United States
Securities and Exchange Commission
Washington, D.C. 20549
Form N-CSR
Certified Shareholder Report of Registered Management Investment Companies
811-21235
(Investment Company Act File Number)
Federated Premier Municipal Income Fund
_______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
Federated Investors Funds
4000 Ericsson Drive
Warrendale, Pennsylvania 15086-7561
(Address of Principal Executive Offices)
John W. McGonigle, Esquire
Federated Investors Tower
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
(412) 288-1900
(Registrant's Telephone Number)
Date of Fiscal Year End: 11/30
Date of Reporting Period: 11/30/2011
Item 1. Reports to Stockholders
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Annual Shareholder Report |
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November 30, 2011 |
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Federated Premier Municipal Income Fund
Federated Premier Intermediate Municipal Income Fund
Fund Established 2002
Portfolio of Investments Summary Tables
Portfolios of Investments
Financial Highlights
Statements of Assets and Liabilities
Statements of Operations
Statements of Changes in Net Assets
Statements of Cash Flows
Notes to Financial Statements
Report of Independent Registered Public Accounting Firm
Board of Trustees and Fund Officers
Last Meeting of Shareholders
Evaluation and Approval of Advisory Contract
Dividend Reinvestment Plan
Voting Proxies on Fund Portfolio Securities
Quarterly Portfolio Schedule
Source of Distributions – Notice
Certification Disclosure
Portfolio of Investments Summary Table (unaudited) – Federated Premier Municipal Income Fund
At November 30, 2011, the Fund's sector composition1 was as follows:
| Sector Composition |
Percentage of Total Investments2 |
| General Obligation – State | 14.1% |
| Special Tax | 14.1% |
| Hospital | 12.1% |
| Transportation | 11.6% |
| General Obligation – Local | 10.3% |
| Water & Sewer | 5.6% |
| Education | 5.5% |
| Senior Care | 5.3% |
| Pre-refunded | 5.0% |
| Tobacco | 4.4% |
| Other3 | 12.0% |
| TOTAL | 100.0% |
| 1 | Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying borrower, as determined by the Fund's Adviser. For securities that have been enhanced by a third-party (other than a bond insurer), such as a guarantor, sector classifications are based upon the economic sector and/or revenue source of the third party, as determined by the Fund's Adviser. Securities that are insured by a bond insurer are assigned according to the economic sector and/or revenue source of the underlying obligor. Pre-refunded securities are those whose debt service is paid from escrowed funds, usually U.S. government securities. |
| 2 | Percentages reflect the fully consolidated asset of any inverse floater trust as presented in the Portfolio of Investments. |
| 3 | For purposes of this table, sector classifications constitute 88.0% of the Fund's investments. Remaining sectors have been aggregated under the designation “Other.” |
Portfolio of Investments – Federated Premier Municipal Income Fund
November 30, 2011
|
Principal Amount |
Value |
| MUNICIPAL BONDS – 99.5% |
| Alabama – 1.2% |
| $1,145,000 | Alabama State Port Authority, Docks Facilities Revenue Bonds (Series 2010), 6.00% (Original Issue Yield: 6.25%), 10/1/2040 | 1,207,483 |
| 415,000 | Selma, AL IDB, Gulf Opportunity Zone Bonds (Series 2010A), 5.80% (International Paper Co.), 5/1/2034 | 423,474 |
| TOTAL | 1,630,957 |
| Arizona – 2.7% |
| 940,000 | Maricopa County, AZ, IDA, Health Facility Revenue Bonds (Series 2004A), 5.375% (Catholic Healthcare West), 7/1/2023 | 985,562 |
| 2,000,000 | Pima County, AZ IDA, Revenue Bonds (Series 2008B), 5.75% (Tucson Electric Power Co.), 9/1/2029 | 2,037,580 |
| 750,000 | Verrado Community Facilities District No. 1, AZ, Revenue Bonds, 6.50%, 7/15/2027 | 718,747 |
| TOTAL | 3,741,889 |
| California – 8.1% |
| 2,000,000 | Bay Area Toll Authority, CA, San Francisco Bay Area Toll Bridge Revenue Bonds (Series 2009F-1), 5.00%, 4/1/2028 | 2,149,640 |
| 1,280,000 | California State, Refunding Economic Recovery Bonds (Series 2009A), 5.00% (California State Fiscal Recovery Fund), 7/1/2018 | 1,496,550 |
| 1,000,000 | California State, Various Purpose UT GO Bonds, 5.00%, 9/1/2030 | 1,039,850 |
| 750,000 | Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Revenue Bonds (Series 2003A-2), 7.90% (United States Agency PRF 6/1/2013@100), 6/1/2042 | 831,787 |
| 1,500,000 | M-S-R Energy Authority, CA, Gas Revenue Bonds (Series 2009A), 7.00% (Citigroup, Inc. GTD), 11/1/2034 | 1,737,210 |
| 2,000,000 | San Francisco, CA City & County Airport Commission, Second Series Revenue Bonds (Series 2009E), 5.50%, 5/1/2025 | 2,224,800 |
| 1,500,000 | San Jose, CA Airport, Airport Revenue Bonds (Series 2011A-2), 5.00% (Original Issue Yield: 5.05%), 3/1/2031 | 1,494,375 |
| TOTAL | 10,974,212 |
| Colorado – 4.2% |
| 713,000 | Antelope Heights Metropolitan District, CO, LT GO Bonds, 8.00% (United States Treasury PRF 12/1/2013@101), 12/1/2023 | 823,415 |
| 500,000 | Colorado Educational & Cultural Facilities Authority, Revenue Refunding Bonds (Series A), 7.00% (Denver Academy)/(Original Issue Yield: 7.25%), 11/1/2023 | 507,820 |
| 230,000 | Colorado State Higher Education Capital Construction Lease Purchase Financing Program, COPs (Series 2008), 5.50% (Original Issue Yield: 5.60%), 11/1/2027 | 247,071 |
|
Principal Amount |
Value |
| $90,000 | Colorado State Higher Education Capital Construction Lease Purchase Financing Program, COPs (Series 2008), 5.50% (United States Treasury and Agency PRF 11/1/2018@100)/(Original Issue Yield: 5.60%), 11/1/2027 | 111,295 |
| 241,000 | Conservatory Metropolitan District, CO, LT GO Bonds, 6.75% (United States Treasury PRF 12/1/2013@102), 12/1/2034 | 272,952 |
| 500,000 | Conservatory Metropolitan District, CO, LT GO Bonds, 7.55% (United States Treasury PRF 12/1/2013@102), 12/1/2032 | 578,090 |
| 665,000 | Conservatory Metropolitan District, CO, Refunding & Improvement LT GO Bonds, 5.125% (Radian Asset Assurance, Inc. INS), 12/1/2037 | 503,811 |
| 1,000,000 | Denver, CO Health & Hospital Authority, Revenue Bonds, 6.25% (United States Treasury & Agency PRF 12/1/2014@100)/(Original Issue Yield: 6.28%), 12/1/2033 | 1,165,930 |
| 1,480,000 | Public Authority for Colorado Energy, Natural Gas Purchase Revenue Bonds (Series 2008), 6.25% (Merrill Lynch & Co., Inc. GTD)/(Original Issue Yield: 6.63%), 11/15/2028 | 1,551,321 |
| TOTAL | 5,761,705 |
| Delaware – 0.5% |
| 715,000 | Delaware EDA, Gas Facilities Refunding Bonds, 5.40% (Delmarva Power and Light Co.), 2/1/2031 | 753,896 |
| District of Columbia – 1.9% |
| 2,500,000 | District of Columbia Tobacco Settlement Financing Corp., Asset-Backed Revenue Bonds, 6.50% (Original Issue Yield: 6.67%), 5/15/2033 | 2,600,350 |
| Florida – 3.9% |
| 1,190,000 | Harbor Bay, FL Community Development District, Special Assessment Revenue Bonds, 6.75%, 5/1/2034 | 1,037,097 |
| 400,000 | Orlando, FL Urban Community Development District, Capital Improvement Revenue Bonds, 6.25%, 5/1/2034 | 353,564 |
| 1,000,000 | South Lake County, FL Hospital District, Revenue Bonds (Series 2009A), 6.00% (South Lake Hospital, Inc.)/(Original Issue Yield: 6.05%), 4/1/2029 | 1,023,700 |
| 1,000,000 | South Lake County, FL Hospital District, Revenue Bonds, 6.625% (South Lake Hospital, Inc.), 10/1/2023 | 1,027,470 |
| 1,000,000 | Tolomato Community Development District, FL, Special Assessment Revenue Bonds (Series 2007), 6.65% (Original Issue Yield: 6.70%), 5/1/2040 | 519,590 |
| 940,000 | Verandah West, FL Community Development District, Capital Improvement Revenue Bonds (Series 2003A), 6.625% (Original Issue Yield: 6.75%), 5/1/2033 | 919,442 |
| 470,000 | Winter Garden Village at Fowler Groves Community Development District, FL, Special Assessment Bonds (Series 2006), 5.65%, 5/1/2037 | 447,482 |
| TOTAL | 5,328,345 |
|
Principal Amount |
Value |
| Georgia – 4.0% |
| $1,000,000 | Atlanta, GA Airport General Revenue, Airport General Revenue Refunding Bonds (Series 2010C), 6.00%, 1/1/2030 | 1,152,720 |
| 1,500,000 | Atlanta, GA Water & Wastewater, Revenue Bonds (Series 2009A), 6.00% (Original Issue Yield: 6.14%), 11/1/2024 | 1,760,325 |
| 1,000,000 | Atlanta, GA, Tax Allocation Bonds (Series 2005B), 5.60% (Eastside Tax Allocation District)/(Original Issue Yield: 5.65%), 1/1/2030 | 997,690 |
| 1,500,000 | DeKalb Private Hospital Authority, GA, Revenue Anticipation Certificates (Series 2009), 5.00% (Children's Healthcare of Atlanta, Inc.), 11/15/2024 | 1,623,660 |
| TOTAL | 5,534,395 |
| Guam – 0.3% |
| 375,000 | Guam Government LO (Section 30), Bonds (Series 2009A), 5.625% (Original Issue Yield: 5.875%), 12/1/2029 | 381,398 |
| Hawaii – 1.7% |
| 750,000 | Hawaii State Department of Budget & Finance, Special Purpose Revenue Bonds (Series 2009), 6.50% (Hawaiian Electric Co., Inc.), 7/1/2039 | 809,948 |
| 1,400,000 | Hawaii State Department of Budget & Finance, Special Purpose Revenue Bonds (Series A), 8.00% (Kahala Nui)/(Original Issue Yield: 8.175%), 11/15/2033 | 1,454,558 |
| TOTAL | 2,264,506 |
| Illinois – 5.6% |
| 964,000 | Antioch Village, IL Special Service Area No. 1, Special Tax Revenue Bonds, 6.625% (Deercrest Project), 3/1/2033 | 770,757 |
| 625,000 | Chicago, IL O'Hare International Airport, General Airport Third Lien Revenue Bonds (Series 2011C), 6.50%, 1/1/2041 | 715,344 |
| 1,000,000 | Chicago, IL Special Assessment, Improvement Revenue Bonds, 6.75% (Lakeshore East Project)/(Original Issue Yield: 6.769%), 12/1/2032 | 1,024,730 |
| 695,000 | Chicago, IL, UT GO Bonds (Project Series 2011A), 5.25%, 1/1/2035 | 713,661 |
| 420,000 | DuPage County, IL, Special Tax Bonds (Series 2006), 5.625% (Naperville Campus LLC), 3/1/2036 | 335,702 |
| 625,000 | Illinois Finance Authority, Revenue Bonds (Series 2005A), 6.00% (Landing at Plymouth Place)/(Original Issue Yield: 6.04%), 5/15/2037 | 509,513 |
| 1,250,000 | Illinois State Toll Highway Authority, Toll Highway Senior Refunding Revenue Bonds (Series 2010 A-1), 5.00%, 1/1/2031 | 1,303,975 |
| 1,475,000 | Illinois State, UT GO Bonds (Series 2008), 5.00%, 4/1/2028 | 1,490,723 |
| 1,000,000 | Metropolitan Pier & Exposition Authority, IL, McCormick Place Expansion Project Bonds (Series 2010A), 5.50%, 6/15/2050 | 1,027,390 |
| TOTAL | 7,891,795 |
| Indiana – 3.5% |
| 1,930,000 | Indiana Health & Educational Facility Financing Authority, Revenue Bonds (Series 2005), 5.25% (Baptist Homes of Indiana), 11/15/2035 | 1,802,890 |
|
Principal Amount |
Value |
| $1,500,000 | Indiana State Finance Authority, First Lien Wastewater Utility Revenue Bonds (Series 2011A), 5.25% (CWA Authority), 10/1/2031 | 1,621,980 |
| 1,200,000 | Whiting, IN Environmental Facilities, Revenue Bonds (Series 2009), 5.25% (BP PLC), 1/1/2021 | 1,400,832 |
| TOTAL | 4,825,702 |
| Maine – 0.4% |
| 600,000 | Maine Health & Higher Educational Facilities Authority, Revenue Bonds (Series 2011), 6.75% (Maine General Medical Center)/(Original Issue Yield: 7.00%), 7/1/2041 | 615,696 |
| Maryland – 1.0% |
| 550,000 | Baltimore, MD, Special Obligation Revenue Bonds (Series 2008A), 7.00% (East Baltimore Research Park), 9/1/2038 | 564,459 |
| 175,000 | Maryland State Economic Development Corp., Port Facilities Refunding Revenue Bonds (Series 2010), 5.75% (CONSOL Energy, Inc.), 9/1/2025 | 178,197 |
| 690,000 | Maryland State Economic Development Corp., Revenue Bonds (Series B), 5.75% (Ports America Chesapeake, Inc. )/(Original Issue Yield: 5.875%), 6/1/2035 | 690,869 |
| TOTAL | 1,433,525 |
| Michigan – 1.2% |
| 625,000 | Michigan Finance Authority, State Aid Revenue Notes (Series 2011A-2), 6.65% (Detroit, MI City School District), 3/20/2012 | 633,913 |
| 1,000,000 | Michigan State Hospital Finance Authority, Refunding Revenue Bonds, 5.75% (Henry Ford Health System, MI)/(Original Issue Yield: 6.00%), 11/15/2039 | 1,024,320 |
| TOTAL | 1,658,233 |
| Minnesota – 1.1% |
| 335,000 | Tobacco Securitization Authority, MN, Minnesota Tobacco Settlement Revenue Bonds (Series 2011B), 5.25% (Original Issue Yield: 5.291%), 3/1/2031 | 338,414 |
| 1,000,000 | University of Minnesota, GO Bonds (Series 2011A), 5.00%, 12/1/2019 | 1,226,230 |
| TOTAL | 1,564,644 |
| Missouri – 0.4% |
| 500,000 | Missouri Development Finance Board, Infrastructure Facilities Revenue Bonds (Series 2003A), 5.50% (Branson, MO)/(Original Issue Yield: 5.56%), 12/1/2032 | 525,735 |
| New Jersey – 1.3% |
| 1,115,000 | New Jersey EDA, Revenue Bonds, Series 2004, 5.75% (NJ Dedicated Cigarette Excise Tax)/(Original Issue Yield: 5.89%), 6/15/2029 | 1,110,094 |
| 211,412 | 1,2 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 6.50% (Pascack Valley Hospital Association)/(Original Issue Yield: 6.72%), 7/1/2023 | 2 |
|
Principal Amount |
Value |
| $600,000 | New Jersey State Transportation Trust Fund Authority, Transportation System Bonds (Series 2011A), 6.00% (New Jersey State), 6/15/2035 | 685,698 |
| TOTAL | 1,795,794 |
| New Mexico – 1.3% |
| 1,000,000 | Farmington, NM, PCR Refunding Bonds (Series 2010E), 5.90% (Public Service Co., NM), 6/1/2040 | 1,021,700 |
| 750,000 | 3,4 | Jicarilla, NM Apache Nation, Revenue Bonds, 5.50%, 9/1/2023 | 781,515 |
| TOTAL | 1,803,215 |
| New York – 8.2% |
| 1,000,000 | Brooklyn Arena Local Development Corporation, NY, Pilot Revenue Bonds (Series 2009), 6.375% (Original Issue Yield: 6.476%), 7/15/2043 | 1,034,990 |
| 1,000,000 | Erie County, NY IDA, School Facility Refunding Revenue Bonds (Series 2011B), 5.00% (Buffalo, NY City School District), 5/1/2020 | 1,164,300 |
| 1,000,000 | Hudson Yards Infrastructure Corp. NY, Hudson Yards Senior Revenue Bonds (Series 2012A), 5.75%, 2/15/2047 | 1,057,750 |
| 800,000 | 3 | New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.50% (7 World Trade Center LLC), 3/1/2035 | 799,800 |
| 1,000,000 | New York City, NY Municipal Water Finance Authority, Revenue Bonds, 5.50% (Original Issue Yield: 5.57%), 6/15/2026 | 1,127,910 |
| 1,500,000 | New York City, NY TFA, Future Tax Secured Bonds (Series Fiscal 2011D), 5.00%, 2/1/2019 | 1,789,845 |
| 2,000,000 | New York Liberty Development Corporation, Liberty Revenue Bonds (Series 2011), 5.75% (4 World Trade Center), 11/15/2051 | 2,122,940 |
| 2,000,000 | New York State Thruway Authority, Revenue Bonds (Series 2011A), 5.00% (New York State Personal Income Tax Revenue Bond Fund), 3/15/2026 | 2,246,920 |
| TOTAL | 11,344,455 |
| North Carolina – 1.4% |
| 1,000,000 | North Carolina Eastern Municipal Power Agency, Power System Refunding Revenue Bonds (Series 2003C), 5.375% (Original Issue Yield: 5.57%), 1/1/2017 | 1,043,130 |
