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.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report for Dreyfus California Tax
Exempt Bond Fund, Inc. for the six-month period ended November 30, 1998. Your
Fund produced a total return, including share price changes and dividend income
generated, of 3.76%,* and an annualized tax-free distribution rate per share of
4.50%.**
Economic Review
During 1998, the main regions of the world had very different economic
fundamentals. The U.S. began the period with a strong economy near full
employment, with unemployment only slightly above 4%. The tight labor market led
the Federal Reserve Board to contemplate a rise in interest rates early in the
year. The U.S. economy cooled enough over the months that the Fed decided to
stand pat. Evidence of economic cooling continued to accumulate and worries
about the world economy intensified. Financial stresses pushed the Fed to ease
beginning in September. After many years of subpar economic growth, continental
Europe moved into a sustained economic expansion. The overall European economy
benefited as interest rates in peripheral countries such as Spain and Italy
fell, approaching the lower levels established by Germany, on the eve of
currency unification. Unlike the U.S., Europe has substantial excess capacity of
productive plants and labor. In Asia, weak economies were pervasive as a result
of the Asian financial crisis. The Latin American economies weakened as the
financial stresses spread throughout that region.
A main influence on the U.S. economy this year was the foreign financial
crisis and cooling of the world economy. The positive effects hit first. Actual
inflation and expected inflation dropped, causing a decline in long-term
Treasury bond yields and mortgage rates. This caused a boom in housing. The drop
in inflation helped the consumer sector as more of the growth in consumer income
was left over after inflation to buy goods and services. Consumers benefited
from a combination of good growth in real income, a strong labor market and past
increases in the prices of assets they owned.
The negative effect of Asian weakness was felt in the industrial sector more
than the consumer sector. Corporate profits weakened, especially in sectors
affected by the Asian crisis such as world-traded commodities (oil, metals and
paper) and exports. One result of the industrial weakness was to cool off a U.S.
economy that had been growing rapidly.
The major change in the economic outlook over recent months has been a
downward shift in expectations for world economic growth. A credit crunch
developed in emerging countries and former communist countries, sharply reducing
the economic outlook for Asia and Latin America as well as for commodity
exporting countries throughout the world. The effect on Europe and the U.S. has
been to lower expectations of profit growth and drive down bond yields. Monetary
policy has begun to ease in both the U.S. and Europe.
Evidence of a weaker world economy accumulated as the financial stresses
continued. A worsened financial crisis occurred between the Russian default in
mid-August and the fallout from the Long-Term Capital Management hedge fund
crisis through early October. However, proactive steps were taken to stabilize
the Japanese banks, design a support package for Brazil and ease monetary
policy. There appears to be a shift in the priorities of key policymakers from
fighting potential inflation to restimulating future world economic growth.
Market Environment
Prices moved higher during the reporting period as various classes of
investors found municipal bonds appealing, despite the extent to which equities
vied for investors' attention for most of the period. Low inflation and low
interest rates helped create and maintain a bond-friendly atmosphere. Not to be
overlooked, either, is the improved fiscal posture enjoyed by many states and
municipalities, the result of several years of strong economic growth that
enhanced the creditworthiness of many municipal securities' issuers, and gave
added comfort to investors. The dollar value of newly issued bonds so far in
1998 has surpassed the volume experienced in all but a few previous years. At
$255 billion, it is approximately 29% above the same period last year, but
nonetheless, a dearth of appropriate bonds persists in several states.
Fortunately, the market has absorbed the new issuance without inordinate
volatility in the process. Municipal yields have been, and continue to be, very
favorably aligned vis-a-vis U.S. Treasury Bonds. Historically, longer-term
municipals have been viewed as being good values when their yields approached
80% to 85% of the yields available on comparable Treasuries. Presently, most
measures place the ratio well in excess of 90%. The environment for municipal
bonds still appears to be positive, particularly with the Federal Reserve
Board's Open Market Committee signaling explicitly, by recent cuts in the target
rate for Federal Funds, its preference for lower interest rates.
