Dreyfus
California Tax Exempt
Bond Fund, Inc.
SEMIANNUAL REPORT November 30, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. 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.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
14 Statement of Assets and Liabilities
15 Statement of Operations
16 Statement of Changes in Net Assets
17 Financial Highlights
18 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus California
Tax Exempt Bond Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus California Tax
Exempt Bond Fund, Inc., covering the six-month period from June 1, 1999 through
November 30, 1999. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with the fund's
portfolio manager, Joseph Darcy.
When the reporting period began, evidence had emerged that the U.S. economy was
growing strongly in an environment characterized by high levels of consumer
spending and low levels of unemployment. Concerns that inflationary pressures
might re-emerge caused the Federal Reserve Board to raise short-term interest
rates three times during the summer and fall of 1999. Higher interest rates led
to some erosion of municipal bond prices, especially toward the end of the
reporting period.
Municipal bonds were also adversely affected by supply-and-demand
considerations. Recently, however, these technical influences have caused the
yields of tax-exempt bonds to rise to very attractive levels compared to the
after-tax yields of taxable bonds of comparable maturity and credit quality.
This is especially true for investors in the higher federal income tax brackets
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus California Tax Exempt Bond Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
December 15, 1999
DISCUSSION OF FUND PERFORMANCE
Joseph Darcy, Portfolio Manager
How did Dreyfus California Tax Exempt Bond Fund Inc. perform?
The fund achieved a -3.40% total return(1) over the six-month period ended
November 30, 1999. In comparison, the Lipper California Municipal Debt Funds
Category Average, the Lipper category in which the fund is reported, achieved a
- -4.06% total return for the same period.(2)
We attribute the fund' s negative return over the past period to a declining
municipal bond market and a rising interest-rate environment. The fund's very
modest favorable relative outperformance of the Lipper average was primarily the
result of our security selection strategy, which was designed to take advantage
of attractive values created by the market's decline.
What is the fund's investment approach?
Our goal is to seek as high a level of federal and California state tax-exempt
income as is practical from a diversified portfolio of municipal bonds. To
achieve this objective, we employ two primary strategies. First, we attempt to
add value by evaluating interest-rate trends and supply-and-demand factors.
Based on that assessment, we select the individual tax-exempt bonds that we
believe are most likely to provide the highest returns with the least risk. We
look at such criteria as the bond's yield, price, age, the creditworthiness of
its issuer, and any provisions for early redemption.
Second, we actively manage the portfolio's average duration in anticipation of
temporary supply-and-demand changes. If we expect the supply of newly issued
bonds to increase temporarily, we may reduce the portfolio's average duration to
make cash available for the purchase of higher yielding securities. Conversely,
if we expect demand for municipal bonds to surge at a time when we anticipate
little issuance, we may increase the portfolio's average duration to maintain
current The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
yields for as long as practical. At other times, we try to maintain a "neutral"
average duration of about seven years, which is consistent with our benchmark
index.
What other factors influenced the portfolio's performance?
The portfolio was adversely affected by rising interest rates and a fall-off in
demand from institutional investors over the past six months that created
generally reduced liquidity in the municipal market.
When the reporting period began on June 1, 1999, investors had become concerned
that stronger than expected economic growth, low unemployment and rising
commodity prices might rekindle long-dormant inflationary pressures. In fact, in
an attempt to forestall a potential reacceleration of inflation, the Federal
Reserve Board raised short-term interest rates three times during the summer and
fall of 1999, causing most bond prices to fall.
Municipal bond prices fell substantially for this reason, and also because of
differing supply-and-demand influences. For a variety of reasons, institutional
investors such as insurance companies and hedge funds participated less in the
tax-exempt market over the past year, which reduced overall demand and drove
municipal bond prices down significantly. One result has been that demand for
U.S. Treasury securities has remained strong from both domestic and foreign
investors, while the supply has fallen because of the federal budget surplus. As
a result, municipal bonds -- including those from California issuers -- are
currently offering tax-exempt yields that compare very favorably with the
taxable yields on U.S. Treasury securities, after adjusting for taxes. Of
course, this yield increase comes at the cost of having achieved a negative
total return.
What is the portfolio's current strategy?
