Dreyfus
U.S. Treasury
Intermediate Term Fund
SEMIANNUAL REPORT June 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 Statement of Investments
8 Statement of Financial Futures
9 Statement of Assets and Liabilities
10 Statement of Operations
11 Statement of Changes in Net Assets
12 Financial Highlights
13 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus U.S. Treasury
Intermediate Term Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus U.S. Treasury
Intermediate Term Fund, covering the six-month period from January 1, 2000
through June 30, 2000. Inside, you'll find valuable information about how the
fund was managed during the reporting period, including a discussion with Gerald
Thunelius, portfolio manager and a member of the Dreyfus Taxable Fixed Income
Team that manages the fund.
Tighter monetary policy adversely affected most -- but not all -- sectors of the
bond market over the past six months. This was primarily a result of efforts by
the Federal Reserve Board (the "Fed" ) to forestall potential inflationary
pressures. The Fed raised short-term interest rates three times during the
reporting period, for a total increase of 1.00 percentage points. These rate
hikes contributed to a total interest-rate increase of 1.75 percentage points
since late June 1999, before the current reporting period began.
Higher interest rates led to an erosion of most bond prices, especially among
higher yielding securities. U.S. Treasury securities represented a notable
exception. Prices of these direct obligations of the federal government rose
primarily because of reduced supply amid robust demand from domestic and foreign
investors.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus U.S. Treasury Intermediate Term Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 17, 2000
DISCUSSION OF FUND PERFORMANCE
Gerald Thunelius, Portfolio Manager Dreyfus Taxable Fixed Income Team
How did Dreyfus U.S. Treasury Intermediate Term Fund perform relative to its
benchmark?
During the six-month reporting period ended June 30, 2000, the fund produced a
total return of 4.91%.(1) In comparison, the fund's benchmark, the Merrill Lynch
Governments, U.S. Treasury, Intermediate-Term (1-10 Years) Index, provided a
total return of 3.60% for the same period.(2)
We attribute the fund' s good relative performance to our security selection
strategy, which emphasized U.S. Treasury notes and bonds over U.S. Government
agency securities. In addition, the fund benefited by allocating to the U.S.
Treasury Inflation Protected Securities market. Our positioning on the yield
curve was further enhanced when the yield curve inverted. For most of the
reporting period, there was an inverted yield curve, which depicts yield
differences by maturity, for these types of securities. This inverted yield
curve illustrated that shorter term instruments provided higher yields than
longer term instruments.
What is the fund's investment approach?
As a U.S. Treasury securities fund, our goal is to provide shareholders with
current income through an investment vehicle that is composed of U.S. Treasury
bills, notes and other securities that are issued or guaranteed by the United
States Government, its agencies or instrumentalities. The fund may also invest
in options and futures and enter into repurchase agreements with securities
dealers that are backed by U.S. Treasuries.
Because U.S. Treasury bills and notes are backed by the full faith and credit of
the U.S. Government, they are generally considered to rank among the highest
quality investments available. By investing in these
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
obligations, the fund seeks to maintain a high degree of credit safety. Of
course, the market value of the fund's securities and the value of fund shares
are not insured or guaranteed by the U.S. Government. The fund generally
maintains an average dollar-weighted maturity of between three and 10 years.
What other factors influenced the fund's performance?
First, the fund was influenced by inflation fears and rising interest rates over
the past six months. When the reporting period began on January 1, 2000,
investors were relieved that Y2K-related concerns proved unfounded. However,
investors soon became worried that robust economic growth might rekindle
long-dormant inflationary pressures, especially since both energy prices and
wages in a tight job market were rising. In an attempt to relieve these
pressures, the Federal Reserve Board has raised short-term interest rates three
times during the reporting period.
Second, the fund responded to forces that are unique to the U.S. Treasury
securities marketplace, which recently provided attractive returns compared to
other market sectors. In mid-January the government announced that it would use
a portion of the budget surplus to initiate a buyback program for U.S. Treasury
securities. This announcement triggered a wave of purchases of long-term U.S.
Treasury securities. Yields for these long-term securities were driven down past
yields of short-term securities and as a result created what is called an
inverted yield curve.
What is the fund's current strategy?
We have continued our efforts to invest the fund's assets in areas of the
intermediate-term U.S. Treasury securities market that we believe offer the most
attractive income opportunities. Accordingly, we have established the fund's
average duration -- a measure of sensitivity to changing interest rates -- at
approximately five years, a level that we consider neutral relative to the
fund' s benchmark. Our duration management strategy was designed to help us
balance the benefits of locking
in prevailing yields while maintaining the flexibility to capture higher yields
if they became available. In addition, we believe that a neutral duration
management strategy enables us to derive greater value from other fixed-income
investment strategies, such as yield curve risk-reward analysis, for as long as
the future direction of interest rates remains uncertain.
