Dreyfus
Appreciation Fund, Inc.
SEMIANNUAL REPORT June 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
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2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus Appreciation Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Appreciation Fund,
Inc., covering the six-month period from January 1, 2000 through June 30, 2000.
Inside, you'll find valuable information about how the fund was managed during
the reporting period, including a discussion with the fund's portfolio manager
Fayez Sarofim, of Fayez Sarofim & Co., the fund's sub-investment adviser.
While stock prices were little changed on average over the past six months, the
period was marked by high levels of volatility and dramatic shifts in investor
sentiment. Between January and mid-March, large-cap stocks generally continued
to advance, led by fast-growing technology stocks that, many investors believed,
would benefit most from the "new economy." Subsequently, however, technology
stocks corrected sharply over concerns about rising interest rates and extremely
high valuations. Other sectors of the large-cap stock market also declined,
erasing the gains achieved earlier in the year.
Also, primarily because of the precipitous drop in technology stock prices,
value-oriented stocks generally outperformed growth stocks during the reporting
period, a reversal of the trend established over the past several years. In
addition, small-capitalization stocks generally outperformed large-cap stocks,
particularly in the value-oriented segment of the market. In our view, these
short-term swings in investor sentiment highlight once again the importance of
broad diversification and a long-term perspective for most investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Appreciation Fund, Inc.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF FUND PERFORMANCE
Fayez Sarofim, Portfolio Manager
Fayez Sarofim & Co., Sub-Investment Adviser
How did Dreyfus Appreciation Fund, Inc. perform relative to its benchmark?
For the six-month period ended June 30, 2000, the fund produced a total return
of 3.61%.(1) For the same period, the Standard & Poor's 500 Composite Stock
Price Index ("S&P 500 Index"), the fund's benchmark, produced a total return of
-0.43%.(2)
We attribute the fund' s relatively good performance to a dramatic shift in
market sentiment away from a more speculative outlook and toward companies with
stronger fundamentals, such as consistent earnings growth and strong franchises.
Because these are the types of companies in which the fund invests, the fund
benefited from this return to more traditional investing.
What is the fund's investment approach?
The fund invests primarily in large, well-established, multinational growth
companies that we believe are well positioned to weather difficult economic
climates and thrive in more favorable environments. We focus on purchasing
growth stocks at a price we consider to be justified by a company' s
fundamentals. The result is a portfolio of stocks in prominent companies
selected for their sustained patterns of profitability, strong balance sheets,
expanding global presence and above-average growth potential.
At the same time, we manage the fund in a manner particularly well suited to
long-term investors. Our investment approach is based on targeting long-term
growth rather than short-term profit. Generally, we buy and sell relatively few
stocks during the course of the year, helping to minimize investors' tax
liabilities and reduce trading costs. During the six-month reporting period, the
fund maintained a turnover rate that was well within our goal of limiting annual
turnover to below 15% during normal market conditions.
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund's performance was primarily influenced by a dramatic shift in market
sentiment that began toward the end of the first quarter of 2000. Before this
change, the stock market had been dominated by a relative handful of technology
stocks that had appreciated to very high prices relative to their earnings. In
fact, some of these companies had no earnings, and achieved high stock prices
based on speculation regarding their future prospects.
In mid-March, the speculative technology bubble began to burst. Investors became
concerned that the Federal Reserve Board's efforts to slow economic growth and
relieve a buildup of inflationary pressures might cause demand for new
technology to slacken. Faced with these concerns, a major measure of technology
stock performance, the Nasdaq Composite Index, fell substantially between
mid-March and the end of April, including a notable single-day drop on April 14.
Subsequently, stock market investors appeared to become much more selective,
rewarding stocks with strong business fundamentals and positive earnings
reports, while avoiding those without such attributes. Accordingly, recoveries
ensued in previously neglected industry groups such as pharmaceutical companies
and multinational consumer products companies, both areas on which the fund
focused. While the fund had less exposure to technology companies than the S&P
500 Index, our technology holdings fared relatively well during the shift in
sentiment, largely because holdings such as Intel and Cisco Systems enjoyed
strong business fundamentals.