| 800,000 | North Carolina Medical Care Commission, Health Care Housing Revenue Bonds (Series 2004A), 5.80% (Arc of North Carolina Projects), 10/1/2034 | 802,104 |
| TOTAL | 1,845,234 |
| Ohio – 3.6% |
| 945,000 | Lucas County, OH, Revenue Bonds (Series 2011A), 6.00% (ProMedica Healthcare Obligated Group)/(Original Issue Yield: 6.22%), 11/15/2041 | 1,033,915 |
| 1,090,000 | Ohio State Air Quality Development Authority, Revenue Bonds (Series 2009A), 5.70% (FirstEnergy Solutions Corp.), 8/1/2020 | 1,196,090 |
| 500,000 | Ohio State University, General Receipts Bonds (Series 2008A), 5.00%, 12/1/2026 | 557,390 |
|
Principal Amount |
Value |
| $500,000 | Ohio State University, General Receipts Bonds (Series 2008A), 5.00%, 12/1/2027 | 553,420 |
| 1,280,000 | Ohio State Water Development Authority, Water Pollution Control Loan Fund Refunding Revenue Bonds (Series 2010C), 5.00%, 6/1/2020 | 1,546,074 |
| TOTAL | 4,886,889 |
| Oregon – 0.3% |
| 500,000 | 3 | Cow Creek Band of Umpqua Tribe of Indians, Tax-Exempt Tax Revenue Bonds (Series 2006C), 5.625%, 10/1/2026 | 395,550 |
| Pennsylvania – 3.1% |
| 1,500,000 | Northampton County, PA General Purpose Authority, Hospital Revenue Bonds (Series 2008A), 5.50% (St. Lukes Hospital of Bethlehem)/(Original Issue Yield: 5.60%), 8/15/2035 | 1,490,040 |
| 1,000,000 | Pennsylvania State Turnpike Commission, Turnpike Subordinate Revenue Bonds (Series 2009D), 5.50%, 12/1/2041 | 1,031,980 |
| 1,630,000 | Philadelphia, PA Water & Wastewater System, Water and Wastewater Revenue Bonds (Series 2009A), 5.00% (Original Issue Yield: 5.13%), 1/1/2027 | 1,718,346 |
| TOTAL | 4,240,366 |
| South Carolina – 0.9% |
| 1,170,000 | South Carolina Jobs-EDA, Health System Revenue Bonds (Series A), 5.625% (Bon Secours Health System)/(Original Issue Yield: 5.84%), 11/15/2030 | 1,169,286 |
| South Dakota – 2.0% |
| 1,000,000 | Educational Enhancement Funding Corp., SD, Tobacco Revenue Bonds (Series 2002B), 6.50%, 6/1/2032 | 1,017,860 |
| 1,750,000 | South Dakota State Health & Educational Authority, Revenue Bonds, 5.65% (Westhills Village Retirement Community)/(Original Issue Yield: 5.75%, 9/1/2023 | 1,778,700 |
| TOTAL | 2,796,560 |
| Tennessee – 3.3% |
| 1,750,000 | Johnson City, TN Health & Education Facilities Board, Hospital Revenue Bonds (Series 2010), 6.00% (Mountain States Health Alliance)/(Original Issue Yield: 6.07%), 7/1/2038 | 1,800,697 |
| 2,580,000 | Tennessee State School Board Authority, Higher Educational Facilities Second Program Bonds (Series 2008B), 5.50%, 5/1/2038 | 2,812,355 |
| TOTAL | 4,613,052 |
| Texas – 14.2% |
| 1,000,000 | Central Texas Regional Mobility Authority, Senior Lien Revenue Bonds (Series 2011), 6.25% (Original Issue Yield: 6.30%), 1/1/2046 | 1,018,650 |
| 700,000 | Decatur, TX Hospital Authority, Hospital Revenue Bonds (Series 2004A), 7.125% (Wise Regional Health System), 9/1/2034 | 698,950 |
|
Principal Amount |
Value |
| $2,000,000 | Harris County, TX Cultural Education Facilities Finance Corp., Revenue Refunding Bonds (Series 2009), 5.625% (St. Luke's Episcopal Hospital), 2/15/2025 | 2,228,140 |
| 385,000 | HFDC of Central Texas, Inc., Retirement Facility Revenue Bonds (Series 2006A), 5.50% (Village at Gleannloch Farms, Inc.), 2/15/2027 | 311,592 |
| 585,000 | HFDC of Central Texas, Inc., Retirement Facility Revenue Bonds (Series 2006A), 5.50% (Village at Gleannloch Farms, Inc.), 2/15/2037 | 428,407 |
| 200,000 | Houston, TX Higher Education Finance Corp., Education Revenue Bonds (Series 2011A), 6.875% (Cosmos Foundation, Inc.), 5/15/2041 | 215,326 |
| 1,000,000 | North Texas Tollway Authority, Special Projects System Revenue Bonds (Series 2011), 5.50% (North Texas Toll Authority Special Projects System)/(Original Issue Yield: 5.70%), 9/1/2041 | 1,080,630 |
| 835,000 | North Texas Tollway Authority, System First Tier Revenue Refunding Bonds (Series 2011B), 5.00% (Original Issue Yield: 5.12%), 1/1/2038 | 824,178 |
| 10,000,000 | 5 | Spring Branch, TX ISD, LT GO Bonds, PSFG, 5.25%, 2/1/2034 | 10,756,800 |
| 500,000 | Tarrant County, TX Cultural Education Facilities Finance Corp., Revenue Bonds, Series 2006A, 6.00% (Northwest Senior Housing Corp. Edgemere Project), 11/15/2036 | 481,845 |
| 1,390,000 | Texas State Department of Housing & Community Affairs, Residential Mortgage Revenue Bonds (Series 2009A), 5.30%, 7/1/2034 | 1,481,406 |
| TOTAL | 19,525,924 |
| Virginia – 3.6% |
| 748,000 | Broad Street CDA, VA, Revenue Bonds, 7.50% (United States Treasury PRF 6/1/2013@102)/(Original Issue Yield: 7.625%), 6/1/2033 | 834,476 |
| 1,400,000 | Peninsula Port Authority, VA, Residential Care Facility Revenue Bonds (Series 2003A), 7.375% (Virginia Baptist Homes Obligated Group)/(United States Treasury PRF 12/1/2013@100)/(Original Issue Yield: 7.625%), 12/1/2032 | 1,570,058 |
| 1,500,000 | University of Virginia, General Revenue Pledge Refunding Bonds (Series 2011), 5.00%, 9/1/2030 | 1,705,725 |
| 1,000,000 | Virginia Peninsula Port Authority, Coal Terminal Revenue Refunding Bonds (Series 2003), 6.00% (Brinks Co. (The)), 4/1/2033 | 1,018,180 |
| TOTAL | 5,128,439 |
| Washington – 11.5% |
| 2,000,000 | Tobacco Settlement Authority, WA, Tobacco Settlement Asset-Backed Revenue Bonds, 6.625% (Original Issue Yield: 6.875%), 6/1/2032 | 2,023,420 |
| 12,790,000 | 5 | Washington State, UT GO Bonds, (Series 2008A), 5.00% 7/1/2030 | 13,712,803 |
| TOTAL | 15,736,223 |
| Wisconsin – 3.1% |
| 2,000,000 | Wisconsin State General Fund Appropriation, Revenue Bonds (Series 2009A), 6.00% (Wisconsin State)/(Original Issue Yield: 6.10%), 5/1/2036 | 2,220,640 |
|
Principal Amount |
Value |
| $500,000 | Wisconsin State HEFA, Revenue Bonds, 6.50% (Tomah Memorial Hospital, Inc.)/(Original Issue Yield: 6.75%), 7/1/2023 | 501,975 |
| 500,000 | Wisconsin State HEFA, Revenue Bonds, 6.625% (Tomah Memorial Hospital, Inc.)/(Original Issue Yield: 6.875%), 7/1/2028 | 500,855 |
| 1,000,000 | Wisconsin State HEFA, Revenue Bonds, 7.25% (Community Memorial Hospital)/(Original Issue Yield: 7.45%), 1/15/2033 | 947,310 |
| TOTAL | 4,170,780 |
|
TOTAL MUNICIPAL BONDS (IDENTIFIED COST $132,716,303) |
136,938,750 |
| SHORT-TERM MUNICIPALS – 0.5%6 |
| Michigan – 0.4% |
| 550,000 | Michigan State Hospital Finance Authority, (Series 1999 A) Weekly VRDNs (Covenant Retirement Communities, Inc.)/(Bank of America N.A. LOC), 0.130%, 12/1/2011 | 550,000 |
| Pennsylvania – 0.1% |
| 200,000 | Luzerne County, PA, (Series A of 2006) Weekly VRDNs (Assured Guaranty Municipal Corp. INS)/(JPMorgan Chase Bank, N.A. LIQ), 0.150%, 12/1/2011 | 200,000 |
|
TOTAL SHORT-TERM MUNICIPALS (AT AMORTIZED COST) |
750,000 |
|
TOTAL MUNICIPAL INVESTMENTS — 100.0% (IDENTIFIED COST $133,466,303)7 |
137,688,750 |
| OTHER ASSETS AND LIABILITIES — NET8 | (15,554,125) |
| LIQUIDATION VALUE OF AUCTION MARKET PREFERRED SHARES | (36,575,000) |
| TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | $85,559,625 |
At November 30, 2011, the Fund held no securities subject to the federal alternative minimum tax (AMT) (unaudited).
| 1 | Non-income producing security. |
| 2 | Issuer in default. |
| 3 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At November 30, 2011, these restricted securities amounted to $1,976,865, which represented 2.3% of total market value. |
| 4 | Denotes a restricted security that may be resold without restriction to “qualified institutional buyers” as defined in Rule 144A under the Securities Act of 1933 and that the Fund has determined to be liquid under criteria established by the Fund's Board of Trustees (the “Trustees”). At November 30, 2011, these liquid restricted securities amounted to $781,515, which represented 0.9% of total market value. |
| 5 | Underlying security in inverse floater structure. |
| 6 | Current rate and next reset date shown for Variable Rate Demand Notes. |
| 7 | The cost of investments for federal tax purposes amounts to $116,280,354. |
| 8 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Note: The categories of investments are shown as a percentage of total market value at November 30, 2011.
Annual Shareholder ReportVarious inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1 — prices in active markets for identical securities, including investment companies with daily net asset values, if applicable.
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
As of November 30, 2011, all investments of the Fund utilized Level 2 inputs in valuing the Fund's assets carried at fair value.
The following acronyms are used throughout this portfolio:
| CDA | — Community Development Authority |
| COPs | — Certificates of Participation |
| EDA | — Economic Development Authority |
| GO | — General Obligation |
| GTD | — Guaranteed |
| HEFA | — Health and Education Facilities Authority |
| HFDC | — Health Facility Development Corporation |
| IDA | — Industrial Development Authority |
| IDB | — Industrial Development Bond |
| INS | — Insured |
| ISD | — Independent School District |
| LIQ | — Liquidity Agreement |
| LO | — Limited Obligation |
| LOC | — Letter of Credit |
| LT | — Limited Tax |
| PCR | — Pollution Control Revenue |
| PRF | — Prerefunded |
| PSFG | — Public School Fund Guarantee |
| TFA | — Transitional Finance Authority |
| UT | — Unlimited Tax |
| VRDNs | — Variable Rate Demand Notes |
See Notes which are an integral part of the Financial Statements
Annual Shareholder ReportPortfolio of Investments Summary Table (unaudited) – Federated Premier Intermediate Municipal Income Fund
At November 30, 2011, the Fund's sector composition1 was as follows:
| Sector Composition |
Percentage of Total Investments2 |
| General Obligation – State | 22.4% |
| Special Tax | 13.6% |
| Hospital | 9.0% |
| Transportation | 8.3% |
| Education | 7.5% |
| Pre-refunded | 7.2% |
| Public Power | 5.9% |
| Water & Sewer | 4.6% |
| Electric & Gas | 4.6% |
| Senior Care | 3.6% |
| Other3 | 13.3% |
| TOTAL | 100.0% |
| 1 | Sector classifications, and the assignment of holdings to such sectors, are based upon the economic sector and/or revenue source of the underlying borrower, as determined by the Fund's Adviser. For securities that have been enhanced by a third-party (other than a bond insurer), such as a guarantor, sector classifications are based upon the economic sector and/or revenue source of the third party, as determined by the Fund's Adviser. Securities that are insured by a bond insurer are assigned according to the economic sector and/or revenue source of the underlying obligor. Pre-refunded securities are those whose debt service is paid from escrowed funds, usually U.S. government securities. |
| 2 | Percentages reflect the fully consolidated asset of any inverse floater trust as presented in the Portfolio of Investments. |
| 3 | For purposes of this table, sector classifications constitute 86.7% of the Fund's total investments. Remaining sectors have been aggregated under the designation “Other.” |
Portfolio of Investments – Federated Premier Intermediate Municipal Income Fund
November 30, 2011
|
Principal Amount |
Value |
| MUNICIPAL BONDS – 100.0% |
| Arizona – 3.9% |
| $1,500,000 | Arizona Transportation Board, Subordinated Highway Revenue Bonds (Series 2004B), 5.00% (United States Treasury PRF 7/1/2014@100), 7/1/2020 | 1,666,650 |
| 1,000,000 | Maricopa County, AZ, IDA, Health Facility Revenue Bonds (Series 2004A), 5.375% (Catholic Healthcare West), 7/1/2023 | 1,048,470 |
| 1,690,000 | Pima County, AZ IDA, PCRBs (Series 2009A), 4.95% (Tucson Electric Power Co.), 10/1/2020 | 1,736,779 |
| 1,500,000 | Verrado Community Facilities District No. 1, AZ, Revenue Bonds, 6.15%, 7/15/2017 | 1,516,695 |
| TOTAL | 5,968,594 |
| Arkansas – 0.8% |
| 1,000,000 | Independence County, AR, PCR Refunding Bonds (Series 2005), 5.00% (Entergy Arkansas, Inc.), 1/1/2021 | 1,000,990 |
| 300,000 | Jefferson County, AR, PCR Refunding Bonds (Series 2006), 4.60% (Entergy Arkansas, Inc.), 10/1/2017 | 300,453 |
| TOTAL | 1,301,443 |
| California – 9.8% |
| 1,115,000 | Bay Area Toll Authority, CA, San Francisco Bay Area Subordinate Toll Bridge Revenue Bonds (Series 2010 S-2), 5.00%, 10/1/2024 | 1,209,953 |
| 570,000 | California Health Facilities Financing Authority, Health Facility Revenue Bonds (Series 2004I), 4.95% TOBs (Catholic Healthcare West), Mandatory Tender 7/1/2014 | 618,176 |
| 1,000,000 | California State Department of Water Resources Power Supply Program, Revenue Bonds (Series 2010L), 5.00%, 5/1/2021 | 1,179,910 |
| 1,705,000 | California State, Refunding Economic Recovery Bonds (Series 2009A), 5.00% (California State Fiscal Recovery Fund), 7/1/2018 | 1,993,452 |
| 1,500,000 | California State, Various Purpose UT GO Bonds, 5.00%, 9/1/2021 | 1,726,905 |
| 1,740,000 | California Statewide CDA, Revenue Bonds (Series 2007), 5.00% (Inland Regional Center), 12/1/2017 | 1,760,567 |
| 1,265,000 | Golden State Tobacco Securitization Corp., CA, Tobacco Settlement Asset-Backed Revenue Bonds (Series 2003A-1), 6.25% (United States Agency PRF 6/1/2013@100)/(Original Issue Yield: 6.55%), 6/1/2033 | 1,356,624 |
| 1,000,000 | M-S-R Energy Authority, CA, Gas Revenue Bonds (Series 2009A), 6.125% (Citigroup, Inc. GTD), 11/1/2029 | 1,047,320 |
| 1,500,000 | San Diego, CA Public Facilities Authority, Senior Sewer Revenue Refunding Bonds (Series 2009B), 5.00% (San Diego, CA Wastewater System), 5/15/2016 | 1,744,380 |
|
Principal Amount |
Value |
| $1,000,000 | San Francisco, CA City & County Airport Commission, Second Series Revenue Refunding Private Activity Bonds (Series 2010C), 5.00%, 5/1/2021 | 1,144,370 |
| 1,500,000 | San Jose, CA Airport, Airport Revenue Bonds (Series 2011A-2), 5.00% (Original Issue Yield: 5.05%), 3/1/2031 | 1,494,375 |
| TOTAL | 15,276,032 |
| Colorado – 5.2% |
| 707,000 | Antelope Heights Metropolitan District, CO, LT GO Bonds, 8.00% (United States Treasury PRF 12/1/2013@101), 12/1/2023 | 816,486 |
| 130,000 | Colorado Educational & Cultural Facilities Authority, Revenue Refunding Bonds (Series A), 6.25% (Denver Academy)/(Original Issue Yield: 6.50%), 11/1/2013 | 132,337 |
| 500,000 | Colorado Educational & Cultural Facilities Authority, Revenue Refunding Bonds (Series A), 7.00% (Denver Academy)/(Original Issue Yield: 7.25%), 11/1/2023 | 507,820 |
| 1,265,000 | Colorado Health Facilities Authority, Revenue Bonds (Series 2005), 5.00% (Covenant Retirement Communities, Inc.), 12/1/2013 | 1,306,543 |
