General Municipal
Bond Fund, Inc.
SEMIANNUAL REPORT
August 31, 1999
(reg.tm)
<PAGE>
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
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
- --------------------------------------------------------------------------------
THE FUND
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
15 Financial Highlights
16 Notes to Financial Statements
FOR MORE INFORMATION
Back Cover
<PAGE>
The Fund
General Municipal Bond Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for General Municipal Bond
Fund, Inc., covering the six-month period from March 1, 1999 through August 31,
1999. 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, William M. Petty.
When the reporting period began, evidence began to emerge that the U.S. economy
was growing strongly in an environment characterized by low inflation and high
levels of consumer spending. Concerns that inflationary pressures might
re-emerge caused the Federal Reserve Board to raise short-term interest rates
twice during the summer of 1999, effectively offsetting most of last fall's
interest-rate cuts. Higher interest rates led to some erosion of municipal bond
prices, especially toward the end of the reporting period.
In this environment, however, the yields of tax-exempt bonds have recently been
quite attractive compared to the after-tax yields of taxable bonds of comparable
maturity and credit quality. This is especially true for investors in the higher
federal income tax brackets.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in General Municipal Bond Fund, Inc.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
September 14, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
William M. Petty, Portfolio Manager
How did General Municipal Bond Fund, Inc. perform over the period?
The fund produced a -3.70% total return(1) over the six-month period ended
August 31, 1999, compared to a total return of -3.34% for the average of the
Lipper General Municipal Debt Funds category.(2) We attribute the fund's
relative performance to a rising interest rate environment during the second
half of the reporting period, as well as to our security selection strategy,
which focused primarily on long-term, high-yielding, high-quality municipal
bonds.
What is the fund's investment approach?
Our goal is to seek a high level of federally tax-exempt income from a
diversified portfolio of municipal bonds. Secondarily, we also seek to provide a
competitive total return.
We begin by evaluating supply-and-demand factors within the municipal bond
marketplace. Based on that assessment, we select the individual tax-exempt bonds
that we believe are most likely to provide the highest returns with the least
risk. We look at such criteria as the bond's yield, price, term to maturity, the
creditworthiness of its issuer, insurance, and any provisions for early
redemption.
While we generally do not attempt to predict changes in interest rates, we may
tactically manage the portfolio's average duration -- a measure of sensitivity
to changes in interest rates -- in anticipation of temporary supply-and-demand
changes. If we expect the supply of newly issued bonds to increase, for example,
we may reduce the portfolio's average duration to make cash available for the
purchase of higher-yielding securities. Conversely, if we expect demand for
municipal bonds to surge at a time when we anticipate little issuance, we may
increase the portfolio' s average duration to maintain current yields for
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
as long as practical. At other times, we try to maintain a neutral average
duration that is consistent with other municipal bond funds.
What other factors influenced the fund's performance?
Because of strong economic conditions throughout the country, most states and
municipalities have had less need to borrow. Yet, demand from individual and
institutional investors seeking to minimize their income tax liabilities
remained high. This imbalance between supply and demand helped constrain the
decline of municipal bond prices relative to comparable U.S. Treasury bonds
during the first three months of the period.
However, the fund's performance was affected by rising interest rates during the
past three months. Economies in Japan and Southeast Asia appear to have halted
their deterioration in the wake of last year's global currency and credit
crisis. What's more, the growth of the U.S. economy has been stronger than most
analysts expected. During the second quarter of the year, this economic news
raised concerns among some fixed-income investors that inflationary pressures
might re-emerge. Tight labor markets and rising commodities prices lent credence
to this view. In fact, the Federal Reserve Board increased short-term interest
rates twice during the summer of 1999 in an attempt to forestall a
reacceleration of inflation. This change in monetary policy -- and the greater
relative attractiveness of taxable bonds with higher yields -- caused municipal
bond prices to fall more sharply from June through August, relative to taxable
bonds.
What is the fund's current strategy?
We have continued to search for the most attractive values in the national
municipal bond market. We have found such values, in our opinion, in
longer-term, higher-yielding bonds. This strategy enabled us to take advantage
of the higher income payments provided by longer-term bonds that are secured by
the revenues generated by municipal projects such as transportation, health care
and housing facilities.
4
<PAGE>
Focusing on opposite extremes of the fund's maturity range, this "barbell"
strategy enabled us to take advantage of higher yields from longer-term
securities while keeping the fund's average duration within the neutral range.
