<PAGE>
Small box above fund name showing a lions face.
PREMIER MANAGED INCOME FUND
DECEMBER 31, 1994
<PAGE>
DEAR SHAREHOLDER,
We are pleased to provide you with performance and portfolio information for
the Premier Managed Income Fund for the year ended December 31, 1994.
As you know from recent correspondence, The Laurel Funds are integrating with
The Dreyfus Family of Funds. As a result of this integration, the Laurel
Managed Income Fund is now known, and publicly listed, as the Premier Managed
Income Fund. Please be assured that the new name does not affect the value of
your account nor the investment objective or strategy of your Fund.
On December 19, 1994, the Fund, which is now part of The Premier Family of
Funds, a group of funds within The Dreyfus Family of Funds that are sold
primarily through financial professionals, adopted a new sales load structure
consisting of four classes of shares. Class A Shares (formerly Investor
Shares) are now subject to a maximum front-end sales load of 4.5%. In
addition, the Fund began offering Class B and Class C Shares which are subject
to a maximum contingent deferred sales charge of 4.0% and 1.0% if shares are
redeemed within six years or one year of purchase respectively. There was no
change to Class R Shares (formerly Trust Shares). If you were a Class A
shareholder of the Fund prior to the implementation of the new multi-class
structure, you will continue to be exempt from all front-end sales loads when
continuing to invest and reinvest in additional Class A Shares of the same
Fund account. However, any new purchase of, or any exchange into, shares of
another Fund account or other Premier Funds will not be exempt from the sales
loads that apply to each such purchase or exchange.
In the pages that follow, we have provided detailed financial statements, a
description of the market environment over the last twelve months and a
commentary on the Fund's investment management strategy and portfolio changes
for the reporting period.
We would like to extend our appreciation for your support and hope that you
will find that your Fund, which is now part of The Premier Family of Funds,
will continue to satisfy your investment needs. As always, we welcome your
thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Funds Trust
Premier Managed Income Fund
February 17, 1995
1
................................................................................
<PAGE>
TABLE of CONTENTS
................................................................................
<TABLE>
<S> <C>
Shareholder Letter........................................ 1
Economic Review........................................... 3
Portfolio Overview........................................ 4
Performance Summary....................................... 5
Portfolio of Investments.................................. 7
Statement of Assets and Liabilities....................... 11
Statement of Operations................................... 12
Statement of Changes in Net Assets........................ 13
Financial Highlights...................................... 14
Notes to Financial Statements............................. 18
Independent Auditors' Report.............................. 26
Tax Information........................................... 27
</TABLE>
2
................................................................................
<PAGE>
ECONOMIC REVIEW
................................................................................
THE ECONOMY MARCHES ON/ECONOMIC STRENGTH CONTINUES
Following several years of stop-and-start recovery, the U.S. economy finally
established a steady pace of expansion early in 1994. Report after government
report brought confirming evidence. New orders for manufacturing, housing
starts and sales, and even consumer spending all went up. At the same time,
unemployment fell to its lowest level in nearly four years.
RISING INTEREST RATES DOMINATED THE MARKET
The robust economy raised the inflationary antennae of the Federal Reserve
Board. Determined to head off any price pressures that might be building along
with the economy's strength, the Fed raised short-term interest rates six
times between February and November, 1994. These moves represented a
definitive shift away from the Fed's previous "easy money" policy and ended a
nearly 5-year period of declining short-term rates.
The Fed acted in a preemptory fashion -- actual inflation had not yet
appeared, although the economy seemed to be growing a bit too rapidly for
comfort. Later in the year, producer prices did begin to rise. The Fed was
concerned that these price increases would eventually flow through to the
consumer level unless it raised interest rates again. Recoveries in foreign
markets pose yet another challenge for the Fed, since their growth creates
demand for U.S. goods and services which puts inflationary pressure on our
economy.
BOND PRICES DECLINED
Financial markets, especially the bond market, had trouble adjusting to higher
interest rates. In line with the Fed's actions, other interest rates rose and
prices of lower yielding bonds fell in order to bring their yields in line
with those of comparable new issues. Investors had been enjoying exceptional
returns during the past two years of declining rates as the bond market had
continued to rally. This new rising environment dealt investor confidence a
heavy blow, especially since people did not know when rates would level off
and some stability would return to the market. Many investors sold off their
bond holdings. The U.S. mortgage securities market was particularly hard hit,
as were bond markets in many developing countries. High yield bond prices held
up best, because the values of these issues are tied more closely to the
economy than to changes in interest rates.
RATES MAY CONTINUE TO RISE
In assessing the outlook for the bond market, we evaluate four main factors:
the state of the business cycle, prospects for inflation, the direction of
foreign interest rates, and the policy of the Federal Reserve Board.
Presently, three of these factors suggest the possibility
3
................................................................................
<PAGE>
ECONOMIC REVIEW (continued)
................................................................................
of higher interest rates ahead. The business cycle, or economy, remains strong
and this puts pressure on rates. Foreign interest rates are rising, another
pressure on U.S. rates. And the Fed is now pursuing a tighter monetary policy,
emphasizing its willingness to raise rates to stop inflation. The lone
positive for stabilizing rates is inflation itself. Inflation is still low
and, although it may rise somewhat during 1995 as higher producer prices flow
through to the consumer level, it should remain low in relation to prevailing
interest rates. In sum, we believe that the trend seems to be toward higher
interest rates, although a slowing economy or other developments could
certainly alter this outlook.
PORTFOLIO OVERVIEW
................................................................................
In a market environment many analysts have called the most difficult in thirty
years, the Fund turned in performance in line with market averages. The Fund's
Class A shares posted a total return of (9.41)%* and Class R shares posted a
total return of (4.88)% for the twelve months ended December 31, 1994.
The Fund has maintained a defensive posture throughout the period. At the
start of the year, we shortened the average maturity of the portfolio to help
preserve principal value in the face of rising interest rates. In seeking high
income, we invested almost 30% of the portfolio in high yield issues which
benefitted from the strengthening economy and performed relatively well
throughout the fiscal year. The Fund suffered some setbacks from the decline
in foreign markets, particularly in its Mexican holdings, and from the
flattening yield curve which hurt the performance of its substantial
intermediate-term securities position.
In the months ahead, we expect to continue building on the Fund's yield
advantage by emphasizing corporate and mortgage-backed securities. By
purchasing some mortgage-backed securities with shorter maturities, we are
attempting to diminish the interest-rate sensitivity of these holdings while
continuing to provide the Fund with a solid income stream.
* Reflects a maximum front-end sales load of 4.5%.
4
................................................................................
<PAGE>
PERFORMANCE SUMMARY
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND
CHANGE IN VALUE OF $10,000 INVESTED FROM JANUARY 1, 1985 - DECEMBER 31, 1994 +
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in Premier Managed Income
Fund Class A shares on December 31, 1984 through December 31, 1994 as compared
with the growth of a $10,000 investment in Lehman Brothers Aggregate Bond Index.