PORTFOLIO OVERVIEW
Trading activity during your Fund's most recent reporting period was guided by
a distinctly positive view of the California market. Much of the time a fully
invested position was maintained by drawing portfolio cash reserves to the
minimum levels necessary to fulfill ongoing liquidity needs. Attention was
focused on those bonds offering not only generous levels of Federal and
California tax exempt income, but also the potential for significant price
appreciation as interest rates declined. To this end, decisions in both the
primary and secondary markets were biased toward those securities selling at
significant discounts to full par value, which respond more quickly to movements
in interest rates than do fuller coupon, par bonds. Additional emphasis was
placed on capital appreciation bonds which can be secured at accrual rates
higher than conventional bonds and which also historically have mirrored the
price movements of the overall market quite consistently.
Throughout the period, also influencing trading decisions were two more
general themes owing more to a desire to enhance the structural integrity of the
portfolio than to the direction of the market in general. First, there was a
desire to extend the optional redemption provisions of the Fund's holdings. The
majority of all outstanding California exempt municipal bonds were issued prior
to 1993 and the standard method of issuance allows the issuer to retain a
ten-year optional redemption, so the majority of bonds available are subject to
a premature call in six years or less. To the extent that the optional
redemption characteristics of the portfolio can be structured to exceed that of
the general market, this should increase the potential performance
characteristics of the portfolio in both rising and declining market
environments.
The second general theme that guided transactions was a desire to increase the
underlying credit quality of the Fund's assets. In recent years as investor
demand for California tax-free municipal bonds has increased and as the economic
fundamentals supporting these credits have improved, the rates of return
available on higher and lower rated bonds have narrowed dramatically. As such,
one is no longer adequately compensated for holding the debt of lower rated
issuers. Should recent trends in higher levels of issuance continue, or the
local economic fundamentals begin to deteriorate as a result of the global
economic slowdown, a significant widening of these spreads would be expected. By
emphasizing higher quality issues and those supported by external credit
enhancements like insurance policies underwritten by one of the major municipal
bond insurers, trading seeks to insulate the portfolio from the potential
underperformance of lower rated issues.
Going forward, while we continue to maintain a constructive outlook for the
bond market, we remain vigilant for any signals that the current accommodative
stance of monetary policy could be reversed should unintended inflationary
signals emerge. Should this occur, a decidedly more conservative posture will be
employed in which, for example, a greater emphasis could be placed on those
issues bearing higher levels of income and lesser degrees of potential principal
volatility.
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
{Richard J. Moynihan signature]
Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
December 15, 1998
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid.
Income may be subject to state and local income taxes for non-California
residents.
**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.
<TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTSNOVEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments--96.6% Amount Value
- ------------------------------------------------------- _______________ _______________
<S> <C> <C>
California--95.9%
Alameda County, COP:
7.25%, 12/1/2014 (Insured; BIGI) (Prerefunded 12/1/2000) (a) . . . . . . . . . . . . . . $ 5,980,000 $ 6,544,691
7.25%, 12/1/2015 (Insured; BIGI) (Prerefunded 12/1/2000) (a) . . . . . . . . . . . . . . 4,045,000 4,426,969
Anaheim Public Finance Authority, Tax Allocation Revenue,
6.45%, 12/28/2018 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 23,126,800
Antelope Valley Healthcare District, Revenue, Refunding
5%, 1/1/2012 (Insured FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,900,000 8,189,061
Bellflower, COP, Refunding
(Bellflower Civic Center) 7.20%, 10/1/2019 (Insured; MBIA) . . . . . . . . . . . . . . . 1,475,000 1,548,072
Berkeley, Health Facilities Revenue, Refunding
(Alta Bates Medical Center) 6.55%, 12/1/2022 (Prerefunded 12/1/2002) (a) . . . . . . . . 17,000,000 19,179,400
Brea Public Finance Authority, Revenue, Tax Allocation (Redevelopment Project):
6.75%, 8/1/2022 (Insured; MBIA) (Prerefunded 8/1/2001) (a) . . . . . . . . . . . . . . . 4,625,000 5,096,796
