Dreyfus
Insured Municipal
Bond Fund, Inc.
ANNUAL REPORT April 30, 2000
(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
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Fund Performance
7 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
15 Financial Highlights
16 Notes to Financial Statements
21 Report of Independent Auditors
22 Important Tax Information
FOR MORE INFORMATION
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Back Cover
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, 1999 through April 30,
2000. 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 five times during the reporting period, for a total increase of 1.25
percentage points. While higher interest rates generally led to an erosion of
municipal bond prices during much of the reporting period, the tax-exempt bond
market showed renewed signs of strength during the first four months of 2000.
Municipal bonds were also influenced by supply-and-demand considerations. 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, making tax-exempt bonds especially
attractive for investors in the higher federal and state income tax brackets.
We appreciate your confidence over the past year, and we look forward to your
continued participation in Dreyfus Insured Municipal Bond Fund, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
May 15, 2000
DISCUSSION OF FUND PERFORMANCE
Joseph Darcy, Portfolio Manager
How did Dreyfus Insured Municipal Bond Fund, Inc. perform during the period?
The fund achieved a -2.45% total return over the one-year period ended April 30,
2000.(1) In comparison, the Lipper Insured Municipal Debt Funds category average
return was -3.12% over the same period.(2)
We attribute the fund' s lackluster absolute return to difficult market
conditions over the past year, including rising interest rates and a fall-off in
demand from institutional investors. On the other hand, we believe that our good
relative performance is the result of our disciplined approach to individual
security selection, which emphasized liquidity from larger issuers, and
especially issuers from states with high income tax rates where demand is
greatest.
What is the fund's investment approach?
Our goal is to seek as high a level of federally tax-exempt income as is
consistent with preserving capital from a diversified portfolio of insured
municipal bonds. In pursuing this objective, we employ two primary strategies.
First, we evaluate interest-rate trends and supply-and-demand factors in the
bond market. Based on that assessment, we select the individual tax-exempt bonds
that we believe potentially can provide the highest returns with the least risk.
We look at such criteria as the bond' s yield, price, age, the underlying
creditworthiness of its issuer, and any provisions for early redemption.
Second, we actively manage the fund's 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 fund's 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 fund' s duration to maintain current yields for as long as
practical.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
Although the fund's performance was hurt by a difficult investment environment
during most of calendar-year 1999, the first quarter of 2000 provided better
market conditions and a market rally. This rally helped offset most -- but not
all -- of 1999's decline.
When the reporting period began on May 1, 1999, investors had become
concerned that strong economic growth might rekindle long-dormant inflationary
pressures. In an attempt to forestall a reacceleration of inflation, the Federal
Reserve Board raised short-term interest rates five times during the 12-month
reporting period, for a total increase of 1.25 percentage points, causing most
bond prices to fall.
Municipal bond prices also fell during 1999 because of adverse
supply-and-demand influences. For a variety of reasons, institutional investors
participated less in the tax-exempt market. Despite strong demand from
individual investors, the absence of institutional buyers helped reduce overall
demand and drove municipal bond prices down. During the first quarter of 2000,
however, issuance of municipal bonds nationally declined approximately 20%, as
compared to the same period one year ago. This supply reduction, combined with
robust demand from individual investors, helped support a rebound of municipal
bond prices, especially among longer term bonds, from which the fund benefited.
What is the fund's current strategy?
We have maintained our long-term strategy of balancing shareholders' needs for
income and total return. To that end, our current strategy is relatively
defensive, emphasizing intermediate-term securities in the 15- to 20-year
maturity range. That' s because intermediate-term securities tend to be less
volatile than longer term securities when interest rates are rising. In
addition, bonds in this maturity range tend to receive the greatest interest
from both individual and institutional investors, which helps to maintain easy
liquidity even in difficult mar
ket environments. As of April 30, 2000, the fund's average duration -- a measure
of sensitivity to changing interest rates -- was at approximately eight years,
which we consider to be in the neutral range.
