Dreyfus New Leaders
Fund, Inc.
SEMIANNUAL REPORT June 30, 1999
(reg.tm)
<PAGE>
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 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.
<PAGE>
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
<PAGE>
The Fund
Dreyfus New Leaders Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus New Leaders Fund,
Inc. covering the six-month period from January 1, 1999 through June 30, 1999.
Inside, you' ll find valuable information about how the fund was managed during
the period, including a discussion with the fund's portfolio managers, Hilary
Woods and Paul Kandel.
The past six months have been rewarding for many equity investors, including
those who own mid-capitalization stocks. Strong U.S. economic growth, low
inflation and high levels of consumer spending supported continued strength in
many broad measures of stock market performance. As a result, several major U.S.
market indices set new records.
Beginning in April, many previously out-of-favor market sectors rallied strongly
- -- including midcap stocks -- as investors became increasingly attracted to
their high growth rates. At the same time, large-cap growth stocks appear to
have paused in their advance. This has helped narrow the valuation gap that had
developed over the past several years between the large- and mid-capitalization
sectors of the stock market.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus New Leaders Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 15, 1999
<PAGE>
DISCUSSION OF FUND PERFORMANCE
Hilary Woods and Paul Kandel, Portfolio Managers
How did Dreyfus New Leaders Fund, Inc. perform relative to its benchmark?
For the six-month period ended June 30, 1999, Dreyfus New Leaders Fund, Inc.
produced a strong positive total return of 16.50%.(1) The fund's performance
well outpaced the Russell 2500 Index, which returned 10.88% for the same time
period.(2)
We attribute this strong relative performance over the period to our recent
success in identifying attractive individual investment opportunities among a
diverse range of sectors, industries and investment styles. In addition, the
fund's broad diversification among value-oriented midcap stocks positioned us to
benefit from the broadening of market strength that occurred in April 1999.
What is the fund's investment approach?
The fund invests primarily in a diversified portfolio of small- and midcap
companies, focusing on new leaders in their industries that offer products or
services that we believe enhance prospects for growth of future earnings. We
also base investment decisions on economic or political conditions that we
believe are likely to affect a stock's performance, and on the impact of changes
in a company's management or organizational structure.
Our investment approach targets both growth-oriented stocks (those of companies
with earnings that are expected to grow faster than the overall market), and
value-oriented stocks (those that appear underpriced according to a variety of
financial measurements).
The result of our approach during the recent six-month period was a broadly
diversified portfolio of carefully selected stocks that generally performed
well. During the first three months of the period, when growth stocks were
showing marked strength, our best performance came from growth-oriented holdings
in the technology and utilities The Fund
<PAGE>
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
sectors. Among the fund's technology holdings, Internet-related companies, such
as Excite, and semiconductor makers, such as Teradyne, led the way. Among
utilities, we scored successes with telecommunications-related stocks, including
Metromedia Fiber Network, Cl. A., which provides telephone companies and
corporations with the increased bandwidth required for data-intensive
communications.
After the market' s dramatic, mid-period shift in favor of value stocks, we
achieved our greatest returns from value-oriented holdings among basic
industrial sectors. The fund's performance was fueled by oil service and energy
exploration companies, such as Weatherford International and Anadarko Petroleum
and basic materials companies, such as Bowater, a leading producer of newsprint.
We also enjoyed gains from equipment producers we believed were ripe for
acquisition, such as Case, which was bought out by New Holland for a substantial
premium.
In addition, the fund achieved excellent results in the consumer products
sector, with strong performance driven by high levels of consumer confidence
throughout the period. Within this sector, our best performers included Hispanic
Broadcasting, which benefited from the growth of targeted marketing to the
fast-growing Spanish community in the United States; Gemstar International
Group, the maker of VCR Plus and satellite TV programming guides; and Tiffany,
the luxury retailer.
What other factors influenced the fund's performance?
Of course not every company in the fund's portfolio showed positive returns.
Some stocks lagged, even among our best-performing sectors. Among technology
stocks, for example, our holdings among business software companies, such as
Network Associates and Aspect Development, faltered due to fears of a
Y2K-related corporate spending slowdown. In the consumer arena, AutoZone
underperformed, hurt by a slowdown in the do-it-yourself auto repair market.
