General Municipal
Bond Fund, Inc.
SEMIANNUAL REPORT August 31, 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
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
17 Notes to Financial Statements
FOR MORE INFORMATION
---------------------------------------------------------------------------
Back Cover
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, 2000 through August 31,
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, W. Michael Petty.
The U.S. economy grew strongly over the past six months in an environment
characterized by high levels of consumer spending and low levels of
unemployment. Concerns that inflationary pressures might reemerge caused the
Federal Reserve Board to raise short-term interest rates twice during the
reporting period before signs of moderation began to appear in the summer of
2000.
Generally, higher interest rates normally lead to lower municipal bond prices.
However, supply-and-demand factors unique to the municipal bond market helped
promote higher prices over the six-month period. Because of robust economic
growth, many municipalities had little need to borrow during the reporting
period, creating a reduced supply of new issues, while demand from individual
investors strengthened. As a result, despite several short-term rallies and
fallbacks, municipal bond averages generally improved during the reporting
period.
We appreciate your confidence over the past six months, and look forward to your
continued participation in General Municipal Bond Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
September 15, 2000
2
DISCUSSION OF FUND PERFORMANCE
W. Michael Petty, Portfolio Manager
How did General Municipal Bond Fund, Inc. perform during the period?
For the six-month period ended August 31, 2000 the fund achieved a 6.49% total
return.(1) In comparison, the Lipper General Municipal Debt Funds category
average return was 6.43% for the same period.(2)
We attribute the fund's good overall performance to our security- selection
strategy, which emphasized bonds with relatively high yields. These securities
performed particularly well when the overall municipal bond market rallied.
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, as is consistent with the preservation
of capital.
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, age, the
creditworthiness of its issuer, insurance, and any provisions for early
redemption. Under most circumstances, we look for high yielding bonds that
cannot be redeemed by their issuers within the next 10 years and that are
selling at a discount to their face values.
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
The Fund 3
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
bonds to surge at a time when we anticipate little issuance, we may increase the
portfolio's average duration to maintain current yields for 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?
When the reporting period began on March 1, 2000, higher interest rates and
inflation concerns had already eroded the prices of many municipal bonds. In
response to these concerns, the Federal Reserve Board (the "Fed") continued to
raise short-term interest rates during the reporting period, implementing
increases in March and May for a total increase of 0.75 percentage points.
Despite higher interest rates, the municipal bond market generally rallied
during the six-month reporting period. The market rally was partly the result of
ongoing strength in the national, state and local economies, which helped keep
municipal bond prices relatively high compared to taxable bonds. Many states and
municipalities have enjoyed higher tax revenues and budget surpluses in this
environment, curtailing their need to borrow and resulting in a reduced supply
of securities compared to the same period one year earlier. At the same time,
demand for municipal bonds has been strong from individuals seeking to protect
wealth created by the strong economy and a rising stock market. When demand
rises and supply falls, prices of existing bonds generally tend to move higher.
What is the fund's current strategy?
We have been preparing for a time of general uncertainty regarding the U.S.
economy and interest rates. Recent signs of economic slowdown suggest that the
Fed's restrictive monetary policies could be near an end. On the other hand, any
threat of resurgent inflationary pressures could lead to more interest-rate
hikes. We expect this uncertainty to persist through November's presidential
election, at which point the Fed may be more comfortable signaling its
intentions for monetary policy.
4
Accordingly, we have recently been selling bonds that we believe may be subject
to the greatest credit concerns in an economic downturn, including securities
issued by hospitals and economically sensitive companies such as paper
producers. As of August 31, 2000, more than 90% of the fund's holdings were
rated investment grade by the major bond rating agencies. When appropriate, we
have redeployed the proceeds of those sales to high quality, income-oriented
bonds with structures that we believe will help cushion price declines if
interest rates rise further.
In addition, we have reduced the fund's average duration to a point that we
consider shorter than the average for our peer group. This posture is intended
to increase our flexibility, enabling us to act faster if and when the future
direction of economic growth, inflation and interest rates becomes clearer.
September 15, 2000
(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 INC.
The Fund 5
STATEMENT OF INVESTMENTS
August 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
Principal
LONG-TERM MUNICIPAL INVESTMENTS--94.6% Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------
ALABAMA--2.7%
Alabama Industrial Development Authority, SWDR
<S> <C> <C>
(Pine City Fiber Co.) 6.45%, 12/1/2023 12,000,000 11,758,080
CALIFORNIA--3.7%
California Pollution Control Financing Authority, PCR
(San Diego Gas and Electric Co.)
