<PAGE>
Dreyfus
California
Tax Exempt
Bond Fund, Inc.
Semi-Annual Report
November 30, 1997
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus California Tax
Exempt Bond Fund, Inc. for the six-month period ended November 30, 1997. Your
Fund produced a total return, including share price changes and dividend income,
of 5.31%.* The Fund's tax-free annualized distribution rate per share was
4.82%.**
ECONOMIC REVIEW
Almost everything went right for the U.S. economy over the reporting period.
In its seventh year of expansion, the economy showed no sign of an upsurge in
inflation resulting from tightening labor markets. With the unemployment rate at
its lowest level in almost a decade, investors had been concerned that wage
gains might result in higher levels of inflation and cause the Federal Reserve
Board (the "Fed") to again raise interest rates. Given the longevity of our
economic recovery, the Fed's monetary policymakers apparently were hoping that a
cyclical easing in the economic growth rate would help dampen any incipient
inflationary pressure. Recent turmoil in the financial markets of Asia and Latin
America has raised prospects for a slowdown in U.S. exports as those nations
shore up their financial systems. If this were to occur, the diminished demand
for U.S. goods overseas could be a drag on domestic economic growth. What is all
but certain is that the Fed is reluctant to further unsettle world financial
markets by raising interest rates over the near term.
Indicators of future economic conditions showed high levels of consumer
optimism and pointed toward continued growth. Consumers' spirits have been
lifted by an unemployment rate at a quarter-century low (4.7% at the end of the
reporting period), and core inflation, which excludes food and energy price
changes, at the 2% level. The Conference Board, a business-sponsored research
group, recently reported that its Consumer Confidence Index hit a new high for
this economic expansion. Since consumers account for two thirds of all economic
activity, their confidence in the economy is an important indicator of future
conditions. Another important index of future economic conditions, the Index of
Leading Economic Indicators (also a Conference Board index), implied continued
growth. Government reports of personal income and consumer spending showed
healthy rates of increase as well.
The production side of the economy continued its robust advance. Industrial
output rose consistently, and while the factory utilization rate (a potential
harbinger of production bottlenecks and price pressures) also increased, there
was little evidence of producer-generated inflation. Additional good news
regarding inflation came from the report that the productivity of U.S. workers
rose at its fastest pace in five years during the third quarter of 1997. This
increase in worker efficiency helped push down unit labor costs and eased
concerns that labor costs, despite the tight labor market, would lead to higher
inflation.
The interplay between worker productivity and worker wage increases does much
in determining the future course of inflation. We continue to monitor that
closely, along with developments in the international financial arena. The
recent international turbulence underscored the close economic relationships
that exist among all countries, particularly in this age of multinational
companies and pervasive global capitalism.
MARKET ENVIRONMENT
While early concerns over mounting inflationary pressures did send interest
rates to their highest levels of the year at the start of this period, there
quickly emerged a school of thought owing to the evolution of a "new paradigm"
of economic growth. Proponents of this concept hold to the notion that the
economy could operate at or near full capacity with low levels of unemployment
without the commensurate increase in the rate of inflation we have come to
expect from past experiences due to the combined forces of technological
advances which have significantly increased the productivity of the nation's
labor force, and global competition emanating from the world's emerging
economies. As this concept gathered a following among market participants,
prices rose and yields declined. In his July Humphrey Hawkins
<PAGE>
testimony before Congress, however, Federal Reserve Board Chairman Alan
Greenspan called to question this concept when compared to the weight of
evidence posed by recent economic history. As a result of his comments, bond
prices sold off sharply in early August as market participants returned a yield
premium to valuations in anticipation of a shift to a less accommodative stance
in monetary policy.
The subsequent rise in interest rates proved to be relatively muted, however,
as attention soon shifted from domestic economic affairs to the rolling series
of crises sweeping the emerging markets of Southeast Asia which culminated in
the formal devaluation of the currencies of Thailand, Malaysia and Indonesia.
Concerned over the potentially deflationary impact these devaluations would have
on prices around the globe, investors began to accumulate fixed income
securities as an alternative to the resulting volatility of the equity markets.
As it became apparent that larger, more established Asian economies like those
of South Korea and Japan were not immune to the troubles sweeping the region,
the scope of the problem expanded and the demand for the perceived "safe haven"
of U.S. fixed income securities pushed yields to their lowest levels of the
year.
While buoyed by the same factors throughout the most recent period, municipal
bonds underperformed their taxable counterparts on a relative basis. The reason
for this was that during the early strength of the markets, municipals were
supported by a formidable supply/demand dynamic which pushed tax exempt yields
to a level which, when viewed as a percentage of taxable yields, were relatively
expensive by historical standards. Consequently, as taxable yields declined over
the period, tax exempt yields moved in a similar though more restrained fashion.