When the reporting period began on June 1, 1999, we had reduced the fund's
average duration because of evidence that U.S. and international economic growth
was stronger than many analysts expected. A shorter duration posture was
designed to reduce the portfolio's sensi
tivity to the eroding effects of higher interest rates. A lower average duration
also put the fund in a good position to capture higher yields as they became
available.
To achieve a lower duration, we sold some of our longer maturity bonds that were
priced at a discount to face value. We reinvested the proceeds of those sales in
tax-exempt money market instruments as well as higher yielding,
intermediate-term bonds.
More recently, we have begun to increase the fund' s average duration by
redeploying some of our cash reserves to longer term municipal bonds. We made
this change because we believe that the bulk of the recent market declines may
be behind us, giving us the opportunity to lock in prevailing high yields. We
have found particularly attractive yield opportunities in current-coupon bonds
from California issuers, for which investor demand and market liquidity tend to
be greatest. We have also found attractive total return opportunities in some
discounted bonds that, in our view, were punished more severely than
circumstances warrant, and we believe they have the potential to recover
strongly when investors once again recognize their perceived values. Of course,
there can be no guarantee when the municipal market might recover, or how the
fund might perform in the future. Finally, we have continued to carefully and
independently evaluate the creditworthiness of issuers in order to help ensure
the high credit quality of the portfolio.
December 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND
INVESTMENT RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL
TAXES FOR NON-CALIFORNIA RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE
FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF
ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
<TABLE>
<CAPTION>
The Fund
STATEMENT OF INVESTMENTS
November 30, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--96.5% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Alameda Corridor Transportation Authority, Revenue:
<S> <C> <C>
5%, 10/1/2029 (Insured; MBIA) 26,775,000 23,291,305
Zero Coupon, 10/1/2030 (Insured; MBIA) 15,000,000 2,320,350
Zero Coupon, 10/1/2031 (Insured; MBIA) 22,500,000 3,260,925
Zero Coupon, 10/1/2032 (Insured; MBIA) 38,380,000 5,201,641
Zero Coupon, 10/1/2033 (Insured; MBIA) 22,600,000 2,877,432
Zero Coupon, 10/1/2034 (Insured; MBIA) 39,095,000 4,680,062
Zero Coupon, 10/1/2035 (Insured; MBIA) 16,000,000 1,800,960
Zero Coupon, 10/1/2036 (Insured; MBIA) 39,940,000 4,225,253
Zero Coupon, 10/1/2037 (Insured; MBIA) 40,340,000 4,012,216
Alameda County, COP:
7.25%, 12/1/2014 (Insured; BIGI) (Prerefunded 12/1/2000) 5,980,000 (a) 6,297,897
7.25%, 12/1/2015 (Insured; BIGI) (Prerefunded 12/1/2000) 4,045,000 (a) 4,260,032
Anaheim Public Finance Authority, Tax Allocation Revenue,
6.45%, 12/28/2018 (Insured; MBIA) 20,000,000 21,181,400
Berkeley, Health Facilities Revenue
(Alta Bates Medical Center)
6.55%, 12/1/2022 (Prerefunded 12/1/2002) 17,000,000 (a) 18,398,590
Beverly Hills Finance Authority, LR (Capital Improvements Project)
5.25%, 6/1/2028 10,000,000 8,988,000
Brea Public Finance Authority, Revenue, Tax Allocation
(Redevelopment Project):
6.75%, 8/1/2022 (Insured; MBIA) (Prerefunded 8/1/2001) 4,625,000 (a) 4,910,409
6.75%, 8/1/2022 (Insured; MBIA) 1,775,000 1,872,714
California:
4.75%, 4/1/2022 10,000,000 8,466,700
4.25%, 10/1/2026 (Insured; MBIA) 17,000,000 13,064,500
4.75%, 2/1/2029 (Insured; FGIC) 10,000,000 8,293,200
California Department of Transportation, COP
5.25%, 3/1/2016 (Insured; MBIA) 13,320,000 12,804,916
California Educational Facilities Authority, Revenue:
(California Institute of Technology) 4.25%, 10/1/2028 50,565,000 38,579,578
(Claremont Colleges Pooled Facilities)
6.375%, 5/1/2022 (Prerefunded 5/1/2002) 3,655,000 (a) 3,901,603
(Standford University):