The plot points used to draw the line graph were as follows:
<TABLE>
<CAPTION>
Growth of $10,000
Investment in the
Growth of $10,000 Lehman Brothers
Invested in Class A shares Aggregate Bond
Month Ended of the Fund Index
<S> <C> <C>
12/84 $ 9,550 $10,000
3/85 $ 9,777 $10,223
6/85 $10,640 $11,096
9/85 $11,004 $11,333
12/85 $11,635 $12,211
3/86 $12,251 $13,160
6/86 $12,548 $13,318
9/86 $12,527 $13,634
12/86 $12,809 $14,079
3/87 $13,404 $14,311
6/87 $13,351 $14,056
9/87 $13,158 $13,672
12/87 $13,572 $14,466
3/88 $14,184 $15,011
6/88 $14,335 $15,187
9/88 $14,648 $15,490
12/88 $14,936 $15,607
3/89 $15,108 $15,785
6/89 $15,589 $17,042
9/89 $15,803 $17,235
12/89 $15,766 $17,874
3/90 $15,652 $17,731
6/90 $16,076 $18,377
9/90 $16,028 $18,534
12/90 $16,459 $19,472
3/91 $16,936 $20,014
6/91 $17,405 $20,341
9/91 $18,343 $21,497
12/91 $19,262 $22,587
3/92 $19,398 $22,299
6/92 $20,162 $23,200
9/92 $20,949 $24,197
12/92 $20,951 $24,260
3/93 $21,965 $25,264
6/93 $22,737 $25,935
9/93 $23,619 $26,611
12/93 $23,997 $26,625
3/94 $23,347 $25,860
6/94 $22,652 $25,594
9/94 $23,072 $25,751
12/94 $22,764 $25,848
</TABLE>
AVERAGE ANNUAL TOTAL RETURN -- CLASS A SHARES
<TABLE>
<CAPTION>
(FORMERLY RETAIL CLASS SHARES)
<S> <C> <C>
WITH WITHOUT
SALES SALES
CHARGE CHARGE
--------------------------------------------------------------------------------
Year Ended 12/31/94 (9.41)% (5.14)%
-------------------------------------------------------------------
Five Years Ended 12/31/94 8.57% 9.07%
-------------------------------------------------------------------
Ten Years Ended 12/31/94 6.64% 7.62%
-------------------------------------------------------------------
<FN>
+ HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN CLASS A SHARES (FORMERLY
RETAIL CLASS SHARES) AT JANUARY 1, 1985 ASSUMING DEDUCTION OF A MAXIMUM 4.50%
SALES CHARGE AT THE TIME OF INVESTMENT AND REINVESTMENT OF DIVIDENDS AND
CAPITAL GAINS AT NET ASSET VALUE THROUGH DECEMBER 31, 1994.
THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS COMPOSED OF THE LEHMAN GOVERNMENT/
CORPORATE INDEX AND THE MORTGAGE-BACKED SECURITIES INDEX AND INCLUDES TREASURY
ISSUES, AGENCY ISSUES, CORPORATE BOND ISSUES AND MORTGAGE-BACKED SECURITIES.
INDEX INFORMATION IS AVAILABLE AT MONTH-END ONLY; THEREFORE, THE CLOSEST
MONTH-END TO INCEPTION DATE OF THE FUND HAS BEEN USED.
THIS PERIOD WAS ONE IN WHICH BOND PRICES FLUCTUATED AND THE RESULTS SHOULD NOT
BE CONSIDERED AS REPRESENTATIVE OF DIVIDEND INCOME OR CAPITAL GAIN OR LOSS
WHICH MAY BE REALIZED FROM AN INVESTMENT IN THE FUND TODAY. NO ADJUSTMENT HAS
BEEN MADE FOR A SHAREHOLDER'S TAX LIABILITY ON DIVIDENDS OR CAPITAL GAINS.
FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING FEE WAIVERS AND/OR
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF
THE PROSPECTUS AND ELSEWHERE IN THE REPORT.
NOTE: ALL FIGURES CITED HERE REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE
FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES UPON REDEMPTION MAY BE WORTH MORE OR
LESS THAN ORIGINAL COST.
</TABLE>
5
................................................................................
<PAGE>
PERFORMANCE SUMMARY (continued)
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND
CHANGE IN VALUE OF $10,000 INVESTED FROM FEBRUARY 1, 1993 - DECEMBER 31, 1994 +
A line graph depicting the total growth (including reinvestment of dividends and
capital gains) of a hypothetical investment of $10,000 in Premier Managed Income
Fund Class R shares on February 1, 1993 through December 31, 1994 as compared
with the growth of a $10,000 investment in Lehman Brothers Aggregate Bond Index.
The plot points used to draw the line graph were as follows:
<TABLE>
<CAPTION>
Growth of $10,000
Investment in the
Growth of $10,000 Lehman Brother
Invested in Class R shares Aggregate Bond
Month Ended of the Fund Index
<S> <C> <C>
1/93 -- $10,000
2/01/93 $10,000 --
3/93 $10,281 $10,218
6/93 $10,651 $10,489
9/93 $11,073 $10,762
12/93 $11,259 $10,768
3/94 $10,963 $10,459
6/94 $10,643 $10,351
9/94 $10,848 $10,415
12/94 $10,709 $10,454
</TABLE>
AVERAGE ANNUAL TOTAL RETURN -- CLASS R SHARES
<TABLE>
<CAPTION>
(FORMERLY INVESTMENT CLASS)
<S> <C>
-------------------------------------------------------------------
Year Ended 12/31/94 (4.88)%
-------------------------------------------------------------------
Inception (2/1/93) through 12/31/94 7.09%
-------------------------------------------------------------------
<FN>
+ HYPOTHETICAL ILLUSTRATION OF $10,000 INVESTED IN CLASS R SHARES (FORMERLY
INVESTMENT CLASS) AT INCEPTION (FEBRUARY 1, 1993) AND REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS AT NET ASSET VALUE THROUGH DECEMBER 31, 1994.
THE LEHMAN BROTHERS AGGREGATE BOND INDEX IS COMPOSED OF THE LEHMAN GOVERNMENT/
CORPORATE INDEX AND THE MORTGAGE-BACKED SECURITIES INDEX AND INCLUDES TREASURY
ISSUES, AGENCY ISSUES, CORPORATE BOND ISSUES AND MORTGAGE-BACKED SECURITIES.
INDEX INFORMATION IS AVAILABLE AT MONTH-END ONLY; THEREFORE, THE CLOSEST
MONTH-END TO INCEPTION DATE OF THE FUND HAS BEEN USED.
THIS PERIOD WAS ONE IN WHICH BOND PRICES FLUCTUATED AND THE RESULTS SHOULD NOT
BE CONSIDERED AS REPRESENTATIVE OF DIVIDEND INCOME OR CAPITAL GAIN OR LOSS
WHICH MAY BE REALIZED FROM AN INVESTMENT IN THE FUND TODAY. NO ADJUSTMENT HAS
BEEN MADE FOR A SHAREHOLDER'S TAX LIABILITY ON DIVIDENDS OR CAPITAL GAINS.
FURTHER INFORMATION RELATING TO FUND PERFORMANCE, INCLUDING FEE WAIVERS AND/OR
EXPENSE REIMBURSEMENTS, IS CONTAINED IN THE FINANCIAL HIGHLIGHTS SECTION OF
THE PROSPECTUS AND ELSEWHERE IN THE REPORT.
NOTE: ALL FIGURES CITED HERE REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE
FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE SO THAT AN INVESTOR'S SHARES UPON REDEMPTION MAY BE WORTH MORE OR
LESS THAN ORIGINAL COST.
