Dreyfus Intermediate Municipal Bond Fund, Inc.
ANNUAL REPORT
May 31, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. In addition, issuers of securities in which the fund
invests may be adversely affected by Year 2000-related problems. This could
have an impact on the value of the fund's investments and its share price.
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
<PAGE>
Contents
THE FUND
- -----------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
24 Statement of Assets and Liabilities
25 Statement of Operations
26 Statement of Changes in Net Assets
27 Financial Highlights
28 Notes to Financial Statements
32 Report of Independent Auditors
33 Important Tax Information
FOR MORE INFORMATION
- ----------------------------
Back Cover
<PAGE>
Dreyfus Intermediate Municipal The Fund
Bond Fund, Inc.
LETTER FROM THE PRESIDENT
- -------------------------
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Intermediate
Municipal Bond Fund, Inc., covering the 12-month period from June 1, 1998
through May 31, 1999. Inside, you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with the
fund's portfolio manager, Monica Wieboldt.
Lower short-term interest rates adopted by the Federal Reserve Board and other
central banks in the fall of 1998 appear to have helped many U.S. businesses
withstand the effects of economic weakness in Japan, Asia and Latin America.
At the same time, the U.S. economy has entered its eighth year of expansion in
an environment characterized by low inflation and high levels of consumer
spending.
Tax-exempt fixed-income securities generally provided good results relative to
taxable U.S. Treasury securities over the past year. This was especially true
during much of the second half of the reporting period. While prices of U.S.
Treasury securities declined significantly over the first five months of 1999,
a lack of new issuance relative to robust investor demand supported most
municipal bond prices.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Intermediate Municipal Bond Fund, Inc.
Sincerely,
/s/Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
June 14, 1999
2
<PAGE>
DISCUSSION OF FUND PERFORMANCE
- ------------------------------
Monica Wieboldt, Portfolio Manager
How did Dreyfus Intermediate Municipal Bond Fund, Inc.
perform during the period?
The fund produced a 3.53% total return over the one-year period ended May 31,
1999,1 compared to a 3.72% total return for the average of the Lipper
Intermediate Municipal Debt Funds category.2
We attribute the fund's relative performance to its focus on higher-quality,
intermediate-term municipal bonds. We have maintained that focus because
lower-rated issues have remained expensive compared to securities with high
credit ratings. In addition, higher-rated securities tend to be more liquid,
making them easier to buy and sell as market conditions change and giving the
fund more flexibility to react in a weak market.
What is the fund's investment approach?
The fund's goal is to seek a high level of federally tax-exempt income
generated from a diversified portfolio of intermediate-term municipal bonds.
In addition, we seek a competitive total return.
In pursuit of these objectives, we employ several strategies. The fund
maintains a large position in income-producing paper, which we view as a core
position. This provides the portfolio with a strong income component and a
relatively stable base.
We attempt to add value by selecting the tax-exempt bonds that we believe are
most likely to provide the highest total returns -- which include both tax-
exempt income and potential capital appreciation. Currently, as interest rates
come under pressure, we see opportunities to add discount and speciality state
paper, which in stronger markets command a premium to other paper.
The Fund 3
<PAGE>
What other factors influenced the fund's performance?
When the Asian currency and credit crisis spread to Latin America just prior
to the start of the reporting period, investors flocked to U.S. Treasury
securities. As a result, yields on taxable Treasuries fell to levels that were
roughly equivalent to yields on comparable tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth by reducing key short-term interest rates.
Because lower short-term interest rates had the potential to reignite
inflationary pressures, yields on intermediate- and long-term bonds rose.
However, the extent of that rise was much greater for taxable U.S. Treasury
securities than for tax-free municipal bonds. Similarly, yields of
intermediate-term municipal bonds rose more than yields of long-term municipal
bonds, primarily because of supply-and-demand factors.
Because of strong economic conditions throughout the United States, the
nation's states and municipalities have had less need to borrow. As a result,
about 24% fewer tax-exempt bonds were issued over the past six months than in
the same period one year ago. Yet, demand from individual investors seeking to
minimize their income tax liabilities remained high. This imbalance between
supply and demand helped municipal bond prices decline less than U.S. Treasury
bond prices, as measured by major market indices and benchmarks. However,
supply in the intermediate-term sector of the marketplace was greater than in
the long-term sector, accounting for many of the differences in performance
between the two segments.
What is the fund's current strategy?
We have continued to search for the most attractive values in the municipal
bond market. We have found such values, in our opinion, primarily in higher-
quality, intermediate-term bonds. Intermediate-term bonds have continued to
provide most of the yield of their longer-term counterparts, but with
4
<PAGE>
substantially less volatility. The current interest-rate environment gives us
the opportunity to increase coupon and call protection. It also affords us the
chance to reevaluate the benefits of adding discount and lower-rated paper,
which will come under pressure and represent value.
June 14, 1999
1 Total return includes reinvestment of dividends and any capital gains
paid. Past performance is no guarantee of future results. Share price and
investment return fluctuate such that upon redemption fund shares may be
worth more or less than their original cost. Income may be subject to state
and local taxes, and some income may be subject to the Federal Alternative
Minimum Tax (AMT) for certain shareholders. Capital gains, if any, are
fully taxable.
2 Source: Lipper Analytical Services, Inc.
The Fund 5
<PAGE>
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in the fund and the
Lehman Brothers 10-Year Municipal Bond Index
<TABLE>
<CAPTION>
Average Annual Total Returns as of 5/31/99
1 Year 5 Years Ten Years
- -------------------------------------------------------------
<S> <C> <C> <C>
Fund 3.53% 5.85% 6.83%
</TABLE>
* Source: Lehman Brothers
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Intermediate
Municipal Bond Fund, Inc. on 5/31/89 to a $10,000 investment made in the
Lehman Brothers 10-Year Municipal Bond Index on that date. All dividends and
capital gain distributions are reinvested.
The fund invests primarily in municipal securities and maintains a portfolio
with a weighted-average maturity ranging between 3 and 10 years. The fund's
performance shown in the line graph takes into account fees and expenses. The
Lehman Brothers 10-Year Municipal Bond Index, unlike the fund, is an unmanaged
total return performance benchmark for the investment-grade, 10-year tax
exempt bond market, consisting of municipal bonds with maturities of 9-12
years. The Index does not take into account charges, fees and other expenses.
These factors, coupled with the potentially longer maturity of the Index, can
contribute to the Index potentially outperforming or underperforming the fund.
Further information relating to fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights
section of the Prospectus and elsewhere in this report.