This relative underperformance during the period now places municipal bonds as
inexpensive versus taxable alternatives.
PORTFOLIO OVERVIEW
In managing the Fund, cash reserve positions were drawn to levels only
necessary to fulfill portfolio liquidity requirements. Assets were directed
toward higher quality securities offering generous levels of tax-free income as
well as the potential for significant principal appreciation as yields declined.
In this way portfolio duration was extended to make it more sensitive to a
declining interest rate environment. Throughout this process we continued to
strive to enhance the liquidity and performance characteristics of the Fund by
extending the optional redemption provisions and improving the underlying
creditworthiness of its holdings.
We appreciate your investment in the Dreyfus California Tax Exempt Bond Fund,
Inc. and we want to assure you that we are, at all times, working in the Fund's
best interest.
Very truly yours,
/s/ Richard J. Moynihan
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
December 18, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid.
** Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the net asset
value per share at the end of the period. Some income may be subject to the
Federal Alternative Minimum Tax (AMT) for certain shareholders.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments--92.8% Amount Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
California--92.1%
Alameda County, COP:
7.25%, 12/1/2014 (Insured; BIGI) (Prerefunded 12/1/2000) (a)................ $ 5,980,000 $ 6,621,953
7.25%, 12/1/2015 (Insured; BIGI) (Prerefunded 12/1/2000) (a)................ 4,045,000 4,479,231
Anaheim Public Finance Authority, Tax Allocation Revenue,
6.45%, 12/28/2018 (Insured; MBIA)........................................... 20,000,000 22,186,400
Bellflower, COP, Refunding
(Bellflower Civic Center) 7.20%, 10/1/2019 (Insured; MBIA).................. 1,475,000 1,575,757
Benicia Unified School District, Refunding:
Zero Coupon, 8/1/2017 (Insured; FGIC)....................................... 1,820,000 645,299
Zero Coupon, 8/1/2019 (Insured; FGIC)....................................... 3,195,000 1,010,930
Zero Coupon, 8/1/2020 (Insured; FGIC)....................................... 2,845,000 849,887
Zero Coupon, 8/1/2021 (Insured; FGIC)....................................... 5,955,000 1,685,861
Zero Coupon, 8/1/2022 (Insured; FGIC)....................................... 5,700,000 1,528,455
Berkeley, Health Facilities Revenue, Refunding
(Alta Bates Medical Center) 6.55%, 12/1/2022 (Prerefunded 12/1/2002) (a).... 17,000,000 19,026,740
Brea Public Finance Authority, Revenue, Tax Allocation (Redevelopment Project):
6.75%, 8/1/2022 (Insured; MBIA) (Prerefunded 8/1/2001) (a).................. 4,625,000 5,116,036
6.75%, 8/1/2022 (Insured; MBIA)............................................. 1,775,000 1,945,223
California 5%, 10/1/2023 (b)................................................... 46,225,000 44,787,865
California Department of Veteran Affairs, Home Purchase Revenue 8.30%, 8/1/2019 1,000,000 1,032,490
California Department of Water Resources, Water System Revenue
(Central Valley Project) 5.25%, 12/1/2028 (Insured; FGIC)................... 35,395,000 35,126,706
California Educational Facilities Authority, Revenue:
(Claremont Colleges Pooled Facilities) 6.375%, 5/1/2022..................... 3,655,000 3,880,879
Refunding (University of Southern California) 5.125%, 10/1/2028............. 13,000,000 12,752,090
California Health Facilities Financing Authority, Revenue:
(Adventist Health System-West):
6.40%, 3/1/2002 (Insured; MBIA).......................................... 1,955,000 2,117,441
6.50%, 3/1/2003 (Insured; MBIA).......................................... 2,140,000 2,317,427
(Episcopal Homes Foundation) 7.75%, 7/1/2018................................ 4,270,000 4,328,115
(Saint Joseph's Health System) 6.75%, 7/1/2021 (Prerefunded 7/1/2001) (a)... 8,500,000 9,366,150
(San Diego Hospital Association) 6.125%, 8/1/2022 (Insured; MBIA)........... 4,250,000 4,481,200
(Stanford University):
6.50%, 11/1/2020 (Prerefunded 11/1/2000) (a)............................. 8,975,000 9,733,747
6.50%, 11/1/2020......................................................... 1,025,000 1,095,633
(Unihealth America) 7.625%, 10/1/2015 (Insured; AMBAC)...................... 55,000 57,630
California Housing Finance Agency:
Home Mortage Revenue:
6.30%, 2/1/2008.......................................................... 2,700,000 2,843,370
6.35%, 2/1/2009.......................................................... 2,870,000 3,009,999
6.40%, 2/1/2010.......................................................... 3,030,000 3,200,862
5.85%, 8/1/2017.......................................................... 6,000,000 6,210,000