7.78%, 6/1/2014 (Insured; MBIA) 6,355,000 (a,b) 7,715,542
San Joaquin Hills Transportation Corridor, Toll Road Revenue:
Zero Coupon, 1/15/2026 (Insured; MBIA) 6,000,000 1,443,420
Zero Coupon, 1/15/2031 (Insured; MBIA) 24,000,000 4,334,640
Zero Coupon, 1/15/2032 (Insured; MBIA) 13,690,000 2,333,461
COLORADO--7.9%
Colorado Housing Finance Authority, Single Family Program:
7.55%, 8/1/2023 1,110,000 1,137,084
7.15, 10/1/2030 (Insured; FHA) 1,115,000 1,263,507
E-470 Public Highway Authority, Revenue
Zero Coupon, 9/1/2022 (Insured; MBIA) 10,900,000 3,125,139
Denver City and County, Airport System Revenue:
7.25%, 11/15/2012 4,065,000 4,314,225
7.25%, 11/15/2012 (Prerefunded 11/15/2002) 1,035,000 (c) 1,114,954
7.75%, 11/15/2021 5,365,000 5,627,939
7.75%, 11/15/2021 (Prerefunded 11/15/2001) 1,395,000 (c) 1,476,984
7.25%, 11/15/2023 3,985,000 4,220,872
7.25%, 11/15/2023 (Prerefunded 11/15/2002) 1,200,000 (c) 1,292,700
8.00%, 11/15/2025 3,890,000 4,020,315
8.00%, 11/15/2025 (Prerefunded 11/15/2001) 1,360,000 (c) 1,418,045
Lakewood, MFHR, Mortgage
6.70%, 10/1/2036 (Insured; FHA) 5,000,000 5,190,500
FLORIDA--3.7%
Palm Beach County, Solid Waste IDR (Osceola Power Ltd.
Partnership) 6.95%, 1/1/2022 3,000,000 (d) 1,710,000
Polk County Industrial Development Authority,
IDR 7.525%, 1/1/2015 13,840,000 14,165,655
ILLINOIS--4.1%
City of Chicago Board of Education, School Reform
Zero Coupon, 12/1/2026 (Insured; FGIC) 20,000,000 4,368,800
Illinois Health Facilities Authority, Health Hospital and Nursing
Home Revenue (Residential Centers Inc.)
8.50%, 8/15/2016 5,335,000 5,573,848
Village of Romeoville 8.375%, 1/1/2010 7,495,000 7,808,291
6
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------
INDIANA--1.0%
Indiana State Development Finance Authority, Revenue
(Inland Steel Facilities) 5.75%, 10/1/2011 5,000,000 4,335,250
KENTUCKY--6.7%
Kenton County Airport Board, Airport Revenue
(Special Facilities--Delta Airlines Project):
7.50%, 2/1/2012 11,550,000 11,985,551
7.125%, 2/1/2021 4,630,000 4,774,039
City of Mount Sterling, Revenue (Kentucky League of Cities
Funding Trust Lease Program) 6.10%, 3/1/2018 5,500,000 5,871,030
Pendleton County, Multi-County Lease Revenue (Kentucky
Association of Counties Leasing Trust Program)
6.40%, 3/1/2019 6,000,000 6,552,240
LOUISIANA--2.5%
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 (c) 6,639,243
Parish of Saint James, SWDR (Freeport-McMoRan
Partnership Project) 7.70%, 10/1/2022 4,140,000 4,300,011
MARYLAND--1.5%
Maryland Community Development Administration Department
of Community Development 9.924%, 4/1/2026 4,840,000 (a,b) 5,157,262
Montgomery County Housing Opportunities Commission,
MFMR 7.375%, 7/1/2032 1,225,000 1,254,400
MASSACHUSETTS--4.0%
Massachusetts Development Finance Agency, College and
University Revenue (Boston University) 6%, 5/15/2059 2,500,000 2,546,125
Massachusetts Port Authority, Special Project Revenue
(Harborside Hyatt Project) 10%, 3/1/2026 3,000,000 3,109,920
Massachusetts Water Resource Authority, Water Revenue
4%, 12/1/2018 (Insured; MBIA) 5,820,000 4,848,584
Route 3 North Transit Improvement Association, Lease
Revenue 5.25%, 6/15/2024 (Insured; MBIA) 7,000,000 6,728,330
MICHIGAN--12.0%
Dearborn Economic Development Corp., HR
(Oakwood Obligation Group)
5.875%, 11/15/2025 (Insured; FGIC) 4,950,000 5,042,515
Dickinson County Healthcare System, HR 5.80%, 11/1/2024 5,000,000 3,885,650