6
<PAGE>
STATEMENT OF INVESTMENTS
May 31, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments--98.7% Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Alabama--.8%
Bay Minette Industrial Development Board, IDR
(Coltec Industries, Inc.) 6.50%, 2/15/2009 4,505,000 4,688,714
McIntosh Industrial Development Board, EIR
4.65%, 6/1/2008 5,500,000 5,484,380
Alaska--2.8%
Alaska Industrial Development and Export Authority,
Revolving Fund
6.375%, 4/1/2008 3,000,000 3,208,620
Alaska Housing Finance Corp.:
5.75%, 12/1/2009 (Insured; MBIA) 10,490,000 11,023,941
5.30%, 12/1/2012 (Insured; MBIA) 2,500,000 2,564,825
Alaska Student Loan Corp., Student Loan Revenue:
5.60%, 7/1/2011 (Insured; AMBAC) 4,700,000 4,905,907
5.70%, 7/1/2013 (Insured; AMBAC) 5,990,000 6,282,971
Anchorage, Electric Utility Revenue:
6.50%, 12/1/2008 (Insured; MBIA) 2,755,000 3,155,632
6.50%, 12/1/2009 (Insured; MBIA) 2,910,000 3,346,966
Arizona--2.8%
Maricopa County Community College District,
4%, 7/1/2013 8,325,000 7,596,396
Maricopa County Industrial Development Authority:
Hospital Facility Revenue (Samaritan Health Services)
7.15%, 12/1/2004 (Insured; MBIA) 9,835,000 11,204,032
Hospital Systems Revenue (Baptist Hospital)
5.20%, 9/1/2005 (Insured; MBIA) 3,125,000 3,289,062
Mesa Industrial Development Authority, Industrial
Revenue (TRW Vehicle Safety Systems, Inc. Project)
7.25%, 10/15/2004 5,000,000 5,328,650
Phoenix 4.125%, 7/1/2014 7,080,000 6,477,988
California--3.3%
California:
7.324%, 12/1/2013a 5,000,000 5,180,900
Veterans, 5.40%, 12/1/2014 5,000,000 5,102,500
California Higher Education Loan Authority,
Student Loan Revenue:
6.40%, 12/1/2003 6,000,000 6,454,380
6.50%, 6/1/2005 5,500,000 5,924,765
California Statewide Community Development
Administration
5.10%, 5/15/2010 4,000,000 3,993,280
</TABLE>
The Fund 7
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
California (continued)
Solano County, COP (Justice Facility and
Public Buildings Project)
5.875%, 10/1/2005 10,000,000 10,441,700
Student Education Loan Marketing Corporation,
Student Loan Revenue:
6.70%, 7/1/2008 2,500,000 2,587,625
6.75%, 7/1/2008 2,500,000 2,689,575
Colorado--3.2%
Bowles Metropolitan District, 4.25%, 12/1/2023
(LOC; U.S. Bank National Association) 5,000,000 4,939,850
Denver City and County, Airport Revenue
8.75%, 11/15/2005 10,645,000 11,867,578
E-470 Public Highway Authority, Revenue
Zero Coupon, 9/1/2010 (Insured; MBIA) 30,000,000 17,395,200
El Paso County School District
(Number 11 Colorado Springs):
6.25%, 12/1/2009 1,000,000 1,137,610
6.50%, 12/1/2010 2,000,000 2,304,660
6.50%, 12/1/2011 2,040,000 2,360,178
Connecticut--.9%
Connecticut, Revenue (Mashantucket Western
Pequot Tribe):
6.50%, 9/1/2006 (Escrowed to Maturity)a 2,475,000 2,818,654
6.50%, 9/1/2006a 2,525,000 2,871,354
5.60%, 9/1/2009a 1,000,000 1,026,600
5.70%, 9/1/2012a 2,400,000 2,441,736
Connecticut Development Authority, PCR
(United Illuminating) 4.35%, 6/1/2026 2,125,000 2,108,042
District of Columbia--1.7%
District of Columbia, Revenue (American University)
5.50%, 10/1/2011 (Insured; AMBAC) 5,435,000 5,629,301
Metropolitan Airports Authority, General Airport
Revenue
5.75%, 10/1/2011 (Insured; MBIA) 5,750,000 6,145,600
Washington D.C. Convention Center Authority,
Dedicated Tax Revenue:
5.25%, 10/1/2013 (Insured; AMBAC) 5,000,000 5,087,350
5.25%, 10/1/2014 (Insured; AMBAC) 5,000,000 5,070,100
Florida--2.4%
Dade County, Resource Recovery Facility Revenue
5.20%, 10/1/2005 (Insured; AMBAC) 7,880,000 8,240,589
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Florida (continued)
Greater Orlando Aviation Authority,
Airport Facilities Revenue
6.40%, 10/1/2004 (Insured; FGIC) 8,940,000 9,699,364
Jacksonville Health Facilities Authority, HR
(Charity Obligation Group)
5.20%, 8/15/2013 (Insured; MBIA) 2,150,000 2,192,011
Orange County, Tourist Development Tax Revenue
5%, 10/1/2015 (Insured; MBIA) 5,000,000 4,991,350
Palm Beach County, Solid Waste IDR
(Okeelanta Power L.P. Project)
6.50%, 2/15/2009 b 3,600,000 2,727,000
Pinellas County, RRR
5.10%, 10/1/2003 (Insured; MBIA) 2,915,000 3,025,595
Georgia--.5%
Atlanta, Airport Facilities Revenue
6%, 1/1/2007 (Insured; AMBAC) 5,780,000 6,357,422
Hawaii--.3%
Hawaii, Airports System Revenue
7.50%, 7/1/2005 (Insured; FGIC) 3,000,000 3,175,710
Illinois--6.3%
Arlington Heights, MFHR
(Brook Run Association, L.P. Project)
5.05%, 12/1/2007 (Insured; FGIC) 4,000,000 4,003,080
Carol Stream, First Mortgage Revenue
(Windsor Park Manor Project)
6.50%, 12/1/2007 3,000,000 3,206,910
Chicago Building Acquisition, COP
5.25% 1/1/2012 (Insured; FSA) 4,460,000 4,556,113
Chicago O'Hare International Airport:
Passenger Facility Charge Revenue
5.50%, 1/1/2008 (Insured; AMBAC) 5,000,000 5,303,450
Special Facility Revenue:
6.505%, 4/1/2011a 2,750,000 2,793,230
(International Terminal) 7.50%, 1/1/2005
(Prerefunded 1/1/2000) c 905,000 944,503
Hoffman Estates, Tax Increment Revenue
(Area Economic Development Project):
7.50%, 11/15/2003 (LOC; Union Bank of
Switzerland, Prerefunded 11/15/2000) c 5,145,000 5,539,930