6.75%, 8/1/2022 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,775,000 1,937,058
California, Refunding:
5%, 2/1/2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,465,000 10,652,219
5.25%, 6/1/2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,411,700
5%, 2/1/2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46,760,000 46,923,192
California Department of Water Resources, Water System Revenue, Refunding
(Central Valley Project):
5%, 12/1/2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,284,050
5.125%, 12/1/2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,085,000 5,395,185
5.125%, 12/1/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,613,500
California Department of Transportation, COP, Refunding
5.25%, 3/1/2016 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,320,000 13,904,082
California Educational Facilities Authority, Revenue
(Claremont Colleges Pooled Facilities) 6.375%, 5/1/2022 . . . . . . . . . . . . . . . . 3,655,000 3,927,151
California Health Facilities Financing Authority, Revenue:
(Adventist Health System-West):
6.40%, 3/1/2002 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,955,000 2,105,105
6.50%, 3/1/2003 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,140,000 2,304,331
(Kaiser Permanente) 5.25%,6/1/2012 (Insured; FSA) . . . . . . . . . . . . . . . . . . . 10,105,000 10,737,674
(Saint Joseph's Health System) 6.75%, 7/1/2021 (Prerefunded 7/1/2001) (a) . . . . . . . 8,500,000 9,333,595
(San Diego Hospital Association) 6.125%, 8/1/2022 (Insured; MBIA) . . . . . . . . . . . 4,250,000 4,630,885
(Stanford University):
6.50%, 11/1/2020 (Prerefunded 11/1/2000) (a) . . . . . . . . . . . . . . . . . . . . . 8,975,000 9,678,820
6.50%, 11/1/2020 (Prerefunded 11/1/2002) (a) . . . . . . . . . . . . . . . . . . . . . 1,025,000 1,134,501
California Housing Finance Agency:
Home Mortgage Revenue:
6.30%, 2/1/2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,555,000 2,747,749
6.35%, 2/1/2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,715,000 2,919,467
6.40%, 2/1/2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,865,000 3,080,391
8.30%, 8/1/2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000 86,829
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _______________ _______________
California (continued)
California Housing Finance Agency (continued):
Home Mortgage Revenue (continued):
6.70%, 8/1/2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,940,000 $ 8,575,994
7.125%, 2/1/2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,430,000 2,642,090
6.55%, 8/1/2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,225,000 12,121,878
6.15%, 8/1/2027 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 10,795,100
6.40%, 8/1/2027 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000,000 21,677,400
7.65%, 8/1/2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,095,000 7,347,582
MFHR 6.30%, 8/1/2026 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . 7,150,000 7,690,183
Multi-Unit Rental Housing Revenue 6.85%, 8/1/2015 . . . . . . . . . . . . . . . . . . . 3,140,000 3,364,950
Single Family Mortgage:
6.25%, 8/1/2014 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,450,000 3,651,860
6.30%, 8/1/2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,554,480
6.45%, 8/1/2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,355,000 16,506,625
California Pollution Control Financing Authority:
PCR (Pacific Gas & Electric Co.) 6.35%, 6/1/2009 (Insured; MBIA) . . . . . . . . . . . . 5,000,000 5,525,800
(Refunding, San Diego Gas and Electric) 5.90%, 6/1/2014 (Insured; MBIA) . . . . . . . . 45,330,000 51,838,028
(Southern California Edison Co.):
6.40%, 12/1/2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,600,000 13,807,836
6.40%, 12/1/2024 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . 4,125,000 4,544,513
SWDR (Browning Ferris Industry, Inc.):
5.80%, 12/1/2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,060,000 17,094,103
6.75%, 9/1/2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,400,000 3,842,952
California Public Works Board, LR:
(Department of Corrections, California State Prison, Susanville)
5.25%, 6/1/2015 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,455,000 5,819,449
(Department of Corrections, Calipatria State Prison, Imperial County)
6.50%, 9/1/2017 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,000,000 15,811,510
(Various University of California Projects):
Refunding 5.50%, 6/1/2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 5,486,150
6.375%, 10/1/2019 (Prerefunded 10/1/2004) (a) . . . . . . . . . . . . . . . . . . . . 12,775,000 14,733,919
California Statewide Community Development Authority, Revenue,
COP (Saint Joseph Health System)
6.50%, 7/1/2015 (Prerefunded 7/1/2004) . . . . . . . . . . . . . . . . . . . . . . . . 7,000,000 8,069,810
(Sherman Oaks Project):
5.50%, 8/1/2013 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,805,000 6,366,518