5.25%, 12/1/2013 17,650,000 17,728,190
5.125%,1/1/2031 11,000,000 9,756,010
California Health Facilities Financing Authority, Revenue:
(Adventist Health System-West):
6.40%, 3/1/2002 (Insured; MBIA) 1,955,000 2,042,271
6.50%, 3/1/2003 (Insured; MBIA) 2,140,000 2,234,481
(Kaiser Permanente) 5.25%,6/1/2012 (Insured;FSA) 10,105,000 10,045,583
(Saint Joseph's Health System)
6.75%, 7/1/2021 (Prerefunded 7/1/2001) 8,500,000 (a) 9,003,540
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
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California Health Facilities Financing Authority, Revenue (continued):
(San Diego Hospital Association)
6.125%, 8/1/2022 (Insured; MBIA) 4,250,000 4,287,273
(Stanford University):
6.50%, 11/1/2020 (Prerefunded 11/1/2000) 8,975,000 (a) 9,369,003
6.50%, 11/1/2020 (Prerefunded 11/1/2002) 1,025,000 (a) 1,088,079
California Housing Finance Agency:
Home Mortage Revenue:
6.30%, 2/1/2008 2,280,000 2,331,984
6.35%, 2/1/2009 2,425,000 2,480,193
6.40%, 2/1/2010 2,560,000 2,618,163
6.70%, 8/1/2025 6,280,000 6,440,580
7.125%, 2/1/2026 2,050,000 2,118,921
6.40%, 8/1/2027 (Insured; MBIA) 18,730,000 19,114,714
MFHR 6.30%, 8/1/2026 (Insured; AMBAC) 7,150,000 7,286,208
Multi-Unit Rental Housing Revenue 6.85%, 8/1/2015 3,140,000 3,259,854
Revenue:
9.327%, 8/1/2026 5,610,000 (b) 5,904,525
8.55%, 8/1/2027 5,000,000 (b) 4,985,700
Single Family Mortgage:
6.25%, 8/1/2014 (Insured; AMBAC) 3,100,000 3,104,030
6.30%, 8/1/2024 7,870,000 7,953,422
6.45%, 8/1/2025 13,830,000 14,081,568
California Pollution Control Financing Authority:
PCR:
8.168%, 6/1/2014 24,165,000 (b) 26,771,920
(Pacific Gas & Electric Co.)
6.35%, 6/1/2009(Insured; MBIA) 5,000,000 5,321,300
(Southern California Edison Co.):
6.40%, 12/1/2024 12,600,000 12,702,060
6.40%, 12/1/2024 (Insured; AMBAC) 4,125,000 4,191,330
SWDR (Browning Ferris Industry, Inc.):
5.80%, 12/1/2016 16,560,000 14,665,370
California Public Works Board, LR:
(Department of Corrections, California State Prison, Susanville)
5.25%, 6/1/2015 (Insured; FSA) 5,455,000 5,322,280
(Department of Corrections, Calipatria State Prison,
Imperial County)
6.50%, 9/1/2017 (Insured; MBIA) 13,000,000 14,311,830
(Various University of California Projects)
5.50%, 6/1/2014 5,000,000 5,062,400
6.375%, 10/1/2019 (Prerefunded 10/1/2004) 12,775,000 (a) 14,042,919
California Statewide Community Development Authority, Revenue:
COP (Saint Joseph Health System)
6.50%, 7/1/2015 (Prerefunded 7/1/2004) 7,000,000 (a) 7,704,970
The Fund
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
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California Statewide Community Development Authority,
Revenue (continued):
(Sherman Oaks Project):
5.50%, 8/1/2013 (Insured; AMBAC) 5,805,000 5,857,361
5%, 8/1/2018 (Insured; AMBAC) 12,000,000 10,780,440
Central Coast Water Authority, Revenue (State Water Project)
5%, 10/1/2016 (Insured; AMBAC) 10,200,000 9,511,296
Chico Public Financing Authority, Revenue
(Southeast Chico Redevelopment Project) 6.625%, 4/1/2021
(Insured; FGIC) 2,000,000 2,052,840
Contra Costa County, COP (Merrithew Memorial Hospital)
6.60%, 11/1/2012 (Prerefunded 11/1/2002) 10,000,000 (a) 10,828,200
Delano, COP (Delano Regional Medical Center)
5.25%, 1/1/2018 10,000,000 8,441,400
East Bay Municipal Utility District,
Water System Revenue (Insured; MBIA) 4.75%, 6/1/2034 46,000,000 37,458,720
Emeryville Public Financing Authority, Revenue
(Shellmound Park Redevelopment Project)
6.80%, 5/1/2024 (Prerefunded 5/1/2004) 2,365,000 (a) 2,624,677
Folsom Community Facilities District Number 3, Special Tax
7.80%, 12/1/2015 (Prerefunded 12/1/1999) 1,900,000 (a) 1,957,209
Fontana, Special Tax
5.25%, 9/1/2017 14,000,000 13,308,400
Foothill Eastern Transportation Corridor Agency,
Toll Road Revenue:
5%, 1/15/2016 (Insured; MBIA) 5,000,000 4,651,200
5.75%, 1/15/2040 20,000,000 18,514,600
Fresno, Sewer Revenue 5.25%, 9/1/2019 (Insured; AMBAC) 9,400,000 8,853,766
Hesperia Water District, COP
(Water Facilities Improvement Project) 7.15%, 6/1/2026
(Insured; FGIC) (Prerefunded 6/1/2001) 4,500,000 (a) 4,827,735
Inglewood, HR (Daniel Freeman Hospital, Inc.)