A number of company-specific issues also affected the fund's performance.
Pfizer, a major drug manufacturer which the fund held during the reporting
period, was rewarded for its merger with Warner-Lambert. Consumer non-durables
company PepsiCo received strong results from its Frito Lay unit. And financial
powerhouse Citigroup' s stock rose as benefits of the merger between Travelers
Group and Citicorp improved bottom-line performance.
4
What is the fund's current strategy?
Much of the fund's strategy is based on our sector-selection process, which is
designed to identify industries likely to enjoy long-term growth. Currently, for
example, developments in biotechnology and demographic shifts toward an aging
population have created long-term trends favorable to the health care industry.
Trends toward a growing middle class in emerging market countries have created
opportunities for global financial services firms and consumer products
companies. These conditions have currently led us to maintain the fund's
emphasis on the health care, consumer staples and financial services industries,
and to de-emphasize commodities and basic industries. Our investment discipline
has also led us away from technology companies with stock prices higher than we
judge to be warranted by their financial strength and growth rates.
As of June 30, 2000, the long-term economic trends that have led us to emphasize
health care, financial services and consumer staples appear to remain in place.
Accordingly, we have seen little reason to alter our current sector-allocation
strategy.
July 17, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION, FUND SHARES MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
(2) SOURCE: LIPPER INC. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX IS A WIDELY ACCEPTED, UNMANAGED INDEX OF U.S. STOCK MARKET
PERFORMANCE.
The Fund 5
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STATEMENT OF INVESTMENTS
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
COMMON STOCKS--99.1% Shares Value ($)
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APPAREL--.8%
Christian Dior 150,000 33,979,125
AUTO RELATED--.1%
Visteon 278,220 (a) 3,373,420
AUTOMOTIVE--2.2%
Ford Motor 2,124,905 91,370,915
BANKING--3.2%
Chase Manhattan 1,800,000 82,912,500
SunTrust Banks 1,100,000 50,256,250
133,168,750
CAPITAL GOODS--8.3%
Emerson Electric 950,000 57,356,250
General Electric 3,900,000 206,700,000
Honeywell International 1,475,000 49,689,062
Rockwell International 925,000 29,137,500
342,882,812
COMMUNICATIONS SERVICES--5.7%
Bell Atlantic 1,000,000 50,812,500
BellSouth 2,175,000 92,709,375
SBC Communications 2,175,192 94,077,054
237,598,929
COMPUTERS--9.2%
Cisco Systems 2,215,000 (a) 140,790,937
Hewlett-Packard 850,000 106,143,750
International Business Machines 250,000 27,390,625
Microsoft 1,350,000 (a) 108,000,000
382,325,312
ELECTRONICS--9.5%
Agilent Technologies 324,190 (a) 23,909,013
Conexant Systems 300,000 (a) 14,587,500
Intel 2,650,000 354,271,875
392,768,388
ENERGY--6.2%
BP Amoco, ADS 1,640,000 92,762,500
Chevron 400,000 33,925,000
Exxon Mobil 1,646,299 129,234,472
255,921,972
6
COMMON STOCKS (CONTINUED) Shares Value ($)
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FINANCE-MISC.--8.2%
American Express 900,000 46,912,500
Associates First Capital, Cl. A 851,788 19,005,520
Citigroup 2,025,250 122,021,312
Federal National Mortgage Association 1,900,000 99,156,250
Merrill Lynch 465,000 53,475,000
340,570,582
FOOD & DRUGS--2.5%
Walgreen 3,200,000 103,000,000
FOOD, BEVERAGE & TOBACCO--7.9%
Coca-Cola 2,400,000 137,850,000
Nestle, ADR 200,000 20,000,000
PepsiCo 2,050,000 91,096,875
Philip Morris Cos. 3,000,000 79,687,500
328,634,375
HEALTH CARE--19.1%
Abbott Laboratories 1,500,000 66,843,750
Bristol-Myers Squibb 1,350,000 78,637,500
Johnson & Johnson 1,600,000 163,000,000
Merck & Co. 1,945,000 149,035,625
Pfizer 6,200,000 297,600,000
Roche Holdings, ADR 300,000 29,212,500
Schering-Plough 150,000 7,575,000
791,904,375
HOUSEHOLD PRODUCTS-MISC.--5.4%