5.25%, 11/15/2009 10,000,000 10,206,600
</TABLE>
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Illinois (continued)
Illinois Development Finance Authority
Providers Facility Acquisition Revenue
(Community Rehabilitation):
8.25%, 9/1/2000 (Escrowed to Maturity) 995,000 1,022,452
8.25%, 9/1/2000 945,000 998,959
5.60%, 7/1/2003 1,485,000 1,540,970
5.60%, 7/1/2004 1,000,000 1,041,390
5%, 7/1/2006 2,765,000 2,754,272
5.90%, 7/1/2009 1,325,000 1,406,024
Illinois Educational Facilities Authority, Revenue:
(Illinois Institute of Technology)
6.60%, 12/1/2009 2,665,000 2,956,364
(MJH Education Assistance)
5%, 9/1/2013 (Insured; AMBAC) 3,000,000 2,965,140
Illinois Health Facilities Authority, Revenue:
(Catholic Health Co. Addolorata Project)
7.625%, 7/1/1999 320,000 321,155
(Central Dupage Health Wyndemere Retirement
Community)
6.125%, 11/1/2007 (Insured; MBIA) 4,400,000 4,685,516
(Evangelical Hospital):
6.75%, 4/15/2007 2,035,000 2,280,990
6.75%, 4/15/2007 (Prerefunded 4/15/2002) c 1,055,000 1,153,927
(Southern Illinois Hospital Services)
6.50%, 3/1/2007
(Insured; MBIA, Prerefunded 3/1/2002) c 4,000,000 4,342,760
(Swedish American Hospital) 7.30%, 4/1/2007
(Insured; AMBAC, Prerefunded 4/1/2000) c 4,000,000 4,208,120
Illinois Student Assistance Commission,
Student Loan Revenue 5.75%, 3/1/2007 3,365,000 3,451,380
Metropolitan Pier and Exposition Authority,
Dedicated Tax Revenue
(McCormick Place Exposition)
Zero Coupon, 6/15/2015 (Insured; FGIC) 10,040,000 4,364,086
Normal, EDR (Dayton-Hudson Corp. Project)
6.75%, 11/1/2001 3,400,000 3,587,748
Indiana--8.1%
Boonville Junior High School Building Corp.,
First Mortgage Revenue
6.80%, 7/1/2005 3,100,000 3,375,373
Brownsburg School Building Corp., First Mortgage
Revenue:
5.80%, 8/1/2008 (Insured; FSA,
Prerefunded 2/1/2005) c 2,650,000 2,901,697
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Indiana (continued)
Brownsburg School Building Corp., First Mortgage
Revenue (continued):
5.90%, 8/1/2009 (Insured; FSA,
Prerefunded 2/1/2005) c 2,895,000 3,184,442
Central High School Building Corp., First Mortgage
5.50%, 8/1/2009 (Insured; AMBAC) 3,960,000 4,202,075
Indiana Bond Bank (Hendricks Special Hospital
Program) 6.90%, 4/1/2006 3,000,000 3,258,660
Indiana Development Finance Authority, PCR
(Inland Steel Company Project Number 13):
5.75%, 10/1/2011 11,500,000 10,816,325
7.25%, 11/1/2011 10,330,000 10,743,510
Indiana Health Facility Financing Authority, HR
(Clarian Health Partners, Inc.):
5.50%, 2/15/2010 3,000,000 3,141,120
5.50%, 2/15/2011 5,000,000 5,203,800
Indiana Municipal Power Agency, Power Supply
Systems Revenue
5.70%, 1/1/2006 (Insured; MBIA) 8,400,000 9,031,008
Indiana Transportation Finance Authority,
Airport Facilities LR (United Air):
6.50%, 11/1/2007 2,575,000 2,797,171
6.50%, 11/1/2007 (Prerefunded 11/1/2002) c 2,675,000 2,945,924
Indianapolis Local Public Improvement Bond Bank:
6.30%, 2/1/2004 2,800,000 3,038,504
6.40%, 2/1/2005 3,000,000 3,299,610
6.50%, 1/1/2011 (Insured; FSA) 6,415,000 7,384,820
Knox County Hospital Association, LR
5.65%, 7/1/2008 (Insured; MBIA) 4,150,000 4,351,026
Logansport School Building Corp.,
First Mortgage Revenue
7.30%, 1/15/2007 (Prerefunded 1/15/2000) c 4,750,000 4,957,907
North Montgomery Elementary School Building Corp.,
First Mortgage Revenue 6.50%, 7/1/2006 5,665,000 6,224,249
Plymouth, Multi-School Building Corp.
(First Mortgage-Plymouth Community School)
5.50%, 7/1/2005 (Insured; MBIA) 3,000,000 3,196,800
Westfield High School Building Corp.,
First Mortgage Revenue:
5.45%, 7/15/2009 (Insured; AMBAC,
Prerefunded 7/15/2005) c 5,000,000 5,407,700
5.25%, 7/5/2013 (Insured; AMBAC) 3,000,000 3,041,700
</TABLE>
The Fund 11
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Iowa--1.4%
Ames, HR (Mary Greeley Medical Center Project)
6.25%, 8/15/2006 (Insured; AMBAC) 4,320,000 4,677,998
Council Bluffs, IDR (Cargill, Inc. Project)
7%, 3/1/2007 4,400,000 4,782,184
Iowa Student Loan Liquidity Corp.,
Student Loan Revenue:
6.35%, 3/1/2001(Insured; Guaranteed
Student Loans) 3,400,000 3,527,228
6.65%, 3/1/2003 (Insured; Guaranteed
Student Loans) 4,900,000 5,248,194
Kentucky--2.2%
Carrolton and Henderson Public Energy Authority,
Gas Revenue (Kentucky Trust)
5%, 1/1/2006 (Insured; FSA) 10,000,000 10,325,200
Jefferson County, Health Facilities Revenue
(Alliant Health Systems)
5%, 10/1/2011 (Insured; MBIA) 3,155,000 3,156,041
Jefferson County School District Finance Corporation,
School Building Revenue
4.50%, 2/1/2015 (Insured; MBIA) 3,930,000 3,687,440
Kenton County Airport Board, Airport Revenue
(Cincinnati/Northern Kentucky International)
5.75%, 3/1/2009 (Insured; MBIA) 3,710,000 3,968,884
Mount Sterling, LR (Kentucky League Cities Funding)
5.625%, 3/1/2003 6,500,000 6,803,485
Louisiana--.9%
Louisiana Public Facilities Authority, Revenue:
8.72%, 11/15/2012d 4,430,000 4,869,810
8.72%, 11/15/2012 (Prerefunded 11/15/2002) c,d 3,635,000 4,049,099
(Louisiana Association of Independent Colleges
and Universities) 6.50%, 12/1/2002 2,155,000 2,293,082
Maine--.3%