8.20%, 8/1/2017.......................................................... 15,000 15,348
8.30%, 8/1/2019.......................................................... 105,000 108,275
</TABLE>
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
California (continued)
California Housing Finance Agency (continued):
Home Mortage Revenue (continued):
6.70%, 8/1/2025.......................................................... $ 7,985,000 $ 8,530,934
7.125%, 2/1/2026......................................................... 3,115,000 3,359,185
6.55%, 8/1/2026.......................................................... 11,225,000 11,932,849
6.15%, 8/1/2027 (Insured; MBIA).......................................... 10,000,000 10,457,100
6.40%, 8/1/2027 (Insured; MBIA).......................................... 20,000,000 21,221,200
7.65%, 8/1/2029.......................................................... 9,835,000 10,228,695
MFHR 6.30%, 8/1/2026 (Insured; AMBAC)....................................... 7,150,000 7,499,564
Multi-Unit Rental Housing Revenue 6.85%, 8/1/2015........................... 3,140,000 3,328,997
Single Family Mortgage:
6.25%, 8/1/2014 (Insured; AMBAC)......................................... 3,550,000 3,706,058
6.30%, 8/1/2024.......................................................... 8,000,000 8,412,400
6.45%, 8/1/2025.......................................................... 15,355,000 16,219,333
California Pollution Control Financing Authority:
PCR (Pacific Gas & Electric Co.) 6.35%, 6/1/2009 (Insured; MBIA)............ 5,000,000 5,450,850
(Refunding, San Diego Gas and Electric) 5.90%, 6/1/2014 (Insured; MBIA)..... 41,830,000 46,051,902
(Southern California Edison Co.):
6.40%, 12/1/2024......................................................... 12,600,000 13,494,348
6.40%, 12/1/2024 (Insured; AMBAC)........................................ 4,125,000 4,423,485
SWDR (Browning Ferris Industry, Inc.):
5.80%, 12/1/2016......................................................... 10,660,000 10,965,729
6.75%, 9/1/2019.......................................................... 3,400,000 3,789,878
California Public Works Board, LR:
(Department of Corrections, California State Prison, Susanville)
5.25%, 6/1/2015 (Insured; FSA)........................................... 5,455,000 5,596,775
(Department of Corrections, Calipatria State Prison, Imperial County)
6.50%, 9/1/2017 (Insured; MBIA).......................................... 13,000,000 15,256,930
(Department of Corrections, Madera State Prison)
5.50%, 6/1/2015 (Insured; MBIA).......................................... 4,500,000 4,725,450
(Refunding, University of California Project)
5.25%, 12/1/2013 (Insured; AMBAC)........................................ 5,580,000 5,654,437
(Various University of California Projects)
6.375%, 10/1/2019........................................................ 12,775,000 13,955,666
California Statewide Community Development Authority, Revenue,
COP (Saint Joseph Health System):
Refunding 5.50%, 7/1/2009 (Insured; MBIA)................................ 8,645,000 9,025,812
Refunding 5.50%, 7/1/2010 (Insured; MBIA)................................ 9,115,000 9,469,482
6.50%, 7/1/2015 (Prerefunded 7/1/2004) (a)............................... 7,000,000 7,940,100
Refunding 5.125%, 7/1/2017............................................... 5,000,000 4,887,950
Central Coast Water Authority, Revenue, Refunding (State Water Project)
5%, 10/1/2022 (Insured; AMBAC).............................................. 36,980,000 35,852,110
Chico Public Financing Authority, Revenue
(Southeast Chico Redevelopment Project) 6.625%, 4/1/2021 (Insured; FGIC).... 2,000,000 2,140,920
Contra Costa County, COP (Merrithew Memorial Hospital):
6.60%, 11/1/2012 (Prerefunded 11/1/2002) (a)................................ 10,000,000 11,232,200
5.375%, 11/1/2017 (Insured; MBIA)........................................... 22,500,000 22,765,950
</TABLE>
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
California (continued)
Corona Community Facilities District, Special Tax, Refunding:
7.60%, 9/1/2013............................................................. $ 5,755,000 $ 6,055,871
7.60%, 9/1/2017............................................................. 3,000,000 3,154,770
7.70%, 9/1/2019............................................................. 2,000,000 2,103,040
East Bay Municipal Utilities District, Revenue:
Wastewater Treatment System:
Refunding 5.50%, 6/1/2013 (Insured; AMBAC)............................... 16,900,000 17,243,070
Refunding 5.55%, 6/1/2020 (Insured; AMBAC)............................... 26,500,000 26,629,055
Water System, Refunding 4.75%, 6/1/2021 (Insured; FGIC)..................... 43,435,000 40,521,380
Emeryville Public Financing Authority, Revenue
(Shellmound Park Redevelopment Project) 6.80%, 5/1/2024..................... 2,365,000 2,581,610