As part of our cautious strategy, we have also carefully monitored the
underlying credit quality of the issuers whose bonds we hold. Even though all of
the fund' s holdings are insured by third-party insurance companies, bonds from
better quality issuers tend to enjoy even greater measures of liquidity.(3)
However, we are prepared to adopt a more aggressive posture if and when it
appears that interest rates are near their peak. We are also constantly looking
to lock in yields whenever supply-and-demand influences create temporary
opportunities to do so.
May 15, 2000
(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, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE
MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY
TAXABLE. RETURN FIGURES PROVIDED REFLECT THE ABSORPTION OF FUND EXPENSES BY
THE DREYFUS CORPORATION PURSUANT TO AN UNDERTAKING IN EFFECT THAT MAY BE
EXTENDED, TERMINATED OR MODIFIED AT ANY TIME. HAD THESE EXPENSES NOT BEEN
ABSORBED, THE FUND'S RETURNS WOULD HAVE BEEN LOWER.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
(3) PORTFOLIO INSURANCE EXTENDS TO THE REPAYMENT OF PRINCIPAL AND PAYMENT OF
INTEREST IN THE EVENT OF DEFAULT. IT DOES NOT EXTEND TO THE MARKET VALUE OF
PORTFOLIO SECURITIES OR TO THE VALUE OF THE FUND'S SHARES.
The Fund
FUND PERFORMANCE
Comparison of change in value of $10,000 investment in Dreyfus Insured Municipal
Bond Fund, Inc. and the Lehman Brothers Municipal Bond Index
--------------------------------------------------------------------------------
Average Annual Total Returns AS OF 4/30/00
<TABLE>
<CAPTION>
1 Year 5 Years 10 Years
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FUND (2.45)% 4.62% 5.89%
</TABLE>
((+)) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE ABOVE GRAPH COMPARES A $10,000 INVESTMENT MADE IN DREYFUS INSURED MUNICIPAL
BOND FUND, INC. (THE "FUND") ON 4/30/90 TO A $10,000 INVESTMENT MADE IN THE
LEHMAN BROTHERS MUNICIPAL BOND INDEX (THE "INDEX") ON THAT DATE. ALL DIVIDENDS
AND CAPITAL GAIN DISTRIBUTIONS ARE REINVESTED.
THE FUND INVESTS PRIMARILY IN MUNICIPAL SECURITIES WHICH ARE INSURED AS TO THE
TIMELY PAYMENT OF PRINCIPAL AND INTEREST BY RECOGNIZED INSURERS OF MUNICIPAL
SECURITIES. THE FUND'S PERFORMANCE SHOWN IN THE LINE GRAPH TAKES INTO ACCOUNT
FEES AND EXPENSES. THE INDEX, UNLIKE THE FUND, IS AN UNMANAGED TOTAL RETURN
PERFORMANCE BENCHMARK FOR THE LONG-TERM, INVESTMENT-GRADE TAX-EXEMPT BOND
MARKET, CALCULATED BY USING MUNICIPAL BONDS SELECTED TO BE REPRESENTATIVE OF THE
MUNICIPAL MARKET OVERALL; HOWEVER, THE BONDS IN THE INDEX GENERALLY ARE NOT
INSURED. THE INDEX ALSO DOES NOT TAKE INTO ACCOUNT CHARGES, FEES AND OTHER
EXPENSES. ALL OF THESE FACTORS CAN CONTRIBUTE TO THE INDEX POTENTIALLY
OUTPERFORMING OR UNDERPERFORMING THE FUND. FURTHER INFORMATION RELATING TO FUND
PERFORMANCE, INCLUDING EXPENSE REIMBURSEMENTS, IF APPLICABLE, IS CONTAINED IN
THE FINANCIAL HIGHLIGHTS SECTION OF THE PROSPECTUS AND ELSEWHERE IN THIS REPORT.
NEITHER FUND SHARES NOR THE MARKET VALUE OF ITS PORTFOLIO SECURITIES ARE
INSURED.