State of Michigan, COP 5.50%, 6/1/2027 (Insured; AMBAC) 2,000,000 1,977,980
The Fund 7
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------
MICHIGAN (CONTINUED)
Michigan Hospital Finance Authority, HR
(Genesys Health System):
8.10%, 10/1/2013 (Prerefunded 10/1/2005) 2,000,000 (c) 2,359,200
8.125%, 10/1/2021 (Prerefunded 10/1/2005) 4,910,000 (c) 5,797,384
7.50%, 10/1/2027 (Prerefunded 10/1/2005) 8,000,000 (c) 9,089,040
Michigan Strategic Fund, SWDR (Genesee Power Station
Project) 7.50%, 1/1/2021 7,000,000 7,229,040
Pinckney Community Schools
5.50%, 5/1/2027 (Insured; FGIC) 2,675,000 2,642,338
Ravenna Public Schools 5.25%, 5/1/2024 (Insured; FGIC) 3,000,000 2,876,280
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 5,761,450
Wayne Charter County, Special Airport Facilities Revenue
(Northwest Airlines Inc.) 6.75%, 12/1/2015 5,605,000 5,612,174
MINNESOTA--4.0%
Chaska, Electric Revenue 6%, 10/1/2025 2,000,000 2,020,220
Minneapolis and Saint Paul Metropolitan Airports Commission,
Airport Revenue 5%, 1/1/2030 (Insured; AMBAC) 5,000,000 4,586,700
Minnesota Housing Finance Agency, SFMR:
5.95%, 1/1/2017 2,525,000 2,579,616
6%, 1/1/2021 2,415,000 2,463,493
Washington County Housing and Redevelopment Authority,
Hospital Facility Revenue (Healtheast Project)
5.50%, 11/15/2027 (Insured; ACA) 6,400,000 5,861,760
MISSOURI--.4%
Missouri State Housing Development Commission, SFMR
6.30%, 9/1/2025 (Guaranteed; GNMA, FNMA) 1,500,000 1,540,380
NEW HAMPSHIRE--.6%
New Hampshire Housing Finance Authority,
Single Family Residential Mortgage:
7.75%, 7/1/2023 655,000 679,346
7.70%, 7/1/2029 1,960,000 1,995,574
NEW YORK--11.0%
Monroe Tobacco Asset Securitization Corp., Tobacco
Settlement asset Backed Bonds:
6.375%, 6/1/2035 3,000,000 3,029,850
6.625, 6/1/2042 3,000,000 3,099,780
New York City Transitional Finance Authority, Revenue
4.75%, 5/1/2023 3,000,000 2,665,830
8
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
New York State Dormitory Authority, Revenue:
(Mount Sinai School of Medicine)
5.15%, 7/1/2024 (Insured; MBIA) 4,000,000 3,829,840
(State University Educational Facilities):
7.50%, 5/15/2013 2,500,000 3,051,800
5.50%, 5/15/2026 10,000,000 9,763,900
New York State Local Government Assistance Corp., Sales
Tax Revenue 5.25%, 4/1/2016 (Insured; AMBAC) 6,410,000 6,453,844
Port Authority of New York and New Jersey, Special
Obligation Revenue (JFK International Airlines
Terminal) 5.75%, 12/1/2022 (Insured; MBIA) 5,800,000 5,905,560
Triborough Bridge and Tunnel Authority, Highway Toll
Revenues 5.50%, 1/1/2017 (Insured; MBIA) 10,000,000 10,294,400
NORTH CAROLINA--4.4%
Charlotte, Special Facilities, Airport and Marina
Revenue (Charlotte--Douglas International Airport)
5.60%, 7/1/2027 10,480,000 8,457,046
North Carolina Medical Care Commission, Revenue
(North Carolina Housing Foundation Inc.):
6.45%, 8/15/2020 (Insured; ACA) 1,000,000 1,039,090
6.625%, 8/15/2030 (Insured; ACA) 2,565,000 2,684,683
North Carolina Eastern Municipal Power Agency, Power
System Revenue:
5.75%, 1/1/2024 2,000,000 1,861,660
6.75%, 1/1/2026 5,000,000 5,172,250
NORTH DAKOTA--1.1%
North Dakota Housing Finance Agency, SFMR:
7.30%, 7/1/2024 2,455,000 2,509,869
7.75%, 7/1/2024 (Insured; MBIA) 2,380,000 2,437,667
OHIO--5.6%
Cuyahoga County, HR (Metrohealth Systems Project)
6.15%, 2/15/2029 4,540,000 4,501,864
Lucas County, HR (Promedica Healthcare Obligated