Escondido Union High School District:
Zero Coupon, 11/1/2015 (Insured; MBIA)...................................... 6,250,000 2,442,875
Zero Coupon, 11/1/2017 (Insured; MBIA)...................................... 7,935,000 2,776,615
Folsom Community Facilities District Number 3, Special Tax 7.80%, 12/1/2015.... 1,900,000 2,023,367
Foothill Eastern Transportation Corridor Agency, Toll Road Revenue:
6%, 1/1/2016................................................................ 8,750,000 9,243,150
Zero Coupon, 1/1/2027....................................................... 5,000,000 976,100
Zero Coupon, 1/1/2029....................................................... 16,200,000 2,826,576
Fresno, Sewer Revenue:
5.25%, 9/1/2019 (Insured; AMBAC)............................................ 4,850,000 4,931,771
5%, 9/1/2023 (Insured; MBIA)................................................ 14,390,000 13,883,904
Hesperia Water District, COP, Refunding
(Water Facilities Improvement Project) 7.15%, 6/1/2026 (Insured; FGIC)...... 4,500,000 4,990,725
Inglewood, HR (Daniel Freeman Hospital, Inc.) 6.75%, 5/1/2013.................. 6,300,000 6,767,775
La Verne Community Facilities District, Special Tax
(Koll Business Center) 7.875%, 3/1/2014..................................... 3,625,000 3,812,340
Lake Elsinore Public Financing Authority, Tax Allocation Revenue
(Lake Elsinore Redevelopment Project)
6.25%, 2/1/2019 (Insured; FGIC)............................................. 4,220,000 4,463,030
Loma Linda, HR, Refunding (Loma Linda University Medical Center Project)
7%, 12/1/2015 (Insured; AMBAC).............................................. 12,355,000 13,204,777
Long Beach, Water Revenue, Refunding 5%, 5/1/2024 (Insured; MBIA).............. 8,590,000 8,284,626
Los Angeles Community Redevelopment Agency, Tax Allocation
(Hollywood Redevelopment Project) 6.10%, 7/1/2022 (Insured; MBIA)........... 4,900,000 5,187,973
Los Angeles County, COP:
(Disney Parking Project) 6.50%, 3/1/2023.................................... 7,440,000 7,929,031
(Edmund D. Edelman Childrens' Court) 6%, 4/1/2012 (Insured; AMBAC).......... 9,000,000 9,564,570
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
6%, 7/1/2020 (Insured; MBIA)................................................ 15,000,000 16,026,150
Los Angeles County Public Works Financing Authority, LR
(Multiple Capital Facilities Project) 5.125%, 12/1/2029 (Insured; AMBAC).... 10,115,000 9,889,334
</TABLE>
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
California (continued)
Los Angeles Department Water and Power,
Waterworks Revenue, Refunding:
6.40%, 5/15/2028......................................................... $ 2,435,000 $ 2,612,974
6.375%, 7/1/2034 (Insured; MBIA)......................................... 12,000,000 13,160,640
Los Angeles Harbor Department, Revenue:
6%, 8/1/2012................................................................ 8,900,000 9,490,070
6.625%, 8/1/2019 (Insured; AMBAC)........................................... 6,000,000 6,536,100
6.625%, 8/1/2025............................................................ 17,780,000 19,267,475
Los Angeles Municipal Improvement Corp.:
COP (Equipment Real Property) 5.40%, 12/1/2010 (Insured; AMBAC)............. 2,335,000 2,422,633
LR, Refunding (Central Library Project):
6.30%, 6/1/2016.......................................................... 3,500,000 3,736,180
6.30%, 6/1/2018.......................................................... 4,250,000 4,540,360
6.35%, 6/1/2020.......................................................... 7,700,000 8,231,762
Metropolitan Water District of Southern California, Waterworks Revenue:
6.75%, 7/1/2018 (Prerefunded 7/1/2001) (a).................................. 4,750,000 5,239,060
5%, 7/1/2026 (c)............................................................ 23,000,000 22,218,460
5%, 7/1/2027................................................................ 60,785,000 58,600,387
Modesto, Multi-Family Housing Mortgage Revenue, Refunding 6.40%, 6/1/2029...... 7,723,000 8,051,768
Moulton Niguel Water District, Improvement District Number 6
7.25%, 4/1/2016 (Insured; AMBAC) (Prerefunded 4/1/2000) (a)................. 5,000,000 5,454,700
Mount Diablo Hospital District, Revenue
6.125%, 12/1/2020 (Insured; AMBAC) (Prerefunded 12/1/2000) (a).............. 5,000,000 5,383,400
Mount Diablo Unified School District, Community Facilities District, Special Tax
7.05%, 8/1/2020 (Insured; FGIC) (Prerefunded 8/1/2000) (a).................. 3,500,000 3,832,360
M-S-R Public Power Agency, Revenue, Refunding (San Juan Project):
5.375%, 7/1/2013 (Insured; MBIA)............................................ 2,500,000 2,570,500
5.375%, 7/1/2014 (Insured; MBIA)............................................ 3,000,000 3,068,730
