Dreyfus Insured Municipal Bond Fund, Inc.
ANNUAL REPORT
April 30, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- -------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
13 Statement of Assets and Liabilities
14 Statement of Operations
15 Statement of Changes in Net Assets
16 Financial Highlights
17 Notes to Financial Statements
21 Report of Independent Auditors
22 Important Tax Information
FOR MORE INFORMATION
- --------------------------------------------------------
Back Cover
<PAGE>
The Fund
Dreyfus Insured Municipal
Bond Fund, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this annual report for Dreyfus Insured Municipal Bond
Fund, Inc., covering the 12-month period from May 1, 1998 through April 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 manager,
Joseph Darcy.
The past year has generally been rewarding for municipal bond investors. Lower
short-term interest rates adopted by the Federal Reserve Board and other central
banks in the fall of 1998 appear to have helped many U.S. businesses withstand
the effects of economic weakness in Japan, Asia and Latin America. At the same
time, the U.S. economy has entered its eighth year of expansion in an
environment characterized by low inflation and high levels of consumer spending.
In the second half of the reporting period, tax-exempt fixed-income securities
provided good results, especially relative to taxable U.S. Treasury securities.
While prices for U.S. Treasury securities declined significantly through the
second half of the reporting period, a lack of new issuance relative to robust
investor demand supported most municipal bond prices, which have remained
relatively unchanged over the past six months. As a result, the differences in
valuations between taxable U.S. Treasury securities and tax-exempt bonds, which
reached historically wide levels last October, have since narrowed to a more
historically normal relationship.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Insured Municipal Bond Fund, Inc.
Sincerely,
/s/ Stephen E. Canter
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 13, 1999
2
<PAGE>
The Fund
DISCUSSION OF FUND PERFORMANCE
Joseph Darcy, Portfolio Manager
How did Dreyfus Insured Municipal Bond Fund, Inc. perform?
The Fund produced a 6.80% total return over the 12-month period ended April 30,
1999,1 compared to a total return of 6.05% for the average of the Lipper Insured
Municipal Debt Funds category. 2
We attribute the Fund's strong relative performance to its unwavering focus on
credit quality. The Fund invests primarily in municipal bonds that have been
insured by a Dreyfus-approved third-party insurer.3 We attribute the Fund's good
absolute performance to our conservative investment approach in a generally
positive environment for municipal bonds.
What is the Fund's investment approach?
Our goal is to seek as high a level of federally tax-exempt income as is
practical from a diversified portfolio of insured 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, maturity, the creditworthiness of its
issuer, and any provisions for early redemption.
Second, we actively manage the portfolio's average duration--a measure of
sensitivity to changes in interest rates--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
yields for as long as practical. At other times, we try to maintain a "neutral"
average duration of about
The Fund 3
<PAGE>
DISCUSSION OF FUND PERFORMANCE (continued)
seven years, which is consistent with the Fund's benchmark, the Lehman Brothers
Municipal Bond Index.
What other factors influenced the Fund's performance?
When the Asian currency and credit crisis spread to Russia and threatened Latin
America last summer and fall, investors flocked to U.S. Treasury securities. As
a result, yields on taxable Treasuries fell briefly in October to levels that
were roughly equivalent to yields on comparable term tax-exempt bonds.
However, the Federal Reserve Board and other central banks moved quickly to
stimulate global economic growth. They did so last fall by reducing key
short-term interest rates. Because lower short-term interest rates were expected
to stimulate economic growth and potentially reignite inflationary pressures,
yields on longer term bonds rose. However, the extent of that rise was much
greater for taxable U.S. Treasury securities than for municipal bonds.
In addition, because of strong economic conditions throughout the country, many
states and municipalities have had less need to borrow. As a result, fewer
tax-exempt bonds were issued than in the same period one year ago. Yet, demand
from investors seeking to minimize their income tax liabilities remained high.
This imbalance between supply and demand helped keep municipal bond prices
relatively stable while U.S. Treasury bond prices fell sharply. Even after the
yield differences between taxable and tax-exempt bonds widened, however,
long-term municipal bonds continued to provide more than 90% of the yield of
U.S. Treasury bonds, a historically high percentage.
What is the Fund's current strategy?