Group) 5.375%, 11/15/2029 (Insured: AMBAC) 3,345,000 3,211,568
State of Ohio, SWDR (USG Corp. Project) 5.60%, 8/1/2032 4,000,000 3,581,600
Ohio Housing Finance Agency, Residential Mortgage
Revenue (Mortgage Backed Securities Program)
6.25%, 9/1/2020 (Guaranteed; GNMA) 5,000,000 5,184,400
Ohio Water Development Authority, Pollution Control Facilities
Revenue (Cleveland Electric) 6.10%, 8/1/2020 8,400,000 7,991,172
The Fund 9
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------
OKLAHOMA--1.5%
McGee Creek Authority, Water Revenue
6%, 1/1/2013 (Insured; MBIA) 6,025,000 6,577,071
PENNSYLVANIA--.9%
Lehigh County General Purpose Authority, Revenue
(Wiley House) 9.50%, 11/1/2016 (Prerefunded 11/1/2001) 3,500,000 (c) 3,767,540
RHODE ISLAND--1.0%
Rhode Island Housing and Mortgage Finance Corp.
(Homeownership E-1) 7.55%, 10/1/2022 4,305,000 4,437,594
TEXAS--6.6%
Alliance Airport Authority Inc., Special Facilities Revenue
(American Airlines Inc. Project)
7%, 12/1/2011 (Guaranteed; AMR Corp.) 10,000,000 10,868,100
Dallas--Fort Worth International Airport Facility Improvement
Corp., Revenue (Delta Airlines Inc.)
7.125%, 11/1/2026 5,000,000 5,056,300
Gulf Coast Waste Disposal Authority, SWDR
(Champion International Corp. Project):
7.25%, 4/1/2017 2,810,000 2,912,425
7.25%, 4/1/2017 (Prerefunded 4/1/2002) 1,925,000 (c) 2,040,038
Houston, Airport System Revenue, Special Facilities
(Continental Airlines Project) 5.70%, 7/15/2029 5,575,000 4,669,174
Tomball Hospital Authority, Health Hospital and Nursing Home
Revenue (Tomball Regional Hospital) 6%, 7/1/2025 3,550,000 3,115,480
UTAH--.9%
Carbon County, SWDR (Sunnyside Cogeneration Project):
7.10%, 8/15/2023 3,975,000 3,810,276
Zero Coupon, 8/15/2024 1,235,000 203,059
WASHINGTON--4.7%
Chelan County Public Utility District Number 001, Consolidated
Revenue (Chelan Hydroelectric) 7.50%, 7/1/2011 5,655,000 6,708,470
Washington Housing Finance Commission, Nonprofit Housing
Revenue (Seattle University Auxiliary Services Project)
5.30%, 7/1/2031 (LOC; Bank of America) 1,370,000 1,250,865
Washington Public Power Supply System, Revenue (Nuclear
Project Number 3) 7.125%, 7/1/2016 (Insured; MBIA) 10,425,000 12,348,830
WYOMING--1.1%
Wyoming Community Development Authority, Housing Revenue
6.25%, 6/1/2027 2,335,000 2,370,025
Wyoming Student Loan Corp., Student Loan Revenue
6.25%, 6/1/2029 2,500,000 2,622,450
10
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------
U.S. RELATED--1.0%
Puerto Rico Electric Power Authority, Power Revenue
4.50%, 7/1/2018 (Insured; MBIA) 5,000,000 4,507,100
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $401,124,811) 411,508,596
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--4.1%
--------------------------------------------------------------------------------
FLORIDA--1.1%
Saint Lucie, SWDR, VRDN
(Florida Light and Power Co.) 4.35% 5,000,000 (e) 5,000,000
IOWA--2.8%
Iowa Finance Authority, SWDR, VRDN
(Cedar River Paper Co. Project):
4.40% (LOC; Bank of Nova Scotia) 4,000,000 (e) 4,000,000
4.40% (LOC; Union Bank of Switzerland) 8,000,000 (e) 8,000,000
MINNESOTA--.2%
Mankato, VRDN (Mankato Area Family YMCA)
4.40% (LOC; U.S. Bank N.A.) 800,000 (e) 800,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $17,800,000) 17,800,000
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $418,924,811) 98.7% 429,308,596
CASH AND RECEIVABLES (NET) 1.3% 5,539,830