5%, 8/1/2018 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,500,000 13,635,945
Central Coast Water Authority, Revenue, Refunding (State Water Project)
5%, 10/1/2016 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000,000 11,226,380
Chico Public Financing Authority, Revenue
(Southeast Chico Redevelopment Project) 6.625%, 4/1/2021 (Insured; FGIC) . . . . . . . . 2,000,000 2,113,480
Contra Costa County, COP (Merrithew Memorial Hospital)
6.60%, 11/1/2012 (Prerefunded 11/1/2002) (a) . . . . . . . . . . . . . . . . . . . . . . 10,000,000 11,286,600
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _______________ _______________
California (continued)
Corona Community Facilities District, Special Tax, Refunding:
7.60%, 9/1/2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,755,000 $ 5,953,490
7.60%, 9/1/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,099,180
7.70%, 9/1/2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,067,180
Delano, COP, Refunding (Delano Regional Medical Center)
5.25%, 1/1/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,822,200
Emeryville Public Financing Authority, Revenue
(Shellmound Park Redevelopment Project) 6.80%, 5/1/2024 . . . . . . . . . . . . . . . . 2,365,000 2,747,137
Folsom Community Facilities District Number 3, Special Tax
7.80%, 12/1/2015 (Prerefunded 12/1/1999) (a) . . . . . . . . . . . . . . . . . . . . . . 1,900,000 2,043,070
Fontana, Special Tax Refunding
5.25%, 9/1/2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,000,000 14,630,280
Foothill Eastern Transportation Corridor Agency, Toll Road Revenue:
6%, 1/1/2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,750,000 9,577,138
Zero Coupon, 1/1/2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 1,138,050
Zero Coupon, 1/1/2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,200,000 3,318,408
Fresno, Sewer Revenue 5.25%, 9/1/2019 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . 7,550,000 8,008,134
Hesperia Water District, COP, Refunding
(Water Facilities Improvement Project) 7.15%, 6/1/2026 (Insured; FGIC) . . . . . . . . . 4,500,000 5,020,110
Inglewood, HR (Daniel Freeman Hospital, Inc.) 6.75%, 5/1/2013 (Prerefunded 5/1/2001) (a) . 6,300,000 6,888,483
La Verne Community Facilities District, Special Tax
(Koll Business Center) 7.875%, 3/1/2014 . . . . . . . . . . . . . . . . . . . . . . . . 3,625,000 3,717,800
Lake Elsinore Public Financing Authority, Tax Allocation Revenue
(Lake Elsinore Redevelopment Project)
6.25%, 2/1/2019 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,220,000 4,423,446
Loma Linda, HR, Refunding (Loma Linda University Medical Center Project)
7%, 12/1/2015 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,355,000 13,006,973
Los Angeles Community Redevelopment Agency, Tax Allocation
(Hollywood Redevelopment Project) 6.10%, 7/1/2022 (Insured; MBIA) . . . . . . . . . . . 4,900,000 5,406,072
Los Angeles County, COP
(Disney Parking Project):
4.75%, 3/1/2023 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000,000 9,698,100
6.50%, 3/1/2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,440,000 7,990,114
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue:
5%, 7/1/2013 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,800,000 13,284,608
5.25%, 7/1/2013 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000,000 9,509,760
6%, 7/1/2020 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000,000 16,523,700
Los Angeles Department Water and Power,
Waterworks Revenue, Refunding:
5%, 10/15/2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,595,000 11,803,826
6.40%, 5/15/2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,435,000 2,619,841
6.375%, 7/1/2034 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000 13,648,080
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _______________ _______________
California (continued)
Los Angeles Harbor Department, Revenue:
6%, 8/1/2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,900,000 $ 9,841,798
6.625%, 8/1/2019 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000,000 6,617,460
6.625%, 8/1/2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,280,000 20,128,291
Los Angeles Municipal Improvement Corporation, LR, Refunding
(Central Library Project):
6.30%, 6/1/2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,769,640
6.30%, 6/1/2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,250,000 4,583,200
6.35%, 6/1/2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,700,000 8,308,223
Los Angeles County Public Works Financing Authority, LR
(Multiple Capital Facilities Project) 5.125%, 12/1/2017 . . . . . . . . . . . . . . . . 8,500,000 8,760,440
Los Angeles Unified School District:
5.375, 7/1/2010 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,345,000 11,317,947
5.375, 7/1/2012 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500,000 2,700,250
5.375, 7/1/2015 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,500,000 5,847,325