We continue to search for the most attractive values in the municipal bond
market. We have found such values, in our opinion, in bonds issued by states
such as New York and California that have relatively high state income tax
rates. What's more, we have focused on the underlying creditworthiness of the
issues we hold. Because the difference in yields between the debt of highly
regarded issuers and those
4
<PAGE>
having limited market acceptance have been so narrow by historical standards, we
see little reason to impair the liquidity of our holdings by using weaker
underlying issues.
As of April 30, the portfolio's 7.53-year average duration was positioned at the
short end of the neutral range. In our view, this position should enable us to
capture higher yields if long-term rates rise as the global economy gains
strength. We also intend to remain vigilant in our efforts to identify tactical
opportunities in anticipation of any supply-and-demand imbalances. We expect
these strategies to help us to continue to maximize returns for our
shareholders.
May 13, 1999
1 Total return includes reinvestment of dividends and any capital gains paid.
Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
2 Source: Lipper Analytical Services, Inc.
3 Insurance on portfolio securities does not extend to Fund shares, nor to the
value of portfolio securities.
The Fund 5
<PAGE>
FUND PERFORMANCE
[INSERT GRAPH]
$21,615 Lehman Brothers Municipal Bond Index*
$19,089 Dreyfus Insured Municipal Bond Fund, Inc.
Comparison of change in value of $10,000 investment in the Fund and the Lehman
Brothers Municipal Bond Index
- --------------------------------------------------------------------------------
Average Annual Total Returns as of 4/30/99
1 Year 5 Years 10 Years
- --------------------------------------------------------------------------------
Fund 6.80% 6.04% 6.68%
* Source: Lehman Brothers
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Dreyfus Insured Municipal
Bond Fund (the "Fund") on 4/30/89 to a $10,000 investment made in the Lehman
Brothers Municipal Bond Index (the "Index") on that date. All dividends and
capital gain distributions are reinvested. The Fund invests primarily in
municipal securities which are insured as to the timely payment of principal and
interest by recognized insurers of municipal securities. The Fund's performance
shown in the line graph takes into account fees and expenses. The Index, unlike
the Fund, is an unmanaged total return performance benchmark for the long-term,
investment-grade tax exempt bond market, calculated by using municipal bonds
selected to be representative of the municipal market overall; however, the
bonds in the Index generally are not insured. The Index also does not take into
account charges, fees and other expenses. All of these factors can contribute to
the Index potentially outperforming or underperforming the Fund. Further
information relating to Fund performance, including expense reimbursements, if
applicable, is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report. Neither Fund shares nor the market value of its
portfolio securities are insured.
6
<PAGE>
STATEMENT OF INVESTMENTS
April 30, 1999
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Principal
Long-Term Municipal Investments--98.7% Amount ($) Value ($)
- --------------------------------------------------------------------------------
California--8.6%
Los Angeles County Metropolitan
Transportation Authority, Sales Tax Revenue
6%, 7/1/2020 (Insured; MBIA)
(Prerefunded 7/1/2006)a 3,865,000 4,393,539
San Francisco City and County Airports Commission,
International Airport Revenue
6.10%, 5/1/2025 (Insured; FGIC)
(Prerefunded 5/1/2004)a 8,240,000 9,198,230
San Joaquin Hills Transportation Corridor Agency,
Toll Road Revenue, Refunding
Zero Coupon, 1/15/2031 (Insured; MBIA) 10,000,000 1,901,000
Colorado--1.5%
E-470 Public Highway Authority, Revenue, Refunding
Zero Coupon, 9/1/2016 (Insured; MBIA) 6,550,000 2,745,040
Delaware--3.6%