| 2,000,000 | Colorado Health Facilities Authority, Revenue Bonds (Series 2011A), 5.25% (Catholic Health Initiatives), 2/1/2031 | 2,067,480 |
| 805,000 | Conservatory Metropolitan District, CO, LT GO Bonds, 7.40% (United States Treasury PRF 12/1/2013@102), 12/1/2016 | 909,111 |
| 600,000 | Denver (City & County), CO, Airport System Revenue Bonds (Series 2009A), 5.00% (Denver, CO City & County Airport Authority), 11/15/2016 | 691,326 |
| 1,000,000 | Public Authority for Colorado Energy, Natural Gas Purchase Revenue Bonds (Series 2008), 6.25% (Merrill Lynch & Co., Inc. GTD)/(Original Issue Yield: 6.63%), 11/15/2028 | 1,048,190 |
| 500,000 | Southlands, CO Metropolitan District No. 1, LT GO Bonds (Series 2004), 7.00% (United States Treasury PRF 12/1/2014@100)/(Original Issue Yield: 7.05%), 12/1/2024 | 592,780 |
| TOTAL | 8,072,073 |
| District of Columbia – 0.7% |
| 1,000,000 | District of Columbia, Ballpark Revenue Bonds (Series 2006B-1), 5.25% (FGIC and National Public Finance Guarantee Corporation INS), 2/1/2016 | 1,105,540 |
| Florida – 3.8% |
| 600,000 | 1 | Capital Trust Agency, FL, Revenue Bonds (Series 2003A), 8.95% (Seminole Tribe of Florida Convention and Resort Hotel Facilities)/(United States Treasury PRF 10/1/2012@102), 10/1/2033 | 654,960 |
| 1,000,000 | Citizens Property Insurance Corp. FL, Senior Secured Bonds (Series 2009A-1), 5.00% (Assured Guaranty Corp. INS), 6/1/2014 | 1,067,850 |
| 35,000 | Fishhawk Community Development District II, Special Assessment Revenue Bonds (Series 2004B), 7.04% (Original Issue Yield: 7.087%), 11/1/2014 | 34,283 |
|
Principal Amount |
Value |
| $335,000 | Orlando, FL Urban Community Development District, Capital Improvement Revenue Bonds, 6.00%, 5/1/2020 | 314,542 |
| 500,000 | Orlando, FL, Senior Tourist Development Tax Revenue Bonds (Series 2008A), 5.25% (6th Cent Contract Payments)/(Assured Guaranty Corp. INS), 11/1/2020 | 538,315 |
| 1,325,000 | Tolomato Community Development District, FL, Special Assessment Revenue Bonds (Series 2007), 6.375%, 5/1/2017 | 821,473 |
| 2,390,000 | University of Central Florida Athletics Association, Inc., FL, COPs (Series 2004A), 5.125% (FGIC and National Public Finance Guarantee Corporation INS), 10/1/2022 | 2,447,742 |
| TOTAL | 5,879,165 |
| Georgia – 4.3% |
| 1,000,000 | Atlanta, GA Airport Passenger Facilities Charge Revenue, Subordinate Lien General Revenue Bonds (Series 2010B), 5.00%, 1/1/2020 | 1,155,840 |
| 1,500,000 | Atlanta, GA Water & Wastewater, Revenue Bonds (Series 2009A), 6.00%, 11/1/2019 | 1,847,295 |
| 1,250,000 | Atlanta, GA, Tax Allocation Bonds (Series 2005B), 5.40% (Eastside Tax Allocation District)/(Original Issue Yield: 5.50%), 1/1/2020 | 1,282,662 |
| 500,000 | DeKalb Private Hospital Authority, GA, Revenue Anticipation Certificates (Series 2009), 5.00% (Children's Healthcare of Atlanta, Inc.), 11/15/2016 | 569,455 |
| 750,000 | Fulton County, GA Residential Care Facilities, Revenue Bonds (Series 2004A), 6.00% (Canterbury Court), 2/15/2022 | 706,785 |
| 1,115,000 | Municipal Electric Authority of Georgia, Revenue Bonds (Series 2002A), 5.25% (National Public Finance Guarantee Corporation INS), 11/1/2015 | 1,157,493 |
| TOTAL | 6,719,530 |
| Guam – 0.9% |
| 1,250,000 | Guam Government LO (Section 30), Bonds (Series 2009A), 5.00%, 12/1/2015 | 1,332,837 |
| Hawaii – 0.4% |
| 600,000 | Hawaii State Department of Budget & Finance, Special Purpose Revenue Bonds (Series A), 7.00% (Kahala Nui)/(Original Issue Yield: 7.00%), 11/15/2012 | 611,244 |
| Illinois – 4.9% |
| 1,325,000 | Chicago, IL Sales Tax, Refunding Revenue Bonds, 5.00% (Assured Guaranty Municipal Corp. INS), 1/1/2019 | 1,445,058 |
| 900,000 | Chicago, IL Special Assessment, Improvement Bonds (Series 2002), 6.625% (Lakeshore East Project)/(Original Issue Yield: 6.637%), 12/1/2022 | 927,594 |
| 875,000 | Illinois Finance Authority, Revenue Bonds (Series 2005A), 6.00% (Landing at Plymouth Place), 5/15/2025 | 781,261 |
| 1,000,000 | Illinois Finance Authority, Revenue Refunding Bonds (Series 2005A), 5.00% (Depaul University), 10/1/2014 | 1,086,330 |
|
Principal Amount |
Value |
| $2,000,000 | Illinois State Sales Tax, Sales Tax Revenue Bonds (Junior Obligation Series June 2010), 5.00%, 6/15/2016 | 2,274,420 |
| 1,000,000 | Railsplitter Tobacco Settlement Authority, IL, Tobacco Settlement Revenue Bonds (Series 2010), 5.00%, 6/1/2015 | 1,100,640 |
| TOTAL | 7,615,303 |
| Indiana – 2.4% |
| 1,050,000 | Indiana Health & Educational Facility Financing Authority, Revenue Bonds (Series 2005), 5.00% (Baptist Homes of Indiana), 11/15/2014 | 1,110,931 |
| 1,000,000 | Indiana State Finance Authority, First Lien Wastewater Utility Revenue Bonds (Series 2011A), 5.25% (CWA Authority), 10/1/2023 | 1,162,610 |
| 1,300,000 | Whiting, IN Environmental Facilities, Revenue Bonds (Series 2009), 5.25% (BP PLC), 1/1/2021 | 1,517,568 |
| TOTAL | 3,791,109 |
| Louisiana – 0.3% |
| 981,000 | 2,3 | Lakeshore Villages Master Community Development District, LA, Special Assessment Bonds (Series 2007), 5.25% (Original Issue Yield: 5.378%), 7/1/2017 | 392,106 |
| Maine – 0.5% |
| 665,000 | Maine Health & Higher Educational Facilities Authority, Revenue Bonds (Series 2011), 7.50% (Maine General Medical Center), 7/1/2032 | 725,216 |
| Maryland – 10.8% |
| 175,000 | Maryland State Economic Development Corp., Port Facilities Refunding Revenue Bonds (Series 2010), 5.75% (CONSOL Energy, Inc.), 9/1/2025 | 178,197 |
| 1,000,000 | Maryland State Economic Development Corp., Revenue Bonds (Series A), 5.125% (Ports America Chesapeake, Inc. )/(Original Issue Yield: 5.25%), 6/1/2020 | 1,006,570 |
| 13,500,000 | 4 | Maryland State, UT GO Bonds (Second Series 2008), 5.00%, 7/15/2022 | 15,702,390 |
| TOTAL | 16,887,157 |
| Massachusetts – 3.9% |
| 1,000,000 | Massachusetts Bay Transportation Authority Sales Tax Revenue, Revenue Bonds (Series B), 5.25%, 7/1/2018 | 1,223,080 |
| 2,000,000 | Massachusetts Department of Transportation, Metropolitan Highway System Revenue Bonds (Series 2010B), 5.00%, 1/1/2024 | 2,196,340 |
| 1,300,000 | Massachusetts Development Finance Agency, Revenue Bonds (Series 2010B-2), 5.00% (Harvard University), 10/15/2020 | 1,615,432 |
| 1,030,000 | Massachusetts HEFA, Revenue Bonds (Series 2010A), 5.00% (Northeastern University), 10/1/2023 | 1,134,164 |
| TOTAL | 6,169,016 |
|
Principal Amount |
Value |
| Michigan – 2.9% |
| $2,000,000 | Cornell Township MI, Economic Development Corp., Refunding Revenue Bonds, 5.875% (MeadWestvaco Corp.)/(United States Treasury PRF 5/1/2012@100), 5/1/2018 | 2,047,340 |
| 710,000 | Michigan Finance Authority, State Aid Revenue Notes (Series 2011A-2), 6.65% (Detroit, MI City School District), 3/20/2012 | 720,125 |
| 1,500,000 | Michigan State Building Authority, Revenue Refunding Bonds (Series 2009I), 5.00%, 10/15/2016 | 1,698,750 |
| TOTAL | 4,466,215 |
| Minnesota – 0.8% |
| 335,000 | Tobacco Securitization Authority, MN, Minnesota Tobacco Settlement Revenue Bonds (Series 2011B), 5.25% (Original Issue Yield: 5.291%), 3/1/2031 | 338,414 |
| 750,000 | University of Minnesota, GO Bonds (Series 2011A), 5.00%, 12/1/2018 | 913,575 |
| TOTAL | 1,251,989 |
| Nevada – 2.5% |
| 2,000,000 | Clark County, NV, IDRB (Series 2003C), 5.45% TOBs (Southwest Gas Corp.), Mandatory Tender 3/1/2013 | 2,096,020 |
| 960,000 | Las Vegas, NV, Local Improvement Special Assessment Bonds (Series 2004), 5.50% (Providence SID No. 607), 6/1/2013 | 969,350 |
| 780,000 | North Las Vegas, NV SID No. 60, Subordinate LT Obligation Refunding Bonds (Series 2006B), 5.00% (Aliante SID No. 60)/(Original Issue Yield: 5.05%), 12/1/2017 | 778,799 |
| TOTAL | 3,844,169 |
| New Jersey – 0.0% |
| 251,750 | 2,3 | New Jersey Health Care Facilities Financing Authority, Revenue Bonds, 6.00% (Pascack Valley Hospital Association)/(Original Issue Yield: 6.25%), 7/1/2013 | 3 |
| New Mexico – 1.3% |
| 1,000,000 | Farmington, NM, PCR Refunding Bonds (Series A), 5.20% TOBs (Public Service Co., NM), Mandatory Tender 6/1/2020 | 1,026,740 |
| 1,000,000 | Farmington, NM, Refunding Revenue Bonds (Series 2002A), 4.00% TOBs (El Paso Electric Co.)/(FGIC INS), Mandatory Tender 8/1/2012 | 1,014,780 |
| TOTAL | 2,041,520 |
| New York – 10.3% |
| 2,000,000 | Dutchess County, NY IDA, Revenue Bonds, 5.00% (Marist College)/(Original Issue Yield: 5.15%), 7/1/2020 | 2,043,080 |
| 1,000,000 | Erie County, NY IDA, School Facility Revenue Bonds (Series 2011A), 5.25% (Buffalo, NY City School District), 5/1/2027 | 1,098,090 |
| 800,000 | 1 | New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.25% (7 World Trade Center LLC), 3/1/2015 | 801,632 |
| 1,500,000 | New York City, NY TFA, Future Tax Secured Bonds (Series Fiscal 2011D), 5.00%, 2/1/2019 | 1,789,845 |
|
Principal Amount |
Value |
| $1,340,000 | New York City, NY, UT GO Bonds (Series 2002D), 5.00% (Original Issue Yield: 5.21%), 6/1/2017 | 1,367,242 |
| 1,000,000 | New York Liberty Development Corporation, Liberty Revenue Bonds (Series 2011), 5.00% (4 World Trade Center), 11/15/2031 | 1,034,070 |
| 2,000,000 | New York State Dormitory Authority, Revenue Bonds (Series 2009C), 5.00% (School District Financing Program)/(Assured Guaranty Corp. INS), 10/1/2015 | 2,246,980 |
| 1,500,000 | New York State Thruway Authority, Revenue Bonds (Series 2011A), 5.00% (New York State Personal Income Tax Revenue Bond Fund), 3/15/2025 | 1,700,505 |
| 2,000,000 | Tobacco Settlement Financing Corp., NY, (Series 2003B-1C), 5.50% (New York State), 6/1/2019 | 2,125,840 |
| 1,710,000 | Triborough Bridge & Tunnel Authority, NY, General Revenue Refunding Bonds (Series 2011A), 5.00%, 1/1/2026 | 1,948,186 |
| TOTAL | 16,155,470 |
| North Carolina – 2.2% |
| 1,000,000 | North Carolina Eastern Municipal Power Agency, Power System Revenue Refunding Bonds (Series D), 5.50%, 1/1/2014 | 1,088,530 |
| 965,000 | North Carolina Medical Care Commission, Health Care Housing Revenue Bonds (Series 2004A), 5.50% (Arc of North Carolina Projects), 10/1/2024 | 978,221 |
| 1,500,000 | North Carolina Municipal Power Agency No. 1, Electric Revenue Bonds (Series 2003A), 5.50%, 1/1/2014 | 1,578,435 |
| TOTAL | 3,645,186 |
| Ohio – 2.3% |
| 1,000,000 | Cuyahoga, OH CCD, General Receipts Revenue Bonds (Series 2002A), 5.00% (AMBAC Assurance Corporation INS), 12/1/2022 | 1,041,390 |
| 2,135,000 | Franklin County, OH Hospital Facility Authority, Hospital Improvement Revenue Bonds (Series 2009), 5.00% (Nationwide Children's Hospital), 11/1/2019 | 2,436,377 |
| TOTAL | 3,477,767 |
| Oregon – 1.0% |
| 500,000 | 1 | Cow Creek Band of Umpqua Tribe of Indians, Tax-Exempt Tax Revenue Bonds (Series 2006C), 5.625%, 10/1/2026 | 395,550 |
| 1,000,000 | Yamhill County, OR Hospital Authority, Revenue Bonds, 6.50% (Friendsview Retirement Community)/(United States Treasury PRF 12/1/2013@101), 12/1/2018 | 1,123,790 |
| TOTAL | 1,519,340 |
| Pennsylvania – 10.9% |
| 1,500,000 | Allegheny County, PA HDA, Revenue Bonds (Series 2010A), 5.00% (UPMC Health System), 5/15/2017 | 1,710,915 |
|
Principal Amount |
Value |
| $435,000 | Allegheny County, PA IDA, Environmental Improvement Refunding Revenue Bonds (Series 2005), 5.50% (United States Steel Corp.), 11/1/2016 | 438,724 |
| 12,000,000 | 4 | Commonwealth of Pennsylvania, UT GO Bonds, 5.00%, 3/15/2025 | 13,834,830 |
| 1,000,000 | Lancaster, PA Higher Education Authority, College Revenue Bonds, 5.00% (Franklin & Marshall College), 4/15/2019 | 1,108,920 |
| TOTAL | 17,093,389 |
| South Carolina – 2.1% |
| 1,000,000 | Georgetown County, SC Environmental Improvements, Refunding Revenue Bonds (Series 2000A), 5.95% (International Paper Co.), 3/15/2014 | 1,075,870 |
| 2,000,000 | Piedmont Municipal Power Agency, SC, Electric Refunding Revenue Bonds (Series 2010A-3), 5.00%, 1/1/2024 | 2,207,140 |
| TOTAL | 3,283,010 |
| South Dakota – 1.1% |
| 1,715,000 | Educational Enhancement Funding Corp., SD, Tobacco Revenue Bonds (Series 2002B), 6.50%, 6/1/2032 | 1,745,630 |
| Texas – 6.1% |
| 1,000,000 | Decatur, TX Hospital Authority, Hospital Revenue Bonds (Series 2004A), 6.50% (Wise Regional Health System), 9/1/2014 | 1,005,860 |
| 1,000,000 | Houston, TX Airport System, Senior Lien Revenue & Refunding Bonds (Series 2009A), 5.00%, 7/1/2018 | 1,168,450 |
| 500,000 | North Texas Tollway Authority, Special Projects System Revenue Bonds (Series 2011), 5.00% (North Texas Toll Authority Special Projects System), 9/1/2021 | 586,440 |
| 545,000 | Tarrant County, TX Cultural Education Facilities Finance Corp., Retirement Facility Revenue Bonds (Series 2007), 5.00% (Air Force Village), 5/15/2016 | 569,874 |
| 500,000 | Tarrant County, TX Cultural Education Facilities Finance Corp., Revenue Bonds, Series 2006A, 6.00% (Northwest Senior Housing Corp. Edgemere Project), 11/15/2026 | 501,255 |
| 1,000,000 | Tyler, TX HFDC, Hospital Revenue Bonds , 5.25% (Mother Frances Hospital ), 7/1/2012 | 1,017,820 |
| 1,770,000 | University of Texas System Board of Regents, Revenue Bonds (Series 2004B), 5.25%, 8/15/2019 | 2,195,827 |
| 2,235,000 | West Harris County, TX Regional Water Authority, Water System Revenue Bonds (Series 2006), 5.00% (AMBAC INS), 12/15/2021 | 2,426,875 |
| TOTAL | 9,472,401 |
| Virginia – 1.3% |
| 126,000 | Bell Creek CDA, VA, Special Assessment Revenue Bonds (Series 2003), 6.75%, 3/1/2022 | 126,476 |
| 700,000 | Broad Street CDA, VA, Revenue Bonds, 7.10% (United States Treasury PRF 6/1/2013@102)/(Original Issue Yield: 7.15%), 6/1/2016 | 776,825 |
|
Principal Amount |
Value |
| $1,000,000 | Peninsula Port Authority, VA, Residential Care Facility Revenue Bonds (Series 2003A), 7.375% (Virginia Baptist Homes Obligated Group)/(United States Treasury PRF 12/1/2013@100)/(Original Issue Yield: 7.50%), 12/1/2023 | 1,131,080 |
| TOTAL | 2,034,381 |
| Washington – 0.9% |
| 1,420,000 | Tobacco Settlement Authority, WA, Tobacco Settlement Asset Backed Revenue Bonds, 6.50% (Original Issue Yield: 6.65%), 6/1/2026 | 1,442,663 |
| Wisconsin – 1.8% |
| 2,000,000 | Wisconsin State HEFA, Revenue Bonds, 5.75% (SynergyHealth, Inc.), 11/15/2015 | 2,118,500 |
| 745,000 | Wisconsin State HEFA, Revenue Bonds, 7.125% (Community Memorial Hospital)/(Original Issue Yield: 7.25%), 1/15/2022 | 729,973 |
| TOTAL | 2,848,473 |
|
TOTAL MUNICIPAL INVESTMENTS — 100.0% (IDENTIFIED COST $149,271,793)5 |
156,167,971 |
| OTHER ASSETS AND LIABILITIES — NET6 | (17,098,725) |
| LIQUIDATION VALUE OF AUCTION MARKET PREFERRED SHARES | (41,900,000) |
| TOTAL NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS | $97,169,246 |
At November 30, 2011, the Fund held no securities subject to the federal alternative minimum tax (AMT) (unaudited).