In addition, we recently reduced our holdings of U.S. Government agency
securities to approximately 7% of fund assets. This shift proved beneficial to
the fund after the investment policies of some government agencies were
questioned by members of Congress and the U.S. Treasury Department, adversely
affecting the prices of those agencies' securities. Instead, we focused
primarily on U.S. Treasury notes and bonds during the reporting period. We also
successfully participated in the U.S. Treasury securities futures market, which
enabled us to enhance current income without assuming additional interest-rate
risk.
July 17, 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. TOTAL RETURN INCLUDES REINVESTMENT OF
DIVIDENDS. 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 RETURN WOULD HAVE BEEN LOWER.
(2) SOURCE: BLOOMBERG L.P. -- REFLECTS REINVESTMENT OF DIVIDENDS AND, WHERE
APPLICABLE, CAPITAL GAIN DISTRIBUTIONS. THE MERRILL LYNCH GOVERNMENTS, U.S.
TREASURY, INTERMEDIATE-TERM (1-10 YEARS) INDEX IS AN UNMANAGED PERFORMANCE
BENCHMARK FOR TREASURY SECURITIES WITH MATURITIES OF 1-10 YEARS; ISSUES IN THE
INDEX MUST HAVE PAR AMOUNTS OUTSTANDING GREATER THAN OR EQUAL TO $1 BILLION.
The Fund
STATEMENT OF INVESTMENTS
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Principal
BONDS AND NOTES--85.4% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCIES--7.1%
Tennessee Valley Authority,
Valley Indexed Principal Securities,
3.375%, 1/15/2007 10,500,000 (a) 10,523,791
U.S. TREASURY BONDS--70.2%
6.25%, 5/15/2030 7,500,000 7,875,000
10.375%, 11/15/2009 18,500,000 21,205,625
10.375%, 11/15/2012 10,000,000 12,309,300
10.75%, 2/15/2003 5,000,000 5,514,050
11.25%, 2/15/2015 17,400,000 25,615,932
12%, 8/15/2013 12,500,000 16,894,500
12.375%, 5/15/2004 5,000,000 6,021,850
13.75%, 8/15/2004 7,500,000 9,489,825
104,926,082
U.S. TREASURY INFLATION PROTECTION SECURITIES--8.1%
3.625%, 7/15/2002 2,500,000 (a) 2,654,569
3.875%, 4/15/2029 9,075,000 (a) 9,423,010
12,077,579
TOTAL BONDS AND NOTES
(cost $128,574,372) 127,527,452
------------------------------------------------------------------------------------------------------------------------------------
OPTIONS--.0% Contracts
------------------------------------------------------------------------------------------------------------------------------------
PUT OPTIONS;
U.S. Treasury Notes, 6.5%, 2/15/2010,
August 2000 @ 103.578125
(cost $67,188) 50 59,450
Principal
SHORT-TERM INVESTMENTS--13.0% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCIES--11.8%
Federal Home Loan Banks
6.3%, 7/3/2000 17,580,000 17,573,847
U.S. TREASURY BILLS--1.2%
5.4%, 7/20/2000 370,000 (b) 369,053
5.61%, 7/27/2000 460,000 (b) 458,371
5.52%, 8/3/2000 1,000,000 995,250
1,822,674
TOTAL SHORT-TERM INVESTMENTS
(cost $19,395,871) 19,396,521
------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $148,037,431) 98.4% 146,983,423
CASH AND RECEIVABLES (NET) 1.6% 2,443,588
NET ASSETS 100.0% 149,427,011
(A) PRINCIPAL AMOUNT FOR ACCRUAL PURPOSES IS PERIODICALLY ADJUSTED BASED ON
CHANGES TO THE CONSUMER PRICE INDEX.