Delaware Economic Development Authority, Revenue:
Gas Facilities (Delmarva Power & Light)
7.30%, 7/1/2021 (Insured; FGIC) 1,000,000 1,084,560
Water (United Water Delaware Inc., Project)
6.20%, 6/1/2025 (Insured; AMBAC) 5,000,000 5,463,950
District of Columbia--2.4%
District of Columbia, Revenue,
Refunding (Howard University)
5.75%, 10/1/2013 (Insured; MBIA) 4,130,000 4,422,734
Florida--5.1%
Florida Housing Finance Agency, SFMR, Refunding
6.65%, 7/1/2026 (Insured; MBIA) 750,000 802,763
Gulf Breeze, Revenue (Capital Funding)
4.50%, 10/1/2027 (Insured; MBIA) 7,500,000 6,791,775
Lee County, Solid Waste System Revenue
7%, 10/1/2011 (Insured; MBIA) 1,420,000 1,539,266
Georgia--.6%
Douglasville Water and Sewer Authority,
Water and Sewer Revenue
4.50%, 6/1/2023 (Insured; FGIC) 1,250,000 1,142,563
Illinois--4.9%
Chicago O'Hare International Airport,
Special Facility Revenue, Refunding
(International Terminal)
6.50%, 1/1/2018 (Insured; FGIC) 1,750,000 1,782,043
The Fund 7
<PAGE>
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Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
Illinois (continued)
Metropolitan Pier and Exposition Authority,
Dedicated State Tax Revenue
(McCormick Place Expansion Project)
6.50%, 6/15/2027 (Insured; FGIC) 6,375,000 7,066,687
Kansas--2.9%
Wyandotte County, Unified Government
Utilities System Revenue, Refunding and
Improvement 4.50%,09/01/2028 (Insured; MBIA) 5,650,000 5,172,745
Kentucky--2.6%
Louisville and Jefferson County Metropolitan
Sewer District, Sewer and Drain System Revenue,
Refunding 6.25%, 5/15/2026 (Insured; MBIA) 4,200,000 4,665,066
Massachusetts--2.7%
Massachusetts Education Loan Authority,
Education Loan Revenue:
7.60%, 1/1/2003 (Insured; MBIA) 600,000 626,382
7.65%, 1/1/2004 (Insured; MBIA) 690,000 720,546
Massachusetts Health and Educational
Facilities Authority,
Revenue (Brandeis University) 4.75%, 10/1/2028
(Insured; MBIA) 1,600,000 1,493,184
Massachusetts Housing Finance Agency,
Housing Revenue (Rental-Mortgage)
6.50%, 7/1/2025 (Insured; AMBAC) 1,000,000 1,076,290
Massachusetts Port Authority,
Special Facilities Revenue (US Air Project)
5.75%, 9/1/2016 (Insured; MBIA) 1,000,000 1,063,150
Michigan--.9%
Michigan Housing Development Authority,
LOR (Greenwood Villa Project)
6.50%, 9/15/2007 (Insured; FSA) 1,500,000 1,610,955
Montana--1.3%
Forsyth, PCR, Refunding
(Puget Sound, Power & Light Co.)
7.25%, 8/1/2021 (Insured; AMBAC) 2,250,000 2,435,153
Nevada--2.0%
Reno, HR (Saint Mary's Hospital)
7.75%, 7/1/2015 (Insured; BIGI)
(Prerefunded 1/1/2000) (a) 1,285,000 1,347,091
Washoe County, Gas Facilities Revenue
(Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA) 2,000,000 2,187,980
8
<PAGE>
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Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
New Jersey--5.9%
New Jersey Economic Development Authority,
PCR (Public Service Electric & Gas Co.)
6.40%, 5/1/2032 (Insured; MBIA) 7,600,000 8,414,492
New Jersey Health Care Facilities
Financing Authority, Revenue, Refunding
(Jersey Shore Medical Center)
6.25%, 7/1/2021 (Insured; AMBAC) 100,000 110,575
New Jersey Housing and Mortgage Finance Agency,
Revenue: Home Buyer 6.20%, 10/1/2025
(Insured; MBIA) 1,995,000 2,107,219
New York--22.1%
Albany Airport Authority, Airport Revenue
5.375%, 12/15/2017 (Insured; FSA) 1,250,000 1,282,500
Buffalo Municipal Water Finance Authority,
Water System Revenue, Refunding
5%, 7/1/2017 (Insured; FGIC) 3,795,000 3,788,017
New York City Transitional Financing
Authority, Revenue
5%, 11/15/2015 (Insured; FGIC) 2,485,000 2,510,720
New York State Dormitory Authority, Revenue:
(Beth Israel Medical Center) 6%, 11/1/2015
(Insured; MBIA) 8,395,000 9,092,541
(Mount Sinai Medical School) 5.15%, 7/1/2024
(Insured; MBIA) 3,000,000 3,066,000
(State University Athletic Facility)
5.25%, 7/1/2018 (Insured; MBIA) 2,000,000 2,041,400
Refunding (Siena College)
5.70%, 7/1/2017 (Insured; MBIA) 3,585,000 3,838,675
New York State Energy, Research and
Development Authority, Facilities Revenue
(Con Edison Co. New York, Inc.)