Maine Educational Loan Marketing Corp.,
Student Loan Revenue
6.90%, 11/1/2003 4,195,000 4,421,320
Maryland--1.6%
Maryland Health and Higher Educational Facilities
Authority, Revenue
(John Hopkins University) 5.125%, 7/1/2013 8,115,000 8,280,546
Northeast Waste Disposal Authority, RRR
(Baltimore Resco Retrofit Project):
4.75%, 1/1/2012 6,900,000 6,608,061
5%, 1/1/2012 5,000,000 4,912,750
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Massachusetts--2.5%
Barnstable 4.50%, 3/15/2015 320,000 302,477
Boston Industrial Development Financing Authority,
Sewage Facility Revenue
(Harbor Electric Energy Co. Project)
7.10%, 5/15/2002 2,250,000 2,369,745
Massachusetts:
6.40%, 8/1/2003 3,175,000 3,457,162
Water Pollution Abatement Revenue
(New Bedford Loan Program):
5.50%, 2/1/2008 1,310,000 1,390,945
5.50%, 2/1/2008 (Prerefunded 2/1/2006) c 5,640,000 6,083,135
Massachusetts Housing Finance Agency:
Housing Revenue:
6.30%, 7/1/2007 (Insured; AMBAC) 3,040,000 3,268,517
6.35%, 7/1/2008 (Insured; AMBAC) 3,265,000 3,510,071
6.40%, 7/1/2009 (Insured; AMBAC) 3,565,000 3,832,161
Residential Development 6.125%, 11/15/2008
(Collateralized; FNMA) 5,000,000 5,288,900
Plymouth County, COP (Correctional Facilities Project)
5%, 4/1/2015 (Insured; AMBAC) 2,025,000 2,001,956
Michigan--4.4%
Detroit:
5%, 4/1/2010 (Insured; FSA) 1,205,000 1,227,666
5%, 5/1/2011 (Insured; FSA) 2,325,000 2,348,668
Detroit Local Development Finance Authority:
5.25%, 5/1/2006 1,570,000 1,638,860
5.20%, 5/1/2010 5,745,000 5,881,214
Greater Detroit Resource Recovery Authority,
Revenue:
6.25%, Series A, 12/13/2008 (Insured; AMBAC) 11,000,000 12,330,120
6.25%, Series B, 12/13/2008 (Insured; AMBAC) 7,755,000 8,692,735
Michigan Hospital Finance Authority, Revenue:
(Genesys Health System) 8.10%, 10/1/2013
(Prerefunded 10/1/2005) c 10,000,000 12,255,300
Michigan Strategic Fund, SWDR (Genesee Power
Station Project) 7.125%, 1/1/2006 7,500,000 7,913,250
Wayne State University, University Revenues
5.40%, 11/15/2006 (Insured; AMBAC) 3,105,000 3,264,535
Mississippi--.3%
Mississippi Development Bank, Special Obligation
(Adams County HR Project)
5.75%, 7/1/2010 (Insured; FSA) 3,445,000 3,650,356
</TABLE>
The Fund 13
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Missouri--2.7%
Joplin Industrial Development Authority, Revenue
(Catholic Health Initiatives):
5.50%, 12/1/2009 3,185,000 3,361,640
5.625%, 12/1/2010 3,340,000 3,530,146
Phelps City Industrial Development Authority,
Industrial Revenue
(Excel Corp. Project) 7%, 12/1/2000 4,500,000 4,714,290
Saint Louis, Airport Improvement Revenue
(Lambert-Saint Louis International Airport):
6%, 7/1/2005 (Insured; FGIC) 1,545,000 1,650,554
6%, 7/1/2005
(Insured; FGIC, Prerefunded 7/1/2002) c 8,130,000 8,760,482
Saint Louis Municipal Finance Corp.,
Leasehold Revenue:
5.375%, 7/15/2003 (LOC; Sanwa Bank, Ltd.) 5,075,000 5,276,275
5.50%, 7/15/2004 (LOC; Sanwa Bank, Ltd.) 6,835,000 7,171,760
Montana--.3%
Montana Health Facilities Authority, Revenue
(Sisters of Charity-Levenworth)
5%, 12/1/2014 (Insured; MBIA) 3,250,000 3,234,367
Nebraska--.2%
Albion, IDR (Cargill, Inc. Project) 7%, 12/1/2000 2,600,000 2,728,440
Nevada--.9%
Clark County, Passenger Facility Charge Revenue
(Las Vegas McCarran International Airport):
5.95%, 7/1/2005 (Insured; AMBAC) 6,365,000 6,951,853
5.80%, 7/1/2009 (Insured; MBIA) 4,250,000 4,533,475
New Jersey--1.1%
New Jersey Economic Development Authority:
LR
(Bergen County Administration Complex):
5%, 11/15/2008 (Insured; MBIA) 1,090,000 1,121,861
5%, 11/15/2009 (Insured; MBIA) 285,000 292,116
Waste Paper Recycling Revenue
(Marcal Paper Mills, Inc. Project):
5.75%, 2/1/2004 2,815,000 2,875,494
8.50%, 2/1/2010 2,930,000 3,366,131
Orange Township 6.60%, 2/1/2007
(Insured; FSA, Prerefunded 2/1/2002) c 5,600,000 6,092,408
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
New Mexico--1.3%
New Mexico Educational Assistance Foundation,
Student Loan Revenue:
6.60%, 3/1/2005 8,130,000 8,559,264
6.70%, 3/1/2006 7,345,000 7,745,082
New York--10.5%
City University of New York, COP (John Jay College)
5.75%, 8/15/2004 5,970,000 6,348,558
Long Island Power Authority, Electric System Revenue:
4.25%, 4/1/2003 6,000,000 6,009,180
5.50%, 12/1/2010 (Insured; AMBAC) 7,600,000 8,090,428
5%, 4/1/2012 (Insured; MBIA) 5,000,000 5,131,750
Municipal Assistance Corporation for New York City
5.25%, 7/1/2008 10,500,000 11,077,815
New York City:
7.30%, 2/1/2001 (Escrowed To Maturity) 4,410,000 4,666,133
7.30%, 2/1/2001 590,000 622,946
5.70%, 8/1/2007 3,450,000 3,705,680
5.80%, 8/1/2008 5,725,000 6,176,474
6.25%, 8/1/2009 7,000,000 7,769,720
6.375%, 8/15/2009 19,750,000 21,863,448
6.375%, 8/15/2009 (Prerefunded 8/15/2005) c 5,250,000 5,901,315
5.25%, 8/1/2011 3,930,000 4,015,202
5%, 8/1/2012 3,935,000 3,921,582
New York State Dormitory Authority, Revenues:
(City University System) 5.125%, 7/1/2010 4,365,000 4,438,725
(Department of Health):
5.50%, 7/1/2010 2,000,000 2,084,860
5.625%, 7/1/2011 3,240,000 3,394,775
Mental Health Service Facilities, 6%, 8/15/2006 6,940,000 7,563,490