5.90%, 7/1/2020............................................................. 15,000,000 15,121,650
Northern California Power Agency, Power Revenue:
(Hydroelectric Project) 7%, 7/1/2016 (Insured; AMBAC) (Prerefunded) 1/1/2016 (a) 670,000 818,753
Refunding 7.50%, 7/1/2023 (Insured; AMBAC) (Prerefunded 7/1/2021) (a)....... 375,000 480,450
Palmdale Elementary School District, Special Tax, Community Facilities District Number 90
5.30%, 8/1/2014 (Insured; FSA).............................................. 2,500,000 2,534,575
Pasadena Community Development Commission, MFHR (Civic Center)
6.45%, 12/1/2021 (Insured; FSA)............................................. 13,185,000 13,780,698
Port of Oakland, Special Facilities Revenue (Mitsui O.S.K. Lines Ltd.)
6.80%, 1/1/2019 (LOC; Industrial Bank of Japan) (d)......................... 2,000,000 2,167,540
Rancho Cucamonga Redevelopment Agency, Tax Allocation
(Rancho Cucamonga Redevelopment Project):
7.125%, 9/1/2019 (Insured; MBIA)......................................... 2,455,000 2,620,909
6.75%, 9/1/2020 (Insured; MBIA).......................................... 1,415,000 1,501,725
</TABLE>
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
California (continued)
Riverside County Asset Leasing Corp., Leasehold Revenue
(Riverside County Hospital Project):
6.25%, 6/1/2019 (Prerefunded 6/1/1999) (a)............................... $ 7,500,000 $ 7,748,475
Zero Coupon, 6/1/2023 (Insured; MBIA).................................... 18,755,000 4,805,594
Sacramento, COP (Refunding-Public Facilities Project) 6%, 7/1/2012............. 4,500,000 4,751,865
Sacramento County, Airport System Revenue
6%, 7/1/2017 (Insured; MBIA)................................................ 5,850,000 6,168,591
Sacramento Municipal Utility District, Electric Revenue, Refunding
5.125%, 7/1/2022 (Insured; MBIA)............................................ 11,700,000 11,467,053
Saddleback Community College District, COP
7%, 8/1/2019 (Insured; BIGI)................................................ 2,875,000 3,050,059
San Bernardino County, COP:
(Capital Facilities Project)
6.875%, 8/1/2024......................................................... 5,000,000 6,222,500
(Refunding, Medical Center Financing Project) 5.50%, 8/1/2015 (Insured; MBIA) 12,790,000 13,136,609
(West Valley Detention Center) 5.90%, 11/1/2001 (Insured; MBIA)............. 1,565,000 1,668,447
San Diego Public Utilities Financing Authority, Sewer Revenue
5%, 5/15/2020 (Insured; FGIC)............................................... 11,000,000 10,625,450
San Elijo Joint Powers Authority, Revenue
(San Elijo Water Pollution Control Project) 7%, 3/1/2020 (Insured; FGIC)
(Prerefunded 3/1/2000) (a).................................................. 5,500,000 5,957,435
San Francisco City and County, SFMR
(FNMA/GNMA Mortgage Backed Securities Program) 7.45%, 1/1/2024.............. 255,000 268,423
San Francisco City and County Airports Commission, International Airport Revenue,
Refunding 6.10%, 5/1/2003 (Insured; AMBAC).................................. 3,000,000 3,266,280
San Francisco City and County Public Utilities Commission, Water Revenue:
Refunding 5%, 11/1/2017..................................................... 10,060,000 9,897,632
6.50%, 11/1/2017 (Prerefunded 11/1/2001) (a)................................ 3,500,000 3,859,240
San Francisco State Building Authority, LR
(San Francisco Civic Center Complex) 5.25%, 12/1/2016 (Insured; AMBAC)...... 23,175,000 23,309,647
San Joaquin Hills Transportation Corridor Agency, Toll Road Revenue, Refunding:
Zero Coupon, 1/15/2031 (Insured; MBIA)...................................... 107,740,000 18,213,447
Zero Coupon, 1/15/2034 (Insured; MBIA)...................................... 46,535,000 6,687,545
Zero Coupon, 1/15/2035 (Insured; MBIA)...................................... 37,445,000 5,096,265
San Marcos Public Facilities Authority, Tax Allocation Revenue
6%, 1/1/2006 (Insured; FSA) (Prerefunded 1/1/2002) (a)...................... 10,500,000 11,390,820
San Mateo County, COP (Capital Projects Program)
6.50%, 7/1/2017 (Insured; MBIA) (Prerefunded 7/1/2001) (a).................. 6,000,000 6,576,660
San Mateo County Flood Control District, COP
(Colma Creek Flood Control Zone) 5.125%, 8/1/2032 (Insured; MBIA)........... 10,145,000 9,863,881
Santa Barbara, COP, Refunding (Water System Improvement Project)
6.70%, 4/1/2027 (Insured; AMBAC)............................................ 4,000,000 4,379,600
</TABLE>
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
California (continued)
Santa Clara Unified School District
5%, 8/1/2022 (Insured; FGIC)................................................ $ 8,920,000 $ 8,612,794
Santa Cruz County, COP (Capital Facilities Project)
6.70%, 9/1/2020 (Insured; MBIA) (Prerefunded 9/1/2001) (a).................. 5,000,000 5,531,200