6.375%, 12/1/2027 (Insured; MBIA) 3,000,000 3,190,830
New York State Local Government
Assistance Corporation, Refunding
5%, 4/1/2011 (Insured; FGIC) 2,580,000 2,667,307
New York State Medical Care Facilities
Finance Agency, Revenue (Long-Term Healthcare)
6.50%, 11/1/2015 (Insured; FSA) 4,655,000 5,102,439
Port Authority of New York and
New Jersey, Refunding
4.25%,10/1/2026 2,500,000 2,182,975
St. Lawrence County Industrial Development Agency,
Civic Facility Revenue (Lawrence
University Project)
5.50%, 7/1/2013 (Insured; MBIA) 1,135,000 1,211,601
The Fund 9
<PAGE>
STATEMENT OF INVESTMENTS (continued)
- --------------------------------------------------------------------------------
Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
North Dakota--2.1%
Mercer County, PCR, Refunding
(Montana-Dakota Utilities Co. Project)
6.65%, 6/1/2022 (Insured; FGIC) 3,500,000 3,821,615
Pennsylvania--2.9%
Beaver County Industrial Development Authority,
PCR, Refunding
(Ohio Edison Co./Mansfield)
7%, 6/1/2021 (Insured; FGIC) 3,000,000 3,232,500
Chester County Health and Educational
Facilities Authority, Health System Revenue
(Jefferson Health System)
5.125%, 5/15/2018 (Insured; AMBAC) 2,000,000 1,983,140
Rhode Island--2.6%
Rhode Island Housing and Mortgage Finance Corp., SFMR
9.30%, 7/1/2004 (Insured; FGIC) 15,000 15,024
Rhode Island Port Authority and
Economic Development Corp.,
Airport Revenue 6.625%, 7/1/2024 (Insured; FSA) 4,250,000 4,741,088
South Carolina--1.0%
Charleston, Waterworks and Sewer Revenue,
Refunding (Capital Improvement)
4.50%, 1/1/2024 (Insured; FGIC) 2,000,000 1,818,160
Tennessee--.6%
Metropolitan Government, Nashville and
Davidson County, Water and
Sewer Revenue, Refunding
5.20%, 1/1/2013 (Insured; FGIC) 1,000,000 1,056,670
Texas--3.7%
Brazos River Authority, PCR, Refunding
(Texas Utilities Electric Co. Project)
6.625%, 6/1/2022 (Insured; FGIC) 5,500,000 5,967,940
Brownsville Housing Finance Corp., SFMR
(Mortgage-Multiple Originators and Services)
9.625%, 12/1/2011 (Insured; FGIC) 640,000 650,342
Virginia--7.5%
Richmond Metropolitan Authority,
Expressway Revenue, Refunding:
5.25%, 7/15/2017 (Insured; FGIC) 2,925,000 3,063,382
5.25%, 7/15/2022 (Insured; FGIC) 2,600,000 2,697,578
10
<PAGE>
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Principal
Long-Term Municipal Investments (continued) Amount ($) Value ($)
- --------------------------------------------------------------------------------
Virginia (continued)
Virginia College Building Authority,
Educational Facilities Revenue
(Washington and Lee University)
5.25%, 1/1/2026 (Insured; MBIA) 7,500,000 7,768,350
Washington--9.5%
King County, Sewer Revenue 6.125%, 1/1/2033
(Insured; MBIA) 5,000,000 5,495,550
Washington, MFMR:
(Gilman Meadows Project) 7.40%, 1/1/2030
(Insured; FSA) 3,000,000 3,338,609
(Mallard Cove Project 1)
7.40%, 1/1/2030 (Insured; FSA) 800,000 890,295
(Mallard Cove Project 2) 7.40%, 1/1/2030
(Insured; FSA) 2,700,000 3,004,748
Yakima-Tieton Irrigation District, Revenue,
Refunding 6.20%, 6/1/2019 (Insured; FSA) 4,000,000 4,370,359
West Virginia--1.7%
West Virginia, 6.50% 11/1/2026 (Insured; FGIC) 2,600,000 3,071,587
Total Long-Term Municipal Investments