5.375, 7/1/2016 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,845,000 5,131,679
Metropolitan Water District of Southern California, Waterworks Revenue
6.75%, 7/1/2018 (Prerefunded 7/1/2001) (a) . . . . . . . . . . . . . . . . . . . . . . . 9,250,000 10,166,768
Medesto Irrigation District Financing Authority, Revenue, Refunding
5.125%, 9/1/2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,190,520
Modesto, Multi-Family Housing Mortgage Revenue, Refunding 6.40%, 6/1/2029. . . . . . . . . 7,723,000 8,123,901
Moulton Niguel Water District, Improvement District Number 6
7.25%, 4/1/2016 (Insured; AMBAC) (Prerefunded 4/1/2000) (a) . . . . . . . . . . . . . . 5,000,000 5,355,950
Mount Diablo Hospital District, Revenue
6.125%, 12/1/2020 (Insured; AMBAC) (Prerefunded 12/1/2000) (a) . . . . . . . . . . . . . 5,000,000 5,368,050
Mount Diablo Unified School District, Community Facilities District, Special Ta
7.05%, 8/1/2020 (Insured; FGIC) (Prerefunded 8/1/2000) (a) . . . . . . . . . . . . . . . 3,500,000 3,780,665
M-S-R Public Power Agency, Revenue, Refunding (San Juan Project)
5.90%, 7/1/2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,860,000 19,887,804
Northern California Power Agency, Power Revenue:
(Hydroelectric Project) 7%, 7/1/2016 (Insured; AMBAC) (Prerefunded 1/1/2016) (a) . . . . 670,000 840,046
Refunding 7.50%, 7/1/2023 (Insured; AMBAC) (Prerefunded 7/1/2021) (a) . . . . . . . . . 375,000 499,916
Pasadena Community Development Commission, MFHR (Civic Center)
6.45%, 12/1/2021 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,185,000 13,914,922
Port of Oakland, Special Facilities Revenue (Mitsui O.S.K. Lines Ltd.)
6.80%, 1/1/2019 (LOC; Industrial Bank of Japan) . . . . . . . . . . . . . . . . . . . . 2,000,000 2,134,580
Rancho Cucamonga Redevelopment Agency, Tax Allocation
(Rancho Cucamonga Redevelopment Project)
7.125%, 9/1/2019 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,455,000 2,570,606
Riverside County Asset Leasing Corp., Leasehold Revenue
(Riverside County Hospital Project)
6.25%, 6/1/2019 (Prerefunded 6/1/1999) (a) . . . . . . . . . . . . . . . . . . . . . . . 7,500,000 7,624,350
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _______________ _______________
California (continued)
Sacramento City Financing Authority, LR (E.P.A. Building):
5%, 5/1/2012 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,260,000 $ 6,560,856
5%, 5/1/2013 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,210,000 7,509,071
5%, 5/1/2014 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,390,000 5,568,409
Sacramento County, Airport System Revenue
6%, 7/1/2017 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,850,000 6,344,091
Sacramento Municipal Utility District, Electric Revenue, Refunding:
6.50%, 9/1/2013 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,930,000 8,407,684
5.125%, 7/1/2015 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,270,000 27,338,401
5.20%, 7/1/2017 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000,000 8,318,720
Saddleback Community College District, COP
7%, 8/1/2019 (Insured; BIGI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,875,000 2,998,194
San Bernardino County, COP:
(Capital Facilities Project)
6.875%, 8/1/2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000,000 6,345,050
(West Valley Detention Center) 5.90%, 11/1/2001 (Insured; MBIA) . . . . . . . . . . . . 1,565,000 1,671,968
San Diego, (Undivided Interest Water Utility Fund):
5.375%, 8/1/2014 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 2,122,180
5.375%, 8/1/2015 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,085,000 6,427,464
San Diego County Water Authority, Water Revenue, COP:
5%, 5/1/2012 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,425,000 12,994,686
5%, 5/1/2013 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,980,000 13,498,162
5%, 5/1/2014 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,350,000 13,782,006
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 5,860,635
San Francisco City and County, SFMR
(FNMA/GNMA Mortgage Backed Securities Program) 7.45%, 1/1/2024 . . . . . . . . . . . . . 255,000 266,480
San Francisco City and County Airports Commission, International Airport
Revenue:
4.75%, 5/1/2029 (Insured; FSA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,195,000 23,530,121
Refunding:
6.10%, 5/1/2003 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000 3,287,280
4.50%, 5/1/2011 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,890,000 13,044,809
4.50%, 5/1/2012 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,430,000 13,483,183
4.50%, 5/1/2013 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,155,000 14,102,485
5%, 5/1/2016 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,365,000 3,442,832
5%, 5/1/2018 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,740,000 3,796,811