Santa Cruz County Public Financing Authority, Revenue, Refunding
7.10%, 9/1/2021 (Insured; MBIA)............................................. 6,500,000 6,966,765
Santa Rosa, Wastewater Revenue, Refunding
(Subregional Wastewater Project) 5%, 9/1/2022 (Insured; FGIC)............... 3,000,000 2,896,500
Southern California Rapid Transportation District, COP (Workers Compensation Fund)
6.50%, 7/1/2007 (Insured; MBIA)............................................. 22,900,000 24,809,860
University of California, COP (UCLA Central Chiller/ Cogeneration)
6.25%, 11/1/2009 (Prerefunded 11/1/1999) (a)................................ 3,000,000 3,176,759
West Basin Municipal Water District, COP
6.85%, 8/1/2016 (Insured; AMBAC) (Prerefunded 8/1/2000) (a)................. 6,000,000 6,539,640
U.S. Related--.7%
Commonwealth of Puerto Rico Infrastructure Financing Authority, Special Tax Revenue
5%, 7/1/2028 (Insured; AMBAC) (c)........................................... 10,000,000 9,724,699
--------------
TOTAL LONG TERM MUNICIPAL INVESTMENTS
(cost $1,178,883,082)....................................................... $1,248,340,367
--------------
--------------
Short-Term Municipal Investments--7.2%
- --------------------------------------------------------------------------------
California--5.4%
California Health Facilities Financing Authority, Revenue
(Catholic Health Care West) 3.66% (Insured; AMBAC) (e)...................... 14,960,000 14,960,000
California Pollution Control Financing Authority, Revenue, Refunding, VRDN:
Pollution Control (Pacific Gas and Electric):
3.75% (LOC; Bank of America National Trust and Savings Association) (d,f) 22,200,000 22,200,000
3.85% (LOC; Deutsche Bank) (d,f)......................................... 1,700,000 1,700,000
Resource Recovery:
(Ultrapower Malaga) 3.65% (LOC; Bank America National Trust
and Savings Association) (d,f)........................................ 3,200,000 3,200,000
(Ultrapower, Rocklin) 3.65% (LOC; Bank America National
Trust and Savings Association) (d,f).................................. 3,100,000 3,100,000
Solid Waste Disposal (Shell Martinez Refining) 3.65% (f).................... 4,700,000 4,700,000
California Statewide Communities Development Authority, Revenue, COP, VRDN
(Sutter Health Obligation Group) 3.75% (Insured; AMBAC) (f)................. 3,200,000 3,200,000
Chula Vista, IDR, Refunding, VRDN:
(San Diego Gas) 3.80% (f)................................................... 1,000,000 1,000,000
(San Diego Gas and Electric Company) 4.15% (f).............................. 6,400,000 6,400,000
Irvine Improvement Bond Act 1915, Assessment District Number 97-16, VRDN
(Northwest Irvine Project) 3.75% (LOC; Societe Generale) (d,f).............. 8,900,000 8,900,000
</TABLE>
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Investments November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Short-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ --------------
<S> <C> <C>
California (continued)
Irvine Ranch Water District, Consolidated Bonds, VRDN
3.75% (LOC; Landesbank Hessen) (d,f)........................................ $ 2,600,000 $ 2,600,000
U.S. Related--1.8%
Commonwealth of Puerto Rico, Government Development Bank, Refunding,
VRDN 3.80% (LOC; Credit Suisse) (d,f)....................................... 2,250,000 2,250,000
Puerto Rico Electric Power Authority, Power Revenue 3.45% (Insured; FSA) (e)... 22,500,000 22,500,000
--------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $96,710,000).......................................................... $ 96,710,000
--------------
--------------
TOTAL INVESTMENTS--100.0%
(cost $1,275,593,082)....................................................... $1,345,050,367
--------------
--------------
</TABLE>
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
Summary of Abbreviations
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BIGI Bond Investors Guaranty Insurance LR Lease Revenue
COP Certificate of Participation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FNMA Federal National Mortgage Association MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
GMNA Government National Mortgage Association SWDR Solid Waste Disposal Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
IDR Industrial Development Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
Summary of Combined Ratings (Unaudited)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Fitch (g) or Moody's or Standard & Poor's Percentage of Value
- ------ ------- ---------------- -----------------
AAA Aaa AAA 63.0%
AA Aa AA 16.9
A A A 12.7
BBB Baa BBB 1.8
F1 MIG1/P1 SP1/A1 4.4
Not Rated (h) Not Rated (h) Not Rated (h) 1.2
-------
100.0%
=======
<FN>
Notes to Statement of Investments:
- --------------------------------------------------------------------------------
(a) 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.
