounts - income ............ (1,535)
Redemption amounts - principal ......... (143,274)
------------------------------------------------
Total share transactions ............... (144,809)
------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS..... (136,628) 212,776 (43,328)
NET ASSETS AT BEGINNING OF YEAR .......... 3,440,403 3,227,627 3,270,955
------------------------------------------------
NET ASSETS AT END OF YEAR ................ $ 3,303,775 $ 3,440,403 $ 3,227,627
================================================
PER UNIT:
Income distributions during
year ................................. $ 55.21 $ 55.19 $ 55.28
================================================
Principal distributions during
year ................................. $ 2.60
===================
Net asset value at end of
year ................................. $ 1,061.28 $ 1,058.59 $ 993.12
================================================
TRUST UNITS:
Redeemed during year ................... 137
Outstanding at end of year ............. 3,113 3,250 3,250
================================================
</TABLE>
See Notes to Financial Statements.
D - 29.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(PENNSYLVANIA TRUST), DEFINED ASSET FUNDS
NOTES TO FINANCIAL STATEMENTS
1. SIGNIFICANT ACCOUNTING POLICIES
The Fund is registered under the Investment Company Act of 1940 as a Unit
Investment Trust. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its
financial statements. The policies are in conformity with generally accepted
accounting principles.
(A) Securities are stated at value as determined by the
Evaluator based on bid side evaluations for the securities.
(B) The Fund is not subject to income taxes. Accordingly, no
provision for such taxes is required.
(C) Interest income is recorded as earned.
2. DISTRIBUTIONS
A distribution of net investment income is made to Holders each month.
Receipts other than interest, after deductions for redemptions and applicable
expenses, are also distributed periodically.
3. NET CAPITAL
<TABLE>
<CAPTION>
<S> <C> <C>
Cost of 3,113 units at Date of Deposit ..................... $ 3,081,233
Less sales charge .......................................... 138,653
-----------
Net amount applicable to Holders ........................... 2,942,580
Redemptions of units - net cost of 137 units redeemed
less redemption amounts (principal)....................... (13,774)
Realized gain on securities sold or redeemed ............... 9,811
Principal distributions .................................... (8,094)
Unrealized appreciation of investments...................... 332,436
-----------
Net capital applicable to Holders .......................... $ 3,262,959
===========
</TABLE>
4. INCOME TAXES
As of February 28, 1999, unrealized appreciation of investments, based on
cost for Federal income tax purposes, aggregated $332,436, all of which
related to appreciated securities. The cost of investment securities for
Federal income tax purposes was $2,930,514 at February 28, 1999.
D - 30.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(PENNSYLVANIA TRUST) (INSURED), DEFINED ASSET FUNDS
PORTFOLIO
As of February 28, 1999
<TABLE>
<CAPTION>
Rating of PE VER C. Optional
Portfolio No. and Title of Issues Face Redemption
Securities (1) (4) Amount Coupon Maturities(3) Provisions(3) Cost Value(2)
---------- --------- ----------- ----------- ------------ ------------ ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 Pennsylvania Intergovernmental Coop. AAA $ 500,000 5.625 % 2023 06/15/03 $ 467,740 $ 520,355
Auth., Spec. Tax Rev. Bonds (City of 708840BM4 @ 100.000
Philadelphia Funding Prog.), Ser. 1993
(MBIA Ins.)
2 Allegheny Cnty. Hosp. Dev. Auth., PA, AAA 500,000 6.000 2013 10/01/02 494,335 542,900
Hosp. Rev. Rfdg. Bonds (Magee-Woman's 01728ABA3 @ 102.000
Hosp.), Ser. 1992 (Financial Guaranty Ins.)
3 Allegheny Cnty. Hosp. Dev. Auth., PA, AAA 250,000 6.000 2023 11/01/02 244,900 271,350
Hlth. Ctr. Rev. Bonds (Presbyterian Univ. 01728AED4 @ 102.000
Hlth. Sys. Inc. Proj.) Ser. 1992 B
(MBIA Ins.)
4 Beaver Cnty., Ind. Dev. Auth., PA, AAA 500,000 5.450 2033 09/15/03 451,680 510,745
Poll. Ctl. Rev. Rfdg. Bonds 074876DV2 @ 102.000
(Ohio Edison Co. Mansfield Proj.),
1993 Ser. A (AMBAC Ins.)
5 Delaware Cnty. Auth., (Commonwealth of AAA 500,000 5.500 2023 08/01/03 462,405 517,475
PA), Univ. rev. Bonds (Villanova Univ.), 246008FK7 @ 102.000
Ser. 1993 (MBIA Ins.)