| 1 | Denotes a restricted security that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) is subject to a contractual restriction on public sales. At November 30, 2011, these restricted securities amounted to $1,852,142, which represented 1.9% of total market value. |
| 2 | Non-incoming producing security. |
| 3 | Issuer in default. |
| 4 | Underlying security in inverse floater structure. |
| 5 | The cost of investments for federal tax purposes amounts to $130,052,775. |
| 6 | Assets, other than investments in securities, less liabilities. See Statement of Assets and Liabilities. |
Note: The categories of investments are shown as a percentage of total market value at November 30, 2011 .
Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in the three broad levels listed below:
Level 1 — prices in active markets for identical securities, including investment companies with daily net asset values, if applicable.
Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.). Also includes securities valued at amortized cost.
Level 3 — significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).
Annual Shareholder ReportThe inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.
As of November 30, 2011, all investments of the Fund utilized Level 2 inputs in valuing the Fund's assets carried at fair value.
The following acronyms are used throughout this portfolio:
| AMBAC | — American Municipal Bond Assurance Corporation |
| CCD | — Community College District |
| CDA | — Community Development Authority |
| COPs | — Certificates of Participation |
| FGIC | — Financial Guaranty Insurance Company |
| GO | — General Obligation |
| GTD | — Guaranteed |
| HDA | — Hospital Development Authority |
| HEFA | — Health and Education Facilities Authority |
| HFDC | — Health Facility Development Corporation |
| IDA | — Industrial Development Authority |
| IDRB | — Industrial Development Revenue Bond |
| INS | — Insured |
| LO | — Limited Obligation |
| LT | — Limited Tax |
| PCR | — Pollution Control Revenue |
| PCRBs | — Pollution Control Revenue Bonds |
| PRF | — Prerefunded |
| SID | — Special Improvement District |
| TFA | — Transitional Finance Authority |
| TOBs | — Tender Option Bonds |
| UT | — Unlimited Tax |
See Notes which are an integral part of the Financial Statements
Annual Shareholder ReportFinancial Highlights – Federated Premier Municipal Income Fund
(For a Common Share Outstanding Throughout Each Period)
| Year Ended November 30 | 2011 | 2010 | 2009 | 2008 | 2007 |
| Net Asset Value, Beginning of Period | $13.49 | $13.25 | $11.08 | $14.60 | $15.56 |
| Income From Investment Operations: |
| Net investment income1 | 1.02 | 1.05 | 1.07 | 1.12 | 1.12 |
| Net realized and unrealized gain (loss) on investments, swap contracts and futures contracts | 0.38 | 0.25 | 2.13 | (3.59) | (0.96) |
| Distributions to preferred shareholders from net investment income2 | (0.01) | (0.01) | (0.02) | (0.25) | (0.32) |
| TOTAL FROM INVESTMENT OPERATIONS | 1.39 | 1.29 | 3.18 | (2.72) | (0.16) |
|
Less Distributions to Common Shareholders: |
| Distributions from net investment income | (1.02) | (1.05) | (1.01) | (0.80) | (0.80) |
| Net Asset Value, End of Period | $13.86 | $13.49 | $13.25 | $11.08 | $14.60 |
| Market Price, End of Period | $14.89 | $14.36 | $14.47 | $9.37 | $13.92 |
| Total Return at Net Asset Value3 | 10.95% | 9.90% | 29.89% | (19.45)% | (1.01)% |
| Total Return at Market Price4 | 11.91% | 6.87% | 67.59% | (28.31)% | (7.03)% |
| Ratios to Average Net Assets: |
| Net expenses5 | 1.05% | 1.03% | 1.03% | 0.98%6 | 0.85% |
| Net expenses excluding interest and trust expenses on inverse floater structures5 | 0.85% | 0.85% | 0.85% | 0.85% | 0.85% |
| Net investment income7 | 7.60% | 7.54% | 8.59% | 6.37% | 5.33% |
| Expense waiver/reimbursement8 | 0.48% | 0.42% | 0.56% | 0.54% | 0.47%9 |
| Supplemental Data: |
| Net assets, end of period (000 omitted) | $85,560 | $83,123 | $81,443 | $67,990 | $89,528 |
| Portfolio turnover | 38% | 19% | 79% | 32% | 12% |
Annual Shareholder Report
|
Total Amount Outstanding |
Asset Coverage Per Share |
Minimum Required Asset Coverage Per Share |
Involuntary Liquidating Preference Per Share |
Average Market Value Per Share10 |
| 11/30/2011 | $36,575,000 | $83,482 | $50,001 | $25,000 | $25,000 |
| 11/30/2010 | $36,575,000 | $81,817 | $50,008 | $25,004 | $25,000 |
| 11/30/2009 | $36,575,000 | $80,668 | $50,006 | $25,003 | $25,000 |
| 11/30/2008 | $44,075,000 | $63,565 | $50,006 | $25,003 | $25,000 |
| 11/30/2007 | $53,675,000 | $66,699 | $50,006 | $25,003 | $25,000 |
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | The amounts shown are based on Common Share equivalents. |
| 3 | Total Return at Net Asset Value is the combination of changes in the Common Share net asset value, reinvested dividend income and reinvested capital gains distributions at net asset value, if any, and does not reflect the sales charge, if applicable. |
| 4 | Total Return at Market Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of the reinvestment. |
| 5 | Ratios do not reflect the effect of dividend payments to preferred shareholders and any associated commission costs. |
| 6 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.98% for the year ended November 30, 2008 after taking into account this expense reduction. |
| 7 | Ratios reflect reductions for dividend payments to preferred shareholders. |
| 8 | This expense decrease is reflected in both the net expense and net investment income ratios shown above. |
| 9 | Additional information relating to contractual expense waivers, which has no effect on net expenses, net investment income and net assets previously reported, has been included to conform to the current year presentation. |
| 10 | Represents initial public offering price. |
See Notes which are an integral part of the Financial Statements
Annual Shareholder ReportFinancial Highlights – Federated Premier Intermediate Municipal Income Fund
(For a Common Share Outstanding Throughout Each Period)
| Year Ended November 30 | 2011 | 2010 | 2009 | 2008 | 2007 |
| Net Asset Value, Beginning of Period | $13.57 | $13.46 | $11.90 | $14.15 | $14.83 |
| Income From Investment Operations: |
| Net investment income1 | 0.83 | 0.86 | 0.92 | 0.97 | 0.99 |
| Net realized and unrealized gain (loss) on investments, swap contracts and futures contracts | 0.36 | 0.13 | 1.54 | (2.29) | (0.66) |
| Distributions to preferred shareholders from net investment income2 | (0.01) | (0.01) | (0.02) | (0.24) | (0.32) |
| TOTAL FROM INVESTMENT OPERATIONS | 1.18 | 0.98 | 2.44 | (1.56) | 0.01 |
|
Less Distributions to Common Shareholders: |
| Distributions from net investment income | (0.81) | (0.87) | (0.88) | (0.69) | (0.69) |
| Net Asset Value, End of Period | $13.94 | $13.57 | $13.46 | $11.90 | $14.15 |
| Market Price, End of Period | $13.87 | $13.60 | $13.62 | $9.37 | $12.50 |
| Total Return at Net Asset Value3 | 9.06% | 7.40% | 21.24% | (11.47)% | 0.10% |
| Total Return at Market Price4 | 8.51% | 6.38% | 56.22% | (20.62)% | (4.80)% |
| Ratios to Average Net Assets: |
| Net expenses5 | 1.06% | 1.07% | 1.08% | 0.98%6 | 0.89% |
| Net expenses excluding interest and trust expenses on inverse floater structures5 | 0.89% | 0.89% | 0.89% | 0.89% | 0.89% |
| Net investment income7 | 6.02% | 6.16% | 7.01% | 5.43% | 4.63% |
| Expense waiver/reimbursement8 | 0.37% | 0.33% | 0.43% | 0.45% | 0.42%9 |
| Supplemental Data: |
| Net assets, end of period (000 omitted) | $97,169 | $94,569 | $93,598 | $82,655 | $98,317 |
| Portfolio turnover | 21% | 31% | 47% | 20% | 17% |
Annual Shareholder Report
|
Total Amount Outstanding |
Asset Coverage Per Share |
Minimum Required Asset Coverage Per Share |
Involuntary Liquidating Preference Per Share |
Average Market Value Per Share10 |
| 11/30/2011 | $41,900,000 | $82,977 | $50,000 | $25,000 | $25,000 |
| 11/30/2010 | $41,900,000 | $81,426 | $50,002 | $25,001 | $25,000 |
| 11/30/2009 | $41,900,000 | $80,846 | $50,000 | $25,000 | $25,000 |
| 11/30/2008 | $50,900,000 | $65,597 | $50,004 | $25,002 | $25,000 |
| 11/30/2007 | $61,025,000 | $65,277 | $50,018 | $25,009 | $25,000 |
| 1 | Per share numbers have been calculated using the average shares method. |
| 2 | The amounts shown are based on Common Share equivalents. |
| 3 | Total Return at Net Asset Value is the combination of changes in the Common Share net asset value, reinvested dividend income and reinvested capital gains distributions at net asset value, if any, and does not reflect the sales charge, if applicable. |
| 4 | Total Return at Market Price is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of the reinvestment. |
| 5 | Ratios do not reflect the effect of dividend payments to preferred shareholders and any associated commission costs. |
| 6 | The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.98% for the year ended November 30, 2008 after taking into account this expense reduction. |
| 7 | Ratios reflect reductions for dividend payments to preferred shareholders. |
| 8 | This expense decrease is reflected in both the net expense and net investment income ratios shown above. |
| 9 | Additional information relating to contractual expense waivers, which has no effect on net expenses, net investment income and net assets previously reported, has been included to conform to the current year presentation. |
| 10 | Represents initial public offering price. |
See Notes which are an integral part of the Financial Statements
Annual Shareholder ReportStatements of Assets and Liabilities
|
Federated Premier Municipal Income Fund |
Federated Premier Intermediate Municipal Income Fund |
| Assets: |
| Total investments in securities, at value | $137,688,750 | $156,167,971 |
| Cash | 24,893 | — |
| Income receivable | 2,120,650 | 2,258,406 |
| Receivable for investments sold | 15,000 | 379,300 |
| TOTAL ASSETS | 139,849,293 | 158,805,677 |
| Liabilities: |
| Bank overdraft | $ — | $59,851 |
| Payable for floating rate certificate securities (Note 2) | 17,100,000 | 19,125,000 |
| Income distribution payable — Common Shares | 512,307 | 452,966 |
| Income distribution payable — Preferred Shares | 549 | 62 |
| Payable to adviser (Note 5) | 1,643 | 1,172 |
| Accrued expenses | 100,169 | 97,380 |
| TOTAL LIABILITIES | 17,714,668 | 19,736,431 |
| Auction Market Preferred Shares (1,463 and 1,676 shares, respectively, authorized and issued at $25,000 per share) | $36,575,000 | $41,900,000 |
| Net Assets Applicable to Common Shares Consist of: |
| Paid-in capital | $87,463,971 | $98,767,470 |
| Net unrealized appreciation of investments | 4,222,447 | 6,896,178 |
| Accumulated net realized loss on investments | (6,671,379) | (8,892,627) |
| Undistributed net investment income | 544,586 | 398,225 |
| TOTAL NET ASSETS APPLICABLE TO COMMON SHARES | $85,559,625 | $97,169,246 |
| Common Shares Outstanding, ($0.01 par value, unlimited shares authorized) | 6,172,377 | 6,968,700 |
| Net asset value per share | $13.86 | $13.94 |
| Investments, at identified cost | $133,466,303 | $149,271,793 |
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report|
Federated Premier Municipal Income Fund |
Federated Premier Intermediate Municipal Income Fund |
| Investment Income: |
| Interest | $7,249,743 | $6,869,197 |
| Expenses: |
| Investment adviser fee (Note 5) | 652,441 | 749,897 |
| Administrative fee (Note 5) | 150,000 | 150,000 |
| Custodian fees | 6,563 | 5,719 |
| Transfer and dividend disbursing agent fees and expenses | 34,231 | 34,015 |
| Directors'/Trustees' fees | 11,168 | 11,298 |
| Auditing fees | 41,024 | 41,024 |
| Legal fees | 23,640 | 23,171 |
| Portfolio accounting fees | 91,469 | 95,619 |
| Printing and postage | 24,899 | 26,188 |
| Insurance premiums | 4,168 | 4,189 |
| Auction agent fees | 6,500 | 6,500 |
| Trailer commission fees (Note 2) | 97,145 | 106,904 |
| Interest and trust expenses (Note 2) | 156,508 | 156,350 |
| Miscellaneous | 48,164 | 47,092 |
| TOTAL EXPENSES | 1,347,920 | 1,457,966 |
| Waivers and Reimbursement (Note 5): |
| Waiver of investment adviser fee | (4,989) | (5,726) |
| Waiver of administrative fee | (150,000) | (150,000) |
| Reimbursement of other operating expenses | (237,837) | (193,806) |
| TOTAL WAIVERS AND REIMBURSEMENT | (392,826) | (349,532) |
| Net expenses | 955,094 | 1,108,434 |
| Net investment income | 6,294,649 | 5,760,763 |
| Realized and Unrealized Gain (Loss) on Investments: |
| Net realized loss on investments | (525,585) | (347,319) |
| Net change in unrealized appreciation of investments | 2,876,074 | 2,884,475 |
| Net realized and unrealized gain on investments | 2,350,489 | 2,537,156 |
| Income distributions declared to Preferred Shareholders | (61,044) | (72,288) |
| Change in net assets resulting from operations applicable to common shares | $8,584,094 | $8,225,631 |
See Notes which are an integral part of the Financial Statements
Annual Shareholder ReportStatements of Changes in Net Assets
|
Federated Premier Municipal Income Fund |
Federated Premier Intermediate Municipal Income Fund |
||
| Year Ended November 30 | 2011 | 2010 | 2011 | 2010 |
| Increase (Decrease) in Net Assets | |||
| Operations: | |||
| Net investment income | $6,294,649 | $6,489,568 | $5,760,763 | $5,984,016 |
| Net realized gain (loss) on investments | (525,585) | 490,732 | (347,319) | (79,255) |
| Net change in unrealized appreciation/depreciation of investments | 2,876,074 | 1,080,892 | 2,884,475 | 1,004,713 |
| Distributions from net investment income — Preferred Shares | (61,044) | (79,201) | (72,288) | (92,181) |
| CHANGE IN NET ASSETS RESULTING FROM OPERATIONS APPLICABLE TO COMMON SHARES | 8,584,094 | 7,981,991 | 8,225,631 | 6,817,293 |
| Distributions to Common Shareholders: | |||
| Distributions from net investment income — Common Shares | (6,291,294) | (6,482,049) | (5,644,628) | (6,035,554) |
|
Share Transactions Applicable to Common Shares: |
|||
| Net asset value of shares issued to shareholders in payment of distributions declared | 143,541 | 180,585 | 18,902 | 189,720 |
| Change in net assets | 2,436,341 | 1,680,527 | 2,599,905 | 971,459 |
|
Net Assets Applicable to Common Shares: |
|||
| Beginning of period | 83,123,284 | 81,442,757 | 94,569,341 | 93,597,882 |
| End of period | $85,559,625 | $83,123,284 | $97,169,246 | $94,569,341 |
| Undistributed net investment income at end of period | $544,586 | $605,956 | $398,225 | $338,665 |
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report|
Federated Premier Municipal Income Fund |
Federated Premier Intermediate Municipal Income Fund |
| Operating Activities: |
| Change in net assets resulting from operations | $8,584,094 | $8,225,631 |
| Adjustments to Reconcile Change in Net Assets Resulting From Operations to Net Cash Provided By Operating Activities: |
| Purchase of investment securities | (44,185,202) | (30,588,339) |
| Proceeds from sale of investment securities | 43,597,903 | 27,944,653 |
| Net sale of short-term investment securities | 300,000 | 2,049,998 |
| Increase in interest receivable | (23,914) | (29,687) |
| Increase in accrued expenses | 47,813 | 38,656 |
| (Increase) decrease in receivable for investments sold | 1,000 | (291,850) |
| Increase in payable to adviser | 1,643 | 1,172 |
| Net amortization of premium (discount) | 198,847 | 741,930 |
| Net realized loss on investments | 525,585 | 347,319 |
| Net change in unrealized appreciation of investments | (2,876,074) | (2,884,475) |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | 6,171,695 | 5,555,008 |
| Financing Activities: |
| Income distribution to participants | (6,177,282) | (5,661,935) |
| NET CASH USED IN FINANCING ACTIVITIES | (6,177,282) | (5,661,935) |
| Net decrease in cash | (5,587) | (106,927) |
| Cash: |
| Beginning of period | 30,480 | 47,076 |
| End of period | $24,893 | $(59,851) |
Non-cash financing activities not included herein consist of reinvestment of dividends and
distributions of $143,541 and $18,902, respectively.