5%, 5/1/2019 (Insured; FGIC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,455,000 3,498,395
San Francisco City and County Public Utilities Commission, Water Revenue
6.50%, 11/1/2017 (Prerefunded 11/1/2001) (a) . . . . . . . . . . . . . . . . . . . . . . 3,500,000 3,858,120
San Francisco State Building Authority, LR
(San Francisco Civic Center Complex) 5.25%, 12/1/2016 (Insured; AMBAC) . . . . . . . . . 30,375,000 31,782,578
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) NOVEMBER 30, 1998 (UNAUDITED)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- _______________ _______________
California (continued)
San Joaquin Hills Transportation Corridor Agency, Toll Road Revenue:
Refunding Zero Coupon, 1/15/2031 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . $ 110,240,000 $ 21,761,376
Refunding Zero Coupon, 1/15/2034 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . 46,535,000 7,894,197
Refunding Zero Coupon, 1/15/2035 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . 37,445,000 6,039,504
San Marcos Public Facilities Authority, Tax Allocation Revenue
6%, 1/1/2006 (Insured; FSA) (Prerefunded 1/1/2002) (a) . . . . . . . . . . . . . . . . . 10,500,000 11,445,000
San Mateo County, COP (Capital Projects Program)
6.50%, 7/1/2017 (Insured; MBIA) (Prerefunded 7/1/2001) (a) . . . . . . . . . . . . . . . 6,000,000 6,561,000
Santa Barbara, COP, Refunding (Water System Improvement Project)
6.70%, 4/1/2027 (Insured; AMBAC). . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000,000 4,391,440
Santa Cruz County, COP (Capital Facilities Project)
6.70%, 9/1/2020 (Insured; MBIA) (Prerefunded 9/1/2001) (a) . . . . . . . . . . . . . . . 5,000,000 5,515,600
Santa Cruz County Public Financing Authority, Revenue, Refunding
7.10%, 9/1/2021 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,500,000 6,836,570
Stockton, Revenue, COP (Wastewater System Project)
5.125%, 9/1/2016 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900,000 5,070,814
Southern California Rapid Transportation District, COP (Workers Compensation
Fund)
6.50%, 7/1/2007 (Insured; MBIA) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,900,000 24,768,182
University of California:
COP (UCLA Central Chiller/Cogeneration) 6.25%, 11/1/2009 (Prerefunded 11/1/1999) (a) . . 3,000,000 3,145,918
Revenue, Refunding (Multiple Purpose Projects) 5.125%, 9/1/2016 (Insured; MBIA) . . . . 11,415,000 11,825,824
West Basin Municipal Water District, COP
6.85%, 8/1/2016 (Insured; AMBAC) (Prerefunded 8/1/2000) (a) . . . . . . . . . . . . . . 6,000,000 6,462,418
U.S. RELATED--.7%
Puerto Rico Infrastructure Financing Authority, Special Tax Revenue
5%, 7/1/2016 (Insured; AMBAC) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500,000 8,684,873
_______________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $1,182,034,523) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,257,703,306
_______________
SHORT-TERM MUNICIPAL INVESTMENTS--2.6%
- -----------------------------------------------------------------------------
Newport Beach, Revenue, VRDN (Hoag Memorial Hospital):
3.25% (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,590,000 $ 15,590,000
3.25% (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,900,000 3,900,000
3.25% (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,300,000 14,300,000
_______________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $33,790,000). . . . . . . . . . . . . . . . . $ 33,790,000
_______________
TOTAL INVESTMENTS (cost $1,215,824,523). . . . . . . . . . . . . . . . . . . . . . . . . . 99.2% $1,291,493,306
_______ _______________
CASH AND RECEIVABLES (NET) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8% $ 10,806,915
_______ _______________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.0% $1,302,300,221
_______ _______________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
Summary of Abbreviations
- -----------------------------------------------------------------------------
AMBAC American Municipal Bond Assurance Corporation LR Lease Revenue
BIGI Bond Investors Guaranty Insurance MBIA Municipal Bond Investors
COP Certificate of Participation Assurance Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FNMA Federal National Mortgage Association PCR Pollution Control Revenue
FSA Financial Security Assurance SFMR Single Family Mortgage Revenue
GNMA Government National Mortgage Association SWDR Solid Waste Disposal Revenue
HR Hospital Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
SUMMARY OF COMBINED RATINGS
- -----------------------------------------------------------------------------
FITCH OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
______ _______ ________________ _________________
AAA Aaa AAA 67.2%
AA Aa AA 16.2
A A A 10.0
BBB Baa BBB 2.7
F1 MIG1/P1 SP1/A1 2.6
Not Rated(d) Not Rated(d) Not Rated(d) 1.3
_______
100.0%
_______
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) Purchased on a delayed delivery basis.