STATEMENT OF INVESTMENTS
April 30, 2000
<TABLE>
<CAPTION>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--97.2% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA--6.1%
Alameda Corridor Transportation Authority, Revenue
4.75%, 10/1/2025 (Insured; MBIA) 2,000,000 1,674,800
San Francisco City and County Airports Commission,
International Airport Revenue
6.10%, 5/1/2025 (Insured; FGIC)
(Prerefunded 5/1/2004) 6,000,000 (a) 6,347,820
San Joaquin Hills Transportation Corridor Agency,
Toll Road Revenue
Zero Coupon, 1/15/2031 (Insured; MBIA) 10,000,000 1,572,300
COLORADO--1.6%
E-470 Public Highway Authority, Revenue
Zero Coupon, 9/1/2016 (Insured; MBIA) 6,550,000 2,508,650
DELAWARE--3.9%
Delaware Economic Development Authority, Revenue:
Gas Facilities (Delmarva Power & Light)
7.30%, 7/1/2021 (Insured; FGIC) 1,000,000 1,043,880
Water (United Water Delaware Inc., Project)
6.20%, 6/1/2025 (Insured; AMBAC) 5,000,000 5,033,500
FLORIDA--4.0%
Florida Housing Finance Agency, SFMR
6.65%, 7/1/2026 (Insured; MBIA) 690,000 713,501
Gulf Breeze, Revenue (Capital Funding)
4.50%, 10/1/2027 (Insured; MBIA) 5,000,000 3,969,200
Lee County, Solid Waste System Revenue
7%, 10/1/2011 (Insured; MBIA) 1,420,000 1,481,486
GEORGIA--.7%
Douglasville-Douglas County Water and Sewer Authority,
Sewer Revenue
4.50%, 6/1/2023 (Insured; FGIC) 1,250,000 1,005,913
ILLINOIS--4.3%
Metropolitan Pier and Exposition Authority,
Dedicated State Tax Revenue
(McCormick Place Expansion Project)
6.50%, 6/15/2027 (Insured; FGIC) 6,375,000 6,741,499
KANSAS--4.1%
Wyandotte County, Unified Government Utilities System
Revenue, Improvement
4.50%, 9/1/2028 (Insured; MBIA) 8,150,000 6,408,345
MASSACHUSETTS--4.2%
Massachusetts Education Loan Authority, Education
Loan Revenue:
7.60%, 1/1/2003 (Insured; MBIA) 515,000 527,118
7.65%, 1/1/2004 (Insured; MBIA) 600,000 614,070
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
--------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Massachusetts Health and Educational Facilities
Authority, Revenue (Brandeis University)
4.75%, 10/1/2028 (Insured; MBIA) 1,600,000 1,311,488
Massachusetts Housing Finance Agency, Housing Revenue
(Rental-Mortgage)
6.50%, 7/1/2025 (Insured; AMBAC) 1,000,000 1,022,850
Massachusetts Port Authority, Special Facilities Revenue
(US Air Project)
5.75%, 9/1/2016 (Insured; MBIA) 1,000,000 997,290
Massachusetts Turnpike Authority, Revenue
(Metropolitan Highway System)
5%, 1/1/2039 (Insured; AMBAC) 2,500,000 2,094,700
MICHIGAN--1.0%
Michigan Housing Development Authority, LOR
(Greenwood Villa Project)
6.50%, 9/15/2007 (Insured; FSA) 1,500,000 1,560,435
MONTANA--1.5%
Forsyth, PCR (Puget Sound, Power & Light Co.)
7.25%, 8/1/2021 (Insured; AMBAC) 2,250,000 2,346,728
NEVADA--1.3%
Washoe County, Gas Facilities Revenue
(Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA) 2,000,000 2,087,980
NEW JERSEY--6.3%
New Jersey Economic Development Authority, PCR
(Public Service Electric & Gas Co.)