NET ASSETS 100.0% 434,848,426
The Fund 11
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
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
COP Certificate of Participation Assurance Insurance
FHA Federal Housing Administration Corporation
FGIC Financial Guaranty Insurance MFHR Multi-Family Housing Revenue
Company MFMR Multi-Family Mortgage Revenue
FNMA Federal National Mortgage PCR Pollution Control Revenue
Association SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage SWDR Solid Waste Disposal Revenue
Association VRDN Variable Rate Demand Notes
HR Hospital Revenue
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 33.4
AA Aa AA 10.8
A A A 18.2
BBB Baa BBB 18.9
BB Ba BB 2.9
B B B 1.0
F1 Mig1 SP1 4.0
Not Rated(f) Not Rated(f) Not Rated(f) 10.8
100.0
</TABLE>
(A) INVERSE FLOATER SECURITY-THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(B) SECURITIES EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT
OF 1933. THESE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM
REGISTRATION, NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS. AT AUGUST 31, 2000,
THESE SECURITIES AMOUNTED TO $12,872,804 OR 3.0% OF NET ASSETS.
(C) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST
ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING
DATE.
(D) NON-INCOME ACCRUING SECURITY.
(E) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST-SUBJECT TO PERIODIC
CHANGE.
(F) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
SEE NOTES TO FINANCIAL STATEMENTS.
12
STATEMENT OF ASSETS AND LIABILITIES
August 31, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 418,924,811 429,308,596
Interest receivable 6,349,028
Receivable for investment securities sold 246,885
Prepaid expenses 10,982
435,915,491
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 318,895
Cash overdraft due to Custodian 560,749
Payable for shares of Common Stock redeemed 34,383
Accrued expenses 153,038
1,067,065
--------------------------------------------------------------------------------
NET ASSETS ($) 434,848,426
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 444,758,421
Accumulated net realized gain (loss) on investments (20,293,780)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 10,383,785
--------------------------------------------------------------------------------
NET ASSETS ($) 434,848,426
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(150 million shares of $.001 par value Common Stock authorized) 32,214,934
NET ASSET VALUE, offering and redemption price per share-Note 3(d) ($) 13.50
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 13
STATEMENT OF OPERATIONS
Six Months Ended August 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 13,837,062
EXPENSES:
Management fee--Note 3(a) 1,196,880
Shareholder servicing costs--Note 3(b) 602,382
Professional fees 48,036
Directors' fees and expenses--Note 3(c) 25,127
Custodian fees 23,319
Registration fees 10,359
Prospectus and shareholders' reports 8,318
Loan commitment fees--Note 2 1,683
Miscellaneous 13,427
TOTAL EXPENSES 1,929,531
INVESTMENT INCOME--NET 11,907,531
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (2,024,078)
Net unrealized appreciation (depreciation) on investments 17,427,955
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 15,403,877
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 27,311,408
SEE NOTES TO FINANCIAL STATEMENTS.