(b) Wholly held by custodian as collateral for delayed-delivery security.
(c) Purchased on a delayed-delivery basis.
(d) Secured by letters of credit.
(e) Inverse Floater Security -- the interest rate is subject to change
periodically
(f) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(g) Fitch currently provides creditworthiness information for a limited number
of investments.
(h) 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.
(i) At November 30, 1997, 28.1% of the Funds net assets are insured by MBIA.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
--------------- ---------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $1,275,593,082 $1,345,050,367
Cash............................................. 1,390,319
Interest receivable.............................. 23,323,398
Receivable for investment securities sold........ 5,060,400
Prepaid expenses................................. 19,385
--------------
1,374,843,869
--------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 694,409
Payable for investment securities purchased...... 32,625,381
Accrued expenses and other liabilities........... 83,443
--------------
33,403,233
--------------
NET ASSETS..................................................................... $1,341,440,636
==============
REPRESENTED BY: Paid-in capital.................................. $1,294,348,637
Accumulated undistributed investment income--net.. 347,423
Accumulated net realized gain (loss) on investments (22,712,709)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4(b)....................... 69,457,285
--------------
NET ASSETS..................................................................... $1,341,440,636
==============
SHARES OUTSTANDING
(300 million shares of $.01 par value Common Stock authorized)................. 91,136,898
NET ASSET VALUE, offering and redemption price per share--Note 3(d)............. $14.72
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Operations Six Months Ended November 30, 1997 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................. $37,257,813
EXPENSES: Management fee--Note 3(a)................... $ 4,025,520
Shareholder servicing costs--Note 3(b)...... 380,304
Custodian fees.............................. 49,000
Directors' fees and expenses--Note 3(c)..... 31,371
Professional fees........................... 29,351
Registration fees........................... 18,616
Loan commitment fees--Note 2................ 4,988
Prospectus, shareholders' reports and miscellaneous 2,393
-----------
Total Expenses............................ 4,541,543
-----------
INVESTMENT INCOME--NET.................................................... 32,716,270
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments..... $10,650,828
Net realized gain (loss) on financial futures (1,249,563)
-----------
Net Realized Gain (Loss)................. 9,401,265
Net unrealized appreciation (depreciation) on
investments (including $656,250 net unrealized
appreciation on financial futures)....... 27,493,076
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 36,894,341
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $69,610,611
===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>>
Six Months Ended
November 30, 1997 Year Ended
(Unaudited) May 31, 1997
------------------ ---------------
<S> <C> <C>
OPERATIONS
Investment income--net.................................................. $ 32,716,270 $ 70,286,683
Net realized gain (loss) on investments................................ 9,401,265 (2,115,312)
Net unrealized appreciation (depreciation) on investments.............. 27,493,076 34,799,633
-------------- --------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 69,610,611 102,971,004
-------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................................................. (32,553,337) (70,102,193)
Net realized gain on investments....................................... -- (86,360)
-------------- --------------
Total Dividends..................................................... (32,553,337) (70,188,553)
-------------- --------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.......................................... 234,679,674 1,675,496,366
Dividends reinvested................................................... 20,372,149 43,945,559
Cost of shares redeemed................................................ (319,726,820) (1,754,439,821)
-------------- --------------
Increase (Decrease) in Net Assets from Capital Stock Transactions... (64,674,997) (34,997,896)
-------------- --------------
Total Increase (Decrease) in Net Assets.......................... (27,617,723) (2,215,445)
NET ASSETS:
Beginning of Period.................................................... 1,369,058,359 1,371,273,804
-------------- --------------
End of Period.......................................................... $1,341,440,636 $1,369,058,359
============== ==============
Undistributed investment income--net....................................... $ 347,423 $ 184,490
-------------- --------------
Shares Shares
-------------- --------------
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................ 16,121,000 117,770,679
Shares issued for dividends reinvested................................. 1,395,626 3,079,624
Shares redeemed........................................................ (21,987,731) (123,222,239)
-------------- --------------
Net Increase (Decrease) in Shares Outstanding....................... (4,471,105) (2,371,936)