6.40%, 5/1/2032 (Insured; MBIA) 7,600,000 7,785,972
New Jersey Health Care Facilities Financing Authority,
Revenue (Jersey Shore Medical Center):
6.25%, 7/1/2021 (Insured; AMBAC) 70,000 71,992
6.25%, 7/1/2021 (Insured; AMBAC)
(Prerefunded 7/1/2004) 30,000 (a) 31,830
New Jersey Housing and Mortgage Finance Agency, Revenue,
Home Buyer 6.20%, 10/1/2025 (Insured; MBIA) 1,995,000 2,006,651
NEW YORK--19.9%
Albany Airport Authority, Airport Revenue
5.375%, 12/15/2017 (Insured; FSA) 1,250,000 1,183,163
Buffalo Municipal Water Finance Authority, Water System
Revenue, Refunding
5%, 7/1/2017 (Insured; FGIC) 3,795,000 3,457,700
New York City Transitional Finance Authority, Revenue
5%, 11/15/2015 (Insured: FGIC) 2,485,000 2,301,085
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
New York State Dormitory Authority, Revenue:
(Beth Israel Medical Center)
6%, 11/1/2015 (Insured; MBIA) 8,395,000 8,595,892
(Mount Sinai Medical School)
5.15%, 7/1/2024 (Insured; MBIA) 3,000,000 2,698,740
(State University Athletic Facility)
5.25%, 7/1/2018 (Insured; MBIA) 2,000,000 1,869,800
New York State Energy, Research and Development
Authority, Facilities Revenue
(Con Edison Co.-New York, Inc.)
6.375%, 12/1/2027 (Insured; MBIA) 3,000,000 3,042,030
New York State Medical Care Facilities Finance Agency,
Revenue (Long-Term Healthcare)
6.50%, 11/1/2015 (Insured; FSA) 4,655,000 4,890,357
Port Authority of New York and New Jersey
4.25%, 10/1/2026 (Insured: FGIC) 2,500,000 1,906,025
St. Lawrence County Industrial Development Agency,
Civic Facility Revenue
(Lawrence University Project)
5.50%, 7/1/2013 (Insured; MBIA) 1,135,000 1,136,214
NORTH DAKOTA--2.4%
Mercer County, PCR, Refunding
(Montana-Dakota Utilities Co. Project)
6.65%, 6/1/2022 (Insured; FGIC) 3,500,000 3,666,635
PENNSYLVANIA--2.0%
Beaver County Industrial Development Authority, PCR
(Ohio Edison Co./Mansfield) 7%, 6/1/2021 (Insured; FGIC) 3,000,000 3,119,130
RHODE ISLAND--2.8%
Rhode Island Housing and Mortgage Finance Corp., SFMR
9.30%, 7/1/2004 (Insured; FGIC) 15,000 15,021
Rhode Island Port Authority and Economic Development Corp.,
Airport Revenue 6.625%, 7/1/2024 (Insured; FSA) 4,250,000 4,364,453
SOUTH CAROLINA--3.4%
Charleston, Waterworks and Sewer Revenue
(Capital Improvement)
4.50%, 1/1/2024 (Insured; FGIC) 2,000,000 1,600,660
Spartanburg, Waterworks Revenue
5.25%, 6/1/2023 (Insured; FGIC) 4,100,000 3,744,366
TEXAS--5.4%
Brazos River Authority, PCR (Texas Utilities Electric Co. Project)
6.625%, 6/1/2022 (Insured; FGIC) 5,500,000 5,733,090
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Brownsville Housing Finance Corp., SFMR (Mortgage-Multiple
Originators and Services)
9.625%, 12/1/2011 (Insured; FGIC) 585,000 591,189
Houston, Airport Systems Revenue
5%, 7/1/2028 (Insured; FGIC) 2,500,000 2,134,875
VIRGINIA--9.5%
Richmond Metropolitan Authority, Expressway Revenue
5.25%, 7/15/2022 (Insured; FGIC) 2,600,000 2,405,650
Upper Occoquan Sewer Authority, Regional Sewer Revenue
5.15%, 7/1/2020 (Insured; MBIA) 5,000,000 4,634,550
Virginia College Building Authority, Educational Facilities
Revenue (Washington and Lee University)
5.25%, 1/1/2026 (Insured; MBIA) 8,500,000 7,841,675
WASHINGTON--10.2%
King County, Sewer Revenue
6.125%, 1/1/2033 (Insured; MBIA) 5,000,000 5,019,850
Washington, MFMR:
(Gilman Meadows Project) 7.40%, 1/1/2030 (Insured; FSA) 3,000,000 3,196,860
(Mallard Cove Project 1) 7.40%, 1/1/2030 (Insured; FSA) 800,000 852,496
(Mallard Cove Project 2) 7.40%, 1/1/2030 (Insured; FSA) 2,700,000 2,877,174
Yakima-Tieton Irrigation District, Revenue
6.20%, 6/1/2019 (Insured; FSA) 4,000,000 4,077,320
WEST VIRGINIA--2.6%
West Virginia:
6.50%, 11/1/2026 (Insured; FGIC) 2,600,000 2,815,696
Zero Coupon, 11/1/2026 (Insured; FGIC) 5,950,000 1,206,838
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $154,707,767) 151,938,532
-----------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--.8%
-----------------------------------------------------------------------------------------------------------------------------------
UTAH;
Emery County (Pacificorp Project) PCR, VRDN,