</TABLE>
6
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
DOMESTIC CORPORATE OBLIGATIONS -- 27.5%
INDUSTRIAL -- 6.6%
<C> <S> <C> <C> <C>
$1,650,000 ADT Operations Inc. Sr. Note 8.250% 08/01/00 $ 1,518,000
960,000 Kroger Company 9.875 08/01/02 951,600
473,000 Lear Seating Corporation Sub. Note 8.250 02/01/02 417,423
1,000,000 Owens Illinois Inc. Sr. Deb. 11.000 12/01/03 1,038,750
1,100,000 Penn Traffic Sr. Note 8.625 12/15/03 958,375
1,000,000 Stone Container Corporation 10.750 10/01/02 1,002,500
------------
5,886,648
------------
BANKING AND FINANCE -- 5.1%
600,000 Midland Bank, Sub. Notes 8.625 12/15/04 596,250
1,000,000 MNC Financial Inc., Sub. Capital
Note 9.375 05/01/97 1,023,750
570,000 Paine Webber Group Inc. 6.250 06/15/98 525,113
1,375,000 Paine Webber Group Inc. 6.310 07/22/99 1,234,063
225,000 Paine Webber Group Inc. 7.750 09/01/02 205,031
1,000,000 Smith Barney Holdings Inc. 7.875 10/01/99 966,250
------------
4,550,457
------------
OIL, GAS AND COAL -- 3.9%
2,000,000 Consolidation Coal Company++ 8.300 03/06/02 2,037,500
1,440,000 Moran Energy International 8.000 11/01/95 1,386,000
------------
3,423,500
------------
TECHNOLOGY -- 3.1%
1,860,000 Jones Intercable Inc. 11.500 07/15/04 1,927,425
810,000 Paging Network Inc., Sr. Sub. Note 11.750 05/15/02 818,100
------------
2,745,525
------------
TRANSPORTATION -- 2.4%
1,250,000 American President Companies
Limited 7.125 11/15/03 1,084,375
1,100,000 Overseas Shipholding Group Note 8.000 12/01/03 1,087,625
------------
2,172,000
------------
COMPUTER LEASING -- 2.3%
2,000,000 Comdisco Inc., Note 8.950 05/15/95 2,010,000
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 7
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (continued)
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
DOMESTIC CORPORATE OBLIGATIONS -- (continued)
UTILITIES -- 1.6%
<C> <S> <C> <C> <C>
$ 500,000 First Paulo Verde Funding
Corporation, Leased Security
Obligation, Series 1986A 10.300% 01/15/14 $ 471,250
500,000 First Paulo Verde Funding
Corporation, Series 1986A 10.150 01/15/16 471,250
500,000 Nynex Capital Funding Company 8.100 11/01/99 494,375
------------
1,436,875
------------
MEDIA -- 1.3%
3,000,000 Turner Boradcasting Systems Inc.++ ZERO 02/13/07 1,192,500
COUPON
------------
INSURANCE -- 1.2%
1,200,000 Kemper Corporation Note 6.875 09/15/03 1,077,000
------------
TOTAL DOMESTIC CORPORATE OBLIGATIONS
(Cost $25,157,055) 24,494,505
------------
FOREIGN CORPORATE OBLIGATIONS -- 8.1%
430,000 Carter Holt Harvey Limited Sr. Note 8.875 12/01/04 433,763
950,000 Cemex S.A. 8.875 06/10/98 817,000
730,000 Domtar Inc., Sr. Note 11.750 03/15/99 748,250
2,600,000 Fideicomiso Petacalco++ 8.125 12/15/03 1,898,000
1,450,000 lnternational Semi-Tech, Sr. Note+ ZERO 08/15/03 652,500
COUPON
1,400,000 Petroliam Nasional Berhad++ 6.875 07/01/03 1,258,250
1,450,000 Swire Pacific Limited, Note++ 8.500 09/29/04 1,442,750
------------
TOTAL FOREIGN CORPORATE OBLIGATIONS
(Cost $8,343,661) 7,250,513
------------
FOREIGN GOVERNMENT & AGENCY OBLIGATIONS -- 7.5%
2,000,000 Banco Nacional De Orbas 6.875 10/01/98 1,750,000
1,820,000 Bank China Note 6.750 03/15/99 1,708,525
3,500,000 Republic of Argentina, Bond 8.375 12/20/03 2,537,500
685,000 Republic of Colombia, Notes 8.750 10/06/99 649,038
------------
TOTAL FOREIGN GOVERNMENT & AGENCY OBLIGATIONS
(Cost $7,937,272) 6,645,063
------------
CONVERTIBLE BONDS -- 3.4%
7,000,000 Freeport McMoran Inc., Deb. Conv. ZERO 08/05/06 2,493,750
COUPON
850,000 Pacific Concord Financial, Conv.++ 4.750 12/10/98 580,125
------------
TOTAL CONVERTIBLE BONDS (Cost $3,391,948 ) 3,073,875
------------
</TABLE>
8 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (continued)
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
MORTGAGE-BACKED SECURITIES -- 30.6%
FEDERAL NATIONAL MORTGAGE ASSOCIATION-(FNMA) -- 21.4%
<C> <S> <C> <C> <C>
$6,229,000 FNMA 15 Year TBA 7.500% 02/01/09 $ 5,950,642
6,506,000 FNMA 15 Year TBA 8.000 01/01/10 6,361,648
1,121,325 FNMA 93-97 Guaranteed
Remic (I/O) 2.780(1) 05/25/23 396,668
490,624 FNMA 93-222 Guaranteed Remic (P/O) 0.000(2) 01/25/22 370,421
2,000,000 FNMA 92-12 Guaranteed Remic (I/O) 5.351(3) 01/25/22 1,202,500
22,264 FNMA 92-G20 Guaranteed
Remic (I/O) 437.875(4) 04/25/22 203,711
2,268,820 FNMA 92-204 Guaranteed Remic (I/O) 3.281(5) 10/25/22 138,965
735,517 FNMA 93-182 Guaranteed Remic (I/O) 2.830(6) 09/25/23 258,350
4,208,855 FNMA 8.500 12/01/24 4,140,461
51,073 FNMA 14.750 08/01/12 56,184
------------
19,079,550
------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION-(GNMA) -- 9.1%
4,920,000 GNMA 7.000 12/15/24 4,424,900
3,763,800 GNMA 8.500 12/15/24 3,703,814
------------
8,128,714
------------
FEDERAL HOME LOAN MORTGAGE CORPORATION-(FHLMC) -- 0.1%
97,753 FHLMC 6.500 04/01/09 89,922
------------
TOTAL MORTGAGE-BACKED SECURITIES
(Cost $28,862,279) 27,298,186
------------
ASSET-BACKED SECURITIES -- 5.0%
900,000 Advanta Credit Card Master 6.405 10/01/01 897,480
1,065,000 Discover Card Master 6.538 10/16/04 1,064,499
1,385,000 MBNA Master Credit Card 6.275 03/15/01 1,376,829
1,187,720 Equa Credit Corporation Home Equity
Loan 5.150 09/15/08 1,105,293
------------
TOTAL ASSET-BACKED SECURITIES
(Cost $4,528,909) 4,444,101
------------
U.S. TREASURY OBLIGATIONS -- 13.4%
U.S. TREASURY BILLS -- 10.5%
9,495,000 U.S. Treasury Bills 5.424+++ 02/09/95 9,396,226
------------
U.S. TREASURY NOTES -- 2.9%
1,000,000 U.S. Treasury Notes 3.875 04/30/95 992,760
1,000,000 U.S. Treasury Notes 5.125 03/31/96 972,370
50,000 U.S. Treasury Notes 5.125 03/31/98 46,197
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 9
................................................................................
<PAGE>
PORTFOLIO of INVESTMENTS (continued)
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
PRINCIPAL INTEREST MATURITY VALUE
AMOUNT RATE DATE (NOTE 1)
U.S. TREASURY NOTES -- (CONTINUED)
<C> <S> <C> <C> <C>
$ 35,000 U.S. Treasury Notes 5.500% 04/15/00 $ 31,563
200,000 U.S. Treasury Notes 7.500 01/31/96 200,468
300,000 U.S. Treasury Notes 8.000 05/15/01 302,469
------------
2,545,827
------------
TOTAL U.S. TREASURY OBLIGATIONS (Cost $11,963,413) 11,942,053
------------
<CAPTION>
SHARES
<C> <S> <C> <C> <C>
CONVERTIBLE PREFERRED STOCKS -- 2.8%
70,000 Freeport-McMoran Copper & Gold, Conv. Pfd. $5.00 1,452,500
20,000 Newmont Mining Depository Shares Representing 1 Share++ 1,050,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $3,165,000) 2,502,500
------------
<CAPTION>
PRINCIPAL
AMOUNT
<C> <S> <C> <C> <C>
COMMERCIAL PAPER -- 5.6% (Cost $5,000,000)
$5,000,000 General Electric Capital
Corporation 5.800 01/03/95 5,000,000
------------
REPURCHASE AGREEMENT -- 9.7% (Cost $8,672,000)
Agreement with Morgan Stanley & Company dated 12/30/94
bearing 5.600% to be repurchased at $8,677,396 on
01/03/95, collateralized by $9,450,000 U.S. Treasury
Bond, 7.125% due 02/15/23 8,672,000
8,672,000
------------
TOTAL INVESTMENTS
(Cost $107,021,537*) 113.7% 101,322,796
OTHER ASSETS AND LIABILITIES (NET) (13.7) (12,187,384)
------ ------------
NET ASSETS 100.0% $ 89,135,412
------
------
------------
------------
---------------------------------------------------------------------------------
<FN>
* AGGREGATE COST FOR FEDERAL TAX PURPOSES.
+ NON-INTEREST BEARING UNTIL 08/15/00, 11.500% DUE 08/15/03.