(cost $168,228,831) 178,326,920
- --------------------------------------------------------------------------------
Short-Term Municipal Investments--.7%
Massachusetts;
Massachusetts Health and Educational
Facilities Authority, Revenue, VRDN
4.15% (Insured; MBIA) (b) (cost $1,200,000) 1,200,000 1,200,000
- --------------------------------------------------------------------------------
Total Investments (cost $169,428,831) 99.4% 179,526,920
Cash and Receivables (Net) .6% 1,076,556
Net Assets 100.0% 180,603,476
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The Fund 11
<PAGE>
STATEMENT OF INVESTMENTS (continued)
Summary of Abbreviations
AMBAC American Municipal Bond MBIA Municipal Bond Investors
Assurance Corporation Assurance Insurance
BIGI Bond Investors Corporation
Guaranty Insurance MFMR Multi-Family
FGIC Financial Guaranty Mortgage Revenue
Insurance Company PCR Pollution Control Revenue
FSA Financial Security Assurance SFMR Single Family
HR Hospital Revenue Mortgage Revenue
LOR Limited Obligation Revenue VRDN Variable Rate Demand Notes
- --------------------------------------------------------------------------------
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value %
- --------------------------------------------------------------------------------
AAA Aaa AAA 99.3
F-1 MIG1/P1 SP1/A1 .7
100.0
a Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest refunding
date.
b Securities payable on demand. Variable interest rate-subject to periodic
change.
c At April 30, 1999, 46.9% of the Fund's net assets are insured by MBIA
and 30.0% are insured by FGIC. See notes to financial statements.
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999
- --------------------------------------------------------------------------------
Cost Value ($)
- --------------------------------------------------------------------------------
Assets ($):
Investments in securities
--See Statement of Investments 169,428,831 179,526,920
Interest receivable 3,454,025
Receivable for investment securities sold 3,087,118
Prepaid expenses 17,497
186,085,560
- --------------------------------------------------------------------------------
Liabilities ($):
Due to The Dreyfus Corporation and affiliates 116,752
Due to Distributor 4,428
Cash overdrafts due to Custodian 2,431,076
Payable for investment securities purchased 2,879,746
Accrued expenses 50,082
5,482,084
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Net Assets ($) 180,603,476
- --------------------------------------------------------------------------------
Composition of Net Assets ($):
Paid-in capital 170,757,599
Accumulated net realized gain (loss) on investments (252,212)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 10,098,089
- --------------------------------------------------------------------------------
Net Assets ($) 180,603,476
- --------------------------------------------------------------------------------
Shares Outstanding
(300 million shares of $.01 par value Common Stock authorized) 9,902,357
- --------------------------------------------------------------------------------
Net Asset Value, offering and redemption price per share--Note 3(d) ($) 18.24
See notes to financial statements.