6.75%, 5/1/2013 (Prerefunded 5/1/2001) 6,300,000 (a) 6,642,594
Lake Elsinore Public Financing Authority, Tax Allocation Revenue
(Lake Elsinore Redevelopment Project)
6.25%, 2/1/2019 (Insured; FGIC) 4,220,000 4,318,959
Loma Linda, HR (Loma Linda University Medical Center Project)
7%, 12/1/2015 (Insured; AMBAC)(Prerefunded 12/1/1999) 12,355,000 (a) 12,603,212
Los Angeles Community Redevelopment Agency, Tax Allocation
(Hollywood Redevelopment Project) 6.10%, 7/1/2022
(Insured; MBIA) (Prerefunded 7/1/2002) 4,900,000 (a) 5,213,061
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Los Angeles County, COP
(Disney Parking Project)
6.50%, 3/1/2023 (Prerefunded 3/1/2003) 7,440,000 (a) 8,045,467
Los Angeles County Metropolitan Transportation Authority,
Sales Tax Revenue:
5%, 7/1/2013 (Insured; AMBAC) 10,000,000 9,716,300
5.25%, 7/1/2013 (Insured; MBIA) 5,150,000 5,122,551
Los Angeles Department Water and Power,
Waterworks Revenue:
4.50%, 10/15/2024 23,300,000 18,773,742
6.40%, 5/15/2028 2,435,000 2,526,751
6.375%, 7/1/2034 (Insured; MBIA) 9,000,000 9,797,490
Los Angeles Harbor Department, Revenue:
6%, 8/1/2012 8,900,000 9,254,843
6.625%, 8/1/2019 (Insured; AMBAC) 6,000,000 6,310,020
6.625%, 8/1/2025 18,280,000 19,040,265
Los Angeles Municipal Improvement Corporation, LR
(Central Library Project):
6.30%, 6/1/2016 3,500,000 3,581,655
6.30%, 6/1/2018 4,250,000 4,310,520
6.35%, 6/1/2020 7,700,000 7,824,663
Merced Union High School District:
Zero Coupon, 8/1/2021 (Insured; FGIC) 2,390,000 642,528
Zero Coupon, 8/1/2022 (Insured; FGIC) 2,445,000 617,289
Zero Coupon, 8/1/2023 (Insured; FGIC) 2,500,000 594,000
Zero Coupon, 8/1/2024 (Insured; FGIC) 2,555,000 569,918
Metropolitan Water District of Southern California,
Waterworks Revenue
6.75%, 7/1/2018 (Prerefunded 7/1/2001) 9,250,000 (a) 9,797,970
Modesto, Multi-Family Housing Mortage Revenue,
6.40%, 6/1/2029 7,723,000 7,849,348
Moulton Niguel Water District, Improvement District Number 6
7.25%, 4/1/2016 (Insured; AMBAC) (Prerefunded 4/1/2000) 5,000,000 (a) 5,156,700
Mount Diablo Hospital District, Revenue
6.125%, 12/1/2020 (Insured; AMBAC)
(Prerefunded 12/1/2000 5,000,000 (a) 5,212,000
Mount Diablo Unified School District, Community Facilities District,
Special Tax
7.05%, 8/1/2020 (Insured; FGIC) (Prerefunded 8/1/2000) 3,500,000 (a) 3,643,955
M-S-R Public Power Agency, Revenue (San Juan Project)
5.90%, 7/1/2020 19,665,000 19,285,072
The Fund
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Northern California Power Agency, Revenue:
(Multiple Capital Facilities) 5%, 8/1/2025 (Insured; AMBAC) 17,000,000 14,917,160
Northern California Power Agency, Revenue (continued):
(Hydroelectric Project) 7%, 7/1/2016 (Insured; AMBAC)
(Prerefunded 1/1/2016) 670,000 (a) 768,175