In our view, a neutral average duration should help us maintain relatively high
yields while giving us the flexibility we need to lock in potentially higher
yields if they become available.
September 14, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL
TAXES, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund 5
<PAGE>
<TABLE>
STATEMENT OF INVESTMENTS
August 31, 1999 (Unaudited)
Principal
Amount ($) Value ($)
<S> <C> <C>
LONG-TERM MUNICIPAL INVESTMENTS--98.4%
ALABAMA--3.2%
Alabama Industrial Development Authority, SWDR
(Pine City Fiber Co.) 6.45%, 12/1/2023 12,000,000 12,082,200
Courtland Industrial Development Authority, SWDR
(Champion International Corp. Project) 6.375%, 3/1/2029 4,000,000 4,073,120
CALIFORNIA--5.6%
State of California:
4.375%, 10/1/2016 5,000,000 4,299,650
4.50%, 10/1/2018 5,485,000 4,722,256
California Pollution Control Financing Authority, PCR
(San Diego Gas and Electric Co.) 5.90%, 6/1/2014 6,355,000 (a) 7,188,013
Los Angeles County Metropolitan Transportation Authority,
Sales Tax Revenue, 6%, 7/1/2026 (Insured; MBIA) 3,900,000 4,280,211
San Joaquin Hills Transportation Corridor, Toll Road Revenue:
Zero Coupon, 1/15/2026 (Insured; MBIA) 6,000,000 1,306,380
Zero Coupon, 1/15/2031 (Insured; MBIA) 24,000,000 3,890,160
Zero Coupon, 1/15/2032 (Insured; MBIA) 13,690,000 2,087,314
COLORADO--8.1%
Colorado Housing Finance Authority, Single Family Program,
7.55%, 8/1/2023 1,465,000 1,519,806
Denver City and County:
Airport System Revenue:
7.25%, 11/15/2012 4,065,000 4,376,054
7.25%, 11/15/2012 (Prerefunded 11/15/2002) 1,035,000 (b) 1,143,747
7.75%, 11/15/2021 5,365,000 5,745,861
7.75%, 11/15/2021 (Prerefunded 11/15/2001) 1,395,000 (b) 1,525,000
7.25%, 11/15/2023 3,985,000 4,287,462
7.25%, 11/15/2023 (Prerefunded 11/15/2002) 1,200,000 (b) 1,326,084
8.00%, 11/15/2025 3,890,000 4,116,670
8.00%, 11/15/2025 (Prerefunded 11/15/2001) 1,360,000 (b) 1,468,392
Special Facilities Airport Revenue (United Airlines Project)
6.875%, 10/1/2032 9,235,000 9,585,930
Lakewood, MFHR, Mortgage 6.70%, 10/1/2036 (Insured; FHA) 5,000,000 5,267,050
CONNECTICUT--1.2%
Connecticut Housing Finance Authority (Housing Mortgage
Finance Program) 6%, 11/15/2027 5,945,000 6,032,511
FLORIDA--7.8%
Florida Board of Education:
4.50%, 6/1/2018 2,795,000 2,404,259
4.50%, 6/1/2019 5,930,000 5,051,826
Gulf Breeze, Revenue 4.50%, 10/1/2027 (Insured; MBIA) 11,380,000 9,320,562
Palm Beach County, Solid Waste IDR (Osceola Power Ltd.
Partnership) 6.95%, 1/1/2022 3,000,000 (c) 1,860,000
6
<PAGE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
FLORIDA (CONTINUED)
Pinellas County Housing Facilities Authority, SFMR
(Multi-County Program) 6.70%, 2/1/2028
(Guaranteed: FNMA, GNMA) 5,920,000 6,171,955
Polk County Industrial Development Authority, IDR
7.525%, 1/1/2015 13,840,000 14,398,721
ILLINOIS--4.2%
City of Chicago Board of Education, School Reform:
Zero Coupon, 12/1/2023 (Insured; FGIC) 12,200,000 2,890,668
Zero Coupon, 12/1/2026 (Insured; FGIC) 20,000,000 3,939,400
Illinois Health Facilities Authority, Health Hospital and
Nursing Home Revenue (Residential Centers Inc.)