See Notes which are an integral part of the Financial Statements
Annual Shareholder Report1. Organization
Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund (individually referred to as the “Fund,” or collectively as the “Funds”) are registered under the Investment Company Act of 1940, as amended (the “Act”), as diversified, closed-end management investment companies. Each Fund's investment objective is to provide current income exempt from federal income tax, including the federal AMT.
2. Significant Accounting Policies
The following is a summary of significant accounting policies consistently followed by the Funds in the preparation of their financial statements. These policies are in conformity with U.S. generally accepted accounting principles (GAAP).
Investment Valuation
In calculating its net asset value (NAV), each Fund generally values investments as follows:
- Fixed-income securities acquired with remaining maturities greater than 60 days are fair valued using price evaluations provided by a pricing service approved by the Trustees.
- Fixed-income securities acquired with remaining maturities of 60 days or less are valued at their cost (adjusted for the accretion of any discount or amortization of any premium), which approximates market value.
- Shares of other mutual funds are valued based upon their reported NAVs.
- Derivative contracts listed on exchanges are valued at their reported settlement or closing price.
- Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Trustees.
- For securities that are fair valued in accordance with procedures established by and under the general supervision of the Trustees, certain factors may be considered such as: the purchase price of the security, information obtained by contacting the issuer, analysis of the issuer's financial statements or other available documents, fundamental analytical data, the nature and duration of restrictions on disposition, the movement of the market in which the security is normally traded and public trading in similar securities of the issuer or comparable issuers.
If the Funds cannot obtain a price or price evaluation from a pricing service for an investment, the Funds may attempt to value the investment based upon the mean of bid and asked quotations or fair value the investment based on price evaluations, from one or more dealers. If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, the Funds use the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Funds could purchase or sell an investment at the price used to calculate each Fund's NAV.
Fair Valuation and Significant Events Procedures
The Trustees have authorized the use of pricing services to provide evaluations of the current fair value of certain investments for purposes of calculating the NAV. Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. Some pricing services provide a single price evaluation reflecting the bid-side of Annual Shareholder Report
The Trustees also have adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment's value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:
- With respect to price evaluations of fixed-income securities determined before the close of regular trading on the NYSE, actions by the Federal Reserve Open Market Committee and other significant trends in U.S. fixed-income markets;
- Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
- Announcements concerning matters such as acquisitions, recapitalizations, litigation developments, a natural disaster affecting the issuer's operations or regulatory changes or market developments affecting the issuer's industry.
The Funds may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Funds will determine the fair value of the investment using another method approved by the Trustees.
Investment Income, Gains and Losses, Expenses and Distributions
Investment transactions are accounted for on a trade-date basis. Realized gains and losses from investment transactions are recorded on an identified-cost basis. Interest income and expenses are accrued daily. Non-cash dividends included in dividend income, if any, are recorded at fair value. Distributions to common shareholders are recorded on the ex-dividend date and are declared and paid monthly. Distributions to preferred shareholders are recorded daily and paid weekly at a rate set through auction procedures or under each Fund's Statement of Preferences. The dividend rate to preferred shareholders for Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund at November 30, 2011, was 0.088% and 0.055%, respectively.
Each auction requires the participation of one or more Broker-Dealers. The auction agent, currently Deutsche Bank Trust Company Americas, will enter into agreements with one or more Broker-Dealers selected by the Funds, which provide for the participation of those Broker-Dealers in auctions for preferred shares. The auction agent will pay each Broker- Dealer after each auction, from funds provided by the Funds. The trailer commissions for Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund for the year ended November 30, 2011, were $97,145 and $106,904, respectively.
Annual Shareholder Report
All premiums and discounts on fixed-income securities are amortized/accreted using the effective interest rate method.
Federal Taxes
It is each Fund's policy to comply with the Subchapter M provision of the Internal Revenue Code (the “Code”) and to distribute to shareholders each year substantially all of its income. Accordingly, no provision for federal income tax is necessary. As of and during the year ended November 30, 2011, the Funds did not have a liability for any uncertain tax positions. The Funds recognize interest and penalties, if any, related to tax liabilities as income tax expense in the Statement of Operations. As of November 30, 2011, tax years 2008 through 2011 remain subject to examination by the Funds' major tax jurisdictions, which include the United States of America and the state of Delaware.
When-Issued and Delayed Delivery Transactions
The Funds may engage in when-issued or delayed delivery transactions. The Funds record when-issued securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a when-issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the contract.
Inverse Floater Structures
The Funds may participate in Inverse Floater Structures in which fixed-rate, tax-exempt municipal bonds purchased by the Funds are transferred to a trust. The trust subsequently issues two or more variable rate securities that are collateralized by the cash flows of the fixed-rate, tax-exempt municipal bonds. One or more of these variable-rate securities pays interest based on a floating rate set by a remarketing agent at predetermined intervals. A residual-interest tax-exempt security, which is transferred to the Funds, is also created by the trust and pays interest based on the remaining cash flow of the trust, after payment of interest on the other securities and various expenses of the trust.
The Funds account for the transfer of bonds to the trusts as secured borrowings, with the securities transferred remaining in the Funds' investments, and the related floating rate notes reflected as Fund liabilities under the caption, “Payable for floating rate certificate securities” in the Statements of Assets and Liabilities. At November 30, 2011, for Federated Premier Municipal Income Fund, investments with a value of $24,469,603 are held by the trust and serve as collateral for the $17,100,000 in floating-rate certificate securities outstanding at that date, and for the Federated Premier Intermediate Municipal Income Fund, investments with a value of $29,537,220 are held by the trust and serve as collateral for the $19,125,000 in floating-rate certificate securities outstanding at that date. The Federated Premier Municipal Income Fund and the Federated Premier Intermediate Municipal Income Fund recorded interest and trust expenses of $156,508 and $156,350, respectively, for these investments for the year ended November 30, 2011.
While these inverse floater structures are accounted for as secured borrowings, the Funds' Adviser has determined that they do not constitute borrowings for purposes of any fundamental limitation on borrowings that may be applicable to the Funds.
Annual Shareholder Report
The Funds may purchase securities which are considered restricted. Restricted securities are securities that either: (a) cannot be offered for public sale without first being registered, or being able to take advantage of an exemption from registration, under the Securities Act of 1933; or (b) are subject to contractual restrictions on public sales. In some cases, when a security cannot be offered for public sale without first being registered, the issuer of the restricted security has agreed to register such securities for resale, at the issuer's expense, either upon demand by the Funds or in connection with another registered offering of the securities. Many such restricted securities may be resold in the secondary market in transactions exempt from registration. Restricted securities may be determined to be liquid under criteria established by the Trustees. The Funds will not incur any registration costs upon such resales. The Funds' restricted securities are valued at the price provided by dealers in the secondary market or, if no market prices are available, at the fair value as determined in accordance with procedures established by and under the general supervision of the Trustees.
Additional information on restricted securities, excluding securities purchased under Rule 144A, if applicable, that have been deemed liquid by the Trustees, held at November 30, 2011, is as follows:
Federated Premier Municipal Income Fund:
| Security |
Acquisition Date |
Acquisition Cost |
Market Value |
| Cow Creek Band of Umpqua Tribe of Indians, Tax-Exempt Tax Revenue Bonds (Series 2006C), 5.625%, 10/1/2026 | 6/9/2006 | $500,000 | $395,550 |
| New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.50% (7 World Trade Center LLC), 3/1/2035 | 3/15/2005 | $800,000 | $799,800 |
Federated Premier Intermediate Municipal Income Fund:
| Security |
Acquisition Date |
Acquisition Cost |
Market Value |
| Capital Trust Agency, FL, Revenue Bonds (Series 2003A), 8.95% (Seminole Tribe of Florida Convention and Resort Hotel Facilities)/(United States Treasury PRF 10/1/2012@102), 10/1/2033 | 5/9/2003 | $600,000 | $654,960 |
| Cow Creek Band of Umpqua Tribe of Indians, Tax-Exempt Tax Revenue Bonds (Series 2006C), 5.625%, 10/1/2026 | 6/9/2006 | $500,000 | $395,550 |
| New York City, NY IDA, Liberty Revenue Bonds (Series A), 6.25% (7 World Trade Center LLC), 3/1/2015 | 3/15/2005 | $800,000 | $801,632 |
Other
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets, liabilities, expenses and revenues reported in the financial statements. Actual results could differ from those estimated.
Annual Shareholder Report
The following tables summarize share activity:
| Federated Premier Municipal Income Fund |
| Year Ended November 30 | 2011 | 2010 |
| Shares issued to shareholders in payment of distributions declared | 10,838 | 12,750 |
| NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | 10,838 | 12,750 |
| Federated Premier Intermediate Municipal Income Fund |
| Year Ended November 30 | 2011 | 2010 |
| Shares issued to shareholders in payment of distributions declared | 1,395 | 13,829 |
| NET CHANGE RESULTING FROM FUND SHARE TRANSACTIONS | 1,395 | 13,829 |
4. Federal Tax Information
The timing and character of income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP. These differences are due to differing treatments for discount accretion/premium amortization on debt securities, inverse floater structures and expired capital loss carryforwards.
For the year ended November 30, 2011, permanent differences identified and reclassified among the components of net assets were as follows:
| Increase (Decrease) | ||
|
Paid-In Capital |
Undistributed Net Investment Income (Loss) |
Accumulated Net Realized Gains (Losses) |
| Federated Premier Municipal Income Fund | $ — | $(3,681) | $3,681 |
| Federated Premier Intermediate Municipal Income Fund | $(5,504) | $15,713 | $(10,209) |
Net investment income (loss), net realized gains (losses) and net assets were not affected by this reclassification.
The tax character of distributions as reported on the Statements of Changes in Net Assets for the years ended November 30, 2011 and 2010, was as follows:
|
2011 Tax-Exempt Income |
2010 Tax-Exempt Income |
| Federated Premier Municipal Income Fund | $6,352,338 | $6,561,250 |
| Federated Premier Intermediate Municipal Income Fund | $5,716,916 | $6,127,735 |
Annual Shareholder Report
|
Federated Premier Municipal Income Fund |
Federated Premier Intermediate Municipal Income Fund |
| Undistributed tax-exempt income | $544,586 | $398,225 |
| Net unrealized appreciation | $4,308,396 | $6,990,196 |
| Capital loss carryforwards | $(6,757,328) | $(8,986,645) |
The difference between book-basis and tax-basis net unrealized appreciation/depreciation is attributable to differing treatments for discount accretion/premium amortization on debt securities, inverse floater structures and wash sales.
At November 30, 2011, the following amounts apply for federal income tax purposes:
|
Cost of Investments |
Unrealized Appreciation |
Unrealized Depreciation |
Net Unrealized Appreciation/ (Depreciation) |
| Federated Premier Municipal Income Fund | $116,280,354 | 6,504,004 | 2,195,608 | 4,308,396 |
| Federated Premier Intermediate Municipal Income Fund | $130,052,775 | 8,688,627 | 1,698,431 | 6,990,196 |
At November 30, 2011, Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund had capital loss carryforwards of $6,757,328 and $8,986,645, respectively, which will reduce the Funds' taxable income arising from future net realized gains on investments, if any, to the extent permitted by the Code and thus will reduce the amount of distributions to shareholders which would otherwise be necessary to relieve the Funds of any liability for federal income tax. Pursuant to the Code, such capital loss carryforwards will expire as follows:
| 2012 | 2013 | 2015 | 2016 | 2017 | 2018 | 2019 |
Total Capital Loss Carryforwards |
| Federated Premier Municipal Income Fund | $1,006,389 | $678,904 | $ — | $1,763,799 | $2,786,088 | — | $522,148 | $6,757,328 |
| Federated Premier Intermediate Municipal Income Fund | $1,598,165 | $1,175,977 | $615,196 | $1,122,663 | $4,048,132 | $79,207 | $347,305 | $8,986,645 |
For Federated Premier Intermediate Municipal Income Fund, capital loss carryforwards of $5,504 expired during the year ended November 30, 2011.
Annual Shareholder Report
5. Investment Adviser Fee and Other Transactions With Affiliates
Investment Adviser Fee
Each Fund has entered into an Investment Management Agreement (the “Agreement”) with Federated Investment Management Company (the “Adviser”), to serve as investment manager to the Funds. The Agreement provides for an annual management fee, payable daily, at the annual rate of 0.55% of each Fund's managed assets.
In order to reduce the Funds' expenses, the Adviser has contractually agreed to waive a portion of its investment adviser fee at the annual rate of 0.20% of the average daily net value of each Fund's managed assets, inclusive of any assets attributable to any preferred shares that may be issued, from the commencement of operations through December 31, 2007, and at a declining rate thereafter through December 31, 2010. Effective January 1, 2009 and continuing through December 31, 2009, the contractual waiver was reduced to 0.10%. Effective January 1, 2010 and continuing through December 31, 2010, the contractual waiver was reduced to 0.05%. Effective January 1, 2011, the contractual fee waiver expired. For the year ended November 30, 2011, the Adviser waived $4,989 and $5,726 of its fee for Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund, respectively. Additionally, for the year ended November 30, 2011, the Adviser voluntarily reimbursed other operating expenses of $237,837 and $193,806 for Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund, respectively. The Adviser may modify or terminate this voluntary waiver at any time at its sole discretion.
Annual Shareholder Report
Federated Administrative Services (FAS), under the Administrative Services Agreement, provides the Funds with administrative personnel and services. The fee paid to FAS is based on the average aggregate daily net assets of certain Federated funds as specified below:
|
Administrative Fee |
Average Aggregate Daily Net Assets of the Federated Funds |
| 0.150% | on the first $5 billion |
| 0.125% | on the next $5 billion |
| 0.100% | on the next $10 billion |
| 0.075% | on assets in excess of $20 billion |
The administrative fee received during any fiscal year shall be at least $150,000 per portfolio and $40,000 per each additional class of Shares. FAS may voluntarily choose to waive any portion of its fee. FAS can modify or terminate this voluntary waiver at any time at its sole discretion. For the year ended November 30, 2011, FAS waived its entire fee of $150,000 on each Fund.
Interfund Transactions
During the year ended November 30, 2011, the Funds engaged in purchase and sale transactions with funds that have a common investment adviser (or affiliated investment advisers), common Directors/Trustees, and/or common Officers. These purchase and sale transactions complied with Rule 17a-7 under the Act and were as follows:
| Purchases | Sales |
| Federated Premier Municipal Income Fund | $44,225,000 | $43,425,000 |
| Federated Premier Intermediate Municipal Income Fund | $37,330,000 | $35,160,000 |
General
Certain Officers and Trustees of the Funds are Officers and Directors or Trustees of the above companies.
6. PREFERRED SHARES
On February 13, 2003, Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund offered 2,147 and 2,441 Auction Market Preferred Shares (AMPS), respectively. The AMPS are redeemable at the option of the Funds at the redemption price of $25,000 per share plus an amount equal to accumulated, but unpaid dividends thereon through the redemption date. As of November 30, 2011, Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund currently have outstanding 1,463 and 1,676 AMPS, respectively.
Annual Shareholder Report
Whenever AMPS are outstanding, common shareholders will not be entitled to receive any distributions from the Funds unless all accrued dividends on AMPS have been paid, the Funds satisfy the 200% asset coverage requirement, and certain other requirements imposed by any nationally recognized statistical ratings organizations (NRSROs) rating the AMPS have been met. Should these requirements not be met, or should dividends accrued on the AMPS not be paid, the Funds may be restricted in their ability to declare dividends to common shareholders or may be required to redeem certain of the AMPS. At November 30, 2011, there were no such restrictions on the Funds.