The Fund 13
<PAGE>
STATEMENT OF OPERATIONS
Year Ended April 30, 1999
- --------------------------------------------------------------------------------
Investment Income ($)
- --------------------------------------------------------------------------------
Income:
Interest Income 10,162,382
Expenses:
Management fee--Note 3(a) 1,119,293
Shareholder servicing costs--Note 3(b) 480,995
Professional fees 48,477
Directors' fees and expenses--Note 3(c) 35,293
Registration fees 32,188
Custodian fees 18,891
Prospectus and shareholders' reports--Note 3(b) 16,339
Loan commitment fees--Note 2 683
Miscellaneous 13,026
Total Expenses 1,765,185
Less--reduction in management fee due to
undertaking--Note 3(a) (178,837)
Net Expenses 1,586,348
Investment Income--Net 8,576,034
- --------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments--Note 4:
Net realized gain (loss) on investments 1,605,218
Net unrealized appreciation (depreciation) on investments 2,176,440
Net Realized and Unrealized Gain (Loss) on Investments 3,781,658
Net Increase in Net Assets Resulting From Operations 12,357,692
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
Year Ended April 30,
---------------------------------
1999 1998
- --------------------------------------------------------------------------------
Operations ($):
Investment income--net 8,576,034 9,301,806
Net realized gain (loss) on investments 1,605,218 3,232,483
Net unrealized appreciation (depreciation)
on investments 2,176,440 3,408,483
Net Increase (Decrease) in Net Assets
Resulting from Operatons 12,357,692 15,942,772
- --------------------------------------------------------------------------------
Dividends to Shareholders From ($):
Investment income--net (8,576,034) (9,301,806)
- --------------------------------------------------------------------------------
Capital Stock Transactions ($):
Net proceeds from shares sold 37,949,044 72,586,101
Dividends reinvested 5,758,276 6,094,336
Cost of shares redeemed (53,321,793) (91,356,721)
Increase (Decrease) in Net Assets from
Capital Stock Transactions (9,614,473) (12,676,284)
Total Increase (Decrease) in Net Assets (5,832,815) (6,035,318)
- --------------------------------------------------------------------------------
Net Assets ($):
Beginning of Period 186,436,291 192,471,609
End of Period 180,603,476 186,436,291
- --------------------------------------------------------------------------------
Capital Share Transactions (Shares):
Shares sold 2,072,158 4,071,401
Shares issued for dividends reinvested 314,254 339,966
Shares redeemed (2,913,873) (5,100,142)
Net Increase (Decrease) in Shares Outstanding (527,461) (688,775)
See notes to financial statements.
The Fund 15
<PAGE>
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Certain information reflects financial results for a single Fund share. Total
return shows how much your investment in the Fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Year Ended April 30,
---------------------------------------------
1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per Share Data ($):
Net asset value, beginning of period 17.88 17.31 17.13 17.25 17.46
Investment Operations:
Investment income--net .84 .85 .87 .91 .94
Net realized and unrealized gain (loss)
on investments .36 .57 .18 (.11) (.21)
Total from Investment Operations 1.20 1.42 1.05 .80 .73
Distributions:
Dividends from investment income--net (.84) (.85) (.87) (.92) (.94)
Net asset value, end of period 18.24 17.88 17.31 17.13 17.25
- ----------------------------------------------------------------------------------------
Total Return (%) 6.80 8.31 6.24 4.58 4.36
- ----------------------------------------------------------------------------------------
Ratios/Supplemental Data (%):
Ratio of expenses to average net assets .85 .85 .80 .85 .94
Ratio of net investment income
to average net assets 4.60 4.76 5.03 5.14 5.49
Decrease reflected in above expense ratios
due to undertakings by the Manager .10 .10 .17 .09 --
Portfolio Turnover Rate 32.27 64.38 93.39 82.86 41.19
- ----------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 180,603 186,436 192,472 208,388 220,398
See notes to financial statements.
</TABLE>
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Insured Municipal Bond Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The Fund's investment objective is to
provide investors with as high a level of current income exempt from Federal
income tax as is consistent with the preservation of capital. The Dreyfus
Corporation (the "Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc.
(the "Distributor") is the distributor of the Fund's shares, which are sold to
the public without a sales load.
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
The Fund 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
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 $14,238 for the period ended April 30, 1999, based on available cash balances
left on deposit. Income earned under this arrangement is included in interest
income.
(c) Dividends to shareholders: It is the policy of the Fund to declare dividends
daily from investment income-net. Such dividends are paid monthly. Dividends
from net realized capital gain are normally declared and paid annually, but the
Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
"Code"). To the extent that net realized capital gain can be offset by capital
loss carryovers, 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.
The Fund has an unused capital loss carryover of approximately $252,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 1999. If not
applied, the carryover 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 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 April
30, 1999, the Fund did not borrow under the Facility.
18
<PAGE>
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 year the aggregate expenses of the Fund, exclusive of taxes,
brokerage, commitment fees, interest on borrowings 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. However, the Manager had undertaken from May 1, 1998 through April 30,
1999 to reduce the management fee paid by the Fund, to the extent that the
Fund's aggregate annual expenses (exclusive of certain expenses as described
above) exceed an annual rate of .85 of 1% of the value of the Fund's average
daily net assets. The reduction in management fee, pursuant to the undertaking,
amounted to $178,837 during the period ended April 30, 1999.