14
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
August 31, 2000 Year Ended
(Unaudited) February 29, 2000
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 11,907,531 27,028,469
Net realized gain (loss) on investments (2,024,078) (18,324,025)
Net unrealized appreciation (depreciation)
on investments 17,427,955 (34,848,198)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 27,311,408 (26,143,754)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (11,907,531) (27,197,310)
Net realized gain on investments -- (4,690,240)
TOTAL DIVIDENDS (11,907,531) (31,887,550)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 17,595,667 249,567,796
Dividends reinvested 8,176,411 22,212,897
Cost of shares redeemed (45,154,610) (350,134,837)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (19,382,532) (78,354,144)
TOTAL INCREASE (DECREASE) IN NET ASSETS (3,978,655) (136,385,448)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 438,827,081 575,212,529
END OF PERIOD 434,848,426 438,827,081
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,336,019 17,395,556
Shares issued for dividends reinvested 617,744 1,623,846
Shares redeemed (3,426,202) (24,802,975)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,472,439) (5,783,573)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund 15
<TABLE>
<CAPTION>
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
August 31, 2000 Fiscal Year Ended February,
---------------------------------------------------------------
(Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 13.03 14.57 14.95 14.53 15.00 14.45
Investment Operations:
Investment income--net .36 .73 .74 .77 .78 .82
Net realized and unrealized
gain (loss) on investments .47 (1.42) (.09) .44 (.21) .57
Total from Investment Operations .83 (.69) .65 1.21 .57 1.39
Distributions:
Dividends from investment
income--net (.36) (.73) (.74) (.77) (.78) (.82)
Dividends from net realized gain
on investments -- (.12) (.29) (.02) (.26) (.02)
Total Distributions (.36) (.85) (1.03) (.79) (1.04) (.84)
Net asset value, end of period 13.50 13.03 14.57 14.95 14.53 15.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 12.87(a) (4.81) 4.47 8.52 4.04 9.79
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .89(a) .87 .86 .87 .88 .88
Ratio of net investment income
to average net assets 5.47(a) 5.29 5.04 5.23 5.40 5.50
Portfolio Turnover Rate 23.25(b) 47.10 99.51 91.37 115.62 114.78
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 434,848 438,827 575,213 653,515 690,093 867,157
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
16
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., which is a wholly-owned subsidiary of Mellon Financial Corporation.
Effective March 22, 2000, Dreyfus Service Corporation ("DSC"), a wholly-owned
subsidiary of the Manager, 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 (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
The Fund 17
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market on each
business day. Investments not listed on an exchange or the national securities
market, or securities for which there were no transactions, are valued at the
average of the most recent bid and asked prices. Bid price is used when no asked
price is available.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date. Under the terms of the custody
agreement, the fund received net earnings credits of $8,137 during the period
ended August 31, 2000 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, if any, are normally declared and paid annually,
but the fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
"Code"). To the extent that net realized capital gain can be offset by capital
loss carryovers, it is the policy of the fund not to distribute such gain.
(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.
18
The fund has an unused capital loss carryover of approximately $12,272,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to February 29, 2000. This
amount is calculated based on Federal income tax regulations which may differ
from financial reporting in accordance with generally accepted accounting
principles. If not applied, the carryover expires in fiscal 2008.
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. During the period ended August
31, 2000, 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 fees, 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, 2000, there was no
expense reimbursement pursuant to the Agreement.
The Fund 19
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(b) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1 under the
Act, the fund pays the distributor for distributing the fund's shares, servicing
shareholder accounts and for advertising and marketing relating to the fund. The
Plan provides for payments to be made at an annual aggregate rate of .20 of 1%
of the value of the fund's average daily net assets. Prior to March 22, 2000,
Premier Mutual Fund Services, Inc., and not DSC, received payments under the
Plan for distributing fund shares and for servicing shareholders accounts. The
distributor determines 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 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, 2000 the fund was charged $438,581 pursuant to the Plan, all of which
was paid to DSC.
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, 2000, the fund was charged $98,537 pursuant to the transfer
agency 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
20
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 $4,500 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.
(d) A .10% redemption fee is charged and retained by the fund on shares redeemed
within thirty days following the date of issuance, including redemptions made
through the use of the fund's exchange privilege. During the period ended August
31, 2000, redemption fees charged and retained by the fund amounted to $480.
Prior to June 1, 2000, this fee was chargeable within fifteen days following the
date of issuance of such shares.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended August 31, 2000, amounted to
$94,611,111 and $112,973,754, respectively.
At August 31, 2000, accumulated net unrealized appreciation on investments was
$10,383,785, consisting of $19,301,046 gross unrealized appreciation and
$8,917,261 gross unrealized depreciation.
At August 31, 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 21
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
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
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) 2000 Dreyfus Service Corporation 106SA008