<PAGE>
The fund also experienced weak performance throughout the period from two
sectors in particular: finance and health care. Financial stocks generally
suffer during periods of rising interest rates, as was the case during the first
half of 1999. Although the fund was significantly underweighted in the financial
sector going into this reporting period, some of the fund's financial company
holdings, such as Torchmark, failed to match the performance of the Index. An
exception was Executive Risk, which was taken over by Chubb Corp. at a
substantial premium.
The health care sector was battered by an increasingly restrictive regulatory
environment and the prospect for further government-imposed limitations on
Medicare and Medicaid reimbursements. The fund benefited from holdings of stocks
such as Allergan, a growing pharmaceutical company, and Centocor, an
advanced-stage biotech company. However, those gains were more than matched by
losses in companies such as HEALTHSOUTH, a provider of outpatient surgery and
rehabilitation, and Sepracor Technologies, a biotech company that sold off when
concerns arose about the effectiveness of one of its lead drugs.
What is the fund's current strategy?
We continue to believe that midcap stocks of fast-growing new leaders in their
industries offer the potential for strong growth and above-average capital
appreciation. Accordingly, we continue to target such stocks while adhering to
our blended growth-and-value investment strategy and our goal of seeking to
outperform the Russell 2500 Index.
July 15, 1999
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. SHARE PRICE AND INVESTMENT
RETURN FLUCTUATE SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS
THAN THEIR ORIGINAL COST.
(2) SOURCE: THE FRANK RUSSELL COMPANY -- REFLECTS THE REINVESTMENT OF INCOME
DIVIDENDS AND, WHERE APPLICABLE, CAPITAL GAINS DISTRIBUTIONS. THE RUSSELL 2500
INDEX IS A WIDELY ACCEPTED UNMANAGED INDEX OF SMALL- AND MIDSIZE-COMPANY STOCK
PERFORMANCE.
The Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS
June 30, 1999 (Unaudited)
COMMON STOCKS--95.1% Shares Value ($)
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<S> <C> <C>
COMMERCIAL SERVICES--3.5%
Grainger (W.W.) 145,000 7,802,812
Outdoor Systems 390,000 (a) 14,235,000
22,037,812
CONSUMER NON-DURABLES--1.2%
International Flavors & Fragrances 175,000 7,765,625
CONSUMER SERVICES--11.5%
Chancellor Media, Cl. A 170,000 (a) 9,371,250
Hilton Hotels 475,000 6,739,062
Hispanic Broadcasting 210,000 15,933,750
Meredith 250,000 8,656,250
Premier Parks 335,000 (a) 12,311,250
USA Networks 255,000 (a) 10,231,875
Wendy's International 330,000 9,343,125
72,586,562
ELECTRONIC TECHNOLOGY--17.4%
ASM Lithography Holding 175,000 (a) 10,390,625
Adaptec 310,000 (a) 10,946,875
Altera 260,000 (a) 9,571,250
CIENA 250,000 (a) 7,546,875
Cordant Technologies 200,000 9,037,500
Gemstar International Group 190,000 (a) 12,397,500
Lexmark International Group, Cl. A 140,000 (a) 9,248,750
National Semiconductor 400,000 (a) 10,125,000
Scientific-Atlanta 200,000 7,200,000
Teradyne 160,000 (a) 11,480,000
Vitesse Semiconductor 170,000 (a) 11,464,375
109,408,750
ENERGY MINERALS--2.6%
Anadarko Petroleum 260,000 9,571,250
Apache 165,000 6,435,000
16,006,250
FINANCE--16.1%
Boston Properties 250,000 8,968,750