New York State Energy, Research and Development
Authority, Service Contract Revenue
(Western New York Nuclear Service Center Project)
5.20%, 4/1/2002 (Insured; CapMac) 5,085,000 5,250,568
New York State Urban Development Corp., Revenue
(Correctional Facilities)
5.25%, 1/1/2010 4,520,000 4,631,011
Niagara Falls City School District, COP
(High School Facility):
5.625%, 6/15/2011 1,835,000 1,908,290
5.625%, 6/15/2012 1,935,000 2,011,220
Triborough Bridge and Tunnel Authority,
General Purpose Revenue
6.75%, 1/1/2009 5,100,000 5,891,418
</TABLE>
The Fund 15
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
North Carolina--3.4%
Coastal Regional Solid Waste Management Authority,
Solid Waste Disposal System Revenue
4%, 6/1/2006 (Insured; AMBAC) 2,150,000 2,115,793
North Carolina Eastern Municipal Power Agency,
Power System Revenue:
5%, 1/1/2002 4,860,000 4,904,420
7%, 1/1/2008 4,115,000 4,589,542
6.125%, 1/1/2009 7,425,000 7,857,655
North Carolina Medical Care Commission,
Health Care Facilities Revenue
(First Mortgage-Deerfield) 5.30%, 11/1/2004 5,840,000 5,972,334
North Carolina Municipal Power Agency,
Electric Revenue (Number 1 Catawba):
6%, 1/1/2004 2,000,000 2,129,500
5.25%, 1/1/2009 5,000,000 5,138,200
5.50%, 1/1/2010 10,000,000 10,344,400
Ohio--2.2%
Cleveland, Airport Systems Revenue:
5.50%, 1/1/2005 (Insured; FSA) 1,000,000 1,054,210
5.125%, 1/1/2010 (Insured; FSA) 1,700,000 1,733,354
Cuyahoga County, HR (Metrohealth System)
5.25%, 2/15/2010 (Insured; MBIA) 5,160,000 5,363,304
Franklin County, HR (Holy Cross Health Systems)
5.20%, 6/1/2005 (Insured; MBIA) 2,930,000 3,077,027
Knox County, Hospital Facilities Revenue
(Knox Community Hospital Asset Guaranty)
5%, 6/1/2012 1,500,000 1,497,855
Lorain, Hospital Improvement Revenue
(Lakeland Community Hospital, Inc.)
6.50%, 11/15/2012 3,860,000 4,333,776
Ohio Air Quality Development Authority, PCR
(Cleveland) 4.60%, 10/1/2030 3,085,000 3,074,017
Ohio Water Development Authority,
Pollution Control Facilities Revenue
(Cleveland Electric) 4.60%, 10/1/2030 6,000,000 5,909,280
Student Loan Funding Corporation,
Student Loan Revenue
7.20%, 8/1/2003 1,155,000 1,181,761
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Oklahoma--.5%
Washington County Medical Authority, Revenue
(Jane Phillips Medical Center Project)
5.50%, 11/1/2010 (Insured; Connie Lee) 6,175,000 6,455,963
Oregon--.2%
Multnomah County, COP:
4.50%, 8/1/2014 1,270,000 1,203,592
4.50%, 8/1/2015 2,000,000 1,878,220
Pennsylvania--6.2%
Beaver County Industrial Development Authority, PCR
(Ohio Edison Co. Project) 4.65%, 6/1/2033e 15,000,000 14,998,800
Erie County Hospital Authority, Revenue
(Hamot Health Foundation)
5.375%, 5/15/2010 (Insured; AMBAC) 2,340,000 2,418,952
Lehigh County General Purpose Authority
(Wiley House)
9.375%, 11/1/2006 (Prerefunded 11/1/2001)a 6,115,000 6,901,206
Pennsylvania, COP 5.40%, 7/1/2009 (Insured; AMBAC) 5,000,000 5,160,600
Pennsylvania Economic Development Financing
Authority, RRR (Northampton Generating):
6.75%, 1/1/2007 7,000,000 7,563,640
6.40%, 1/1/2009 10,500,000 11,048,520
6.50%, 1/1/2013 2,000,000 2,110,340
Pennsylvania Higher Educational Facilities Authority,
Health Services Revenue
(University of Pennsylvania):
5.60%, Series A, 1/1/2010 10,000,000 10,354,400
5.60%, Series B, 1/1/2010 4,350,000 4,504,164
Philadelphia Hospitals and Higher Education Facilities
Authority, Revenue
(Community Mental Health/Retardation)
8.875%, 6/15/2009 12,430,000 13,493,884
Rhode Island--2.0%
Central Falls Detention Facility Corp.,
Detention Facility Revenue
(Donald W. Wyatt Detention):
5.25%, 1/15/2009 1,230,000 1,264,083
5.25%, 1/15/2010 1,290,000 1,314,665
5.25%, 1/15/2011 1,360,000 1,373,709
5.25%, 1/15/2012 1,430,000 1,437,436
</TABLE>
The Fund 17
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Rhode Island (continued)
Rhode Island Health and Educational Building Corp.,
Hospital Financing Revenue
(Lifespan Obligation Group):
5.75%, 5/15/2007 (Insured; MBIA) 4,805,000 5,168,258
5.75%, 5/15/2008 (Insured; MBIA) 5,560,000 5,980,836
Rhode Island Housing and Mortgage Finance Corp.:
(Homeownership Opportunity) 7.30%, 10/1/2008 4,680,000 5,121,558
(Rental Housing Program):
5.65%, 10/1/2007 2,175,000 2,255,714
5.65%, 10/1/2008 1,350,000 1,396,643
South Carolina--2.5%
Charleston County, Health Facilities Revenue
(Espiscopal Church Project) 5.40%, 4/1/2004 5,000,000 5,063,900
Charleston County, Hospital Facilities Improvement
Revenue (Medical Society Health Project)
5.50%, 10/1/2005 (Insured; MBIA) 7,945,000 8,413,993
Charleston County, RRR (Foster Wheeler)
5%, 1/1/2007 (Insured; AMBAC) 2,685,000 2,759,106
Lexington County Health Services District Inc., HR
5%, 11/1/2012 (Insured; FSA) 1,710,000 1,694,268
Oconee County, PCR (Engelhard Corp. Project)
5.375%, 5/1/2006 6,000,000 6,310,980
Piedmont Municipal Power Agency, Electric Revenue:
6.25%, 1/1/2004
(Insured; FGIC, Escrowed To Maturity) 585,000 638,024
6.25%, 1/1/2004 (Insured; FGIC) 3,465,000 3,700,204
York County, PCR (Bowater, Inc. Project)
7.625%, 3/1/2006 2,900,000 3,303,912