++ SECURITY EXEMPT FROM REGISTRATION UNDER RULE 144A OF THE SECURITIES ACT OF
1933. THE SECURITIES MAY BE RESOLD IN TRANSACTIONS EXEMPT FROM REGISTRATION,
NORMALLY TO QUALIFIED INSTITUTIONAL BUYERS.
+++ ANNUALIZED YIELD (UNAUDITED).
(1) CURRENT YIELD: 11.000% (UNAUDITED)
(2) CURRENT YIELD: 7.250% (UNAUDITED)
(3) CURRENT YIELD: 10.500% (UNAUDITED)
(4) CURRENT YIELD: 20.000% (UNAUDITED)
(5) CURRENT YIELD: 12.000% (UNAUDITED)
(6) CURRENT YIELD: 10.500% (UNAUDITED)
I/O INTEREST ONLY SECURITY.
P/O PRINCIPAL ONLY SECURITY.
</TABLE>
10 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
STATEMENT of ASSETS and LIABILITIES
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND DECEMBER 31, 1994
<TABLE>
<CAPTION>
ASSETS:
<S> <C> <C>
Investments, at value (Cost $107,021,537) (Note 1)
See accompanying schedule $ 101,322,796
Cash 2,041
Interest receivable 888,210
Receivable for investment securities sold 278,583
Receivable for Fund shares sold 30,694
-------------
TOTAL ASSETS 102,522,324
-------------
LIABILITIES:
Payable for investment securities purchased $ 12,685,477
Payable for Fund shares redeemed 477,470
Dividends payable 102,998
Investment management fee payable (Note 2) 96,842
Accrued Trustees' fees and expenses (Note 2) 8,090
Distribution fee payable (Note 3) 2,178
Accrued expenses and other payables 13,857
------------
TOTAL LIABILITIES 13,386,912
-------------
NET ASSETS $ 89,135,412
-------------
-------------
NET ASSETS consist of:
Distributions in excess of net investment income $ (34,274)
Accumulated net realized loss on investments sold (6,814,864)
Unrealized depreciation of investments (5,698,741)
Paid-in capital 101,683,291
-------------
TOTAL NET ASSETS $ 89,135,412
-------------
-------------
NET ASSET VALUE:
CLASS A SHARES:
Net asset value and redemption price per share
($79,547,869 DIVIDED BY 7,857,534 shares of beneficial interest
outstanding) $10.12
------
------
Maximum offering price per share ($10.12 DIVIDED BY .955)
(based on sales charge of 4.5% of the offering price at December
31,1994) $10.60
------
------
CLASS B SHARES:
Net asset value and offering price per share+
($14.89 DIVIDED BY 1.472 shares of beneficial interest
outstanding) $10.12
------
------
CLASS C SHARES:
Net asset value and offering price per share+
($14.89 DIVIDED BY 1.472 shares of beneficial interest
outstanding) $10.12
------
------
CLASS R SHARES:
Net asset value, offering and redemption price per share
($9,587,513 DIVIDED BY 947,069 shares of beneficial interest
outstanding) $10.12
------
------
<FN>
+ REDEMPTION PRICE PER SHARE IS EQUAL TO NET ASSET VALUE LESS ANY APPLICABLE
CONTINGENT DEFERRED SALES CHARGE.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 11
................................................................................
<PAGE>
STATEMENT of OPERATIONS
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND
FOR THE YEAR ENDED DECEMBER 31, 1994
<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest (net of foreign withholding taxes of $41,889) $ 6,872,891
Dividends 244,184
-------------
TOTAL INVESTMENT INCOME 7,117,075
EXPENSES:
Investment management fee (Note 2) $ 487,690
Distribution fee (Note 3) 180,162
Investment advisory fee (Note 2) 155,295
Transfer agent fees (Note 2) 41,972
Trustees' fees and expenses (Note 2) 13,430
Custodian fees (Note 2) 9,757
Legal and audit fees 9,222
Other 17,852
Fees waived and expenses reimbursed by investment adviser
(Note 2) (12,421)
---------
TOTAL EXPENSES 902,959
-------------
NET INVESTMENT INCOME 6,214,116
-------------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
(Notes 1 and 4):
Net realized loss on:
Securities transactions (3,952,929)
Foreign currencies transactions (3,617)
-------------
Net realized loss on investments sold during the year (3,956,546)
-------------
Net change in unrealized appreciation/(depreciation)
of:
Securities (7,397,005)
Foreign currencies and net other assets 5,360
-------------
Net unrealized depreciation of investments during the
year (7,391,645)
-------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS (11,348,191)
-------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $ (5,134,075)
-------------
-------------
</TABLE>
12 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
STATEMENT of CHANGES in NET ASSETS
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND
<TABLE>
<CAPTION>
YEAR
ENDED YEAR ENDED
12/31/94 12/31/93
<S> <C> <C>
Net investment income $ 6,214,116 $ 6,452,736
Net realized gain/(loss) on investments sold and foreign currency
transactions during the year (3,956,546) 5,292,379
Net unrealized appreciation/(depreciation) on investments and foreign
currency holdings during the year (7,391,645) 1,549,905
------------ -------------
Net increase/(decrease) in net assets resulting from operations (5,134,075) 13,295,020
Distributions to shareholders from net investment income:
Class A (formerly Retail Class) (5,050,079) (3,849,182)
Institutional Class (444,891) (1,680,498)
Class R (formerly Investment Class) (817,994) (646,861)
Distributions to shareholders from net realized gain on investments:
Class A (formerly Retail Class) -- (2,491,789)
Institutional Class -- (1,359,345)
Class R (formerly Investment Class) -- (589,476)
Distributions to shareholders in excess of net realized gain on
investments:
Class A (formerly Retail Class) -- (1,867,962)
Institutional Class -- (806,383)
Class R (formerly Investment Class) -- (298,992)
Net increase/(decrease) in net assets from Fund share transactions (Note
5):
Class A (formerly Retail Class) 3,098,460 (40,569,594)
Institutional Class -- 28,853,134
Class B 15 --
Class C 15 --
Class R (formerly Investment Class) (315,127) 11,604,502
------------ -------------
Net decrease in net assets (8,663,676) (407,426)
NET ASSETS:
Beginning of year 97,799,088 98,206,514
------------ -------------
End of year (including distributions in excess of net investment income of
$34,274 and $80,813, respectively) $ 89,135,412 $ 97,799,088
------------ -------------
------------ -------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 13
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
................................................................................
- --------------------------------------------------------------------------------
PRIEMIER MANAGED INCOME FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH YEAR.*
<TABLE>
<CAPTION>
YEAR YEAR YEAR
ENDED ENDED ENDED
12/31/94** 12/31/93## 12/31/92
<S> <C> <C> <C>
------------------------------------------------------------------------------------
Net asset value, beginning of year $ 11.38 $ 11.45 $ 11.41
---------- ----------- --------
Income from investment operations:
Net investment income# 0.69 0.78 0.87
Net realized and unrealized gain/(loss) on
investments (1.26) 0.83 0.10
---------- ----------- --------
Total from investment operations (0.57) 1.61 0.97
Less distributions:
Distributions from net investment income (0.69) (0.75) (0.87)
Distributions in excess of net investment income -- -- (0.06)
Distributions from net realized gains on
investments -- (0.57) --
Distributions in excess of net realized gains on
investments -- (0.36) --
---------- ----------- --------
Total Distributions: (0.69) (1.68) (0.93)
---------- ----------- --------
Net asset value, end of year $ 10.12 $ 11.38 $ 11.45
---------- ----------- --------
Total return+ (5.14)% 14.54% 8.77%
---------- ----------- --------
---------- ----------- --------
Ratios to average net assets/supplemental data:
Net assets, end of year (in 000's) $79,548 $58,052 $98,207
Ratio of operating expenses to average net
assets+++ 0.98% 1.14% 1.02%
Ratio of net investment income to average net
assets 6.32% 6.55% 7.58%
Portfolio turnover rate++++ 270% 333% 216%
------------------------------------------------------------------------------------
<FN>
* ON FEBRUARY 1, 1993 EXISTING SHARES OF THE FUND WERE DESIGNATED THE RETAIL
CLASS AND THE FUND BEGAN OFFERING THE INSTITUTIONAL CLASS AND THE INVESTMENT
CLASS OF SHARES. EFFECTIVE APRIL 4, 1994 THE RETAIL AND INSTITUTIONAL
CLASSES WERE RECLASSIFIED AS A SINGLE CLASS OF SHARES KNOWN AS INVESTOR
SHARES. ON OCTOBER 17, 1994 INVESTOR SHARES WERE REDESIGNATED CLASS A
SHARES. THE AMOUNTS SHOWN FOR THE YEAR ENDED DECEMBER 31, 1994 WERE
CALCULATED USING THE PERFORMANCE OF A RETAIL CLASS SHARE OUTSTANDING FROM
JANUARY 1, 1994 TO APRIL 3, 1994 AND THE PERFORMANCE OF AN INVESTOR (NOW
CLASS A) SHARE OUTSTANDING FROM APRIL 4, 1994 TO DECEMBER 31, 1994. THE
FINANCIAL HIGHLIGHTS FOR THE YEAR ENDED DECEMBER 31, 1993 AND PRIOR YEARS
ARE BASED UPON A RETAIL CLASS SHARE OUTSTANDING.