(c) Securities payable on demand. Variable interest rate -- subject to periodic
change.
(d)Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those rated
securities in which the Fund may invest.
(e) At May 31, 1998, 31.6% of the Fund's net assets are insured by MBIA.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIESNOVEMBER 30, 1998 (UNAUDITED)
Cost Value
_______________ ________________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments . . $1,215,824,523 $1,291,493,306
Interest receivable . . . . . . . . . . . . . . . . . . . 22,269,286
Prepaid expenses . . . . . . . . . . . . . . . . . . . . 127,444
_________________
1,313,890,036
_________________
LIABILITIES: Due to The Dreyfus Corporation and affiliates . . . . . . 741,560
Cash overdrafts due to Custodian . . . . . . . . . . . . 1,151,605
Payable for investment securities purchased . . . . . . . 9,624,622
Payable for shares of Common Stock redeemed . . . . . . . 6,550
Accrued expenses . . . . . . . . . . . . . . . . . . . . 65,478
_________________
11,589,815
_________________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,302,300,221
_________________
REPRESENTED BY: Paid-in capital . . . . . . . . . . . . . . . . . . . . . $1,222,788,390
Accumulated net realized gain (loss) on investments . . . 3,843,048
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 . . . . . . . . . . . . . . . . 75,668,783
_________________
NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,302,300,221
_________________
SHARES OUTSTANDING
(300 MILLION SHARES OF $.01 PAR VALUE COMMON STOCK AUTHORIZED) . . . . . . . . . . . . . . 86,335,741
NET ASSET VALUE, offering and redemption price per share--Note 3(d). . . . . . . . . . . . $15.08
_______
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONSSIX MONTHS ENDED NOVEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income . . . . . . . . . . . . . . . . . $34,302,482
EXPENSES: Management fee--Note 3(a) . . . . . . . . . . . . $ 3,913,315
Shareholder servicing costs--Note 3(b) . . . . . 674,783
Custodian fees . . . . . . . . . . . . . . . . . 46,138
Directors' fees and expenses--Note 3(c) . . . . . 33,369
Professional fees . . . . . . . . . . . . . . . . 17,096
Registration fees . . . . . . . . . . . . . . . . 14,949
Prospectus and shareholders' reports . . . . . . 12,484
Loan commitment fees--Note 2 . . . . . . . . . . 3,207
Miscellaneous . . . . . . . . . . . . . . . . . . 5,986
____________
Total Expenses . . . . . . . . . . . . . . . . 4,721,327
_____________
INVESTMENT INCOME--NET . . . . . . . . . . . . . . . . . . . . . . . . 29,581,155
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments and
options transactions . . . . . . . . . . . . . $12,284,022
Net unrealized appreciation (depreciation)
on investments . . . . . . . . . . . . . . . . 6,088,360
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS . . . . . . . . . . . . . . 18,372,382
_____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . . . . . . . . . . $47,953,537
_____________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
November 30, 1998 Year Ended
(Unaudited) May 31, 1998
__________________ _________________
<S> <C> <C>
OPERATIONS:
Investment income--net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 29,581,155 $ 63,463,904
Net realized gain (loss) on investments . . . . . . . . . . . . . . . . . . . . . 12,284,022 23,754,940
Net unrealized appreciation (depreciation) on investments . . . . . . . . . . . . 6,088,360 27,616,214
_________________ _________________
Net Increase (Decrease) in Net Assets Resulting from Operations . . . . . 47,953,537 114,835,058
_________________ _________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,915,498) (63,314,051)
Net realized gain on investments . . . . . . . . . . . . . . . . . . . . . . . . ---- (81,940)
_________________ _________________
Total Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (29,915,498) (63,395,991)
_________________ _________________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . 45,456,574 342,706,207
Dividends reinvested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,036,278 39,899,176
Cost of shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90,369,953) (492,963,526)
_________________ _________________
Increase (Decrease) in Net Assets from Capital Stock Transactions . . . . (25,877,101) (110,358,143)
_________________ _________________
Total Increase (Decrease) in Net Assets . . . . . . . . . . . . . . . . (7,839,062) (58,919,076)
NET ASSETS:
Beginning of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,310,139,283 1,369,058,359
_________________ _________________
End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,302,300,221 $1,310,139,283
_________________ _________________
UNDISTRIBUTED INVESTMENT INCOME--NET. . . . . . . . . . . . . . . . . . . . . . . . ---- $ 334,343
_________________ _________________
Shares Shares
_________________ _________________
CAPITAL SHARE TRANSACTIONS:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,031,987 23,402,066
Shares issued for dividends reinvested . . . . . . . . . . . . . . . . . . . . . 1,269,038 2,710,842
Shares redeemed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,035,234) (33,650,961)
_________________ _________________
Net Increase (Decrease) in Shares Outstanding . . . . . . . . . . . . . . (1,734,209) (7,538,053)
_________________ _________________
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
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.