Tennessee--.5%
Johnson City Health and Educational Facility Board, HR
(Medical Center Hospital Improvement)
5.125%, 7/1/2011 (Insured; MBIA) 6,720,000 6,795,869
Texas--8.0%
Austin Independent School District:
5.60%, 8/1/2009 (Prerefunded 8/1/2006) c 4,590,000 4,962,111
5.60% 8/1/2009 2,025,000 2,152,251
Cass County Industrial Development Corp., PCR
(International Paper Co.) 5.35%, 4/1/2012 3,750,000 3,853,312
Ennis IDC, Revenue, (Cargill, Inc. Project)
6.15%, 11/1/2003 2,450,000 2,587,347
</TABLE>
18
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Texas (continued)
Gulf Coast Waste Disposal Authority, SWDR
(Quaker Oats Co. Project)
5.70%, 5/1/2006 2,210,000 2,357,407
Harris County Health Facilities Development Corp., HR:
(Memorial Hermann Hospital System Project)
5.50%, 6/1/2012 (Insured; FSA) 8,795,000 9,250,581
(Memorial Hospital System Project)
6%, 6/1/2008 (Insured; MBIA) 3,000,000 3,287,190
Harris County Hospital District, Mortgage Revenue
7.50%, 2/15/2003 (Insured; AMBAC) 7,000,000 7,539,070
Houston, Hotel Occupancy Tax Revenue:
7%, 7/1/2003
(Insured; FGIC, Prerefunded 7/1/2001) c 4,400,000 4,690,840
7%, 7/1/2004
(Insured; FGIC, Prerefunded 7/1/2001) c 1,525,000 1,625,802
North Central Health Facility Development Corp.,
Revenue (Baylor Healthcare System):
8.72%, 5/15/2008 11,750,000 12,690,235
8.72%, 5/15/2008 (Prerefunded 5/15/2002) c,d 1,250,000 1,366,038
North Texas Higher Education Authority,
Student Loan Revenue:
7%, Series B, 4/1/2002 (Insured; AMBAC) 4,250,000 4,440,740
7%, Series E, 4/1/2002 (Insured; AMBAC) 4,250,000 4,440,740
Port Corpus Christi Authority, Nueces County
General Revenue (Union Pacific)
5.125%, 4/1/2009 2,250,000 2,254,163
Port Houston Authority, Harris County
Zero Coupon, 10/1/2006 3,625,000 2,609,058
Rio Grande Consolidated Independent School District,
Public Facilities LR
6.40%, 7/15/2003 4,000,000 4,104,360
Rio Grande Valley Health Facilities Development
Corp., HR
(Valley Baptist Medical Center)
6.25%, 8/1/2006 (Insured; MBIA) 5,100,000 5,519,016
South Texas Higher Education Authority,
Student Loan Revenue
5.30%, 12/1/2003 2,390,000 2,488,588
Tarrant County Health Facilities Development Corp.,
Health Systems Revenue:
(Harris Methodist Health Systems) 6%, 9/1/2010 7,725,000 8,683,518
(Health Resources Systems)
5.75%, 2/15/2014 (Insured; MBIA) 5,000,000 5,400,500
</TABLE>
The Fund 19
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Texas (continued)
Texas State College, Student Loan:
6%, 8/1/2005 2,130,000 2,317,781
6%, 8/1/2006 2,500,000 2,730,000
Utah--2.0%
Carbon County, SWDR:
(Sunnyside Cogeneration Project) 9%, 7/1/2006 b 9,750,000 5,850,000
(Sunnyside Cogeneration Association)
7.50%, 7/1/2007 b 7,000,000 4,200,000
Intermountain Power Agency, Power Supply Revenue,
Special Obligation
6.50%, 7/1/2010 (Insured; MBIA) 5,200,000 5,984,576
Utah Board of Regents, Student Loan Revenue:
6.25%, 11/1/2003 (Insured; AMBAC) 3,000,000 3,205,920
6.35%, 11/1/2004 (Insured; AMBAC) 3,000,000 3,238,080
6.45%, 11/1/2005 (Insured; AMBAC) 3,000,000 3,245,910
Virginia--2.1%
Big Stone Gap Redevelopment and Housing Authority,
Correctional Facility LR
(Wallens Ridge Development Project) 6%, 9/1/2007 4,000,000 4,412,040
Fairfax County Economic Development Authority,
Educational Facilities Revenue
(George Mason University Educational Foundation):
6.50%, 11/15/2002 2,000,000 2,124,620
6.95%, 11/15/2002 5,360,000 5,641,400
Lexington Industrial Development Authority,
Residential Care Facility Revenue
(First Mortgage) 5%, 10/1/2004 5,630,000 5,580,512
Virginia Housing Development Authority,
Commonwealth Mortgage:
6.05%, 1/1/2004 4,400,000 4,580,620
6.15%, 1/1/2005 4,400,000 4,606,184
Washington--3.1%
Clark County Public Utility District, Electric Revenue
6.30%, 1/1/2004 (Insured; FGIC) 1,275,000 1,346,107
6.30%, 1/1/2004
(Insured; FGIC, Prerefunded 1/1/2001) c 1,885,000 1,996,931
King County, 5.20%, 12/1/2003 2,525,000 2,651,502
Washington Health Care Facilities Authority, Revenue
(Sisters of Providence) 5.40%, 10/1/2010
(Insured; AMBAC) 3,000,000 3,098,790
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- -------------------------------------------------------------------------------
<S> <C> <C>
Washington (continued)
Washington Housing Finance Commission:
MFHR (Alderbrook Apartments Project)
4.90% 7/1/2030 (LOC; Bank One, Arizona, N.A.) 7,100,000 7,099,716
SFMR, 6.85%, 7/1/2011 (Insured; FNMA, GNMA) 3,015,000 3,211,065
Washington, Public Power Supply Systems Revenue
(Nuclear Project Number 1):
6.60%, 7/1/2004 2,500,000 2,672,475
7.25%, 7/1/2006 (Insured; FSA) 6,000,000 6,996,720
6%, 7/1/2007 (Insured; AMBAC) 9,720,000 10,675,087
Wisconsin--2.3%
Carlton, PCR (Wisconsin Public Service Corp.)
6.125%, 10/1/2005 5,000,000 5,357,900
Nekoosa, PCR (Nekoosa Papers, Inc. Project)
5.35%, 7/1/2015 4,850,000 4,821,288
Wisconsin Health and Educational Facilities Authority,
Revenue:
(Aurora Health Care, Inc.):
5%, 8/15/2009 (Insured; MBIA) 4,335,000 4,409,302
5%, 8/15/2010 (Insured; MBIA) 3,955,000 3,981,459
(Aurora Medical Group, Inc.)