Charter One Financial 309,750 8,614,922
Compass Bancshares 240,000 6,540,000
<PAGE>
COMMON STOCKS (CONTINUED) Shares Value ($)
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FINANCE (CONTINUED)
Dime Bancorp 300,000 6,037,500
Everest Reinsurance Holdings 295,000 9,624,375
First Tennessee National 275,000 10,535,938
First Virginia Banks 135,000 6,631,875
Hibernia, Cl. A 425,000 6,667,187
Protective Life 175,000 5,775,000
Terra Nova Holdings, Cl. A 275,000 7,407,812
Torchmark 225,000 7,678,125
UnionBanCal 240,000 8,670,000
XL Capital, Cl. A 137,250 7,754,625
100,906,109
HEALTH TECHNOLOGY--5.8%
Allergan 110,000 12,210,000
Bard (C.R.) 150,000 7,171,875
Biomet 200,000 7,950,000
Centocor 200,000 (a) 9,325,000
36,656,875
INDUSTRIAL SERVICES--4.7%
ENSCO International 375,000 7,476,563
Noble Drilling 475,000 (a) 9,351,563
Weatherford International 335,000 (a) 12,269,375
Separation Technologies 81,984 (a,b,c) 311,539
29,409,040
NON-ENERGY MINERALS--2.4%
Freeport-McMoRan Copper & Gold, Cl. B 475,000 (a) 8,520,313
USX-U.S. Steel Group 250,000 6,750,000
15,270,313
PROCESS INDUSTRIES--8.5%
Bowater 150,000 7,087,500
Goodrich (B.F.) 175,000 7,437,500
Great Lakes Chemical 175,000 8,060,938
Lyondell Chemical 315,000 6,496,875
OM Group 222,500 7,676,250
Owens-Illinois 250,000 (a) 8,171,875
Westpoint Stevens 280,000 (a) 8,347,500
53,278,438
The Fund
<PAGE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
COMMON STOCKS (CONTINUED) Shares Value ($)
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PRODUCER MANUFACTURING--4.4%
Case 350,000 16,843,750
Howmet International 631,700 (a) 10,857,343
27,701,093
RETAIL TRADE--4.3%
Consolidated Stores 225,000 (a) 6,075,000
Food Lion, Cl. A 535,000 6,353,125
Tiffany 150,000 14,475,000
26,903,125
TECHNOLOGY SERVICES--4.1%
Citrix Systems 165,000 (a) 9,322,500
HCR Manor Care 275,000 (a) 6,651,563
Intuit 110,000 (a) 9,913,750
25,887,813
TRANSPORTATION--1.0%
Expeditors International of Washington 230,000 6,267,500
UTILITIES--7.6%
BEC Energy 175,000 7,218,750
Illinova 280,000 7,630,000
ITC DeltaCom 520,000 (a) 14,560,000
Metromedia Fiber Network, Cl. A 390,000 (a) 14,015,625
Nicor 120,000 4,567,500
47,991,875
TOTAL COMMN STOCKS
(cost $405,599,195) 598,077,180
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PREFERRED STOCKS--.1%
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Separation Technologies,
Ser. A, 6%, Cum. Conv.
(cost $931,463) 243,385 (a,b,c) 924,863
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Principal
SHORT-TERM INVESTMENTS--4.1% Amount ($) Value ($)
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U.S. TREASURY BILLS:
4.45%, 7/22/1999 7,000 6,983
4.48%, 8/26/1999 8,601,000 8,542,659
4.53%, 9/16/1999 12,625,000 12,501,313
<PAGE>
Principal
SHORT-TERM INVESTMENTS (CONTINUED) Amount ($) Value ($)
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U.S. TREASURY BILLS (CONTINUED):
4.59%, 9/23/1999 2,756,000 2,726,740
4.67%, 9/30/1999 1,761,000 1,740,290
TOTAL SHORT-TERM INVESTMENTS
(cost $25,517,282) 25,517,985
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TOTAL INVESTMENTS (cost $432,047,940) 99.3% 624,520,028
CASH AND RECEIVABLES (NET) .7% 4,418,899
NET ASSETS 100.0% 628,938,927
(A) NON-INCOME PRODUCING.
(B) INVESTMENTS IN NON-CONTROLLED AFFILIATES (COST $1,243,000)--SEE NOTE 1(D).