** PRIOR TO APRIL 4, 1994, THE BOSTON COMPANY ADVISORS, INC. SERVED AS THE
FUND'S INVESTMENT ADVISER. FROM APRIL 4, 1994 THROUGH OCTOBER 16, 1994,
MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT MANAGER. EFFECTIVE OCTOBER
17, 1994, THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER.
+ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE YEARS INDICATED AND
DOES NOT REFLECT ANY APPLICABLE SALES CHARGE.
</TABLE>
14 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS (continued)
................................................................................
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
12/31/91 12/31/90 12/31/89 12/31/88 12/31/87 12/31/86 12/31/85
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------
$ 10.55 $ 11.12 $ 11.43 $ 11.29 $ 11.91 $ 11.80 $ 10.60
---------- -------- -------- -------- -------- -------- --------
0.86 0.93 0.98 1.01 1.20 0.86 1.20
0.86 (0.47) (0.36) 0.09 (0.52) 0.28 0.99
---------- -------- -------- -------- -------- -------- --------
1.72 0.46 0.62 1.10 0.68 1.14 2.19
(0.86) (1.03) (0.93) (0.96) (1.20) (0.96) (0.99)
-- -- -- -- -- -- --
-- -- -- -- (0.10) (0.07) --
-- -- -- -- -- -- --
---------- -------- -------- -------- -------- -------- --------
(0.86) (1.03) (0.93) (0.96) (1.30) (1.03) (0.99)
---------- -------- -------- -------- -------- -------- --------
$ 11.41 $ 10.55 $ 11.12 $ 11.43 $ 11.29 $ 11.91 $ 11.80
---------- -------- -------- -------- -------- -------- --------
17.03% 4.40% 5.56% 10.05% 5.96% 10.09% 21.83%
---------- -------- -------- -------- -------- -------- --------
---------- -------- -------- -------- -------- -------- --------
$84,203 $71,132 $83,912 $65,105 $51,765 $49,272 $16,721
1.13% 1.19% 1.15% 1.14% 0.94% 0.88% 1.48%
7.91% 8.65% 8.76% 8.81% 10.30% 10.01% 10.77%
119% 183% 142% 139% 306% 71% 173%
----------------------------------------------------------------------------
<FN>
+++ WITHOUT THE VOLUNTARY REIMBURSEMENT OF EXPENSES AND/OR WAIVER OF FEES BY
THE INVESTMENT ADVISER AND/OR TRANSFER AGENT AND/OR DISTRIBUTOR, THE RATIO
OF EXPENSES TO AVERAGE NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 1994 AND
1993 WOULD HAVE BEEN 0.99%, AND 1.27%, RESPECTIVELY.
++++ IN ACCORDANCE WITH THE SECURITIES AND EXCHANGE COMMISSION'S JULY 1985 RULES
AMENDMENT, THE RATES FOR 1986 AND LATER PERIODS INCLUDE U.S. GOVERNMENT
LONG-TERM SECURITIES WHICH WERE EXCLUDED FROM THE CALCULATIONS IN PRIOR
YEARS.
# NET INVESTMENT INCOME BEFORE VOLUNTARY WAIVER OF FEES OR REIMBURSEMENT OF
EXPENSES BY THE INVESTMENT ADVISER FOR THE YEAR ENDED DECEMBER 31, 1994 WAS
$0.69. NET INVESTMENT INCOME BEFORE WAIVER OF FEES AND/OR REIMBURSEMENT OF
EXPENSES BY THE INVESTMENT ADVISER AND/OR TRANSFER AGENT, AND/OR
DISTRIBUTOR, FOR THE YEAR ENDED DECEMBER 31, 1993 WAS $0.77.
## PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARE
METHOD, WHICH MORE APPROPRIATELY PRESENTS THE PER SHARE DATA FOR THIS YEAR
SINCE THE USE OF THE UNDISTRIBUTED METHOD DID NOT ACCORD WITH RESULTS OF
OPERATIONS.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 15
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND
FOR AN INSTITUTIONAL CLASS SHARE OUTSTANDING THROUGHOUT THE PERIOD.
<TABLE>
<CAPTION>
PERIOD
ENDED
12/31/93*##
<S> <C>
---------------------------------------------------------------
Net asset value, beginning of period $ 11.62
-----------
Income from investment operations:
Net investment income# 0.73
Net realized and unrealized gain on investments 0.65
-----------
Total from investment operations 1.38
Less distributions:
Dividends from net investment income (0.69)
Distributions from net realized gains on
investments (0.60)
Distributions in excess of net realized gains on
investments (0.33)
-----------
Total Distributions: (1.62)
-----------
Net asset value, end of period $ 11.38
-----------
Total return+ 12.35%
-----------
-----------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $28,410
Ratio of operating expenses to average net
assets+++ 1.07%++
Ratio of net investment income to average net
assets 6.62%++
Portfolio turnover rate 333%
---------------------------------------------------------------
<FN>
* ON FEBRUARY 1 ,1993, THE FUND COMMENCED SELLING INSTITUTIONAL CLASS SHARES.
EFFECTIVE APRIL 4, 1994 THE RETAIL AND INSTITUTIONAL CLASSES WERE
RECLASSIFIED AS A SINGLE CLASS OF SHARES KNOWN AS INVESTOR SHARES. ON OCTOBER
17, 1994, INVESTOR SHARES WERE REDESIGNATED CLASS A SHARES.
+ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIOD INDICATED.
++ ANNUALIZED.
+++ WITHOUT THE VOLUNTARY REIMBURSEMENT OF EXPENSES BY THE INVESTMENT ADVISER,
THE ANNUALIZED RATIO OF EXPENSES TO AVERAGE NET ASSETS FOR THE PERIOD ENDED
DECEMBER 31, 1993 WOULD HAVE BEEN 1.10%.
# NET INVESTMENT INCOME BEFORE VOLUNTARY WAIVER OF FEES AND/OR REIMBURSEMENT OF
EXPENSES BY THE INVESTMENT ADVISER FOR THE PERIOD ENDED DECEMBER 31, 1993 WAS
$0.73.
## PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARE
METHOD, WHICH MORE APPROPRIATELY PRESENTS THE PER SHARE DATA FOR THIS PERIOD
SINCE THE USE OF THE UNDISTRIBUTED METHOD DID NOT ACCORD WITH RESULTS OF
OPERATIONS.
</TABLE>
16 SEE NOTES TO FINANCIAL STATEMENTS.
................................................................................
<PAGE>
FINANCIAL HIGHLIGHTS
................................................................................