6%, 11/15/2011 (Insured; FSA) 3,500,000 3,909,640
(Luther Hospital Project) 6.125%, 11/15/2006 3,500,000 3,725,925
(Wheaton Franciscan Services, Inc.)
6.50%, 8/15/2007 (Insured; MBIA) 3,000,000 3,218,091
Total Long-Term Municipal Investments
(cost $1,201,798,267) 1,248,997,849
Short-Term Municipal Investments--.9%
- -------------------------------------------------------------------------------
Indiana--.1%
Princeton, PCR, VRDN
(PSI Energy, Inc. Project) 3.35%
(LOC; Morgan Guaranty Trust Co. of New York)f 1,300,000 1,300,000
Minnesota--.5%
Minnesota Higher Education Facilities Authority,
Revenue, VRDN:
(Macalester College) 3.35% f 1,500,000 1,500,000
(University of St. Thomas)
3.25% (LOC; Allied Irish Banks)f 1,600,000 1,600,000
St. Cloud, Health Care Facilities Revenue, VRDN
(St. Cloud Hospital) 3.25%
(LOC; Rabobank Nederland)f 1,400,000 1,400,000
University of Minnesota, VRDN 3.35%f 1,500,000 1,500,000
</TABLE>
The Fund 21
<PAGE>
STATEMENT OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Principal
Short-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
<S> <C> <C>
Wyoming--.3%
Lincoln County, PCR, VRDN (Exxon Project) 3.35%f 3,500,000 3,500,000
Total Short-Term Municipal Investments
(cost $10,800,000) 10,800,000
- --------------------------------------------------------------------------------
Total Investments (cost $1,212,598,267) 99.6% 1,259,797,849
Cash and Receivables (Net) .4% 5,468,808
Net Assets 100.0% 1,265,266,657
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Summary of Abbreviations
<S> <C> <C> <C>
AMBAC American Municipal Bond LOC Letter of Credit
Assurance Corporation LR Lease Revenue
COP Certificate of Participation MBIA Municipal Bond Investors
EDR Economic Development Revenue Assurance Insurance
EIR Environment Improvement Revenue Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing
FNMA Federal National Mortgage Association Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
GNMA Government National Mortgage RRR Resources Recovery Revenue
Association SFMR Single Family Mortgage
HR Hospital Revenue Revenue
IDC Industrial Development Corporation SWDR Solid Waste Disposal Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 46.6
AA Aa AA 16.0
A A A 16.9
BBB Baa BBB 9.0
BB Ba BB .7
B B B 1.7
F1+, F-1 MIG1, VMIG1 & P1 SP1, A1 .9
Not Ratedg Not Ratedg Not Ratedg 8.2 100.0
<FN>
a 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 May 31, 1999,
these securities amounted to $24,033,680 or 1.9% of net assets.
b Non-income producing security; interest payments in default.
c Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
d Inverse floater security--the interest rate is subject to change
periodically.
e Purchased on a delayed-delivery basis.
f Securities payable on demand. Variable interest rate--subject to periodic
change.
g Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the fund may invest.
See notes to financial statements.
</FN>
</TABLE>
The Fund 23
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Cost Value
- -------------------------------------------------------------------------------
<S> <C> <C>
Assets ($):
Investments in securities--See Statement of
Investments 1,212,598,267 1,259,797,849
Cash 1,191,806
Interest receivable 20,690,281
Receivable for investment securities sold 1,471,356
Receivable for shares of Common Stock subscribed 15,000
Prepaid expenses 135,427
1,283,301,719
- -------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 753,751
Payable for investment securities purchased 17,118,152
Payable for shares of Common Stock redeemed 1,500
Accrued expenses 161,659
18,035,062
- -------------------------------------------------------------------------------
Net Assets ($) 1,265,266,657
- -------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 1,209,877,467
Accumulated undistribued investment income--net 490,255
Accumulated net realized gain (loss) on investments 7,699,353
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 47,199,582
- -------------------------------------------------------------------------------
Net Assets ($) 1,265,266,657
- -------------------------------------------------------------------------------
Shares Outstanding
(300 million shares of $.01 par value Common Stock authorized) 91,457,469
Net Asset Value, offering and redemption price per
share--Note 3(d) ($) 13.83
</TABLE>
See notes to financial statements.
24
<PAGE>
STATEMENT OF OPERATIONS
Year Ended May 31, 1999
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Investment Income ($)
- -------------------------------------------------------------------------------
<S> <C>
Interest Income 72,570,072
Expenses:
Management fee--Note 3(a) 7,891,106
Shareholder servicing costs--Note 3(b) 1,874,095
Custodian fees 90,765
Registration fees 61,293
Professional fees 51,196
Directors' fees and expenses--Note 3(c) 50,007
Prospectus and shareholders' reports 49,518
Loan commitment fees--Note 2 6,466
Miscellaneous 58,827
Total Expenses 10,133,273
Less--reduction in management fee due to
undertaking--Note 3(a) (256,487)
Net Expenses 9,876,786
Investment Income--Net 62,693,286
- -------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4 ($):
Net realized gain (loss) on investments 11,626,654
Net unrealized appreciation (depreciation) on investments (27,720,053)
Net Realized and Unrealized Gain (Loss) on Investments (16,093,399)
Net Increase in Net Assets Resulting from Operations 46,599,887
</TABLE>
See notes to financial statements.
The Fund 25
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
Year Ended May 31,
--------------------------------
1999 1998
- -------------------------------------------------------------------------------
Operations ($):
Investment income--net 62,693,286 67,354,397
Net realized gain (loss) on investments 11,626,654 16,826,858
Net unrealized appreciation (depreciation)
on investments (27,720,053) 22,880,755
Net Increase (Decrease) in Net Assets
Resulting from Operations 46,599,887 107,062,010
- -------------------------------------------------------------------------------
Dividends to Shareholders from ($):
Investment income--net (62,553,395) (67,194,371)
Net realized gain on investments (11,801,579) (11,741,273)
Total Dividends (74,354,974) (78,935,644)
- -------------------------------------------------------------------------------
Capital Stock Transactions ($):
Net proceeds from shares sold 152,479,000 201,091,675
Dividends reinvested 54,958,796 58,183,925
Cost of shares redeemed (260,941,326) (328,451,313)
Increase (Decrease) in Net Assets from
Capital Stock Transactions (53,503,530) (69,175,713)
Total Increase (Decrease) in Net Assets (81,258,617) (41,049,347)
- -------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 1,346,525,274 1,387,574,621
End of Period 1,265,266,657 1,346,525,274
Undistributed investment income--net 490,255 350,364
- -------------------------------------------------------------------------------
Capital Share Transactions (Shares):
Shares sold 10,818,392 14,280,929
Shares issued for dividends reinvested 3,895,035 4,133,183
Shares redeemed (18,514,989) (23,346,665)
Net Increase (Decrease) in Shares Outstanding (3,801,562) (4,932,553)
See notes to financial statements.