Colgate-Palmolive 1,250,000 74,843,750
Estee Lauder, Cl. A 500,000 24,718,750
Gillette 1,900,000 66,381,250
Procter & Gamble 1,000,000 57,250,000
223,193,750
INSURANCE--4.0%
American General 266,000 16,226,000
Berkshire Hathaway, Cl. A 1,000 (a) 53,800,000
Marsh & McLennan Cos. 910,000 95,038,125
165,064,125
MEDIA/ENTERTAINMENT--2.2%
Fox Entertainment Group, Cl. A 1,257,700 (a) 38,202,638
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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MEDIA/ENTERTAINMENT (CONTINUED)
McDonald's 1,550,000 51,053,125
89,255,763
PUBLISHING--1.6%
McGraw-Hill Cos. 1,075,000 58,050,000
News Corp, ADR 120,000 6,540,000
64,590,000
RETAIL--2.0%
Wal-Mart Stores 1,450,000 83,556,250
TRANSPORTATION--1.0%
Norfolk Southern 1,675,000 24,915,625
United Parcel Service, Cl. B 300,000 17,700,000
42,615,625
TOTAL COMMON STOCKS
(cost $2,558,575,094) 4,105,774,468
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PREFERRED STOCKS--.9%
--------------------------------------------------------------------------------
PUBLISHING;
News Corp, ADS, Cum. $.4428
(cost $15,964,941) 800,000 38,000,000
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Principal
SHORT-TERM INVESTMENTS--.0% Amount ($) Value ($)
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U.S. TREASURY BILLS;
5.68%, 10/5/2000
(cost $1,405,379) 1,427,000 1,405,723
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TOTAL INVESTMENTS (cost $2,575,945,414) 100.0% 4,145,180,191
LIABILITIES, LESS CASH AND RECEIVABLES .0% (202,319)
NET ASSETS 100.0% 4,144,977,872
(A) NON-INCOME PRODUCING.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
8
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
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ASSETS ($):
Investments in securities--See Statement of
Investments 2,575,945,414 4,145,180,19
Cash 6,073,396
Receivable for investment securities sold 4,449,731
Receivable for shares of Common Stock subscribed 3,563,065
Dividends receivable 3,047,486
Prepaid expenses 79,539
4,162,393,408
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 2,089,707
Due to Fayez Sarofim & Co. 921,139
Payable for shares of Common Stock redeemed 13,782,911
Interest payable--Note 2 4,320
Accrued expenses 617,459
17,415,536
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NET ASSETS ($) 4,144,977,872
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 2,314,981,605
Accumulated undistributed investment income--net 11,644,975
Accumulated net realized gain (loss) on investments 249,115,823
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 1,569,235,469
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NET ASSETS ($) 4,144,977,872
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SHARES OUTSTANDING
(300 million shares of $.001 par value Common Stock authorized) 88,297,794
NET ASSET VALUE, offering and redemption price per share ($) 46.94
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 9
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
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INVESTMENT INCOME ($):
INCOME:
Cash dividends (net of $268,333 foreign taxes withheld at source) 30,320,565
Interest 274,132
TOTAL INCOME 30,594,697
EXPENSES:
Investment advisory fee--Note 3(a) 5,870,701
Sub-Investment advisory fee--Note 3(a) 5,699,143
Shareholder servicing costs--Note 3(b) 6,741,202
Interest expense--Note 2 176,714
Prospectus and shareholders' reports 126,067
Custodian fees--Note 3(b) 95,533
Registration fees 34,268
Professional fees 32,669
Directors' fees and expenses--Note 3(c) 23,234
Loan commitment fees--Note 2 16,867
Miscellaneous 75,525
TOTAL EXPENSES 18,891,923
INVESTMENT INCOME--NET 11,702,774
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 249,204,514
Net unrealized appreciation (depreciation) on investments
and foreign currency transactions (135,633,874)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 113,570,640
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 125,273,414
SEE NOTES TO FINANCIAL STATEMENTS.