- --------------------------------------------------------------------------------
PREMIER MANAGED INCOME FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
YEAR PERIOD
ENDED ENDED
12/31/94** 12/31/93*##
<S> <C> <C>
----------------------------------------------------------------------------
Net asset value, beginning of period $11.38 $ 11.62
---------- -----------
Income from investment operations:
Net investment income# 0.72 0.74
Net realized and unrealized gain/(loss) on
investments (1.26) 0.67
---------- -----------
Total from investment operations (0.54) 1.41
Less distributions:
Dividends from net investment income (0.72) (0.71)
Distributions from net realized gains on
investments -- (0.61)
Distributions in excess of net realized gains on
investments -- (0.33)
---------- -----------
Total Distributions: (0.72) (1.65)
Net asset value, end of period $10.12 $ 11.38
---------- -----------
Total return+ (4.88)% 12.59%
---------- -----------
---------- -----------
Ratios to average net assets/supplemental data:
Net assets, end of period (in 000's) $9,588 $11,338
Ratio of operating expenses to average net
assets++ 0.71% 0.83%***
Ratio of net investment income to average net
assets 6.59% 6.86%***
Portfolio turnover rate 270% 333%
----------------------------------------------------------------------------
<FN>
* ON FEBRUARY 1 ,1993, THE FUND COMMENCED SELLING INVESTMENT CLASS SHARES.
EFFECTIVE APRIL 4, 1994 THE INVESTMENT CLASS WAS REDESIGNATED AS THE TRUST
SHARES. ON OCTOBER 17, 1994 THE TRUST SHARES WERE REDESIGNATED CLASS R
SHARES.
** PRIOR TO APRIL 4, 1994, THE BOSTON COMPANY ADVISORS, INC. SERVED AS THE
FUND'S INVESTMENT ADVISER. FROM APRIL 4, 1994 THROUGH OCTOBER 16, 1994,
MELLON BANK, N.A. SERVED AS THE FUND'S INVESTMENT MANAGER. EFFECTIVE OCTOBER
17, 1994, THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER.
*** ANNUALIZED.
+ TOTAL RETURN REPRESENTS AGGREGATE TOTAL RETURN FOR THE PERIODS INDICATED.
++ WITHOUT THE VOLUNTARY REIMBURSEMENT OF EXPENSES AND/OR WAIVER OF FEES BY THE
INVESTMENT ADVISER AND TRANSFER AGENT, THE RATIO OF EXPENSES TO AVERAGE NET
ASSETS FOR THE YEAR ENDED DECEMBER 31, 1994 AND FOR THE PERIOD ENDED
DECEMBER 31, 1993 WOULD HAVE BEEN 0.72% AND 0.87%, RESPECTIVELY.
# NET INVESTMENT INCOME BEFORE VOLUNTARY WAIVER OF FEES AND/OR REIMBURSEMENT OF
EXPENSES BY INVESTMENT ADVISER FOR THE YEAR ENDED DECEMBER 31, 1994 WAS
$0.71. NET INVESTMENT INCOME BEFORE WAIVER OF FEES AND/OR REIMBURSEMENT OF
EXPENSES BY THE INVESTMENT ADVISER, TRANSFER AGENT, AND DISTRIBUTOR, FOR THE
PERIOD ENDED DECEMBER 31, 1993 WAS $0.74.
## PER SHARE AMOUNTS HAVE BEEN CALCULATED USING THE MONTHLY AVERAGE SHARE
METHOD, WHICH MORE APPROPRIATELY PRESENTS THE PER SHARE DATA FOR THIS PERIOD
SINCE THE USE OF THE UNDISTRIBUTED METHOD DID NOT ACCORD WITH RESULTS OF
OPERATIONS.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS. 17
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS
................................................................................
1. SIGNIFICANT ACCOUNTING POLICIES
The Dreyfus/Laurel Funds Trust (the "Trust") (formerly The Boston Company
Fund), The Dreyfus/Laurel Tax-Free Municipal Funds, The Dreyfus/Laurel Funds,
Inc. and The Dreyfus/Laurel Investment Series are all registered open-end
investment companies that are now part of The Dreyfus Family of Funds. The
Trust is an investment company which consists of four funds: Premier Limited
Term Government Securities Fund, Dreyfus Core Value Fund, Dreyfus Special
Growth Fund and Premier Managed Income Fund (the "Fund"). The Trust is a
"Massachusetts business trust" and is registered with the Securities and
Exchange Commission under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a diversified, open-end management investment company. On
April 4, 1994, the Retail and Institutional Classes of shares were
reclassified as a single class of shares known as the Investor Shares, and the
Investment Class shares were reclassified as the Trust Shares. On October 17,
1994 Investor and Trust Shares was redesignated as Class A and Class R shares,
respectively. Effective December 19, 1994 the Trust began offering two
additional classes of shares, Class B and Class C. Class A, Class B and Class
C shares are sold primarily to retail investors, through financial
intermediaries and bear a distribution fee. Class A shares are sold with a
front-end sales charge, while Class B and Class C shares may be subject to a
contingent deferred sales charge. Class R shares are sold primarily to bank
trust departments and other financial service providers (including Mellon Bank
and its affiliates) acting on behalf of customers having a qualified trust or
investment account or relationship at such institution, and bear no
distribution fee or sales charge. Each class of shares has identical rights
and privileges except with respect to the distribution fees and voting rights
on matters affecting a single class. The following is a summary of significant
accounting policies consistently followed by the Fund in the preparation of
its financial statements.
(A) PORTFOLIO VALUATION
Investments in securities which are traded on a national securities exchange
are valued at the last reported sales price or, in the absence of a recorded
sale, at the mean of the closing bid and asked prices. Over-the-counter
securities are valued at the mean of the closing bid and asked price at the
close of business each day. When market quotations for such securities are not
readily available, securities are valued at fair value, as determined in good
faith by the Board of Trustees. Bonds are valued through valuations obtained
from a commercial pricing service or at the most recent mean of the bid and
asked prices provided by investment dealers in accordance with procedures
established by the Board of Trustees. Debt securities with maturities of 60
days or less from the valuation day are valued on the basis of amortized cost
which approximates market value. Foreign securities are generally valued at
the preceding closing values of such securities on their respective exchanges,
except that when an occurrence subsequent to the time a value was so
established is likely to have changed such value, then the fair value of those
securities will be determined by consideration of other factors by or under
the direction of the Board of Trustees or its delegates.
18
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
(B) REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions. Under the terms of a
typical repurchase agreement, the Fund takes possession, through its
custodian, of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Fund to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Fund's holding
period. This arrangement results in a fixed rate of return that is not subject
to market fluctuations during the Fund's holding period. The value of the
collateral is at least equal at all times to the total amount of the
repurchase obligations, including interest. In the event of counterparty
default, the Fund has the right to use the collateral to offset losses
incurred. There is potential loss to the Fund in the event the Fund is delayed
or prevented from exercising its rights to dispose of the collateral
securities, including the risk of a possible decline in the value of the
underlying securities during the period while the Fund seeks to assert its
rights. The Fund's investment manager, acting under the supervision of the
Board of Trustees, reviews the value of the collateral and the
creditworthiness of those banks and dealers with which the Fund enters into
repurchase agreements to evaluate potential risks.
(C) FOREIGN CURRENCY
The books and records of the Fund are maintained in United States (U.S.)
dollars. Foreign currencies, investments and other assets and liabilities are
translated into U.S. dollars at the exchange rates prevailing at the end of
the period, and purchases and sales of investment securities, income and
expenses are translated on the respective dates of such transactions.
Unrealized gains and losses which result from changes in foreign currency
exchange rates have been included in the unrealized
appreciation/(depreciation) of investments and net other assets. Net realized
foreign currency gains and losses resulting from changes in exchange rates
include foreign currency gains and losses between trade date and settlement
date on investment securities transactions, foreign currency transactions and
the difference between the amounts of interest and dividends recorded on the
books of the Fund and the amount actually received. The portion of foreign
currency gains and losses related to fluctuation in exchange rates between the
initial purchase trade date and subsequent sale trade date is included in
realized gains and losses on investment securities sold.
(D) EXPENSE ALLOCATION
Expenses of the Fund not directly attributable to the operations of any class
of shares are prorated among the classes based upon the relative average daily
net assets of each class. Distribution expense is directly attributable to a
particular class of shares and is charged only to that class' operations.
(E) SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Dividend income is
recorded on the ex-dividend date. Interest income is recorded on the accrual
basis. Realized gains and
19
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
losses on sales of investments are determined on the basis of identified cost.