26
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods
indicated. Total return shows how much your investment in the fund would have
increased (or decreased) during each period, assuming you had reinvested all
dividends and distributions. These figures have been derived from the fund's
financial statements.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Year Ended May 31,
-------------------------------------------------
1999 1998 1997 1996 1995
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 14.14 13.85 13.75 14.02 13.84
Investment Operations:
Investment income--net .67 .69 .71 .72 .75
Net realized and unrealized gain (loss)
on investments (.18) .41 .20 (.24) .24
Total from Investment Operations .49 1.10 .91 .48 .99
Distributions:
Dividends from investment income--net (.67) (.69) (.70) (.72) (.75)
Dividends from net realized gain
on investments (.13) (.12) (.11) (.03) (.06)
Total Distributions (.80) (.81) (.81) (.75) (.81)
Net asset value, end of period 13.83 14.14 13.85 13.75 14.02
- --------------------------------------------------------------------------------------------
Total Return (%) 3.53 8.04 6.80 3.44 7.54
- --------------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .75 .74 .73 .71 .73
Ratio of net investment income
to average net assets 4.75 4.91 5.10 5.14 5.52
Decrease reflected in above expense ratios
due to undertakings by the Manager .02 .01 -- -- --
Portfolio Turnover Rate 20.37 40.27 46.67 48.70 42.18
- --------------------------------------------------------------------------------------------
Net Assets, end of period ($ X 1,000) 1,265,267 1,346,525 1,387,575 1,467,340 1,569,511
</TABLE>
See notes to financial statements.
The Fund 27
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Intermediate 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 provide the maximum amount of current income exempt from
Federal income tax as is consistent with the preservation of capital. The
Dreyfus Corporation (the "Manager") serves as the fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund
Services, Inc. is the distributor of the fund's shares which are sold to the
public without a sales charge.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities 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.
(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
28
<PAGE>
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 $12,751 during the period ended May 31, 1999 based on available
cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(c) Dividends to shareholders: It is the policy of the fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the fund may make distributions on a more frequent basis to
comply with the distribution requirements of the Internal Revenue Code of
1986, as amended (the "Code"). To the extent that net realized capital gain
can be offset by capital loss carryovers, if any, it is the policy of the fund
not to distribute such gain.
(d) Federal income taxes: It is the policy of the fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends,
by complying with the applicable provisions of the Code, and to make
distributions of income and net realized capital gain sufficient to relieve it
from substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility") to be utilized for temporary or
emergency purposes, including the financing of 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 May
31, 1999, the fund did not borrow under the Facility.
The Fund 29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
NOTE 3--Management Fee and Other Transactions
With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .60 of 1% of the value of the fund's average
daily net assets and is payable monthly. However, pursuant to a court approved
settlement agreement of previously disclosed litigation, dated September 14,
1988, the Manager agreed to make payments to the fund for 10 years, ranging
from $0 to $1 million per year depending upon average daily net assets of the
fund. The management fee for the period ended May 31, 1999 was reduced by
$25,750 pursuant to the settlement of litigation. This arrangement terminated
on September 13, 1998.
The Manager had undertaken from June 1, 1998 through May 31, 1999 to reduce
the management fee paid by the fund, to the extent that the fund's aggregate
annual expenses, exclusive of taxes, brokerage, interest on borrowings,
commitment fees and extraordinary expenses, exceeded an annual rate of .75 of
1% of the value of the fund's average daily net assets. The reduction in
management fee, pursuant to the undertaking, amounted to $256,487 during the
period ended May 31, 1999.
(b) Under the Shareholder Services Plan, the fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% of the value of the fund's average daily net
assets for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. During the period
ended May 31, 1999, the fund was charged $1,149,683 pursuant to the
Shareholder Services Plan.
30
<PAGE>
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 May 31, 1999, the fund was charged $465,916 pursuant to the transfer
agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A .10% redemption fee is charged and retained by the fund on shares
redeemed within fifteen days following the date of issuance, including
redemptions made through use of the fund's Exchange privilege. During the
period ended May 31, 1999, redemption fees retained by the fund amounted to
$29,330.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended May 31, 1999,
amounted to $264,328,278 and $318,328,919, respectively.
At May 31, 1999, accumulated net unrealized appreciation on investments was
$47,199,582, consisting of $59,764,891 gross unrealized appreciation and
$12,565,309 gross unrealized depreciation.
At May 31, 1999, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
The Fund 31
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Intermediate Municipal Bond Fund, Inc.
We have audited the accompanying statement of assets and liabilities of
Dreyfus Intermediate Municipal Bond Fund, Inc., including the statement of
investments, as of May 31, 1999, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and financial highlights for each of the
years indicated therein. 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 audits.
We conducted our audits 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 includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of May 31, 1999 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
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Intermediate Municipal Bond Fund, Inc. at May 31, 1999, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for
each of the indicated years, in conformity with generally accepted accounting
principles.
Ernst & Young LLP
New York, New York
July 7, 1999
32
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the fund hereby makes the following
designations regarding its fiscal year ended May 31, 1999:
- --all the dividends paid from investment income--net are "exempt - interest
dividends" (not subject to regular Federal income tax), and
- --the fund hereby designates $.0869 per share as a long-term capital gain
distribution of the $.1262 per share paid on December 8, 1998.
As required by Federal tax law rules, shareholders will receive notification
of their portion of the fund's taxable ordinary dividends (if any) and capital
gains distributions (if any) paid for the 1999 calendar year on Form 1099-DIV
which will be mailed by January 31, 2000.
The Fund 33
<PAGE>
For More Information
Dreyfus Intermediate
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
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call 1-800-645-6561
By mail Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
By E-mail Send your request
to [email protected]
On the Internet Information
can be viewed online or
downloaded from:
http://www.dreyfus.com
(C) 1999 Dreyfus Service Corporation 947AR995
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS INTERMEDIATE MUNICIPAL BOND FUND, INC. AND
THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
LEHMAN BROTHERS INTERMEDIATE
PERIOD 10-YEAR MUNICIPAL MUNICIPAL
BOND INDEX * BOND FUND, INC.
5/31/89 10,000 10,000
5/31/90 10,736 10,653
5/31/91 11,852 11,644
5/31/92 12,954 12,745
5/31/93 14,549 14,132
5/31/94 15,048 14,574
5/31/95 16,400 15,673
5/31/96 17,176 16,213
5/31/97 18,579 17,315
5/31/98 20,303 18,708
5/31/99 21,239 19,369
*Source: Lehman Brothers