7.50%, 7/1/2023 (Insured; AMBAC) (Prerefunded 7/1/2021) 375,000 (a) 448,196
Pasadena Community Development Commission, MFHR
(Civic Center) 6.45%, 12/1/2021 (Insured; FSA) 13,185,000 13,386,994
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 2,033,980
Sacramento City Financing Authority, LR (E.P.A. Building):
5%, 5/1/2012 (Insured; AMBAC) 3,260,000 3,202,200
5%, 5/1/2014 (Insured; AMBAC) 7,390,000 7,085,458
Sacramento County, Airport System Revenue
6%, 7/1/2017 (Insured; MBIA) 5,850,000 5,902,299
Sacramento Municipal Utility District, Electric Revenue:
6.50%, 9/1/2013 (Insured; MBIA) 6,930,000 7,773,866
5.125%, 7/1/2015 (Insured; MBIA) 15,270,000 14,682,716
5.20%, 7/1/2017 (Insured; MBIA) 5,000,000 4,729,150
5.25%, 7/1/2028 1,600,000 1,416,000
San Bernardino County, COP:
(Capital Facilities Project)
6.875%, 8/1/2024 5,000,000 5,657,150
(West Valley Detention Center) 5.90%, 11/1/2001
(Insured; MBIA) 1,565,000 1,618,413
San Diego County Water Authority, Water Revenue, COP:
5%, 5/1/2013 (Insured; FGIC) 4,430,000 4,313,713
4.75%, 5/1/2028 (Insured; FGIC) 25,000,000 20,775,750
San Diego Unified School District:
Zero Coupon, 7/1/2020 (Insured; FGIC) 12,000,000 3,479,640
Zero Coupon, 7/1/2022 (Insured; FGIC) 10,000,000 2,559,800
Zero Coupon, 7/1/2023 (Insured; FGIC) 10,000,000 2,410,000
San Elijo Joint Powers Authority, Revenue
(San Elijo Water Pollution Control Project) 7%, 3/1/2020
(Insured; FGIC) (Prerefunded 3/1/2000) 5,500,000 (a) 5,653,615
San Francisco Bay Area Rapid Transit District,
Sales Tax Revenue:
5%, 7/1/2028 (Insured; AMBAC) 10,000,000 8,720,100
5.50%, 7/1/2034 (Insured; FGIC) 3,500,000 3,286,465
San Francisco City and County, SFMR
(FNMA/GNMA Mortgage Backed Securities Program)
7.45%, 1/1/2024 220,000 225,608
Principal
LONG-TERM MUNICIPAL INVESTMENTS (continued) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
San Francisco City and County Airports Commission,
International Airport Revenue:
6.10%, 5/1/2003 (Insured; AMBAC) 3,000,000 3,173,310
4.50%, 5/1/2012 (Insured; MBIA) 2,000,000 1,851,380
5%, 5/1/2016 (Insured; FGIC) 3,365,000 3,141,328
4.50%, Issue 20 5/1/2026 (Insured; MBIA) 8,750,000 7,025,813
4.50%, Issue 21 5/1/2026 (Insured; MBIA) 10,670,000 8,567,477
4.50%, 5/1/2028 (Insured; MBIA) 10,000,000 7,971,200
4.50%, 5/1/2029 (Insured: MBIA) 15,410,000 12,242,475
San Francisco City and County Public Utilities Commission,
Water Revenue
6.50%, 11/1/2017 (Prerefunded 11/1/2001) 3,500,000 (a) 3,721,165
San Francisco State Building Authority, LR
(San Francisco Civic Center Complex)
5.25%, 12/1/2016 (Insured; AMBAC) 30,375,000 29,235,026
San Joaquin Hills Transportation Corridor Agency,
Toll Road Revenue
Zero Coupon, 1/15/2031 (Insured; MBIA) 115,240,000 17,458,860
San Marcos Public Facilities Authority, Tax Allocation Revenue