Investment income and realized and unrealized gains and losses are allocated
based upon relative daily net assets of each class of shares.
(F) DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income, of the Fund if any, are determined
on a class level, are declared each day the Fund is open for business and are
paid on the first business day of the month. The Fund distributes any net
realized capital gains on a Fund level annually. Distributions to shareholders
are recorded on the ex-dividend date. Additional distributions of net
investment income and capital gains for the Fund may be made at the discretion
of the Board of Trustees in order to avoid the 4% nondeductible Federal excise
tax. Income distributions and capital gain distributions on a Fund level are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are primarily due
to differing treatments of income and gains on various investment securities
held by the Fund, timing differences and differing characterization of
distributions made by the Fund as a whole. Permanent differences incurred
during the Fund's fiscal year resulting from different book and tax accounting
for certain debt securities have been reclassified from income to gains. Also,
permanent differences incurred during the Fund's fiscal year resulting from
different book and tax accounts for foreign currency have been reclassified to
income at year-end.
(G) FEDERAL TAXES
It is the Fund's policy to qualify as a regulated investment company, if such
qualification is in the best interest of its shareholders, by complying with
the requirements of the Internal Revenue Code applicable to regulated
investment companies and by distributing all of its taxable income to its
shareholders. Therefore, no Federal income tax provision is required.
2. INVESTMENT MANAGEMENT FEE, TRUSTEES' FEES
AND OTHER RELATED PARTY TRANSACTIONS
Effective as of October 17, 1994, the Trust's investment management agreement
with Mellon Bank, N.A. ("Mellon Bank") was transferred to The Dreyfus
Corporation (the "Manager"), a wholly-owned subsidiary of Mellon Bank. The
Manager provides, or arranges for one or more third parties to provide,
investment advisory, administrative, custody, fund accounting and transfer
agency services to the Trust. The Manager also directs the investments of the
Fund in accordance with its investment objective policies and limitations. For
these services, the Fund is contractually obligated to pay the Manager a fee,
calculated daily and paid monthly, at the annual rate of 0.70% of the value of
the Fund's average daily net assets. Out of its fee, the Manager pays all of
the expenses of the Fund except brokerage fees, taxes, interest, Rule 12b-1
distribution fees and expenses, fees and expenses of non-interested Trustees
(including counsel fees) and extraordinary
20
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
expenses. In addition, the Manager is required to reduce its fee in an amount
equal to the Fund's allocable portion of fees and expenses of the
non-interested Trustees (including counsel).
For the period from April 4, 1994 to October 16, 1994, Mellon Bank served as
the Trust's investment manager pursuant to the investment management agreement
described above. Prior to April 4, 1994, the Trust had an investment advisory
agreement under which the Fund paid The Boston Company Advisors Inc. ("Boston
Advisors"), a wholly-owned subsidiary of Mellon Bank, a monthly fee at the
annual rate of 0.60% of the value of its average daily net assets. For the
year ended December 31, 1994, Boston Advisors, as investment advisor, waived
fees and reimbursed expenses in the amounts of $7,023 and $5,398,
respectively.
Prior to April 4, 1994, the Trust had individual contracts, which contained
specific fee provisions, with Boston Safe Deposit and Trust Company, a
wholly-owned subsidiary of Mellon Bank, and The Shareholder Services Group,
Inc. to provide custody and transfer agent services, respectively, to the
Fund. Effective April 4, 1994, the payment of fees for custody, accounting and
transfer agent services are covered by the investment management agreement
described above.
Operating expenses directly attributable to a particular class of shares are
charged only to that class' operations. In addition to the distribution fees,
gross class specific operating expenses include transfer agent fees. For the
year ended December 31, 1994, Class A and Class R shares incurred transfer
agent fees of $40,951 and $1,021, respectively.
From April 4, 1994 to September 23, 1994, Frank Russell Investment Management
Company (the "Administrator") served as the Fund's administrator and provided,
pursuant to an administration agreement, various administrative and corporate
secretarial services to the Fund. For the period from April 4, 1994 to
September 23, 1994, Mellon Bank, as investment manager, paid the
Administrator's fee out of the management fee described above.
Prior to October 17, 1994, the Trust had a contract with Funds Distributor,
Inc. to serve as distributor of the Trust's shares. Effective as of October
17, 1994, Premier Mutual Fund Services, Inc. ("Premier") serves as the Trust's
distributor. Premier also serves as the Trust's sub-administrator and,
pursuant to a sub-administration agreement with the Manager, provides various
administrative and corporate secretarial services to the Trust.
No officer or employee of Premier (or of any parent, subsidiary or affiliate
thereof) receives any compensation from The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Municipal Funds or The
Dreyfus/Laurel Investment Series (collectively, "The Dreyfus/Laurel Funds")
for serving as an officer or Director/Trustee of The Dreyfus/Laurel Funds. In
addition, no officer or employee of the Manager (or of any parent, subsidiary
or affiliate thereof) serves as an officer or Director or Trustee of The
Dreyfus/Laurel Funds. The Dreyfus/Laurel Funds pays each Director/ Trustee who
is not an officer or employee of Premier (or of any parent, subsidiary or
21
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
affiliate thereof or of the Manager), $27,000 per annum, $1,000 for each Board
meeting attended and $750 for each Audit Committee meeting attended, and
reimburses each Director or Trustee for travel and out-of-pocket expenses.
3. DISTRIBUTION PLAN
Class A shares are subject to a Distribution Plan adopted pursuant to Rule
12b-1 of the 1940 Act. Under this Distribution Plan, the Fund may pay annually
up to 0.25% of the value of the average daily net assets attributable to Class
A shares to compensate Premier and Dreyfus Service Corporation, an affiliate
of the Manager, for shareholder servicing activities and Premier for
activities and expenses primarily intended to result in the sale of Class A
shares. Class B and Class C shares are subject to a Distribution Plan adopted
pursuant to Rule 12b-1, pursuant to which the Fund pays Premier for
distributing the Fund's Class B and C shares at an aggregate annual rate of
0.75% of the value of the average daily net assets of Class B and C. Class B
and Class C shares are also subject to a Service Plan adopted pursuant to Rule
12b-1 pursuant to which the Fund pays Dreyfus Service Corporation or Premier
for the provision of certain services to the holders of Class B and C shares a
fee at the annual rate of 0.25% of the value of the average daily net assets
of Class B and C. Class R shares bear no distribution fee. Prior to April 4,
1994, under a distribution plan, the Fund was authorized to spend up to 0.25%
and 0.15%, respectively, of its average daily net assets annually on
distribution expenses for the Retail Class and the Institutional Class which
are now classified as Class A (formerly Investor Class) shares.
Under their terms, the Plans shall remain in effect from year to year,
provided such continuance is approved annually by a vote of a majority of the
Trustees and a majority of the Trustees who are not "interested persons" of
the Trust and who have no direct or indirect financial interest in the
operation of the Plan or in any agreement related to the Plan.
4. SECURITIES TRANSACTIONS
Cost of purchases and proceeds from sales of securities, excluding short-term
investments and U.S. government securities for the year ended December 31,
1994, were $47,898,186 and $60,600,209, respectively.
Cost of purchases and proceeds from sales of long-term U.S. government
securities for the year ended December 31, 1994 were $192,495,082 and
$195,497,933, respectively.
At December 31, 1994, aggregate gross unrealized appreciation for all
securities in which there is an excess of value over tax cost and aggregate
gross unrealized depreciation for all securities in which there is an excess
of tax cost over value were $242,849 and $5,941,590, respectively.
22
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
5. SHARES OF BENEFICIAL INTEREST
The Trust has the authority to issue an unlimited number of shares of
beneficial interest of each class in each separate series, without par value.
The Trust offers four classes of shares of the Fund. On April 4, 1994, the
Retail and Institutional Classes of shares were combined and reclassified as a
single class of shares known as Investor Shares and the Investment Class was
reclassified as the Trust shares. On October 17, 1994 Investor and Trust
shares were redesignated as Class A and Class R shares, respectively, and the
Trust began offering two additional classes of shares, Class B and Class C, on
December 19, 1994.