6.10% (Insured; AMBAC) (cost $1,300,000) 1,300,000 (b) 1,300,000
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $156,007,767) 98.0% 153,238,532
CASH AND RECEIVABLES (NET) 2.0% 3,193,281
NET ASSETS 100.0% 156,431,813
The Fund
</TABLE>
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
FGIC Financial Guaranty Insurance
Company
FSA Financial Security Assurance
LOR Limited Obligation Revenue
MBIA Municipal Bond Investors
Assurance Insurance Corporation
MFMR Multi-Family Mortgage Revenue
PCR Pollution Control Revenue
SFMR Single Family Mortgage Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AAA Aaa AAA 99.2
F-1 MIG1/P1 SP1/A1 .8
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(C) AT APRIL 30, 2000, 43.8% OF THE FUND'S NET ASSETS ARE INSURED BY MBIA AND
31.9% ARE INSURED BY FGIC.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF ASSETS AND LIABILITIES
April 30, 2000
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 156,007,767 153,238,532
Cash 143,392
Interest receivable 3,193,131
Receivable for shares of Common Stock subscribed 1,000
Prepaid expenses 11,979
156,588,034
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 104,588
Payable for shares of Common Stock redeemed 2,799
Accrued expenses 48,834
156,221
--------------------------------------------------------------------------------
NET ASSETS ($) 156,431,813
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 159,418,931
Accumulated undistributed investment income--net 43,761
Accumulated net realized gain (loss) on investments (261,644)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4 (2,769,235)
--------------------------------------------------------------------------------
NET ASSETS ($) 156,431,813
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(300 million shares of $.001 par value Common Stock authorized) 9,237,547
NET ASSET VALUE, offering and redemption price per share--Note 3(d) ($)
16.93
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Year Ended April 30, 2000
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 9,644,326
EXPENSES:
Management fee--Note 3(a) 990,951
Shareholder servicing costs--Note 3(b) 431,375
Professional fees 53,339
Directors' fees and expenses--Note 3(c) 30,464
Registration fees 29,013
Prospectus and shareholders' reports--Note 3(b) 19,682
Custodian fees 16,431
Loan commitment fees--Note 2 1,684
Miscellaneous 12,046
TOTAL EXPENSES 1,584,985
Less--reduction in management fee due to undertaking--Note 3(a) (179,454)
NET EXPENSES 1,405,531
INVESTMENT INCOME--NET 8,238,795
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments (9,432)
Net unrealized appreciation (depreciation) on investments (12,867,324)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (12,876,756)
NET (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (4,637,961)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Year Ended April 30,
-----------------------------------
2000 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 8,238,795 8,576,034
Net realized gain (loss) on investments (9,432) 1,605,218
Net unrealized appreciation (depreciation)
on investments (12,867,324) 2,176,440
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS (4,637,961) 12,357,692
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET: (8,195,034) (8,576,034)
--------------------------------------------------------------------------------
CAPITAL STOCK TRANSACTIONS ($):
Net proceeds from shares sold 20,699,443 37,949,044
Dividends reinvested 5,583,234 5,758,276
Cost of shares redeemed (37,621,345) (53,321,793)
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS (11,338,668) (9,614,473)
TOTAL INCREASE (DECREASE) IN NET ASSETS (24,171,663) (5,832,815)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 180,603,476 186,436,291
END OF PERIOD 156,431,813 180,603,476
Undistributed investment income-net 43,761 -
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,189,771 2,072,158
Shares issued for dividends reinvested 326,137 314,254
Shares redeemed (2,180,718) (2,913,873)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (664,810) (527,461)
SEE NOTES TO FINANCIAL STATEMENTS.