8.50%, 8/15/2016 5,475,000 5,871,554
Village of Romeoville 8.375%, 1/1/2010 7,495,000 8,075,863
INDIANA--.9%
Indiana State Development Finance Authority, Revenue
(Inland Steel Facilities) 5.75%, 10/1/2011 5,000,000 4,567,900
IOWA--.7%
Iowa Finance Authority, Single Family Mortgage
6.10%, 1/1/2028 (Guaranteed: FNMA, GNMA) 3,550,000 3,620,468
KENTUCKY--5.9%
Kenton County Airport Board, Airport Revenue
(Special Facilities - Delta Airlines Project):
7.50%, 2/1/2012 11,550,000 12,259,863
7.125%, 2/1/2021 4,630,000 4,891,410
City of Mount Sterling, Revenue (Kentucky League of Cities
Funding Trust Lease Program) 6.10%, 3/1/2018 5,500,000 5,733,475
Pendleton County, Multi-County Lease Revenue
(Kentucky Association of Counties Leasing Trust Program)
6.40%, 3/1/2019 6,000,000 6,450,060
LOUISIANA--2.2%
Louisiana Public Facilities Authority, HR (Louisiana Association
of Independent Colleges and Universities Facilities
Loan Program) 7%, 12/1/2017 (Prerefunded 12/1/2002) 6,195,000 (b) 6,792,136
Parish of Saint James, SWDR (Freeport-McMoRan
Partnership Project) 7.70%, 10/1/2022 4,140,000 4,369,273
MARYLAND--1.3%
Maryland Community Development Administration Department
of Community Development 9.924% 4/1/2026 4,910,000 (a) 5,307,317
Montgomery County Housing Opportunities Commission,
MFMR 7.375%, 7/1/2032 1,225,000 1,256,115
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
MASSACHUSETTS--2.2%
Massachusetts Development Finance Agency, College and
University Revenue (Boston University) 6%, 5/15/2059 2,500,000 2,489,650
Massachusetts Port Authority, Special Project Revenue
(Harborside Hyatt Project) 10%, 3/1/2026 3,000,000 3,219,390
Massachusetts Water Resource Authority, Water Revenue
4%, 12/1/2018 (Insured; MBIA) 7,000,000 5,491,500
MICHIGAN--9.4%
Detroit Downtown Development Authority, Tax Increment
Revenue (Downtown Development Area Number 1 Projects)
4.75%, 7/1/2025 (Insured; MBIA) 7,000,000 5,984,160
Dickinson County Healthcare System, HR 5.80%, 11/1/2024 5,000,000 4,609,250
Michigan Hospital Finance Authority, HR (Genesys Health System):
8.10%, 10/1/2013 (Prerefunded; 10/1/2005) 2,000,000 (b) 2,392,320
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 4,910,000 (b) 5,879,332
7.50%, 10/1/2027 (Prerefunded 10/1/2005) 8,000,000 (b) 9,202,480
Michigan Strategic Fund, SWDR (Genesee Power Station Project)
7.50%, 1/1/2021 7,000,000 7,381,500
Romulus Economic Development Corp., Economic Development
Revenue (HIR Limited Partnership Project)
7%, 11/1/2015 (Surety Bond; ITT Lyndon Property Co. Inc.) 5,000,000 5,500,500
Wayne Charter County, Special Airport Facilities Revenue
(Northwest Airlines Inc.) 6.75%, 12/1/2015 5,610,000 5,808,033
MINNESOTA--1.3%
Washington County Housing and Redevelopment Authority,
Hospital Facility Revenue (Healtheast Project)
5.50%, 11/15/2027 (Insured; ACA) 7,000,000 6,539,540
NEW HAMPSHIRE--1.3%
New Hampshire Housing Finance Authority,
Single Family Residential Mortgage:
7.75%, 7/1/2023 4,060,000 4,238,112
7.70%, 7/1/2029 2,380,000 2,438,715
NEW YORK--6.5%
New York City Transitional Finance Authority, Sales and Income
Tax Revenue 4.50%, 11/15/2027 3,000,000 2,448,930
New York State Dormitory Authority, Revenue:
(Mount Sinai School of Medicine) 5.15%, 7/1/2024
(Insured; MBIA) 4,000,000 3,737,960
(State University Educational Facilities) 7.50%, 5/1/2013 2,500,000 3,000,825
New York State Local Government Assistance Corp.,
Sales Tax Revenue 5.25%, 4/1/2016 (Insured; AMBAC) 6,410,000 6,288,018
8
<PAGE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
NEW YORK (CONTINUED)
New York State Urban Development Corp., Lease Revenue
(Correctional Capital Facilities) 5.25%, 1/1/2014
(Insured; FSA) 6,925,000 6,859,143
Triborough Bridge and Tunnel Authority, Highway Toll
Revenues 5.50%, 1/1/2017 (Insured; MBIA) 10,000,000 10,071,600