10
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
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OPERATIONS ($):
Investment income--net 11,702,774 24,346,294
Net realized gain (loss) on investments 249,204,514 69,316,684
Net unrealized appreciation (depreciation)
on investments (135,633,874) 347,343,155
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 125,273,414 441,006,133
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DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (543,500) (23,860,593)
Net realized gain on investments (38,045,066) (31,629,698)
TOTAL DIVIDENDS (38,588,566) (55,490,291)
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CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 1,053,584,324 2,920,671,160
Dividends reinvested 35,326,764 49,185,985
Cost of shares redeemed (1,772,699,140) (2,775,307,800)
INCREASE (DECREASE) IN NET ASSETS
FROM CAPITAL STOCK TRANSACTIONS (683,788,052) 194,549,345
TOTAL INCREASE (DECREASE) IN NET ASSETS (597,103,204) 580,065,187
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NET ASSETS ($):
Beginning of Period 4,742,081,076 4,162,015,889
END OF PERIOD 4,144,977,872 4,742,081,076
Undistributed investment income--net 11,644,975 485,701
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 23,365,030 66,761,307
Shares issued for dividends reinvested 779,325 1,068,187
Shares redeemed (39,540,218) (63,059,964)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (15,395,863) 4,769,530
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
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FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Six Months Ended
June 30, 2000 Year Ended December 31,
---------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
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PER SHARE DATA ($):
Net asset value,
beginning of period 45.73 42.07 32.38 25.58 20.55 15.17
Investment Operations:
Investment income--net .12(a) .23(a) .23 .25 .25 .33
Net realized and unrealized
gain (loss) on investments 1.52 3.97 9.76 6.87 5.03 5.42
Total from Investment Operations 1.64 4.20 9.99 7.12 5.28 5.75
Distributions:
Dividends from investment
income--net (.01) (.23) (.23) (.26) (.25) (.34)
Dividends from net
realized gain on investments (.42) (.31) (.07) (.06) -- (.03)
Total Distributions (.43) (.54) (.30) (.32) (.25) (.37)
Net asset value, end of period 46.94 45.73 42.07 32.38 25.58 20.55
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TOTAL RETURN (%) 3.61(b) 9.97 30.85 27.85 25.68 37.89
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses
to average net assets .44(b) .88 .89 .87 .91 .92
Ratio of interest expense
and loan commitment
fee to average net assets .01(b) .01 -- -- -- --
Ratio of net investment
income to average net assets .28(b) .51 .75 .99 1.34 2.28
Portfolio Turnover Rate .70(b) 11.77 1.40 1.23 4.84 4.51
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Net Assets, end of period
($ x 1,000) 4,144,978 4,742,081 4,162,016 1,977,638 845,497 457,267
A BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
B NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
12
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Appreciation Fund, Inc. (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act"), as a diversified open-end
management investment company. The fund's investment objective is to provide
investors with long-term capital growth consistent with the preservation of
capital. The Dreyfus Corporation ("Dreyfus") serves as the fund's investment
adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon"), which
is a wholly-owned subsidiary of Mellon Financial Corporation. Fayez Sarofim &
Co. ("Sarofim") serves as the fund's sub-investment adviser. Effective March 22,
2000, Dreyfus Service Corporation ("DSC"), a wholly-owned subsidiary of Dreyfus,
became the distributor of the fund's shares which are sold to the public without
a sales charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was
the distributor.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at the last sales
price on the securities exchange on which such securities are primarily traded
or at the last sales price on the national securities market. Securities not
listed on an exchange or the national securities market, or securities for which
there were no transactions, are valued at the average of the most recent bid and
asked prices. Bid price is used when no asked price is available. Securities for
which there are no such valuations are valued at fair value as determined in
good faith under the direction of the Board of Directors. Investments
denominated in foreign currencies are translated to U.S. dollars at the
prevailing rates of exchange.