6 Franklin County Ind. Dev. Auth., PA, AAA 360,000 6.250 2022(5) 07/01/02 364,029 395,359
Bonds (Hoover Universal, Inc. Proj.) 353268BX2 @ 102.000
7 City of Philadelphia, PA, Water and AAA 500,000 5.250 2023 06/15/03 445,425 504,766
Waste Water Rev. Bonds, Ser. 1993 717893AS0 @ 102.000
(MBIA Ins.)
--------- --------- ---------
TOTAL $ 3,110,000 $ 2,930,514 $ 3,262,950
========= ========= =========
</TABLE>
See Notes to Portfolios on Page D - 32.
D - 31.
MUNICIPAL INVESTMENT TRUST FUND, MULTISTATE SERIES - 57
(CALIFORNIA, FLORIDA, MICHIGAN, NEW JERSEY, NEW YORK AND
PENNSYLVANIA TRUSTS), DEFINED ASSET FUNDS
NOTES TO PORTFOLIOS
As of February 28, 1999
(1) The ratings of the bonds are by Standard & Poor's Ratings Group, or by
Moody's Investors Service, Inc. if followed by "(m)", or by Fitch Investors
Service, Inc. if followed by "(f)"; "NR" indicates that this bond is not
currently rated by any of the above-mentioned rating services. These ratings
have been furnished by the Evaluator but not confirmed with the rating agencies.
(2) See Notes to Financial Statements.
(3) Optional redemption provisions, which may be exercised in whole or in part,
are initially at prices of par plus a premium, then subsequently at prices
declining to par. Certain securities may provide for redemption at par prior
or in addition to any optional or mandatory redemption dates or maturity, for
example, through the operation of a maintenance and replacement fund, if
proceeds are not able to be used as contemplated, the project is condemned or
sold or the project is destroyed and insurance proceeds are used to redeem
the securities. Many of the securities are also subject to mandatory sinking
fund redemption commencing on dates which may be prior to the date on which
securities may be optionally redeemed. Sinking fund redemptions are at par
and redeem only part of the issue. Some of the securities have mandatory
sinking funds which contain optional provisions permitting the issuer to
increase the principal amount of securities called on a mandatory redemption
date. The sinking fund redemptions with optional provisions may, and optional
refunding redemptions generally will, occur at times when the redeemed
securities have an offering side evaluation which represents a premium over
par. To the extent that the securities were acquired at a price higher than
the redemption price, this will represent a loss of capital when compared
with the Public Offering Price of the Units when acquired. Distributions will
generally be reduced by the amount of the income which would otherwise have
been paid with respect to redeemed securities and there will be distributed
to Holders any principal amount and premium received on such redemption after
satisfying any redemption requests for Units received by the Fund. The
estimated current return may be affected by redemptions.
(4) All securities are insured, either on an individual basis or by portfolio
insurance, by a municipal bond insurance company which has been assigned
"AAA" claims paying ability by Standard & Poor's. Accordingly, Standard &
Poor's has assigned "AAA" ratings to the securities. Securities covered by
portfolio insurance are rated "AAA" only as long as they remain in this Trust.
(5) Bonds with an aggregate face amount of $ 365,000 of the California Trust,
$ 1,050,000 of the Florida Trust, $ 815,000 of the New York Trust and
$ 360,000 of the Pennsylvania Trust have been pre-refunded and are expected
to be called for redemption on the optional redemption provision dates shown.
` D - 32.
<PAGE>
Defined
Asset FundsSM
HAVE QUESTIONS ? MUNICIPAL INVESTMENT TRUST FUND
Request the most MULTISTATE SERIES--57
recent free Information (A Unit Investment Trust)
Supplement that gives more ---------------------------------------
details about the Fund, This Prospectus does not contain
by calling: complete information about the
The Chase Manhattan Bank investment company filed with the
1-800-323-1508 Securities and Exchange Commission in
Washington, D.C. under the:
o Securities Act of 1933 (file no.
33-52183) and
o Investment Company Act of 1940 (file
no. 811-1777).
TO OBTAIN COPIES AT PRESCRIBED RATES--
WRITE: Public Reference Section of the
Commission
450 Fifth Street, N.W., Washington,
D.C. 20549-6009
CALL: 1-800-SEC-0330.
VISIT: http://www.sec.gov.
---------------------------------------
No person is authorized to give any
information or representations about
this Fund not contained in this
Prospectus or the Information
Supplement, and you should not rely on
any other information.
---------------------------------------
When units of this Fund are no longer
available, this Prospectus may be used
as a preliminary prospectus for a
future series, but some of the
information in this Prospectus will be
changed for that series.
Units of any future series may not be
sold nor may offers to buy be accepted
until that series has become effective
with the Securities and Exchange
Commission. No units can be sold in any
State where a sale would be illegal.
14806--6/99