NORTH CAROLINA--2.4%
Charlotte North Carolina Special Facilities,
Airport and Marina Revenue (Charlotte - Douglas
International Airport) 5.60%, 7/1/2027 8,480,000 7,507,853
State of North Carolina, Public School Building
4.60%, 4/1/2016 5,000,000 4,490,700
NORTH DAKOTA--1.1%
North Dakota Housing Finance Agency, SFMR:
7.30%, 7/1/2024 2,630,000 2,719,104
7.75%, 7/1/2024 (Insured; MBIA) 2,730,000 2,837,972
OHIO--2.4%
State of Ohio, SWDR (USG Corp. Project) 5.60%, 8/1/2032 4,000,000 3,664,560
Ohio Water Development Authority, Pollution Control Facilities
Revenue (Cleveland Electric) 6.10%, 8/1/2020 8,500,000 8,298,550
OKLAHOMA--3.8%
McGee Creek Authority, Water Revenue 6%, 1/1/2013
(Insured; MBIA) 6,025,000 6,438,978
Trustees of the Tulsa Municipal Airport Trust, Revenue
(American Airlines Inc. Project) 7.60%, 12/1/2030 12,000,000 12,663,720
PENNSYLVANIA--.8%
Lehigh County General Purpose Authority, Revenue
(Wiley House) 9.50%, 11/1/2016 (Prerefunded 11/1/2001) 3,500,000 (b) 3,944,360
RHODE ISLAND--1.6%
Rhode Island Housing and Mortgage Finance Corp.:
(Homeownership E-1) 7.55%, 10/1/2022 4,305,000 4,482,840
(Rental Housing Program) 7.95%, 10/1/2020 3,195,000 3,266,919
SOUTH CAROLINA--.7%
Piedmont Municipal Power Agency, Electric Revenue
6.55%, 1/1/2016 3,885,000 3,886,204
TEXAS--15.4%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project) 7%, 12/1/2011
(Guaranteed; AMR Corp.) 10,000,000 10,854,800
Austin, Multiple Utility Revenue 4.25%, 5/15/2028
(Insured; MBIA) 30,920,000 23,812,110
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
TEXAS (CONTINUED)
Dallas - Fort Worth International Airport Facility Improvement
Corp., Revenue (Delta Airlines Inc.):
7.625%, 11/1/2021 2,200,000 2,334,068
7.125%, 11/1/2026 5,000,000 5,165,350
Gulf Coast Waste Disposal Authority, SWDR
(Champion International Corp. Project):
7.25%, 4/1/2017 2,810,000 2,976,998
7.25%, 4/1/2017 (Prerefunded 4/1/2002) 1,925,000 (b) 2,091,647
Houston, Airport System Revenue (Continental Airlines Project)
6.125% (Series C) 7/15/2027 5,000,000 4,793,650
Matagorda County Navigation District Number 1,
Industrial Revenue (Houston Lighting) 5.125%, 11/1/2018
(Insured; AMBAC) 14,000,000 12,613,580
Northeast Independent School District
4.50%, 10/1/2028 (Guaranteed; Permanent School Fund) 10,700,000 8,622,167
Tomball Hospital Authority, Health Hospital and Nursing Home
Revenue (Tomball Regional Hospital) 6%, 7/1/2025 4,000,000 3,818,080
UTAH--1.0%
Carbon County, SWDR (Sunnyside Cogeneration Project)
9.25%, 7/1/2018 8,000,000 (c) 4,800,000
WASHINGTON--5.9%
Central Puget Sound Regional Transit Authority,
Sales Tax and Motor Vehicle Excise
Tax Revenue 4.75%, 2/1/2028 (Insured; FGIC) 7,000,000 5,892,460
Chelan County Public Utility District Number 001, Consolidated
Revenue (Chelan Hydroelectric) 7.50%, 7/1/2011 5,655,000 6,588,301
Washington Housing Finance Commission, Nonprofit Housing
Revenue (Seattle University Auxiliary Services Project)
5.30%, 7/1/2031 (LOC; Bank of America) 5,380,000 4,809,128
Washington Public Power Supply System, Revenue
(Nuclear Project Number 3) 7.125%, 7/1/2016
(Insured; MBIA) 10,425,000 12,211,428
WYOMING--.6%
Wyoming Community Development Authority,
Housing Revenue 6.25%, 6/1/2027 2,995,000 3,062,358
U.S. RELATED--.9%
Puerto Rico Electric Power Authority, Power Revenue
4.50%, 7/1/2028 5,000,000 4,340,950
TOTAL INVESTMENTS (cost $495,508,353) 98.4% 492,126,489
CASH AND RECEIVABLES (NET) 1.6% 7,852,111
NET ASSETS 100.0% 499,978,600
10
<PAGE>
Summary of Abbreviations
ACA American Capital Access IDR Industrial Development Revenue
AMBAC American Municipal Bond LOC Letter of Credit
Assurance Corporation MBIA Municipal Bond Investors
FHA Federal Housing Administration Assurance Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FNMA Federal National Mortgage Association MFMR Multi-Family Mortgage Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