(C) SECURITIES RESTRICTED AS TO PUBLIC RESALE. INVESTMENTS IN RESTRICTED SECURITIES, WITH AN AGGREGATE VALUE OF $1,236,402
REPRESENTS APPROXIMATELY .20% OF NET ASSETS:
</TABLE>
<TABLE>
<CAPTION>
Acquisition Purchase
Issuer Date Price ($) Net Assets (%) Valuation ($)((+))
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<S> <C> <C> <C> <C>
Separation Technologies 1/13/95 3.80 .05 3.80
Separation Technologies,
Ser. A, 6%, Cum. Conv. 7/12/93-1/13/95 3.80 .15 3.80
((+)) THE VALUATION OF THESE SECURITIES HAS BEEN DETERMINED IN GOOD FAITH UNDER THE DIRECTION OF THE BOARD OF DIRECTORS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
Cost Value
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<S> <C> <C>
ASSETS ($):
Investments in securities--See Statement of
Investments 432,047,940 624,520,028
Cash 302,709
Receivable for investment securities sold 18,131,334
Dividends receivable 516,238
Receivable for shares of Common Stock subscribed 10,582
Prepaid expenses 47,272
643,528,163
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LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 459,712
Due to Distributor 130,156
Payable for shares of Common Stock redeemed 11,716,327
Payable for investment securities purchased 2,176,877
Accrued expenses 106,164
14,589,236
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NET ASSETS ($) 628,938,927
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COMPOSITION OF NET ASSETS ($):
Paid-in capital 347,963,963
Accumulated investment (loss) (289,112)
Accumulated net realized gain (loss) on investments 88,791,988
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 192,472,088
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NET ASSETS ($) 628,938,927
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SHARES OUTSTANDING
(100 million shares of $.01 par value Common Stock authorized) 13,105,258
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($) 47.99
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1999 (Unaudited)
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<S> <C>
INVESTMENT INCOME ($):
INCOME:
Cash dividends 2,698,163
Interest 580,042
TOTAL INCOME 3,278,205
EXPENSES:
Management fee--Note 3(a) 2,350,860
Shareholder servicing costs--Note 3(b) 1,070,737
Registration fees 32,235
Professional fees 31,584
Prospectus and shareholders' reports 27,440
Custodian fees--Note 3(b) 24,589
Directors' fees and expenses--Note 3(c) 22,933
Loan commitment fees--Note 2 1,783
Miscellaneous 5,156
TOTAL EXPENSES 3,567,317
INVESTMENT (LOSS) (289,112)
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REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments 91,178,919
Net unrealized appreciation (depreciation) on investments 4,873,547
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 96,052,466
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 95,763,354
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 1999 Year Ended
(Unaudited) December 31, 1998
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<S> <C> <C>
OPERATIONS ($):
Investment (loss) (289,112) (1,678,401)
Net realized gain (loss) on investments 91,178,919 (83,704)
Net unrealized appreciation (depreciation)
on investments 4,873,547 (27,003,995)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 95,763,354 (28,766,100)
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DIVIDENDS TO SHAREHOLDERS FROM ($):
NET REALIZED GAIN ON INVESTMENTS (1,734,981) (20,245,621)
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CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 91,898,289 327,144,836
Dividends reinvested 1,659,408 19,379,693
Cost of shares redeemed (243,395,578) (472,441,525)
Redemption fee -- 143,546
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL STOCK TRANSACTIONS (149,837,881) (125,773,450)
TOTAL INCREASE (DECREASE) IN NET ASSETS (55,809,508) (174,785,171)
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NET ASSETS ($):
Beginning of Period 684,748,435 859,533,606
END OF PERIOD 628,938,927 684,748,435
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CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 2,090,758 7,407,474
Shares issued for dividends reinvested 39,765 517,921
Shares redeemed (5,600,184) (10,732,055)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (3,469,661) (2,806,660)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<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
June 30, 1999 Year Ended December 31,
----------------------------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
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<S> <C> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 41.31 44.35 40.74 37.39 31.33 34.13
Investment Operations:
Investment income (loss)--net (.02)(a) (.10) (.14) (.05) .06 .10
Net realized and unrealized
gain (loss) on investments 6.82 (1.78) 7.99 6.47 9.17 (.22)
Total from Investment Operations 6.80 (1.88) 7.85 6.42 9.23 (.12)
Distributions:
Dividends from investment
income--net -- -- -- -- (.07) (.08)
Dividends from net realized gain
on investments (.12) (1.17) (4.24) (3.07) (3.10) (2.60)
Total Distributions (.12) (1.17) (4.24) (3.07) (3.17) (2.68)
Redemption fee added to
paid-in capital -- .01 -- -- -- --
Net asset value, end of period 47.99 41.31 44.35 40.74 37.39 31.33
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TOTAL RETURN (%) 16.50(b) (3.95) 19.54 17.31 29.80 (.15)
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RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .56(b) 1.14 1.12 1.17 1.19 1.16
Ratio of net investment income
(loss) to average net assets (.05)(b) (.21) (.33) (.15) .17 .30
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- -- -- .02 .05
Portfolio Turnover Rate 54.59(b) 107.38 82.28 102.22 108.80 94.21
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Net Assets, end of period
($ x 1,000) 628,939 684,748 859,534 780,999 606,945 391,625
(A) BASED ON AVERAGE SHARES OUTSTANDING AT EACH MONTH END.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus New Leaders Fund, Inc. (the "fund") is registered under the Investment
Company Act of 1940, as amended (the "Act" ), as a diversified open-end
management investment company. The fund's investment objective is to maximize
capital appreciation. The Dreyfus Corporation (the "Manager") serves as the
fund' s investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A. (" Mellon"). Premier Mutual Fund Services, Inc. (the "Distributor") 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 at the last sales
price on the securities exchange on which such securities are primarily traded
or at the last sales price on the national securities market. Securities not
listed on an exchange or the national securities market, or securities for which
there were no transactions, are valued at the average of the most recent bid and
asked prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
Investments denominated in foreign currencies are translated to U.S. dollars at
the prevailing rates of exchange.