(B) PARTIALLY HELD BY THE CUSTODIAN IN A SEGREGATED ACCOUNT AS COLLATERAL FOR
OPEN FINANCIAL FUTURES POSITIONS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
The Fund
STATEMENT OF FINANCIAL FUTURES
June 30, 2000 (Unaudited)
<TABLE>
<CAPTION>
Unrealized
Market Value Appreciation
Covered by (Depreciation)
Contracts Contracts ($) Expiration at 6/30/2000 ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FINANCIAL FUTURES (LONG)
U.S. Treasury 30 Year Bonds 186 18,105,938 September 2000 17,688
FINANCIAL FUTURES (SHORT)
U.S. Government Agency
10 Year Notes 33 3,051,984 September 2000 (19,469)
U.S. Treasury 5 Year Notes 76 7,525,188 September 2000 (5,937)
U.S. Treasury 10 Year Notes 60 5,909,062 September 2000 (30,938)
(38,656)
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 148,037,431 146,983,423
Interest receivable 2,701,289
Prepaid expenses 14,372
149,699,084
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 82,402
Cash overdraft due to Custodian 65,064
Payable for futures variation margin--Note 4(a) 49,609
Payable for shares of Beneficial Interest redeemed 22,681
Accrued expenses 52,317
272,073
--------------------------------------------------------------------------------
NET ASSETS ($) 149,427,011
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 181,013,883
Accumulated net realized gain (loss) on investments
and financial futures (30,494,208)
Accumulated net unrealized appreciation (depreciation) on investments
[including ($38,656) net unrealized (depreciation)
on financial futures] (1,092,664)
--------------------------------------------------------------------------------
NET ASSETS ($) 149,427,011
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial
Interest authorized) 12,628,548
NET ASSET VALUE, offering and redemption price per share ($) 11.83
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 5,719,919
EXPENSES:
Management fee--Note 3(a) 453,971
Shareholder servicing costs--Note 3(b) 194,948
Professional fees 21,813
Trustees' fees and expenses--Note 3(c) 20,427
Custodian fees--Note 3(b) 9,682
Registration fees 7,793
Prospectus and shareholders' reports 4,113
Loan commitment fees--Note 2 296
Miscellaneous 1,065
TOTAL EXPENSES 714,108
Less--reduction in management fee due to undertaking--Note 3(a) (108,518)
NET EXPENSES 605,590
INVESTMENT INCOME--NET 5,114,329
--------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 4 ($):
Net realized gain (loss) on investments and options written (2,410,726)
Net realized gain (loss) on financial futures (144,660)
NET REALIZED GAIN (LOSS) (2,555,386)
Net unrealized appreciation (depreciation) on investments
[including ($12,000) net unrealized (depreciation) on financial
futures] 4,688,870
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 2,133,484
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 7,247,813
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
June 30, 2000 Year Ended
(Unaudited) December 31, 1999
--------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 5,114,329 10,803,096
Net realized gain (loss) on investments (2,555,386) (10,211,222)
Net unrealized appreciation (depreciation)
on investments 4,688,870 (6,830,807)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 7,247,813 (6,238,933)
--------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (5,114,329) (10,803,096)
--------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold 17,074,482 57,909,646
Dividends reinvested 3,668,575 7,526,372
Cost of shares redeemed (34,456,060) (68,907,889)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (13,713,003) (3,471,871)
TOTAL INCREASE (DECREASE) IN NET ASSETS (11,579,519) (20,513,900)
--------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 161,006,530 181,520,430
END OF PERIOD 149,427,011 161,006,530
--------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (SHARES):
Shares sold 1,459,302 4,719,115
Shares issued for dividends reinvested 313,114 619,155
Shares redeemed (2,948,714) (5,657,431)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (1,176,298) (319,161)
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Six Months Ended
June 30, 2000 Year Ended December 31,
--------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period 11.66 12.85 12.70 12.69 13.13 12.16
Investment Operations:
Investment income--net .39 .75 .79 .91 .82 .89
Net realized and unrealized gain
(loss) on investments .17 (1.19) .15 .01 (.44) .97
Total from Investment Operations .56 (.44) .94 .92 .38 1.86
Distributions:
Dividends from investment
income--net (.39) (.75) (.79) (.91) (.82) (.89)
Net asset value, end of period 11.83 11.66 12.85 12.70 12.69 13.13
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 9.85(a) (3.48) 7.61 7.63 3.08 15.77
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net
assets .80(a) .80 .80 .80 .80 .84
Ratio of net investment income
to average net assets 6.72(a) 6.16 6.19 7.30 6.41 7.02
Decrease reflected in above expense
ratios due to undertakings by
The Dreyfus Corporation .14(a) .15 .17 .17 .13 .02
Portfolio Turnover Rate 274.60(b) 462.29 957.80 643.20 728.01 492.76
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 149,427 161,007 181,520 188,347 192,296 196,970
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus U.S. Treasury Intermediate Term Fund (the "fund") is registered under
the Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The investment objective is to provide
investors with as high a level of current income 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. (" Mellon" ), 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 (excluding short-term
investments other than U.S. Treasury Bills and financial futures) are valued
each business day by an independent pricing service ("Service") approved by the
Board of Trustees. 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 securities of comparable quality,
coupon, maturity and type; indications as to values from dealers; and general
market conditions. Securities for
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
which there are no such valuations are valued at fair value as determined in
good faith under the direction of the Board of Trustees. Short-term investments,
excluding U.S. Treasury Bills, are carried at amortized cost, which approximates
value. Financial futures 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 on each business day.
(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,
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 $2,167 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, if any, 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, 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.