7. INVESTMENT TRANSACTIONS
Purchases and sales of investments, excluding long-term U.S. government securities and short-term obligations, for the year ended November 30, 2011, were as follows:
| Purchases | Sales |
| Federated Premier Municipal Income Fund | $44,185,202 | $43,597,903 |
| Federated Premier Intermediate Municipal Income Fund | $30,588,339 | $27,944,653 |
8. RECENT ACCOUNTING PRONOUNCEMENTS
In April 2011, the Financial Accounting Standards Board (FASB) released Accounting Standards Update (ASU) No. 2011-03, “Reconsideration of Effective Control for Repurchase Agreements.” This ASU amends FASB Accounting Standards Codification (ASC) Topic 860, “Transfers and Servicing”; specifically the criteria required to determine whether a repurchase agreement and similar agreements should be accounted for as sales of financial assets or secured borrowings with commitments. This ASU is effective for fiscal years and interim periods beginning after December 15, 2011. Management has concluded that the adoption of ASU No. 2011-03 is not expected to have a material impact on the Funds' financial statements and the accompanying notes, net assets or results of operations.
In addition, in May 2011, FASB released ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs.” This ASU amends FASB ASC Topic 820, “Fair Value Measurement,” to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP. This ASU is effective for fiscal years and interim periods beginning after December 15, 2011. Management has concluded that the adoption of ASU No. 2011-04 is not expected to have a material impact on the Funds' financial statements and the accompanying notes.
Annual Shareholder Report
On December 22, 2011, each Fund issued variable rate municipal term preferred shares (VMTP shares) in a private offering. Federated Premier Municipal Income Fund issued 737 VMTP shares totaling $18.4 million and Federated Premier Intermediate Municipal Income Fund issued 1,080 VMTP shares totaling $27.0 million. Also on December 22, 2011, each Fund used the proceeds from the VMTP share offering to pay for the AMPS it accepted in an AMPS tender offer. Each Fund offered to liquidate outstanding AMPS at a price equal to 96% of the per share redemption price of $25,000 plus an amount equal to accumulated, but unpaid dividends. As a result of this offer to the AMPS shareholders, Federated Premier Municipal Income Fund liquidated 737 AMPS representing 50.4% of those outstanding and Federated Premier Intermediate Municipal Income Fund liquidated 1,080 AMPS representing 64.4% of those outstanding. VMTP shares are a floating-rate form of preferred shares with a mandatory term redemption date of December 22, 2014, unless extended, and dividends that are set weekly to a fixed spread against the Securities Industry and Financial Markets Association Municipal Swap Index. VMTP shares represent preferred shares and rank on parity with AMPS that remain outstanding after the tender offer. VMTP shares are senior in priority to each Fund's outstanding common shares as to payment of dividends. As a result of the AMPS tender offer and corresponding VMTP share issuance, each Fund's leverage amount remains largely unchanged and each Fund maintains its current leveraged strategy.
Management has evaluated subsequent events through the date the financial statements were issued, and determined that no additional events have occurred that require disclosure.
10. Federal Tax Information (Unaudited)
For the year ended November 30, 2011, 100.0% of the distributions from net investment income for each Fund is exempt from federal income tax, other than the federal AMT.
Annual Shareholder ReportReport of Independent Registered Public Accounting Firm
TO THE BOARD OF TRUSTEES AND SHAREHOLDERS OF FEDERATED PREMIER MUNICIPAL INCOME FUND AND FEDERATED PREMIER INTERMEDIATE MUNICIPAL INCOME FUND:
We have audited the accompanying statements of assets and liabilities of Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund (the “Funds”) including the portfolios of investments, as of November 30, 2011, and the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of November 30, 2011, by correspondence with the custodian and others. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Federated Premier Municipal Income Fund and Federated Premier Intermediate Municipal Income Fund, the results of their operations and their cash flows for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Boston, Massachusetts
January 25, 2012
Last Meeting of Shareholders (unaudited)
FEDERATED PREMIER MUNICIPAL INCOME FUND
An Annual Meeting of Fund shareholders (Common Shares and Preferred Shares) was held on October 17, 2011. On July 7, 2011, the record date for shareholders voting at the meeting, there were 6,171,419 total outstanding shares. The following item was considered by shareholders and the results of their voting are listed below. Unless otherwise noted, each matter was approved.
ELECTION OF THREE CLASS II TRUSTEES - COMMON SHARES AND PREFERRED SHARES:
1. J. Christopher Donahue
| For |
Withheld Authority to Vote |
| 5,795,858 | 76,911 |
2. Nicholas P. Constantakis
| For |
Withheld Authority to Vote |
| 5,785,792 | 86,977 |
3. John F. Cunningham
| For |
Withheld Authority to Vote |
| 5,790,998 | 81,771 |
An Annual Meeting of Fund shareholders (Preferred Shares) was held on October 17, 2011. On July 7, 2011, the record date for shareholders voting at the meeting, there were 1,463 total outstanding shares. The following item was considered by shareholders and the results of their voting are listed below. Unless otherwise noted, each matter was approved.
ELECTION OF TWO TRUSTEES - PREFERRED SHARES ONLY:
1. Peter E. Madden
| For |
Withheld Authority to Vote |
| 573 | 5 |
2. John S. Walsh
| For |
Withheld Authority to Vote |
| 573 | 5 |
The following Trustees of the Fund continued their terms as Trustees of the Fund: John W. McGonigle, Maureen Lally-Green, Charles F. Mansfield, Jr., R. James Nicholson, Thomas M. O'Neill and James F. Will.
FEDERATED PREMIER INTERMEDIATE MUNICIPAL INCOME FUND
An Annual Meeting of Fund shareholders (Common Shares and Preferred Shares) was held on October 17, 2011. On July 7, 2011, the record date for shareholders voting at the meeting, there were 6,970,376 total outstanding shares. The following item was considered by shareholders and the results of their voting are listed below. Unless otherwise noted, each matter was approved.
ELECTION OF ThREE CLASS II TRUSTEES - COMMON SHARES AND PREFERRED SHARES:
1. J. Christopher Donahue
| For |
Withheld Authority to Vote |
| 6,449,173 | 157,262 |
2. Nicholas P. Constantakis
| For |
Withheld Authority to Vote |
| 6,393,966 | 212,467 |
3. John F. Cunningham
| For |
Withheld Authority to Vote |
| 6,395,929 | 210,506 |
Annual Shareholder Report
ELECTION OF TWO TRUSTEES - PREFERRED SHARES ONLY:
1. Peter E. Madden
| For |
Withheld Authority to Vote |
| 1,022 | 26 |
2. John S. Walsh
| For |
Withheld Authority to Vote |
| 1,022 | 26 |
The following Trustees of the Fund continued their terms as Trustees of the Fund: John W. McGonigle, Maureen Lally-Green, Charles F. Mansfield, Jr., R. James Nicholson, Thomas M. O'Neill and James F. Will.
Annual Shareholder ReportBoard of Trustees and Fund Officers
The Board is responsible for managing the Funds' business affairs and for exercising all the Funds' powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Funds. Where required, the tables separately list Trustees who are “interested persons” of the Funds (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2011, the Federated Fund Family consisted of 43 investment companies (comprising 134 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Fund Complex.
INTERESTED TRUSTEES BACKGROUND
|
Name Birth Date Positions Held with Funds Date Service Began |
Principal Occupation(s) for Past Five Years, Other Directorships Held and Previous Position(s) |
Year of Term Expiration |
|
J. Christopher Donahue* Birth Date: April 11, 1949 PRESIDENT AND TRUSTEE Began serving: December 2002 |
Principal Occupations: Principal Executive Officer and President of the Federated Fund Family; Director or Trustee of some of the Funds in the Federated Fund Family; President, Chief Executive Officer and Director, Federated
Investors, Inc.; Chairman and Trustee, Federated Investment Management Company; Trustee, Federated Investment Counseling; Chairman and Director, Federated Global Investment Management Corp.; Chairman, Federated Equity Management Company of
Pennsylvania and Passport Research, Ltd. (investment advisory subsidiary of Federated); Trustee, Federated Shareholder Services Company; Director, Federated Services Company. Previous Positions: President, Federated Investment Counseling; President and Chief Executive Officer, Federated Investment Management Company, Federated Global Investment Management Corp. and Passport Research, Ltd. |
2014 |
|
John W. McGonigle* Birth Date: October 26, 1938 EXECUTIVE VICE PRESIDENT, SECRETARY AND TRUSTEE Began serving: December 2002 |
Principal Occupations: Trustee of certain Funds in the Federated Fund Family; Executive Vice President and Secretary of the Federated Fund Family; Vice Chairman, Executive Vice President, Secretary and Director, Federated
Investors, Inc. Previous Positions: Trustee, Federated Investment Management Company and Federated Investment Counseling; Director, Federated Global Investment Management Corp., Federated Services Company and Federated Securities Corp. |
2013 |
| * | Reasons for “interested” status: J. Christopher Donahue and John W. McGonigle are “interested” due to their beneficial ownership of shares of Federated Investors, Inc. and the positions they hold with Federated and its subsidiaries. |
INDEPENDENT TRUSTEES BACKGROUND
|
Name Birth Date Address Positions Held with Funds Date Service Began |
Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Year of Term Expiration |
|
Nicholas P. Constantakis++** Birth Date: September 3, 1939 TRUSTEE Began serving: December 2002 |
Principal Occupation: Director or Trustee of the Federated Fund Family. Other Directorships Held: Director, Chairman of the Audit Committee, and member of the Compensation Committee, Michael Baker Corporation (architecture, engineering and construction services). Previous Position: Partner, Andersen Worldwide SC. Qualifications: Public accounting and director experience. |
2014 |
|
John F. Cunningham++ Birth Date: March 5, 1943 TRUSTEE Began serving: December 2002 |
Principal Occupations: Director or Trustee of the Federated Fund Family. Other Directorships Held: Chairman, President and Chief Executive Officer, Cunningham & Co., Inc. (strategic business consulting); Trustee Associate, Boston College. Previous Positions: Director, Redgate Communications and EMC Corporation (computer storage systems); Chairman of the Board and Chief Executive Officer, Computer Consoles, Inc.; President and Chief Operating Officer, Wang Laboratories; Director, First National Bank of Boston; Director, Apollo Computer, Inc. Qualifications: Business management and director experience. |
2014 |
|
Maureen Lally-Green++ Birth Date: July 5, 1949 TRUSTEE Began serving: August 2009 |
Principal Occupations: Director or Trustee of the Federated Fund Family; Director, Office of Church Relations, Diocese of Pittsburgh; Adjunct professor of law, Duquesne University School of Law. Other Directorships Held: Director, Auberle; Trustee, St. Francis University; Director, Ireland Institute of Pittsburgh; Director, UPMC Mercy Hospital; Regent, St. Vincent Seminary; Director, Epilepsy Foundation of Western and Central Pennsylvania; Director, Saint Thomas More Society, Allegheny County. Previous Positions: Pennsylvania Superior Court Judge. Qualifications: Legal and director experience. |
2013 |
|
Name Birth Date Address Positions Held with Funds Date Service Began |
Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Year of Term Expiration |
|
Peter E. Madden+ ++ Birth Date: March 16, 1942 TRUSTEE Began serving: December 2002 |
Principal Occupation: Director or Trustee, and Chairman of the Board of Directors or Trustees, of the Federated Fund Family. Previous Positions: Representative, Commonwealth of Massachusetts General Court; President, Chief Operating Officer and Director, State Street Bank and Trust Company and State Street Corporation (retired); Director, VISA USA and VISA International; Chairman and Director, Massachusetts Bankers Association; Director, Depository Trust Corporation; Director, The Boston Stock Exchange. Qualifications: Business management, mutual fund services and director experience. |
2012 |
|
Charles F. Mansfield, Jr.**++ Birth Date: April 10, 1945 TRUSTEE Began serving: December 2002 |
Principal Occupations: Director or Trustee of the Federated Fund Family; Management Consultant. Previous Positions: Chief Executive Officer, PBTC International Bank; Partner, Arthur Young & Company (now Ernst & Young LLP); Chief Financial Officer of Retail Banking Sector, Chase Manhattan Bank; Senior Vice President, HSBC Bank USA (formerly Marine Midland Bank); Vice President, Citibank; Assistant Professor of Banking and Finance, Frank G. Zarb School of Business, Hofstra University; Executive Vice President, DVC Group, Inc. (marketing, communications and technology). Qualifications: Banking, business management, education and director experience. |
2012 |
|
Thomas M. O'Neill++** Birth Date: June 14, 1951 TRUSTEE Began serving: October 2006 |
Principal Occupations: Director or Trustee, Vice Chairman of the Audit Committee of the Federated Fund Family; Sole Proprietor, Navigator Management Company (investment and strategic consulting). Other Directorships Held: Board of Overseers, Children's Hospital of Boston; Visiting Committee on Athletics, Harvard College; Board of Directors, Medicines for Humanity; Board of Directors, The Golisana Children's Museum of Naples, Florida. Previous Positions: Chief Executive Officer and President, Managing Director and Chief Investment Officer, Fleet Investment Advisors; President and Chief Executive Officer, Aeltus Investment Management, Inc.; General Partner, Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer, The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer, Fleet Bank; Director and Consultant, EZE Castle Software (investment order management software); and Director, Midway Pacific (lumber). Qualifications: Business management, mutual fund, director and investment experience. |
2013 |
|
Name Birth Date Address Positions Held with Funds Date Service Began |
Principal Occupation(s) for Past Five Years, Other Directorships Held, Previous Position(s) and Qualifications |
Year of Term Expiration |
|
John S. Walsh+**++ Birth Date: November 28, 1957 TRUSTEE Began serving: December 2002 |
Principal Occupations: Director or Trustee, Chairman of the Audit Committee of the Federated Fund Family; President and Director, Heat Wagon, Inc. (manufacturer of construction temporary heaters); President and Director,
Manufacturers Products, Inc. (distributor of portable construction heaters); President, Portable Heater Parts, a division of Manufacturers Products, Inc. Previous Position: Vice President, Walsh & Kelly, Inc. Qualifications: Business management and director experience. |
2012 |
| + | Member of Executive Committee |
| ** | Member of Audit Committee |
| ++ | Member of Nominating Committee |
OFFICERS
|
Name Birth Date Positions Held with Funds Date Service Began |
Principal Occupation(s) for Past Five Years and Previous Position(s) |
|
Richard A. Novak Birth Date: December 25, 1963 TREASURER Began serving: January 2006 |
Principal Occupations: Principal Financial Officer and Treasurer of the Federated Fund Family; Senior Vice President, Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp., Edgewood
Services, Inc. and Southpointe Distribution Services, Inc. Previous Positions: Controller of Federated Investors, Inc.; Vice President, Finance of Federated Services Company; held various financial management positions within The Mercy Hospital of Pittsburgh; Auditor, Arthur Andersen & Co. |
|
Richard B. Fisher Birth Date: May 17, 1923 VICE PRESIDENT Began serving: December 2002 |
Principal Occupations: Vice Chairman or Vice President of some of the Funds in the Federated Fund Family; Vice Chairman, Federated Investors, Inc.; Chairman, Federated Securities Corp. Previous Positions: President and Director or Trustee of some of the Funds in the Federated Fund Family; Executive Vice President, Federated Investors, Inc.; Director and Chief Executive Officer, Federated Securities Corp. |
|
Brian P. Bouda Birth Date: February 28, 1947 CHIEF COMPLIANCE OFFICER AND SENIOR VICE PRESIDENT Began serving: August 2004 |
Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Fund Family; Vice President and Chief Compliance Officer of Federated Investors, Inc. and Chief Compliance Officer of its subsidiaries. Mr. Bouda joined Federated in 1999 and is a member of the American Bar Association and the State Bar Association of Wisconsin. |
|
Name Birth Date Positions Held with Funds Date Service Began |
Principal Occupation(s) for Past Five Years and Previous Position(s) |
|
Robert J. Ostrowski Birth Date: April 26, 1963 SENIOR VICE PRESIDENT AND CHIEF INVESTMENT OFFICER Began serving: February 2010 |
Principal Occupations: Robert J. Ostrowski joined Federated in 1987 as an Investment Analyst and became a Portfolio Manager in 1990. He was named Chief Investment Officer of taxable fixed-income products in 2004 and also serves as a Senior Portfolio Manager. Mr. Ostrowski became an Executive Vice President of the Fund's Adviser in 2009 and served as a Senior Vice President of the Fund's Adviser from 1997 to 2009. Mr. Ostrowski has received the Chartered Financial Analyst designation. He received his M.S. in Industrial Administration from Carnegie Mellon University. |
Evaluation and Approval of Advisory Contract – May 2011
federated premier municipal income fund (“FMN” or the “Fund”)
Federated premier intermediate municipal income fund (“fpt” or the “fund”)
The Fund's Board reviewed each Fund's investment advisory contract at meetings held in May 2011. The Board's decision regarding these contracts reflects the exercise of its business judgment on whether to continue the existing arrangements.
In this connection, the Federated Funds' Board had previously appointed a Senior Officer, whose duties include specified responsibilities relating to the process by which advisory fees are to be charged to a Federated fund. The Senior Officer has the authority to retain consultants, experts, or staff as may be reasonably necessary to assist in the performance of his duties, reports directly to the Board, and may be terminated only with the approval of a majority of the independent members of the Board. The Senior Officer prepared and furnished to the Board an independent, written evaluation that covered topics discussed below (the “Evaluation”). The Board considered that Evaluation, along with other information, in deciding to approve the advisory contract.