(b) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1 under the
Act, the Fund (a) reimburses the Distributor for payments to certain Service
Agents (a securities dealer, financial institution or other industry
professional) for distributing the Fund's shares and servicing shareholder
accounts ("Servicing") and (b) pays the Manager, Dreyfus Service Corporation, a
wholly-owned subsidiary of the Manager, and any affiliate of either of them
(collectively, "Dreyfus") for advertising and marketing relating to the Fund and
for Servicing, at an aggregate annual rate of .20 of 1% of the value of the
Fund's average daily net assets. Both the Distributor and Dreyfus may pay one or
more Service Agents a fee in respect of the Fund's shares owned by shareholders
with whom the Service Agent has a Servicing relationship or for whom the Service
Agent is the dealer or holder of record. Both the Distributor and Dreyfus
determine the amounts, if any, to be paid to Service Agents under the Plan and
the basis on which such payments are made. The fees payable under the Plan are
payable without regard to actual expenses incurred. The Plan also sep-
The Fund 19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued)
arately provides for the Fund to bear the costs of preparing, printing and
distributing certain of the Fund's prospectuses and statements of additional
information and costs associated with implementing and operating the Plan, not
to exceed the greater of $100,000 or .005 of 1% of the value of the Fund's
average daily net assets for any full fiscal year. During the period ended April
30, 1999, the Fund was charged $379,306 pursuant to the 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 April 30, 1999, the Fund was charged $70,981 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 $2,500 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
(d) A .10% redemption fee is charged and retained by the Fund on certain
redemptions of Fund shares fifteen days following the date of issuance,
including redemptions made through the use of the Fund Exchange privilege.
During the period ended April 30, 1999, redemption fees amounted to $16,356.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 1999, amounted to
$58,400,283 and $67,990,164, respectively.
At April 30, 1999, accumulated net unrealized appreciation on investments was
$10,098,089, consisting of $10,399,181 gross unrealized appreciation and
$301,092 gross unrealized depreciation.
At April 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).
20
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Shareholders and Board of Directors
Dreyfus Insured Municipal Bond Fund, Inc.
We have audited the accompanying statement of assets and liabilities of Dreyfus
Insured Municipal Bond Fund, Inc., including the statement of investments, as of
April 30, 1999, and the related statement of operations for the year then ended,
the statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of April 30, 1999 by correspondence with the custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Insured Municipal Bond Fund, Inc. at April 30, 1999, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the indicated years, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
May 28, 1999
The Fund 21
<PAGE>
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the dividends
paid from investment income-net during its fiscal year ended April 30, 1999 as
"exempt-interest dividends" (not generally subject to regular Federal income
tax).
As required by Federal tax law, shareholders will receive notification of their
portion of the Fund's taxable ordinary dividends (if any) and capital gain
distributions (if any) paid for the 1999 calendar year on Form 1099-DIV which
will be mailed by January 31, 2000.
22
<PAGE>
For More Information
Dreyfus Insured Municipal
Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
Investment Adviser
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
By telephone
Call 1-800-645-6561
By mail Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
By E-mail Send your request to [email protected]
On the Internet Information can be viewed online or downloaded from:
http://www.dreyfus.com
Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
(C) 1999 Dreyfus Service Corporation 306AR994
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS INSURED MUNICIPAL BOND FUND, INC. AND
THE LEHMAN BROTHERS MUNICIPAL BOND INDEX
EXHIBIT A:
PERIOD LEHMAN BROTHERS DREYFUS
MUNICIPAL INSURED MUNICIPAL
BOND INDEX * BOND FUND, INC.
4/30/89 10,000 10,000
4/30/90 10,720 10,510
4/30/91 11,952 11,653
4/30/92 13,088 12,651
4/30/93 14,744 14,339
4/30/94 15,063 14,234
4/30/95 16,065 14,854
4/30/96 17,341 15,534
4/30/97 18,492 16,503
4/30/98 20,211 17,874
4/30/99 21,615 19,089
* Source: Lehman Brothers