The fund has an unused capital loss carryover of approximately $24,802,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1999. This
amount is calculated based on Federal
income tax regulations which may differ from financial reporting in accordance
with generally accepted accounting principles. If not applied, $11,758,000 of
the carryover expires in fiscal 2002, $2,997,000 expires in fiscal 2004,
$1,425,000 expires in fiscal 2005, and $8,622,000 expires in fiscal 2007.
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 June
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 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 Manager had undertaken from January
1, 2000 through June 30, 2000 to reduce the management fee paid by the fund, to
the extent that the fund's aggregate expenses, exclusive of taxes, brokerage
fees, interest on borrowings, commitment fees and extraordinary expenses,
exceeded an annual rate of .80 of 1% of the value of the fund's average daily
net assets. The reduction in management fee, pursuant to the undertaking,
amounted to $108,518 during the period ended June 30, 2000.
(b) Under the Shareholder Services Plan, the fund reimburses DSC, an amount not
to exceed an annual rate of .25 of 1% of the value of the fund's average daily
net assets for certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include personal
services relating to shareholder
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
accounts, such as answering shareholder inquiries regarding the fund and
providing reports and other information, and services related to the maintenance
of shareholder accounts. During the period ended June 30, 2000, the fund was
charged $123,679 pursuant to the Shareholder Services Plan.
The fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of the
Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the fund. During the period
ended June 30, 2000, the fund was charged $44,422 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, 2000, the fund was
charged $9,682 pursuant to the custody agreement.
(c) Each Board member also serves as a Board member of other funds within the
Dreyfus complex (collectively, the "Fund Group"). Effective April 11, 2000, each
Board member who is not an "affiliated person" as defined in the Act receives an
annual fee of $30,000 and an attendance fee of $4,000 for each in person meeting
and $500 for telephone meetings. These fees are allocated among the funds in the
Fund Group. The Chairman of the Board receives an additional 25% of such
compensation. Prior to April 11, 2000, each Board member who was not an
" affiliated person" as defined in the Act received from the fund an annual fee
of $2,500 and an attendance fee of $250 per meeting. The Chairman of the Board
received an additional 25% of such compensation. Subject to the fund's Emeritus
Program Guidelines, Emeritus Board members, if any, receive 50% of the fund's
annual retainer fee and per meeting fee paid at the time the Board member
achieves emeritus status.
NOTE 4--Securities Transactions:
(a) The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, financial futures and
options, during the period ended June 30, 2000, amounted to $392,396,141 and
$425,634,223, respectively.
In addition, the following table summarizes the fund's call/put options written
during the period ended June 30, 2000:
<TABLE>
<CAPTION>
Options Terminated
------------------------------
Number of Premiums Net Realized
Options Written: Contracts Received ($) Cost ($) Gain (Loss) ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Contracts outstanding
December 31, 1999 -- --
Contracts written 150 123,047
Contracts terminated:
Closed 150 123,047 208,594 (85,547)
CONTRACTS OUTSTANDING
JUNE 30, 2000 -- --
</TABLE>
The fund may purchase and write (sell) call/put options in order to gain
exposure to or protect against changes in the market.
As writer of call options, the fund receives a premium at the outset and then
bears the market risk of unfavorable changes in the price of the financial
instruments underlying the options. Generally, the fund would incur a gain, to
the extent of the premium, if the price of the underlying financial instrument
decreases between the date the option is written and the date on which the
option is terminated. Generally, the fund would realize a loss, if the price of
the financial instrument increases between those dates.
As writer of put options, the fund receives a premium at the outset and then
bears the market risk of unfavorable changes in the price of the financial
instruments underlying the options. Generally, the fund
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
would incur a gain, to the extent of the premium, if the price of the underlying
financial instrument increases between the date the option is written and the
date on which the option is terminated. Generally, the fund would realize a
loss, if the price of the financial instrument decreases between those dates.
The fund may invest in financial futures contracts in order to gain exposure to
or protect against changes in the market. The fund is exposed to market risk as
a result of changes in the value of the underlying financial instruments.
Investments in financial futures require the fund to "mark to market" on a daily
basis, which reflects the change in the market value of the contract at the
close of each day's trading. Typically, variation margin payments are received
or made to reflect daily unrealized gains or losses. When the contracts are
closed, the fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of these
deposits is determined by the exchange or Board of Trade on which the contract
is traded and is subject to change. Contracts open at June 30, 2000 are set
forth in the Statement of Financial Futures.
(b) At June 30, 2000, accumulated net unrealized depreciation on investments and
financial futures was $1,092,664, consisting of $1,330,381 gross unrealized
appreciation and $2,423, 045 gross unrealized depreciation.
At June 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).
NOTES
For More Information
Dreyfus U.S. Treasury Intermediate Term Fund
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
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 072SA006