During its review of these contracts, the Board considered compensation and benefits received by the Adviser. This included the fees received for services provided to the Fund by other entities in the Federated organization and research services received by the Adviser from brokers that execute Federated fund trades, as well as advisory fees. The Board is also familiar with and considered judicial decisions concerning allegedly excessive investment advisory fees which have indicated that the following factors may be relevant to an Adviser's fiduciary duty with respect to its receipt of compensation from a fund: the nature and quality of the services provided by the Adviser, including the performance of the Fund; the Adviser's cost of providing the services; the extent to which the Adviser may realize “economies of scale” as the Fund grows larger; any indirect benefits that may accrue to the Adviser and its affiliates as a result of the Adviser's relationship with the Fund; performance and expenses of comparable funds; and the extent to which the independent Board members are fully informed about all facts the Board deems relevant bearing on the Adviser's services and fees. The Board further considered management fees (including any components thereof) charged to institutional and other clients of the Adviser for what might be viewed as like services and the cost to the Adviser and its affiliates of supplying services pursuant to the management fee agreements, excluding any intra-corporate profit and profit margins of the Adviser and its affiliates for supplying such services. The Board was aware of these factors and was guided by them in its review of the Fund's advisory contract to the extent it considered them to be appropriate and relevant, as discussed further below.
Annual Shareholder Report
With respect to the Fund's performance and expenses in particular, the Board has found the use of comparisons to other closed-end funds with comparable investment programs to be relevant, given the high degree of competition in the investment company industry. The Board focused on comparisons with other similar funds more heavily than non-fund products or services because it is believed that they are more relevant. For example, other closed-end funds are the products most like the Fund, they are readily available to Fund shareholders Annual Shareholder Report
The Senior Officer reviewed information compiled by Federated, using data supplied by independent fund ranking organizations, regarding the performance of, and fees charged by, other regulated investment companies, noting his view that comparisons to fund peer groups are relevant in judging the reasonableness of proposed fees.
For the one-year, three-year and five-year periods covered by the Evaluation, FMN's performance was above the median of the relevant peer group.
For the one-year, three-year and five-year periods covered by the Evaluation, FPT's performance was above the median of the relevant peer group.
The Board also received financial information about Federated, including information regarding the compensation and benefits Federated derived from its relationships with the Federated funds. This information covered not only the fees under the advisory contracts, but also fees received by Federated's subsidiaries for providing other services to the Federated funds under separate contracts (e.g., for serving as the Federated funds' administrator). The information also detailed any indirect benefit Federated may derive from its receipt of research services from brokers who execute Federated fund trades. In addition, the Board also considered the fact that, in order for a fund to be competitive in the marketplace, Federated and its affiliates frequently waived fees and/or reimbursed expenses and have disclosed to fund investors and/or indicated to the Board their intention to do so in the future, where appropriate. Moreover, the Board receives regular reporting as to the institution or elimination of these voluntary waivers.
Annual Shareholder Report
The Board and the Senior Officer also reviewed information compiled by Federated comparing profitability information for Federated to other publicly held fund management companies. In this regard, the Senior Officer noted the limited availability of such information, but nonetheless concluded that Federated's profit margins did not appear to be excessive and the Board agreed.
The Board also considered whether the Fund might benefit from “economies of scale” and noted that, as a “closed-end fund,” which has made an offering of a fixed number of common shares and (other than the issuance of preferred shares contemplated at the time of the Fund's initial public offering) has not made and does not expect to make additional offerings to raise more assets, the Fund is unlikely to grow materially in size and, as a consequence, there are no meaningful “economies of scale” to be realized from internal growth. Accordingly, the Board concluded that this was not a relevant consideration in its overall evaluation.
It was noted in the materials for the Board meeting that for the period covered by the Evaluation, FMN's investment advisory fee was above the median of the relevant peer group. The Board reviewed the fees and other expenses of FMN with the Adviser and was satisfied that the overall expense structure of FMN remained competitive. The Board will continue to monitor advisory fees and other expenses borne by FMN.
It was noted in the materials for the Board meeting that for the period covered by the Evaluation, FPT's investment advisory fee was above the median of the relevant peer group. The Board reviewed the fees and other expenses of FPT with the Adviser and was satisfied that the overall expense structure of FPT remained competitive. The Board will continue to monitor advisory fees and other expenses borne by FPT.
The Senior Officer noted that, considering the totality of the circumstances, and all of the factors referenced within his Evaluation, he had concluded that, subject to comments and recommendations made within his Evaluation, his observations and the information accompanying the Evaluation supported a finding by the Board that the management fees for each of the funds are reasonable and that Federated appeared to provide appropriate administrative services to the Fund for the fees paid. Under these circumstances, no changes Annual Shareholder Report
In its decision to continue an existing investment advisory contract, the Board was mindful of the potential disruptions of the Fund's operations and various risks, uncertainties and other effects that could occur as a result of a decision to terminate or not renew an advisory contract. In particular, the Board recognized that many shareholders have invested in the Fund on the strength of the Adviser's industry standing and reputation and with the expectation that the Adviser will have a continuing role in providing advisory services to the Fund. Thus, the Board's approval of the advisory contract reflected the fact that it is the shareholders who have effectively selected the Adviser by virtue of having invested in the Fund.
The Board based its decision to approve the advisory contract on the totality of the circumstances and relevant factors and with a view to past and future long-term considerations. Not all of the factors and considerations identified above were necessarily relevant to the Fund, nor did the Board consider any one of them to be determinative. With respect to the factors that were relevant, the Board's decision to approve the contract reflects its determination that Federated's performance and actions provided a satisfactory basis to support the decision to continue the existing arrangements.
Annual Shareholder ReportThe following description of each Fund's Dividend Reinvestment Plan (the “Plan”) is furnished to you annually as required by federal securities laws.
Unless the registered owner of a Fund's common shares elects to receive cash by contacting Computershare Trust Co., N.A. (the “Plan Administrator”), all dividends declared on common shares of the Fund will be automatically reinvested by the Plan Administrator, as agent for shareholders in the Plan, in additional common shares of the Fund. Common shareholders who elect not to participate in the Plan will receive all dividends and other distributions in cash. You may elect not to participate in the Plan and to receive all dividends in cash by contacting the Plan Administrator at the address set forth below if your Shares are registered in your name, or by contacting your bank, broker, or other nominee if your Shares are held in street or other nominee name. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by written notice to the Plan Administrator. Such notice will be effective for a dividend if received and processed by the Plan Administrator prior to the dividend record date; otherwise the notice will be effective with respect to any subsequently declared dividend or other distribution. Some brokers may automatically elect to receive cash on your behalf and may reinvest that cash in additional common shares of the Fund for you. If you wish for all dividends declared on your common shares to be automatically reinvested pursuant to the Plan, please contact your broker.
The Plan Administrator will open an account for each common shareholder under the Plan in the same name in which the shareholder's common shares are registered. Whenever the Fund declares a dividend or other distribution payable in cash (together, a “dividend”), non-participants in the Plan will receive cash, and participants in the Plan will receive the equivalent in common shares. The common shares will be acquired by the Plan Administrator for the participants' accounts, depending upon the circumstances described below, either: (1) through receipt from the Fund of additional authorized but unissued common shares (“newly issued common shares”); or (2) by purchase of outstanding common shares on the open market (“open-market purchases”) on the New York Stock Exchange or elsewhere. If, on the payment date for a dividend, the closing market price plus estimated brokerage commissions per common share is equal to or greater than the net asset value (NAV) per common share, the Plan Administrator will invest the dividend amount on behalf of the participants in newly issued common shares. The number of newly issued common shares to be credited to each participant's account will be determined by dividing the dollar amount of the dividend by the NAV per common share on the payment date; provided that, if the NAV is less than or equal to 95% of the closing market value on the payment date, the dollar amount of the dividend will be divided by 95% of the closing market price per common share on the payment date. If, on the payment date for any dividend, Annual Shareholder Report
In the event of a market discount on the payment date for any dividend, the Plan Administrator will have until the last business day before the next date on which the common shares trade on an “ex-dividend” basis or 30 days after the payment date for such dividend, whichever is sooner (the “last purchase date”), to invest the dividend amount in common shares acquired in open-market purchases. It is contemplated that the Funds will pay monthly income dividends. Therefore, the period during which open-market purchases can be made will exist only from the payment date of each dividend through the day before the next “ex-dividend” date, which will be approximately ten days. If, before the Plan Administrator has completed its open-market purchases, the market price per common share exceeds the NAV per common share, the average per share purchase price paid by the Plan Administrator may exceed the NAV of the common shares, resulting in the acquisition of fewer common shares than if the dividend had been paid in newly issued common shares on the dividend payment date. Because of the foregoing difficulty with respect to open-market purchases, the Plan provides that if the Plan Administrator is unable to invest the full dividend amount in open-market purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making open-market purchases and may invest the uninvested portion of the dividend amount in newly issued common shares at the NAV per common share at the close of business on the last purchase date; provided that, if the NAV is less than or equal to 95% of the then current market price per common share, the dollar amount of the dividend will be divided by 95% of the market price on the payment date.
The Plan Administrator maintains all shareholders' accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Common shares in the account of each Plan participant will be held by the Plan Administrator on behalf of the Plan participant, and each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for shares held under the Plan in accordance with the instructions of the participants.
In the case of record shareholders such as banks, brokers, or nominees which hold common shares for others who are the beneficial owners, the Plan Administrator will administer the Plan on the basis of the number of common shares certified from time to time by the record holder as held for the account of beneficial owners who participate in the Plan.
Annual Shareholder Report
Each Fund reserves the right to amend or terminate its Plan. There is no direct service charge to participants with regard to purchases in the Plan; however, each Fund reserves the right to amend its Plan to include a service charge payable by the participants.
All correspondence or questions concerning the Plan should be directed to the Plan Administrator, Computershare Trust Company, N.A., P.O. Box 43011, Providence, RI 02940-3011 or by telephone at (800) 730-6001.
The address of the principal office of the Funds is 4000 Ericsson Drive, Warrendale, PA 15086-7561.
The Funds' transfer agent is Computershare Trust Company, N.A., P.O. Box 43011, Providence, RI 02940-3011.
Annual Shareholder Report
A description of the policies and procedures that each Fund uses to determine how to vote proxies, if any, relating to securities held in the Fund's portfolio is available, without charge and upon request, by calling 1-800-341-7400. A report on “Form N-PX” of how the Fund voted any proxies during the most recent 12-month period ended June 30 is available from Federated's website at FederatedInvestors.com. To access this information from the home page, select “All” under “Asset Classes.” Scroll to “Closed-End Funds” and select a Fund name and share class, if applicable, to go to the Fund Overview page. On the Fund Overview page, select the “Documents” tab. At the bottom of that page, select “Proxy Voting Record Report (Form N-PX).” Form N-PX filings are also available at the SEC's website at www.sec.gov.
Each Fund files with the SEC a complete schedule of its portfolio holdings, as of the close of the first and third quarters of its fiscal year, on “Form N-Q.” These filings are available on the SEC's website at www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. (Call 1-800-SEC-0330 for information on the operation of the Public Reference Room.) You may also access this information from the “Products” section of the Federated Investors website at FederatedInvestors.com. From the home page, select “All” under “Asset Classes.” Scroll to “Closed-End Funds” and select a Fund name and share class, if applicable, to go to the Fund Overview page. On the Fund Overview page, select the “Documents” tab. At the bottom of that page, select “SEC Filings” then “N-Q” from the list of filings.
Source of Distributions – Notice
Under the federal securities laws, the Funds are required to provide a notice to shareholders regarding the source of distributions made by the Funds if such distributions are from sources other than ordinary investment income. In addition, important information regarding the Funds' distributions, if applicable, is available in the “Products” section of Federated's website at FederatedInvestors.com. To access this information from the home page, select “All” under “Asset Classes.” Scroll to “Closed-End Funds” and select a Fund name and share class, if applicable, to go to the “Fund Overview” page. On the “Fund Overview” page, select the “Tax Information” tab, then select a year.
Annual Shareholder Report
The Funds' reports on Form N-CSR and Form N-Q filed with the SEC during the past fiscal year, including the annual report for the year ended November 30, 2010, have contained the certifications of the Funds' Chief Executive Officer and Chief Financial Officer regarding the quality of the Funds' public disclosure required by Section 302 of the Sarbanes-Oxley Act.
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY
In an effort to reduce costs and avoid duplicate mailings, the Fund(s) intend to deliver a single copy of certain documents to each household in which more than one shareholder of the Fund(s) resides (so-called “householding”), as permitted by applicable rules. The Fund's “householding” program covers its Semi-Annual and Annual Shareholder Reports and any Proxies or information statements. Shareholders must give their written consent to participate in the “householding” program. The Fund is also permitted to treat a shareholder as having given consent (“implied consent”) if (i) shareholders with the same last name, or believed to be members of the same family, reside at the same street address or receive mail at the same post office box, (ii) the Fund gives notice of its intent to “household” at least sixty (60) days before it begins “householding” and (iii) none of the shareholders in the household have notified the Fund(s) or their agent of the desire to “opt out” of “householding.” Shareholders who have granted written consent, or have been deemed to have granted implied consent, can revoke that consent and opt out of “householding” at any time: shareholders who purchased shares through an intermediary should contact their representative; other shareholders may call the Fund at 1-800-730-6001 or email CEinfo@federatedinvestors.com.
Closed-end funds are not bank deposits or obligations, are not guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency. Investment in closed-end funds involves investment risk, including the possible loss of principal.
This Overview and Report is for shareholder information. This is not a Prospectus intended for use in the sale of Fund Shares. Statements and other information contained in this Overview and Report are as dated and subject to change.
Federated Premier Municipal Income Fund
Federated Premier Intermediate Municipal Income Fund
Federated Investors Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Cusip 31423P108
Cusip 31423P207
Cusip 31423M105
Cusip 31423M204
29861 (1/12)
Federated is a registered trademark of Federated Investors, Inc.
2012 ©
Federated Investors, Inc.
Item 2. Code of Ethics
(a) As of the end of the period covered by this report, the registrant has adopted a code of ethics (the "Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers") that applies to the registrant's Principal Executive Officer and Principal Financial Officer; the registrant's Principal Financial Officer also serves as the Principal Accounting Officer.
(c) There were no amendments to or waivers from the Section 406 Standards for Investment Companies -- Ethical Standards for Principal Executive and Financial Officers during the period covered by this report.
(f)(3) The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant at 1-800-341-7400, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.
Item 3. Audit Committee Financial Expert
The registrant's Board has determined that each of the following members of the Board's Audit Committee is an “audit committee financial expert,” (as defined in Item 3 of Form N-CSR) and is "independent," for purposes of this Item: Nicholas P. Constantakis, Charles F. Mansfield, Jr., Thomas M. O’Neill and John S. Walsh.
Item 4. Principal Accountant Fees and Services
(a) Audit Fees.
Audit Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2011 - $32,650
Fiscal year ended 2010 - $31,000
(b) Audit-Related Fees.
Audit-Related Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2011 - $10,000
Fiscal year ended 2010 - $10,024
Fiscal year ended 2011- Review of Preferred Share asset maintenance test calculation.
Fiscal year ended 2010- Review of Preferred Share asset maintenance test calculation and attending audit committee meeting.
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(c) Tax Fees.
Tax Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2011 - $0
Fiscal year ended 2010 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $3,576 and $0 respectively. Fiscal year ended 2011- Tax preparation fees for fiscal year end 2010.
(d) All Other Fees.
All Other Fees billed to the registrant for the two most recent fiscal years:
Fiscal year ended 2011 - $0
Fiscal year ended 2010 - $0
Amount requiring approval of the registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, $0 and $0 respectively.
(e)(1) Audit Committee Policies regarding Pre-approval of Services.
The Audit Committee is required to pre-approve audit and non-audit services performed by the independent auditor in order to assure that the provision of such services do not impair the auditor’s independence. Unless a type of service to be provided by the independent auditor has received general pre-approval, it will require specific pre-approval by the Audit Committee. Any proposed services exceeding pre-approved cost levels will require specific pre-approval by the Audit Committee.
Certain services have the general pre-approval of the Audit Committee. The term of the general pre-approval is 12 months from the date of pre-approval, unless the Audit Committee specifically provides for a different period. The Audit Committee will annually review the services that may be provided by the independent auditor without obtaining specific pre-approval from the Audit Committee and may grant general pre-approval for such services. The Audit Committee will revise the list of general pre-approved services from time to time, based on subsequent determinations. The Audit Committee will not delegate its responsibilities to pre-approve services performed by the independent auditor to management.
The Audit Committee has delegated pre-approval authority to its Chairman. The Chairman will report any pre-approval decisions to the Audit Committee at its next scheduled meeting. The Committee will designate another member with such pre-approval authority when the Chairman is unavailable.
AUDIT SERVICES
The annual Audit services engagement terms and fees will be subject to the specific pre-approval of the Audit Committee. The Audit Committee must approve any changes in terms, conditions and fees resulting from changes in audit scope, registered investment company (RIC) structure or other matters.
In addition to the annual Audit services engagement specifically approved by the Audit Committee, the Audit Committee may grant general pre-approval for other Audit Services, which are those services that only the independent auditor reasonably can provide. The Audit Committee has pre-approved certain Audit services, all other Audit services must be specifically pre-approved by the Audit Committee.
AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements or that are traditionally performed by the independent auditor. The Audit Committee believes that the provision of Audit-related services does not impair the independence of the auditor, and has pre-approved certain Audit-related services, all other Audit-related services must be specifically pre-approved by the Audit Committee.