6%, 1/1/2006 (Insured; FSA) (Prerefunded 1/1/2002) 10,500,000 (a) 11,069,100
San Mateo County, COP (Capital Projects Program)
6.50%, 7/1/2017 (Insured; MBIA) (Prerefunded 7/1/2001) 6,000,000 (a) 6,335,520
Santa Barbara, COP (Water System Improvement Project)
6.70%, 4/1/2027 (Insured; AMBAC) 4,000,000 4,230,320
Santa Cruz County, COP (Capital Facilities Project)
6.70%, 9/1/2020 (Insured; MBIA) (Prerefunded 9/1/2001) 5,000,000 (a) 5,314,400
Santa Cruz County Public Financing Authority, Revenue
7.10%, 9/1/2021 (Insured; MBIA) 6,500,000 6,703,905
Stockton, Revenue, COP (Wastewater System Project)
5.125%, 9/1/2016 (Insured; MBIA) 4,900,000 4,630,891
Southern California Rapid Transportation District, COP
(Workers Compensation Fund)
6.50%, 7/1/2007 (Insured; MBIA) 21,900,000 22,961,273
West Basin Municipal Water District, COP
6.85%, 8/1/2016 (Insured; AMBAC) (Prerefunded 8/1/2000) 6,000,000 (a) 6,239,219
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $1,103,628,140) 1,083,058,181
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
SHORT-TERM MUNICIPAL INVESTMENTS--1.7% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA--1.6%
California Pollution Control Financing Authority, SWDR, VRDN
(Shell Martinez Refining) 3.60% 2,200,000 (c) 2,200,000
Irvine Improvement Bond Act 1915, VRDN:
(Assessment District No.97-16) 3.55% 6,600,000 (c) 6,600,000
(Assessment District No.97-17) 3.55% 2,500,000 (c) 2,500,000
(Assessment District No.87-8) 3.55% 7,200,000 (c) 7,200,000
U.S. RELATED--.1%
Commonwealth of Puerto Rico Highway and Transportation
Authority, Transportation Revenue, VRDN
3.65% (Insured; AMBAC) 600,000 (c) 600,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $19,100,000) 19,100,000
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TOTAL INVESTMENTS
(cost $1,122,728,140) 98.2% 1,102,158,181
CASH AND RECEIVABLES (NET) 1.8% 19,822,090
NET ASSETS 100.0% 1,121,980,271
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
AMBAC American Municipal Bond Assurance LR Lease Revenue
Corporation MBIA Municipal Bond Investors Assurance
BIGI Bond Investors Guaranty Insurance Insurance Corporation
COP Certificate of Participation MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FSA Financial Security Assurance SWDR Solid Waste Disposal Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 74.1
AA Aa AA 10.7
A A AA 9.1
BBB Baa BBB 2.9
BB Ba BB 1.3
F1 MIG1/P1 SP1/A1 1.7
Not Rated(d) Not Rated(d) Not Rated(d) .2
100.0
</TABLE>
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT SECURITIES
WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND INTEREST ON THE
MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE EARLIEST REFUNDING DATE.
(B) INVERSE FLOATER SECURITY--THE INTEREST RATE IS SUBJECT TO CHANGE
PERIODICALLY.