GNMA Government National Mortgage SFMR Single Family Mortgage Revenue
Association SWDR Solid Waste Disposal Revenue
HR Hospital Revenue
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
AAA Aaa AAA 39.4
AA Aa AA 14.0
A A A 6.3
BBB Baa BBB 27.4
BB Ba BB 2.6
B B B .9
Not Rated(d) Not Rated(d) Not Rated(d) 9.4
100.0
(A) INVERSE FLOATER SECURITY -- THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(B) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(C) NON-INCOME ACCRUING SECURITY.
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD &
POOR'S HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY
TO THOSE RATED SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 11
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1999 (Unaudited)
Cost Value
<S> <C> <C>
ASSETS ($):
Investments in securities--See Statement of
Investments 495,508,353 492,126,489
Cash 441,484
Interest receivable 8,127,590
Prepaid expenses 19,900
500,715,463
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 299,623
Due to Distributor 21,113
Accrued expenses 416,127
736,863
NET ASSETS ($) 499,978,600
COMPOSITION OF NET ASSETS ($):
Paid-in capital 506,258,320
Accumulated net realized gain (loss) on investments (2,897,856)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (3,381,864)
NET ASSETS ($) 499,978,600
SHARES OUTSTANDING
(150 million shares of $.01 par value Common Stock authorized) 36,897,995
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($)
13.55
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
12
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six Months Ended August 31, 1999 (Unaudited)
INVESTMENT INCOME ($):
<S> <C> <C>
INTEREST INCOME 16,551,066
EXPENSES:
Management fee--Note 3(a) 1,529,864
Shareholder servicing costs--Note 3(b) 739,442
Professional fees 30,813
Custodian fees 24,446
Registration fees 22,469
Prospectus and shareholders' reports--Note 3(b) 19,886
Directors' fees and expenses--Note 3(c) 19,538
Loan commitment fees--Note 2 1,263
Miscellaneous 11,695
TOTAL EXPENSES 2,399,416
INVESTMENT INCOME--NET 14,151,650
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (2,952,179)
Net unrealized appreciation (depreciation) on investments (31,185,892)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (34,138,071)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (19,986,421)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
August 31, 1999 Year Ended
(Unaudited) February 28, 1999
<S> <C> <C>
OPERATIONS ($):
Investment income--net 14,151,650 31,888,308
Net realized gain (loss) on investments (2,952,179) 9,380,080
Net unrealized appreciation (depreciation) on investments (31,185,892) (12,086,075)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (19,986,421) 29,182,313
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (14,320,491) (31,810,608)
Net realized gain on investments (4,690,240) (12,572,013)
TOTAL DIVIDENDS (19,010,731) (44,382,621)
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 228,061,119 780,640,827
Dividends reinvested 13,274,175 31,599,382
Cost of shares redeemed (277,572,071) (875,342,703)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (36,236,777) (63,102,494)
TOTAL INCREASE (DECREASE) IN NET ASSETS (75,233,929) (78,302,802)
NET ASSETS ($):
Beginning of Period 575,212,529 653,515,331
END OF PERIOD 499,978,600 575,212,529
Undistributed investment income--net -- 168,841
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 15,771,009 52,769,098
Shares issued for dividends reinvested 943,037 2,136,104
Shares redeemed (19,286,997) (59,140,024)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (2,572,951) (4,234,822)
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
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.