(b) Foreign currency transactions: The fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
The Fund 13
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amounts of
dividends, interest, and foreign withholding taxes recorded on the fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discounts on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund receives net
earnings credits based on available cash balances left on deposit.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends from net realized capital
gain are normally declared and paid annually but the fund may make distributions
on a more frequent basis to comply with the distribution requirements of the
Internal Revenue Code of 1986, as amended (the "Code"). To the extent that net
realized capital gain can be offset by capital loss carryovers, if any, it is
the policy of the fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
14
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings.
The average daily amount of borrowings outstanding during the period ended June
30, 2000 was approximately $5,234,500, with a related average annualized
interest rate of 6.79%.
NOTE 3--Investment Advisory Fee, Sub-Investment Advisory Fee and Other
Transactions With Affiliates:
(a) Fees payable by the fund pursuant to the provisions of an Investment
Advisory Agreement with Dreyfus and a Sub-Investment Advisory Agreement with
Sarofim are payable monthly, computed on the average daily value of the fund's
net assets at the following annual rates:
Average Net Assets Dreyfus Sarofim
----------------------------------------------------------------------------
0 up to $25 million. . . . . . . . . . . .44 of 1% .11 of 1%
$25 million up to $75 million. . . . . . .37 of 1% .18 of 1%
$75 million up to $200 million . . . . . .33 of 1% .22 of 1%
$200 million up to $300 million. . . . . .29 of 1% .26 of 1%
In excess of $300 million. . . . . . . .275 of 1% .275 of 1%
(b) Under the Shareholder Services Plan, the fund pays the distributor for the
provision of certain services at the annual rate of . 25 of 1% of the value of
the fund's average daily net assets. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the fund and providing reports and other information, and
services related to the maintenance
The Fund 15
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
of shareholder accounts. The distributor may make payments to Service Agents (a
securities dealer, financial institution or other industry professional) in
respect of these services. The distributor determines the amounts to be paid to
Service Agents. During the period ended June 30, 2000, the fund was charged
$5,259,020 pursuant to the Shareholder Services Plan, of which $3,434,834 was
paid to DSC.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
Dreyfus, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended June 30, 2000, the fund was charged $490,776 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended June 30, 2000, the fund was
charged $95,533 pursuant to the custody agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 13, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $50,000 and an attendance fee of $6,500 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 13, 2000, each Board member who was not an
"affiliated person" as defined in the Act received from the fund an annual fee
of $2,500 and an attendance fee of $500 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
16
(d) During the period ended June 30, 2000, the fund incurred total brokerage
commissions of $336,327, of which $37,300 was paid to Dreyfus Brokerage
Services, a wholly-owned subsidiary of Mellon Financial Corporation.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding,
short-term securities, during the period ended June 30, 2000, amounted to
$29,603,476 and $724,428,328, respectively.
At June 30, 2000, accumulated net unrealized appreciation on investments was
$1,569,234,777, consisting of $1,657,738,221 gross unrealized appreciation and
$88,503,444 gross unrealized depreciation.
At June 30, 2000, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund 17
For More Information
Dreyfus Appreciation Fund, Inc.
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Fayez Sarofim & Co.
Two Houston Center
Suite 2907
Houston, TX 77010
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
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