(b) Foreign currency transactions: The fund does not isolate that portion of the
results of operations resulting from changes in foreign exchange rates on
investments from the fluctuations arising from changes in the market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
<PAGE>
Net realized foreign exchange gains or losses arise from sales and maturities of
short-term securities, sales of foreign currencies, currency gains or losses
realized on securities transactions and the difference between the amount of
dividends, interest and foreign withholding taxes recorded on the fund's books
and the U.S. dollar equivalent of the amounts actually received or paid. Net
unrealized foreign exchange gains and losses arise from changes in the value of
assets and liabilities other than investments in securities, resulting from
changes in exchange rates. Such gains and losses are included with net realized
and unrealized gain or loss on investments.
(c) 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. Dividend income is
recognized on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis. Under the terms of the custody agreement, the fund received net
earnings credits of $2,056 during the period ended June 30, 1999 based on
available cash balances left on deposit. Income earned under this arrangement is
included in interest income.
(d) Affiliated issuers: Issuers in which the fund held 5% or more of the
outstanding voting securities are defined as "affiliated" in the Act. The
following summarizes affiliated issuers during the period ended June 30, 1999:
<TABLE>
<CAPTION>
Shares
-------------------------------------------------------
Beginning End of Dividend Market
Name of issuer of Period Purchases Sales Period Income ($) Value ($)
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<S> <C> <C> <C> <C> <C> <C>
Separation
Technologies 81,984 -- -- 81,984 -- 311,539
(Common)
Separation
Technologies 243,385 -- -- 243,385 -- 924,863
(Conv. Preferred)
(e) Dividends to shareholders: Dividends are recorded on the ex-dividend date.
Dividends from investment income-net and dividends The Fun
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
from net realized capital gain are normally declared and paid annually, but the
fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ). To the extent that net realized capital gain can be offset by capital
loss carryovers, if any, it is the policy of the fund not to distribute such
gain.
(f) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, if such qualification is in the best interests
of its shareholders, by complying with the applicable provisions of the Code,
and to make distributions of taxable income sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended June
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 .75 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 year the aggregate expenses of the fund, exclusive of taxes,
brokerage, commitment fees, interest on borrowings (which, in the view of
Stroock & Stroock & Lavan LLP, counsel to the fund, also contemplates dividends
on securities sold short) , 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
<PAGE>
excess expense. During the period ended June 30, 1999, there was no expense
reimbursement pursuant to the Agreement.
(b) Under the Shareholder Services Plan, the fund pays the Distributor, at an
annual rate of .25 of 1% of the value of the fund's average daily net assets for
the provision of certain services. 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. The Distributor may
make payments to Service Agents (a securities dealer, financial institution or
other industry professional) in respect of these services. The Distributor
determines the amounts to be paid to Service Agents. During the period ended
June 30, 1999, the fund was charged $783,620 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 provid- ing personnel and
facilities to perform transfer agency services for the fund. During the period
ended June 30, 1999, the fund was charged $167,977 pursuant to the transfer
agency agreement.
The fund compensates Mellon under a custody agreement for providing custodial
services for the fund. During the period ended June 30, 1999, the fund was
charged $24,589 pursuant to the custody agreement.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $2,500 and an attendance fee of $500 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A 1% redemption fee is charged and retained by the fund on shares redeemed
within six months following the date of issuance, including redemptions made
through the use of the fund's exchange privilege. During the period ended June
30, 1999, redemption fees retained by the fund amounted to $17,102.
The Fund
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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 June 30, 1999, amounted to
$332,105,391 and $495,578,030, respectively.
At June 30, 1999, accumulated net unrealized appreciation on investments was
$192,472,088, consisting of $197,055,776 gross unrealized appreciation and
$4,583,688 gross unrealized depreciation.
At June 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).
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NOTES
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For More Information
Dreyfus New Leaders Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
The Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 1999 Dreyfus Service Corporation 085SA996
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