TAX SERVICES
The Audit Committee believes that the independent auditor can provide Tax services to the Company such as tax compliance, tax planning and tax advice without impairing the auditor’s independence. However, the Audit Committee will not permit the retention of the independent auditor in connection with a transaction initially recommended by the independent auditor, the purpose of which may be tax avoidance and the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committee has pre-approved certain Tax services, all Tax services involving large and complex transactions must be specifically pre-approved by the Audit Committee.
ALL OTHER SERVICES
With respect to the provision of services other than audit, review or attestation services the pre-approval requirement is waived if:
(1) The aggregate amount of all such services provided constitutes no more than five percent of the total amount of revenues paid by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant to its accountant during the fiscal year in which the services are provided;
(2) Such services were not recognized by the registrant, the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant at the time of the engagement to be non-audit services; and
(3) Such services are promptly brought to the attention of the Audit Committee of the issuer and approved prior to the completion of the audit by the Audit Committee or by one or more members of the Audit Committee who are members of the board of directors to whom authority to grant such approvals has been delegated by the Audit Committee.
The Audit Committee may grant general pre-approval to those permissible non-audit services classified as All Other services that it believes are routine and recurring services, and would not impair the independence of the auditor.
The SEC’s rules and relevant guidance should be consulted to determine the precise definitions of prohibited non-audit services and the applicability of exceptions to certain of the prohibitions.
PRE-APPROVAL FEE LEVELS
Pre-approval fee levels for all services to be provided by the independent auditor will be established annually by the Audit Committee. Any proposed services exceeding these levels will require specific pre-approval by the Audit Committee.
PROCEDURES
Requests or applications to provide services that require specific approval by the Audit Committee will be submitted to the Audit Committee by both the independent auditor and the Principal Accounting Officer and/or Internal Auditor, and must include a joint statement as to whether, in their view, the request or application is consistent with the SEC’s rules on auditor independence.
(e)(2) Percentage of services identified in items 4(b) through 4(d) that were approved by the registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
4(b)
Fiscal year ended 2011 – 0%
Fiscal year ended 2010 - 0%
Percentage of services provided to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(c)
Fiscal year ended 2011 – 0%
Fiscal year ended 2010 – 0%
Percentage of services provided to the registrants investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
4(d)
Fiscal year ended 2011 – 0%
Fiscal year ended 2010 – 0%
Percentage of services provided to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were approved by the registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X, 0% and 0% respectively.
(f) Not Applicable
(g) Non-Audit Fees billed to the registrant, the registrant’s investment adviser, and certain entities controlling, controlled by or under common control with the investment adviser:
Fiscal year ended 2011 - $322,095
Fiscal year ended 2010 - $307,710
(h) The registrant’s Audit Committee has considered whether the provision of non-audit services that were rendered to the registrant’s adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Item 5. Audit Committee of Listed Registrants
The registrant has established an Audit Committee of the Board as described in Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit Committee consists of the following Board members: Nicholas P. Constantakis, Charles F. Mansfield, Jr., Thomas M. O’Neill and John S. Walsh.
Item 6. Investments
(a) The registrant’s Schedule of Investments is included as part of the Report to Stockholders filed under Item 1 of this form.
(b) Not Applicable; Fund had no divestments during the reporting period covered since the previous Form N-CSR filing.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
VOTING PROXIES ON FUND PORTFOLIO SECURITIES
The Board has delegated to the Adviser authority to vote proxies on the securities held in the Fund’s portfolio. The Board has also approved the Adviser’s policies and procedures for voting the proxies, which are described below.
Proxy Voting Policies
The Adviser’s general policy is to cast proxy votes in favor of proposals that the Adviser anticipates will enhance the long-term value of the securities being voted. Generally, this will mean voting for proposals that the Adviser believes will: improve the management of a company; increase the rights or preferences of the voted securities; and/or increase the chance that a premium offer would be made for the company or for the voted securities.
The following examples illustrate how these general policies may apply to proposals submitted by a company’s board of directors. However, whether the Adviser supports or opposes a proposal will always depend on the specific circumstances described in the proxy statement and other available information.
On matters of corporate governance, generally the Adviser will vote for the full slate of directors nominated in an uncontested election; and for proposals to: require a company’s audit committee to be comprised entirely of independent directors; require independent tabulation of proxies and/or confidential voting by shareholders; reorganize in another jurisdiction (unless it would reduce the rights or preferences of the securities being voted); ratify the board’s selection of auditors (unless compensation for non-audit services exceeded 50% of the total compensation received from the company, or the previous auditor was dismissed because of a disagreement with the company); and repeal a shareholder rights plan (also known as a “poison pill”). The Adviser will generally vote against the adoption of such a plan (unless the plan is designed to facilitate, rather than prevent, unsolicited offers for the company).
On matters of capital structure, generally the Adviser will vote: against proposals to authorize or issue shares that are senior in priority or voting rights to the securities being voted; and for proposals to: reduce the amount of shares authorized for issuance; authorize a stock repurchase program; and grant preemptive rights to the securities being voted. The Adviser will generally vote against proposals to eliminate such preemptive rights.
On matters relating to management compensation, generally the Adviser will vote: for stock incentive plans that align the recipients’ interests with the interests of shareholders without creating undue dilution; against proposals that would permit the amendment or replacement of outstanding stock incentives with new stock incentives having more favorable terms; and against executive compensation plans that do not disclose the maximum amounts of compensation that may be awarded or the criteria for determining awards.
On matters relating to corporate transactions, the Adviser will vote proxies relating to proposed mergers, capital reorganizations, and similar transactions in accordance with the general policy, based upon its analysis of the proposed transaction. The Adviser will vote proxies in contested elections of directors in accordance with the general policy, based upon its analysis of the opposing slates and their respective proposed business strategies. Some transactions may also involve proposed changes to the company’s corporate governance, capital structure or management compensation. The Adviser will vote on such changes based on its evaluation of the proposed transaction or contested election. In these circumstances, the Adviser may vote in a manner contrary to the general practice for similar proposals made outside the context of such a proposed transaction or change in the board. For example, if the Adviser decides to vote against a proposed transaction, it may vote for anti-takeover measures reasonably designed to prevent the transaction, even though the Adviser typically votes against such measures in other contexts.
The Adviser generally votes against proposals submitted by shareholders without the favorable recommendation of a company’s board. The Adviser believes that a company’s board should manage its business and policies, and that shareholders who seek specific changes should strive to convince the board of their merits or seek direct representation on the board.
In addition, the Adviser will not vote if it determines that the consequences or costs outweigh the potential benefit of voting. For example, if a foreign market requires shareholders casting proxies to retain the voted shares until the meeting date (thereby rendering the shares “illiquid” for some period of time), the Adviser will not vote proxies for such shares.
Proxy Voting Procedures
The Adviser has established a Proxy Voting Committee (Proxy Committee), to exercise all voting discretion granted to the Adviser by the Board in accordance with the proxy voting policies. The Adviser has hired Glass Lewis & Co. (GL) to obtain, vote, and record proxies in accordance with the Proxy Committee’s directions. The Proxy Committee has supplied GL with general voting instructions that represent decisions made by the Proxy Committee in order to vote common proxy proposals; however, the Proxy Committee retains the right to modify these voting instructions at any time or to vote contrary to the voting instructions at any time in order to cast proxy votes in a manner that the Proxy Committee believes is consistent with the Adviser’s general policy. GL may vote any proxy as directed in the voting instructions without further direction from the Proxy Committee and may make any determinations required to implement the voting instructions. However, if the voting instructions require case-by-case direction for a proposal, GL shall provide the Proxy Committee with all information that it has obtained regarding the proposal and the Proxy Committee will provide specific direction to GL.
Conflicts of Interest
The Adviser has adopted procedures to address situations where a matter on which a proxy is sought may present a potential conflict between the interests of the Fund (and its shareholders) and those of the Adviser or Distributor. This may occur where a significant business relationship exists between the Adviser (or its affiliates) and a company involved with a proxy vote. A company that is a proponent, opponent, or the subject of a proxy vote, and which to the knowledge of the Proxy Committee has this type of significant business relationship, is referred to as an “Interested Company.”
The Adviser has implemented the following procedures in order to avoid concerns that the conflicting interests of the Adviser have influenced proxy votes. Any employee of the Adviser who is contacted by an Interested Company regarding proxies to be voted by the Adviser must refer the Interested Company to a member of the Proxy Committee, and must inform the Interested Company that the Proxy Committee has exclusive authority to determine how the Adviser will vote. Any Proxy Committee member contacted by an Interested Company must report it to the full Proxy Committee and provide a written summary of the communication. Under no circumstances will the Proxy Committee or any member of the Proxy Committee make a commitment to an Interested Company regarding the voting of proxies or disclose to an Interested Company how the Proxy Committee has directed such proxies to be voted. If the voting instructions already provide specific direction on the proposal in question, the Proxy Committee shall not alter or amend such directions. If the voting instructions require the Proxy Committee to provide further direction, the Proxy Committee shall do so in accordance with the proxy voting policies, without regard for the interests of the Adviser with respect to the Interested Company. If the Proxy Committee provides any direction as to the voting of proxies relating to a proposal affecting an Interested Company, it must disclose to the Fund’s Board information regarding: the significant business relationship; any material communication with the Interested Company; the matter(s) voted on; and how, and why, the Adviser voted as it did. Alternatively, the Proxy Committee may seek direction from the Fund’s Board on how a proposal concerning an Interested Company shall be voted, and shall follow any such direction provided by the Board. In seeking such direction, the Proxy Committee will disclose the reason such company is considered an Interested Company and may provide a recommendation on how such proposal should be voted and the basis for such recommendation.
If the Fund holds shares of another investment company for which the Adviser (or an affiliate) acts as an investment adviser, the Proxy Committee will vote the Fund’s proxies in the same proportion as the votes cast by shareholders who are not clients of the Adviser at any shareholders’ meeting called by such investment company, unless otherwise directed by the Board.
Proxy Voting Report
A report on "Form N-PX" of how the Fund voted any proxies during the most recent 12-month period ended June 30 is available through Federated's website. Go to FederatedInvestors.com; from the home page, select “All” under “Asset Classes”;” scroll to “Closed-End Funds” and select the Fund name and share class, if applicable, to go to the Fund Overview page, select the “Documents” tab; at the bottom of that page, select “Proxy Voting Record Report (Form N-PX).” Form N-PX filings are also available at the SEC’s website at www.sec.gov.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
As of the date of filing of the report, the Portfolio Managers listed below are jointly and primarily responsible for managing the Fund’s assets.
Lee R. Cunningham II
Lee R. Cunningham II has been a Portfolio Manager of the Fund since the fund’s inception in December 2002. Mr. Cunningham joined Federated in 1995 as an Investment Analyst, became a Portfolio Manager in 1998 and a Senior Portfolio Manager in 2007. He was named an Assistant Vice President of the Fund’s Adviser in January 1998 and became a Vice President of the Fund’s Adviser in July 2000. From 1986 through 1994, Mr. Cunningham was a Project Engineer with Pennsylvania Power and Light Company. Mr. Cunningham received his M.B.A. with concentrations in Finance and Operations from the University of Pittsburgh.
Portfolio Manager Information
The following information about the Fund’s portfolio manager is provided as of the end of the fund's most recently completed fiscal year.
| Other Accounts Managed by Lee Cunningham | Total Number of Other Accounts Managed/ Total Assets* |
| Registered Investment Companies | 3/$702 million |
| Other Pooled Investment Vehicles | 0/$0 |
| Other Accounts | 0/$0 |
* None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
Lee Cunningham is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager’s experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and, to a lesser extent, Financial Success, and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Investors, Inc. (Federated). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is calculated based on a mix of rolling one, three and five year total returns and income performance relative to peers and benchmark (i.e. S&P, custom 70% A & up/20% BBB/10% HY/3yr+/Non AMT). Total return receives greater weighting in calculating the IPP compared to income. The weighting on total return is higher than the income weighting for the trailing one and three year periods. The weighting on income is higher for the five year period. Going forward, the weighting on income will continue to decline, reflecting the group’s emphasis on total return. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one-year of performance history under a portfolio manager may be excluded. As noted above, Mr. Cunningham is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks. Within each performance measurement period and IPP group, IPP is calculated on the basis of an assigned weighting to each account or fund managed by the portfolio manager and included in the IPP groups. The weighting assigned to the Fund is greater than the weighting assigned to other accounts or funds used to determine IPP. In this regard, any account for which the total return target is not met with respect to a five-year period will receive a score of zero for that period. Additionally, a portion of Mr. Cunningham’s IPP score is based on the performance for which he provides research and analytic support. A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to fund performance and any other factors as deemed relevant.
The Financial Success category is designed to tie the portfolio manager’s bonus, in part, to Federated’s overall financial results. Funding for the Financial Success category may be determined on a product or asset class basis, as well as on corporate financial results. Senior Management determines individual Financial Success bonuses on a discretionary basis, considering overall contributions and any other factors deemed relevant.
As a general matter, certain conflicts of interest may arise in connection with a portfolio manager’s management of a fund’s investments, on the one hand, and the investments of other accounts for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts might include conflicts created by specific portfolio manager compensation arrangements, and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research or “soft dollars”). The Adviser has adopted policies and procedures and has structured the portfolio managers’ compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
R.J. Gallo
R.J. Gallo has been the Fund’s Portfolio Manager since the fund’s inception in December 2002. Mr. Gallo was named Head of Municipal Bond Investment Group in 2010. Mr. Gallo joined Federated in 2000 as an Investment Analyst. He became a portfolio manager in 2002 and a Senior Portfolio Manager in 2005. He became a Senior Vice President of the Fund’s Adviser in January of 2011, served as a Vice President of the Fund’s Adviser from January 2005 through 2011 and served as Assistant Vice President of the Fund’s Adviser from January 2002 through 2004. From 1996 to 2000, Mr. Gallo was a Financial Analyst and Trader at the Federal Reserve Bank of New York. Mr. Gallo has received the Chartered Financial Analyst designation. Mr. Gallo received a Master’s in Public Affairs with a concentration in Economics and Public Policy from Princeton University.
| Other Accounts Managed by Richard J. Gallo | Total Number of Other Accounts Managed/ Total Assets* |
| Registered Investment Companies | 3/$1,001 million |
| Other Pooled Investment Vehicles | 0/$0 |
| Other Accounts | 0/$0 |
* None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
Richard J. Gallo is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive position-specific salary range, based on the portfolio manager’s experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and, to a lesser extent, Financial Success, and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Investors, Inc. (Federated). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is calculated based on a mix of rolling one, three and five year total returns and income performance relative to peers and benchmark (i.e. S&P, custom 70% A & up/20% BBB/10% HY/3yr+/Non AMT). Total return receives greater weighting in calculating the IPP compared to income. The weighting on total return is higher than the income weighting for the trailing one and three year periods. The weighting on income is higher for the five year period. Going forward, the weighting on income will continue to decline, reflecting the group’s emphasis on total return. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded. As noted above, Mr. Gallo is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks. For purposes of calculating the annual incentive amount, each fund or account managed by the portfolio manager is categorized into one of three IPP groups. Within each performance measurement period and IPP group, IPP is calculated on the basis of an assigned weighting to each account or fund managed by the portfolio manager and included in the IPP groups. The weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts or funds used to determine IPP. In this regard, any account for which the total return target is not met with respect to a three- or five-year period will receive a score of zero for that period. A portion of the bonus tied to the IPP score may be adjusted based on management's assessment of overall contributions to fund performance and any other factors as deemed relevant.
The Financial Success category is designed to tie the portfolio manager’s bonus, in part, to Federated’s overall financial results. Funding for the Financial Success category may be determined on a product or asset class basis, as well as on corporate financial results. Senior Management determines individual Financial Success bonuses on a discretionary basis, considering overall contributions and any other factors deemed relevant.
In addition, Richard J. Gallo was awarded a grant of restricted Federated stock. Awards of restricted stock are discretionary and are made in variable amounts based on the subjective judgment of Federated's senior management.
As a general matter, certain conflicts of interest may arise in connection with a portfolio manager’s management of a fund’s investments, on the one hand, and the investments of other accounts for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts might include conflicts created by specific portfolio manager compensation arrangements, and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research or “soft dollars”). The Adviser has adopted policies and procedures and has structured the portfolio managers’ compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
No such purchases this period.
Item 10. Submission of Matters to a Vote of Security Holders
No changes to report.
Item 11. Controls and Procedures
(a) The registrant’s President and Treasurer have concluded that the
registrant’s disclosure controls and procedures (as defined in rule 30a-3(c) under the Act) are effective in design and operation and are sufficient to form the basis of the certifications required by Rule 30a-(2) under the Act, based on their evaluation of these disclosure controls and procedures within 90 days of the filing date of this report on Form N-CSR.
(b) There were no changes in the registrant’s internal control over financial reporting (as defined in rule 30a-3(d) under the Act) during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
(a)(1) Code of Ethics- Not Applicable to this Annual Report.
(a)(2) Certifications of Principal Executive Officer and Principal Financial Officer.
(a)(3) Not Applicable.
(b) Certifications pursuant to 18 U.S.C. Section 1350.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Registrant Federated Premier Municipal Income Fund
By /S/ Richard A. Novak
Richard A. Novak, Treasurer and Principal Financial Officer
Date ___January 23, 2012____
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By /S/ J. Christopher Donahue
J. Christopher Donahue, President and Principal Executive Officer
Date ___January 23, 2012____
By /S/ Richard A. Novak
Richard A. Novak, Treasurer and Principal Financial Officer
Date ___January 23, 2012____