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.
<TABLE>
<CAPTION>
Year Ended April 30,
-------------------------------------------------------------------
2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 18.24 17.88 17.31 17.13 17.25
Investment Operations:
Investment income--net .86 .84 .85 .87 .91
Net realized and unrealized
gain (loss) on investments (1.32) .36 .57 .18 (.11)
Total from Investment Operations (.46) 1.20 1.42 1.05 .80
Distributions:
Dividends from investment income--net (.85) (.84) (.85) (.87) (.92)
Net asset value, end of period 16.93 18.24 17.88 17.31 17.13
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (2.45) 6.80 8.31 6.24 4.58
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets .85 .85 .85 .80 .85
Ratio of net investment income
to average net assets 4.99 4.60 4.76 5.03 5.14
Decrease reflected in above expense ratios
due to undertakings by The Dreyfus
Corporation .11 .10 .10 .17 .09
Portfolio Turnover Rate 12.36 32.27 64.38 93.39 82.86
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 156,432 180,603 186,436 192,472 208,388
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
</TABLE>
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., which is a wholly-owned subsidiary
of Mellon Financial Corporation. Effective March 22, 2000, Dreyfus Service
Corporation (" DSC" ), a wholly-owned subsidiary of the Manager, became the
distributor of the fund's shares, which are sold to the public without a sales
charge. Prior to March 22, 2000, Premier Mutual Fund Services, Inc. was the
distributor.
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 $8,398 during the period
ended April 30, 2000, 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 $262,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to April 30, 2000. If not
applied, $252,000 of the carryover expires in fiscal 2005 and $10,000 expires in
fiscal 2008.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 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, 2000, 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 year the aggregate expenses of the fund, exclusive of taxes,
brokerage, commitment fees, interest on borrowings and extraordinary expenses,
exceed 11/2% of the value of the fund's average net assets, the fund may deduct
from the payments to be made to the Manager, or the Manager will bear such
excess. However, the Manager had undertaken from May 1, 1999 through April 30,
2000 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) exceeded 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 $179,454 during the period ended April 30, 2000.
(B) Under the Service Plan (the "Plan") adopted pursuant to Rule 12b-1 under the
Act, the fund pays the distributor for distributing the fund's shares, servicing
shareholder accounts and for advertising and marketing relating to the fund. The
Plan provides for payments to be made at an aggregate annual rate of .20 of 1%
of the value of the fund's average daily net assets. Prior to March 22, 2000,
Premier Mutual Fund Service, Inc., and not DSC, received payments under the Plan
for dis
tributing fund shares and for servicing shareholder accounts. The distributor
determines 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 separately
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, 2000, the
fund was charged $334,141 pursuant to the Plan, of which $313,300 was paid to
DSC.
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, 2000, the fund was charged $73,211 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 shares redeemed
within fifteen days following the date of issuance, including redemptions made
through the use of fund's exchange privilege. During the period ended April 30,
2000, redemption fees charged and retained by the fund amounted to $7,356.
Effective June 1, 2000, this fee will be chargeable within thirty days following
the date of issuance of such shares.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities, during the period ended April 30, 2000, amounted to
$19,877,349 and $33,611,016, respectively.
The Fund
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At April 30, 2000, accumulated net unrealized depreciation on investments was
$2,769,235, consisting of $3,098,218 gross unrealized appreciation and
$5,867,453 gross unrealized depreciation.
At April 30, 2000, 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).
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, 2000, 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 auditing standards generally accepted
in the United States. 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, 2000 by correspondence with the
custodian. 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, 2000, 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 accounting principles generally accepted
in the United States.
New York, New York June 2, 2000
The Fund
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, 2000 as
"exempt-interest dividends" (not generally subject to regular Federal income
tax).
As required by Federal tax law rules, 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 2000 calendar year on Form 1099-DIV which
will be mailed by January 31, 2001.
(
NOTES
For More Information
Dreyfus
Insured Municipal 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
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
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 306AR004