<TABLE>
Six Months Ended
August 31, 1999 Fiscal Year Ended February,
(Unaudited) 1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 14.57 14.95 14.53 15.00 14.45 15.46
Investment Operations:
Investment income--net .37 .74 .77 .78 .82 .86
Net realized and unrealized
gain (loss) on investments (.90) (.09) .44 (.21) .57 (.89)
Total from Investment Operations (.53) .65 1.21 .57 1.39 (.03)
Distributions:
Dividends from investment
income--net (.37) (.74) (.77) (.78) (.82) (.86)
Dividends from net realized gain
on investments (.12) (.29) (.02) (.26) (.02) (.12)
Total Distributions (.49) (1.03) (.79) (1.04) (.84) (.98)
Net asset value, end of period 13.55 14.57 14.95 14.53 15.00 14.45
TOTAL RETURN (%) (7.34)(a) 4.47 8.52 4.04 9.79 .07
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .86(a) .86 .87 .88 .88 .87
Ratio of net investment income
to average net assets 5.07(a) 5.04 5.23 5.40 5.50 5.99
Portfolio Turnover Rate 20.47(b) 99.51 91.37 115.62 114.78 67.87
Net Assets, end of period
($ x 1,000) 499,979 575,213 653,515 690,093 867,157 934,277
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
The Fund 15
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
General Municipal Bond 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
maximize current income exempt from Federal income tax to the extent consistent
with the preservation of capital. The Dreyfus Corporation (the "Manager") serves
as the fund's investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A. Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the fund's shares, which are sold to the public without a sales
charge.
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 (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Directors. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the
16
<PAGE>
national securities market, or securities for which there were no transactions,
are valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $800 during the period
ended August 31, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
(c) Dividends to shareholders: It is the policy of the fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain are normally declared and paid annually, but the
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code 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.
(d) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of
The Fund 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
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.
During the period ended August 31, 1999, the fund did not borrow under the
Facility.
NOTE 3--Management Fee and Other Transactions
With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .55 of 1% of the value of the
fund' s average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses of the fund, exclusive of
taxes, brokerage, interest on borrowings, commitment fees and extraordinary
expenses, exceed 1 1/2% of the value of the fund's average daily net assets, the
fund may deduct from payments to be made to the Manager, or the Manager will
bear such excess expense. During the period ended August 31, 1999, there was no
expense reimbursement pursuant to the Agreement.
(b) Under a Service Plan (the "Plan") adopted pursuant to Rule 12b-1 under the
Act, the fund (a) reimburses the Distributor for payments to certain Service
Agents (a securities dealer, financial institution or other industry
professional) for distributing the fund's shares and servicing shareholder
accounts ("Servicing") and (b) pays the Manager, Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager, and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing relating to the fund and
for Servicing, at an aggregate annual rate of .20 of 1% of the value of the
fund's average daily net assets. Both the Distributor and Dreyfus may pay one or
more Service Agents a fee in respect of the fund's shares owned by shareholders
with whom the Service Agent has a Servicing relationship or for whom the Service
Agent is the dealer or holder of record. Both the Distributor and Dreyfus
determine the amounts, if any, to be paid to Service Agents under the Plan and
the basis on which such payments are made. The fees payable under the Plan are
payable without regard to
18
<PAGE>
actual expenses incurred. The Plan also separately provides for the fund to bear
the costs of preparing, printing and distributing certain of the fund's
prospectuses and statements of additional information and costs associated with
implementing and operating the Plan, not to exceed the greater of $100,000 or
.005 of 1% of the value of the fund's average daily net assets for any full
fiscal year. During the period ended August 31, 1999, the fund was charged
$560,673 pursuant to the Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended August 31, 1999, the fund was charged $127,926 pursuant to the transfer
agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A .10% redemption fee is charged and retained by the fund on shares redeemed
within fifteen days following the date of issuance, including on redemptions
made through the use of the fund's Exchange privilege. During the period ended
August 31, 1999, redemption fees retained by the fund amounted to $20,952.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended August 31, 1999, amounted to
$110,798,204 and $169,859,970, respectively.
At August 31, 1999, accumulated net unrealized depreciation on investments was
$3,381,864, consisting of $18,997,735 gross unrealized appreciation and
$22,379,599 gross unrealized depreciation.
At August 31, 1999, 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 19
<PAGE>
NOTES
<PAGE>
For More Information
General Municipal
Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL
Send your request
to [email protected]
ON THE INTERNET
Information can be viewed
online or downloaded from:
http://www.dreyfus.com
(c) 1999 Dreyfus Service Corporation 106SA998
<PAGE>