(C) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.(
(D) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S OR STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
(E) AT NOVEMBER 30, 1999, 29.8% OF THE FUND'S NET ASSETS ARE INSURED BY MBIA.(
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 1,122,728,140 1,102,158,18
Interest receivable 20,246,912
Receivable for investment securities sold 322,722
Prepaid expenses 60,586
1,122,788,401
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 615,591
Cash overdraft due to Custodian 35,360
Payable for shares of Common Stock redeemed 41,244
Accrued expenses 115,935
808,130
- --------------------------------------------------------------------------------
NET ASSETS ($) 1,121,980,271
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 1,145,078,81
Accumulated net realized gain (loss) on investments (2,528,583)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (20,569,959)
- --------------------------------------------------------------------------------
NET ASSETS ($) 1,121,980,271
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(300 million shares of $.001 par value Common Stock authorized) 80,977,101
- --------------------------------------------------------------------------------
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 13.86
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($)
INTEREST INCOME 32,835,893
EXPENSES:
Management fee--Note 3(a) 3,498,196
Shareholder servicing costs--Note 3(b) 607,372
Custodian fees 41,084
Professional fees 41,082
Directors' fees and expenses--Note 3(c) 28,238
Prospectus and shareholders' reports 17,316
Registration fees 12,726
Loan commitment fees--Note 2 7,421
Miscellaneous 14,382
TOTAL EXPENSES 4,267,817
INVESTMENT INCOME--NET 28,568,076
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (6,402,865)
Net unrealized appreciation (depreciation) on investments (64,629,675)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (71,032,540)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (42,464,464)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
November 30, 1999 Year Ended
(Unaudited) May 31, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 28,568,076 58,695,267
Net realized gain (loss) on investments (6,402,865) 16,110,687
Net unrealized appreciation (depreciation)
on investments (64,629,675) (25,520,707)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (42,464,464) 49,285,247
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (29,044,115) (58,553,571)
Net realized gain on investments -- (3,795,431)
TOTAL DIVIDENDS (29,044,115) (62,349,002)
- --------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 23,257,904 123,029,082
Dividends reinvested 18,658,069 40,028,943
Cost of shares redeemed (83,283,009) (225,277,667)
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (41,367,036) (62,219,642)
TOTAL INCREASE (DECREASE) IN NET ASSETS (112,875,615) (75,283,397)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 1,234,855,886 1,310,139,283
END OF PERIOD 1,121,980,271 1,234,855,886
Undistributed investment income--net -- 476,039
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,638,372 8,226,298
Shares issued for dividends reinvested 1,323,096 2,673,961
Shares redeemed (5,883,368) (15,071,208)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (2,921,900) (4,170,949)
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
Six Months Ended
November 30, 1999 Year Ended May 31,
-----------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 14.72 14.88 14.32 14.00 14.54 14.59
Investment Operations:
Investment income--net .35 .68 .70 .73 .77 .82
Net realized and unrealized
gain (loss) on investments (.86) (.12) .56 .32 (.54) --
Total from Investment Operations (.51) .56 1.26 1.05 .23 .82
Distributions:
Dividends from investment
income--net (.35) (.68) (.70) (.73) (.77) (.82)
Dividends from net realized
gain on investments -- (.04) -- -- -- (.05)
Total Distributions (.35) (.72) (.70) (.73) (.77) (.87)
Net asset value, end of period 13.86 14.72 14.88 14.32 14.00 14.54
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (6.78)(a) 3.81 8.89 7.61 1.58 5.93
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .73(a) .72 .71 .73 .69 .71
Ratio of net investment income
to average net assets 4.90(a) 4.56 4.77 5.11 5.37 5.77
Portfolio Turnover Rate 25.09(b) 58.49 64.67 60.56 56.12 39.85
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,121,980 1,234,856 1,310,139 1,369,058 1,371,274 1,557,754
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
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.,
which is a wholly-owned subsidiary of Mellon Financial Corporation. 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 $15,344 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.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the funds has agreed to pay commitment fees on its pro rata portion
of the Facility. Interest is The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
charged to the fund at rates based on prevailing market rates in effect at the
time of borrowings. During the period ended November 30, 1999, 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, 1999, 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, 1999, the fund was charged $305,913 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, 1999, the fund was charged $167,231 pursuant to the transfer
agency agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $4,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A .10% redemption fee is charged and retained by the fund on shares redeemed
within fifteen days following the date of issuance, including redemptions made
through the use of the fund' s Exchange privilege. During the period ended
November 30, 1999, redemption fees retained by the fund amounted to $55.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended November 30, 1999, amounted to
$280,701,311 and $331,060,077, respectively.
At November 30, 1999, accumulated net unrealized depreciation on investments was
$20,569,959, consisting of $23,787,431 gross unrealized appreciation and
$44,357,390 gross unrealized depreciation.
At November 30, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
For More Information
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
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 928SA9911