============== ==============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of Common
Stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended
November 30, 1997 Year Ended May 31,
---------------------------------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995 1994 1993
---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $14.32 $14.00 $14.54 $14.59 $15.34 $14.82
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net................ .36 .73 .77 .82 .84 .89
Net realized and unrealized gain (loss)
on investments.................... .39 .32 (.54) -- (.57) .66
------ ------ ------ ------ ------ ------
Total from Investment Operations..... .75 1.05 .23 .82 .27 1.55
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net. (.35) (.73) (.77) (.82) (.85) (.88)
Dividends from net realized gain on investments -- -- -- (.05) (.17) (.15)
------ ------ ------ ------ ------ ------
Total Distributions.................. (.35) (.73) (.77) (.87) (1.02) (1.03)
------ ------ ------ ------ ------ ------
Net asset value, end of period....... $14.72 $14.32 $14.00 $14.54 $14.59 $15.34
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN................. 10.59%(1) 7.61% 1.58% 5.93% 1.58% 10.89%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .68%(1) .73% .69% .71% .70% .69%
Ratio of net investment income
to average net assets............. 4.88%(1) 5.11% 5.37% 5.77% 5.46% 5.88%
Portfolio Turnover Rate.............. 31.92%(2) 60.56% 56.12% 39.85% 28.14% 41.40%
Net Assets, end of period (000's omitted) $1,341,440 $1,369,058 $1,371,274 $1,557,754 $1,658,782 $1,834,956
<FN>
- ------------
(1) Annualized.
(2) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus California Tax Exempt Bond Fund, Inc. (the "Fund") is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company. The Fund's investment objective is to provide
investors with the maximum amount of current income exempt from Federal and
State of California income taxes as is consistent with the preservation of
capital. The Dreyfus Corporation ("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 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.
The Fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the Fund.
(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. To the extent
that net realized capital gain can be offset by capital loss carryovers, it is
the policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $31,549,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to May 31, 1997. The carryover
does not include net realized securities losses from November 1, 1996 through
May 31, 1997 which are treated, for Federal income tax purposes, as arising in
fiscal 1998. If not applied, $2,069,000 of the carryover expires in fiscal 2003,
$27,927,000 expires in fiscal 2004 and $1,553,000 expires in fiscal 2005.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Funds 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. For the period ended November
30, 1997, the Fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(A) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .60 of 1% of the value of the
Fund's average daily net assets and is payable monthly. The Agreement provides
that if in any full fiscal year the aggregate expenses of the Fund, exclusive of
taxes, brokerage, interest on borrowings, commitment fees and extraordinary
expenses, exceed 1 1/2% of the value of the Fund's average net assets, the Fund
may deduct from the payments to be made to the Manager, or the Manager will bear
such excess expense. During the period ended November 30, 1997, there was no
expense reimbursement pursuant to the Agreement.
(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
November 30, 1997, the Fund was charged $97,908 pursuant to the Shareholder
Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. During the period
ended November 30, 1997, the Fund was charged $194,453 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 certain
redemptions of Fund shares (including redemptions through the use of the Fund
Exchanges service) where the shares being redeemed were issued subsequent to a
specified effective date and the redemption or exchange occurs less than fifteen
days following the date of issuance. During the period ended November 30, 1997,
redemption fees amounted to $109,685.
NOTE 4--Securities Transactions:
(A) The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures contracts, during the
period ended November 30, 1997, amounted to $400,048,772 and $394,796,517,
respectively.
The Fund may invest in financial futures contracts in order to gain exposure
to or protect against changes in the market. The Fund is exposed to market risk
as a result of changes in the value of the underlying financial instruments.
<PAGE>
Dreyfus California Tax Exempt Bond Fund, Inc.
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Investments in financial futures require the Fund to "mark to market" on a
daily basis, which reflects the change in market value of the contracts at the
close of each day's trading. Accordingly, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. At November 30, 1997, there were no
financial futures contracts outstanding.
(B) At November 30, 1997, accumulated net unrealized appreciation on
investments was $69,457,285, consisting of $69,465,454 gross unrealized
appreciation and $8,169 gross unrealized depreciation.
At November 30, 1997, 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).
<PAGE>
Dreyfus
California
Tax Exempt 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
Printed in U.S.A. 928SA9711