Six Months Ended
November 30, 1998 Year Ended May 31,
_____________________________________________
PER SHARE DATA: Unaudited 1998 1997 1996 1995 1994
_________ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . $14.88 $14.32 $14.00 $14.54 $14.59 $15.34
_______ _______ _______ _______ _______ _______
Investment Operations:
Investment income--net . . . . . . . . . . .34 .70 .73 .77 .82 .84
Net realized and unrealized gain (loss)
on investments . . . . . . . . . . . . .20 .56 .32 (.54) --- (.57)
_______ _______ _______ _______ _______ _______
Total from Investment Operations . . . . . .54 1.26 1.05 .23 .82 .27
_______ _______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net . . . (.34) (.70) (.73) (.77) (.82) (.85)
Dividends from net realized gain
on investments . . . . . . . . . . . . --- --- --- --- (.05) (.17)
_______ _______ _______ _______ _______ _______
Total Distributions . . . . . . . . . . . . (.34) (.70) (.73) (.77) (.87) (1.02)
_______ _______ _______ _______ _______ _______
Net asset value, end of period . . . . . $15.08 $14.88 $14.32 $14.00 $14.54 $14.59
_______ _______ _______ _______ _______ _______
TOTAL INVESTMENT RETURN. . . . . . . . . . . . 7.50%(1) 8.89% 7.61% 1.58% 5.93% 1.58%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets . . .72%(1) .71% .73% .69% .71% .70%
Ratio of net investment income
to average net assets . . . . . . . . . 4.54%(1) 4.77% 5.11% 5.37% 5.77% 5.46%
Portfolio Turnover Rate . . . . . . . . . . 34.86%(2) 64.67% 60.56% 56.12% 39.85% 28.14%
Net Assets, end of period (000's Omitted) . . $1,302,300 $1,310,139 $1,369,058 $1,371,274 $1,557,754 $1,658,782
- ------------------------
(1) Annualized.
(2) Not Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
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, as amended (the "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 (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 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 $17,658 during the period
November 30, 1998 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income.
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 of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the Fund not to distribute such
gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
The Fund has an unused capital loss carryover of approximately $8,591,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to May 31, 1998. If not applied,
$7,038,000 of the carryover expires in fiscal 2004 and $1,553,000 expires in
fiscal 2005.
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. During the period ended
November 30, 1998, 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 11_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, 1998, there were 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, 1998, the Fund was charged $373,125 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, 1998 the Fund was charged $181,203 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 (including on
redemptions through the use of the Fund Exchange privilege) on shares redeemed
within fifteen days of their issuance. During the period ended November 30,
1998, redemption fees retained by the Fund amounted to $7,477.
DREYFUS CALIFORNIA TAX EXEMPT BOND FUND, INC.
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NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 4--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended November 30, 1998,
amounted to $474,581,497 and $420,097,188, respectively.
At November 30, 1998, accumulated net unrealized appreciation on investments
was $75,668,783, consisting of $75,794,238 gross unrealized appreciation and
$125,455 gross unrealized depreciation.
At November 30, 1998, 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).
[reg.tm logo]
(reg.tm)
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. 928SA9811
California
Tax Exempt
Bond Fund, Inc.
Semi-Annual
Report
November 30, 1998