-------------------------------------------------------------------
PREMIER MANAGED INCOME FUND
<TABLE>
<CAPTION>
YEAR ENDED PERIOD ENDED
YEAR ENDED DECEMBER 31, 1993* DECEMBER 31, 1993*
DECEMBER 31, 1994** (RETAIL CLASS) (INSTITUTIONAL CLASS)
SHARES+ AMOUNT++ SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C> <C> <C>
------------------------------------------------------------------------------------
CLASS A SHARES:
Sold 4,868,476 $ 51,614,329 1,754,982 $ 20,659,176 2,352,191 $ 28,131,595
Issued as reinvestment of
dividends and distributions 421,059 4,468,073 607,958 7,046,149 311,810 3,614,721
Redeemed (5,028,074) (52,983,942) (2,373,003) (27,963,489) (2,743,133) (32,814,345)
Exchanged for Institutional
shares -- -- (2,574,971) (29,921,163) -- --
Exchanged for Investment
shares -- -- (894,171) (10,390,267) -- --
Issued in exchange for Retail
shares -- -- -- -- 2,574,971 29,921,163
---------- ------------ ----------- ------------- ----------- -------------
---------- ------------ ----------- ------------- ----------- -------------
Net increase/ (decrease) 261,461 $ 3,098,460 (3,479,205) $ (40,569,594) 2,495,839 $ 28,853,134
---------- ------------ ----------- ------------- ----------- -------------
---------- ------------ ----------- ------------- ----------- -------------
------------------------------------------------------------------------------------
</TABLE>
23
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
<TABLE>
<CAPTION>
PERIOD ENDED
YEAR ENDED DECEMBER 31, 1993*
DECEMBER 31, 1994** (INVESTMENT CLASS)
SHARES AMOUNT SHARES AMOUNT
------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
CLASS R SHARES:
Sold 538,268 $ 5,912,410 379,242 $ 4,513,734
Issued as reinvestment of
dividends and distributions 46,123 489,170 96,990 1,123,017
Redeemed (633,398) (6,716,707) (374,327) (4,422,516)
Issued in exchange for Retail
shares -- -- 894,171 10,390,267
---------- ------------ ----------- -------------
---------- ------------ ----------- -------------
Net increase/ (decrease) (49,007) $ (315,127) 996,076 $ 11,604,502
---------- ------------ ----------- -------------
---------- ------------ ----------- -------------
------------------------------------------------------------------------------------
<FN>
* ON FEBRUARY 1, 1993 EXISTING SHARES OF THE FUND WERE DESIGNATED THE RETAIL
CLASS AND THE FUND BEGAN OFFERING THE INSTITUTIONAL CLASS AND THE INVESTMENT
CLASS OF SHARES.
** EFFECTIVE APRIL 4, 1994 THE RETAIL AND INSTITUTIONAL CLASSES WERE
RECLASSIFIED AS A SINGLE CLASS OF SHARES KNOWN AS INVESTOR SHARES AND THE
INVESTMENT CLASS WAS RECLASSIFIED AS TRUST SHARES. ON OCTOBER 17, 1994
INVESTOR AND TRUST SHARES WERE REDESIGNATED AS CLASS A AND CLASS R SHARES,
RESPECTIVELY.
+ NUMBER OF SHARES INCUDES 464,962 OF SUBSCRIPTIONS, 35,257 OF REINVESTMENTS
AND 524,902 OF REDEMPTIONS FOR THE INSTITUTIONAL CLASS UP TO APRIL 4, 1994.
++ AMOUNTS INCLUDE $5,339,913 OF SUBSCRIPTIONS, $399,392 OF REINVESTMENTS AND
$6,015,971 OF REDEMPTIONS FOR THE INSTITUTIONAL CLASS UP TO APRIL 4, 1994.
AS OF DECEMBER 31, 1994 THE TRUST HAD ISSUED 1.472 CLASS B AND 1.472 CLASS C
SHARES IN THE AMOUNT OF $14.89 AND $14.89, RESPECTIVELY.
</TABLE>
6. FOREIGN SECURITIES
The Fund may purchase securities of foreign issuers. Investing in securities
of foreign companies and foreign governments involves special risks and
considerations not typically associated with investing in securities of U.S.
companies and the U.S. government. These risks include revaluation of
currencies and future adverse political and economic developments. Moreover,
securities of many foreign companies and foreign governments and their markets
may be less liquid and their prices more volatile than those of securities of
comparable U.S. companies and the U.S. government.
7. LINE OF CREDIT
The Fund and several affiliated entities participate in a $20 million line of
credit provided by Bank of America (formerly Continental Bank N.A.) under a
Line of Credit Agreement (the "Agreement") dated March 31, 1992, primarily for
temporary or emergency purposes, including the meeting of redemption requests
that otherwise might require the
24
................................................................................
<PAGE>
NOTES to FINANCIAL STATEMENTS (continued)
................................................................................
untimely disposition of securities. Under this Agreement, the Fund may borrow
up to the amount specified in its Borrowing Base Certificate. Interest is
payable either at the bank's Money Market Rate or the London Interbank Offered
Rate (LIBOR) plus .375% on an annualized basis. The Fund and the other
affiliated entities are charged an aggregate commitment fee of $50,000, which
is allocated equally among each of the participants. The Agreement requires,
among other provisions, each participating fund to maintain a ratio of net
assets (not including funds borrowed pursuant to the Agreement) to aggregate
amount of indebtedness pursuant to the Agreement of no less than 4 to 1.
During the year ended December 31, 1994, the Fund did not borrow under the
Agreement.
8. CAPITAL LOSS CARRYFORWARD
At December 31, 1994 the Fund had available for Federal tax purposes an unused
capital loss carryforward of $6,470,191 to offset future net capital gains
expiring in 2002.
25
................................................................................
<PAGE>
INDEPENDENT AUDITORS' REPORT
................................................................................
[LOGO]
The Board of Trustees and Shareholders
The Dreyfus/Laurel Funds Trust:
We have audited the accompanying statements of assets and liabilities,
including the portfolio of investments of the Premier Managed Income Fund of
The Dreyfus/Laurel Funds Trust (formerly The Boston Company Fund) as of
December 31, 1994, and the related statement of operations, statement of
changes in net assets and financial highlights for the year then ended. These
financial statements and financial highlights are the responsibility of the
Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audit. The
statement of changes in net assets for the year ended December 31, 1993 and
financial highlights for each of the years or periods in the nine-year period
ended December 31, 1993 were audited by other auditors whose report thereon,
dated February 14, 1994, expressed an unqualified opinion on that statement
and those financial highlights.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of securities
owned as of December 31, 1994, by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Premier Managed Income Fund of The Dreyfus/Laurel Funds Trust as of December
31, 1994, the results of its operations, the changes in its net assets and the
financial highlights for the year then ended, in conformity with generally
accepted accounting principles.
KPMG Peat Marwick LLP
Pittsburgh, Pennsylvania
February 17, 1995
26
................................................................................
<PAGE>
TAX INFORMATION (unaudited)
................................................................................
PREMIER MANAGED INCOME FUND
FISCAL YEAR ENDED DECEMBER 31, 1994
In accordance with tax law, the Fund has elected to defer the recognition of
losses occurring between October 31 and December 31 until the first day of the
following fiscal year. The amount of such deferral is $344,673, of capital
losses. These losses for tax purposes will be deemed to occur on January 1,
1995.
27
................................................................................
<PAGE>
................................................................................
FOR MORE INFORMATION ON YOUR FUND, INCLUDING:
- GENERAL FUND INFORMATION.
- ADDITIONAL PROSPECTUSES - Read the prospectus carefully before you invest.
- ACCOUNT INFORMATION.
- YIELD AND SHARE PRICE INFORMATION.
<TABLE>
<S> <C>
CALL 1-800-645-6561
24 HOURS A DAY, 7 DAYS A WEEK.
OR WRITE:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
Further information is contained
in the Prospectus, which must
precede or accompany this report.
</TABLE>
The Funds are distributed by:
Premier Mutual Fund Services, Inc.
One Exchange Place 10th Floor
Boston, MA 02109
MIFAR9412
<PAGE>
MIFAR9412
